Guangzhou Automobile Group Company Limited 廣州汽車集團股份有限公司 (a joint stock company incorporated in the People’s Republic of China with limited liability) Stock Code : 2238 2 0 1 6 2016 年度報告 Annual Report 2016 THE CORE OF BRANDS Detailing Greatness ENTERPRISE MISSION To develop into a preeminent international enterprise and a trustworthy public company ENTERPRISE CONCEPT Humanity Credibility Creativity ENTERPRISE POLICY Respect humanity, advocate communication; Work diligently, operate practically; Improve efficiency, utilise resources reasonably; Cooperate with credibility, innovate with enthusiasm Important Notice 1. The Board, supervisory committee and the directors, supervisors and senior management of the Company warrant the authenticity, accuracy and completeness of the information contained in the annual report and there are no misrepresentations, misleading statements contained in or material omissions from the annual report for which they shall assume joint and several responsibilities. 2. Attendance of the meeting of the Board Position of absent director Name of absent director Reason(s) for absence Name of proxy Director Lu Sa Official leave Wu Song 3. Zeng Qinghong, the Chairman of the Company, Feng Xingya, General Manager, Wang Dan, the person in charge of accounting function and Li Canhui, the manager of the accounting department (Accounting Chief), represent that they warrant the truthfulness and completeness of the financial statement contained in this annual report. 4. The plan for profit distribution or conversion of capital reserve fund into share capital for the reporting period considered by the Board The Board proposed payment of cash dividend of RMB2.2 per 10 shares (tax inclusive), and together with the cash dividend paid of RMB0.8 per 10 shares (including tax) during the interim period, the ratio of total cash dividend payment for the year to net profit attributable to the shareholders’ equity of listed company for the year was approximately 30.79%. 5. Risks relating to forward-looking statements The forward-looking statements contained in this annual report regarding the Company’s future plans and development strategies do not constitute any substantive commitment to investors and investors are reminded of investment risks. 6. No appropriation of funds of the Company by the controlling shareholder or its related parties for non-operational activities 7. There are no guarantees granted to external parties by the Company without complying with the prescribed decision-making procedures ANNUAL REPORT 2016 1 Contents 2 Guangzhou Automobile Group Co., Ltd. Contents Chapter 1 Definitions 5 Chapter 2 Chairman’s Statement 10 Chapter 3 Corporate Information and Major Financial Indicators 15 Chapter 4 Summary of Business 19 Chapter 5 Operation Discussion and Analysis 26 Chapter 6 Significant Events 50 Chapter 7 Report of the Directors 83 Chapter 8 Report of the Supervisory Committee 88 Chapter 9 Changes in Ordinary Shares and Information on Shareholders 92 Chapter 10 Profiles of Directors, Supervisors, Senior Management and Employees 102 Chapter 11 Corporate Governance 121 Chapter 12 Corporate Bonds 135 Chapter 13 Financial Statements 139 ANNUAL REPORT 2016 3 CHAPTER 1 Defi nitions 4 Guangzhou Automobile Group Co., Ltd. CHAPTER 1 Defi nitions I DEFINITIONS In this annual report, unless the context otherwise requires, all terms used shall have the following meaning: “associated companies, all entities over which the Company has significant influence but not control, associated enterprises” generally accompanying a shareholding of between 20% and 50% of the voting rights of such entities “Board” the board of directors of the Company “Company” Guangzhou Automobile Group Co., Ltd.（廣州汽車集團股份有限公司） “Company Law” Company Law of the PRC “CAAM” China Association of Automobile Manufacturers “China Lounge Investments” China Lounge Investments Limited (中隆投資有限公司), a wholly-owned subsidiary of the Company incorporated in Hong Kong “CSRC” China Securities Regulatory Commission “Da Sheng Ke Ji” 大聖科技股份有限公司, jointly established by the Company, Urtrust Insurance and Leshi Holdings (Beijing) Co., Ltd. (樂視控股（北京）有限公司) on 8 June 2016, in which the Company, Urtrust Insurance and Le Holdings hold 45%, 15% and 40% equity interest respectively “Denway Motors” Denway Motors Limited (駿威汽車有限公司), a wholly-owned subsidiary of the Company incorporated on 23 June 1992 in Hong Kong “GAC Bus” Guangzhou Automobile Group Autobus Co., Ltd（廣州汽車集團客車有限公司） (formerly known as Guangzhou Denway Bus Co., Ltd（廣州駿威客車有限公司） ), a wholly-owned subsidiary of the Group incorporated on 18 January 1993 under PRC law “GAC BYD” Guangzhou GAC BYD New Energy Passenger Vehicle Co., Ltd.（廣州廣汽比亞 迪新能源客車有限公司）, an associated company incorporated on 4 August 2014 under PRC law by the Group and BYD Company Limited, and the Company holds 49% of its equity interest “GAC Capital” GAC Capital Co., Ltd. (廣汽資本有限公司), a wholly-owned subsidiary incorporated in April 2013 under PRC Law “GAC Changfeng” GAC Changfeng Motor Co., Ltd. (廣汽長豐汽車股份有限公司) (formerly known as Hunan Changfeng Motor Co. Ltd. (湖南長豐汽車製造股份有限公司)), a company incorporated in November 1996 under PRC law, in which the Company currently holds 100% equity interest “GAC Commercial” Guangzhou Automobile Group Business Co., Ltd (廣州汽車集團商貿有限公司), a wholly-owned subsidiary of the Group incorporated on 21 March 2000 under PRC law ANNUAL REPORT 2016 5 CHAPTER 1 Defi nitions “GAC Component” Guangzhou Automobile Group Component Co., Ltd. (廣州汽車集團零部件有限 公司), a wholly-owned subsidiary incorporated on 29 August 2000 under PRC law and jointly funded by the Group and its subsidiaries “GAC Fiat-Chrysler” GAC FIAT Automobiles Co., Ltd. (廣汽菲亞特汽車有限公司), a jointly controlled entity incorporated on 9 March 2010 under PRC law by the Company and Fait Chrysler Automobiles S.P.A., on 19 January 2015, the name of this company has been changed to GAC Fiat Chrysler Automobiles Co., Ltd. (廣汽菲亞 特克萊斯勒汽車有限公司) “GAC Gonow” GAC Gonow Automobile Co., Ltd (廣州吉奧汽車有限公司), a subsidiary incorporated on 8 December 2010 under PRC Law by the Company and Gonow Holdings and the Company holds 51% of its equity interest “GAC Hino” GAC Hino Motors Co., Ltd. (廣汽日野汽車有限公司), a jointly controlled entity incorporated on 28 November 2007 under PRC law by the Company and Hino Motors, Ltd. “GAC (HK)” Guangzhou Auto Group (Hong Kong) Limited, a company incorporated in Hong Kong, and a wholly-owned subsidiary of GAIG “GAC Leasing” Guangzhou Automobile Leasing Co., Ltd. (廣州廣汽租賃有限公司), a subsidiary of GAC Commercial incorporated in February 2004 under PRC law “GAC Mitsubishi” GAC Mitsubishi Motor Co., Ltd. (廣汽三菱汽車有限公司), a jointly controlled entity incorporated on 25 September 2012 under PRC law by the Company and Mitsubishi Motors Corporation “GAC Toyota Engine” GAC Toyota Engine Co., Ltd. (廣汽豐田發動機有限公司), an associated company incorporated on 24 February 2004 under PRC law by the Group and Toyota Motor Company, and the Company holds 30% of its equity interest “GAC-SOFINCO” GAC-SOFINCO Automobile Finance Co., Ltd. (廣汽滙理汽車金融有限公司), a jointly controlled entity incorporated on 25 May 2010 under PRC law by the Company and Société de Financement Industriel et Commercial (SOFINCO) “GAMC” Guangzhou Automobile Group Motor Co. Ltd. (廣州汽車集團乘用車有限公司), a wholly-owned subsidiary incorporated on 21 July 2008 under PRC law by the Group “GAMC Hangzhou” Its predecessor was GAC Gonow, in which the Company held its 51% equity interest. In March 2016, GAMC acquired the remaining 49% equity interest therein and renamed the entity as Guangzhou Automobile Group Motor (Hangzhou) Co., Ltd (廣州汽車集團乘用車（杭州）有限公司) in May 2016 “GAC Toyota” GAC Toyota Motor Co. Ltd (廣汽豐田汽車有限公司) (formerly known as Guangzhou Toyota Motor Co. Ltd (廣州豐田汽車有限公司)), a jointly controlled entity incorporated on 1 September 2004 under PRC law by the Company and Toyota Motor Company 6 Guangzhou Automobile Group Co., Ltd. CHAPTER 1 Defi nitions “GACZX” GACZX (Yichang) Auto Co., Ltd (廣汽中興（宜昌）汽車有限公司), established in 2013 with capital jointly contributed by the Company and Hebei Zhongxing Automobile Manufacturing Co., Ltd. (河北中興汽車製造有限公司), and in which the Company holds 40% of its equity interest “GAEI” Guangzhou Automobile Group Company Automotive Engineering Institute, a subsidiary of the Company established on 29 June 2006 for the purpose of conducting research and development of the products and technology in which the Company has proprietary rights “GAIG” Guangzhou Automobile Industry Group Co., Ltd. (廣州汽車工業集團有限公司), which was a state-owned enterprise incorporated on 18 October 2000, and is the controlling shareholder of the Company “Gonow Holdings” Zhejiang Gonow Holdings Limited (浙江吉奧控股集團有限公司), a company incorporated under PRC law with limited liabilities “Group” The Company and its subsidiaries “Guangqi Honda” Guangqi Honda Automobile Co., Ltd. (廣汽本田汽車有限公司) (formerly known as Guangzhou Honda Automobile Co. Ltd (廣州本田汽車有限公司)), a jointly controlled entity incorporated on 13 May 1998 under PRC law by the Company and Honda Motor Co. Ltd. “Guang Ai” Guangzhou Guang Ai Insurance Brokers Limited (廣州廣愛保險經紀有限公司), a subsidiary incorporated on 7 June 2006 under PRC law, in which the Company (directly and indirectly) holds a total of 75.1% equity interest “Honda (China)” Honda Automobile (China) Co., Ltd. (本田汽車（中國）有限公司), an associated company incorporated by the Company, Honda Motor Co. Ltd. and Dongfeng Motor Company on 8 September 2003 under PRC law, and the Company holds 25% of its equity interest “independent director(s)” have the same meaning as independent non-executive