CO

NT

EN

TS

Company Profile_

Remarks of Board Chairman and General Manager_

Senior Management Officers_

Organizational Structure_

Auditor's Report_

Balance Sheet_

Profit & Loss Statement_

Automotive Finance Business_

Corporate Finance Business_

International Business_

Settlement Business_

Investment Business_

Equity Investment_

Internal Control_

Human Resource Management_

Corporate Culture_

02

04

08

13

16

18

19

22

24

25

26

27

28

29

30

31

正文.indd 01正文.indd 01 2012-4-18 11:22:202012-4-18 11:22:20

02

1994 5

30 1000

98.592 1.408%

2011 682.03 32.07

12.15

2011 329

2011SAIC Finance receives the 2011 SAIC Group

Excellent Performance Award

SAIC Finance receives the Golden Dragon Award - 'Best Finance Company of the Year'

正文.indd 02正文.indd 02 2012-4-18 11:22:232012-4-18 11:22:23

20

11

An

nu

al Rep

ort

w w w . s a i c f i n a n c e . c o m

03

Co

mp

any P

rofile

According to the Administrative Rules for Commercial Group Enterprise Finance Company SAIC Finance can provide the following services upon approval by the regulatory authority:

1. Providing finance and funding related advisory services, credit investigation and other relevant consulting and agent services to group member companies;

2. Fund settlement for transactions entered into by group member companies;

3. Providing insurance related agent services with approval from relevant regulators;

4. Providing guarantee to group member companies;

5. Arranging for entrusted loans / entrusted investment transactions between group member companies;

6. Accepting or discounting bank drafts / commercial notes for group member companies;

7. Fund settlement between group member companies and designing fund settlement / clearance plans and processes for group member companies;

8. Taking deposits from group member companies;

9. Providing loans and financial leasing services to group member companies;

10. Inter-bank borrowing / lending transactions;

11. Issuing finance company bond upon approval by relevant regulators;

12. Underwriting corporate bond issued by group member companies;

13. Equity investment in financial institutions;

14. Securities investment;

15. Providing consumer loan, buyer’s credit and financial leasing services for the products manufactured by group member companies;

16. Foreign currency conversion for SAIC Finance and foreign currency related spot and forward transactions for group member companies;

17. Other services as approved by China Banking Regulatory Commission (“CBRC”);

18. Other foreign currency related services as approved by State Administration of Foreign Exchange (“SAFE”).

Approved by People’s Bank of China (“PBOC”), Shanghai Automotive Group Finance Corporation Limited (“SAIC Finance”) was established in May 1994 as a non-bank financial institution. SAIC Finance’s registered capital is RMB 3 billion (including USD 10 million). Currently SAIC Finance is 98.592% owned by SAIC Motor Co., Ltd. and 1.408% owned by Shanghai Automotive Industry Sales Co., Ltd. By the end of 2011, SAIC Finance’s total asset reached RMB 68.2 billion. The company reported a total revenue of RMB 3.207 billion and a net profit of RMB 1.215 billion for 2011.

Mr. Liu Rong is SAIC Finance’s current Chairman of the Board and Mr. Shen Genwei serves as the company’s General Manager. SAIC Finance adopts a corporate governance structure under which the General Manager takes the responsibility of managing the operations under the leadership of the Board. SAIC Finance currently has 18 departments including the General Manager’s Office, HR Department, Treasury Department, Risk Management Department, Internal Audit Department, Corporate Finance Department, Global Markets Department, Innovation and Market Department, Sales Department I, Sales Department II, Credit Approval Department, Wholesale Department, Retail Finance Department, Fixed Income Department, Securities Investment Department I, Securities Investment Department II, Settlement Department and IT Department. By the end of 2011, SAIC Finance had a total of 329 employees.

正文.indd 03正文.indd 03 2012-4-18 11:22:242012-4-18 11:22:24

04

2011 ,

2010 2009 86%

2010 44% 12.15

;

7

2011

2011

2012 +

2011SAIC Finance receives the 2011 Excellent Performance Award

正文.indd 04正文.indd 04 2012-4-18 11:22:252012-4-18 11:22:25

20

11

An

nu

al Rep

ort

w w w . s a i c f i n a n c e . c o m

05

Rem

arks of B

oard

Ch

airman

an

d G

eneral M

anag

er

In 2011, the domestic and international economic environment experienced rapid and complex changes, the market situation became increasingly challenging. With the strategy based on innovation, SAIC Finance successfully opened brand new business d imens ions and met the chal lenges successfully with a total of RMB 1.215 billion net profit achieved for 2011 representing a 44% growth following the 86% growth achieved already in the last year rewriting a new record since the establishment of the company. SAIC Finance was also awarded the ‘Excellent Performance Award’ by SAIC Group for the fourth time thus achieving a beautiful finish of the first year in the 12th 5-year plan period.

During the last year, our auto finance business grew rapidly achieving the win-win

situation for both the manufacturer and the financier despite of the weakening of the market. Our total wholesale outstanding balance and the number of activated dealers both ranked No.2 in the auto finance industry. Our retail annual new volume ranked No.3 in the industry with over 100,000 contracts booked for the first time in a single year. Based on accurate judgment of the market trend, we successfully made investment decisions on the stock of Pangang Fantai making an extremely high income of over RMB 700 million. We also made significant progress on our financial innovation initiatives. We were granted the license for forward foreign currency conversion and buying/selling and our vehicle QC remote monitoring system also received two patents and laid solid foundations for future business growth.

Additionally in 2011 SAIC Finance was appointed vice-chairman of the China Finance Company Association and was the only local state-owned finance company out of the 5 vice-chairman companies. SAIC Finance was also awarded ‘the Best Finance Company of the Year’ during the 2011 China financial institution ‘Golden Dragon Award’ selection organized by Financial Times and China Social Science Research Institute.

2012 is an important second year of the 12th 5-year plan period, we will maintain our strategy with the focus on stability and innovation to grow our business in a sustainable way and to lead our employees to face new challenges and make new progresses.

Liu RongChairman

Shen GenweiGeneral Manager

SAIC Finance is appointed vice-chairman & executive council member of China Finance Company Association

Mr. Zhou Ping, chief executive and Mr.Chao Kejian, deputy chief executive of Jingan district government, visit SAIC Finance

正文.indd 05正文.indd 05 2012-4-18 11:22:282012-4-18 11:22:28

正文.indd 06正文.indd 06 2012-4-18 11:22:312012-4-18 11:22:31

正文.indd 07正文.indd 07 2012-4-18 11:22:342012-4-18 11:22:34

08

Hu MaoyuanChairman of Supervisory BoardSenior EconomistSenior Engineer

正文.indd 08正文.indd 08 2012-4-18 11:22:362012-4-18 11:22:36

20

11

An

nu

al Rep

ort

w w w . s a i c f i n a n c e . c o m

09

Senio

r Man

agem

ent O

fficers

Liu RongChairman of the Board of Directors

Senior Accountant

正文.indd 09正文.indd 09 2012-4-18 11:22:362012-4-18 11:22:36

10

Shen GenweiBoard DirectorGeneral ManagerSenior Economist

正文.indd 10正文.indd 10 2012-4-18 11:22:392012-4-18 11:22:39

20

11

An

nu

al Rep

ort

w w w . s a i c f i n a n c e . c o m

11

Ben ZhangCCP Deputy General Secretary

Economist

Senio

r Man

agem

ent O

fficers

正文.indd 11正文.indd 11 2012-4-18 11:22:402012-4-18 11:22:40

12

Senio

r Man

agem

ent O

fficers

Hu Maoyuan Chairman of Supervisory Board / Senior Economist / Senior Engineer

Liu Rong Chairman of the Board of Directors / Senior Accountant

Xue Jian Board Director / Senior Political Affairs Specialist

Gu Feng Board Director / Senior Accountant

Shen Genwei Board Director / General Manager / Senior Economist

Xia Jun Board Director / Senior Economist

Zhu Xian Supervisor / Senior Accountant

Ben Zhang CCP Deputy General Secretary / Economist

Yan Dongyin Supervisor / Accountant

正文.indd 12正文.indd 12 2012-4-18 11:22:432012-4-18 11:22:43

20

11

An

nu

al Rep

ort

w w w . s a i c f i n a n c e . c o m

13

Org

anizatio

nal Stru

cture

Gen

eral Man

ager's O

ffice

HR D

epartm

ent

Treasury D

epartm

ent

Risk Man

agem

ent D

epartm

ent

Intern

al Au

dit D

epartm

ent

Co

rpo

rate Finan

ce Dep

artmen

t

Glo

bal M

arkets Dep

artmen

t

Inn

ovatio

n an

d M

arket Dep

artmen

t

Sales Dep

artmen

t I

Sales Dep

artmen

t II

Cred

it Ap

pro

val Dep

artmen

t

Wh

olesale D

epartm

ent

Retail Finan

ce Dep

artmen

t

Fixed In

com

e Dep

artmen

t

Securities In

vestmen

t Dep

artmen

t I

Securities In

vestmen

t Dep

artmen

t II

Settlemen

t Dep

artmen

t

IT Dep

artmen

t

Risk Management Committee

Supervisory Board

Shareholders

Board of Directors

Management Team

正文.indd 13正文.indd 13 2012-4-18 11:22:432012-4-18 11:22:43

正文.indd 14正文.indd 14 2012-4-18 11:22:442012-4-18 11:22:44

正文.indd 15正文.indd 15 2012-4-18 11:22:462012-4-18 11:22:46

16

正文.indd 16正文.indd 16 2012-4-18 11:22:482012-4-18 11:22:48

20

11

An

nu

al Rep

ort

w w w . s a i c f i n a n c e . c o m

17

Au

dito

r’s Rep

ort

正文.indd 17正文.indd 17 2012-4-18 11:22:502012-4-18 11:22:50

18

Balan

ce Sheet

_ Unit_ RMB in 10 thousand yuan

2009 2010 2011

ASSETS

DEPOSITS WITH CENTRAL BANK AND FINANCIAL INSTITUTIONS 2,158,105 3,047,328 2,682,228

ACCOUNTS RECEIVABLE 11,972 22,133 4,535

LOANS 499,720 869,951 1,751,786

INVESTMENT 1,719,303 2,544,956 2,377,596

FIXED ASSETS 4,642 4,245 4,022

OTHER ASSETS 54 153 151

TOTAL ASSETS 4,393,796 6,488,766 6,820,318

LIABILITIES

DEPOSITS 3,648,461 5,525,367 5,667,777

ACCOUNTS PAYABLE 6,562 9,534 13,040

OTHER LIABILITIES 321,688 486,474 626,221

TOTAL LIABILITIES 3,976,712 6,021,375 6,307,038

OWNER'S EQUITY

PAID-IN CAPITAL 300,000 300,000 300,000

CAPITAL RESERVE 19,550 25,847 25,590

SURPLUS RESERVE 52,152 57,145 66,431

UNDISTRIBUTED PROFIT 45,382 84,399 121,259

TOTAL OWNER'S EQUITY 417,084 467,391 513,280

TOTAL LIABILITIES AND OWNER'S EQUITY 4,393,796 6,488,766 6,820,318

正文.indd 18正文.indd 18 2012-4-18 11:22:512012-4-18 11:22:51

20

11

An

nu

al Rep

ort

w w w . s a i c f i n a n c e . c o m

19

Pro

fit & Lo

ss Statemen

t

_ Unit_ RMB in 10 thousand yuan

2009 2010 2011

INCOME 116,548 195,773 320,734

INTEREST INCOME 81,578 107,278 197,636

INVESTMENT INCOME 24,813 71,098 116,512

OTHER OPREATING REVENUES 10,157 17,397 6,586

EXPENSES 56,555 87,628 162,367

INTEREST EXPENSES 39,516 63,451 98,590

OPERATING EXPENSE 10,487 17,158 33,797

OTHER OPERATING EXPENSE 6,552 7,020 29,980

OPERATING TAX&SURCHARGE 2,147 6,280 9,444

OPERATING PROFITS 57,846 101,864 148,923

ADD:NET NON OPERATING REVENUES 36 117 143

TOTAL PROFITS 57,882 101,982 149,066

正文.indd 19正文.indd 19 2012-4-18 11:22:512012-4-18 11:22:51

正文.indd 20正文.indd 20 2012-4-18 11:22:512012-4-18 11:22:51

正文.indd 21正文.indd 21 2012-4-18 11:22:532012-4-18 11:22:53

22

2011 5 18

12 214 543 69.5

116% 268

1004 93.3

100,168 141% 7

8

5

3

In 2011 our auto finance business grew rapidly through the forming of strategic cooperation. On May 18, SAIC Finance and Shanghai VW signed a retail finance cooperation frame agreement thus the two sides entered a new phase of strategic cooperation.

By the end of December, our wholesale business covered 543 dealers in 214 cities with a total outstanding balance of RMB 6.95 billion representing a 116% growth compared with the last year. Our wholesale business ranked No.2 in the auto finance industry in terms of the loan outstanding balance and the number of activated dealers. Our retail business also grew to cover 1004 dealers in 268 cities with an outstanding balance of RMB 9.33 billion. Retail new volume for the year reached 100,168 contracts representing 141% growth. In July a monthly new volume record was written and starting August till the end of the year the retail monthly new volume surpassed 10,000 contracts for 5 consecutive months. Currently SAIC Finance is already one the top 3 financial institutions in terms of retail business scale in the auto finance industry.

While rapidly growing the business, SAIC Finance implemented stringent risk control measures and maintained very high credit asset quality with zero wholesale delinquency achieved for 3 consecutive years and retail delinquency maintained at a 0.01% low. Both our wholesale and retail delinquency rates are much lower than the industry average level.

10Celebration for achieving 100,000 contracts of retail new volume for 2011

10General Manager Mr. Shen Genwei personally approves the 100,000th retail contract

正文.indd 22正文.indd 22 2012-4-18 11:22:562012-4-18 11:22:56

20

11

An

nu

al Rep

ort

w w w . s a i c f i n a n c e . c o m

23

Au

tom

otive Fin

ance B

usin

ess

SAIC Finance signs a retail financing frame agreement with Shanghai VW

Path of development for SAIC Finance's dealer buyer's credit business

The development path of the retail auto loan business

2009 20092009 20092010 2010

187

163

380,579

125,940

432

341

41,439

15,518

2010 20102011 2011

214 932,521

543 100,168

2011 2011

正文.indd 23正文.indd 23 2012-4-18 11:22:582012-4-18 11:22:58

24

2011

1-12 534

32.84%

In 2011 despite of the continuing tightening of monetary policies by the government, SAIC Finance still maintained a stable growth of the corporate finance business. With the success of our new products such as the electronic notes, our customer deposit ratio steadily grew in 2011. The average daily deposit outstanding balance for the period from January to December reached RMB 53.4 billion, representing 32.84% growth compared with the last year despite of the negative market trends. In the meantime SAIC Finance provided favorable rates on the loan and discounting businesses giving strong funding support to group member companies and facilitating our own sustainable business growth.

Co

rpo

rate Finan

ce Bu

siness

Employees discuss new product promotion plans

Designing loan products that are tailored to meet customer needs

正文.indd 24正文.indd 24 2012-4-18 11:23:042012-4-18 11:23:04

20

11

An

nu

al Rep

ort

w w w . s a i c f i n a n c e . c o m

25

2011

1-12 43.97 88.94%

237.48 109.29%

Intern

ation

al Bu

siness

Employees process foreign exchange forward transactions

Employees conduct research on foreign exchange rate market trend

In 2011 significant policy breakthrough was made for our international business. SAIC Finance became the first non-bank financial institution to enter the inter-bank foreign currency forward trading market for foreign currency forward transactions. In the end of 2011 SAIC Finance successfully launched the forward foreign currency conversion business. With the strong growth trend throughout the year for our international business, a total of USD 4.397 billion international settlement was completed in 2011, representing 88.94% growth compared with the last year. SAIC Finance’s foreign currency conversion volume reached RMB 23.748 billion in 2011 representing a 109.29% growth and such scale is already similar to the foreign currency conversion volume of the Shanghai branch network of a medium-sized commercial bank.

正文.indd 25正文.indd 25 2012-4-18 11:23:172012-4-18 11:23:17

26

2011

5

In 2011 with the advantages of convenience, customization and low cost, SAIC Finance’s settlement businesses expanded to all members of the SAIC Group. In particular, the functionality of our cash management platform improved with the launch of a new product – enterprise fund settlement data direct link platform. The new product was developed for Shanghai GM specifically and it is now able to achieve a true seamless connection between financial institutions and client enterprises. In May SAIC Finance joined the China Settlement and Clearance Association and was elected a council member among the only 3 finance company council members.

Settlemen

t Bu

siness

SAIC Finance joins the China Settlement and Clearance Association and becomes a council member

Employees operate the enterprise fund settlement direct link system

正文.indd 26正文.indd 26 2012-4-18 11:23:422012-4-18 11:23:42

20

11

An

nu

al Rep

ort

w w w . s a i c f i n a n c e . c o m

27

2011

10

7

In 2011, we made accurate judgment on the market trend and successfully avoided the most severe systematic risk ever seen in China’s bond market history and made over RMB 1 billion in investment income, which is much higher than the income level of the average fund, securities trader or similar bank products available on the market. In particular during the first half of the year we made successful investment decisions on the Pangang Fantai stock. After two years of holding the stock, we made accurate judgment based on market trend and sold the stock timely at high prices making a total of RMB 700 million in income and successfully avoided the risk resulted from the severe price drop of the stock afterwards. The positive results of these successful investments made positive contributions to the Group IPO initiative.

Investm

ent B

usin

ess

Employees analyze bond market trends

Employees explore automotive financing project feasibility plans

正文.indd 27正文.indd 27 2012-4-18 11:23:562012-4-18 11:23:56

2822222222222228888888888

2004

2011

12 298.19 12.13

51%

The SAIC Finance invested company GMAC-SAIC Automotive Finance Company Limited (GMAC-SAIC) was established in 2004 and is China’s first company specializing in automotive retail financing. In 2011 GMAC-SAIC maintained stable business growth, by the end of December the total credit asset outstanding balance reached RMB 29.819 billion with a net profit of RMB 1.213 billion achieved for the year representing a 51% growth compared with the last year.

Eq

uity In

vestmen

t

Visit of Mr. Jiang Liang, Vice Chairman of Municipal Political Consultation Committee

and Chief Executive of Pudong District and Mr. Yan Xu, Deputy Chief Executive

of Pudong Distrcit

SAIC Finance representatives attend the China Automotive Finance Seminar

正文.indd 28正文.indd 28 2012-4-18 11:24:082012-4-18 11:24:08

20

11

An

nu

al Rep

ort

w w w . s a i c f i n a n c e . c o m

29

2011

In 2011 SAIC Finance greatly enhanced risk control capabilities by improving internal control systems and internal audit measures. New risk control methods were implemented and continuous efforts were made to improve processes and policies to support sustainable business growth. Additionally internal audits and internal control assessments were carried out before, during and after fact. Follow-up audits were also conducted to ensure all issues discovered during audits are being addressed and risks properly controlled.

Intern

al Co

ntro

l

Mr. Jiang Yingshi, Chairman of SAIC Group Supervisory Committee, listens to SAIC Finance's risk control report

Mr. Jiang Mingkang, Deputy Director of Shanghai CBRC, visits SAIC Finance

正文.indd 29正文.indd 29 2012-4-18 11:24:142012-4-18 11:24:14

30

In 2011 SAIC Finance focused on new recruitment, career development and training to meet the urgent HR needs of the rapidly growing business. Along with the on-site management model, we initiated the customer end finance professional recruitment plan to hire talents to meet the business needs. Additionally we made continuous efforts to improve employees’ career development channel to build a new team of auto finance professionals in addition to the existing middle management team and technical staff. Lastly we organized several training programs such as the ‘new hire assistance’ and ‘CEIBS MINI MBA’ to improve employees’ professional knowledge and quality.

2011

MINI MBA

Hu

man

Reso

urce M

anag

emen

t

mini-MBASAIC Finance's mini-MBA training program

AInter-departmental activity participated by A-class employees

Outdoor team-building event

正文.indd 30正文.indd 30 2012-4-18 11:24:172012-4-18 11:24:17

20

11

An

nu

al Rep

ort

w w w . s a i c f i n a n c e . c o m

31

2011

16

VI

12

In 2011, in order to promote our corporate culture among our new and old employees and to build our company core competencies based on a strong culture, we made significant efforts to build our culture with the focuses on concept, visual perception and behavior. During the year, a total of 12 new cultural events were successfully organized including the ‘Department Brand Building’, corporate cultural VI design, ‘Year of Cooperation’, the first ‘Art Festival’, etc. in addition to the existing 16 cultural activities. According to the ‘Excellent Employer’ market survey jointly conducted by Towers Watson and Fortune magazine, SAIC Finance employees have very high level of identification with the company culture and achieved above-average results on many relevant indicators of the survey.

Co

rpo

rate Cu

lture

The first SAIC Finance cultural, sports and art festival

SAIC Finance spring festival party

SAIC Finance professional skill competition

正文.indd 31正文.indd 31 2012-4-18 11:24:192012-4-18 11:24:19

正文.indd 32正文.indd 32 2012-4-18 11:24:212012-4-18 11:24:21