Jiangling Motors Corporation, Ltd.
2016 Half-year Report
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 false
statements, misrepresentations or major omissions.
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.
Chairman Qiu Tiangao, CFO Gong Yuanyuan and Chief of Finance
Department, Ding Ni, confirm that the Financial Statements in this Half-year
Report are truthful, accurate and complete.
The prospective description regarding future business plan and development
strategy in this report does not constitute virtual commitment. The investors
shall pay attention to the risk.
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 Operating Overview ...................................................................... 5
Chapter IV Management Discussion and Analysis.......................................... 6
Chapter V Major Events ............................................................................... 12
Chapter VI Share Capital Changes & Shareholders ...................................... 15
Chapter VII Preferred Shares.......................................................................... 17
Chapter VIII Directors, Supervisors and Senior Management.......................... 17
Chapter IX Financial Statements .................................................................. 18
Chapter XI Catalog on Documents for Reference .......................................... 73
Abbreviations:
JMC, or the Company Jiangling Motors Corporation, Ltd.
JMH Jiangling Motor Holding Co., Ltd.
Ford Ford Motor Company
Jiangling-Isuzu Jiangling-Isuzu Motors Company, Ltd.
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 86-791-85235675 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 2015 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 2015 Annual Report for details.
iii. Changes of Registration
Changes of registration during the reporting period
√Applicable □Not Applicable
No. of Legal Taxation Organization
Registered Person’s Registration Code
Registered Place
date Business Number
Licence
Registration at the Jiangxi (State
April 30, 3600005110
beginning of Administration for Administration of 61244694-3
2008 00021
reporting period Industry & Taxation)
4
Commerce 3601086124469
43；(Nanchang
Local Taxation)
3601046124469
43
Jiangxi
Registration at the
Administration for 9136000061 9136000061244 9136000061
end of reporting April 8, 2016
Industry & 24469438 69438 24469438
period
Commerce
Chapter III Operating Overview
1. Main accounting data and financial ratios
Unit: RMB ‘000
Reporting period Same period
(2016 first half)* last year* Change (%)
Revenue 10,810,736 11,989,327 -9.83
Profit Attributable to the
Equity Holders of the 704,517 1,081,532 -34.86
Company
Net Cash Generated
987,554 230,053 329.27
From Operating Activities
Basic Earnings Per Share
0.82 1.25 -34.86
(RMB)
Diluted Earnings Per
0.82 1.25 -34.86
Share (RMB)
Weighted Average Return Down 4
5.71 9.71
on Equity Ratio percentage points
At the end of At the end of the Change (%)
reporting period* previous year
Total Assets 21,307,886 21,050,726 1.22
Shareholders’ Equity
Attributable to the Equity 11,796,549 11,981,142 -1.54
Holders of the Company
Note: *unaudited financial indexes.
2. Accounting data difference between China GAAP and IFRS
Impact of IFRS adjustments on the net profit and shareholders’ equity
□Applicable √Not Applicable
5
Chapter IV Management Discussion and Analysis
1. Summary
In the first half of 2016, China automobile market has been maintained growth
attributed to the rapid growth of SUV market. Total sales volume was 12.83
million units, increased 8.14% compared with the same period last year. SUV
sales volume was 3.85 million units, increased 44.26% compared with the
same period last year and commercial vehicle sales volume was 1.79 million
units, increased 1.87% compared with the same period last year.
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 a series of sales policy to respond the market
pressure. In the first half of 2016, JMC achieved sales volume of 121,008
units, decreased 10.78% compared with the same period last year, achieved
revenue of RMB 10.81 billion, decreased 9.83% compared with the same
period last year and achieved net profit of RMB 700 million, decreased 34.86%
compared with the same period last year.
2. Core Business Analysis
Year-over-Year Changes of Main Financial Data
Unit: RMB’000 Yuan
YOY change
2016 1H 2015 1H Reason
（%）
Revenue 10,810,736 11,989,327 -9.83%
Cost of sales 8,356,083 9,009,816 -7.26%
Distribution costs 758,003 634,670 19.43%
Administrative
944,758 1,059,639 -10.84%
expenses
Income PBT declined due to
66,103 185,924 -64.45%
tax expense lower sales
Profit Attributable to the Sales volume decrease,
Company’s Equity product price reduction
704,517 1,081,532 -34.86
Holders and distribution costs
increase
Net cash generated the decrease of payment
987,554 230,053 329.27%
from operating activities of commodity purchasing
Net cash used in
-357,893 -484,523 26.13%
investing activities
Net cash used in
-7,783 -231 -3269.26%
financing activities
Net increase/(decrease)
in cash and cash 621,878 -254,701 344.16%
equivalents
6
3. Composition of Core Business
Unit: RMB Yuan
Y-O-Y
Y-O-Y
Y-O-Y Cost gross
Gross turnover
Turnover Cost Change margin
Margin change
(%) change
(%)
(points)
Automobile 10,694,697,832 8,246,952,920 22.89% -10.10% -7.53% -2.15
Industry
Vehicle 9,507,665,193 7,381,951,778 22.36% -12.36% -9.42% -2.52
China 10,694,697,832 8,246,952,920 22.89% -10.10% -7.53% -2.15
Substantial change of profit composition during the reporting period
□Applicable √Not Applicable
There was no substantial change of profit composition during the reporting
period.
Future development and prospects disclosed in the public disclosure
documents, such as prospectus, raised funding report and assets
restructuring report continue into the reporting period
□Applicable √Not Applicable
There was no future development and prospects disclosed in the public
disclosure documents, such as prospectus, raised funding report and assets
restructuring report continued into the reporting period.
Review on the operation status of the previous disclosed business plan in the
reporting period
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 a series of sales policy to respond the market
pressure. In the first half of 2016, JMC achieved sales volume of 121,008
units, decreased 10.78% compared with the same period last year, achieved
revenue of RMB 10.81 billion or the target of 42% of 2016 budget, decreased
9.83% compared with the same period last year and achieved net profit of
RMB 700 million, decreased 34.86% compared with the same period last year.
In the second half of 2016, JMC will continue to expand market and
endeavour to the promotion of new products such as New Yusheng 330 SUV
so as to increase sales volume and complete annual target.
4. Core Competitiveness Analysis
JMC is a sino-foreign joint venture auto company with R&D, manufacturing
and sales operations. As a mainstream of domestic light commercial vehicle
industry, JMC had been ranked among the top hundred Chinese listed
corporations with comprehensive strength for consecutive years; and
7
certificated as a national enterprise technology center, high-tech enterprise
and national automobile export base.
JMC's influence over auto industry is improving steadily, making considerable
progress both in technical equipment and new product development. As the
series of new products such as Ford brand SUV EVEREST, MPV TOURNEO
and Ford engine 2.0GTDI launched, the Company’s development and
manufacturing competences are further strengthened; Xiaolan new plant’s
manufacturing level and new R&D center’s development capability are further
improved. Meanwhile, learning Ford advanced technology and management
experience, JMC self-developed Yusheng S330 SUV will be launched in 2016
second half which will further enhance the Company’s competence on R&D,
manufacturing and competitiveness in SUV field.
5. Investment Analysis
I. Outside Equity Investment
(a) Outside Investment
□Applicable √Not Applicable
The Company had no outside investment during the reporting period.
(b) Equity of Financial Enterprise Held by JMC
□Applicable √Not Applicable
The Company did not hold any equity of financial enterprise during the
reporting period.
(c) Stock Investment
□Applicable √Not Applicable
The Company had no stock investment during the reporting period.
(d) Equity of Other Listed Company Held by JMC
□Applicable √Not Applicable
The Company did not hold any equity of other listed company during the
reporting period.
II. Entrusting Investment, Derivative Investment, Entrusting Loan
(a) Entrusting Investment
□Applicable √Not Applicable
The Company had no entrusting investment during the reporting period.
(b) Derivative Investment
□Applicable √Not Applicable
The Company had no derivate investment during the reporting period.
(c) Entrusting Loan
□Applicable √Not Applicable
The Company had no entrusting loan during the reporting period.
8
III. Usage of Raised Fund
□Applicable √Not Applicable
The Company had no usage of raised fund during the reporting period.
IV. Operating Results of Main Subsidiaries and Joint-Stock Companies
√Applicable □ Not Applicable
Unit: RMB Yuan
Name of Type of Registered Operating
Main Products Assets Net Assets Turnover Net Profit
Companies Companies Capital Profit
Jiangling
Motors Sales Sales vehicle,
Subsidiary 50,000,000 2,205,665,234 87,458,596 9,295,198,103 -177,623,727 -133,272,894
Corporation, service parts
Ltd
Product heavy
JMC Heavy commercial
Duty Vehicle Subsidiary vehicle , engine, 281,793,174 1,165,379,777 -42,119,396 51,515,855 -81,496,049 10,751,799
Co., Ltd component, and
related service
Hannon
Automotive air
Systems Joint -Stock
conditioning and 46,627,171 333,142,527 210,306,977 229,287,329 35,196,869 26,244,382
(Nanchang) Company
Parts
Co., Ltd.
V. Major Non-Raised Fund Investment
√Applicable □ Not Applicable
Total Spending in
Investment
Investment the first half Planned
Project Name Committed
Approval of 2016 Job#1 Time
(RMB Mils) (RMB Mils) (RMB Mils)
J08 Program 1,233 6 812 First Half, 2016
J09 Program 2,414 149 1,754 Second Half, 2016
Capacity
Investment in 2,133 12 1,878 First Half, 2017
Xiaolan Site
N330 Program 1,212 121 780 First Half, 2017
J20 Heavy Truck
Program Long 1,173 122 305 First Half, 2019
Lead Funding
6. Forecast on operating performance in the first nine months of 2016
Warning and explanations as to the situation that accumulated net profit
during the period from year beginning to the end of next reporting period may
be negative or, compared with the same period last year, may have a
substantial change
□Applicable √Not Applicable
7. Explanation of the Board of Directors, the Supervisory Board to abnormal
opinions from accounting firm in the first half of 2016
9
□Applicable √Not Applicable
8. Explanation of the Board of Directors to abnormal opinions from
accounting firm in 2015
□Applicable √Not Applicable
9. Implementation of profit distribution in the reporting period
Implementation or adjustment of profit distribution proposal during the reporting
period, esp. cash dividend distribution proposal and proposal on converting
capital reserve to share capital
√Applicable □Not Applicable
During the reporting period, the Proposal on Profit Distribution for Year 2015
was reviewed and approved by the Board of Directors, and was approved by
2015 Annual Shareholders’ Meeting. On July 2016, the Company completed
the profit distribution for Year 2015. Both the formulation of JMC Profit
Distribution Plan and implementation complies with the relevant requirements
of the Articles of Association and other profit distribution policy, and the
procedures are valid and legal, which protect the interests of all shareholders.
Year 2015 profit distribution plan is as follows:
(1). to appropriate for the dividend distribution from the profit available for
distribution, which shall be equal to RMB 1.03 per share and shall apply to
the Company’s total share capital; and
(2). to carry forward the un-appropriated portion to the following fiscal year.
Profit distribution proposal: a cash dividend of RMB 10.3 (including tax) will be
distributed for every 10 shares held. Based on the total share capital of
863,214,000 shares as of December 31, 2015, the total cash dividend
distribution amounts shall be RMB 889,110,420.
B share dividend shall be paid in Hong Kong Dollars and converted based on
the HKD-to-RMB standard exchange rate published by the People’s Bank of
China on the first working day following the approval on the profit distribution
proposal by the Shareholders’ Meeting of the Company.
The Board decided not to convert capital reserve to share capital this time.
Special Explanation on Cash Dividend Policy
Whether to comply with the requirements of the Articles of Association of JMC or
Y
resolution of the Shareholders’ Meeting (Y/N)
Whether the standards and proportion of dividends on profit distribution are clear
Y
(Y/N)
Whether the procedures are valid and legal (Y/N) Y
Whether the Independent Director fulfil their duties (Y/N) Y
Whether middle and small shareholders have opportunities to claim their appeals
Y
and their legal rights and interests are completely protected (Y/N)
Whether the condition and procedure are reasonable and transparent when the
Y
cash dividend policy is being changed (Y/N)
10
10. Proposal on profit distribution and converting capital reserve to share
capital for the reporting period
Applicable √Not Applicable
11. External research and media interview to the Company
√Applicable □Not Applicable
Date Place Communication Type of Object Information
Method Object Discussed and
Materials offered
January In the On-the-spot Institution Two analysts from JMC Operating
14, 2016 Company research Perseverance Asset highlights
Management Co.,
Ltd.
January In the On-the-spot Institution Six analysts from JMC Operating
26, 2016 Company research Pingan Securities highlights
Co., Ltd., Bosera
Funds Management
Co., Ltd., China
Southern Asset
Management Co.,
Ltd., Run Hui
Investment
Consulting (Beijing)
Co., Ltd., E Fund
Management Co.,
Ltd., Invesco Great
Wall Management
Co., Ltd.
March 3, In the On-the-spot Institution Eight analysts from JMC Operating
2016 Company research Harvest Fund highlights
Management Co.,
Ltd., Taikang Asset
Management Co.,
Ltd., Yingfeng Asset
Management Co.,
Ltd., Huarong
Securities Co., Ltd.,
Beijing Zhongxin
Huacheng
Investment Co., Ltd.,
King Tower Asset
Management Co.,
Ltd., E Fund
Management Co.,
Ltd., Industrial
Securities Co., Ltd.
March 10, In the On-the-spot Institution Two analysts from JMC Operating
2016 Company research Southwest highlights
Securities Co., Ltd.,
First Seafront Fund
Management Co.,
Ltd.
June 15, In the On-the-spot Institution An analyst from JMC Operating
2016 Company research South China Capital highlights
Management Co.,
Ltd.
11
Chapter V Major Events
1. Status of the Corporate Governance in JMC
There was no major difference between actual situation of corporate
governance in JMC and the requirements in the Company Law and the related
regulations promulgated by CSRC. During the reporting period, the Company
continued to seriously implement its corporate governance in compliance with
the Company law, the Code of Corporate Governance for Listed Companies in
China, the Rules Governing Listing of Stock on Shenzhen Stock Exchange, as
well as relevant laws and regulations.
2. Litigation or Arbitration
Major Litigation or Arbitration
□Applicable √Not Applicable
The Company had no major litigation or arbitration during the reporting period.
Other Litigation or Arbitration
□Applicable √Not Applicable
3. Query from the Media
□Applicable √Not Applicable
There was no widespread skepticism from the media to the Company during
the reporting period.
4. Related Matters regarding Bankruptcy
□Applicable √Not Applicable
The Company did not happen bankruptcy during the reporting period.
5. Assets
i. Acquisition of Assets
□Applicable √Not Applicable
The Company did not acquire assets during the reporting period.
ii. Sell of Assets
□Applicable √Not Applicable
The Company did not sell assets during the reporting period.
iv. Merger
□Applicable √Not Applicable
There was no merger concerning the Company during the reporting period.
6. Implementation of Equity Incentive Plan and Impacts
□Applicable √Not Applicable
7. Major Related Transactions
i. Routine related party transactions
√Applicable □Not Applicable
As % of
Pricing Settlement Amount
Transaction Parties Content Relationship Total
Principle Method (RMB’000)
Purchases/
12
Revenue
Parts and Subsidiary of 60 days after
Jiangxi Jiangling Contracted
components JMCG delivery and 384,153 5.08%
Chassis Company price
purchase invoicing
GETRAG (Jiangxi) Parts and Associate of 60 days after
Contracted
Transmission components JMCG delivery and 311,993 4.13%
price
Company purchase invoicing
Jiangxi Jiangling Parts and Wholly-owned 30 days after
Contracted
Special-Purpose components subsidiary of delivery and 298,479 3.95%
price
Vehicle Co, Ltd. purchase JMCG invoicing
Nanchang Bao-jiang Parts and Associate of
Contracted
Steel Processing & components JMCG Prepayment 254,213 3.36%
price
Distribution Co., Ltd. purchase
Parts and Subsidiary of 60 days after
Jiangling-Lear Contracted
components JMCG delivery and 227,342 3.01%
Interior Trim Factory price
purchase invoicing
40% of
prepayment
JMCG Import and Associate of Contracted and the
Sales 550,617 5.09%
Export Co., Ltd. JMCG price remains paid
during 30 days
after delivery
ii. Major related party transaction concerning acquisition and sell of assets
□Applicable √Not Applicable
There was no major related party transaction concerning acquisition or sell of
assets during the reporting period.
iii. Related party transaction concerning outside co-investment
□Applicable √Not Applicable
The Company had 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, 2016 was RMB 383,118 thousand. The Board of
Directors reviewed and approved JMCG Finance Company Continious Risk
Assessment Report. Please refer to the website www.cninfo.com.cn for the
original of the report.
8. Non-operating funding occupation by controlling shareholder and its
affiliates
□Applicable √Not Applicable
13
There was no non-operating funding occupation by controlling shareholder
and its affiliates to the Company.
9. Major Contracts and Execution
i. Entrustment, contract or lease
a. Entrustment
□Applicable √Not Applicable
The Company had no entrustment during the reporting period.
b. Contract
□Applicable √Not Applicable
The Company did not make contract during the reporting period.
c. Lease
√Applicable □Not Applicable
See the note 31 (b) to financial statements for lease of related parties.
Project with more than 10% of net profit
□Applicable √Not Applicable
There was no lease project resulting more than 10% of net profit during the
reporting period.
ii Major guarantee
□Applicable √Not Applicable
The Company had no outside guarantee during the reporting period.
iii. Other major contract
□Applicable √Not Applicable
The Company had no other major contract during the reporting period.
10. Commitments of the Company, the shareholder, the actual controlling
party, the acquirer, the Director, the Supervisor, the senior executive or other
related party of the Company
□√Applicable □Not Applicable
Promisor Content of Time Term of Implementation of
Item
Commitments Commitments commitments
Share reform None None None N/A
Acquisition report or
Statement of changes in None None None N/A
equity
Asset restructuring None None None N/A
Initial Public Offering or
None None None N/A
re-funding
JMH July 11, within 6 months JMH exercised its
2015 since July 9, commitments sincerely and
Other commitments *
2015 did not breach the promise as
of January 9, 2016.
Implementation in time Yes
or not
* i. JMH will not reduce JMC shares by secondary market within six months
since July 9, 2015; ii. JMH will exercise its duties as a major shareholder,
14
concentrate on the quality of the listed company, push to establish a sound
invest-return long-term mechanism and continue to improve the return level.
11. Appointment or Dismissal of Accounting Firm
Audited half-year Report
□Applicable √Not Applicable
JMC 2016 half-year report is unaudited.
12. Punishment
□Applicable √Not Applicable
There was neither punishment nor rectification to the Company during the
reporting period.
13. Warning against Termination of Listing in Breach of Laws & Regulations
□Applicable √Not Applicable
The Company had no risk on termination of listing during the reporting period.
14. Other Major Events
JMC received government incentives of approximate RMB 230 million
appropriated by Nanchang City, Xiaolan Economy Development Zone,
Nanchang County, Nanchang City Qingyupu District, and Taiyuan Economic
& Technological Development Zone in the first half of 2016, which is to
support JMC’s development.
15. Company Bond
□Applicable √Not Applicable
Chapter VI Share Capital Changes & Shareholders
1. Changes of shareholding structure
Before the change Change (+, -) After the change
Proportion New Reserve- Proportion
Bonus
Shares of total share converte Others Subtotal Shares of total
Shares
shares (%) s d shares shares (%)
I. Limited tradable
1,725,900 0.20% - - - - - 1,725,900 0.20%
A shares
3. Other domestic
1,725,900 0.20% - - - - - 1,725,900 0.20%
shares
Including:
Domestic legal
1,713,000 0.20% - - - - - 1,713,000 0.20%
person shares
Domestic natural
12,900 - - - - - - 12,900 -
person shares
II. Unlimited
861,488,100 99.80% - - - - - 861,488,100 99.80%
tradable shares
1. A shares 517,488,100 59.95% - - - - - 517,488,100 59.95%
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
15
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
Explanation on changes of shares, shareholding structure, assets and
liabilities structure
□Applicable √Not Applicable
2. Shareholders and shareholding status
Total shareholders 22,588
(as of June 30, 2016)
Top ten shareholders
Shares due
Shareholding Shares at Shares with
Shareholder Change to
Shareholder Name Percentage the End of Trading
Type (+,-) 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
32.00 276,228,394 0 0 0
person
Shanghai Automotive State-owned
1.51 13,019,610 0 0 0
Co., Ltd. Legal person
E-fund New Silk-road Domestic non-
Securities Investment state-owned 1.03 8,900,000 637,913 0 0
Fund legal person
Central Huijin
Other 0.83 7,186,600 0 0 0
Investment Ltd.
JPMBLSA RE FTIF
Foreign legal
TEMPLETON CHINA 0.70 6,026,850 0 0 0
person
FUND GTI 5497
GAOLING Foreign legal
0.63 5,439,086 -231,659 0 0
FUND,L.P. person
TEMPLETON
Foreign legal
DRAGON 0.57 4,937,808 0 0 0
person
FUND,INC.
INVESCO FUNDS Foreign legal
0.51 4,372,630 0 0 0
SICAV person
TEMPLETON GBL
INVSTMT TRST- Foreign legal
0.46 3,948,718 0 0 0
TMPLTN EMGNG person
MKTS SMALL CAP
16
FD
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 22,745,784 A share
Shanghai Automotive Co., Ltd. 13,019,610 A share
Pingan Life Insurance Specific Client
9,012,285 A share
Asset Management Project-No.1
E-fund New Silk-road Securities
8,262,087 A share
Investment Fund
Central Huijin Investment Ltd. 7,186,600 A share
JPMBLSA RE FTIF TEMPLETON
6,026,850 B share
CHINA FUND GTI 5497
GAOLING FUND,L.P. 5,670,745 B share
TEMPLETON DRAGON FUND,INC. 4,937,808 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
□Applicable √Not Applicable
3. 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.
4. Shareholding Increase Plan Presented or Implemented by the
Shareholder and Its Concerted Action Persons
□Applicable √Not Applicable
As the Company knows, there was no JMC shareholding increase plan
presented or implemented by the shareholders or its concerted action persons
during the reporting period.
Chapter VII Preferred Shares
□Applicable √Not Applicable
JMC had no preferred shares during the reporting period.
Chapter VIII Directors, Supervisors and Senior Management
1. Changes of Shares held by Directors, Supervisors and Senior
Management
□Applicable √Not Applicable
17
There was no change of shares held by Directors, Supervisors and senior
management in the reporting period. Please refer to 2015 annual report for
details.
2. Changes of Directors, Supervisors and Senior Management
Name Position Status Date Reason
Qiu Tiangao Chairman Elected April 7, 2016
Wang Xigao Chairman Leave April 7, 2016
Wang Xigao Director Leave April 28, 2016
Mark Kosman Director Elected April 28, 2016
Thomas Fann Director Elected April 28, 2016
Xiong
Director Elected April 28, 2016
Chunying
Thomas Fann President Appointed April 7, 2016
Manto Wong Director Leave April 28, 2016
Yuan-Ching
Director Leave April 28, 2016
Chen
Yuan-Ching
President Leave April 7, 2016
Chen
Gong
CFO Appointed April 7, 2016
Yuanyuan
Dennis Leu CFO Leave April 7, 2016
Chapter IX Financial Statements
18
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2016
(All amounts in RMB unless otherwise stated)
Six months ended 30 June
Note 2016# 2015#
RMB’000 RMB’000
Revenue 5 10,810,736 11,989,327
Sales tax (320,459) (371,171)
Cost of sales 6 (8,356,083) (9,009,816)
Gross profit 2,134,194 2,608,340
Distribution costs 6 (758,003) (634,670)
Administrative expenses 6 (944,758) (1,059,639)
Impairment charge of non-current assets (1,347) -
Other income 8 225,856 198,598
Operating profit 655,942 1,112,629
Finance income 9 110,419 147,997
Finance costs 9 (767) (477)
Finance income-net 9 109,652 147,520
Share of profit of investments accounted for using the
equity method 15b 5,026 7,307
Profit before income tax 770,620 1,267,456
Income tax expense 10 (66,103) (185,924)
Profit for the period 704,517 1,081,532
Total comprehensive income for the period 704,517 1,081,532
Profit attributable to:
Shareholders of the Company 704,517 1,081,532
Total comprehensive income attributable to:
Shareholders of the Company 704,517 1,081,532
Earnings per share for profit attributable to the
shareholders of the Company
(expressed in RMB per share)
- Basic and diluted 11 0.82 1.25
#Unaudited financial indexes
The notes on pages 24 to 72 are an integral part of these consolidated financial statements.
19
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
(All amounts in RMB unless otherwise stated)
As at
31 December
Note 30 June 2016#
2015
RMB’000 RMB’000
ASSETS
Non-current assets
Property, plant and equipment (“PPE”) 12 6,390,229 6,323,546
Lease prepayment 13 640,098 645,608
Intangible assets 14 98,613 41,705
Investments accounted for using the equity method 15b 40,274 40,993
Other non-current assets 92,564 64,487
Deferred income tax assets 16 503,617 473,933
7,765,395 7,590,272
Current assets
Financial assets at fair value through profit or loss 1,998 77
Inventories 17 1,729,280 1,730,930
Trade, other receivables and prepayments 18 2,253,658 2,793,770
Cash and cash equivalents 19 9,469,918 8,848,040
Assets classified as held for sale 20 87,637 87,637
13,542,491 13,460,454
Total assets 21,307,886 21,050,726
20
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
AS AT 30 JUNE 2016
(All amounts in RMB unless otherwise stated)
As at
Note 31 December
30 June 2016#
2015
RMB’000 RMB’000
EQUITY
Capital and reserves attributable to the
Company’s shareholders
Share capital 21 863,214 863,214
Share premium 816,609 816,609
Other reserves 22 452,938 452,938
Retained earnings 9,663,788 9,848,381
Total equity 11,796,549 11,981,142
LIABILITIES
Non-current liabilities
Borrowings 23 4,560 4,678
Deferred income tax liabilities 16 27,854 28,392
Retirement benefit obligations 24 49,579 52,273
Provisions for warranty and other liabilities 25 230,489 214,722
Other non-current liabilities 360 400
312,842 300,465
Current liabilities
Trade and other payables 26 9,157,905 8,708,829
Current income tax liabilities 30,596 50,305
Borrowings 23 434 425
Retirement benefit obligations 24 4,560 4,560
Other current liabilities 5,000 5,000
9,198,495 8,769,119
Total liabilities 9,511,337 9,069,584
Total equity and liabilities 21,307,886 21,050,726
#Unaudited financial indexes
The notes on pages 24 to 72 are an integral part of these consolidated financial statements.
21
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2016
(All amounts in RMB unless otherwise stated)
Attributable to shareholders of the Company
Share Share Other Retained Total
Note capital premium reserves earnings Equity#
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2015 863,214 816,609 454,968 8,463,638 10,598,429
Profit for the six months - - - 1,081,532 1,081,532
Dividend relating to 2014 - - - (837,318) (837,318)
Balance at 30 June 2015 863,214 816,609 454,968 8,707,852 10,842,643
Balance at 1 January 2016 863,214 816,609 452,938 9,848,381 11,981,142
Profit for the six months - - - 704,517 704,517
Dividend relating to 2015 27 - - - (889,110) (889,110)
Balance at 30 June 2016 863,214 816,609 452,938 9,663,788 11,796,549
#Unaudited financial indexes
The notes on pages 24 to 72 are an integral part of these consolidated financial statements.
22
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2016
(All amounts in RMB unless otherwise stated)
Six months ended 30 June
Note 2016# 2015#
RMB’000 RMB’000
Cash flows from operating activities
Cash generated from operations 28 1,103,907 520,669
Interest paid (320) (300)
Income tax paid (116,033) (290,316)
Net cash generated from operating activities 987,554 230,053
Cash flows from investing activities
Purchase of PPE and Lease prepayment (512,444) (681,892)
Other cash paid relating to investing activities (101) (6,256)
Proceeds from disposal of PPE and Lease prepayment 28 2,611 2,125
Interest received 145,919 184,952
Dividends received 5,745 15,657
Other cash received from investing activities 377 891
Net cash used in investing activities (357,893) (484,523)
Cash flows from financing activities
Repayments of borrowings (212) (203)
Dividends paid to the Company’s shareholders (7,571) (28)
Net cash used in financing activities (7,783) (231)
Net increase/(decrease) in cash and cash equivalents 621,878 (254,701)
Cash and cash equivalents at beginning of year 8,848,040 8,963,468
Effects of exchange rate changes - -
Cash and cash equivalents at end of period 19 9,469,918 8,708,767
#Unaudited financial indexes
The notes on pages 24 to 72 are an integral part of these consolidated financial statements.
23
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in 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 Authorization 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 2016, 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 25 August 2016.
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 except as disclosed in
the accounting policies below.
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.
24
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.1 Basis of preparation (continued)
2.1.1 Going concern
The group meets its day-to-day working capital requirements through its bank facilities. The
current economic conditions continue to create uncertainty particularly over (a) the level of
demand for the group’s products; and (b) the availability of bank finance for the foreseeable
future. The group’s forecasts and projections, taking account of reasonably possible changes
in trading performance, show that the group should be able to operate within the level of its
current facilities. After making enquiries, the directors have a reasonable expectation that the
group has adequate resources to continue in operational existence for the foreseeable future.
The group therefore continues to adopt the going concern basis in preparing its consolidated
financial statements. Further information on the group’s borrowings is given in Note 23.
2.1.2 Changes in accounting policy and disclosures
New and amended standards adopted by the group
Standards, amendments and interpretations which are effective for the financial year ending 31
December 2015 are not material to the Group.
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.
25
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
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.
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.
26
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
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.
27
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.6 Property, plant and equipment
Property, plant and equipment are 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’s 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.
28
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in 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) it can be demonstrated how the intangible asset will generate probable future economic
benefits;
(e) adequate technical, financial and other resources to complete the development and to use
or sell the intangible asset are available; and
(f) the expenditure attributable to the intangible asset during its development can be reliably
measured.
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. 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.
29
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in 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.
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 to sell 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,, held-to-maturity financial assets 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.
(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.
30
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.11 Financial assets (continued)
(1) Classification(continued)
(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 (losses)/gains – 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.
31
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in 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 liability 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.
32
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in 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 removed 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 removed 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 cost 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 costs.
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.
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, other short-term highly liquid investments with original
maturities of three months or less, and bank overdrafts.
33
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in 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 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.
34
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
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.
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 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.
35
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.21 Current and deferred income tax (continued)
(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.
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 income.
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.
36
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.22 Employee benefits (continued)
(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.
2.24 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable, and
represents amounts receivable for goods supplied, stated net of discounts returns and value
added taxes. The Group recognises revenue when the amount of revenue can be reliably
measured; when it is probable that future economic benefits will flow to the entity; and when
specific criteria have been met for each of the Group’s activities, as described below. The Group
bases its estimates of return on historical results, taking into consideration the type of customer,
the type of transaction and the specifics of each arrangement.
37
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.24 Revenue recognition (continued)
(1) Sales of goods
Revenue from the sale of goods is recognised when significant risks and rewards of ownership
of the goods are transferred to the customer, the customer has accepted the products and
collectability of the related receivables is reasonably assured.
(2) Rental income
Rental income is recognised on a straight-line basis over the period of the rental contracts.
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.
2.28 Government grants
Grants from the government are recognised at their fair value where there is a reasonable
assurance that the grant will be received and the Group will comply with all attached
conditions.
Government grants relating to costs are deferred and recognised in profit or loss over the
period necessary to match them with the costs they are intended to compensate. Government
grants not relating to future costs are recognised on receipt basis.
Government grants relating to the purchase of property, plant and equipment are included in
non-current liabilities as deferred income and are credited to profit or loss on a straight line
basis over the expected lives of the related assets.
38
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
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”).
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.
As at 30 June 2016, if RMB had strengthened/weakened by 10% against USD with all other
variable held constant, the Group’s net profit for the six months ended 30 June 2016 would
have been approximately RMB19,237,000 (2015: RMB23,276,000) 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 2016, 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 2016, 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 six months ended 30 June 2016 would have been increased/decreased by
approximately RMB8,691,000.
(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 2016, the Group had cash of approximately RMB383,118,000 (2015:
RMB372,320,000) 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 deposited in state-owned banks or other listed banks. Management believes all
these financial institutions have high credit quality without significant credit risk.
39
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
3 Financial risk management (continued)
3.1 Financial risk factors (continued)
(2) Credit risk (continued)
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.
(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 and
year and 2 years 5 years Over 5 years
RMB ‘000 RMB ‘000 RMB ‘000 RMB ‘000
At 30 June 2016
Bank borrowings
- Principals 434 434 1,303 2,823
- Interests 73 67 161 148
Trade and other payables 7,862,376 - - -
7,862,883 501 1,464 2,971
At 31 December 2015
Bank borrowings
- Principals 425 425 1,276 2,977
- Interests 75 69 167 167
Trade and other payables 8,206,159 - - -
8,206,659 494 1,443 3,144
40
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
3 Financial risk management (continued)
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.
The gearing ratios at 30 June 2016 and 31 December 2015 were as follows:
30 June 2016 31 December 2015
RMB’000 RMB’000
Total borrowings 4,994 5,103
Total equity 11,796,549 11,981,142
Total capital 11,801,543 11,986,245
Gearing ratio 0.04% 0.04%
3.3 Fair value estimation
Financial 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. The different levels have been defined 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).
Since all significant inputs required to value the instrument 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 face 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.
41
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
3 Financial risk management (continued)
3.3 Fair value estimation (continued)
The fair value of financial liabilities for disclosure purposes is estimated by discounting the
future contractual cash flows at the current market interest rate available to the Group for
similar financial instruments.
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.
(1) 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.
(2) Pension benefits
The present value of the pension obligations depend on a number of factors that are
determined on an actuarial basis using a number of assumptions. Any changes in these
assumptions will impact the carrying amount of pension obligations.
The Group determines the appropriate discount rate at the end of each year. This is the
interest rate that should be used to determine the present value of estimated future cash
outflows expected to be required to settle the pension obligations. In determining the
appropriate discount rate, the Group considers the interest rates of government bonds that are
denominated in the currency in which the benefits will be paid, and that have terms to maturity
approximating the terms of the related pension liability.
Other key assumptions for pension obligations are based on current market conditions.
Additional information is disclosed in Note 24.
42
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
4 Critical accounting estimates and judgements (continued)
(3) 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 such determination is
made.
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 2016, the Group recorded the deferred tax assets of approximately RMB
503,617,000. 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.
(4) Estimated impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment, in accordance with
the accounting policy stated in Note 2.8. The recoverable amounts of cash-generating units
have been determined based on value in use calculations. These calculations require the use
of estimates (Note 14).
If budgeted gross margin rates used in CGU or groups of CGU’s extrapolate cash flow
projections are adjusted to be lower than current gross margin rates, a further impairment of
goodwill is required to be recognised.
If after-tax discount rate applied to the cash flow projections is adjusted to be higher than
current after-tax discount rate, a further impairment of goodwill is required to be recognised.
If actual gross margin rates or after-tax discount rate is higher or lower than management’s
estimation, the recognised impairment of goodwill cannot be reversed.
(5) Impairment of inventory
Inventories shall be measured at the lower of cost and the net realisable value. The Group will
reassess whether the inventories’ net realisable value is lower than the inventories’ cost at
end of each year. Impairment provision for inventories is recognised in profit or loss when the
cost is higher than the net realisable value.
43
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
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.
6 Expenses by nature
Six months ended 30 June
2016 2015
RMB’000 RMB’000
Changes in inventories of finished goods and
work in progress 74,118 167,151
Raw materials and consumables used 7,390,290 8,003,085
Employee benefit expenses (Note 7) 872,355 880,091
Depreciation of PPE (Note 12, 28) 323,276 270,989
Repairs and maintenance expenditure on PPE 37,727 43,641
Research and development expenditure 650,289 800,915
Amortisation of lease prepayment (Note 13, 28) 7,904 7,936
Amortisation of intangible assets (Note 14, 28) 4,743 3,286
Provision of warranty 108,763 55,961
Others 570,545 470,085
Total cost of sales, distribution costs and
administrative expenses 10,040,010 10,703,140
For the six months ended 30 June 2016, depreciation of PPE of RMB 21,797,000 (the six
months ended 30 June 2015: RMB 17,987,000) and amortisation of intangible assets of RMB
888,000 (the six months ended 30 June 2015: RMB 1,485,000) were included in research and
development expenditure.
Impairment charge for trade and other receivables of RMB8,710,000 (the six months ended 30
June 2016: RMB 985,000) and impairment charge for inventories of RMB10,124,000 (the six
months ended 30 June 2016: None), which were included in administrative expenses, were not
included in expenses by nature.
44
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
7 Employee benefit expenses
Six months ended 30 June
2016 2015
RMB’000 RMB’000
Wages and salaries 619,534 643,777
Social security costs 84,831 80,312
Pension costs defined contribution plans 114,803 107,826
Others 53,187 48,176
872,355 880,091
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.
8 Other income
Six months ended 30 June
2016 2015
RMB’000 RMB’000
Government grants (a) 227,480 204,078
Others (1,624) (5,480)
225,856 198,598
(a) For the six months ended 30 June 2016, the Group received grants of approximately
RMB227,480,000, mainly from Finance Bureau of Nanchang, Finance Bureau of Nanchang
Qingyunpu District, Economic Development District Administrative Commission of Xiaolan
and the Finance Bureau of Economic and Technological Development District Administrative
Commission of Taiyuan. Those grants were income related government grants to support
the Group’s operation.
9 Finance income and cost
Six months ended 30 June
2016 2015
RMB’000 RMB’000
(a) Finance income
Interest income on bank deposits 103,318 129,404
Interest income on credit sales 7,101 18,593
110,419 147,997
(b) Finance cost
Interest expense on bank loans (483) (209)
Bank charges (284) (268)
(767) (477)
Net finance income 109,652 147,520
45
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
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 (2015: 15%). The CIT rates of JMC Heavy Duty Vehicle Co., Ltd. (“JMCH”) and Jiangling
Motor Sales Co, Ltd. (“JMCS”), the subsidiaries of the Company, are 25%.
The amounts of income tax expense charged to profit or loss represented:
Six months ended 30 June
2016 2015
RMB’000 RMB’000
Current tax (96,325) (144,643)
Deferred tax (Note 16) 30,222 (41,281)
(66,103) (185,924)
The difference between the actual income tax charge in profit or loss and the amounts which
result from applying the enacted tax rate to profit before income tax can be reconciled as
follows:
Six months ended 30 June
2016 2015
RMB’000 RMB’000
Profit before tax 770,620 1,267,456
Tax calculated at tax rates applicable to profits in
the respective companies (100,020) (189,216)
Tax concessions 105 160
Expenses not deductible for tax purposes (250) (25,271)
Income not subject to tax 47,715 53,365
Effect of different tax rates applied for the periods
in which the temporary differences are
expected to reverse (4,322) (57)
Tax losses for which no deferred income tax
asset was recognised (9,331) (24,905)
Tax charge (66,103) (185,924)
The weighted average applicable tax rate was 13% (the six months ended 30 June 2015:
15%).
46
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
10 Taxation (continued)
(a) Value-added tax (“VAT”)
Output VAT is levied at a general rate of 17% on the selling price of goods. Input VAT paid on
purchase of goods and equipment can be used to offset the output VAT to determine the net
VAT payable.
(b) Consumption Tax (“CT”)
The Group’s automobile sale is subject to CT at 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
2016 2015
Profit attributable to shareholders of the
Company (‘000) 704,517 1,081,532
Weighted average number of ordinary shares in
issue (‘000) 863,214 863,214
Basic earnings per share (RMB) 0.82 1.25
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 2016.
47
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
12 Property, plant and equipment
Plant and Motor Electronic and Assets under
Buildings Machinery Vehicles Moulds other equipment’s constructions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2015
Cost 1,819,897 3,138,887 190,888 1,421,197 2,030,067 1,282,854 9,883,790
Accumulated depreciation and impairment (330,391) (1,595,216) (85,728) (1,144,046) (991,309) (692) (4,147,382)
Net book amount 1,489,506 1,543,671 105,160 277,151 1,038,758 1,282,162 5,736,408
Year ended 31 December 2015
Opening net book amount 1,489,506 1,543,671 105,160 277,151 1,038,758 1,282,162 5,736,408
Additions - - - - - 1,457,199 1,457,199
Transfers 114,352 261,449 34,729 193,583 399,568 (1,003,681) -
Disposals (4,255) (1,612) (1,216) - (2,150) - (9,233)
Classified as held for sale (78,870) - - - - - (78,870)
Other deductions - (86,845) - - (2,628) （98,898） (188,371)
Impairment charge (Note 28) - (1,719) (316) - (981) - (3,016)
Depreciation charge (Note 6, 28) (46,204) (179,076) (25,116) (106,987) (233,188) - (590,571)
Closing net book amount 1,474,529 1,535,868 113,241 363,747 1,199,379 1,636,782 6,323,546
At 31 December 2015
Cost 1,802,523 3,193,284 219,587 1,591,116 2,384,260 1,637,474 10,828,244
Accumulated depreciation and impairment (327,994) (1,657,416) (106,346) (1,227,369) (1,184,881) (692) (4,504,698)
Net book amount 1,474,529 1,535,868 113,241 363,747 1,199,379 1,636,782 6,323,546
Six months ended 30 June 2016
Opening net book amount 1,474,529 1,535,868 113,241 363,747 1,199,379 1,636,782 6,323,546
Additions - - - - - 421,273 421,273
Transfers 24,515 133,933 7,482 259,581 191,542 (617,053) -
Disposals - (155) (3,007) - (127) - (3,289)
Other deductions - - - - - (4,881) (4,881)
Impairment charge (Note 28) - (781) (24) - (542) - (1,347)
Depreciation charge (Note 6, 28) (23,775) (96,029) (13,103) (77,277) (134,889) - (345,073)
Closing net book amount 1,475,269 1,572,836 104,589 546,051 1,255,363 1,436,121 6,390,229
At 30 June 2016
Cost 1,827,038 3,306,866 217,349 1,850,137 2,566,064 1,436,812 11,204,266
Accumulated depreciation and impairment (351,769) (1,734,030) (112,760) (1,304,086) (1,310,701) (691) (4,814,037)
Net book amount 1,475,269 1,572,836 104,589 546,051 1,255,363 1,436,121 6,390,229
48
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
12 Property, plant and equipment (continued)
For the six months ended 30 June 2016, depreciation expense of approximately
RMB289,897,000 (the six months ended 30 June 2015: RMB247,139,000) has been charged in
cost of sales, RMB1,427,000 (the six months ended 30 June 2015: RMB1,071,000) in
distribution costs and RMB53,749,000 (the six months ended 30 June 2015: RMB40,766,000) in
administrative expenses.-
Lease rental expenses amounting to RMB3,087,000 (the six months ended 30 June 2015:
RMB3,075,000) 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 2016 31 December 2015
RMB’000 RMB’000
Opening net book amount 645,608 590,629
Additions 2,394 79,479
Classified as held for sale - (8,767)
Amortisation charge (Note 6, 28) (7,904) (15,733)
Closing net book amount 640,098 645,608
Cost 751,626 749,232
Accumulated amortisation (111,528) (103,624)
Net book amount 640,098 645,608
Amortisation expense was charged in administrative expenses.
49
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
14 Intangible assets
After-sale
management Development
model Software Goodwill Expenditure Other Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Year ended 31 December 2015
Opening net book amount - 28,682 3,462 - 29 32,173
Addition - 19,419 - - - 19,419
Impairment charge - - - - - -
Amortisation charge (Note 6, 28) - (9,876) - - (11) (9,887)
Closing net book amount - 38,225 3,462 - 18 41,705
At 31 December 2015
Cost 36,978 85,627 89,028 - 1,649 213,282
Accumulated amortisation and impairment (36,978) (47,402) (85,566) - (1,631) (171,577)
Net book amount - 38,225 3,462 - 18 41,705
Six months ended 30 June 2016
Opening net book amount - 38,225 3,462 - 18 41,705
Addition - 2,486 - 60,053 - 62,539
Impairment charge - - - - - -
Amortisation charge (Note 6, 28) - (5,627) - - (4) (5,631)
Closing net book amount - 35,084 3,462 60,053 14 98,613
At 30 June 2016
Cost 36,978 88,113 89,028 60,053 1,649 275,821
Accumulated amortisation and impairment (36,978) (53,029) (85,566) - (1,635) (177,208)
Net book amount - 35,084 3,462 60,053 14 98,613
For the six months ended 30 June 2016, amortisation expense of approximately RMB5,506,000 (the six months ended 30 June 2016:
RMB4,666,000) was charged in administrative expenses, RMB97,000 (the six months ended 30 June 2015: RMB97,000) in cost of sales and RMB
28,000 (the six months ended 30 June 2015: RM8,000) in distribution costs.
50
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
14 Intangible assets (continued)
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 cash generating unit
(“CGU”):
31 December 2015 Addition Impairment 30 June 2016
RMB’000 RMB’000 RMB’000 RMB’000
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 2015 are as follows:
Item JMCH
Compound annual volume growth rate 404%
Long term growth rate 3%
Discount rate 19.4%
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.
51
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
15a Subsidiaries
As at the date of this report, the Group has the following subsidiary:
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
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 is as follow:
30 June 2016 31 December 2015
RMB’000 RMB’000
Associate 40,274 40,993
The amount recognised in the consolidated statement of comprehensive income is as follow:
Six months ended 30 June
2016 2015
RMB’000 RMB’000
Share of profit 5,026 7,307
As at 17 December 2015 Halla Visteon Climate Control (Nanchang) Co., Ltd., was renamed as
Hannon Systems (Nanchang) Co., Ltd. (“Hannon Systems”). The Company holds 19.15%
interest of Hannon Systems and the investment is accounted for using the equity method of
accounting.
(b) Reconciliation of summarised financial information
Six months ended 30 June
2016 2015
RMB’000 RMB’000
Opening net assets 1 January 214,061 140,719
Profit for the period 26,245 38,156
Dividends distributed (30,000) -
Closing net assets 210,306 178,875
Interest in associate 19.15% 19.15%
Carrying value 40,274 34,255
52
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
16 Deferred income tax
30 June 2016 31 December 2015
RMB’000 RMB’000
Deferred tax assets 519,904 480,109
Deferred tax liabilities-can be offset (16,287) (6,176)
Deferred tax liabilities-cannot be offset (27,854) (28,392)
Deferred tax assets-net 503,617 473,933
Deferred tax liabilities-net (27,854) (28,392)
The gross movement on the deferred income tax account is as follows:
30 June 2016 31 December 2015
RMB’000 RMB’000
At beginning of the year 445,541 411,272
Credited to profit or loss (Note 10) 30,222 33,592
Credited to other comprehensive income - 677
At end of the year 475,763 445,541
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:
Deferred tax assets Provision for Retirement
impairment of benefits Accrued
assets obligation expenses Others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2015 5,329 12,442 381,437 43,200 442,408
(Charged)/credited to profit or
loss 878 220 78,607 (42,681) 37,024
Credited to other
comprehensive income - 677 - - 677
At 31 December 2015 6,207 13,339 460,044 519 480,109
Credited/(charged) to profit or
loss 1,713 (407) (19,206) 57,695 39,795
Credited to other
comprehensive income - - - - -
At 30 June 2016 7,920 12,932 440,838 58,214 519,904
Deferred tax liabilities Amortization Fair Forward
of Intangible PPE value exchange
Assets depreciation gains contracts Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2015 (1,678) - (29,458) - (31,136)
Credited to profit or loss (1,082) (3,404) 1,066 (12) (3,432)
At 31 December 2015 (2,760) (3,404) (28,392) (12) (34,568)
(Charged)/credited to profit or
loss (1,016) (8,807) 538 (288) (9,573)
At 30 June 2016 (3,776) (12,211) (27,854) (300) (44,141)
53
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
16 Deferred income tax (continued)
.
The analysis of deferred tax assets and deferred tax liabilities is as follows:
30 June 2016 31 December 2015
RMB’000 RMB’000
Deferred tax assets:
–Deferred tax asset to be recovered after
more than 12 months 12,246 12,653
–Deferred tax asset to be recovered
within 12 months 507,658 467,456
519,904 480,109
30 June 2016 31 December 2015
RMB’000 RMB’000
Deferred tax liabilities:
–Deferred tax liabilities to be recovered
after more than 12 months (41,868) (32,787)
–Deferred tax liabilities to be recovered
within 12 months (2,273) (1,781)
(44,141) (34,568)
Tax losses which no deferred income tax assets were recognised were as follows:
30 June 2016 31 December 2015
RMB’000 RMB’000
Tax losses 249,729 250,697
The expiry years of the tax losses are as follows:
30 June 2016 31 December 2015
RMB’000 RMB’000
2016 6,721 6,721
2017 89,447 89,447
2018 44,319 44,319
2019 36,773 36,773
2020 72,469 73,437
249,729 250,697
54
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
17 Inventories
30 June 2016 31 December 2015
RMB’000 RMB’000
Raw materials 1,242,718 1,170,043
Work in progress 161,790 144,654
Finished goods 324,772 416,233
1,729,280 1,730,930
For the six months ended 30 June 2016, the cost of inventories recognised as expenses and
included in cost of sales amounted to approximately RMB7,464,408,000 ( the six months
ended 30 June 2015: RMB8,170,236,000), which included inventory provision of
RMB10,532,000 ( the six months ended 30 June 2015:None).
A provision of RMB39,789,000 (2015: RMB47,637,000) was made as at 30 June 2016. The
Group reversed RMB408,000 of a previous inventory write-down in 2015. In 2016, the Group
wrote-off inventories with provision of RMB17,971,000 made in prior years. The provision and
reversal of the inventory write-down have been included in cost of sales in profit or loss.
As at 30 June 2016, no inventory was pledged as security for liabilities.
18 Trade, other receivables and prepayments
30 June 2016 31 December 2015
RMB’000 RMB’000
Trade receivables 1,118,083 1,463,736
Less: Provision for impairment of trade
receivables (15,930) (7,319)
Trade receivables – net 1,102,153 1,456,417
Notes receivables 456,860 709,630
Other receivables 78,254 58,427
Less: Provision for impairment of other
receivables (391) (292)
Other receivables – net 77,863 58,135
Prepayments 556,398 476,952
Dividends receivables - -
Interest receivables 60,384 92,636
2,253,658 2,793,770
Refer to Note 31 for details of receivables from related parties.
The carrying amounts of trade and other receivables approximate their fair values.
55
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
18 Trade, other receivables and prepayments (continued)
Movement on the provision for impairment of trade and other receivables is as follows:
30 June 2016 31 December 2015
RMB’000 RMB’000
At beginning of the year (7,611) (7,638)
Provision for receivables impairment
(Note 28) (8,710) (3,882)
Receivables written off during the year as
uncollectible - 3,909
At end of the period (16,321) (7,611)
The creation of provision for impaired receivables have been included in ‘administrative
expense’ in profit or loss.
56
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
19 Cash and bank balances
Cash and cash equivalents
30 June 2016 31 December 2015
RMB’000 RMB’000
Cash at bank and in hand 664,918 606,040
Short-term bank deposits (a) 8,805,000 8,242,000
9,469,918 8,848,040
As at 30 June 2016, the Group had cash of approximately RMB383,118,000 (2015:
RMB372,320,000) deposited in JMCF (Note 31 (g)). The interest rates range from 1.495% to
2.25% per annum (2015: 0.455% to 3%). 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 2016 31 December 2015
RMB’000 RMB’000
Lease prepayment and buildings of
Transit plant 87,637 87,637
As at 26 March 2015, under the authorization from the board of directors, the Company signed
an agreement of “state-owned land reserves” with Nanchang City Land Reserve Centre (the
“agreement”). According to the agreement, the Company will sell its land use right and
buildings of Transit plant, with a consideration of RMB135,000,000 to Nanchang City Land
Reserve Centre. The transaction is expected to be completed within the year of 2016.
As those aforementioned assets met the criteria of assets classified as held for sale, they were
reclassified as current assets and presented separately in the consolidated statement of
financial position.
57
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
21 Share capital
Number of Tradable shares Total
shares “A” shares “B” shares
(thousands) Restricted Non-restricted
RMB’000 RMB’000 RMB’000 RMB’000
Year ended 31 December 2015
Balance at 1 January 2015 863,214 1,822 517,392 344,000 863,214
Transfer - (96) 96 - -
Balance at 31 December 2015 863,214 1,726 517,488 344,000 863,214
Six months ended 30 June
2016
Balance at 1 January 2016 863,214 1,726 517,488 344,000 863,214
Transfer - - - - -
Balance at 30 June 2016 863,214 1,726 517,488 344,000 863,214
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, 1,726,000 shares
were still restricted as at 30 June 2016.
58
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
22 Other reserves
Statutory
surplus reserve
fund (a) Reserve fund Others Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2015 431,607 18,627 4,734 454,968
Other comprehensive income
-Remeasurements of retirement
benefit obligation, net of tax - - (2,030) (2,030)
At 31 December 2015 431,607 18,627 2,704 452,938
Other comprehensive income
-Remeasurements of retirement
benefit obligation, net of tax - - - -
At 30 June 2016 431,607 18,627 2,704 452,938
(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 2016.
23 Borrowings
30 June 2016 31 December 2015
RMB’000 RMB’000
Current
Bank borrowings - guaranteed (a) 434 425
Non-current
Bank borrowings - guaranteed (a) 4,560 4,678
Total borrowings 4,994 5,103
(a) Bank borrowings of USD753,000 (equivalent to approximately RMB4,994,000) (2015:
USD786,000 equivalent to approximately RMB5,103,000) were guaranteed by JMCF (Note 31
(c)).
The interest rate of bank borrowings is 1.50% per annum (2015: 1.50%).
The fair value of borrowings approximates their carrying values.
59
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
23 Borrowings (continued)
The maturity of non-current borrowings is as follows:
30 June 2016 31 December 2015
RMB’000 RMB’000
Between 1 and 2 years 434 425
Between 2 and 5 years 1,303 1,276
Over 5 years 2,823 2,977
4,560 4,678
The Group has the following undrawn borrowing facilities:
30 June 2016 31 December 2015
RMB’000 RMB’000
Fixed rate
- Expiring within one year 1,906,810 2,214,032
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 2016 31 December 2015
RMB’000 RMB’000
Present value of defined benefits obligations 54,139 56,833
The movement of early retirement and supplemental benefit obligations for the year ended 31
December 2015 is as follows:
30 June 2016 31 December 2015
RMB’000 RMB’000
At beginning of the year 56,833 55,726
For the year
-Current service cost - 1,625
-Interest cost - 1,991
-Payment (2,694) (5,216)
-Actuarial loss - 2,707
At end of the period 54,139 56,833
Current 4,560 4,560
Non-current 49,579 52,273
54,139 56,833
The material actuarial assumptions used in valuing these obligations are as follows:
30 June 2016 31 December 2015
Discount rate adopted —— 3%
The salary and supplemental benefits inflation —— 0% to 5%
rate of retiree, early-retiree and employee at
post
60
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
24 Retirement benefits obligations (continued)
As at 30 June 2016, the Group did not estimate the present value of defined benefit obligation.
Based on the assessment and IAS 19, the Group estimated that, at 30 June 2016, a provision of
RMB54,139,000 is sufficient to cover all future retirement-related obligations.
Obligation in respect of retirement benefits of RMB54,139,000 is the present value of the
unfunded obligations, of which the current portion amounting to RMB4,560,000 (2015:
RMB4,560,000) has been included under current liabilities.
25 Provisions for warranty and other liabilities
The movement on the warranty provisions is as follows:
30 June 2016 31 December 2015
RMB’000 RMB’000
At beginning of the year 214,722 226,503
Charged for the year 108,770 168,141
Utilised during the year (93,003) (179,922)
At end of the period 230,489 214,722
26 Trade and other payables
30 June 2016 31 December 2015
RMB’000 RMB’000
Trade payables 5,475,420 5,600,317
Payroll and welfare payable 205,481 278,396
Dividend payables 892,223 11,646
Other payables 2,584,781 2,818,470
9,157,905 8,708,829
Refer to Note 31 for details of amount due to related parties.
61
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
27 Dividends
A final dividend for 2015 of RMB1.03 per share, amounting to a total dividend of
RMB889,110,000 is proposed at the Shareholders’ Meeting on 30 June 2016.
28 Cash generated from operations
Six months ended 30 June
2016 2015
RMB’000 RMB’000
Profit before tax 770,620 1,267,456
Depreciation of PPE (Note 6, 12) 345,073 288,976
Amortisation of lease prepayment (Note 6, 13) 7,904 7,936
Amortisation of intangible assets (Note 6, 14) 5,631 4,771
Impairment charges of PPE (Note 12) 1,347 -
Provision for receivables impairment (Note 18) 8,710 985
Write-down of inventories (Note 17) 10,124 -
Loss on disposals of PPE 895 3,508
Finance cost (Note 9) 767 477
Finance income (Note 9) (110,419) (147,997)
Net foreign exchange transaction loss 6,863 1,136
Share of profit from investment accounted for using
equity method (Note 15b) (5,026) (7,307)
Investment loss of forward exchange contracts (276) 5,365
Changes on fair value of forward exchange contracts (1,921) (1,929)
Changes in working capital:
- Decrease in restricted cash - 6,810
- (Increase)/decrease in inventories (32,459) 67,841
- Decrease/(increase) in trade and other receivables 460,103 (238,306)
- Increase/(decrease) in provisions for warranty 15,767 (32,422)
- Decrease in trade and other payables (377,102) (703,807)
- Decrease in pensions and other retirement benefits (2,694) (2,824)
Cash generated from operations 1,103,907 520,669
62
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in 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
2016 2015
RMB’000 RMB’000
Net book amount 3,289 5,529
Loss on disposal of PPE (895) (3,508)
Offset with trade and other payables (a) 217 104
Proceeds from disposal of PPE 2,611 2,125
29 Contingencies
At 30 June 2016, 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:
31 December
30 June 2016 2015
RMB’000 RMB’000
Contracted but not provided for:
Purchases of buildings, plant and machinery 839,650 1,033,458
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 2016. For JMH, the shareholders are Chongqing
Changan Automobile Corporation Ltd. (“Changan Auto”) and JMCG, 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, Ford and its subsidiaries in the ordinary course of
business during the six months ended 30 June 2016.
63
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
31 Related party transactions (continued)
For the six months ended 30 June 2016, related parties, other than the subsidiary, and their
relationship with the Group are as follows:
Name of related party Relationship
JMCG Shareholder of JMH
Nanchang JMCG Skyman Auto Component Co., Ltd. Subsidiary of JMH
Ford Motor (China) Co., Ltd. Subsidiary of Ford
Ford Motor Research & Engineering (Nanjing) Co., Ltd. Subsidiary of Ford
Ford Global Technologies, LLC Subsidiary of Ford
Ford Otosan Company Subsidiary of Ford
Ford Motor Company of Australia Limited Subsidiary of Ford
JMCG Interior Trim Factory Subsidiary of JMCG
Jiangxi JMCG Industry Co., Ltd. Subsidiary of JMCG
JMCG Property Management Co. Subsidiary of JMCG
Nanchang Gear Co., Ltd. Subsidiary of JMCG
Jiangxi Jiangling Material Utilization Co., Ltd. Subsidiary of JMCG
Jiangling Material Co. Subsidiary of JMCG
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. Subsidiary of JMCG
Nanchang Jiangling Hua Xiang Auto Components Co., Ltd. Subsidiary of JMCG
Jiangxi Specialty Vehicles Jiangling Motors Group Co., Ltd. Subsidiary of JMCG
JMCF Subsidiary of JMCG
Jiangxi ISUZU Engine Co., Ltd. Subsidiary of JMCG
Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd. Subsidiary of JMCG
Jiangxi Jiangling Chassis Co., Ltd. Subsidiary of JMCG
Nanchang JMCG Liancheng Auto Component Co., Ltd. Subsidiary of JMCG
JMCG Jingma Motors Co., Ltd. Subsidiary of JMCG
Nanchang Unistar Electric & Electronics Co.,Ltd. Subsidiary of JMCG
Jiangxi Jiangling Real Estate Co., Ltd. Subsidiary of JMCG
Jiangxi Jiangling Lear Interior System Co., Ltd. Subsidiary of JMCG
Jiangxi JMCG Shangrao Industrial Co., Ltd. Subsidiary of JMCG
JMCG Jiangxi Engineering Construction Co., Ltd. Subsidiary of JMCG
Nanchang JMCG Xinchen Auto Component Co., Ltd. Subsidiary of JMCG
Nanchang JMCG Shishun Logistics Co., Ltd. Subsidiary of JMCG
Nanchang Lianda Machinery Co., Ltd. Subsidiary of JMCG
Jiangxi JMCG Yichehang Second-hand Motors Sales Co., Ltd. Subsidiary of JMCG
Jiangxi Biaohong Engine Tappet Co., Ltd. Subsidiary of JMCG
Nanchang Jiangling Huasheng Cleaner Co., Ltd. Subsidiary of JMCG
Jiangxi Sinodef International Trade Co.,Ltd. Subsidiary of JMCG
Nanchang Hengou Industry Co., Ltd. Subsidiary of JMCG
Nanchang JMCG Car Frame Co., Ltd. Subsidiary of JMCG
Jiangxi JMCG Special Vehicle Co., Ltd. Associate of JMCG
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. Associate of JMCG
Nanchang Yinlun Heat-exchanger Co.,Ltd. Associate of JMCG
JMCG Hequn Costume Co., Ltd. Associate of JMCG
Jiangling Aowei Aotomobile Spare Part Co., Ltd. Associate of JMCG
Nanchang JMCG Printing Plant Co., Ltd. Associate of JMCG
GETRAG (Jiangxi) Transmission Company Associate of JMCG
Nanchang Baojiang Steel Processing Distribution Co., Ltd. Associate of JMCG
Faurecia Emissions Control Technologies (Nanchang) Co., Ltd. Associate of JMCG
Changan Ford Automobile Co., Ltd. Joint venture of Ford
64
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in 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 Price policy 2016 2015
RMB’000 RMB’000
Jiangxi Jiangling Chassis Co., Ltd. (B) 384,153 390,207
GETRAG (Jiangxi) Transmission Company (B) 311,994 326,771
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. (B) 298,479 178,609
Nanchang Baojiang Steel Processing Distribution (B)
Co., Ltd. 254,213 313,992
Jiangxi Jiangling Lear Interior System Co., Ltd. (i) (B) 227,342 236,173
Ford (A) 184,544 178,711
Nanchang JMCG Liancheng Auto Component Co., Ltd. (B) 138,623 148,015
Nanchang Jiangling Hua Xiang Auto Components Co., Ltd. (B) 135,181 137,056
Hannon Systems (B) 103,226 123,085
Nanchang Unistar Electric & Electronics Co.,Ltd. (B) 100,047 111,874
Jiangxi Specialty Vehicles Jiangling Motors Group Co.,
Ltd. (B) 90,130 111,566
JMCG (B) 53,480 75,163
Nanchang Lianda Machinery Co., Ltd. (B) 35,657 40,705
Nanchang JMCG Skyman Auto Component Co., Ltd. (B) 32,714 37,907
Faurecia Emissions Control Technologies (Nanchang)
Co., Ltd. (B) 28,368 2,772
Nanchang Yinlun Heat-exchanger Co.,ltd (B) 23,343 26,826
Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd. (B) 18,710 18,890
Jiangling Aowei Aotomobile Spare Part Co., Ltd. (B) 15,318 19,023
Nanchang JMCG Xinchen Auto Component Co., Ltd. (B) 14,164 13,488
Jiangling Material Co. (B) 11,117 12,377
Changan Ford Automobile Co., Ltd. (B) 10,719 84
Nanchang Gear Co., Ltd. (B) 8,976 8,194
Ford Otosan Company (A) 5,865 74
Jiangxi Biaohong Engine Tappet Co., Ltd. (B) 4,814 5,277
Nanchang JMCG Printing Plant Co., Ltd. (B) 3,963 2,625
Jiangxi JMCG Shangrao Industrial Co., Ltd. (B) 3,709 4,555
JMCG Hequn Costume Co., Ltd. (B) 1,504 1,272
Jiangxi Jiangling Material Utilization Co., Ltd. (B) 1,327 2,287
Jiangxi ISUZU Engine Co., Ltd. (B) 989 8,789
Jiangxi JMCG industry Co., Ltd. (B) 831 5,388
JMCG Interior Trim Factory (B) - 190,610
Nanchang Jiangling Huasheng Cleaner Co., Ltd. (B) - 3,460
Others (B) - 51
2,503,500 2,735,876
The Company purchased goods from related parties classified as two types: import parts and home-
made parts.
(A) Purchase import parts from Ford or Ford’s suppliers, based on agreed price;
(B) Purchase home-made parts from other related parts, based on quotation, cost accounting and
negotiation.
(i) As at September 2015, Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. absorbed JMCG Interior
Trim Factory.
65
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
31 Related party transactions (continued)
(a) Purchases and sales of goods, provision and purchases of services (continued)
Provision of services Natures of transaction Price policy Six months ended 30 June
2016 2015
RMB’000 RMB’000
Ford Motor Company of Australia Limited Vehicle testing (C) 6,698 -
Purchase of services Natures of transaction Price policy Six months ended 30 June
2016 2015
RMB’000 RMB’000
Ford Otosan Company Engineering service and design (C) 151,648 161,576
Nanchang JMCG Shishun Logistics Co., Ltd. Transportation (C) 85,587 106,385
Ford Engineering service and design (C) 46,590 185,150
Ford Global Technologies, LLC Royalty fee (C) 37,885 23,850
Nanchang Hengou Industry Co., Ltd. Packing/truckage (C) 30,836 16,971
Ford Secondments costs (C) 19,584 34,033
Ford Otosan Company Secondments costs (C) 15,334 11,721
Jiangxi JMCG Industry Co.,Ltd. Working meal (C) 13,053 15,331
Ford Otosan Company Royalty fee (C) 6,736 23,388
Jiangxi Specialty Vehicles Jiangling Motors Group
Co., Ltd. Promotion (C) 2,774 4,251
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. Agent business of importation (C) 2,705 2,474
Ford Motor (China) Co., Ltd. Regional personnel costs (C) 2,702 2,313
Hannon Systems Experimental manufacturing cost (C) 2,479 -
Ford Motor Research & Engineering (Nanjing)
Co., Ltd. Regional personnel costs (C) 1,871 961
Changan Ford Automobile Co., Ltd. Design fee (C) 1,650 -
66
JIANGLING MOTORS CORPORATION, LTD.
FOR THE SIX MONTHS ENDED 30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
31 Related party transactions (continued)
(a) Purchases and sales of goods, provision and purchases of services (continued)
Purchase of services Natures of transaction Price policy Six months ended 30 June
2016 2015
RMB’000 RMB’000
Engineering construction and
JMCG Jiangxi Engineering Construction Co., Ltd. maintenance (C) 789 10,372
JMH Secondments costs (C) 641 571
Jiangxi Jiangling Lear Interior System Co., Ltd. Evaluation and design (C) 223 5,124
Ford Motor Research & Engineering (Nanjing) Experimental expenses and
Co., Ltd. software fee (C) 13 1,531
Others (C) - 1,096
423,100 607,098
(C) The Company provisioned and purchased the service price from related parties based on agreement, of which engineering service and
design fee mainly including the fee to Ford.
67
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
31 Related party transactions (continued)
(a) Purchases and sales of goods, provision and purchases of services (continued)
Sales of goods Price policy Six months ended 30
June
2016 2015
RMB’000 RMB’000
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. (D) 550,617 468,636
Jiangxi Specialty Vehicles Jiangling Motors Group Co., (D)
Ltd. 84,586 90,267
JMCG Jingma Motors Co., Ltd. (D) 38,436 35,467
Jiangxi Jiangling Chassis Co., Ltd. (D) 26,293 29,559
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. (D) 24,979 10,751
Nanchang JMCG Liancheng Auto Component Co.,
Ltd. (D) 22,918 21,025
Jiangxi Jiangling Material Utilization Co., Ltd. (D) 15,849 29,007
Jiangxi JMCG Yichehang Second-hand Motors Sales
Co., Ltd. (D) 11,215 529
Jiangxi Jiangling Lear Interior System Co., Ltd. (D) 6,702 7,761
Jiangxi JMCG Industrial Co. (D) 5,214 4,605
Jiangxi Sinodef International Trade Co.,Ltd. (D) 4,831 10,504
JMCG Property Management Co. (D) 3,353 3,388
Jiangxi JMCG Special Vehicle Co., Ltd. (D) 3,145 87
Nanchang Jiangling Hua Xiang Auto Components Co.,
Ltd. (D) 1,908 78
JMH (D) 1,729 427
JMCG Interior Trim Factory (D) - 16,989
Jiangxi ISUZU Engine Co., Ltd. (D) - 3,161
Others (D) 1,575 1,956
803,350 734,197
(D) The Company sold goods to related parties, based on agreement price.
(b) Rental
Rental cost
Lessor Category Rental cost of six Rental cost of six
months ended 30 months ended 30
June 2016 June 2015
RMB’000 RMB’000
Jiangxi Jiangling Motors Imp. & Exp.
Co., Ltd. Building 2,981 2,981
JMCG Building - 24
JMCG Property Management Co. Building 106 65
Jiangxi Jiangling Real Estate Co., Ltd. Building - 5
3,087 3,075
68
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
31 Related party transactions (continued)
(b) Rental (continued)
Rental income
Lessee Category Rental income of six Rental income of six
months ended 30 months ended 30
June 2016 June 2015
RMB’000 RMB’000
JMH Building 22 -
(c) Guarantee
As at 30 June 2016, bank loans of USD753,000 (equivalent to approximately RMB4,994,000)
(2015:USD786,000 equivalent to approximately RMB5,103,000) were guaranteed by JMCF
(Note 23).
(d) Sales of PPE
Six months ended 30 June
2016 2015
RMB’000 RMB’000
Jiangxi JMCG Industrial Co., Ltd. 5 3
(e) 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 2016, the total remuneration of the key management was
approximately RMB8,077,000 (the six months ended 30 June 2015: RMB8,117,000).
(f) Interest received from cash deposit in related parties
Six months ended 30 June
2016 2015
RMB’000 RMB’000
JMCF 5,879 5,236
During the six months ended 30 June 2016, the interest rates range from1.495% to 2.25% per
annum.
69
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
31 Related party transactions (continued)
(g) Balances arising from sales/purchases of goods/services
Trade receivables from related parties 30 June 2016 31 December 2015
RMB’000 RMB’000
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 208,000 230,762
Jiangxi Specialty Vehicles Jiangling Motors
Group Co., Ltd. 12,118 24,097
JMCG Jingma Motors Co., Ltd. 7,640 8,337
Jiangxi Jiangling Lear Interior System Co., Ltd. 5,816 -
Nanchang JMCG Car Frame Co., Ltd. 2,453 2,453
JMH 1,664 -
Jiangxi JMCG Industry Co., Ltd. 1,386 3,384
Jiangxi JMCG Special Vehicle Co., Ltd. 1,009 9
Others 591 229
240,677 269,271
Other receivables from related parties 30 June 2016 31 December 2015
RMB’000 RMB’000
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 10,718 6,941
Ford Motor Company of Australia Limited 6,698 -
Nanchang Baojiang Steel Processing Distribution
Co., Ltd. 1,472 -
Ford Otosan Company 1,225 1,225
20,113 8,166
Prepayments for purchasing of goods 30 June 2016 31 December 2015
RMB’000 RMB’000
Nanchang Baojiang Steel Processing Distribution
Co., Ltd. 311,191 211,530
Notes receivables from related parties 30 June 2016 31 December 2015
RMB’000 RMB’000
JMCG Jingma Motors Co., Ltd. 44,722 27,080
Jiangxi Jiangling Chassis Co., Ltd. - 4,217
44,722 31,297
Prepayments for construction in progress 30 June 2016 31 December 2015
RMB’000 RMB’000
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 14,702 20,166
JMCG Jiangxi Engineering Construction Co., Ltd. 2,272 1,755
16,974 21,921
Prepayments for mould lease 30 June 2016 31 December 2015
RMB’000 RMB’000
Changan Ford Automobile Co., Ltd. 34,963 18,517
70
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
31 Related party transactions (continued)
(g) Balances arising from sales/purchases of goods/services (continued)
Cash deposit in related parties 30 June 2016 31 December 2015
RMB’000 RMB’000
JMCF (Note 19) 383,118 372,320
Trade payables to related parties 30 June 2016 31 December 2015
RMB’000 RMB’000
Jiangxi Specialty Vehicles Jiangling Motors
Group Co., Ltd. 298,349 330,939
Jiangxi Jiangling Chassis Co., Ltd. 241,802 210,110
Jiangxi Jiangling Lear Interior System Co., Ltd. 226,518 195,310
Jiangxi Jiangling Special Purpose Vehicle Co.,
Ltd. 223,612 199,259
JMCG 143,144 136,953
GETRAG (Jiangxi) Transmission Company 128,963 181,415
Nanchang Jiangling Hua Xiang Auto
Components Co., Ltd. 109,034 112,597
Nanchang JMCG Liancheng Auto Component
Co., Ltd. 97,045 105,596
FORD 83,876 127,701
Nanchang Unistar Electric & Electronics Co.,Ltd. 69,415 71,433
Hannon Systems 67,090 96,058
Nanchang JMCG Skyman Auto Component Co.,
Ltd. 34,822 22,024
Nanchang Yinlun Heat-exchanger Co.,Ltd. 20,365 15,247
Nanchang Lianda Machinery Co., Ltd. 20,084 22,373
Faurecia Emissions Control Technologies
(Nanchang) Co., Ltd. 19,324 17,574
Jiangling Aowei Aotomobile Spare Part Co., Ltd. 13,042 13,860
Jiangxi Lingge Non-ferrous Metal Die-casting
Co., Ltd. 11,271 10,737
Nanchang JMCG Xinchen Auto Component Co.,
Ltd. 11,135 7,049
Nanchang Gear Co., Ltd. 6,118 6,680
Nanchang JMCG Printing Plant Co., Ltd. 2,756 1,474
Jiangxi Biaohong Engine Tappet Co., Ltd. 2,048 3,156
Jiangxi JMCG Shangrao Industrial Co., Ltd. 2,025 3,872
Ford Otosan Company 1,483 -
Changan Ford Automobile Co., Ltd. 1,336 5,829
Jiangling Material Co. 1,082 1,501
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 1,000 -
Jiangxi Jiangling Material Utilization Co., Ltd. 780 1,192
Nanchang Jiangling Huasheng Cleaner Co., Ltd. - 5,274
Others 1,817 1,202
1,839,336 1,906,415
71
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in RMB unless otherwise stated)
31 Related party transactions (continued)
(g) I Balances arising from sales/purchases of goods/services (continued)
Other payables to related parties 30 June 2016 31 December 2015
RMB’000 RMB’000
Ford Otosan Company 198,543 122,899
FORD 68,790 110,278
Ford Global Technologies, LLC 20,647 48,500
Jiangxi Specialty Vehicles Jiangling Motors
Group Co., Ltd. 15,734 13,554
Nanchang Hengou Industry Co., Ltd. 7,882 11,815
JMCG Jiangxi Engineering Construction Co., Ltd. 1,741 8,333
GETRAG (Jiangxi) Transmission Company 2,265 6,650
Nanchang Jiangling Hua Xiang Auto Components
Co., Ltd. 1,755 5,590
Jiangxi Jiangling Lear Interior System Co., Ltd. 4,556 5,178
Ford Motor (China) Co., Ltd. 2,551 4,340
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 1,827 3,668
Nanchang JMCG Shishun Logistics Co., Ltd. 3,803 2,773
Changan Ford Automobile Co., Ltd. 1,369 -
Nanchang JMCG Liancheng Auto Component
Co., Ltd. 1,159 1,745
JMCG Hequn Costume Co., Ltd. 836 1,189
Ford Motor Research & Engineering (Nanjing)
Co., Ltd. 1,233 1,126
JMH 662 386
Others 2,968 3,536
338,321 351,560
Advance from related parties 30 June 2016 31 December 2015
RMB’000 RMB’000
Jiangxi Sinodef International Trade Co.,Ltd. 837 737
Others 803 476
1,640 1,213
(h) I Related parties commitments
Capital commitments 30 June 2016 31 December 2015
RMB’000 RMB’000
JMCG Jiangxi Engineering Construction Co.,
Ltd. 45,751 29,304
72
Chapter XI Catalog on Documents for Reference
1. Originals of 2016 financial statements signed by legal representative and Chief
Financial Officer.
2. Originals of all the documents and public announcements disclosed in
newspapers designated by CSRC in the first half of 2016.
4. The Half-year Report in the China GAAP.
Board of Directors
Jiangling Motors Corporation, Ltd.
August 27, 2016
73
