意见反馈 手机随时随地看行情

公司公告

江 铃B:2018年半年度报告(英文版)2018-08-29  

						Jiangling Motors Corporation, Ltd.




     2018Half-year Report

               2018-040




                                 1
Chapter I     Important Notes, Contents and Abbreviations


Important Note
The Board of Directors and its members, the Supervisory Board and its
members, and the senior executives are jointly and severally liable for the
truthfulness, accuracy and completeness of the information disclosed in the
report and confirm that the information disclosed herein does not contain any
false statement, misrepresentation or major omission.

Chairman Qiu Tiangao, CFO Li Weihua and Chief of Finance Department, Xie
Wanzhao, confirm that the Financial Statements in this Half-year Report are
truthful, accurate and complete.

All Directors were present at the Board meeting to review this Half-year
Report.

Neither cash dividend nor stock dividend was distributed. The Board decided
not to convert capital reserve to share capital this time.

All financial data in this report are prepared under International Financial
Reporting Standards (‘IFRS’) unless otherwise specified.

The Half-year Report is prepared in Chinese and English. In case of
discrepancy, the Chinese version will prevail.




                                                                         2
                                        Contents
Chapter I      Important Notes, Contents and Abbreviations ................................. 2
Chapter II     Brief Introduction ............................................................................. 4
Chapter III    Business Profile............................................................................... 6
Chapter IV     Business Operation Discussion and Analysis ................................. 8
Chapter V      Major Events ................................................................................. 13
Chapter VI     Share Capital Changes & Shareholders ........................................ 20
Chapter VII    Preferred Shares........................................................................... 24
Chapter VIII   Directors, Supervisors and Senior Management .......................... 25
Chapter IX     Company Bond ............................................................................. 26
Chapter X      Financial Statements ..................................................................... 27
Chapter XI     Catalogue on Documents for Reference ....................................... 83

Abbreviations:
JMC, or the Company                       Jiangling Motors Corporation, Ltd.
JMH                                       Jiangling Motor Holding Co., Ltd.
Ford                                      Ford Motor Company
CSRC                                      China Securities Regulatory Commission
JMCG                                      Jiangling Motors Company (Group)
JMCH                                      JMC Heavy Duty Vehicle Co., Ltd.
EVP                                       Executive Vice President
CFO                                       Chief Financial Officer
VP                                        Vice President




                                                                                                    3
Chapter II       Brief Introduction

1. Company’s information
Share’s name        Jiangling Motors, Jiangling B Share’s Code   000550, 200550
Place of listing     Shenzhen Stock Exchange
Company’s Chinese
                     江铃汽车股份有限公司
name
English name         Jiangling Motors Corporation, Ltd.
Abbreviation         JMC
Company legal
                     Qiu Tiangao
representative

2. Contact person and method
                                                                  Securities Affairs
                                    Board Secretary
                                                                   Representative
Name                         Wan Hong                      Quan Shi
                             No. 509, Northern Yingbin     No. 509, Northern Yingbin
Address                      Avenue, Nanchang City,        Avenue, Nanchang City,
                             Jiangxi Province, P.R.C       Jiangxi Province, P.R.C
Tel                          86-791-85266178               86-791-85266178
Fax                          86-791-85232839               86-791-85232839
E-mail                       relations@jmc.com.cn          relations@jmc.com.cn

3. Other
I. Contact methods
Changes of registered address, headquarter address, postal code, website
and e-mail
□Applicable √Not Applicable
There is no change of registered address, headquarter address, postal code,
website and e-mail. Please refer to 2017 Annual Report for details.

II. Newspapers for information disclosure, website for publication of JMC’s
half-year report and place for achieving half-year report
□Applicable √Not Applicable
There is no change of newspapers for information disclosure, website
designated by CSRC for publication of JMC’s Half-year Report and place for
achieving Half-year Report. Please refer to 2017 Annual Report for details.




                                                                        4
    4. Main accounting data and financial ratios
                                                                       Unit: RMB ‘000
                             Reporting period       Same period
                             (2018 first half)        last year            Change (%)

Revenue                             14,287,497          15,666,476                     -8.80
Profit Attributable to the
Equity Holders of the                  318,951              552,903                   -42.31
Company
Net Cash Generated
From Operating Activities             -906,818             -899,401                    -0.83
Basic Earnings Per Share
                                         0.370                0.640                   -42.31
(RMB)
Diluted Earnings Per
                                         0.370                0.640                   -42.31
Share (RMB)
Weighted Average Return                                                       Down 1.64
                                         2.72%               4.36%
on Equity Ratio                                                         percentage points

                               At the end of       At the end of the       Change (%)
                             reporting period       previous year
Total Assets                        23,232,394          26,383,761                    -11.94
Shareholders’ Equity
Attributable to the Equity          10,615,058          12,572,402                    -15.57
Holders of the Company

    5. Accounting data difference between domestic and foreign accounting
    standards

    I. Differences in net profit and net assets disclosed respectively per IFRS and
    PRC GAAP.
    □Applicable √Not Applicable
    There is no difference between IFRS and PRC GAAP in net profit and net
    assets.

    II. Differences in net profit and net assets disclosed respectively per GAAP
    and PRC GAAP.
    □Applicable √Not Applicable
    There is no difference between GAAP and PRC GAAP in net profit and net
    assets.




                                                                                  5
Chapter III       Business Profile

1. Company’s core business during the reporting period
JMC’s core business is production and sales of commercial vehicles, SUV
and related components. JMC’s major products include JMC series light truck,
heavy duty trucks, pickup, Light Bus, Yusheng SUV, Ford-brand commercial
vehicles and sports utility vehicles, including Ford-brand Light Bus, Ford
brand MPV. The Company also produces engines, castings and other
components.

2. Major change of main assets

I. Major change of main assets
There’s no major change of main assets during the reporting period.

II. Main overseas assets
□ Applicable √ Not Applicable
3. Core competitiveness analysis
    JMC is a sino-foreign joint venture auto company with R&D, manufacturing
and sales operations. With the support of advanced technology and leader
status on the Light commercial vehicle market, JMC also is a pioneer of
domestic automobile industry that provides excellent products and solutions
for intelligent logistics. JMC had been ranked among the top hundred global
corporations with the most valuable brand for consecutive years, and is a
national high-tech enterprise, national innovative pilot enterprise, a national
enterprise technology centre, national industrial design centre, national
intellectual property model enterprise, quality management advanced
enterprise, national automobile export base which improve the Company’s
core business competence.
    With the support from Ford's advanced technology and management
experience, JMC's influence over auto industry is improving steadily, making
considerable progress both in new product development and technical
equipment on the traditional business. Series of new products such as
premium Yuhu MCA, N800HP, upgrade Kaiyun (4D30/Stg. V), classical Yuhu
and Kairui EV launched further improved JMC’s competence on R&D and
manufacturing, JMC has been certificated as the first a model enterprise that
produce vehicular networking products which network with beidou system, a
self-develop GPS in China. And JMC’s patent for invention, a method of
analyzing RE relationship between the vehicle and parts, won the 19th
Chinese Patent Excellence Award. The first JMC-brand heavy truck, Jiangling
Weilong, won 2018 China’s Annual Truck Award and the Most Potential
Heavy Truck Award, fully showed JMC’s leading technology and self-
innovation capability in commercial vehicle field. High standard Xiaolan
manufacturing site continues to expand modern plants of vehicle, engine and
frame, it will further ensure JMC's products production and quality
improvement. Through the construction of Fushan new energy base, JMC will
provide more new energy vehicles and take a solid foundation of sustainable
and healthy development.



                                                                           6
   While continuing to consolidate traditional advantages and keep pace with
the new situation of international and domestic industry development, JMC
continue to explore new business domain and innovative business models. In
terms of new technology exploration, the Company cooperates with top
domestic autonomous driving companies in R&D and use the self-driving
function of mass production commercial vehicles to achieve project goals and
carry out innovation in specific scenarios. JMC participated in the global
intelligent driving competition, and explored the mass production plan of
ADAS and demonstration plan of automatic driving. In terms of new business
model exploration, the Company has reached strategic cooperative
partnership with the international Internet cargo transport platform and
domestic new energy transport capacity service platform, and explored new
business cooperation models and the analysis and application of the Internet
and big data. This lays the foundation for the Company's strategic vision to
transform itself into the "best partner for mobility and smart logistics solutions”.




                                                                                7
Chapter IV             Business Operation Discussion and Analysis
1. Summary
    In the first half of 2018, China’s economy keeps steadily growth, and
China's automotive market continues to keep slightly growth. Total sales
volume was 14.07 million units, increased 5.57% than 2017 first half.
    During the reporting period, to cope with more severe competition, more
stringent regulatory requirement and intensifying cost pressures, the
Company focused on quality improvement, new product development,
operating cost control and production efficiency enhancement. Simultaneously,
the Company introduced series of sales policy to respond the market risk. In
the first half of 2018, JMC achieved sales volume of 147,354 units, decreased
4.16% compared with the same period last year, achieved revenue of RMB
14.287 billion, decreased 8.80% compared with the same period last year,
achieved net profit of RMB 0.319 billion, decreased 42.31% compared with
the same period last year. It mainly reflected the decline of passenger vehicle
sales during the adjustment period and the changes in product mix, the
increasing promotion expenses to cope with the fierce market competition,
and the continuous growing expenditures in new product and technology
development. In the first half, the Company achieved a good start in the field
of electrification transformation. Kairui EV, JMC’s first electric light truck, has
driven the Company’s strategic alliance with a number of well-known domestic
enterprises on strength of high range, low energy consumption, connectivity
feature, high quality, comfort and safety performance. A total of 5,100 units
Kairui EV order for year 2018 was received short after its launch. The
Company has taken a solid step toward shaping a smart logistics ecosystem.

2. Core business analysis
Year-over-Year Changes of Main Financial Data
                                                                   Unit: RMB’000
                                                           YOY
                             2018 1H      2017 1H                                Reason
                                                        change(%)
Revenue                      14,287,497   15,666,476           -8.80
Cost of sales                12,277,724   12,371,957           -0.76
                                                                        Due to the effect of
                                                                        implementing IFRS 15 --
                                                                        Revenue from Contracts
                                                                        with Customers since
                                                                        January 1, 2018, and this
Distribution costs             452,934     1,270,477          -64.35
                                                                        affects the presentation
                                                                        between income
                                                                        statement accounts and
                                                                        does not actually affect
                                                                        the net profit.
Administrative expenses       1,139,448    1,193,666           -4.54
Finance Income-net              103,392      125,900          -17.88
Income                                                                  Due to the operating profit
                                27,404        62,435          -56.11
tax expense                                                             decrease.
Research and
                               820,752       860,424            -4.61
Development Expenditure
Net cash generated from
                               -906,818     -899,401            -0.83
operating activities
Net cash used in investing     -442,747     -282,756          -56.58    Cash increase in the



                                                                                 8
             activities                                                                              purchase of fixed assets
                                                                                                     Due to the payment of
             Net cash used in
                                            -2,000,548               -6,118        -32,599.38        2017 interim special
             financing activities
                                                                                                     dividends.
                                                                                                     Due to the payment of
             Net increase/(decrease)                                                                 2017 interim special
             in cash and cash               -3,350,113           -1,188,275              -181.93     dividends and cash
             equivalents                                                                             increase in the purchase
                                                                                                     of fixed assets
             Significant change in the profit structure or profit source of the Company
             during the reporting period.
             □ Applicable √ Not Applicable
             There is no significant change in the profit structure or profit source of the
             Company during the reporting period.

             Main Business Structure:
                                                                Gross           Y-O-Y                          Y-O-Y gross
                             Turnover          Cost                                          Y-O-Y cost
                                                                Margin        turnover                           margin
                            (RMB ‘000)     (RMB ‘000)                                       change
                                                              (RMB ‘000)      change                            change
    By Industry
    Automobile Industry       14,157,872        12,158,290       14.12%           -8.61%             -0.39%           -7.09%
    By Products
    Vehicle                   12,753,388        11,136,749       12.68%          -10.15%             -1.34%           -7.80%
    By Region
    China                     14,157,872        12,158,290       14.12%           -8.61%             -0.39%           -7.09%

             3. Non-core business analysis
             √ Applicable □Not Applicable

                                                                                               Unit:RMB’000
                                                        Proportion of
                                       Amount                                   Explanation                Sustainability(Y/N)
                                                         total profits
                                                                        Due to the support
             Non-operating
                                            155,624              44.93% funds provided by              Y
             revenue
                                                                        government

             4. Analysis of assets and liabilities
             I. Major changes
                                                                                               Unit: RMB’000
                                                                                                           YOY
                                    June 30, 2018                     December 31, 2017                                 Major
       Asset item                                                                                      Proportion      Changes
                                                                                                       change(%)      Explanation
                              Amount       Proportion (%)         Amount         Proportion (%)
Property, plant and
                              6,659,992               28.67        6,714,088                 25.45            3.22
equipment
Inventories                   2,348,117               10.11        2,339,304                  8.87            1.24
Trade and other
receivables and               4,925,270               21.20        4,555,934                 17.27            3.93
prepayments
Cash and cash
                              7,787,610               33.52       11,137,723                 42.21            -8.69
equivalents




                                                                                                               9
II. The fair value of the assets and liabilities (not applicable)

III. Restriction on Assets Rights as of the End of the Reporting Period
There was no major restriction on assets rights as of the end of the reporting
period.

5. Investment
I. Summary
□ Applicable √ Not Applicable
II. Obtained major equity investment during the reporting period
□ Applicable √ Not Applicable
III. Ongoing major non-equity investment during the reporting period
√Applicable □ Not Applicable
                                                                Unit: RMB’000
                               Spending
         Investment Fixed      in the first Investment
 Project
         method/    Assets       half of    accumulated Progress Index
 Name
         source     (Y/N)         2018       (RMB mils)
                              (RMB mils)
                                                                 Announcement of this
Fushan                                                           project(NO:2017-044) was
         Self-funded Y            115,345       115,361 6%
Plant                                                            published in the website
                                                                 http://www.cninfo.com.cn
Total         --         --       115,345       115,361    --                 --

IV. Financial assets investment
a. Stock investment
□ Applicable √ Not Applicable
b. Derivative investment
□ Applicable √ Not Applicable
6. Sale of major assets and equity
I. Sale of major assets

□   Applicable √ Not Applicable
II. Sale of major equity
□ Applicable √ Not Applicable
7. Operating results of main subsidiaries and joint-stock companies whose
impact on JMC’s net profit more than 10%
√Applicable □ Not Applicable




                                                                                   10
                                                                                                              Unit: RMB
  Name of       Type of                         Registered                                                     Operating
                             Main business                       Assets       Net Assets       Turnover                        Net Profit
 Companies     Companies                         Capital                                                        Profit
Jiangling
Motors Sales                Sales vehicle,
               Subsidiary                        50,000,000   4,563,798,498   187,951,647    12,343,315,461     -84,733,435    -63,674,289
Corporation,                service parts
Ltd
                            Product heavy
JMC Heavy                   commercial
Duty Vehicle   Subsidiary   vehicle , engine,   281,793,174   2,355,155,295   -466,164,322     144,853,549     -158,940,478   -138,797,971
Co., Ltd                    component, and
                            related service


                 8.Structured entities controlled by JMC
                 □ Applicable √ Not Applicable
                 9. Forecast of business performance in the first nine months of 2018.
                 □ Applicable √ Not Applicable
                 10. Challenges and solutions
                    In 2018, the Company will continue to face fiercer competition, more
                 stringent regulatory requirements, intensifying cost pressures and a slowdown
                 in China’s economic growth. To achieve steady growth, the Company will
                 continue to focus on the following aspects:
                    i. Optimizing Company’s production system to improve efficiency and
                 product quality;
                    ii. Optimizing dealer network and marketing spending to improve market
                 share;
                    iii. Improve suppliers’ capability and parts quality; continue to reduce parts
                 purchasing cost;
                    iv. Strengthening corporate governance and application of appropriate risk
                 assessment and control mechanisms;
                    v. Sustaining the expense management and control to optimize the
                 business structure;
                    vi. Optimize and execute the Company’s growth strategies to pursue
                 sustainable and healthy growth.
                    The Company will continue to optimize cost structure, improve production
                 efficiency, mitigate management cost as well as focus on new product
                 development to deliver the launch quality and cost target through process and
                 working group that have been set up. With the support from technical partners,
                 the Company continues to promote new product development and R&D ability
                 improvement, to accelerate the progress of launching new competitive and
                 profitable products to the market and speed up the exploration and
                 development of heavy truck to enhance the company’s influence on
                 commercial vehicles. Meanwhile, the Company will devote to strengthening
                 dealer network, expanding overseas market and parts business.




                                                                                                                    11
Chapter V Major Events

1. Annual and special shareholders’ meeting
I. Shareholders’ meeting during the reporting period
                                     Investors
                                                                  Announcement
Number           Name               Attending      Meeting Date                Announcement Index
                                                                      Date
                                  Percentage (%)
                                                                              Number 2018-008
         2018 First Special                                                   publishedon the
   1                                        77.59 Feb 06, 2018 Feb 07, 2018
         Shareholders’ Meeting                                               website
                                                                              www.cninfo.com.cn.
                                                                              Number 2018-028,
         2017 Annual                                                          published on the
   2                                        76.91 June 26, 2018 June 27, 2018
         Shareholders’ Meeting                                               website
                                                                              www.cninfo.com.cn.

II. Share holders who hold vote right restored preferred shares apply to hold a
special shareholders’ meeting
□Applicable √Not Applicable

2. Proposal on profit distribution and converting capital reserve to share
capital for the reporting period
□Applicable √Not Applicable
The Company planned that neither cash dividend nor stock dividend was
distributed, and not to convert capital reserve to share capital for the first half
of 2018.

3. Commitments of actual controlling parties, shareholders, related parties,
acquirers and the Company finished in the reporting period or overdue
unfinished by the end of the reporting period
□Applicable √Not Applicable
There is no commitments of actual controlling parties, shareholders, related
parties, acquirers and the Company finished in the reporting period or
overdue unfinished by the end of the reporting period.

4. Appointment or dismissal of accounting firm
Whether the 2018 half-year report is audited?
□Yes √No
JMC 2018 half-year report is not audited.

5. Explanation of the board of directors, the supervisory board to abnormal
opinions from accounting firm for the reporting period
□Applicable √Not Applicable

6. Explanation of the board of directors to abnormal opinions from accounting
firm in 2017
□Applicable √Not Applicable

7. Related matters regarding bankruptcy
□Applicable √Not Applicable


                                                                                  12
                    The Company did not go bankrupt during the reporting period.

                    8. Litigation or arbitration
                    Significant litigation or arbitration
                    □Applicable √Not Applicable
                    There is no significant litigation or arbitration in the reporting period.

                    Other litigation
                    □Applicable √Not Applicable

                    9. Punishment
                    □Applicable √Not Applicable
                    The Company have not been punished by regulatory authorities.

                    10. Honesty and credit of JMC and its controlling shareholder or actual
                    controlling party
                    □Applicable √Not Applicable

                    11. Implementation of equity incentive plan, employee stock ownership plan
                    and other employee incentive method
                    □Applicable √Not Applicable

                    12. Major related transactions
                    I. Routine operation related party transactions
                    √Applicable □Not Applicable
                                                                                                                      As % of
                                                                   Pricing                               Amount        Total
  Transaction Parties             Content        Relationship                    Settlement Method
                                                                  Principle                             (RMB’000)   Purchases/
                                                                                                                      Revenue
Nanchang Bao-jiang
                          Raw materials          Associate of    Contracted
Steel Processing &                                                            Prepayment                   464,830         4.29
                          purchase               JMCG            price
Distribution Co., Ltd.
Jiangxi Jiangling         Parts and components   Subsidiary of   Contracted   60 days after delivery
                                                                                                           464,265         4.29
Chassis Co., Ltd.         purchase               JMCG            price        and invoicing
                                                 Controlling
                                                 shareholder
Ford and subsidiaries     Parts and components                   Contracted
                                                 of JMC and                   D/P & T/T                    450,143         4.16
of Ford                   purchase                               price
                                                 subsidiaries
                                                 of Ford
                                                 Wholly-
Jiangxi Jiangling
                          Parts and components   owned           Contracted   30 days after delivery
Special-Purpose                                                                                            397,028         3.67
                          purchase               subsidiary of   price        and invoicing
Vehicle Co., Ltd.
                                                 JMCG
GETRAG (Jiangxi)          Parts and components   Associate of    Contracted   60 days after delivery
                                                                                                           395,455         3.65
Transmission Company      purchase               JMCG            price        and invoicing
Nanchang Jiangling
                          Parts and components   Joint venture   Contracted   60 days after delivery
Hua Xiang Auto                                                                                             244,473         2.26
                          purchase               of JMCG         price        and invoicing
Components Co. ,Ltd.
Jiangling-Lear Interior   Parts and components   Joint venture   Contracted   60 days after delivery
                                                                                                           234,271         2.16
system Co., Ltd.          purchase               of JMCG         price        and invoicing
Jiangxi Jiangling                                                             40% of prepayment and
                                                 Associate of    Contracted
Motors Imp. and Exp.      Sales                                               the remains paid during      566,065         3.96
                                                 JMCG            price
Co., Ltd.                                                                     30 days after delivery


                    II. Major related party transaction concerning transfer of assets or equity



                                                                                                           13
□Applicable √Not Applicable
There was no major related party transaction concerning transfer of assets or
equity during the reporting period.

III. Related party transaction concerning outside co-investment
□Applicable √Not Applicable
There was no outside co-investment during the reporting period.

IV. Related credit and debt
√Applicable □Not Applicable
Is there non-operating related credit and debt?
□Yes √No
The Company had no non-operating related credit and debt during the
reporting period.

V. Other major related party transactions
√Applicable □Not Applicable
The balance amount of bank deposit of the Company in JMCG Finance
Company as of June 30, 2018 was RMB 861,476 thousand. The Board of
Directors reviewed and approved JMCG Finance Company Continuous Risk
Assessment Report. Please refer to the website www.cninfo.com.cn for the
original of the report which was published on August 29, 2018.

13. Non-operating funding in the Company occupied by controlling
shareholder and its affiliates
□Applicable √Not Applicable
There was no non-operating funding in the Company occupied by controlling
shareholder and its affiliates during the reporting period.

14. Major contracts and execution
I. Entrustment, contract or lease
a. Entrustment
□Applicable √Not Applicable
There was no entrustment during the reporting period.

b. Contract
□Applicable √Not Applicable
There was no contract during the reporting period.

c. Lease
√Applicable □Not Applicable
See the note 31(b) to financial statements for lease of related parties.

Project earns more than 10% of net profit.
□Applicable √Not Applicable

II Major guarantee
□Applicable √Not Applicable
The Company had no outside guarantee during the reporting period.


                                                                           14
                   III. Other important contracts
                   □Applicable √Not Applicable
                   There was no other important contract during the reporting period.

                   15. Corporation social responsibilities

                   I. Environmental protection
                   Whether the Company and affiliates is the key pollution discharge unit
                   published by environmental protection administration?
                   √Yes □No
                                Emission                                                                               Emission       Meet
    Main        Emission                   Emission Outlet        Emission                                Emission
                                 Outlet                                             Emission Standard                  Standard     Standard
  Pollutants     Ways                       Distribution        Concentration                             Amount
                                Number                                                                                 Amount        or Not
                                           3 in Mainsite, 1
                                                                                   “Wastewater
Wastewater                                 in Xiaolan Site,                                              COD:        COD≤843.34
               continuous                                   "COD:99mg/L            Discharge                                     Meet
(COD, NH-N)                 6              1 in Cast Plant                                               96.67t, NH- t, NH-
               discharge                                     NH-N:26.1mg/L"        Standard”(GB 8978-                           Standard
                                           and 1 in Axle                                                 N : 3.148t N≤21.72t
                                                                                   1996)
                                           Plant
                                                            SO2: 353mg/m3,
                                                                                   "The Emission
Exhaust gas                                51 in Mainsite, NOx : 104mg/m3,
                                                                                   Standard of Air
(SO2, NOx,                                 35 in Xiaolan    solid: 73.1mg/m3,                               SO2:
               continuous                                                          Pollutants”,” Emission             SO2≤93.01t, Meet
smoke, toluol,              125            Site, 33 in Cast toluol : 0.497mg/m3,                            11.12t,
               discharge                                                           Standard of Air                      NOx≤60.91t Standard
dimethylbenze                              Plant and 6 in   dimethylbenzene:                                NOx : 7.76t
                                                                                   Pollutants for Boiler”
ne, NMHC)                                 Axle Plant       0.19mg/m3 , NMHC:
                                                                                   (GB 13271-2014)
                                                            32.7mg/m3"


                   The construction and operation of environmental protection facilities
                   Since 2006, JMC has invested more than RMB 30 million to construct seven
                   wastewater treatment stations (including the wastewater treatment station in the
                   east plant area and Xiaolan wastewater treatment station), with the treatment
                   capacity as high as 9,000t/d. The treated wastewater reached the national
                   discharge standard. In 2018, the company plans to renew and upgrade the
                   equipment of wastewater treatment station in frame factory, and enhance the
                   treatment capacity to ensure the treated wastewater will reach the national
                   discharge standard.
                   .
                   For up-to-standard emission of waste gases, JMC has taken new control
                   measures over the years. In 2012, the Company invested RMB 10 million to
                   reconstruct the cupola furnace in the casting plant. In 2013, Xiaolan Branch
                   invested RMB 14 million to install a TNV waste gas incinerator. In 2014, JMC
                   invested RMB 14.6 million to construct the boiler coal-gas-switch project in the
                   south district. In 2017, the casting plant reconstructed the ventilation & dust
                   removal system for the smelting furnace in the large-size and middle & small-
                   sized parts workshop, and installed efficient environmental-friendly dust removal
                   equipment, effectively reducing the environmental pollution by dust. In 2018, the
                   casting plant add electric furnace dust collectors in the large-size part workshop,
                   and reconstruct the sand shakeout & dust removal system for KW moulding line ,
                   reducing the environmental pollution.

                   For noise reduction, JMC took different measures to reduce the environmental
                   impact, such as increase of protective sound-proof doors & windows,
                   establishment of noise enclosure for air blower, installation of muffler and


                                                                                                                     15
transformation of sound-proof doors & windows. All these measures can make
sure up-to-standard discharge of noise at the plant boundary.

In the process of waste management, JMC managed from the source, and
divided the generation of wastes. JMC established a temporary storage yard for
solid wastes. Warning graphic symbols have been posted at the temporary
storage site of hazardous wastes. Besides, signboards have been provided as
well, so as to remind the passer-by of probable hazards in the storage process of
hazardous wastes. In 2017, JMC invested RMB500 thousand to extend Xiaolan
storage yard for solid wastes. In 2018, the Company plans to establish a storage
yard for iron scurf and wastes in the Frame Plant, and reconstruct the garbage
station in the Engine Plant.

EIA on construction project and other administrative permits for
environmental protection

The Company strictly implements the construction project environmental impact
assessment system. With respect to new construction, expansion and
reconstruction, JMC comprehensively planned environmental protection and
evaluated the “Three Simultaneities”. From the source of design, JMC carried out
the philosophy of energy saving and low carbon all the time. The Company
carries on the environmental monitoring every year according to the requirements,
ensures the pollutant discharge meeting the requirements of discharge permit,
formulates the stricter internal control target, and strives to reduce the impact of
environmental pollution to the minimum. In 2018, JMC has received EIA approval
of renovating new energy vehicle project in Qingyunpu plant and setting up new
energy testing laboratory project .

Emergency plan on emergency environmental incidents

In order to dilute or prevent environmental risks, JMC established an emergency
preparation and response procedure and specific environmental emergency
plans (such as emergency plan on environmental pollution accidents, emergency
plan on hazardous gases and emergency plan on paint thinner), so as to
formulate corresponding control methods for potential accidents and emergences
occurred or that may probably occur. JMC organized emergency drills every year
to ensure the efficiency of emergency plan.

Environmental self-monitoring scheme

In 2018, JMC’s Qingyunpu Main Plant Area (the “Plant Area”) was listed as a key
pollutant discharging organization of wastewater/hazardous wastes. The Plant
Area monitored by itself in strict accordance with the Method for Self-monitoring
and Information Disclosure of State Key Monitoring Enterprises (Trial). Its self-
monitoring schemes, monitoring results and annual monitoring reports on
pollution sources were disclosed on the “pollution source self-monitoring
reporting platform of Jiangxi Province”. Xiaolan plant area and other plant areas
finished self-monitoring according to the EIA requirements.

Other information related to environmental protection
JMC paid high attention to environmental protection and pollution source control,
taking resource saving and cost reduction as the primary task. Moreover, the



                                                                               16
      Company also took full advantage of 6sigma, and controlled from the source, so
      as to achieve the effect of environmental improvement. In the new expansion and
      reconstruction projects, JMC laid emphasis on improving the environmental
      performance, strictly implemented the system of “Three Simultaneities”,
      transacted the EIA procedure according to national standards, stipulated the
      preventive and control measures for environmental pollution, and reported to
      competent administrative departments on environmental protection for approval.

      II. One-to-one poverty alleviation
      a. Plan on one-to-one poverty alleviation
      The Company joined the one-to-one poverty alleviation, depending on JMCG,
      in Qianmo Village, Dai Jiapu Township, Suichuang County, Jiangxi Province
      and Xianting Village, Songhu Town, Xinjian District, Nanchang City in
      accordance with the working arrangement of Jiangxi Provincial Party
      Committee and Provincial Government. The overall goal is: to help the poor
      village to achieve a well-off standard of living before 2020 by cooperating with
      the local government.

      b. Summary of one-to-one poverty alleviation in the first half
      The Company regards the realization of precision poverty relief as the basic
      strategy of precision poverty alleviation. In 2017, Xianting Village get rid of
      poverty. The Company continued to consolidate efforts of one-to-one poverty
      alleviation in the first half of 2018, and has achieved some results.

      c. Status of targeted measures in poverty alleviation
                            Item                            Unit        Amount/Progress
I.      Brief Introduction                                 ——             ——
including:1. Funding                                    RMB (‘000)                        66
            2. Sum converted from the materials          RMB (‘000)                      17.6
II.     Investments                                        ——               ——
1. Anti-poverty depending on industry development          ——               ——
2. Anti-poverty depending on employment transfer           ——               ——
3. Anti-poverty depending on relocation                    ——               ——
4. Anti-poverty depending on education                     ——               ——
including:4.1 Grants in aid to poor students            RMB (‘000)                      13.6
            4.2 Poor students in aid                      Persons                          179
5. Health Anti-poverty                                     ——               ——
6. Ecological protection anti-poverty                      ——               ——
7. Miscellaneous provisions                                ——               ——
8.    Social anti-poverty                                  ——               ——
            8.1 Investments on one-to-one anti-poverty   RMB (‘000)                      56.3
9.    Other                                                ——               ——
III.    Awards                                             ——               ——

      d. On-going plan on one-to-one poverty alleviation
      In 2018, with the help of JMCG and instruction from the government, JMC will
      lift 2 people from 2 families in Xianting Village out of poverty, pay visit and
      adopt targeted poverty-alleviation measures to 22 registered poor families. At
      the same time, JMC will fund poverty alleviation through education by
      upgrading the existing Xianting primary school into a modern rural primary
      school to provide a sound learning environment to students in Xianting
      primary school.


                                                                                 17
16. Other major events
√Applicable □Not Applicable
JMC received government incentives about RMB 160 million appropriated by
Nanchang City Qingyunpu District, Nanchang County Xiaolan Economic&
Technological Development Zone, Nanchang City wanli District and shanxi
Comprehensive reform demonstration Zone during the reporting period, which
is to support JMC’s development.

17. Major event of JMC subsidiary
□Applicable √Not Applicable




                                                                      18
                 Chapter VI Share Capital Changes & Shareholders

                 1. Changes of Shareholding Structure
                 I. Changes of shareholding structure
                         Before the change                            Change (+, -)                                  After the change
                                        Proporti
                                         on of                        Reserve-                                                    Proportion
                                                     New     Bonus
                          Shares         total                        converted       Others       Subtotal        Shares           of total
                                                    shares   Shares
                                        shares                         shares                                                     shares (%)
                                          (%)
I. Limited tradable A
                              906,855        0.10        -        -           -   -120,015         -120,015          786,840             0.09
   shares
1. Other domestic
                              906,855        0.10        -        -           -   -120,015         -120,015          786,840             0.09
   shares
Including:
Domestic legal
                              785,940        0.09        -        -           -                -              -      785,940             0.09
  person shares
Domestic natural
                              120,915        0.01        -        -           -   -120,015         -120,015                 900
  person shares
II. Unlimited tradable
                          862,307,145     99.90          -        -           -       120,015       120,015       862,427,160           99.91
    shares
1. A shares               518,307,145     60.05          -        -           -       120,015       120,015       518,427,160           60.06
2. B shares               344,000,000     39.85          -        -           -                -              -   344,000,000           39.85
III. Total                863,214,000    100.00          -        -           -                -              -   863,214,000         100.00
                 Causes of shareholding changes
                 √Applicable □Not Applicable

                 During the past three years as of June 30, 2018, the Company did not issue
                 shares and derivative securities. JMC’s total number of shares remained
                 unchanged. The change in shareholding structure was caused by the trading
                 restriction on limited A shares of 120,000 shares held by Mr. Jiang Xiangwei
                 was relived on May 23, 2018.

                 Approval of changes of shareholding structure
                 □Applicable √Not Applicable

                 Shares transfer
                 □Applicable √Not Applicable

                 Impact on accounting data, such as the latest EPS, diluted EPS, shareholders’
                 equity attributable to the equity holders of the Company, generated from
                 shares changes
                 □Applicable √Not Applicable

                 Others to be disclosed necessarily or per the requirements of securities
                 regulator
                 □Applicable √Not Applicable

                 II. Changes of limited tradable shares
                 √Applicable □Not Applicable




                                                                                                                      19
                                   Rescission of   Increase of
                 Initial Limited       the            Limited          Final Limited    Reason for             Trading
 Shareholder                          Limited
                  Tradable A                        Tradable A          Tradable A       Trading           Restriction Relief
   Name                             Tradable A
                    Shares         Shares in the   Shares in the          Shares        Restriction              Date
                                      Period          Period
                                                                                       Legal person
                                                                                       shares before
Jiang Xiangwei         120,000          120,000                    0                 0                  May 23, 2018
                                                                                       Full Circulatory
                                                                                       Share Reform
Total                  120,000          120,000                    0                 0         --             --



2. Securities issuance and listing
□Applicable √Not Applicable




                                                                                                      20
            3. Shareholders and shareholding status

Total shareholders      JMC had 32,528 shareholders, including 27,100 A-share holders, and 5,428 B-share holders.
(as of June 30, 2018)
Top ten shareholders
                                                                                                             Shares
                                                               Shares at                    Shares with
                          Shareholder       Shareholding                      Change                         due to
 Shareholder Name                                             the End of                     Trading
                             Type          Percentage (%)                      (+,-)                        mortgage
                                                                 Year                       Restriction
                                                                                                            or frozen
Jiangling Motor         State-owned
                                                     41.03    354,176,000              0                0           0
Holding Co., Ltd.       legal person
Ford Motor Company      Foreign legal
                                                        32    276,228,394              0                0           0
                        person
China Securities
                        Other                          2.63    22,743,584               0               0           0
Corporation Limited
Shanghai Automotive State-owned
                                                       1.51    13,019,610               0               0           0
Co., Ltd.               Legal person
Shanghai Gao Yi
Asset Management        Other                          1.02      8,800,000     8,800,000                0           0
Partnership (L.P.)
Central Huijin          State-owned
                                                       0.83      7,186,600              0               0           0
Investment Ltd.         legal person
JPMBLSA RE FTIF
                        Foreign legal
TEMPLETON CHINA                                        0.68      5,848,450              0               0           0
                        person
FUND GTI 5497
GAOLING                 Foreign legal
                                                       0.63      5,439,086              0               0           0
FUND,L.P.               person
TEMPLETON
                        Foreign legal
DRAGON                                                 0.56      4,836,708              0               0           0
                        person
FUND,INC.
INVESCO                 Foreign legal
                                                       0.58      5,035,746              0               0           0
FUNDS SICAV             person
Notes on association among above-mentioned                    None.
shareholders
  Top ten shareholders holding unlimited tradable shares
           Shareholder Name                       Shares without Trading Restriction              Share Type
Jiangling Motor Holding Co., Ltd.                                           354,176,000                    A share
Ford Motor Company                                                          276,228,394                    B share
China Securities Corporation Limited                                          22,743,584                   A share
Shanghai Automotive Co., Ltd.                                                 13,019,610                   A share
Shanghai Gao Yi Asset Management
                                                                                8,800,000                     A share
Partnership (L.P.)
Central Huijin Investment Ltd.                                                  7,186,600                     A share
JPMBLSA RE FTIF TEMPLETON
                                                                                5,848,450                     B share
CHINA FUND GTI 5497
GAOLING FUND,L.P.                                                               5,439,086                     B share
INVESCO FUNDS SICAV                                                             5,035,746                     B share
TEMPLETON DRAGON FUND,INC.                                                      4,836,708                     B share
Notes on association among above-           None.
mentioned shareholders
            Stock buy-back by top ten shareholders or top ten shareholders holding
            unlimited tradable shares in the reporting period
            □Yes √No
            There is no stock buy-back by top ten shareholders or top ten shareholders
            holding unlimited tradable shares in the reporting period.


                                                                                                   21
4. Change of controlling shareholders or actual controlling parties
Change of controlling shareholders
□Applicable √Not Applicable
There was no change of controlling shareholders during the reporting period.

Change of actual controlling parties
□Applicable √Not Applicable
There was no change of actual controlling parties during the reporting period.




                                                                           22
Chapter VII     Preferred Shares
□Applicable √Not Applicable
JMC have no preferred shares during the reporting period.




                                                            23
Chapter VIII     Directors, Supervisors and Senior Management
1. Changes of shares held by directors, supervisors and senior management
□Applicable √Not Applicable
There was no change of shares held by Directors, Supervisors and senior
management in the reporting period. Please refer to 2017 annual report for
details.

2. Changes of directors, supervisors and senior management
   √Applicable □Not Applicable

      Name         Position    Status            Date               Reason
Ding Wenmin       VP        Appointed      Jan 01, 2018
Gong Yuanyuan     CFO       Leave          August 01, 2018 Work rotation
Li Weihua         CFO       Appointed      August 01, 2018
                                                           Resign from the vice
Zhu Shuixing      VP         Leave         August 16, 2018 president position for the
                                                           personal reasons




                                                                       24
Chapter IX        Company Bond
Whether the Company owns the corporate bond that is lists in the securities
exchange and undue or is not paid in full although it’s due.
□Yes √No




                                                                         25
Chapter X Financial Statements




JIANGLING MOTORS CORPORATION, LTD.

FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30
JUNE 2018




                                              26
JIANGLING MOTORS CORPORATION, LTD.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts in thousands of RMB unless otherwise stated)

                                                                     Six months ended 30 June
                                                            Note          2018#           2017#

Revenue                                                      5        14,287,497         15,666,476
Taxes and surcharges                                                    (368,792)         (544,622)
Cost of sales                                                6       (12,277,724)      (12,371,957)
Gross profit                                                           1,640,981          2,749,897

Distribution expenses                                        6          (452,934)       (1,270,477)
Administrative expenses                                      6        (1,139,448)       (1,193,666)
Impairment charge of non-current assets                                   (3,607)            (3,347)
Other income                                                 8           195,360            203,584
Operating profit                                                         240,352            485,991

Finance income                                               9           106,654           127,903
Finance expenses                                             9            (3,262)           (2,003)
Finance income-net                                           9           103,392           125,900

Share of profit of investments accounted for using the
  equity method                                             15b             2,611              3,447

Profit before income tax                                                 346,355           615,338
Income tax expense                                           10          (27,404)          (62,435)
Profit for the period                                                    318,951           552,903

Profit attributable to:
Owners of the Company                                                    318,951           552,903

Total comprehensive income for the period                                318,951           552,903

Total comprehensive income attributable to:
Owners of the Company                                                    318,951           552,903

Earnings per share for profit attributable to the
shareholders of the Company for the period
  (expressed in RMB per share)
- Basic and diluted                                          11              0.37               0.64

#Unaudited financial indexes
The notes on pages 32 to 82 are an integral part of these consolidated financial statements.




                                                                                                  27
JIANGLING MOTORS CORPORATION, LTD.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE SIX MONTHS ENDED 30 JUNE 2018
 (All amounts in thousands of RMB unless otherwise stated)

                                                                                    As at
                                                                                            31 December
                                                             Note
                                                                    30 June 2018#               2017

Assets
Non-current assets
Property, plant and equipment                                 12        6,659,992              6,714,088
Lease prepayment                                              13          609,047                616,834
Intangible assets                                             14          191,924                197,860
Investments accounted for using the equity method            15b           40,485                 37,874
Other non-current assets                                                        -                    478
Deferred income tax assets                                   16           669,949                690,253
Total non-current assets                                                8,171,397              8,257,387

Current assets
Inventories                                                  17         2,348,117              2,339,304
Trade and other receivables and prepayments                  18         4,925,270              4,555,934
Cash and cash equivalents                                    19         7,787,610             11,137,723
Assets classified as held for sale                           20                 -                 93,413
Total current assets                                                   15,060,997             18,126,374

Total assets                                                           23,232,394             26,383,761




                                                                                                  28
JIANGLING MOTORS CORPORATION, LTD.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2018
 (All amounts in thousands of RMB unless otherwise stated)

                                                                                     As at
                                                             Note                            31 December
                                                                    30 June 2018#                2017

EQUITY
Share capital                                                21            863,214                863,214
Share premium                                                              816,609                816,609
Other reserves                                               22            450,914                450,914
Retained earnings                                                        8,484,321             10,441,665
Total equity                                                            10,615,058             12,572,402

LIABILITIES
Non-current liabilities
Borrowings                                                   23             3,683                  3,851
Deferred income tax liabilities                              16            26,408                 26,736
Retirement benefit obligations                               24            51,959                 54,764
Provisions for warranty and other liabilities                25           180,628                184,688
Other non-current liabilities                                                 200                    240
Total non-current liabilities                                             262,878                270,279

Current liabilities
Financial liabilities at fair value through profit or loss                  1,578                   8,493
Trade and other payables                                     26        12,161,438              13,222,540
Current income tax liabilities                                                 35                 114,906
Borrowings                                                   23               433                     428
Retirement benefit obligations                               24             4,420                   4,420
Provisions for warranty and other liabilities                25           186,554                 190,293
 Total current liabilities                                             12,354,458              13,541,080

Total liabilities                                                      12,617,336              13,811,359

Total equity and liabilities                                           23,232,394              26,383,761

#Unaudited financial indexes
The notes on pages 32 to 82 are an integral part of these consolidated financial statements.




                                                                                                   29
JIANGLING MOTORS CORPORATION, LTD.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2018
 (All amounts in thousands of RMB unless otherwise stated)


                                             Attributable to owners of the Company
                                          Share        Share         Other      Retained         Total
                                Note     capital    premium      reserves       earnings       Equity#

Balance at 1 January 2017               863,214      816,609     452,126     10,277,287     12,409,236

Profit for the six months                     -            -           -        552,903        552,903
Dividends relating to 2016                    -            -           -       (526,560)      (526,560)
Balance at 30 June 2017                 863,214      816,609     452,126     10,303,630     12,435,579

Balance at 1 January 2018               863,214      816,609     450,914     10,441,665     12,572,402

Profit for the six months                                                        318,951       318,951
Dividends relating to 2017        27                                          (2,276,295)   (2,276,295)
Balance at 30 June 2018                 863,214      816,609     450,914       8,484,321    10,615,058

#Unaudited financial indexes
The notes on pages 32 to 82 are an integral part of these consolidated financial statements.




                                                                                                   30
JIANGLING MOTORS CORPORATION, LTD.

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2018
(All amounts in thousands of RMB unless otherwise stated)

                                                                       Six months ended 30 June
                                                            Note            2018#              2017#

Cash flows from operating activities
Cash generated from operations                              28           (791,761)              (733,272)
Interest paid                                                                 (151)                  (158)
Income tax paid                                                           (114,906)              (165,971)
Net cash generated from operating activities                             (906,818)              (899,401)

Cash flows from investing activities
Purchase of financial assets at fair value through profit
  or loss                                                               (3,462,000)                      -
Purchase of property, plant and equipment (“PPE”)                       (572,583)              (407,102)
Other cash paid relating to investing activities                           (13,354)                (3,886)
Proceeds from disposal of PPE                               28               2,569                  2,097
Proceeds from repayment of financial assets at fair value
through profit or loss                                                   3,462,000                       -
Investment income received                                                  10,202                       -
Interest received                                                          129,686                120,666
Other cash received from investing activities                                  733                  5,469
Net cash used in investing activities                                     (442,747)              (282,756)

Cash flows from financing activities
Repayments of borrowings                                                      (207)                (5,226)
Dividends paid to shareholders of the Company                           (1,999,237)                  (892)
Other cash paid relating to financing activities                            (1,104)                      -
Net cash used in financing activities                                   (2,000,548)                (6,118)

Net decrease in cash and cash equivalents                               (3,350,113)            (1,188,275)
Cash and cash equivalents at beginning of year                          11,137,723             11,666,222
Effects of exchange rate changes                                                 -                       -
Cash and cash equivalents at end of period                  19           7,787,610             10,477,947

#Unaudited financial indexes
The notes on pages 32 to 82 are an integral part of these consolidated financial statements.




                                                                                                    31
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

1     General information

      Jiangling Motors Corporation, Ltd. (the “Company”) was established in the People’s Republic
      of China (the “PRC”) under the Company Law of the PRC and according to the approval of
      Hongban (1992) No. 005 of Nangchang Revolution and Authorisation Group of Company’s
      Joint Stock as a joint stock limited company to hold certain operational assets and liabilities of
      the automotive manufacturing business of Jiangxi Motors Manufacturing Factory, which was
      owned by Jiangling Motors Corporation Group (“JMCG”). The legal representative’s operating
      license of the Company is No. 913600006124469438.

      The address of the Company’s registered office is No.509, Northern Yingbin Avenue,
      Nanchang, Jiangxi Province, the PRC.

      In December 1993, the Company issued 494,000,000 domestic ordinary shares (“A share”).
      In addition, the Company issued 25,214,000 A shares as bonus shares to the existing
      shareholders in 1994. The bonus shares were issued by utilisation of the Company’s retained
      earnings.

      In 1995, the Company issued 174,000,000 domestically listed foreign shares (“B share”) and
      the Company issued 170,000,000 additional B shares in 1998.

      As at 30 June 2018, the total number of issued shares of the Company is 863,214,000
      shares, which are all listed on the Shenzhen Stock Exchange, the PRC.

      The Company and its subsidiaries (the “Group”) are principally engaged in the development,
      manufacturing and selling of automobiles, engines and automobile related parts, dies and
      tools.

      These consolidated financial statements were authorised for issue by the Board of Directors
      on 27 August 2018.

2     Summary of significant accounting policies

      The principal accounting policies applied in the preparation of these consolidated financial
      statements are set out below. These policies have been consistently applied to all the years
      presented, unless otherwise stated.

2.1   Basis of preparation

      The consolidated financial statements of the Group have been prepared in accordance with all
      applicable International Financial Reporting Standards (“IFRS”). The consolidated financial
      statements have been prepared under the historical cost convention, as modified by the
      revaluation of financial assets and financial liabilities at fair value through profit or loss.

      The preparation of financial statements in conformity with IFRS requires the use of certain
      critical accounting estimates. It also requires management to exercise its judgement in the
      process of applying the Group’s accounting policies. The areas involving a higher degree of
      judgement or complexity, or areas where assumptions and estimations are significant to the
      consolidated financial statements are disclosed in Note 4.




                                                                                                       32
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

2      Summary of significant accounting policies (continued)

2.1    Basis of preparation (continued)

2.1.1 Changes in accounting policy and disclosuresau

(a)    New and amended standards adopted by the Group

       The accounting policies adopted are consistent with those of the previous financial year and
       corresponding interim reporting period, except for the adoption of new and amended standards
       as set out below. The other standards did not have any impact on the Group’s accounting
       policies and did not require retrospective adjustments.

        IFRS 15 Revenue from contracts with customers

           The Group assessed the effects of applying the new standard on the Group’s financial
           statements and no significant impact identified except for the reclassification from
           distribution expenses as a deduction of revenue. No retrospective adjustments are required.

(b)    New standards and interpretations not yet adopted

       Certain new accounting standards and interpretations have been published that are not
       mandatory for 30 June 2018 reporting periods and have not been early adopted by the Group.
       The Group’s assessment of the impact of these new standards and interpretations is set out
       below.

            IFRS 16 Leases

            Nature of change
            IFRS 16 will result in almost all leases being recognised on the balance sheet, as the
            distinction between operating and finance leases is removed. Under the new standard,
            an asset (the right to use the leased item) and a financial liability to pay rentals are
            recognised. The only exceptions are short-term and low-value leases. The accounting for
            lessors will not significantly change.

            Impact
            The Group only have operating leases and the leased assets and the lease arrangement
            have no significant impact on financial statement.

            Date of adoption by the Group
            The new standard is mandatory for financial years commencing on or after 1 January
            2019. At this stage, the Group does not intend to adopt the standard before its effective
            date.

       There are no other standards that are not yet effective that would be expected to have a
       material impact on the Group in the current or future reporting periods and on foreseeable
       future transactions.




                                                                                                   33
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

2     Summary of significant accounting policies (continued)

2.2   Subsidiaries

      A subsidiary is an entity (including a structured entity) over which the Group has control. The
      Group controls an entity when the Group is exposed to, or has rights to, variable returns from
      its involvement with the entity and has the ability to affect those returns through its power over
      the entity. Subsidiaries are consolidated from the date on which control is transferred to the
      Group. They are deconsolidated from the date that control ceases.

      Investments in subsidiaries are accounted for at cost less impairment. Cost includes direct
      attributable costs of investment. The results of subsidiaries are accounted for by the Company
      on the basis of dividend received and receivable.

      Impairment testing of the investments in subsidiaries is required upon receiving a dividend
      from these investments if the dividend exceeds the total comprehensive income of the
      subsidiary in the period the dividend is declared or if the carrying amount of the investment in
      the separate financial statements exceeds the carrying amount in the consolidated financial
      statements of the investee’s net assets including goodwill.

2.3   Associates

      An associate is an entity over which the Group has significant influence but not control,
      generally accompanying a shareholding of between 20% and 50% of the voting rights.
      Investments in associates are accounted for using the equity method of accounting. Under the
      equity method, the investment is initially recognised at cost, and the carrying amount is
      increased or decreased to recognise the investor’s share of the profit or loss of the investee
      after the date of acquisition.

      The Group's share of post-acquisition profit or loss is recognised in profit or loss, and its share
      of post-acquisition movements in other comprehensive income is recognised in other
      comprehensive income with a corresponding adjustment to the carrying amount of the
      investment. When the Group's share of losses in an associate equals or exceeds its interest in
      the associate, including any other unsecured receivables, the Group does not recognise
      further losses, unless it has incurred legal or constructive obligations or made payments on
      behalf of the associate.

      The Group determines at each reporting date whether there is any objective evidence that the
      investment in the associate is impaired. If this is the case, the Group calculates the amount of
      impairment as the difference between the recoverable amount of the associate and its
      carrying value and recognises the amount adjacent to ‘share of profit of investments
      accounted for using equity method’ in profit or loss.

      Profits and losses resulting from upstream and downstream transactions between the Group
      and its associate are recognised in the Group’s financial statements only to the extent of
      unrelated investor’s interests in the associates. Unrealised losses are eliminated unless the
      transaction provides evidence of an impairment of the asset transferred. Accounting policies of
      associates have been changed where necessary to ensure consistency with the policies
      adopted by the Group.

      Gains or losses on dilution of equity interest in associates are recognised in profit or loss.




                                                                                                        34
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

2     Summary of significant accounting policies (continued)

2.4   Segment Reporting

      Operating segments are reported in a manner consistent with the internal reporting provided
      to the chief operating decision-maker. The chief operating decision-maker, who is responsible
      for allocating resources and assessing performance of the operating segments, has been
      identified as the executive committee that makes strategic decisions.

2.5   Foreign currency translation

(1)   Functional and presentation currency

      Items included in the financial statements of each of the Group’s entities are measured using
      the currency of the primary economic environment in which the entity operates (the “functional
      currency”). The consolidated financial statements are presented in Renminbi (“RMB”), which is
      the Company’s functional and the Group’s presentation currency.

(2)   Transactions and balances

      Foreign currency transactions are translated into the functional currency using the exchange
      rates prevailing at the dates of the transactions or valuation where items are remeasured.
      Foreign exchange gains and losses resulting from the settlement of such transactions and
      from the translation at year-end exchange rates of monetary assets and liabilities
      denominated in foreign currencies are recognised in profit or loss, except when deferred in
      equity as qualifying cash flow hedges and qualifying net investment hedges.

      Foreign exchange gains and losses are presented in profit or loss within ‘other income/
      (expense)-net’.

      Changes in the fair value of monetary securities denominated in foreign currency classified as
      available-for-sale are analysed between translation differences resulting from changes in the
      amortised cost of the security and other changes in the carrying amount of the security.
      Translation differences related to changes in amortised cost are recognised in profit or loss,
      and other changes in carrying amount are recognised in other comprehensive income.

      Translation differences on non-monetary financial assets and liabilities such as equities held
      at fair value through profit or loss are recognised in profit or loss as part of the fair value gain
      or loss. Translation differences on non-monetary financial assets, such as equities classified
      as available-for-sale, are included in other comprehensive income.




                                                                                                         35
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

2     Summary of significant accounting policies (continued)

2.6   Property, plant and equipment

      Property, plant and equipment is stated at historical cost less accumulated depreciation and
      any impairment losses. Historical cost includes expenditure that is directly attributable to the
      acquisition or construction of the items.

      Subsequent costs are included in the asset’s carrying amount or recognised as a separate
      asset, as appropriate, only when it is probable that future economic benefits associated with
      the item will flow to the Group and the cost of the item can be measured reliably. The carrying
      amount of the replaced part is derecognised. All other repairs and maintenance are charged to
      profit or loss during the financial period in which they are incurred.

      Depreciation is calculated using the straight-line method to allocate their cost to their residual
      values over their estimated useful lives, as follows:

      Buildings                                                                            35-40 years
      Plant and machinery                                                                  10-15 years
      Motor vehicles                                                                        6-10 years
      Moulds                                                                                   5 years
      Electronic and other equipment                                                         5-7 years

      The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end
      of each reporting period.

      An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
      carrying amount is greater than its estimated recoverable amount (Note 2.9).

      Gains and losses on disposals are determined by comparing the proceeds with the carrying
      amount and are recognised within ‘other income/(expense) - net’ in profit or loss.

      Assets under construction represent buildings under construction and plant and equipment
      pending installation, and are stated at cost. Costs include construction and acquisition costs. No
      provision for depreciation is made on assets under construction until such time as the relevant
      assets are completed and ready for intended use. When the assets concerned are brought into
      use, the costs are transferred to property, plant and equipment and depreciated in accordance
      with the policy as stated above.

2.7   Lease prepayment

      Lease prepayment represents upfront prepayment made for the land use rights, and is
      expensed in profit or loss on a straight-line basis over the period of the lease or when there is
      impairment, the impairment is expensed in profit or loss.




                                                                                                         36
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

2     Summary of significant accounting policies (continued)

2.8   Intangible assets

(1)   Goodwill

      Goodwill arises on the acquisition of subsidiaries represents the excess of the consideration
      transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date
      fair value of any previous equity interest in the acquiree over the fair value of the identified net
      assets acquired.

      For the purpose of impairment testing, goodwill acquired in a business combination is allocated
      to each of the cash-generating units (“CGUs”), or groups of CGUs, that is expected to benefit
      from the synergies of the combination. Each unit or group of units to which the goodwill is
      allocated represents the lowest level within the entity at which the goodwill is monitored for
      internal management purposes. Goodwill is monitored at the operating segment level.

      Goodwill impairment reviews are undertaken annually or more frequently if events or changes in
      circumstances indicate a potential impairment. The carrying value of the CGU containing the
      goodwill is compared to the recoverable amount, which is the higher of value in use and the fair
      value less costs of disposal. Any impairment is recognised immediately as an expense and is
      not subsequently reversed.

(2)   Research and development

      Research expenditure is recognised as an expense as incurred. Costs incurred on development
      projects (relating to the design and testing of new or improved products) are recognised as
      intangible assets when the following criteria are fulfilled:

      (a) it is technically feasible to complete the intangible asset so that it will be available for use or
          sale;
      (b) management intends to complete the intangible asset and use or sell it;
      (c) there is an ability to use or sell the intangible asset;
      (d) adequate technical, financial and other resources to complete the development and to use
          or sell the intangible asset are available; and
      (e) the expenditure attributable to the intangible asset during its development can be reliably
          measured.

      The development cost of an internally generated intangible asset is the sum of the expenditure
      incurred from the date the asset meets the recognition criteria above to the date when it is
      available for use. The development costs capitalized in connection with the intangible asset
      include costs of materials and services used or consumed and employee costs incurred in the
      creation of the asset.

      Capitalised development costs are recorded as intangible assets and amortised from the point at
      which the asset is ready for use on a straight-line basis over its useful life.

      Other development expenditures that do not meet these criteria are recognised as an expense
      as incurred. Development costs previously recognised as an expense are not recognised as an
      asset in a subsequent period.




                                                                                                            37
       JIANGLING MOTORS CORPORATION, LTD.

       FOR THE SIX MONTHS ENDED 30 JUNE 2018
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)

2      Summary of significant accounting policies (continued)

2.8    Intangible assets (continued)

(3)    Computer software

       Acquired computer software licences are capitalised on the basis of the costs incurred to acquire
       and bring to use the specific software. These costs are amortised over their estimated useful
       lives of 5 years.

(4)    Non-patent technology

       Non-patent technology is capitalised from the development cost. These costs are amortised over
       their estimated useful lives of 5 years.

2.9    Impairment of non-financial assets

       Intangible assets that have an indefinite useful life or intangible assets not ready to use are not
       subject to amortisation and are tested annually for impairment. Assets that are subject to
       amortisation are reviewed for impairment whenever events or changes in circumstances indicate
       that the carrying amount may not be recoverable. An impairment loss is recognised for the
       amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
       amount is the higher of an asset’s fair value less costs of disposal and value in use. For the
       purposes of assessing impairment, assets are grouped at the lowest levels for which there are
       separately identifiable cash flows (cash-generating units). Non-financial assets other than
       goodwill that suffered an impairment are reviewed for possible reversal of the impairment at
       each reporting date.

2.10   Non-current assets held-for-sale

       Non-current assets are classified as held for sale when their carrying amount is to be recovered
       principally through a sale transaction and a sale is considered highly probable. The non-current
       assets (except for certain assets as explained below), are stated at the lower of carrying amount
       and fair value less costs to sell. Deferred tax assets and financial assets (other than investments
       in subsidiaries and associates), which are classified as held for sale, would continue to be
       measured in accordance with the policies set out elsewhere in Note 2.

2.11   Financial assets

(1)    Classification

       The Group classifies its financial assets in the following categories: at fair value through profit
       or loss, loans and receivables, and available-for-sale. The classification depends on the
       purpose for which the financial assets were acquired. Management determines the
       classification of its financial assets at initial recognition.

(a)    Financial assets at fair value through profit or loss

       Financial assets at fair value through profit or loss are financial assets held for trading. A
       financial asset is classified in this category if acquired principally for the purpose of selling in
       the short term. Derivatives are also categorised as held for trading unless they are designated
       as hedges. Assets in this category are classified as current assets if expected to be settled
       within 12 months; otherwise, they are classified as non-current.




                                                                                                          38
       JIANGLING MOTORS CORPORATION, LTD.

       FOR THE SIX MONTHS ENDED 30 JUNE 2018
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)

2      Summary of significant accounting policies (continued)

2.11   Financial assets (continued)

(1)    Classification (continued)

(b)    Loans and receivables

       Loans and receivables are non-derivative financial assets with fixed or determinable
       payments that are not quoted in an active market. They are included in current assets, except
       for the amounts that are settled or expected to be settled more than 12 months after the end
       of the reporting period. These are classified as non-current assets.

(c)    Available-for-sale financial assets

       Available-for-sale financial assets are non-derivatives that are either designated in this
       category or not classified in any of the other categories. They are included in non-current
       assets unless the investment matures or management intends to dispose of it within 12
       months of the end of the reporting period.

(2)    Recognition and measurement

       Regular way purchases and sales of financial assets are recognised on the trade-date-the
       date on which the Group commits to purchase or sell the asset. Investments are initially
       recognised at fair value plus transaction costs for all financial assets not carried at fair value
       through profit or loss. Financial assets carried at fair value through profit or loss are initially
       recognised at fair value, and transaction costs are expensed in profit or loss. Financial assets
       are derecognised when the rights to receive cash flows from the investments have expired or
       have been transferred and the Group has transferred substantially all risks and rewards of
       ownership. Available-for-sale financial assets and financial assets at fair value through profit
       or loss are subsequently carried at fair value. Loans and receivables are subsequently carried
       at amortised cost using the effective interest method.

       Gains or losses arising from changes in the fair value of the ‘financial assets at fair value
       through profit or loss’ category are presented in profit or loss within ‘other income/(expense)-
       net’ in the period in which they arise. Dividend income from financial assets at fair value
       through profit or loss is recognised in profit or loss as part of other income when the Group’s
       right to receive payments is established.

       Changes in the fair value of monetary and non-monetary securities classified as available-for-
       sale are recognised in other comprehensive income.

       When securities classified as available-for-sale are sold or impaired, the accumulated fair
       value adjustments recognised in equity are included in profit or loss as ‘gains and losses from
       investment securities’.

       Interest on available-for-sale securities calculated using the effective interest method is
       recognised in profit or loss as part of other income. Dividends on available-for-sale equity
       instruments are recognised in profit or loss as part of other income when the Group’s right to
       receive payments is established.




                                                                                                         39
       JIANGLING MOTORS CORPORATION, LTD.

       FOR THE SIX MONTHS ENDED 30 JUNE 2018
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)

2      Summary of significant accounting policies (continued)

2.12   Financial liabilities at fair value through profit or loss and offsetting financial
       instruments

       Financial liabilities at fair value through profit or loss are financial liabilities held for trading. A
       financial liability is classified in this category if incurred principally for the purpose of selling in the
       short term. A financial liability initially recognised at fair value, and transaction costs are
       expensed in profit or loss. Subsequent measurements are measured at fair value. Liabilities in
       this category are classified as current liabilities if expected to be settled within 12 months;
       otherwise, they are classified as non-current. A financial liability is derecognised when it is
       extinguished.

       Financial assets and liabilities are offset and the net amount reported in the statement of
       financial position when there is a legally enforceable right to offset the recognised amounts
       and there is an intention to settle on a net basis or realise the asset and settle the liability
       simultaneously. The legally enforceable right must not be contingent on future events and
       must be enforceable in the normal course of business and in the event of default, insolvency
       or bankruptcy of the Company or the counterparty.

2.13   Impairment of financial assets

(1)    Assets carried at amortised cost

       The Group assesses at the end of each reporting period whether there is objective evidence
       that a financial asset or group of financial assets is impaired. A financial asset or a group of
       financial assets is impaired and impairment losses are incurred only if there is objective
       evidence of impairment as a result of one or more events that occurred after the initial
       recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the
       estimated future cash flows of the financial asset or group of financial assets that can be
       reliably estimated.

       Evidence of impairment may include indications that the debtors or a group of debtors is
       experiencing significant financial difficulty, default or delinquency in interest or principal
       payments, the probability that they will enter bankruptcy or other financial reorganisation, and
       where observable data indicate that there is a measurable decrease in the estimated future
       cash flows, such as changes in arrears or economic conditions that correlate with defaults.

       For loans and receivables category, the amount of the loss is measured as the difference
       between the asset’s carrying amount and the present value of estimated future cash flows
       (excluding future credit losses that have not been incurred) discounted at the financial asset’s
       original effective interest rate. The carrying amount of the asset is reduced and the amount of
       the loss is recognised in profit or loss. If a loan or held-to-maturity investment has a variable
       interest rate, the discount rate for measuring any impairment loss is the current effective
       interest rate determined under the contract. As a practical expedient, the Group may
       measure impairment on the basis of an instrument’s fair value using an observable market
       price.

       If, in a subsequent period, the amount of the impairment loss decreases and the decrease
       can be related objectively to an event occurring after the impairment was recognised (such as
       an improvement in the debtor’s credit rating), the reversal of the previously recognised
       impairment loss is recognised in profit or loss.




                                                                                                                  40
       JIANGLING MOTORS CORPORATION, LTD.

       FOR THE SIX MONTHS ENDED 30 JUNE 2018
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)

2      Summary of significant accounting policies (continued)

2.13   Impairment of financial assets (continued)

(2)    Assets classified as available-for-sale

       The Group assesses at the end of each reporting period whether there is objective evidence
       that a financial asset or a group of financial assets is impaired.

       For debt securities, if any such evidence exists the cumulative loss – measured as the
       difference between the acquisition cost and the current fair value, less any impairment loss
       on that financial asset previously recognised in profit or loss – is reclassified from equity and
       recognised in profit or loss. If, in a subsequent period, the fair value of a debt instrument
       classified as available-for-sale increases and the increase can be objectively related to an
       event occurring after the impairment loss was recognised in profit or loss, the impairment loss
       is reversed through profit or loss.

       For equity investments, a significant or prolonged decline in the fair value of the security
       below its cost is also evidence that the assets are impaired. If any such evidence exists the
       cumulative loss – measured as the difference between the acquisition cost and the current
       fair value, less any impairment loss on that financial asset previously recognised in profit or
       loss – is reclassified from equity and recognised in profit or loss. Impairment losses
       recognised in profit or loss on equity instruments are not reversed through profit or loss.

2.14 Inventories

       Inventories are stated at the lower of cost and net realisable value. Cost is determined using the
       weighted average method. The cost of finished goods and work in progress comprises raw
       materials, direct labour, other direct costs and related production overheads (based on normal
       operating capacity). It excludes borrowing costs. Net realisable value is the estimated selling
       prices in the ordinary course of business, less applicable variable distribution expenses.

2.15   Trade and other receivables

       Trade receivables are amounts due from customers for merchandise sold or services performed
       in the ordinary course of business. If collection of trade and other receivables is expected in one
       year or less (or in the normal operating cycle of the business if longer), they are classified as
       current assets. If not, they are presented as non-current assets.

       Trade and other receivables are recognised initially at fair value and subsequently measured
       at amortised cost using the effective interest method, less allowance for impairment. See Note
       2.11(2) for further information about the Group’s accounting for trade receivables and Note
       2.13 for a description of the Group’s impairment policies.

2.16 Cash and cash equivalents

        In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand,
        deposits held at call with banks and other short-term highly liquid investments with original
        maturities of three months or less.




                                                                                                         41
       JIANGLING MOTORS CORPORATION, LTD.

       FOR THE SIX MONTHS ENDED 30 JUNE 2018
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)

2      Summary of significant accounting policies (continued)

2.17   Share capital

       Share capital consists of “A” and “B” shares.

       Incremental costs directly attributable to the issue of new shares are shown in equity as a
       deduction, net of tax, from the proceeds.

       Where any group company purchases the Company’s equity share capital (treasury shares), the
       consideration paid, including any directly attributable incremental costs (net of income taxes) is
       deducted from equity attributable to owners of the Company until the shares are cancelled or
       reissued. Where such shares are subsequently reissued, any consideration received, net of any
       directly attributable incremental transaction costs and the related income tax effects, is included
       in equity attributable to the Company’s shareholders.

2.18   Trade payables

       Trade payables are obligations to pay for goods or services that have been acquired in the
       ordinary course of business from suppliers. Accounts payable are classified as current liabilities
       if payment is due within one year or less (or in the normal operating cycle of the business if
       longer). If not, they are presented as non-current liabilities.

       Trade payables are recognised initially at fair value and subsequently measured at amortised
       cost using the effective interest method.

2.19   Borrowings

       Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
       subsequently carried at amortised cost; any difference between the proceeds (net of transaction
       costs) and the redemption value is recognised in profit or loss over the period of the borrowings
       using the effective interest method.

       Borrowings are removed from the balance sheet when the obligation specified in the contract is
       discharged, cancelled or expired. The difference between the carrying amount of a financial
       liability that has been extinguished or transferred to another party and the consideration paid,
       including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as
       other income or finance costs.

       Borrowings are classified as current liabilities unless the Group has an unconditional right to
       defer settlement of the liability for at least 12 months after the end of the reporting period.

2.20   Borrowing costs

       General and specific borrowing costs directly attributable to the acquisition, construction or
       production of qualifying assets, which are assets that necessarily take a substantial period of
       time to get ready for their intended use or sale, are added to the cost of those assets, until such
       time as the assets are substantially ready for their intended use or sale.

       Investment income earned on the temporary investment of specific borrowings pending their
       expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

       All other borrowing costs are recognised in profit or loss in the period in which they are incurred.




                                                                                                              42
       JIANGLING MOTORS CORPORATION, LTD.

       FOR THE SIX MONTHS ENDED 30 JUNE 2018
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)

2      Summary of significant accounting policies (continued)

2.20   Borrowing costs (continued)

       Borrowing costs include interest expense, finance charges in respect of finance lease and
       exchange differences arising from foreign currency borrowings to the extent that they are
       regarded as an adjustment to interest costs. The exchange gains and losses that are an
       adjustment to interest costs include the interest rate differential between borrowing costs that
       would be incurred if the entity had borrowed funds in its functional currency, and the borrowing
       costs actually incurred on foreign currency borrowings. Such amounts are estimated based on
       interest rates on similar borrowings in the entity’s functional currency.

       When the construction of the qualifying assets takes more than one accounting period, the
       amount of foreign exchange differences eligible for capitalisation is determined for each annual
       period and are limited to the difference between the hypothetical interest amount for the
       functional currency borrowings and the actual interest incurred for foreign currency borrowings.
       Foreign exchange differences that did not meet the criteria for capitalisation in previous years
       should not be capitalised in subsequent years.

2.21   Current and deferred income tax

       The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or
       loss, except to the extent that it relates to items recognised in other comprehensive income or
       directly in equity. In this case the tax is also recognised in other comprehensive income or
       directly in equity, respectively.

(1)    Current income tax

       The current income tax charge is calculated on the basis of the tax laws enacted or
       substantively enacted at the balance sheet date in the PRC. Management periodically evaluates
       positions taken in tax returns with respect to situations in which applicable tax regulation is
       subject to interpretation. It establishes provisions where appropriate on the basis of amounts
       expected to be paid to the tax authorities.

(2)    Deferred income tax

       Inside basis differences

       Deferred income tax is recognised, using the liability method, on temporary differences arising
       between the tax bases of assets and liabilities and their carrying amounts in the consolidated
       financial statements. However, deferred tax liabilities are not recognised if they arise from the
       initial recognition of goodwill, the deferred income tax is not accounted for if it arises from initial
       recognition of an asset or liability in a transaction other than a business combination that at the
       time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax
       is determined using tax rates (and laws) that have been enacted or substantively enacted by the
       balance sheet date and are expected to apply when the related deferred income tax asset is
       realised or the deferred income tax liability is settled.




                                                                                                             43
       JIANGLING MOTORS CORPORATION, LTD.

       FOR THE SIX MONTHS ENDED 30 JUNE 2018
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)

2      Summary of significant accounting policies (continued)

2.21   Current and deferred income tax (continued)

(2)    Deferred income tax (continued)

       Deferred income tax assets are recognised only to the extent that it is probable that future
       taxable profit will be available against which the temporary differences can be utilised.

       Outside basis differences

       Deferred income tax liabilities are provided on taxable temporary differences arising from
       investments in subsidiaries, associates and joint arrangements, except for deferred income tax
       liability where the timing of the reversal of the temporary difference is controlled by the Group
       and it is probable that the temporary difference will not reverse in the foreseeable future.
       Generally the Group is unable to control the reversal of the temporary difference for associates.
       Only when there is an agreement in place that gives the Group the ability to control the reversal
       of the temporary difference in the foreseeable future, deferred tax liability in relation to taxable
       temporary differences arising from the associate’s undistributed profits is not recognised.

       Deferred income tax assets are recognised on deductible temporary differences arising from
       investments in subsidiaries and associate only to the extent that it is probable the temporary
       difference will reverse in the future and there is sufficient taxable profit available against which
       the temporary difference can be utilised.

(3)    Offsetting

       Deferred income tax assets and liabilities are offset when there is a legally enforceable right to
       offset current tax assets against current tax liabilities and when the deferred income taxes
       assets and liabilities relate to income taxes levied by the same taxation authority on either the
       taxable entity or different taxable entities where there is an intention to settle the balances on a
       net basis.

2.22   Employee benefits

(1)    Pension obligations

       The Group contributes on a monthly basis to a defined contribution retirement scheme managed
       by the PRC government. The contribution to the scheme is charged to profit or loss as and
       when incurred. The Group’s obligations are determined at a certain percentage of the salaries of
       the employees.

       In addition, the Group provides supplementary pension subsidies to certain qualified employees.
       Such supplementary pension subsidies are considered as under defined benefit plans. The
       liability recognised in the statement of financial position in respect of these defined benefit plans
       is the present value of the defined benefit obligation at the balance sheet date less the fair value
       of plan assets, together with adjustments for recognised actuarial gains or losses and past
       service cost. The defined benefit obligation is calculated annually by independent actuaries
       using the projected unit credit method. The present value of the defined benefit obligation is
       determined by discounting the estimated future cash outflows according to the terms of the
       related pension liability.




                                                                                                           44
        JIANGLING MOTORS CORPORATION, LTD.

        FOR THE SIX MONTHS ENDED 30 JUNE 2018
        NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
        (All amounts in thousands of RMB unless otherwise stated)

2       Summary of significant accounting policies (continued)

2.22    Employee benefits (continued)

(1)     Pension obligations (continued)

        The current service cost of the defined benefit plan, recognised in profit or loss in employee
        benefit expense, except where included in the cost of an asset, reflects the increase in the
        defined benefit obligation results from employee service in the current year, benefit changes,
        curtailments and settlements.

        Past-service costs are recognised immediately in profit or loss.

        The net interest cost is calculated by applying the discount rate to the net balance of the defined
        benefit obligation and the fair value of plan assets. This cost is included in employee benefit
        expense in profit or loss.

        Actuarial gains and losses arising from experience adjustments and changes in actuarial
        assumptions are charged or credited to equity in other comprehensive income in the period in
        which they arise.

 (2)    Housing fund and other benefits

        The Group’s full-time employees are entitled to participate in a state-sponsored housing fund.
        The fund can be used by the employees for the purchase of apartment accommodation, or
        may be withdrawn upon their retirement. The Group is required to make annual contributions
        to the state-sponsored housing fund equivalent to a certain percentage of the employees’
        salaries.

 (3)    Bonus entitlement

        The expected cost of bonus payments is recognised as a liability when the Group has a
        present legal or constructive obligation as a result of services rendered by employees and a
        reliable estimate of the obligation can be made. Liabilities for bonus are expected to be settled
        within twelve months and are measured at the amounts expected to be paid when they are
        settled.

 2.23   Provisions

        Provisions, mainly warranty costs, are recognised when: the Group has a present legal or
        constructive obligation as a result of past events; it is probable that an outflow of resources will
        be required to settle the obligation; and the amount has been reliably estimated. Provisions are
        not recognised for future operating losses.

        Where there are a number of similar obligations, the likelihood that an outflow will be required in
        settlement is determined by considering the class of obligations as a whole. A provision is
        recognised even if the likelihood of an outflow with respect to any one item included in the same
        class of obligations may be small.

        Provisions are measured at the present value of the expenditures expected to be required to
        settle the obligation using a pre-tax rate that reflects current market assessments of the time
        value of money and the risks specific to the obligation. The increase in the provision due to
        passage of time is recognised as interest expense.




                                                                                                           45
       JIANGLING MOTORS CORPORATION, LTD.

       FOR THE SIX MONTHS ENDED 30 JUNE 2018
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)

2      Summary of significant accounting policies (continued)

2.24   Revenue recognition

       An entity shall recognize revenue when (or as) the entity satisfies a performance obligation by
       transferring a promised good or service (that is, an asset) to a customer. An asset is transferred
       when (or as) the customer obtains control of that asset. A customer obtains control of a good or
       service if it has the ability to direct the use of and obtain substantially all of the remaining
       benefits from that good or service.

(1)    Sales of goods

       The Group recognises revenue when the goods is transferred to the customer and customer
       obtain control of the goods. Consistent with industry practices, the Group provides the credit
       period to the customer and there is no significant financing component. The Group provides
       quality warranty to the customer, and recognises as a liability.

       The Group provides sales discounts to dealers, the revenue is recognised on a net amount after
       deducting the estimated discount based on historical experience.

(2)    Rental income

       Rental income is recognised on a straight-line basis over the period of the rental contracts.

(3)    Rendering of services

       The Group provides service of vehicle maintenance. The related revenue is recognised using
       the percentage of completion method, with the stage of completion being determined based on
       proportion of costs incurred to date to the estimated total costs.

2.25   Interest income

       Interest income is recognised using the effective interest method. When a loan and receivable is
       impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated
       future cash flow discounted at the original effective interest rate of the instrument, and continues
       unwinding the discount as interest income. Interest income on impaired loan and receivables
       are recognised using the original effective interest rate.

2.26   Leases

       Leases in which a significant portion of the risks and rewards of ownership are retained by the
       lessor are classified as operating leases. Payments made under operating leases (net of any
       incentives received from the lessor) are charged to profit or loss on a straight-line basis over the
       period of the lease.

2.27   Dividend distribution

       Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s
       financial statements in the period in which the dividends are approved by the Company’s
       shareholders, where appropriate.




                                                                                                          46
       JIANGLING MOTORS CORPORATION, LTD.

       FOR THE SIX MONTHS ENDED 30 JUNE 2018
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)

2      Summary of significant accounting policies (continued)

2.28   Government grants

       Government grants refer to the monetary or non-monetary assets obtained by the Group from
       the government, including tax return, financial subsidy and etc.

       Government grants are recognised when the grants can be received and the Group can
       comply with all attached conditions. If a government grant is a monetary asset, it will be
       measured at the amount received or receivable. If a government grant is a non-monetary
       asset, it will be measured at its fair value. If it is unable to obtain its fair value reliably, it will be
       measured at its nominal amount.

       Government grants related to assets refer to government grants which are obtained by the
       Group for the purposes of purchase, construction or acquisition of the long-term assets.
       Government grants related to income refer to the government grants other than those related
       to assets.

       Government grants related to assets will be recorded as deferred income and recognised
       evenly in profit or loss over the useful lives of the related assets. However, the government
       grants measured at their nominal amounts will be directly recorded in profit and loss for the
       current period.

       Government grants related to income will be recorded as deferred income and recognised in
       profit or loss in the period in which the related expenses are recognised if the grants are
       intended to compensate for future expenses or losses, and otherwise recognised in profit or
       loss for the current period if the grants are used to compensate for expenses or losses that
       have been incurred.

3      Financial risk management

3.1    Financial risk factors

       The Group’s activities expose it to a variety of financial risks: market risk (including foreign
       exchange risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk
       management programme focuses on the unpredictability of financial markets and seeks to
       minimise potential adverse effects on the Group’s financial performance.

       Risk management is carried out by Finance Department under policies approved by the Board
       of Directors.

(1)    Market risk

(a)    Foreign exchange risk

       The Group operates domestically and is exposed to foreign exchange risk arising from various
       currency exposures, primarily with respect to other payables dominated in US dollar (“USD”)
       and Euro.

       Management has set up a policy to require the Group to manage their foreign exchange risk
       against their functional currency. Foreign exchange risk arises when future commercial
       transactions or recognised assets or liabilities are denominated in a currency that is not the
       Company’s functional currency.




                                                                                                                 47
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

3     Financial risk management (continued)

3.1   Financial risk factors (continued)

(1)   Market risk (continued)

(a)   Foreign exchange risk (continued)

      As at 30 June 2018, if RMB had strengthened/weakened by 10% against USD with all other
      variable held constant, the Group’s net profit for the year then ended would have been
      approximately RMB21,910,000 (2017: RMB20,650,000) higher/lower.

      As at 30 June 2018, if RMB had strengthened/weakened by 10% against Euro with all other
      variable held constant, the Group’s net profit for the year then ended would have been
      approximately RMB6,761,000 (2017: RMB9,263,000) higher/lower.

(b)   Interest rate risk

      The Group’s income and operating cash flows are substantially independent of changes in
      market interest rates. As at 30 June 2018, a large portion of its bank deposits and all of its
      borrowings were at fixed rate. The Group has not used any interest rate swaps to hedge its
      exposure to interest rate risk.

      As at 30 June 2018, if the interest rate of the Group’s bank deposits had been
      increased/decreased by 10% and all other variables were held constant, the Group’s net profit
      for the year then ended would have been increased/decreased by approximately
      RMB8,019,000 (2017: RMB19,352,000).

(2)   Credit risk

      The Group’s maximum exposure to credit risk in relation to financial assets is the carrying
      amounts of cash and cash equivalents and trade and other receivables.

      As at 30 June 2018, the Group had cash of approximately RMB861,476,000 (2017:
      RMB1,120,806,000) deposited in Jiangling Motor Group Finance Company (“JMCF”), which is
      a non-bank financial institution and a subsidiary of JMCG (Note 19). The Group’s other bank
      deposits are mainly deposited in state-owned banks or other listed banks. Management
      believes all these financial institutions have high credit quality without significant credit risk.

      All the Group’s trade and other receivables have no collateral. However, the Group has
      policies in place to ensure that sales are made to customers with appropriate credit history
      and the Group performs periodic credit evaluations of its customers. The Group assesses the
      credit quality of each customer by taking into account its financial position, past experience
      and other factors. Credit limit and terms are reviewed on periodic basis, and the financial
      department is responsible for such monitoring procedures. In determining whether provision
      for impairment is required, the Group takes into consideration the aging status and the
      likelihood of collection. In this regards, the directors of the Company are satisfied that the risks
      is minimal as all customers are existing ones or related parties and have no default in the past
      and adequate provision for impairment, if any, has been made in the financial statements after
      assessing the collectability of individual debts. Further quantitative disclosures in respect of
      the impairment of trade and other receivables are set out in Note 18.




                                                                                                         48
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

3     Financial risk management (continued)

3.1   Financial risk factors (continued)

(3)   Liquidity risk

      Cash flow forecasting is performed in the operating entities of the Group in and aggregated by
      Finance Department. Finance Department monitors rolling forecasts of the Group's liquidity
      requirements to ensure it has sufficient cash to meet operational needs while maintaining
      sufficient headroom on its undrawn committed borrowing facilities (Note 23) at all times so that
      the Group does not breach borrowing limits or covenants (where applicable) on any of its
      borrowing facilities.

      The table below analyses the Group’s financial liabilities into relevant maturity groupings
      based on the remaining period at the balance sheet date to the contractual maturity date. The
      amounts disclosed in the table are the contractual undiscounted cash flows.

                                        Less than 1        Between 1        Between 2            Over 5
                                               year       and 2 years      and 5 years            years

      At 30 June 2018
      Bank borrowings
       - Principals                              433              433             1,300            1,950
       - Interests                                60               54              122                73
      Financial liabilities at fair
        value through profit or loss          1,578                 -                 -                -
      Trade and other payables           11,339,878                 -                 -                -
                                         11,341,949               487             1,422            2,023

      At 31 December 2017
      Bank borrowings
       - Principals                              428              428              1,284           2,139
       - Interests                                63               56                130              88
      Financial liabilities at fair
         value through profit or loss         8,493                 -                  -               -
      Trade and other payables           12,636,400                 -                  -               -
                                         12,645,384               484              1,414           2,227

3.2   Capital risk management

      The Group’s objectives when managing capital are to safeguard the Group’s ability to continue
      as a going concern in order to provide returns for shareholders and benefits for other
      stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

      In order to maintain or adjust the capital structure, the Group may adjust the amount of
      dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets
      to reduce debt.

      Consistent with others in the industry, the Group monitors capital on the basis of the gearing
      ratio. This ratio is calculated as borrowings divided by total capital. Total capital is calculated
      as equity, as shown in the consolidated statement of financial position, plus borrowings. The
      Group aims to maintain the gearing ratio at a reasonable level.




                                                                                                        49
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

3     Financial risk management (continued)

3.2   Capital risk management (continued)

      The gearing ratios at 30 June 2018 and 31 December 2017 were as follows:

                                                            30 June 2018             31 December 2017

      Total borrowings                                                 4,116                        4,279
      Total equity                                                10,615,058                   12,572,402
      Total capital                                               10,619,174                   12,576,681

      Gearing ratio                                                   0.04%                         0.03%

3.3   Fair value estimation

      The inputs to valuation techniques used to measure fair value are categorised into three levels
      within a fair value hierarchy as follows:

           Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
           Inputs other than quoted prices included within level 1 that are observable for the asset
           or liability, either directly (that is, as prices) or indirectly (that is, derived from prices)
           (level 2).
           Inputs for the asset or liability that are not based on observable market data (that is,
           unobservable inputs) (level 3).

      Financial assets and liabilities at fair value through profit or loss are forward exchange
      contracts which are not traded in an active market. The fair value is determined by using
      valuation techniques which maximised the use of observable market data where it is available
      and rely as little as possible on entity specific estimates. Since all significant inputs required to
      value forward exchange contracts are observable, the forward exchange contracts are
      classified as level 2.

      The carrying amounts of the Group’s financial assets including cash and cash equivalents,
      trade and other receivables and financial liabilities including trade and other payables,
      borrowing, approximate their fair values due to their short maturities. The book values less any
      estimated credit adjustments for financial assets and liabilities with a maturity of less than one
      year are assumed to approximate their fair values.

4     Critical accounting estimates and judgements

      Estimates and judgements are continually evaluated and are based on historical experience
      and other factors, including expectations of future events that are believed to be reasonable
      under the circumstances.

      The Group makes estimates and assumptions concerning the future. The resulting accounting
      estimates will, by definition, seldom equal the related actual results. The estimates and
      assumptions that have a significant risk of causing a material adjustment to the carrying
      amounts of assets and liabilities within the next financial year are addressed below.




                                                                                                          50
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

4     Critical accounting estimates and judgements (continued)

(1)   Impairment of long term assets

      The Group assesses whether there are indicators that the long term assets except for financial
      assets are impaired at each balance sheet date. When there are indicators that the carrying
      amounts of those long term assets are unrecoverable, an impairment test will be performed.

      When the carrying amount of the long term assets except for financial assets or the cash
      generating unit (“CGU”) is higher than its recoverable amount, which is the higher of an
      asset’s or CGU’s fair value less costs of disposal and its value in use, the impairment
      occurred.

      To determine the fair value less costs of disposal, the Group take reference to the prices in
      sales agreements in relevant asset transactions or the observable market prices, and the
      incremental cost which could directly attributable to the assets disposal.

      Key judgements are made on the outputs, sales prices, relevant operation costs and discount
      rates when estimate the discounted future cash flow forecasts. The Group uses relevant
      accessible information, including the assets outputs, sales prices, relevant operation costs
      which are based on the reasonable and supportable assumptions, to estimate the recoverable
      amount of those long term assets.

(2)   Taxation

      The Group is subject to various taxes in the PRC, including corporate income tax, value added
      tax and consumption tax. Significant judgment is required in determining the provision for
      these taxes. There are many transactions and calculations for which the ultimate tax
      determination is uncertain during the ordinary course of business. The Group recognises
      liabilities for anticipated tax issues based on estimates of whether additional taxes will be due.
      Where the final tax outcome of these matters is different from amounts that were initial
      recorded, such differences will impact the tax provisions in the period of final tax outcome.

      Deferred income tax assets relating to certain temporary differences are recognised as
      management considers it is probable that future taxable profit will be available against which
      the temporary differences can be utilised. Where the expectation is different from the original
      estimate, such differences will impact the recognition of deferred tax assets and tax in the
      periods in which such estimate is changed.

      As at 30 June 2018, the Group recorded the deferred tax assets of approximately
      RMB669,949,000. To the extent that it is probable that taxable profit will be available against
      which the deductible temporary differences will be utilised, deferred tax assets are recognised
      mainly for temporary differences arising from accrued expenses and retirement benefit
      obligations.




                                                                                                       51
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

4      Critical accounting estimates and judgements (continued)

(3)    Provisions

       The Group provides warranties on automobile and undertakes to repair or replace items that
       fail to perform satisfactorily based on certain pre-determined conditions. Management
       estimates the related warranty claims based on historical warranty claim information including
       level of repairs and returns as well as recent trends that might suggest that past cost
       information may differ from future claims.

       Factors that could impact the estimated claim information include the success of the Group’s
       productivity and quality controls, as well as parts and labour costs. Any increase or decrease
       in the provision would affect profit or loss in future years.

(4)    Write-down of inventory

       Inventories shall be measured at the lower of cost and the net realisable value. The net
       realisable value is estimated sales price less estimated cost to finish goods, estimated
       distribution expenses and related taxes in the daily operation.

       If management revises estimated sales price, estimated cost to finish goods, distribution
       expenses and related taxes, and revised sales price is lower than current sales price, or
       revised cost to finish goods, distribution expenses and related taxes are higher than those
       current estimation, the Group need to consider increasing the write-down provision of the
       inventories.

       If the actual sales price, the cost to finish goods, distribution expenses and related taxes are
       higher or lower than the estimation of management, the Group will recognise the relevant
       influence in profit or loss in relevant accounting period.

5      Revenue and segment information

       The Group principally derives its turnover from the manufacture, assembly and sale of
       automobiles, related spare parts and components, and sales are made principally in the
       PRC. Revenue represents the total invoiced value of goods supplied to customers, net of
       value-added tax, returns and allowances.

       Management has determined the operating segment based on the reports reviewed by the
       strategic executive committee that are used to make strategic decisions. The committee
       considers the business from the product perspective as all the Group’s sales are made in the
       PRC. Since the Group principally derives its turnover from the sale of automobiles, the
       committee considers the automobile business as a whole in allocating resources and
       assessing performance. Accordingly, no segment information is presented.




                                                                                                      52
    JIANGLING MOTORS CORPORATION, LTD.

    FOR THE SIX MONTHS ENDED 30 JUNE 2018
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
    (All amounts in thousands of RMB unless otherwise stated)

6    Expenses by nature
                                                                Six months ended 30 June
                                                                      2018                     2017

     Changes in inventories of finished goods and
       work in progress                                             (53,018)                162,825
     Raw materials and consumables used                          10,727,511              11,127,866
     Employee benefit expense (Note 7)                            1,118,958               1,042,529
     Depreciation of PPE (Note 12, 28)                              438,714                 397,762
     Repairs and maintenance expenditure on PPE                      52,752                  43,305
     Research and development expenditure                           801,059                 852,674
     Amortisation of lease prepayment (Note 13, 28)                   7,787                   7,787
     Amortisation of intangible assets (Note 14, 28)                  7,199                   5,527
     Provision of warranty                                          123,718                 150,360
     Others                                                         639,313               1,023,595
     Total cost of sales, distribution expenses and
      administrative expenses                                    13,863,993              14,814,230

     For the six months ended 30 June 2018, depreciation of PPE of approximately RMB 24,383,000
     (the six months ended 30 June 2017: RMB 24,788,000) and amortisation of intangible assets of
     approximately RMB 18,615,000 (the six months ended 30 June 2017: RMB 12,642,000) were
     included in research and development expenditure.

     Impairment charge for trade and other receivables of approximately RMB 918,000 (the six
     months ended 30 June 2017: RMB 2,207,000) and impairment charge for inventories of
     approximately RMB 5,195,000 (the six months ended 30 June 2017: RMB 19,663,000), which
     were included in administrative expenses, were not included in expenses by nature.

7    Employee benefit expense
                                                                Six months ended 30 June
                                                                       2018                    2017

     Wages and salaries                                             812,503                 748,104
     Social security costs                                          109,307                  98,055
     Pension costs  defined contribution plans                      138,023                 129,990
     Others                                                          59,125                  66,380
                                                                  1,118,958               1,042,529

     The employees of the Group participated in a retirement benefit plan organised by the municipal
     and provincial governments under which the Group was required to make defined contributions
     monthly to this plan.

     In addition, the Group also paid certain pension subsidies to certain retired employees. In
     accordance with the Group’s early retirement programs, the Group was also committed to
     making periodic benefit payments to certain early-retired employees until they reach their legal
     retirement ages.




                                                                                                53
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

8      Other income
                                                                  Six months ended 30 June
                                                                        2018                    2017

      Government grants (a)                                          159,254                 205,468
      Others                                                          36,106                  (1,884)
                                                                     195,360                 203,584

(a)    For the six months ended 30 June 2018, the Group received grants of approximately RMB
       159,254,000, mainly from Finance Bureau of Nanchang Qingyunpu District and Wanli District,
       Economic Development District Administrative Commission of Xiaolan, Comprehensive
       Reform Demonstration District of Shanxi Province. These government grants were income
       related to support the Group’s operation and were charged to profit or loss directly up
       received.

 9     Finance income and expenses
                                                                   Six months ended 30 June
                                                                        2018                2017

       (a) Finance income

       Interest income on bank deposits                               95,632                 121,328
       Interest income on credit sales                                11,022                   6,575
                                                                     106,654                 127,903

       (b) Finance expenses

       Interest expense on bank loans                                   (107)                    (114)
       Bank charges and others                                         (3,155)                 (1,889)
                                                                      (3,262)                  (2,003)

       Net finance income                                            103,392                 125,900

10    Taxation

(a)   Corporate income tax (“CIT”)

      As the Company is qualified as a high-tech enterprise and approved by the relevant tax
      authorities in 2015, the Company is entitled to a preferential CIT rate of 15% from 2015 to
      2017. The application of the authorised certificate of High-Tech Enterprise is in progress
      pursuant to the relevant PRC tax rules and regulations. The CIT rates of JMC Heavy Duty
      Vehicle Co., Ltd. (“JMCH”) and Jiangling Motor Sales Co, Ltd. (“JMCS”) and Shenzhen
      Fujiang NEV Sales Co., Ltd., the subsidiaries of the Company, are 25%.

      The amounts of income tax expense charged to profit or loss represented:

                                                                  Six months ended 30 June
                                                                        2018                    2017

      Current tax                                                      7,428                   84,376
      Deferred tax (Note 16)                                          19,976                 (21,941)
                                                                      27,404                   62,435




                                                                                                    54
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

10    Taxation (continued)

(a)   Corporate income tax (“CIT”) (continued)

      The tax on the Group’s profit before tax differs from the theoretical amount that would arise
      using the weighted average tax rate applicable to profits of the consolidated entities as
      follows:

                                                                  Six months ended 30 June
                                                                        2018               2017

      Profit before tax                                              346,355               615,338

      Tax calculated at tax rates applicable to profits in
        the respective companies                                       29,341                70,822
      Tax concessions                                                     (69)                  (28)
      Expenses not deductible for tax purposes                            297                   361
      Income not subject to tax                                      (48,106)               (40,650)
      Effect of different tax rates applied for the periods
        in which the temporary differences are
        expected to reverse                                           10,116                 10,849
      Utilisation of previously temporary differences for
        which no deferred income tax asset was
        recognised                                                    (1,764)                (2,391)
      Tax losses for which no deferred income tax
         asset was recognised                                         37,589                 23,472
      Tax charge                                                      27,404                 62,435




                                                                                                   55
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

10    Taxation (continued)

(b)   Value-added tax (“VAT”)

      Output VAT is levied at a general rate of 16% on the selling price of goods from 1 May 2018.
      Pursuant to “The Announcement of VAT Rate Adjustment” (Cai Shui [2018] 32) jointly issued
      by the Ministry of Finance and the State Administration of Taxation, from 1 May 2018, the
      original applicable tax rate of 17% was adjusted to 16%, the applicable tax rate of real estate
      rental income is 10%

(c)   Consumption Tax (“CT”)

      The Group’s automobile sale is subject to CT at 3%, 5% or 9% on the selling price of goods.

11    Earnings per share

      Basic earnings per share is calculated by dividing the profit attributable to shareholders of the
      Company by the weighted average number of ordinary shares in issue during the year.

                                                                  Six months ended 30 June
                                                                        2018               2017

      Profit attributable to shareholders of the
       Company                                                         318,951                552,903
      Weighted average number of ordinary shares in
        issue (‘000)                                                  863,214                863,214
      Basic earnings per share (RMB)                                      0.37                   0.64

      Diluted earnings per share equals to basic earnings per share as there were no dilutive
      potential ordinary shares outstanding during the six months ended 30 June 2018.




                                                                                                      56
     JIANGLING MOTORS CORPORATION, LTD.

     FOR THE SIX MONTHS ENDED 30 JUNE 2018
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)

12   Property, plant and equipment

                                                                  Plant and      Motor                      Electronic and    Assets under
                                                   Buildings     Machinery     Vehicles        Moulds     other equipment     constructions          Total

     At 1 January 2017
     Cost                                          1,865,850      3,526,187     262,667      2,206,895           2,862,436        1,100,860     11,824,895
     Accumulated depreciation and impairment        (373,449)    (1,787,948)   (123,898)    (1,399,618)         (1,450,760)            (692)    (5,136,365)
     Net book amount                               1,492,401      1,738,239     138,769        807,277           1,411,676        1,100,168      6,688,530
     Year ended 31 December 2017
     Opening net book amount                       1,492,401      1,738,239     138,769        807,277          1,411,676         1,100,168      6,688,530
     Additions                                              -             -           -              -                   -          921,700        921,700
     Transfers                                       230,556        517,758      33,133        220,145            320,019        (1,321,611)             -
     Disposals                                          (370)          (351)     (4,562)             -                (617)                -        (5,900)
     Classified as held for sale                      (5,777)             -           -              -                   -                 -        (5,777)
     Other deductions                                      -         (4,817)          -              -                (433)          (22,265)      (27,515)
     Impairment charge                                     -         (8,061)       (352)             -              (3,021)             (416)      (11,850)
     Depreciation charge                             (47,385)      (223,833)    (30,926)      (224,991)          (317,965)                 -      (845,100)
     Closing net book amount                       1,669,425      2,018,935     136,062        802,431          1,409,659           677,576      6,714,088
     At 31 December 2017
     Cost                                          2,084,217      3,954,028     280,071      2,411,080           3,137,100         678,684      12,545,180
     Accumulated depreciation and impairment        (414,792)    (1,935,093)   (144,009)    (1,608,649)         (1,727,441)          (1,108)    (5,831,092)
     Net book amount                               1,669,425      2,018,935     136,062        802,431           1,409,659         677,576       6,714,088
     Six months ended 30 June 2018
     Opening net book amount                       1,669,425      2,018,935     136,062        802,431           1,409,659           677,576     6,714,088
     Additions                                               -             -            -            -                    -          415,891       415,891
     Transfers                                          6,597        15,646        2,518        91,317              39,797         (155,875)              -
     Other transfer                                     2,966          5,948      29,085         3,871             112,607                  -      154,477
     Disposals                                            (56)         (398)     (1,035)             -                (436)               (7)       (1,932)
     Other deductions                                        -    (147,436)      (1,324)             -              (6,820)            (248)     (155,828)
     Impairment charge (Note 28)                             -       (1,321)         (24)            -              (1,907)            (355)        (3,607)
     Depreciation charge (Note 6, 28)                (25,747)     (122,149)     (18,285)     (122,931)           (173,985)                  -    (463,097)
     Closing net book amount                       1,653,185      1,769,225     146,997        774,688           1,378,915           936,982     6,659,992
     At 30 June 2018
     Cost                                          2,093,702       3,814,674     307,183      2,501,879          3,254,054          938,029     12,909,521
     Accumulated depreciation and impairment       (440,517)     (2,045,449)   (160,186)    (1,727,191)        (1,875,139)           (1,047)    (6,249,529)
     Net book amount                               1,653,185       1,769,225     146,997        774,688          1,378,915          936,982       6,659,992




                                                                                                                                                              57
     JIANGLING MOTORS CORPORATION, LTD.

     FOR THE SIX MONTHS ENDED 30 JUNE 2018
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)

12   Property, plant and equipment (continued)

     For the six months ended 30 June 2018, depreciation expense of approximately RMB
     404,610,000 (the six months ended 30 June 2017: RMB 367,960,000) has been charged in cost
     of sales, RMB 1,568,000 (the six months ended 30 June 2017: RMB 1,349,000) in distribution
     costs and RMB 56,919,000 (the six months ended 30 June 2017: RMB 53,241,000) in
     administrative expenses.

     Lease rental expenses amounting to RMB 4,072,000 (the six months ended 30 June 2017:
     RMB 4,419,000) relating to the lease of property are included in profit or loss.

13   Lease prepayment

     Lease prepayment represents the Group’s interests in land which are held on leases of 50
     years. The movement is as follows:

                                                                 30 June 2018     31 December 2017

     Opening net book amount                                           616,834             632,408
     Additions                                                                -                 -
     Amortisation charge (Note 6, 28)                                   (7,787)            (15,574)

     Closing net book amount                                           609,047             616,834

     Cost                                                              751,626             751,626
     Accumulated amortisation                                        (142,579)            (134,792)

     Net book amount                                                   609,047             616,834

     Amortisation expense was charged in administrative expenses.




                                                                                             58
     JIANGLING MOTORS CORPORATION, LTD.

     FOR THE SIX MONTHS ENDED 30 JUNE 2018
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)

14    Intangible assets

                                                          Non-patent                                       After-sale
                                                          technology        Software    Goodwill    management model     Other          Total


      Year ended 31 December 2017
      Opening net book amount                                115,893          38,797       3,462                    -         8     158,160
      Addition                                                58,010          22,265           -                    -         -      80,275
      Amortisation charge                                    (27,347)        (13,220)          -                    -        (8)    (40,575)
      Closing net book amount                                    146,556      47,842       3,462                    -         -     197,860


      At 31 December 2017
      Cost                                                       182,597     120,282      89,028               36,978     1,649     430,534
      Accumulated amortisation and impairment                    (36,041)    (72,440)    (85,566)             (36,978)   (1,649)   (232,674)
      Net book amount                                            146,556      47,842       3,462                    -          -    197,860


      Six months ended 30 June 2018
      Opening net book amount                                146,556          47,842       3,462                    -         -    197,860
      Addition                                                 19,693             248          -                    -         -      19,941
      Disposals                                                     -            (63)          -                    -         -         (63)
      Amortisation charge (Note 6, 28)                       (18,025)         (7,789)          -                    -         -    (25,814)
      Closing net book amount                                148,224          40,238       3,462                    -         -     191,924


      At 30 June 2018
      Cost                                                   202,289         120,112       89,028               36,978     1,649     450,056
      Accumulated amortisation and impairment                (54,065)        (79,874)    (85,566)             (36,978)   (1,649)   (258,132)
      Net book amount                                            148,224      40,238       3,462                     -         -    191,924




                                                                                                                                   59
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

14    Intangible assets (continued)

(a)   For six months ended 30 June 2018, amortisation expense of approximately RMB 25,356,000
      (the six months ended 30 June 2017: RMB 17,690,000) was charged in administrative
      expenses, RMB 288,000 (the six months ended 30 June 2017: RMB 309,000) in cost of sales
      and RMB 170,000 (the six months ended 30 June 2017: RMB 170,000) in distribution costs.

(b)   Development costs of approximately RMB 19,693,000 (the six months ended 30 June 2017:
      RMB 7,751,000) were capitalised as non-patent technology by the Group during the six months
      ended 30 June 2018.

(c)   Impairment test for goodwill

      Goodwill arises on the acquisition of a subsidiary, and is monitored by the management at the
      cash generating unit level. The goodwill is allocated to the following CGU:

                  31 December 2017            Addition            Impairment              30 June 2018

      JMCH                       3,462                 -                   -                       3,462

      The recoverable amount of the CGU is determined based on value in use calculations. These
      calculations use after-tax cash flow projections based on financial budgets approved by
      management covering a nine-year period. Cash flows beyond the five-year period are
      extrapolated using the estimated growth rates stated below. The growth rate does not exceed
      the long-term average growth rate for the heavy duty vehicle business in which the CGU
      operates.

      The key assumptions used for value in use calculations in 2017 were as follows:

      Item                                                                                       JMCH
      Compound annual volume growth rate                                                          135%
      Long term growth rate                                                                         3%
      Discount rate                                                                             19.40%


      The long term growth rates used are consistent with the forecasts included in industry reports.

      The discount rates used are after-tax and reflect specific risks relating to the relevant operating
      subsidiary.




                                                                                                    60
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

15a   Subsidiaries

      As at the date of this report, the Group has the following subsidiaries:

                               Place and date           Percentage of
      Entity                  of incorporation     equity interest held             Principal activities

      JMCH                      Taiyuan, PRC /                     100%         Manufacture and sale of
                               8 January 2013                               automobiles and spare parts
      JMCS                    Nanchang, PRC /                      100%         Sale of automobiles and
                              11 October 2013                                               spare parts
      Shenzhen Fujiang         Shenzhen,PRC/                       100%         Sale of automobiles and
       NEV Sales Co.,              3 May 2018                                               spare parts
       Ltd.

      As at May 2018, the Group set up Shenzhen Fujiang NEV Sales Co., Ltd. with a capital
      contribution of RMB 10,000,000, which is a wholly-owned subsidiary of the Group.

15b   Investments accounted for using the equity method

(a)   Summarised financial information for immaterial associate

      The amount recognised in the consolidated statement of financial position was as follow:

                                                                  30 June 2018      31 December 2017

      Associate                                                         40,485                   37,874

      The amount recognised in the consolidated statement of comprehensive income was as follow:

                                                                       Six months ended 30 June
                                                                          2018                  2017

      Share of profit                                                     2,611                   3,447

      The Company holds 19.15% interest of Hanon Systems (Nanchang) Co., Ltd. (“Hanon
      Systems”) and the investment is accounted for using the equity method of accounting.

(b)   Reconciliation of summarised financial information for immaterial associates

                                                                      Six months ended 30 June
                                                                          2018                 2017

      At beginning of the year                                         197,774                  208,317
      Profit for the year                                               13,634                   18,000
      Dividends distributed                                                  -                        -
      At end of the period                                             211,408                  226,317
      Interest in associate                                             19.15%                   19.15%
      Carrying value                                                    40,485                   43,340




                                                                                                   61
     JIANGLING MOTORS CORPORATION, LTD.

     FOR THE SIX MONTHS ENDED 30 JUNE 2018
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)

16   Deferred income tax

                                                                   30 June 2018             31 December 2017

     Deferred tax assets                                                   780,370                    757,877
     Deferred tax liabilities-can be offset                              (110,421)                    (67,624)
     Deferred tax liabilities-cannot be offset                            (26,408)                    (26,736)

     Deferred tax assets-net                                              669,949                     690,253
     Deferred tax liabilities-net                                         (26,408)                    (26,736)

     The gross movement on the deferred income tax account is as follows:

                                                                   30 June 2018             31 December 2017

     At beginning of the year                                             663,517                     527,105
     Credited to profit or loss (Note 10(a))                              (19,976)                    136,008
     Credited to other comprehensive income
      (Note 10(a))                                                               -                        404
     At end of the period                                                  643,541                    663,517

     The movement in deferred income tax assets and liabilities during the year, without taking into
     consideration the offsetting of balances within the same tax jurisdiction, is as follows:

                                                                         Amortization
                                 Provision for Retirement                           of
                                impairment of    benefits Accrued        nonpatented
     Deferred tax assets               assets obligation expenses         technology         Others       Total

     At 1 January 2017                  7,586       14,094    567,486          1,087            646    590,899
     Credited/(charged) to
       profit or loss                   4,563         (955)   155,901           3,418         3,647    166,574
     Credited to other
       comprehensive income                 -          404           -             -              -        404
     At 31 December 2017               12,149       13,543    723,387          4,505          4,293    757,877
     Credited/(charged) to                 58        (421)    (82,922)         2,253        103,525     22,493
       profit or loss
     Credited to other
       comprehensive income                -              -          -              -            -            -
     At 30 June 2018                  12,207        13,122    640,465          6,758       107,818     780,370

                                    Amortisation                                           Forward
                                    of intangible          PPE       Fair value          exchange
     Deferred tax liabilities             assets    depreciation          gains           contracts       Total

     At 1 January 2017                   (4,696)        (30,434)         (27,383)          (1,281)     (63,794)
     Credited / (charged) to
       profit or loss                      1,151        (33,645)             647             1,281     (30,566)
     At 31 December 2017                 (3,545)        (64,079)         (26,736)                -     (94,360)
     (Charged) /credited to
       profit or loss                      (188)        (42,609)             328                  -    (42,469)
     At 30 June 2018                     (3,733)       (106,688)         (26,408)                 -   (136,829)




                                                                                                          62
     JIANGLING MOTORS CORPORATION, LTD.

     FOR THE SIX MONTHS ENDED 30 JUNE 2018
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)




16   Deferred income tax (continued)

     The analysis of deferred tax assets and deferred tax liabilities is as follows:

                                                                 30 June 2018      31 December 2017

     Deferred tax assets:
     –Deferred tax asset to be recovered after
        more than 12 months                                            19,240                17,453
     –Deferred tax asset to be recovered
        within 12 months                                              761,130               740,424
                                                                      780,370               757,877

                                                                 30 June 2018      31 December 2017

     Deferred tax liabilities:
     –Deferred tax liabilities to be recovered
        after more than 12 months                                    (124,514)               (90,097)
     –Deferred tax liabilities to be recovered
        within 12 months                                              (12,315)                (4,263)
                                                                     (136,829)               (94,360)

     Deductible temporary differences and tax losses which no deferred income tax assets were
     recognised were as follows:

                                                                 30 June 2018      31 December 2017

     Deductible temporary differences                                 107,587               114,642
     Tax losses                                                       570,451               420,977
                                                                      678,038               535,619

     The expiry years of the tax losses are as follows:

                                                                 30 June 2018      31 December 2017

     2018                                                              44,319                44,319
     2019                                                              36,772                36,772
     2020                                                              72,470                72,470
     2021                                                             115,820               115,820
     2022                                                             150,713               151,596
     2023                                                             150,357                     -
                                                                      570,451               420,977




                                                                                                 63
     JIANGLING MOTORS CORPORATION, LTD.

     FOR THE SIX MONTHS ENDED 30 JUNE 2018
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)


17   Inventories
                                                                 30 June 2018    31 December 2017

     Raw materials                                                  1,522,639           1,566,589
     Work in progress                                                 258,892             208,981
     Finished goods                                                   566,586             563,734
                                                                    2,348,117           2,339,304

     For the six months ended 30 June 2018, the cost of inventories recognised as expenses and
     included in cost of sales amounted to approximately RMB10,674,493,000 ( the six months
     ended 30 June 2017: RMB11,290,691,000).

     A provision of approximately RMB44,374,000 (2017: RMB45,130,000) was made as at 30
     June 2018. The Group reversed approximately RMB2,266,000 of a previous inventory write-
     down in 2018. In 2018, the Group wrote-off inventories with provision of approximately
     RMB5,951,000 made in prior years. The provision and reversal of the inventory write-down
     have been included in administrative expenses in profit or loss.

     As at 30 June 2018, no inventory was pledged as security for liabilities.

18   Trade and other receivables and prepayments

                                                                 30 June 2018    31 December 2017

     Trade receivables                                              2,661,638           2,328,135
     Less: Provision for impairment of trade
              receivables                                             (22,125)            (21,016)
     Trade receivables – net                                       2,639,513           2,307,119
     Notes receivables                                                855,005             654,335
     Other receivables                                                 85,201             131,617
     Less: Provision for impairment of other
              receivables                                                (426)               (658)
     Other receivables – net                                          84,775             130,959
     Prepayments                                                    1,288,352           1,384,304
     Interest receivables                                              57,625              79,217
                                                                    4,925,270           4,555,934

     Refer to Note 31 for details of receivables from related parties. The carrying amounts of the
     Group’s trade and other receivables are all denominated in RMB.

     The carrying amounts of trade and other receivables and prepayments approximate their fair
     values.




                                                                                              64
     JIANGLING MOTORS CORPORATION, LTD.

     FOR THE SIX MONTHS ENDED 30 JUNE 2018
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)

18   Trade and other receivables and prepayments (continued)

     Movement on the provision for impairment of trade and other receivables is as follows:

                                                          30 June 2018          31 December 2017

     At beginning of the year                                     (21,674)                    (16,373)
     Provision for receivables impairment
       (Note 28)                                                    (918)                      (5,301)
     Receivables written off during the year as
       uncollectible                                                   41                           -
     At end of the year                                           (22,551)                    (21,674)

     The creation of provision for impaired receivables was included in ‘administrative expense’ in
     profit or loss.




                                                                                                  65
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)



19    Cash and cash equivalents

                                                                  30 June 2018   31 December 2017

      Cash at bank and in hand                                       1,137,610           2,046,999
      Short-term bank deposits (a)                                   6,650,000           9,090,724
                                                                     7,787,610          11,137,723

      As at 30 June 2018, the Group had cash of approximately RMB861,476,000 (2017:
      RMB1,120,806,000) deposited in JMCF (Note 31 (h)). The interest rates range from 1.495%-
      2.25% per annum (2017: 1.495% to 2.25%). JMCF, a non-bank financial institution, is a
      subsidiary of JMCG.

(a)   Short-term bank deposits can be withdrawn at the discretion of the Group without any
      restriction.

20    Assets classified as held for sale

                                                                  30 June 2018   31 December 2017

      Lease prepayment and buildings of
        Transit plant                                                        -              93,413

      As at 26 March 2015, under the authorisation from the Board of Directors, the Company signed
      an agreement of “state-owned land reserves” with Nanchang Land Reserve Centre (the
      “agreement”). According to the agreement, the Company sold its land use right and buildings
      of Transit plant, with a consideration of RMB135,000,000 to Nanchang Land Reserve Centre,
      the transaction completed in the first half year of 2018




                                                                                               66
     JIANGLING MOTORS CORPORATION, LTD.

     FOR THE SIX MONTHS ENDED 30 JUNE 2018
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)

21   Share capital

                                     Number of                     Tradable shares                     Total
                                        shares             “A” shares               “B” shares
                                    (thousands)      Restricted      Non-restricted

     Year ended 31 December 2017
     Balance at 1 January 2017          863,214           1,726            517,488       344,000     863,214
     Transfer                                 -            (819)               819             -           -
     Balance at 31 December 2017        863,214             907            518,307       344,000     863,214

     Six months ended 30 June
       2018
     Balance at 1 January 2018          863,214             907            518,307       344,000     863,214
     Transfer                                              (120)               120
     Balance at 30 June 2018            863,214             787            518,427       344,000     863,214


     All the “A” and “B” shares are registered, issued and fully paid shares of RMB1 each.

     All the “A” and “B” shares rank pari passu in all respects.

     After the implementation of the share reform scheme on 13 February 2006, 787,000 shares
     were still restricted as at 30 June 2018.




                                                                                                       67
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

22    Other reserves

                                                  Statutory
                                            surplus reserve
                                                    fund (a)      Reserve fund     Others          Total

      At 1 January 2017                             431,607            18,627       1,892       452,126
      Other comprehensive income
      -Remeasurements of retirement
        benefit obligation, net of tax                     -                 -     (1,212)       (1,212)

      At 31 December 2017                           431,607            18,627         680       450,914
      Other comprehensive income
      -Remeasurements of retirement
        benefit obligation, net of tax                     -                 -              -            -

      At 30 June 2018                               431,607            18,627         680       450,914

(a)   In accordance with the relevant laws and regulations in the PRC and Articles of Association of
      the Company, it is required to appropriate 10% of its annual net profit, after offsetting any prior
      years’ losses as determined under the Accounting Standards for Business Enterprises in the
      PRC, to the statutory surplus reserve fund before distributing the net profit. When the balance
      of the statutory surplus reserve fund reaches 50% of the Company’s share capital, any further
      appropriation is at the discretion of shareholders. The statutory surplus reserve fund can be
      used to offset prior years’ losses, if any, and may be converted into share capital by issuing
      new shares to shareholders in proportion to their existing shareholding or by increasing the par
      value of the shares currently held by them. The fund is non-distributable except for liquidation.

      As the balance of the statutory surplus reserve fund has reached 50% of the Company’s share
      capital, no further appropriations to the statutory surplus reserve fund were provided for the six
      months ended 30 June 2018

23    Borrowings

                                                                  30 June 2018      31 December 2017

      Current
      Bank borrowings - guaranteed (a)                                     433                      428

      Non-current
      Bank borrowings - guaranteed (a)                                    3,683                   3,851

      Total borrowings                                                    4,116                   4,279

(a)   Bank borrowings of USD622,000 (equivalent to approximately RMB4,116,000) (2017:
      USD655,000, equivalent to approximately RMB4,279,000) were guaranteed by JMCF (Note
      31 (c)).

      The interest rate of bank borrowings is 1.50% per annum (2017: 1.50%).

      The fair value of borrowings approximates their carrying values.




                                                                                                    68
     JIANGLING MOTORS CORPORATION, LTD.

     FOR THE SIX MONTHS ENDED 30 JUNE 2018
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)

23   Borrowings (continued)

     The maturity of non-current borrowings is as follows:

                                                                 30 June 2018     31 December 2017

     Between 1 and 2 years                                                433                     428
     Between 2 and 5 years                                              1,300                   1,284
     Over 5 years                                                       1,950                   2,139
                                                                        3,683                   3,851

     The Group has the following undrawn borrowing facilities:

                                                                 30 June 2018     31 December 2017
     Fixed rate
     - Expiring within one year                                     1,519,924               2,113,140

24   Retirement benefits obligations

     The amount of early retirement and supplemental benefit obligations recognised in the statement
     of financial position is as follows:

                                                                 30 June 2018      31 December 2017

     Present value of defined benefits obligations                      56,379                 59,184

     The movement of early retirement and supplemental benefit obligations for the year ended 30
     June 2018 is as follows:

                                                                 30 June 2018      31 December2017

     At beginning of the year                                          59,184                  58,188
     For the year
     -Current service cost                                                   -                  1,804
     -Interest cost                                                          -                  1,951
     -Payment                                                          (2,805)                 (4,871)
     -Past service cost from the change of plan                              -                    670
      -Actuarial loss                                                        -                  1,442
     At end of the year                                                56,379                  59,184

     Current                                                            4,420                   4,420
     Non-current                                                       51,959                  54,764
                                                                       56,379                  59,184

     The material actuarial assumptions used in valuing these obligations are as follows:

                                                                 30 June 2018      31 December 2017
     Discount rate adopted                                               ——                4.25%
     The salary and supplemental benefits inflation
     rate of retiree, early-retiree and employee at post                 ——               0% to 6%




                                                                                              69
     JIANGLING MOTORS CORPORATION, LTD.

     FOR THE SIX MONTHS ENDED 30 JUNE 2018
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)

24   Retirement benefits obligations (continued)

     Based on the assessment and IAS 19, the Group estimated that, at 30 June 2018, a provision of
     approximately RMB56,379,000 is sufficient to cover all future retirement-related obligations.

     Obligation in respect of retirement benefits of RMB56,379,000 is the present value of the
     unfunded obligations, of which the current portion amounting to RMB4,420,000 (2017:
     RMB4,420,000) has been included under current liabilities.


25   Provisions for warranty and other liabilities

     The movement on the warranty provisions and other liabilities is as follows:

                                                                 30 June 2018       31 December 2017

     At beginning of the year                                         374,981                 284,627
     Charged for the year                                             123,703                 313,289
     Utilised during the year                                       (131,502)               (222,935)
     At end of the period                                             367,182                 374,981

     Analysis of total provisions:

                                                                 30 June 2018       31 December 2017

     Non-current                                                      180,628                184,688
     Current                                                          186,554                190,293
                                                                      367,182                374,981

     The above represents the warranty costs for repairs and maintenance, which are estimated
     based on present after-sale service policies and prior years’ experience on the occurrence of
     such cost.




                                                                                              70
     JIANGLING MOTORS CORPORATION, LTD.

     FOR THE SIX MONTHS ENDED 30 JUNE 2018
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)

26   Trade and other payables

                                                                 30 June 2018           31 December 2017

     Trade payables                                                 7,954,384                  8,603,320
     Payroll and welfare payable                                      285,624                    273,666
     Dividend payables                                                284,033                      4,969
     Other payables                                                 3,637,397                  4,340,585
                                                                   12,161,438                 13,222,540

     For details of amount due to related parties, please refer to Note 31.

27   Dividends

     A special interim dividend for 2017 of RMB2.317 per share, amounting to a total dividend of
     RMB2,000,067,000 was paid in 2018.

     A final dividend for 2017 of RMB0.32 per share, amounting to a total dividend of approximately
     RMB276,228,000 was proposed at the Board of Directors’ Meeting on 22 March 2018, and such
     dividend is proposed at the Shareholders’ Meeting on 26 June 2018.

28   Cash generated from operations

                                                                         Six months ended 30 June
                                                                              2018                2017

     Profit before tax                                                     346,355                615,338
     Depreciation of PPE (Note 6, 12)                                       463,097               422,550
     Amortisation of lease prepayment (Note 6, 13)                            7,787                 7,787
     Amortisation of intangible assets (Note 6, 14)                          25,814                18,169
     Impairment charges of PPE (Note 12)                                      3,607                 3,347
     Provision for receivables impairment (Note 18)                             918                 2,207
     Provision of inventories (Note 17)                                       5,195                19,663
     (Gain)/loss on disposals of PPE                                       (34,273)                   246
     Finance expenses                                                         2,879                 1,646
     Finance income (Note 9)                                              (106,654)             (127,903)
     Net foreign exchange transaction loss                                    3,219                 5,383
     Share of profit from investment accounted for using
        equity method (Note 15b)                                             (2,611)              (3,447)
     Investment income of other investment                                 (10,202)                     -
     Investment loss/(gain) of forward exchange contracts                    12,620               (1,583)
     Changes on fair value of forward exchange contracts                    (6,915)                 2,590
     Changes in working capital:
      - Increase in inventories                                             (20,248)             (52,548)
      - Increase in trade and other receivables                            (399,396)            (948,781)
      -(Decrease)/ Increase in provisions for warranty                       (7,799)                31,812
      - Decrease in trade and other payables                            (1,072,349)            (727,034)
      - Decrease in pensions and other retirement benefits                    (2,805)             (2,714)
     Cash generated from operations                                       (791,761)            (733,272)




                                                                                                  71
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

28    Cash generated from operations (continued)

      In the cash flow statement, proceeds from disposal of PPE comprise:

                                                                    Six months ended 30 June
                                                                          2018               2017

      Net book amount                                                    95,408                 2,161
      Gain/(loss) on disposal of PPE                                     34,273                 (246)
      Offset with trade and other payables                            (127,112)                   182
      Proceeds from disposal of PPE                                       2,569                 2,097

29    Contingencies

      At 30 June 2018, the Group did not have any significant contingent liabilities.

30    Commitments

      Capital commitments

      Capital expenditure contracted for at the balance sheet date but not recognised in the financial
      statements are as follows:

                                                                  30 June 2018      31 December 2017

      Contracted but not provided for:
      Purchases of buildings, plant and machinery                      991,617               477,482

31   Related party transactions

     Related parties are those parties that have the ability to control the other party or exercise
     significant influence in making financial and operating decisions. Parties are also considered to
     be related if they are subject to common control.

     Jiangling Motor Holdings Co. Ltd. (“JMH”), which owns 41.03% of the Company’s shares, and
     Ford Motor Company (“Ford”), which owns 32% of the Company’s shares, are major
     shareholders of the Company as at 30 June 2018. The shareholders of JMH are Chongqing
     Changan Automobile Corporation Ltd. and JMCG, and both of them hold 50% equity interest of
     JMH, respectively.

     The following is a summary of the significant transactions carried out between the Group, its
     associates, JMCG and its subsidiaries, JMH and its subsidiaries and joint venture, Ford and its
     subsidiaries and joint venture in the ordinary course of business during the six months ended 30
     June 2018.




                                                                                                 72
     JIANGLING MOTORS CORPORATION, LTD.

     FOR THE SIX MONTHS ENDED 30 JUNE 2018
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)

31   Related party transactions (continued)

     For the six months ended 30 June 2018, related parties, other than the subsidiary, and their
     relationship with the Group are as follows:

     Name of related party                                                           Relationship

     JMCG                                                                     Shareholder of JMH
     Jiangxi Jiangling Chassis Co.,Ltd.                                       Subsidiary of JMCG
     Jiangxi Jiangling Special Purpose Vehicle Co.,Ltd.                       Subsidiary of JMCG
     Nanchang Gear Co.,Ltd.                                                   Subsidiary of JMCG
     Jiangxi JMCG Industry Co.,Ltd.                                           Subsidiary of JMCG
     Jiangling Material Co.                                                   Subsidiary of JMCG
     Jiangxi Lingrui Recycling Resources Development Corporation              Subsidiary of JMCG
     JMCG Property Management Co.                                             Subsidiary of JMCG
     Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.                            Associate of JMCG
     Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd.                   Associate of JMCG
     Jiangxi JMCG Specialty Vehicles Corporation, Ltd.                         Associate of JMCG
     Jiangxi Jiangling Group Special Vehicle Co.,Ltd.                          Associate of JMCG
     Nanchang Hengou Industry Co., Ltd.                                        Associate of JMCG
     GETRAG (Jiangxi) Transmission Company                                     Associate of JMCG
     Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd                          Associate of JMCG
     Faurecia Emissions Control Technologies (Nanchang) Co.,Ltd.               Associate of JMCG
     Nanchang JMCG Skyman Auto Component Co.,Ltd.                              Associate of JMCG
     Nanchang Baojiang Steel Processing Distribution Co.,Ltd.                  Associate of JMCG
     JMCG Jingma Motors Co., Ltd.                                             Subsidiary of JMCG
     Nanchang JMCG Shishun Logistics Co., Ltd.                                Subsidiary of JMCG
     Jiangxi Lingge Non-ferrous Metal Die-casting Co.,Ltd.                    Subsidiary of JMCG
     Nanchang JMCG Xinchen Auto Component Co.,Ltd.                            Subsidiary of JMCG
     JMCF                                                                     Subsidiary of JMCG
     Nanchang Jiangling Hua Xiang Auto Components Co.,Ltd.                 Joint venture of JMCG
     Jiangxi Jiangling Lear Interior System Co.,Ltd.                       Joint venture of JMCG
     Nanchang Unistar Electric & Electronics Co.,Ltd.                      Joint venture of JMCG
     Jiangxi ISUZU Engine Co.,Ltd.                                         Joint venture of JMCG
     Nanchang Yinlun Heat-exchanger Co.,Ltd.                               Joint venture of JMCG
     Jiangxi ISUZU Co., Ltd.                                               Joint venture of JMCG
     Nanchang Lianda Machinery Co.,Ltd.                                       Subsidiary of JMCG
     Jiangling Aowei Aotomobile Spare Part Co.,Ltd.                           Subsidiary of JMCG
     NC.Gear Forging Factory                                                  Subsidiary of JMCG
     Jiangxi Biaohong Engine Tappet Co.,Ltd.                                  Subsidiary of JMCG
     Jiangxi JMCG Shangrao Industrial Co.,Ltd.                                Subsidiary of JMCG
     JMCG Jiangxi Engineering Construction Co., Ltd.                          Subsidiary of JMCG
     Jiangxi JMCG Yichehang Second-hand Motors Sales Co., Ltd.                Subsidiary of JMCG
     Nanchang JMCG Liancheng Auto Component Co.,Ltd.                          Subsidiary of JMCG
     Ford Global Technologies, LLC                                              Subsidiary of Ford
     Ford Motor (China) Co., Ltd.                                               Subsidiary of Ford
     Ford Motor Research & Engineering (Nanjing) Co., Ltd.                      Subsidiary of Ford
     Ford Otomotiv Sanayi A.S.                                                  Subsidiary of Ford
     Auto Alliance (Thailand) Co.,Ltd.                                          Subsidiary of Ford
     Changan Ford Automobile Co.,Ltd.                                        Joint venture of Ford




                                                                                            73
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

31    Related party transactions (continued)

(a)    Purchases and sales of goods, provision and purchases of services

                                                                         Six months ended 30 June
       Purchase of goods                                                      2018            2017

       Nanchang Baojiang Steel Processing Distribution Co.,Ltd.            464,830           457,760
       Jiangxi Jiangling Chassis Co.,Ltd.                                  464,265           421,636
       Jiangxi Jiangling Special Purpose Vehicle Co.,Ltd.                  397,028           326,851
       GETRAG (Jiangxi) Transmission Company                               395,455           391,606
       Ford                                                                301,095           452,439
       Nanchang Jiangling Hua Xiang Auto Components Co.,Ltd.               244,473           278,927
       Jiangxi Jiangling Lear Interior System Co.,Ltd.                     234,271           282,853
       Nanchang JMCG Liancheng Auto Component Co.,Ltd.                     211,971           234,711
       Nanchang Unistar Electric & Electronics Co.,Ltd.                    158,560           122,995
       Hanon Systems                                                       136,338           120,879
       Jiangxi JMCG Specialty Vehicles Corporation, Ltd.                    89,556            73,564
       Faurecia Emissions Control Technologies (Nanchang) Co.,Ltd.          89,486            99,189
       Ford Otomotiv Sanayi A.S.                                            88,410            16,047
       JMCG                                                                 58,674            50,538
       Auto Alliance (Thailand) Co.,Ltd.                                    53,769            72,011
       Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd                     51,150                 -
       Nanchang JMCG Skyman Auto Component Co.,Ltd.                         39,904            31,861
       Jiangxi Lingge Non-ferrous Metal Die-casting Co.,Ltd.                34,052            29,077
       Jiangxi ISUZU Engine Co.,Ltd.                                        33,131                 -
       Nanchang Lianda Machinery Co.,Ltd.                                   31,963            30,357
       Nanchang Yinlun Heat-exchanger Co.,Ltd.                              23,536            28,259
       Jiangling Material Co.                                               15,044            14,658
       Jiangxi Jiangling Group Special Vehicle Co.,Ltd.                     13,928                 -
       Jiangling Aowei Aotomobile Spare Part Co.,Ltd.                       13,657            13,956
       Nanchang JMCG Xinchen Auto Component Co.,Ltd.                         9,717            11,909
       Nanchang Gear Co.,Ltd.                                                7,220            12,040
       Changan Ford Automobile Co.,Ltd.                                      6,869           115,331
       NC.Gear Forging Factory                                               6,829                 -
       Jiangxi JMCG Industry Co.,Ltd.                                        5,359             1,355
       Jiangxi Biaohong Engine Tappet Co.,Ltd.                               3,379             4,042
       Jiangxi JMCG Shangrao Industrial Co.,Ltd.                             2,248             3,062
       Jiangxi Lingrui Recycling Resources Development Corporation           1,932             1,961
       Nanchang JMCG Shishun Logistics Co., Ltd.                             1,406                 -
       Others                                                                  230             2,546
                                                                         3,689,735         3,702,420

       The Group purchased goods from related parties classified as two types: import parts and home-
       made parts.

           Purchase import parts from Ford or Ford’s suppliers, based on agreed price;
           Purchase home-made parts from other related parts, based on quotation, cost accounting and
           negotiation.




                                                                                          74
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

31    Related party transactions (continued)

(a)   Purchases and sales of goods, provision and purchases of services (continued)

                                                                                                         Six months ended 30 June
      Purchase of services                                                    Natures of transaction            2018             2017

      Ford                                                             Engineering service and design        134,432          148,586
      Nanchang JMCG Shishun Logistics Co., Ltd.                              Truckage/Transportation         126,082          128,924
      Ford Global Technologies, LLC                                                        Royalty fee        94,135          134,653
      Ford Otomotiv Sanayi A.S.                                        Engineering service and design         21,604           32,749
      Jiangxi JMCG Industry Co.,Ltd.                                                    Working meal          20,196           15,434
      Nanchang Hengou Industry Co., Ltd.                                            Packing/Truckage          19,944           29,705
      Ford                                                                        Secondments costs           19,647           16,631
      Ford Otomotiv Sanayi A.S.                                                   Secondments costs           10,746           16,652
      Ford Otomotiv Sanayi A.S.                                                            Royalty fee         9,877            9,582
      Changan Ford Automobile Co.,Ltd.                                                    Channel fee          4,959                -
      JMCG Jiangxi Engineering Construction Co., Ltd.                    Construction and repair costs         4,012           20,430
      Ford Motor (China) Co., Ltd.                                          Regional personnel costs           3,318            2,847
      GETRAG (Jiangxi) Transmission Company                                        Design and test fee         3,280              644
      Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.                    Agent business of importation          2,167            1,972
      Jiangxi Jiangling Special Purpose Vehicle Co.,Ltd.                                Promotion fee          1,959              113
      Ford Motor Research & Engineering (Nanjing) Co., Ltd.                 Regional personnel costs           1,561              937
      Jiangxi Jiangling Group Special Vehicle Co.,Ltd.                                  Promotion fee          1,540              774
      Faurecia Emissions Control Technologies (Nanchang) Co.,Ltd.                          Design fee          1,315                -




                                                                                                                                        75
      JIANGLING MOTORS CORPORATION, LTD.

      FOR THE SIX MONTHS ENDED 30 JUNE 2018
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)

31    Related party transactions (continued)

(a)   Purchases and sales of goods, provision and purchases of services (continued)

                                                                                                            Six months ended 30 June
      Purchase of services                                                       Natures of transaction            2018             2017

                                                                          Afforestation fees and property
      JMCG Property Management Co.                                                                                1,083             302
                                                                                            management
      JMH                                                                             Secondments costs             687              957
      Ford Motor (China) Co., Ltd.                                          Software and consulting fees            466            3,327
      Ford                                                                          Market research fees            108                -
      Nanchang JMCG Liancheng Auto Component Co.,Ltd.                   Experimental manufacturing costs              -            1,145
      Hanon Systems                                                     Experimental manufacturing costs              -            2,263
      JMH                                                                                     Royalty fee             -           10,000
      Others                                                                    Design fee/Warranty fee             922            2,313
                                                                                                                484,040          580,940

      The Group purchased the service from related parties based on agreement price.




                                                                                                                                           76
31    Related party transactions (continued)

(a)   Purchases and sales of goods, provision and purchases of services (continued)

                                                                           Six months ended 30 June
      Sales of goods                                                            2018            2017

      Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.                         566,065         452,175
      Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd.                 91,265               -
      Jiangxi JMCG Specialty Vehicles Corporation, Ltd.                       61,448          42,953
      Jiangxi Jiangling Special Purpose Vehicle Co.,Ltd.                      57,568          18,326
      Jiangxi Jiangling Chassis Co.,Ltd.                                      44,476          47,632
      JMCG Jingma Motors Co., Ltd.                                            36,743          39,224
      Jiangxi Jiangling Group Special Vehicle Co.,Ltd.                        35,586          12,823
      Jiangxi Lingrui Recycling Resources Development Corporation             29,625          29,891
      Nanchang JMCG Liancheng Auto Component Co.,Ltd.                         23,602          30,036
      JMH                                                                     23,080           2,853
      Nanchang Hengou Industry Co., Ltd.                                      22,874          44,199
      Jiangxi JMCG Yichehang Second-hand Motors Sales Co., Ltd.                7,707          14,511
      Nanchang Jiangling Hua Xiang Auto Components Co.,Ltd.                    6,996           9,155
      JMCG Property Management Co.                                             3,191           3,343
      Jiangxi JMCG Industry Co.,Ltd.                                           3,050           3,060
      Jiangxi Jiangling Lear Interior System Co.,Ltd.                          2,902           3,355
      JMCG Jiangxi Engineering Construction Co., Ltd.                          1,919              21
      Jiangxi ISUZU Co., Ltd.                                                    516           1,009
      Others                                                                     446             745
                                                                           1,019,059         755,311

      The Group sold goods to related parties, based on agreement price.




                                                                                            77
31    Related party transactions (continued)

(b)   Rental

      Rental cost

      Lessor                             Category     Rental cost of six       Rental cost of six
                                                      months ended 30          months ended 30
                                                             June 2018                June 2017

      Jiangxi Jiangling Motors Imp. &
                                                                  2,136                    2,138
        Exp. Co., Ltd.                     Building
      JMCG                                 Building               1,725                    2,070
      JMCG Property Management Co.         Building                 211                      211
                                                                  4,072                    4,419

      Rental income

      Lessee                             Category Rental income of six     Rental income of six
                                                    months ended 30          months ended 30
                                                            June 2018                June 2017

      JMH                                 Building                    3                          4
      GETRAG (Jiangxi) Transmission
                                                                      -                          3
       Company                            Building
                                                                      3                          7

(c)   Guarantee

      As at 30 June 2018, bank loans of USD622,000 (equivalent to approximately RMB 4,116,000)
      (2017:USD655,000, equivalent to approximately RMB4,279,000) were guaranteed by JMCF
      (Note 23).

(d)   Sales of PPE

                                                                 Six months ended 30 June
                                                                      2018              2017

      Jiangxi JMCG Industry Co.,Ltd.                                       -                     2

(e)   Purchase of PPE

                                                                  Six months ended 30 June
                                                                      2018              2017

      Jiangxi Jiangling Special Purpose Vehicle Co.,Ltd.              5,671                      -
      Nanchang JMCG Liancheng Auto Component Co.,Ltd.                   677                      -
      Jiangxi JMCG Specialty Vehicles Corporation, Ltd.                   -                    150
                                                                      6,348                    150




                                                                                          78
31    Related party transactions (continued)

(f)   Key management remuneration

      Key management includes directors (executive and non-executive), members of the Executive
      Committee, the Company Secretary and members of the Supervisory Board. During the six
      months ended 30 June 2018, the total remuneration of the key management was approximately
      RMB7,212,000 (the six months ended 30 June 2017: RMB9,256,000).

(g)   Interest received from cash deposit in related parties

                                                                 Six months ended 30 June
                                                                 2018               2017

      JMCF                                                            9,739                 10,098

      During the six months ended 30 June 2018, the interest rates range from 1.495% to 2.25% per
      annum.( the six months ended 30 June 2017: RMB10,098,000)

(h)   Balances arising from sales/purchases of goods/services

      Trade receivables from related parties                   30 June 2018    31 December 2017

      Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.                296,142                171,475
      JMH                                                            39,329                170,853
      Jiangxi JMCG Specialty Vehicles Sales
                                                                     29,991                         -
      Corporation, Ltd.
      JMCG Jingma Motors Co., Ltd.                                   15,458                  8,543
      Jiangxi JMCG Specialty Vehicles Corporation,
                                                                     13,761                         -
      Ltd.
      Nanchang JMCG Shishun Logistics Co., Ltd.                       5,815                 14,731
      Nanchang Jiangling Hua Xiang Auto Components
                                                                      2,612                  3,765
      Co.,Ltd.
      Jiangxi Jiangling Group Special Vehicle Co.,Ltd.                1,311                      -
      Nanchang Hengou Industry Co., Ltd.                                  7                  1,508
      Nanchang JMCG Liancheng Auto Component
                                                                          -                  5,913
      Co.,Ltd.
      Others                                                            957                    549
                                                                    405,383                377,337

      Other receivables from related parties                   30 June 2018    31 December 2017

      Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.                 35,073                 42,356
      Ford                                                              186                  5,158
      GETRAG (Jiangxi) Transmission Company                               -                  2,770
      Others                                                            639                    964
                                                                     35,898                 51,248




                                                                                            79
31    Related party transactions (continued)

(h)   Balances arising from sales/purchases of goods/services (continued)

      Prepayments for purchasing of goods                 30 June 2018      31 December 2017

      Nanchang Baojiang Steel Processing
                                                               454,727               457,613
      Distribution Co.,Ltd.
      Ford Otomotiv Sanayi A.S.                                 31,779                31,069
                                                               486,506               488,682

      Notes receivables from related parties              30 June 2018      31 December 2017

      JMCG Jingma Motors Co., Ltd.                              33,438                48,491

      Prepayments for construction in progress            30 June 2018      31 December 2017

       JMCG Jiangxi Engineering Construction Co.,
                                                                 2,228                 2,231
      Ltd.
       Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.              762                     572
       Jiangxi JMCG Specialty Vehicles Corporation,
                                                                   500                     500
      Ltd.
                                                                 3,490                 3,303

      Prepayments for mould lease                         30 June 2018      31 December 2017

      Changan Ford Automobile Co.,Ltd.                           1,721                11,990

      Cash deposit in related parties                     30 June 2018      31 December 2017

      JMCF                                                     861,476             1,120,806




                                                                                      80
31    Related party transactions (continued)

(h)   Balances arising from sales/purchases of goods/services (continued)

      Trade payables to related parties                       30 June 2018   31 December 2017

      Jiangxi Jiangling Chassis Co.,Ltd.                           347,120            303,148
      Jiangxi Jiangling Lear Interior System Co.,Ltd.              315,049            352,627
      GETRAG (Jiangxi) Transmission Company                        275,770            251,080
      Jiangxi Jiangling Special Purpose Vehicle Co.,Ltd.           264,467            262,946
      Nanchang Jiangling Hua Xiang Auto Components
                                                                   257,405            243,796
      Co.,Ltd.
      Nanchang JMCG Liancheng Auto Component
                                                                   149,256            153,529
      Co.,Ltd.
      Hanon Systems                                                136,498            135,846
      Nanchang Unistar Electric & Electronics Co.,Ltd.             103,587            118,889
      Ford                                                          85,513             86,504
      Jiangxi JMCG Specialty Vehicles Corporation, Ltd.             78,884            209,228
      JMCG                                                          71,112             74,918
      Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd              67,733                  -
      Changan Ford Automobile Co.,Ltd.                              63,356             68,221
      Faurecia Emissions Control Technologies (Nanchang)
                                                                    54,569             83,113
      Co.,Ltd.
      Nanchang JMCG Skyman Auto Component Co.,Ltd.                  47,993             36,998
      Jiangxi ISUZU Engine Co.,Ltd.                                 38,115             11,714
      Nanchang Lianda Machinery Co.,Ltd.                            26,837             24,651
      Nanchang Yinlun Heat-exchanger Co.,Ltd.                       26,782             25,151
      Jiangxi Lingge Non-ferrous Metal Die-casting Co.,Ltd.         19,416             30,751
      Auto Alliance (Thailand) Co.,Ltd.                             15,115             17,000
      Jiangling Aowei Aotomobile Spare Part Co.,Ltd.                14,836             17,142
      Jiangxi Jiangling Group Special Vehicle Co.,Ltd.              12,234             10,490
      Nanchang Gear Co.,Ltd.                                         5,856              7,902
      NC.Gear Forging Factory                                        4,889                  -
      Nanchang JMCG Xinchen Auto Component Co.,Ltd.                  4,423              5,334
      Jiangxi JMCG Industry Co.,Ltd.                                 3,867              2,394
      Ford Otomotiv Sanayi A.S.                                      2,480             29,711
      Jiangxi Biaohong Engine Tappet Co.,Ltd.                        1,870              2,891
      Jiangxi JMCG Shangrao Industrial Co.,Ltd.                      1,866              4,009
      Nanchang JMCG Shishun Logistics Co., Ltd.                      1,422                293
      Jiangling Material Co.                                         1,284              1,002
      Jiangxi Lingrui Recycling Resources Development
                                                                     1,241                 1,712
      Corporation
      Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.                     -              1,007
      Others                                                            40                  -
                                                                 2,500,885          2,573,997




                                                                                      81
31     Related party transactions (continued)

(h)   I Balances arising from sales/purchases of goods/services (continued)

       Other payables to related parties                     30 June 2018     31 December 2017

        Ford                                                      153,232              104,814
        Ford Otomotiv Sanayi A.S.                                 124,469              134,059
        Ford Global Technologies, LLC                              42,510               62,410
        JMCG Jiangxi Engineering Construction Co., Ltd.            25,488               36,818
        JMH                                                        19,555               30,000
        Nanchang JMCG Shishun Logistics Co., Ltd.                  12,136               10,751
        Faurecia Emissions Control Technologies (Nanchang)
                                                                   10,951                8,521
       Co.,Ltd.
       Jiangxi JMCG Specialty Vehicles Sales Corporation,
                                                                   10,624                      -
       Ltd.
        Nanchang Hengou Industry Co., Ltd.                         10,195                3,498
        GETRAG (Jiangxi) Transmission Company                       9,280                6,309
        Jiangxi Jiangling Special Purpose Vehicle Co.,Ltd.          7,561                  510
        Nanchang JMCG Liancheng Auto Component
                                                                    4,606                4,860
       Co.,Ltd.
        Nanchang Jiangling Hua Xiang Auto Components
                                                                    3,861                3,693
       Co.,Ltd.
        Jiangxi Jiangling Lear Interior System Co.,Ltd.             3,649               11,455
        Jiangxi JMCG Industry Co.,Ltd.                              2,565                1,922
        JMCG                                                        1,799                   76
        Changan Ford Automobile Co.,Ltd.                            1,788                2,765
        Ford Motor (China) Co., Ltd.                                1,685                1,755
        Jiangxi Jiangling Group Special Vehicle Co.,Ltd.            1,640                  484
        Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd            1,342                    -
        JMCG Property Management Co.                                1,124                  954
       Hanon Systems                                                   45                2,520
       Others                                                       1,919                4,159
                                                                  452,024              432,333

       Advance from related parties                          30 June 2018     31 December 2017

        Jiangxi Jiangling Special Purpose Vehicle
                                                                    3,369                    694
       Co.,Ltd.
       Jiangxi JMCG Specialty Vehicles Corporation,
                                                                       93                    294
       Ltd.
       Others                                                         532                  807
                                                                    3,994                1,795

(i)   I Related parties commitments

       Capital commitments                                   30 June 2018     31 December 2017

       JMCG Jiangxi Engineering Construction Co.,
       Ltd.                                                        31,768               35,178




                                                                                        82
Chapter XI         Catalogue on Documents for Reference

1. Originals of 2018 Half-year financial statements signed by Chairman, Chief
   Financial Officer and Chief of Finance Department.
2. Originals of all the documents and public announcements disclosed in
   newspapers designated by CSRC in the first half of 2018.
4. The Half-year Report in the China GAAP.

Board of Directors
Jiangling Motors Corporation, Ltd.
August 27, 2018




                                                                                83