Jiangling Motors Corporation, Ltd.
2020Half-year Report
2020-08
1
Chapter I Important Notes, Contents and Abbreviations
Important Note
The Board of Directors and its members, the Supervisory Board and its members,
and the senior executives are jointly and severally liable for the truthfulness,
accuracy and completeness of the information disclosed in the report and confirm
that the information disclosed herein does not contain any false statement,
misrepresentation or major omission.
Chairman Qiu Tiangao, CFO Li Weihua and Chief of Finance Department, Ding Ni,
confirm that the Financial Statements in this Half-year Report are truthful,
accurate and complete.
All Directors were present at the Board meeting to review this Half-year Report.
Neither cash dividend nor stock dividend was distributed. The Board decided not
to convert capital reserve to share capital this time.
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 ........................................................................ 6
Chapter IV Management Discussion and Analysis ........................................... 8
Chapter V Major Events ................................................................................ 14
Chapter VI Share Capital Changes & Shareholders ....................................... 20
Chapter VII Preferred Shares.......................................................................... 24
Chapter VIII Convertible Bond ......................................................................... 26
Chapter IX Directors, Supervisors and Senior Management.......................... 26
Chapter X Company Bond ............................................................................ 27
Chapter XI Financial Statements .................................................................... 28
Chapter XII Catalogue on Documents for Reference .................................... 153
Abbreviations:
JMC, or the Company Jiangling Motors Corporation, Ltd.
JIC Nanchang Jiangling Investment Co.,Ltd.
Ford Ford Motor Company
CSRC China Securities Regulatory Commission
JMCG Jiangling Motors Group Co., Ltd.
JMCH JMC Heavy Duty Vehicle Co., Ltd.
EVP Executive Vice President
CFO Chief Financial Officer
VP Vice President
3
Chapter II Brief Introduction
1. Company’s information
Share’s name Jiangling Motors, Jiangling B Share’s Code 000550,200550
Place of listing Shenzhen Stock Exchange
Company’s Chinese
江铃汽车股份有限公司
name
English name Jiangling Motors Corporation, Ltd.
Abbreviation JMC
Company legal
Qiu Tiangao
representative
2. Contact person and method
Securities Affairs
Board Secretary
Representative
Name Wan Hong Quan Shi
No. 509, Northern Yingbin No. 509, Northern Yingbin
Address Avenue, Nanchang City, Avenue, Nanchang City,
Jiangxi Province, P.R.C Jiangxi Province, P.R.C
Tel 86-791-85266178 86-791-85266178
Fax 86-791-85232839 86-791-85232839
E-mail relations@jmc.com.cn relations@jmc.com.cn
3. Other
I. Contact methods
Changes of registered address, headquarter address, postal code, website and e-
mail in the reporting period
□Applicable √Not Applicable
There is no change of registered address, headquarter address, postal code,
website and e-mail. Please refer to 2019 Annual Report for details.
II. Changes of newspapers for information disclosure, website for publication of
JMC’s half-year report and place for achieving half-year report in the reporting
period
□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 2019 Annual Report for details.
4
4. Main accounting data and financial ratios
Unit: RMB
Reporting period Same period
(2020 first half) last year Change (%)
Revenue 14,073,417,878 13,721,953,502 2.56
Profit Attributable to the
Equity Holders of the 207,771,782 58,861,816 252.98
Company
Net Cash Generated
734,283,627 1,435,351,564 -48.84
From Operating Activities
Basic Earnings Per Share
0.24 0.07 252.98
(RMB)
Diluted Earnings Per
0.24 0.07 252.98
Share (RMB)
Weighted Average Return Up 1.39
1.96% 0.57%
on Equity Ratio percentage points
At the end of At the end of the
reporting period previous year Change (%)
Total Assets 26,114,866,966 24,298,528,593 7.48
Shareholders’ Equity
Attributable to the Equity 10,643,910,583 10,496,563,781 1.40
Holders of the Company
5. Accounting data difference between domestic and foreign accounting standards
I. Differences in net profit and net assets disclosed respectively per IFRS and
PRC GAAP.
□Applicable √Not Applicable
There is no difference between IFRS and PRC GAAP in net profit and net assets.
II. Differences in net profit and net assets disclosed respectively per GAAP and
PRC GAAP.
□Applicable √Not Applicable
There is no difference between GAAP and PRC GAAP in net profit and net assets.
5
Chapter III Operating Overview
1. Company’s Core Business during the Reporting Period
JMC’s core business is production and sales of commercial vehicles, SUV and
related components. JMC’s major products include JMC series light truck, heavy
truck, pickup and light bus; Yusheng SUV; Ford-brand light bus, MPV and SUV.
The Company also produces and sells engines, castings and other components
for sales to domestic and overseas markets.
2. Major Change of Main Assets
I. Major Change of Main Assets
There’s no major change of main assets during the reporting period.
II. Main Overseas Assets
□Applicable √Not Applicable
3. Core Competitiveness Analysis
JMC is a sino-foreign joint venture auto company with R&D, manufacturing and
sales operations. With leading position and advanced technology of commercial
vehicles, JMC is China auto industry pioneer providing excellent products and
solutions to smart logistics, which is certificated as a national high-tech enterprise,
national innovative pilot enterprise, national enterprise technology centre, national
industrial design centre, national intellectual property demonstration enterprises
and national automobile export base; and had been ranked among the top 100
most valuable global brands for consecutive years.
On traditional business, with the support from Ford's advanced technology and
management experience, JMC's influence over auto industry is improving steadily,
making considerable progress both in new product development and technical
equipment. With the implementation of the national phase six emission standards,
JMC as the "bellwether" of the commercial vehicle market, rapidly responds to the
national policy to upgrade the emission of vehicle products by virtue of its
advanced product research and development technology and high-quality
manufacturing capacity. Successively launched the JMC brand light truck EVI,
Ford brand light bus EVI, Kaiyun blue whale and other series of products. The
new Ford Territory SUVS, based on deep insights into Chinese consumers, not
only has leading space and size at the same level, but also takes the lead in
introducing domestic technologies such as the Miller cycle engine, 48V micro-
hybrid power, and Feiyu Intelligent Voice Control System,On-board WeChat.
Respond quickly to market demands, increase comfort, intelligent network
connectivity and assisted driving, including 16 all-standard 28-class leading
configurations, which have been widely recognized by the market and customers
since launched. High standard Xiaolan manufacturing site continues to expand
modern plants of vehicle, engine and frame, which will further ensure JMC's
product production and quality improvement. With the construction of Fushan new
energy base, JMC will deliver more new energy vehicles in the future which will
lay a solid foundation for JMC’s sustainable and healthy growth.
6
While continuous consolidating the traditional advantages, JMC has been
developing new business areas and innovative business models in response to
the new trend of overseas and domestic industries. In the new business field of
intelligent driving, as one of the first demonstration companies certified by the
vehicle networking product of China's self-developed global satellite positioning
system Beidou system, based on 5G and vehicle networking technology
application, the company has researched and developed the first domestic
intelligent driving pure electric TeShun light bus product with autonomous driving
technology on the mass production model, achieve multiple functions such as
high-speed automatic formation, automatic remove formation, automatic obstacle
avoidance, automatic pull over, etc. Cooperated with Jiangxi provincial
Department of Transportation, China mobile, Huawei and other leading
enterprises to complete the Changjiu intelligent high-speed formation autonomous
driving demonstration project, Yingtan international IoT conference collaboration
and presentation project, 2019 World VR industry conference collaboration and
presentation project, etc. Based on the company's new energy light truck platform,
cooperate with partners to build a full series of large-tonnage autonomous special
vehicles for environmental sanitation ， the vehicles will be used in municipal
environmental sanitation and other demonstration projects. Combining with the
above intelligent driving cooperation projects, the Company has become a
member of National Science and Technology Major Project, joint National Science
and Technology Major Project -- "Zhi Gan Xing" subject research. In the field of
new energy technology, based on the commercial scenario, the Company
vigorously promotes the research and sales of pure electric vehicle, and develops
hydrogen fuel and methanol fuel vehicle technology with advantageous partners.
In the new business ecology field, the Company participates in the construction of
the automobile business ecosystem, and creates a new ecology of cross-industry
intelligent service for commercial vehicles with domestic financial enterprises,
communication enterprises, logistics enterprises and mobile travel operating
enterprises.
7
Chapter IV Management Discussion and Analysis
1. Summary
In the first half of 2020, due to the impact of the COVID-19, China’s economy has
declined slightly, and China’s auto market has slowed down. In the first half of
2020 total sales volume was 10.25 million units, decreased 16.91% 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
series of sales policy to respond the market risk. In the first half of 2020, JMC
achieved sales volume of 141,193 units, increased 3.33% compared with the
same period last year, achieved revenue of RMB 14.07 billion, increased 2.56%
compared with the same period last year, achieved net profit of RMB 208 million,
increased 252.98% compared with the same period last year. It mainly reflects
sales volume increase and sales structure improvement, continuous promotion of
cost reduction and efficiency enhancement and strict control of expenses.
2. Core Business Analysis
Year-over-Year Changes of Main Financial Data
Unit: RMB
YOY change
2020 1H 2019 1H Reason
（%）
Revenue 14,073,417,878 13,721,953,502 2.56%
Cost of sales 11,860,122,365 11,678,659,344 1.55%
Distribution costs 592,187,320 705,875,262 -16.11%
Administrative expenses 459,127,446 437,154,690 5.03%
Finance expense -66,731,813 -89,690,604 25.60%
Income
14,137,157 -46,302,374 130.53% Due to profits rise
tax expense
Researchand
823,946,960 914,828,651 -9.93%
DevelopmentExpenditure
Net cash generated from Due to cash received from
734,283,627 1,435,351,564 -48.84%
operating activities sales decrease
Net cash used in investing Due to the purchase of
-3,076,090,849 -684,404,814 -349.45%
activities structured deposits
Net cash used in financing Due to the new added
1,276,424,368 -369,956 345,120.59%
activities short-term loan
Net increase/(decrease) in Due to the increase in
-1,065,382,854 750,576,794 -241.94%
cash and cash equivalents cash paid for investments
8
Composition of Core Business
Unit: RMB
2020 1H 2019 1H
YOY change
Proportion Proportion
Amount Amount （%）
(%) (%)
Revenue 14,073,417,878 100% 13,721,953,502 100% 2.56%
By Industry
Automobile Industry 14,073,417,878 100% 13,721,953,502 100% 2.56%
By Products
Vehicle 13,030,304,986 92.59% 12,327,573,061 89.84% 5.70%
Components 809,320,498 5.75% 1,168,533,129 8.52% -30.74%
Automobile Maintenance
37,965,367 0.27% 43,900,442 0.32% -13.52%
services
Material
195,827,027 1.39% 181,946,870 1.32% 7.63%
& Others
By region
China 14,073,417,878 100% 13,721,953,502 100% 2.56%
Reach to 10% of Revenue or Profit by Industry, Product or Region
√Applicable □Not Applicable
Unit: RMB
Y-O- Y-O-Y gross
Gross Y-O-Y Cost
Turnover Cost Yturnover margin change
Margin Change(%)
change (%) (points)
By Industry
Automobile
14,073,417,878 11,860,122,365 15.73% 2.56% 1.55% 0.84%
Industry
By Products
Vehicle 13,030,304,986 11,046,531,024 15.22% 5.70% 3.65% 1.67%
By Region
China 14,073,417,878 11,860,122,365 15.73% 2.56% 1.55% 0.84%
Explanation on the above 30% year-on-year change of related data
√Applicable □Not Applicable
Affected by the epidemic situation, the sales of spare parts decreased.
3. Non- core business analysis
□Applicable √Not Applicable
9
4. Analysis of Assets and Liabilities
I. Major changes
Unit: RMB
YOY
June 30, 2020 December 31, 2019
Asset item Proportion
change
Amount Proportion Amount Proportion (Points)
Cash at bank and on hand 7,922,272,404 30.34% 8,937,936,658 36.78% -6.44%
Accounts receivables 3,032,745,980 11.61% 2,208,236,620 9.09% 2.52%
Inventories 1,694,426,123 6.49% 1,946,869,092 8.01% -1.52%
Long-term equity investments 37,910,003 0.15% 40,934,557 0.17% -0.02%
Fixed assets 5,230,779,446 20.03% 5,714,489,577 23.52% -3.49%
Construction in progress 1,667,129,490 6.38% 1,498,124,778 6.17% 0.21%
Short-term borrowings 1,300,000,000 4.98% 0 0.00% 4.98%
Long-term borrowings 3,013,368 0.01% 3,197,814 0.01% 0.00%
II. The fair value of the assets and liabilities.
√Applicable □Not Applicable
Unit: RMB
Loss/profit Cumulative
Beginning Impairment
in faire changes in fair Purchase in Sell in the Other End of the
Item of the in the
value in value recorded the period periond changes peridod
period period
the period into equity
financial assets
1.Trading financial
assets (excluding 6,471,000,0
0 7,990,657 0 0.00 9,189,000,000 0 2,725,990,657
derivative financial 00
assets)
2. Receivables 289,044,37 347,037,50
0 0 0.00 328,944,967 0 270,951,837
financing 3 3
289,044,37 6,818,037,5
Subtotal 7,990,657 0 0.00 9,517,944,967 0 2,996,942,494
3 03
Financial liabilities 0 0 0 0 0 0 0 0
Whether there is a significant change in the measurement attributes of the
Company's main assets during the reporting period
□Applicable √Not Applicable
III. Restriction on Assets Rights as of the End of the Reporting Period
There was no major restriction on assets rights as of the end of the reporting
period.
5. Investment
I. Summary
□Applicable √Not Applicable
II. Obtained Major Equity Investment during the Reporting Period
10
□Applicable √Not Applicable
III. Ongoing Major Non-Equity Investment during the Reporting Period
√Applicable □Not Applicable
Unit: RMB
Investment Fixed Spending in Investment
Project
Method/ Assets 2020 Committed Progress Index
Name
source (Y/N) (RMB Mils) (RMB Mils)
Announcement of this
Fushan project (NO:2017-044) was
Self-funded Y 28,203,000 889,203,000 43%
Site published in the website
http://www.cninfo.com.cn
Total -- -- 28,203,000 889,203,000 43% --
IV.Financial assets measured at fair value
√Applicable □Not Applicable
Unit: RMB
Cumulative
Loss/profit Sell in
Initial changes in Purchase in Accumulated End of
Category in faire the Source of
investment fair value the reporting investment the
of Assets value in the reporting funds
cost recorded period income period
period period
into equity
2,996,9
289,044,37 7,990,657.0 9,517,944,96 6,818,03 Self-
Others 0.00 32,619,541.00 42,494.
3.00 0 7.00 7,503.00 funded
00
2,996,9
289,044,37 7,990,657.0 9,517,944,96 6,818,03
Total 0.00 32,619,541.00 42,494. --
3.00 0 7.00 7,503.00
00
V. Financial Assets Investment
(a) Stock Investment
□Applicable √Not Applicable
(b) Derivative Investment
□Applicable √Not Applicable
6. Sales of Major Assets and Equity
I. Sale of Major Assets
□Applicable √Not Applicable
II. Sales of Major Equity
□Applicable √Not Applicable
7. Operating Results of Main Subsidiaries and Joint-Stock Companies whose
impact on JMC’s net profit more than 10%
11
Unit: RMB’000
Name of Type of Main Registere Operating
Assets Net Assets Turnover Net Profit
Companies Companies Business d Capital Profit
Jiangling Sale of
Motors vehicles, -
Subsidiary 50,000 3,590,858 222,591 12,723,312 -11,773
Sales Co., service 8,881
Ltd. parts
Production
and sale of
heavy
JMC Heavy commercial
Duty vehicles,
Subsidiary 281,793 2,677,165 -1,239,673 308,100 -260,225 -259,471
Vehicle engines,
Co., Ltd. component
s, and
related
service
Acquisition and disposal of the subsidiary
□Applicable √Not Applicable
8. Structured Entities Controlled by JMC
□Applicable √Not Applicable
9．Business performance prediction of the first nine monthes of 2020
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
Preliminary results: net profit was positive, with a year-on-year increase of more
than 50%
Data type of performance forecast: Interval number
Beginning of year to
Same period
end of next reporting Change
last year
period
Profit Attributable to the
100.00
Equity Holders of the 31,534 -- 39,417.5 15,767 up -- 150.00%
%
Company(RMB)
Basic earnings per 100.00
0.36 -- 0.45 0.18 up -- 150.00%
share(RMB) %
The main reasons are: 1. the Company's operating conditions in the first
half of 2020 were good, and the net profit in the first half of the year was
Explanation on changes 208 million, increased 252.98% compared with the same period last year;
in performance 2. the third quarter of 2020 is expected to continue the good operating
conditions as in the first half of the year and steadily increase the
Company's profits.
10. Potential Challenges and Solutions
Affected by the epidemic in 2020, the Company faces huge growth tests,
increased industry competition, stricter regulatory requirements, rising cost
pressures, and slowing economic growth. To maintain steady growth, the
Company will continue to focus on the following areas:
12
(1)Based on the stable epidemic prevention and control, continue to steadily
promote the production and operation of the factory;
(2)Insight into customer needs design and release customer-oriented products,
improve channel performance, and achieve customer-centric business growth;
(3)Accelerate product platform, redefine product portfolio, enrich pedigree and
network connection configuration to better meet customer needs; promote the
development of modified vehicle business, and improve market performance and
industrial share in special modified vehicle fields such as medical rescue, logistics
and transportation;
(4)Implement capacity optimization projects and continue to optimize JMC's lean
production, improve production efficiency and product quality level;
(5)Improve supplier capabilities and component quality, and continue to reduce
component procurement costs;
(6)Strengthen corporate governance, strictly follow national laws and regulations,
and improve risk assessment and control mechanisms;
(7)Continuous expense management and control to optimize business structure;
(8)Through the established process optimization team, create a lean and efficient
organization to respond flexibly to market changes;
The Company will focus on light commercial vehicle with the support of SUV,
maximize its own advantage and fully take advantage of shareholders resource to
realize sustainable profit. Strengthen channel coverage, improve financing service
ability; promote new products development and R&D ability improvement, to
accelerate the progress of launching new competitive products to the market;
develop more proactive cost reduction plan to improve the Company’s profit ability.
The Company will accelerate the development and cultivation of the heavy truck
market and increase the company's influence in the field of commercial vehicles.
Guided by the new strategy, the Company will continuously implement all the
specific initiatives to accelerate the strategic target achievement.
13
Chapter V Major Events
1. Annual and special shareholders’ meeting
I. Shareholders’ meeting during the reporting period
Investors
Convening Announcement Announcement
Meetiing Type of meeting Attending
Date Date Index
Percentage (%)
2019 Annual Annual Number 2020-024,
Shareholders’ Shareholders’ 76.42% June 19, 2020 June 19, 2020 published on the website
Meeting Meeting www.cninfo.com.cn.
II. Share holders who hold vote right restored preferred shares apply to hold a
special shareholders’ meeting
□Applicable √Not Applicable
2. Proposal on profit distribution and converting capital reserve to share capital for
the reporting period
□Applicable √Not Applicable
The Company planned that neither cash dividend nor stock dividend was
distributed, and not to convert capital reserve to share capital for the first half of
2020.
3. Commitments of actual controlling parties, shareholders, related parties,
acquirers and the Company finished in the reporting period or overdue unfinished
by the end of the reporting period
□Applicable √Not Applicable
There is no commitmentsof actual controlling parties, shareholders, related parties,
acquirers and the Company finished in the reporting period or overdue unfinished
by the end of the reporting period.
4. Appointment or dismissal of accounting firm
Whether the 2020 half-year report is audited?
□Yes √No
JMC 2020 half-year report is not audited.
5. Explanation of the board of directors, the supervisory board to abnormal
opinions from accounting firm for the reporting period
□Applicable √Not Applicable
6. Explanation of the board of directors to abnormal opinions from accounting firm
in 2020 half-year report
□Applicable √Not Applicable
7. Related matters regarding bankruptcy
□Applicable √Not Applicable
The Company did not go bankrupt during the reporting period.
8. Litigation or arbitration
Significant litigation or arbitration
□Applicable √Not Applicable
There is no significant litigation or arbitration in the reporting period.
14
Other litigation
□Applicable √Not Applicable
9.Media questions
□Applicable √Not Applicable
There is no Media questions in the reporting period.
10. Punishment
□Applicable √Not Applicable
The Company have not been punished by regulatory authorities.
11. Honesty and credit of JMC and its controlling shareholder or actual controlling
party
□Applicable √Not Applicable
12. Implementation of equity incentive plan, employee stock ownership plan and
other employee incentive method
□Applicable √Not Applicable
13. Major related transactions
I. Routine operation related party transactions
√Applicable □Not Applicable
Please refer to the note 7 “Related party Transactions” to the financial statements
for details.
II. Major related party transaction concerning transfer of assets or equity
□Applicable √Not Applicable
There was no major related party transaction concerning transfer of assets or
equity during the reporting period.
III.Related party transaction concerning outside co-investment
□Applicable √Not Applicable
There was no outside co-investment during the reporting period.
IV.Related credit and debt
√Applicable □Not Applicable
Is there non-operating related credit and debt?
□Yes √No
The Company had no non-operating related credit and debt during the reporting
period.
V. Other major related party transactions
√Applicable □Not Applicable
Please refer to the note 7 “Related party Transactions” to the financial statements
for details.
Index for the Announcement of Major related party transactions:
Announcement Title Announcement Disclosure Date Website for Disclosure
Jiangling Motors Corporation, Ltd.
Public Announcement on Related Party March 04, 2020 http://www.cninfo.com.cn
Transactions
15
Jiangling Motors Corporation, Ltd.
Public Announcement on Forecast of
March 26, 2020 http://www.cninfo.com.cn
the Routine Related Party Transactions in
2020
Jiangling Motors Corporation, Ltd.
Public Announcement on Related Party April 08,2020 http://www.cninfo.com.cn
Transactions
14. Non-operating funding in the Company occupied by controlling shareholder
and its affiliates
□Applicable √Not Applicable
There was no non-operating funding in the Company occupied by controlling
shareholder and its affiliates during the reporting period.
15. Major contracts and execution
I. Entrustment, contract or lease
a. Entrustment
□Applicable √Not Applicable
There was no entrustment during the reporting period.
b. Contract
□Applicable √Not Applicable
There was no contract during the reporting period.
c. Lease
√Applicable □Not Applicable
See the note 7(b) to financial statements for lease of related parties.
Project earns more than 10% of net profit.
□Applicable √Not Applicable
II Major Guarantee
□Applicable √Not Applicable
The Company had no outside guarantee during the reporting period.
III.Entrusted financial management
□Applicable √Not Applicable
IV. Other Major Contracts
□Applicable √Not Applicable
There was no other major contract in the reporting period.
16. Corporation social responsibilities
I. Environmental protection
Whether the Company and affiliates is the key pollution discharge unit published
by environmental protection administration?
√Yes □No
Emission Emission Meet
Main Emission Emission Outlet Emission Emission Emission
OutletNum Standard Standard
Pollutants Ways Distribution Concentration Standard Amount
ber Amount or Not
16
3 in Mainsite, 1
Wastewater in Xiaolan Site, “Wastewater
COD: COD≤841.68t,
(COD, NH- continuous 7
1 in Cast "COD:145.4mg/L Discharge
55.15t,NH-N: NH-
Meet
N) discharge Plant ,1 in Axle NH-N:12.64mg/L" Standard”(GB Standard
1.66t N≤83.1414t
Plant and 1 in 8978-1996)
JMCH
"The Emission
Exhaust SO2: 7mg/m3, NOx:
Standard of Air
gas (SO2, 51 in Mainsite, 61mg/m3, solid: Pollutants”,”
NOx, 58 in Xiaolan 20mg/m3, toluol: SO2≤37.69t,
continuous Emission SO2: 8.39t, Meet
smoke, 148 Site, 33 in Cast 0.419mg/m3, Standard of Air NMHC≤2533. Standard
toluol,dimet discharge Plant and 6 in dimethylbenzene: NOx: 12.17t
54t
Pollutants for
hylbenzene, Axle Plant 2.66mg/m3 , NMHC:
Boiler”（GB
NMHC） 3.34mg/m3
13271-2014）
The construction and operation of environmental protection facilities
Since 2006, JMC has invested more than RMB 30 million to construct seven
wastewater treatment stations (including the wastewater treatment station in the
east plant area and Xiaolan wastewater treatment station), with the treatment
capacity as high as 9,000t/d. The treated wastewater reached the national
discharge standard. In 2019,the company built Jiangling Fushan factory
wastewater station.In 2020, the company will build a 600 mu frame wastewater
treatment station, which is planned to be put into use early next year.
For up-to-standard emission of waste gases, JMC has taken new control
measures over the years. In 2012, the Company invested RMB 10 million to
reconstruct the cupola furnace in the casting plant. In 2013, Xiaolan Branch
invested RMB 14 million to install a TNV waste gas incinerator. In 2014, JMC
invested RMB 14.6 million to construct the boiler coal-gas-switch project in the
south district. In 2017, the casting plant reconstructed the ventilation & dust
removal system for the smelting furnace in the large-size and middle & small-
sized parts workshop, and installed efficient environmental-friendly dust removal
equipment, effectively reducing the environmental pollution by dust.In 2018, the
company invested 3.6 million Yuan to upgrade and transform the dust remover of
the foundry, added electric furnace dust removal equipment, removed the existing
supporting dust remover, and installed two sets of "forward flow" reverse blowing
flat bag filter system, effectively reducing environmental pollution.In 2019, the
company set up a set of zealot runner device + a set of regenerative thermal
oxidizer system (RTO) in the coating workshop of Fushan factory. In 2020, the
VOC online of finishing paint drying outlet of Xiaolan painting truck has been
online.
For noise reduction, JMC took different measures to reduce the environmental
impact, such as increase of protective sound-proof doors & windows,
establishment of noise enclosure for air blower, installation of muffler and
transformation of sound-proof doors & windows. All these measures can make
sure up-to-standard discharge of noise at the plant boundary.
In the process of waste management, JMC managed from the source, and divided
the generation of wastes. JMC established a temporary storage yard for solid
wastes. Warning graphic symbols have been posted at the temporary storage site
of hazardous wastes. Besides, signboards have been provided as well, so as to
remind the passer-by of probable hazards in the storage process of hazardous
wastes. In 2017, JMC extend Xiaolan storage yard for solid wastes. In 2018 JMC
has renovated the engine plant garbage station. According to the requirements of
17
the law on the prevention and control of solid waste, solid waste should be
prevented from leakage, spreading and loss, and should not be stored in the open
air.After the transformation of anti pollution, anti-seepage and classified treatment,
leakage and pollution can be avoided, which meets the requirements of laws and
regulations.In 2019, the company will build the solid waste station of Jangling
Fushan factory, and expand the temporary storage of hazardous waste in Xiaolan
gasoline engine and cheqiao plant in 2020.
EIA on construction project and other administrative permits for environmental
protection
The Company strictly implements the construction project environmental impact
assessment system. With respect to new construction, expansion and
reconstruction, JMC comprehensively planned environmental protection and
evaluated the “Three Simultaneities”. From the source of design, JMC carried out
the philosophy of energy saving and low carbon all the time. The Company carries
on the environmental monitoring every year according to the requirements,
ensures the pollutant discharge meeting the requirements of discharge permit,
formulates the stricter internal control target, and strives to reduce the impact of
environmental pollution to the minimum. In 2020, the company obtained the EIA
approval of parts relocation optimization project, Xiaolan simulation collision
laboratory and other construction projects, and obtained the pollution discharge
permit of the foundry factory.
Emergency plan on emergency environmental incidents
In order to dilute or prevent environmental risks, JMC established an emergency
preparation and response procedure and specific environmental emergency plans
which were submitted to the Environmental Protection Bureau for the record,so as
to formulate corresponding control methods for potential accidents and
emergences occurred or that may probably occur. JMC organized emergency
drills every year to ensure the efficiency of emergency plan.
Environmental self-monitoring scheme
In 2020, the company obtained the EIA approval of parts relocation optimization
project, Xiaolan simulation collision laboratory and other construction projects,
and obtained the pollution discharge permit of the foundry factory.
Other information related to environmental protection
JMC paid high attention to environmental protection and pollution source control,
taking resource saving and cost reduction as the primary task. Moreover, the
Company also took full advantage of 6sigma, and controlled from the source, so
as to achieve the effect of environmental improvement. In the new expansion and
reconstruction projects, JMC laid emphasis on improving the environmental
performance, strictly implemented the system of “Three Simultaneities”,
transacted the EIA procedure according to national standards, stipulated the
preventive and control measures for environmental pollution, and reported to
competent administrative departments on environmental protection for approval.
II.One-to-one poverty alleviation
a. Plan on one-to-one poverty alleviation
The Company joined the one-to-one poverty alleviation, depending on JMCG, in
Qianmo Village, Dai Jiapu Township, Suichuang County, Jiangxi Province and
Xianting Village, Songhu Town, Xinjian District, Nanchang City in accordance with
the working arrangement of Jiangxi Provincial Party Committee and Provincial
18
Government. The overall goal is: to help the registered poor households will be
lifted out of povertyand poor village to achieve a well-off standard of living before
2020 by cooperating with the local government.
b. Summary of one-to-one poverty alleviation in the first half
The Company regards the realization of precision poverty relief as the basic
strategy of precision poverty alleviation. The Company continued to consolidate
efforts of one-to-one poverty alleviation in the first half of 2020.
c. Status of targeted measures in poverty alleviation
Item Unit Amount/Progress
I. Brief Introduction —— ——
2. Sum converted from the materials RMB (‘000) 34.4
II. Investments —— ——
1. Anti-poverty depending on industry development —— ——
2. Anti-poverty depending on employment transfer —— ——
3. Anti-poverty depending on relocation —— ——
4. Anti-poverty depending on education —— ——
including：4.1 Grants in aid to poor students RMB (‘000) 2
4.2 Subsidize the number of poor students People 12
5. Health Anti-poverty —— ——
6. Ecological protection anti-poverty —— ——
7. Miscellaneous provisions —— ——
including：7.1 Investments on stay-at-home
RMB (’000) 32.4
children, women and elderly
7.2 Help the number of " stay-at-
People 34
home"children, women and elderly
8. Social anti-poverty —— ——
9. Other —— ——
III. Awards —— ——
d. On-going plan regarding targeted measures in poverty alleviation
The year 2020 will be a decisive year in the fight against poverty, JMC will
unswervingly implement the strategy of targeted poverty alleviation, strengthen
the combination of aiding the poor with wisdom, help all the registered poor
households to stabilize poverty alleviation, consolidate and improve the
effectiveness of poverty alleviation, and resolutely win the battle against poverty.
17. Other major events
√Applicable □Not Applicable
JMC received government incentives about RMB 160 million appropriated by
Nanchang City, Nanchang Xiaolan Economic and Technological Development
Zone, Nanchang County and Shanxi Transformation and Comprehensive Reform
Demonstration Zone during the reporting period, which is to support JMC’s
development.
18. Major event of JMC subsidiary
√Applicable □Not Applicable
JMC Heavy Duty Vehicle Co., Ltd., a whole-owned subsidiary of JMC, was
separated per vehicle and engine business into the surviving company “JMC
Heavy Duty Vehicle Co., Ltd.” and the derived new company “Taiyuan Jiangling
19
Power Co., Ltd.” in August 2020. Before the separation, the registered capital of
JMC Heavy Duty Vehicle Co., Ltd. was RMB 281,793,174; after the separation,
the registered capital of JMC Heavy Duty Vehicle Co., Ltd. is changed to RMB
181,793,174, and the registered capital of Taiyuan Jiangling Power Co., Ltd. is
RMB 100,000,000.
20
Chapter VIShare Capital Changes & Shareholders
1. Changes of Shareholding Structure
I. Changes of shareholding structure
Before the change After the change
Change (+, -)
Proportion Reserve- Proportion
New Bonus
Shares of total converted Others Subtotal Shares of total
shares Shares
shares (%) shares shares (%)
I. Limited tradable A
750,915 0.09% -75 -75 750,840 0.09%
shares
1. Other domestic
750,915 0.09% -75 -75 750,840 0.09%
shares
Including:
Domestic legal
749,940 0.09% 749,940 0.09%
person shares
Domestic natural
975 0.00% -75 -75 900 0.00%
person shares
II. Unlimited tradable
862,463,085 99.91% 75 75 862,463,160 99.91%
shares
1. A shares 518,463,085 60.06% 75 75 518,463,160 60.06%
2. B shares 344,000,000 39.85% 344,000,000 39.85%
III. Total 863,214,000 100.00% 863,214,000 100.00%
Causes of shareholding changes
√Applicable □Not Applicable
Former senior executive Zhu Shuixing left office for more than half a year, and
his shares were released on January 1, 2020.
Approval of changes of shareholding structure
□Applicable √Not Applicable
Shares transfer
□Applicable √Not Applicable
Impact on accounting data, such as the latest EPS, diluted EPS, shareholders’
equity attributable to the equity holders of the Company, generated from
shares changes
□Applicable √Not Applicable
Others to be disclosed necessarily or per the requirements of securities
regulator
□Applicable √Not Applicable
II.Changes of limited tradable shares
√Applicable □Not Applicable
21
Number of
Number of Increase of
Number of shares restricted
restricted shares restricted
Name of shareholder released in the shares at the Reasons Release date
at the beginning of shares in the
current period end of the
the period current period
period
Senior
executives
Zhu Shuixing 75 75 0 0 January 1, 2020
leave for more
than half a year
total 75 75 0 0 -- --
2. Securities issuance and listing
□Applicable √Not Applicable
3. Shareholders and shareholding status
Total shareholders (as of JMC had 30,427 shareholders, including 24,876 A-share holders, and 5,551 B-share
June 30, 2020) holders.
Top ten shareholders
Shares
Shareholding Shares at Shares with
Shareholder Change due to
Shareholder Name Percentage the End of Trading
Type (+,-) Mortgage
(%) Year Restriction
or Frozen
Nanchang Jiangling State-owned
41.03% 354,176,000 0 0 0
Investment Co., Ltd. legal person
Foreign legal
Ford Motor Company 32.00% 276,228,394 0 0 0
person
Domestic non-
China Securities
State-owned 2.72% 23,458,066 0 0 0
Corporation Limited
legal persons
Shanghai Automotive Co., State-owned
1.51% 13,019,610 0 0 0
Ltd. Legal person
Hong Kong Securities
Foreign legal
Clearing Company Ltd. 0.99% 8,514,486 3,849,984 0 0
person
(HKSCC)
Central Huijin Investment State-owned
0.83% 7,186,600 0 0 0
Ltd. Legal person
Foreign legal
GAOLING FUND, L.P. 0.63% 5,453,086 0 0 0
person
Foreign legal
INVESCO FUNDS SICAV 0.56% 4,841,889 0 0 0
person
Domestic
Yang Wenting 0.44% 3,827,921 3,827,921 0 0
natural person
LSV EMERGING
Foreign legal
MARKETS EQUITY 0.35% 2,996,400 0 0 0
person
FUND, L.P.
Notes on association among above-mentioned shareholders None.
Top ten shareholders holding unlimited tradable shares
Shareholder Name Shares without Trading Restriction Share Type
Nanchang Jiangling Investment Co., Ltd. 354,176,000 A share
Ford Motor Company 276,228,394 B share
China Securities Corporation Limited 23,458,066 A share
Shanghai Automotive Co., Ltd. 13,019,610 A share
Hong Kong Securities Clearing Company
8,514,486 A share
Ltd. (HKSCC)
Central Huijin Investment Ltd. 7,186,600 A share
22
GAOLING FUND, L.P. 5,453,086 B share
INVESCO FUNDS SICAV 4,841,889 B share
Yang Wenting 3,827,921 A share
LSV EMERGING MARKETS EQUITY
2,996,400 B share
FUND, L.P.
Notes on association among above- None.
mentioned shareholders
Stock buy-back by top ten shareholders or top ten shareholders holding
unlimited tradable shares in the reporting period
□Yes √No
There is no stock buy-back by top ten shareholders or top ten shareholders
holding unlimited tradable shares in the reporting period.
4. Change of controlling shareholders or actual controlling parties
Change of controlling shareholders
□Applicable √Not Applicable
There was no change of controlling shareholders during the reporting period.
Change of actual controlling parties
□Applicable √Not Applicable
There was no change of actual controlling parties during the reporting period.
23
Chapter VIIPreferred Shares
□Applicable √Not Applicable
JMC have no preferred shares during the reporting period.
24
Chapter VIII Convertible Bond
□Applicable √Not Applicable
JMC have no Convertible Bond during the reporting period.
25
Chapter IX Directors, Supervisors and Senior Management
1. Changes of shares held by directors, supervisors and senior management
□Applicable √Not Applicable
There was no change of shares held by Directors, Supervisors and senior
management in the reporting period. Please refer to 2018 annual report for
details.
2. Changes of directors, supervisors and senior management
√Applicable □Not Applicable
Name Position Status Date Reason
Independent
Lu Song Leave June 19, 2020 Term expired
Director
Independent
Wang Kun Leave June 19, 2020 Term expired
Director
Mike Chang VP Leave August 01,2020 Work rotation.
Jerry Lin VP Appointed August 01,2020
26
Chapter X Company Bond
Whether the Company owns the corporate bond that is lists in the securities
exchange and undue or is not paid in full although it’s due.
□Yes √No
27
Chapter XI Financial Statements
JIANGLING MOTORS CORPORATION, LTD.
FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30
JUNE 2020
28
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED AND COMPANY BALANCE SHEET AS AT 30 JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
Assets Note 30 June 2020 31 December 2019 30 June 2020 31 December 2019
Consolidated* Consolidated Company* Company
Current assets
Cash at bank and on hand 4(1) 7,922,272,404 8,937,936,658 7,165,034,132 8,677,928,946
Transactional financial assets 4(2) 2,725,990,657 - 2,725,990,657 -
Derivative financial assets 4(3) 1,475,752 - 1,475,752 -
4(4)、
Notes receivables 42,368,305 85,816,311 4,905 20,792,000
14(1)
Accounts receivables 4(5) 3,032,745,980 2,208,236,620 1,083,663,550 865,928,297
Receivables financing 4(6) 270,951,837 289,044,373 507,260,468 52,811,157
Advances to suppliers 4(7) 553,294,163 517,122,502 542,256,373 504,562,617
4(8)、
Other receivables 94,908,695 115,983,137 3,267,748,739 3,118,317,705
14(2)
Inventories 4(9) 1,694,426,123 1,946,869,092 1,339,814,288 1,471,931,881
Other current assets 4(10) 807,965,374 973,426,066 634,657,841 821,783,113
Total current assets 17,146,399,290 15,074,434,759 17,267,906,705 15,534,055,716
Non-current assets
4(11)、
Long-term equity investments 37,910,003 40,934,557 377,910,003 380,934,557
14(3)
Fixed assets 4(12) 5,230,779,446 5,714,489,577 4,039,863,217 4,462,909,152
Construction in progress 4(13) 1,667,129,490 1,498,124,778 1,450,890,333 1,244,963,653
Right-of-use asset 4(14) 28,814,063 36,039,891 27,363,329 33,138,423
Intangible assets 4(15) 1,075,657,753 948,755,845 645,298,032 513,529,416
Development costs 4(15) 69,583,416 125,142,080 46,386,709 100,271,663
Deferred tax assets 4(17) 858,593,505 860,607,106 166,881,320 182,248,610
Totalnon-current assets 8,968,467,676 9,224,093,834 6,754,592,943 6,917,995,474
Total assets 26,114,866,966 24,298,528,593 24,022,499,648 22,452,051,190
29
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED AND COMPANY BALANCE SHEET AS AT 30 JUNE 2020 (continued)
(All amounts in thousands of RMB unless otherwise stated)
Liabilities and owners' equity Note 30 June 2020 31 December 2019 30 June 2020 31 December 2019
Consolidated* Consolidated Company* Company
Current liabilities
Short-term borrowings 4(19) 1,300,000,000 - 1,300,000,000 -
Derivative financial liabilities 4(3) - 545,632 - 545,632
Notes payables 4(20) 71,901,506 31,400,000 - -
Accounts payables 4(21) 8,735,960,426 8,116,169,589 8,456,366,479 7,908,815,398
Contract liabilities 4(22) 149,157,003 268,170,154 156,055,834 77,585,490
Employee benefits payable 4(23) 503,696,486 385,547,290 447,103,193 312,170,895
Taxes payable 4(24) 44,504,735 198,777,104 36,995,015 119,431,418
Other payables 4(25) 3,983,922,576 4,145,266,838 1,370,448,674 2,227,351,456
Current portion of non-current
4(26)
liabilities 10,578,872 13,843,406 9,391,439 11,500,358
Other current liabilities 4(27) 273,213,888 264,558,923 25,389,602 13,333,551
Total current liabilities 15,072,935,492 13,424,278,936 11,801,750,236 10,670,734,198
Non-current liabilities
Long-term borrowings 4(28) 3,013,368 3,197,814 3,013,368 3,197,814
Lease liabilities 4(29) 19,139,514 22,592,252 19,139,514 22,592,252
Provisions 4(30) 176,066,962 166,687,460 - -
Deferred income 4(31) 34,693,362 34,389,578 34,693,362 34,389,578
Long-term employee benefits
4(32)
payable 61,276,485 63,685,000 60,976,485 63,385,000
Deferred tax liabilities 4(17) 25,022,887 25,339,981 - -
Other non-current liabilities 4(33) 78,808,313 61,793,791 68,780,832 50,930,075
Total non-current liabilities 398,020,891 377,685,876 186,603,561 174,494,719
Total liabilities 15,470,956,383 13,801,964,812 11,988,353,797 10,845,228,917
Owners' equity
Share capital 4(34) 863,214,000 863,214,000 863,214,000 863,214,000
Capital surplus 4(35) 839,442,490 839,442,490 839,442,490 839,442,490
Other comprehensive income 4(36) (11,395,500) (11,395,500) (11,616,750) (11,616,750)
Surplus reserve 4(37) 431,607,000 431,607,000 431,607,000 431,607,000
Undistributed profits 4(38) 8,521,042,593 8,373,695,791 9,911,499,111 9,484,175,533
Total equity attributable to equity
owners of the Company 10,643,910,583 10,496,563,781 12,034,145,851 11,606,822,273
Minority interests - - - -
Total owners' equity 10,643,910,583 10,496,563,781 12,034,145,851 11,606,822,273
Total Liabilities and owners' equity 26,114,866,966 24,298,528,593 24,022,499,648 22,452,051,190
note：* Unaudited financial indexes
Legal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
30
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED AND COMPANY INCOME STATEMENTS FOR 2020 FIRST
HALF-YEAR
(All amounts in RMB Yuan unless otherwise stated)
2019 First
2020 First 2020 First 2019 First
Half-year
Item Note Half-year Half-year Half-year
Consolidated*
Consolidated* Company* Company*
Revenue 4(39)、14(4) 14,073,417,878 13,721,953,502 13,100,109,933 12,974,537,618
4(39)、
Less: Cost of sales (11,860,122,365) (11,678,659,344) (11,197,514,026) (11,226,955,738)
4(45)、14(4)
Taxes and surcharges 4(40) (386,579,142) (368,975,495) (374,566,719) (356,492,502)
Selling expenses 4(41)、4(45) (592,187,320) (705,875,262) (106,442,789) (116,506,548)
General and administrative
4(42)、4(45) (459,127,446) (437,154,690) (358,155,678) (379,137,935)
expenses
Research and development
4(43)、4(45) (696,582,452) (837,430,636) (694,302,769) (761,825,538)
expenses
Financial expenses 4(44) 66,731,813 89,690,604 67,945,339 111,649,983
Including: Interest expenses (19,061,965) (106,053) (16,322,688) (106,053)
Interest income 94,240,518 92,765,173 91,873,400 112,414,620
Add: Other income 4(48) 165,639,467 72,562,205 145,105,792 12,562,205
Investment income 4(49)、14(5) 28,278,000 13,840,645 28,278,000 13,840,645
Including: Share of profit of
(3,024,554) 333,625 (3,024,554) 333,625
associates and joint ventures
Profit arising from changes in fair
4(50) 10,012,041 (3,556,991) 10,012,041 (3,556,991)
value
Credit impairment losses 4(47) (66,242,811) 1,056,124 (61,963,003) 1,397,263
Asset impairment losses 4(46) (34,107,710) (8,435,244) (20,994,208) (7,931,633)
Gains on disposals of assets 4(51) (581,955) (2,212,045) (1,145,364) (2,136,061)
Operating profit 248,547,998 (143,196,627) 536,366,549 259,444,768
Add: Non-operating income 4(52) 3,599,193 158,387,295 3,052,524 150,453,025
Less: Non-operating expenses 4(53) (30,238,252) (2,631,226) (30,104,671) (2,273,380)
Total profit 221,908,939 12,559,442 509,314,402 407,624,413
Less: Income tax expenses 4(54) (14,137,157) 46,302,374 (21,565,844) (16,530,546)
Net profit 207,771,782 58,861,816 487,748,558 391,093,867
Classified by continuity of
operations
Net profit from continuing
207,771,782 58,861,816 487,748,558 391,093,867
operations
Net profit from discontinued
- - - -
operations
Classified by ownership of the
equity
Minority interests - - - -
Attributable to equity owners of the
207,771,782 58,861,816 487,748,558 391,093,867
Company
Other comprehensive income, net of
- - - -
tax
Changes arising from
4(36)
remesurement of net liability or net
asset of defined benefit plan
Total comprehensive income 207,771,782 58,861,816 487,748,558 391,093,867
Attributable to equity owners of the
4(36) 207,771,782 58,861,816 487,748,558 391,093,867
Company
Attributable to minority interests - - - -
Earnings per share
Basic earnings per share(RMB
4(55) 0.24 0.07 —— ——
Yuan)
Dilutedearnings per share(RMB
4(55) 0.24 0.07 —— ——
Yuan)
note：* Unaudited financial indexes
Legal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
31
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS FOR 2020 FIRST
HALF-YEAR
(All amounts in thousands of RMB unless otherwise stated)
2020 First 2019 First 2020 First 2019 First
Item Note Half-year Half-year Half-year Half-year
Consolidated* Consolidated* Company* Company*
Cash flows from operating activities
Cash received from sales of goods
14,440,474,744 15,268,525,172 12,911,082,079 14,492,403,355
or rendering of services
Cash received relating to other
4(56) 245,920,384 349,521,262 187,369,975 268,605,042
operating activities
Sub-total of cash inflows 14,686,395,128 15,618,046,434 13,098,452,054 14,761,008,397
Cash paid for goods and services (10,617,165,843) (10,518,805,139) (10,193,382,381) (10,053,954,409)
Cash paid to and on behalf of
(1,084,107,268) (1,205,849,910) (962,774,043) (1,072,966,988)
employees
Payments of taxes and surcharges (1,021,043,215) (1,119,736,879) (838,116,455) (927,033,121)
Cash paid relating to other operating
4(56) (1,229,795,175) (1,338,302,942) (768,797,800) (805,267,011)
activities
Sub-total of cash outflows (13,952,111,501) (14,182,694,870) (12,763,070,679) (12,859,221,529)
Net cash flows from operating
4(57) 734,283,627 1,435,351,564 335,381,375 1,901,786,868
activities
Cash flows from investing activities
Cash received from disposal of
6,471,000,000 4,700,000,000 9,238,976,131 6,847,500,000
investments
Cash received from returns on
32,619,541 18,446,866 32,619,541 18,446,866
investments
Net cash received from disposal of
fixed assets, intangible 7,983,584 2,989,695 7,062,524 2,762,095
assets and other long-term assets
Cash received relating to other
4(56) 96,772,432 103,216,428 164,343,358 159,332,398
investing activities
Sub-total of cash inflows 6,608,375,557 4,824,652,989 9,443,001,554 7,028,041,359
Cash paid to acquire fixed assets,
intangible assets and other long-term (493,537,475) (801,467,480) (480,691,940) (638,723,096)
assets
Cash paid to acquire investments (9,189,000,000) (4,700,000,000) (12,088,976,131) (7,157,500,000)
Cash paid relating to other investing
(1,928,931) (7,590,323) (1,928,931) (7,590,323)
activities
Sub-total of cash outflows (9,684,466,406) (5,509,057,803) (12,571,597,002) (7,803,813,419)
Net cash flows from investing
(3,076,090,849) (684,404,814) (3,128,595,448) (775,772,060)
activities
Cash flows from financing activities
Cash received from borrowings 1,800,000,000 - 1,800,000,000 -
Sub-total of cash inflows 1,800,000,000 - 1,800,000,000 -
Cash repayments of borrowings (500,231,444) (219,935) (500,231,444) (219,935)
Cash payments for distribution of
(18,544,156) (150,021) (15,845,917) (150,021)
dividends, profits or interestexpenses
Cash payments relating to other
4(56) (4,800,032) - (3,603,380) -
financing activities
Sub-total of cash outflows (523,575,632) (369,956) (519,680,741) (369,956)
Net cash flows from financing
1,276,424,368 (369,956) 1,280,319,259 (369,956)
activities
Effect of foreign exchange rate
changes on cash and cash - - - -
equivalents
Net increase in cash and cash
4(57) (1,065,382,854) 750,576,794 (1,512,894,814) 1,125,644,852
equivalents
Add: Cash and cash equivalents at
4(57) 8,937,936,658 7,616,879,976 8,677,928,946 6,244,682,576
beginning of year
Cash and cash equivalents at end of
4(57) 7,872,553,804 8,367,456,770 7,165,034,132 7,370,327,428
period
note：* Unaudited financial indexes
Legal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
32
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF CHANGES IN OWNERS' EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2020
(All amounts in thousands of RMB unless otherwise stated)
Attributable to equity owners of the Company
Minority Total owners'
Item Note Other comprehensive Surplus Undistributed
Sharecapital Capital surplus interests equity
income reserves profits
Balance at 1 January 2019 863,214,000 839,442,490 (10,178,250) 431,607,000 8,260,412,273 - 10,384,497,513
Movements for the six months ended 30
- - - - 24,333,256 - 24,333,256
June 2020*
Total comprehensive income
Net profit - - - - 58,861,816 - 58,861,816
Other comprehensive income - - - - - - -
Total comprehensive income for the year - - - - 58,861,816 - 58,861,816
Profit distribution
Profit distribution to equity owners 4(38) - - - - (34,528,560) - (34,528,560)
Balance at 30 June 2020* 863,214,000 839,442,490 (10,178,250) 431,607,000 8,284,745,529 - 10,408,830,769
Balance at 1 January 2020 863,214,000 839,442,490 (11,395,500) 431,607,000 8,373,695,791 - 10,496,563,781
Movements for the six months ended 30
- - - - 147,346,802 - 147,346,802
June 2020*
Total comprehensive income
Net profit - - - - 207,771,782 - 207,771,782
Other comprehensive income - - - - - - -
Total comprehensive income for the year - - - - 207,771,782 - 207,771,782
Profit distribution
Profit distribution to equity owners 4(38) - - - - (60,424,980) - (60,424,980)
Balance at 30 June 2020* 863,214,000 839,442,490 (11,395,500) 431,607,000 8,521,042,593 - 10,643,910,583
note：* Unaudited financial indexes
Legal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
33
JIANGLING MOTORS CORPORATION, LTD.
COMPANY STATEMENT OF CHANGES IN OWNERS' EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2020
(All amounts in thousands of RMB unless otherwise stated)
Other
Item Note Share capital Capital surplus comprehensive Surplus reserves Undistributed profits Total owners' equity
income
Balance at 1 January 2019 863,214,000 839,442,490 (10,395,750) 431,607,000 9,040,459,451 11,164,327,191
Movements for the six
- - - - 356,565,307 356,565,307
months ended 30 June
2020*comprehensive income
Total
Net profit - - - - 391,093,867 391,093,867
Other comprehensive income - - - - - -
Total comprehensive income
- - - - 391,093,867 391,093,867
for the year
Profit distribution
Profit distribution to equity
4(38) - - - - (34,528,560) (34,528,560)
owners
Balance at 30 June 2020* 863,214,000 839,442,490 (10,395,750) 431,607,000 9,397,024,758 11,520,892,498
Balance at 1 January 2020 863,214,000 839,442,490 (11,616,750) 431,607,000 9,484,175,533 11,606,822,273
Movements for the six
- - - - 427,323,578 427,323,578
months ended 30 June
2020*comprehensive income
Total
Net profit - - - - 487,748,558 487,748,558
Other comprehensive income - - - - - -
Total comprehensive income
- - - - 487,748,558 487,748,558
for the year
Profit distribution
Profit distribution to equity
4(38) - - - - (60,424,980) (60,424,980)
owners
Balance at 30 June 2020* 863,214,000 839,442,490 (11,616,750) 431,607,000 9,911,499,111 12,034,145,851
note：* Unaudited financial indexes
Legal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
34
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
1 General information
Jiangling Motors Corporation, Ltd. (hereinafter “the Company”) is a Sino-foreign joint stock
enterprise established under the approval of Hongban (1992) No. 005 of Nanchang
Revolution and Authorisation Group of Company’s Joint Stock on the basis of Jiangxi
Motors Manufacturing Factory on 16 June 1992. The registration number of the enterprise
business license is No. 913600006124469438. The registered address of the Company
and the address of its headquarters are both Nanchang City, Jiangxi Province of the
People’s Republic of China (“the PRC”).
On 23 July 1993, with the approval of the China Securities Regulatory Commission
(hereinafter “CSRC”) (Zheng Jian Fa Shen Zi [1993] No. 22) and (Zheng Jian Han Zi
[1993] No. 86), the Company was listed on the Stock Exchange of Shenzhen on 1
December 1993, issuing 494,000,000 shares in total. On 8 April 1994, a total of
25,214,000 shares were distributed for the 1993 dividend distribution programme with the
approval of the shareholders’ meeting and Jiangxi Securities Management Leading Group
(Gan Securities [1994] No. 02). In 1995, with the approval of CSRC (Zheng Jian Fa Zi
[1995] No. 144) and the Shenzhen Securities Management Office (Shenzhen Office Fu
[1995] No. 92), the Company issued 174,000,000 ordinary shares (“B shares”). In 1998,
with the approval of CSRC (Zheng Jian Fa Zi [1998] No. 19), the Company issued
additional 170,000,000 B shares.
According to the resolution of the shareholders’ meeting regarding the split share structure
reform on 11 January 2006, the Company implemented the Scheme on Split Share
Structure Reform on 13 February 2006. After the implementation, the Company’s total
paid-in capital remains the same. Related details are disclosed in Note 4(32).
As at 30 June 2020, the Company’s paid-in capital totalled RMB 863,214,000, with par
value of RMB 1 per share.
The business scope of the Company and its subsidiaries (hereinafter “the Group”)
includes production and sales of automobile assemblies such as automobiles, special
(modified) vehicles, engines and chassis and other automobile parts, and provision of
related after-sales services; retail and wholesale of imported E series automobiles of Ford
Motor (China) Co., Ltd. (“FORD”) as the dealer; import and export of automobiles and
parts; dealership of used cars; provision enterprise management and consulting services
related to production and sales of automobiles.
Subsidiaries included in the consolidation scope for the current year are detailed in Note
5.
These financial statements were authorised for issue by the Company's Board of Directors
on 26August 2020.
2 Summary of significant accounting policies and accounting estimates
The Group determines specific accounting policies and estimates based on the features of
its production and operation, which mainly comprise the measurement of expected credit
losses (“ECLs”) on receivables (Note 2(8)), valuation of inventories (Note 2(9)),
depreciation of fixed assets and amortisation of intangible assets (Note 2(11), (14)),
criteria for capitalisation of development expenditures (Note 2(14)), recognition and
measurement of revenue (Note 2(19)), etc.
Key judgements applied by the Group on the determination of significant accounting
policies are set out in Note 2(25).
35
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(1) Basis of preparation
The financial statements are prepared in accordance with the Accounting Standards for
Business Enterprises - Basic Standard, specific accounting standards and relevant
regulations issued by the Ministry of Finance on 15 February 2006 and in subsequent
periods (hereinafter collectively referred to as “the Accounting Standards for Business
Enterprises” or “CASs”) and the disclosure requirements in the Preparation Convention of
Information Disclosure by Companies Offering Securities to the Public No.15 - General
Rules on Financial Reporting issued by CSRC.
The financial statements are prepared on a going concern basis.
(2) Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company For the Six Months Ended 30 June 2020 are in
compliance with the Accounting Standards for Business Enterprises, and truly and
completely present the consolidated and company’s financial position of the Company as
at 30 June 2020 and their financial performance, cash flows and other information for the
year then ended.
(3) Accounting year
The Company’s accounting year starts on 1 January and ends on 31 December.
(4) Recording currency
The recording currency is Renminbi (“RMB”). The financial statements are presented in
RMB.
(5) Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company
and all of its subsidiaries.
Subsidiaries are consolidated from the date on which the Group obtains control and are
de-consolidated from the date that such control ceases. For a subsidiary that is acquired
in a business combination involving enterprises under common control, it is included in the
consolidated financial statements from the date when it, together with the Company,
comes under common control of the ultimate controlling party. The portion of the net
profits realised before the combination date is presented separately in the consolidated
income statement.
In preparing the consolidated financial statements, where the accounting policies or the
accounting periods of the Company and subsidiaries are inconsistent, the financial
statements of the subsidiaries are adjusted in accordance with the accounting policies and
the accounting period of the Company. For subsidiaries acquired from business
combinations involving enterprises not under common control, the individual financial
statements of the subsidiaries are adjusted based on the fair value of the identifiable net
assets at the acquisition date.
36
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(5) Preparation of consolidated financial statements (Cont'd)
All significant intra-group balances, transactions and unrealised profits are eliminated in
the consolidated financial statements. The portion of subsidiaries’ shareholders' equity
and the portion of subsidiaries’ net profits and losses and comprehensive income for the
period not attributable to the Company are recognised as minority interests, net profit
attributed to minority interests and total comprehensive income attributed to minority
interests, and presented separately in the consolidated financial statements under
shareholders' equity, net profits and total comprehensive income respectively. Unrealised
profits and losses resulting from the sale of assets by the Company to its subsidiaries are
fully eliminated against net profit attributable to owners of the parent. Unrealised profits
and losses resulting from the sale of assets by a subsidiary to the Company are
eliminated and allocated between net profit attributable to owners of the parent and net
profit attributed to minority interests in accordance with the allocation proportion of the
parent in the subsidiary. Unrealised profits and losses resulting from the sale of assets by
one subsidiary to another are eliminated and allocated between net profit attributable to
owners of the parent and net profit attributed to minority interests in accordance with the
allocation proportion of the parent in the subsidiary.
If the accounting treatment of a transaction is inconsistent in the financial statements at
the Group level and at the Company or its subsidiary level, adjustment will be made from
the perspective of the Group.
(6) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on
demand, and short-term and highly liquid investments that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
(7) Foreign currency translation
Foreign currency transactions
Foreign currency transactions are translated into recording currency using the exchange
rates prevailing at the dates of the transactions.
At the balance sheet date, monetary items denominated in foreign currencies are
translated into recording currency using the spot exchange rates on the balance sheet
date. Exchange differences arising from these translations are recognised in profit or loss
for the current period, except for those attributable to foreign currency borrowings that
have been taken out specifically for acquisition or construction of qualifying assets, which
are capitalised as part of the cost of those assets. Non-monetary items denominated in
foreign currencies that are measured at historical costs are translated at the balance sheet
date using the spot exchange rates at the date of the transactions. The effect of exchange
rate changes on cash is presented separately in the cash flow statement.
37
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(8) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity. A financial asset or a financial
liability is recognised when the Group becomes a party to the contractual provisions of the
instrument.
(a) Financial assets
(i) Classification and measurement
Based on the business model for managing the financial assets and the contractual cash
flow characteristics of the financial assets, financial assets are classified as: (1) financial
assets at amortised cost; (2) financial assets at fair value through other comprehensive
income; (3) financial assets at fair value through profit or loss.
The financial assets are measured at fair value at initial recognition. Related transaction
costs that are attributable to the acquisition of the financial assets are included in the
initially recognised amounts, except for the financial assets at fair value through profit or
loss, the related transaction costs of which are recognised directly in profit or loss for the
current period. Accounts receivable or notes receivable arising from sales of products or
rendering of services (excluding or without regard to significant financing components) are
initially recognised at the consideration that is entitled to be charged by the Group as
expected.
Debt instruments
The debt instruments held by the Group refer to the instruments that meet the definition of
financial liabilities from the perspective of the issuer, and are measured in the following
three ways:
Measured at amortised cost:
The objective of the Group’s business model is to hold the financial assets to collect the
contractual cash flows, and the contractual cash flow characteristics are consistent with a
basic lending arrangement, which gives rise on specified dates to the contractual cash
flows that are solely payments of principal and interest on the principal amount
outstanding. The interest income of such financial assets is recognised using the effective
interest method. Such financial assets mainly include cash at bank and on hand, notes
receivable, accounts receivable, other receivables, etc.
38
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(8) Financial instruments (Cont'd)
(a) Financial assets (Cont’d)
(i) Classification and measurement (Cont’d)
Measured at fair value through other comprehensive income:
The objective of the Group’s business model is to hold the financial assets to both collect
the contractual cash flows and sell such financial assets, and the contractual cash flow
characteristics are consistent with a basic lending arrangement. Such financial assets are
measured at fair value through other comprehensive income, except for the impairment
gains or losses, foreign exchange gains and losses, and interest income calculated using
the effective interest method which are recognised in profit or loss for the current period.
Such financial assets mainly include receivables financing, etc.
Measured at fair value through profit or loss:
Debt instruments held by the Group that are not divided into those at amortised cost, or
those measured at fair value through other comprehensive income, are measured at fair
value through profit or loss and included in financial assets held for trading. At initial
recognition, the Group does not designate a portion of financial assets as at fair value
through profit or loss to eliminate or significantly reduce an accounting mismatch.
Financial assets that are due within one year (inclusive) as from the balance sheet date
and are expected to be held over one year are included in other non-current financial
assets.
Equity instruments
Investments in equity instruments, over which the Group has no control, joint control and
significant influence, are measured at fair value through profit or loss under financial
assets held for trading; investments in equity instruments expected to be held over one
year as from the balance sheet date are included in other non-current financial assets.
The Group had no related equity instruments.
Investments in equity instruments not held for trading can be designated as financial
assets at fair value through other comprehensive income, and included in other
investments in equity instruments. The relevant dividend income of such financial assets
is recognised in profit or loss for the current period. The Group had no related equity
instruments not held for trading.
39
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(8) Financial instruments (Cont'd)
(a) Financial assets (Cont’d)
(ii) Impairment
Loss provision for financial assets at amortised cost and investments in debt instruments
at fair value through other comprehensive income is recognised on the basis of ECLs.
Giving consideration to reasonable and supportable information on past events, current
conditions and forecasts of future economic conditions, as well as the default risk weight,
the Group recognises the ECL as the probability-weighted amount of the present value of
the difference between the cash flows receivable from the contract and the cash flows
expected to collect.
As at each balance sheet date, the ECLs of financial instruments at different stages are
measured respectively. 12-month ECL provision is recognised for financial instruments in
Stage 1 that have not had a significant increase in credit risk since initial recognition;
lifetime ECL provision is recognised for financial instruments in Stage 2 that have had a
significant increase in credit risk yet without credit impairment since initial recognition; and
lifetime ECL provision is recognised for financial instruments in Stage 3 that have had
credit impairment since initial recognition.
For the financial instruments with lower credit risk on the balance sheet date, the Group
assumes there is no significant increase in credit risk since initial recognition and
recognises the 12-month ECL provision.
For the financial instruments in Stage 1, Stage 2 and with lower credit risk, the Group
calculates the interest income by applying the effective interest rate to the gross carrying
amount (before deduction of the impairment provision). For the financial instrument in
Stage 3, the interest income is calculated by applying the effective interest rate to the
amortised cost (after deduction of the impairment provision from the gross carrying
amount).
For notes receivable, accounts receivable and receivables financing arising from sales of
goods and rendering of services in the ordinary course of operating activities, the Group
measures the lifetime ECL provision regardless of whether there is a significant financing
component.
In case the ECLs of an individually assessed financial asset can be evaluated with
reasonable cost, the Group determines the ECLs based on impairment assessment of an
individual financial asset. In case the ECLs of an individually assessed financial asset
cannot be evaluated with reasonable cost, the Group divides the receivables into certain
groupings based on credit risk characteristics, and calculates the ECLs for the groupings.
Basis for determining groupings and related provision method are as follows:
40
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(8) Financial instruments (Cont'd)
(a) Financial assets (Cont’d)
(ii) Impairment (Cont’d)
Bank acceptance notes State-owned banks and joint stock banks
General group of automobiles Customers of general automobiles
Group of new energy automobiles Customers of new energy automobiles
Group of other automobiles Customers of other automobiles
Group of automobile parts Customers of automobile parts
Group of interest from cash at bank Accrued interest on cash at bank
Group of operating advances and warranties Operating advances and warranties etc
For accounts receivable that are classified into the groups and notes receivables and
receivables financing arising from sales of goods and rendering of services in the ordinary
course of operating activities, the Group calculates the ECLs with reference to historical
credit losses experience, current conditions and forecasts of future economic conditions,
and based on the exposure at default and the lifetime ECL rate. For other notes
receivable, receivables financing and other receivables classified into groupings, the
Group calculates the ECLs with reference to the historical credit loss experience, current
conditions and forecasts of future economic conditions, and based on the exposure at
default and the 12-month or lifetime ECL rate.
The Group recognises the loss provision made or reversed into profit or loss for the
current period. For debt instruments held at fair value through other comprehensive
income, the Group adjusts other comprehensive income while the impairment loss or gain
is recognised in profit or loss for the current period.
41
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(8) Financial instruments (Cont'd)
(a) Financial assets (Cont’d)
(iii) Derecognition
A financial asset is derecognised when: (i) the contractual rights to the cash flows from the
financial asset expire, (ii) the financial asset has been transferred and the Group transfers
substantially all the risks and rewards of ownership of the financial asset to the transferee,
or (iii) the financial asset has been transferred and the Group has not retained control of
the financial asset, although the Group neither transfers nor retains substantially all the
risks and rewards of ownership of the financial asset.
When a financial asset is derecognised, the difference between the carrying amount and
the sum of the consideration received and the cumulative changes in fair value that are
previously recognised directly in other comprehensive income is recognised in profit or
loss for the current period, except for those as investments in other equity instruments, the
difference aforementioned is recognised in retained earnings instead.
(b) Financial liabilities
Financial liabilities are classified as financial liabilities at amortised cost and financial
liabilities at fair value through profit or loss at initial recognition.
Financial liabilities of the Group mainly comprise financial liabilities at amortised cost,
including notes payable, accounts payable, other payables, borrowings, etc. Such
financial liabilities are initially recognised at fair value, net of transaction costs incurred,
and subsequently measured using the effective interest method. Financial liabilities that
are due within one year (inclusive) are classified as current liabilities; those with maturities
over one year but are due within one year (inclusive) as from the balance sheet date are
classified as current portion of non-current liabilities. Others are classified as non-current
liabilities.
A financial liability is derecognised or partly derecognised when the underlying present
obligation is discharged or partly discharged. The difference between the carrying amount
of the derecognised part of the financial liability and the consideration paid is recognised
in profit or loss for the current period.
42
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(8) Financial instruments (Cont'd)
(c) Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined at
the quoted price in the active market. The fair value of a financial instrument that is not
traded in an active market is determined by using a valuation technique. In valuation, the
Group adopts valuation techniques applicable in the current situation and supported by
adequate available data and other information, selects inputs with the same characteristics
as those of assets or liabilities considered in relevant transactions of assets or liabilities by
market participants, and gives priority to the use of relevant observable inputs. When
relevant observable inputs are not available or feasible, unobservable inputs are adopted.
(9) Inventories
(a) Classification
Inventories include raw materials, work in progress, finished goods, materials in transit,
low value consumables, materials consigned for processing, etc., and are measured at the
lower of cost and net realisable value.
(b) Costing of inventories
Cost is determined using the weighted average method. The cost of finished goods and
work in progress comprise raw materials, direct labour and systematically allocated
production overhead based on the normal production capacity.
(c) Basis for determining net realisable value of inventories and method for making provision
for decline in the value of inventories
Provision for decline in the value of inventories is determined at the excess amount of the
carrying amounts of the inventories over their net realisable value. Net realisable value is
determined based on the estimated selling price in the ordinary course of business, less
the estimated costs to completion and estimated costs necessary to make the sale and
related taxes.
(d) The Group adopts the perpetual inventory system.
(e) Amortisation methods of low value consumables
Low value consumables are amortised into expenses in full when issued for use.
43
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(10) Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its
subsidiaries and the Group’s long-term equity investments in its associates.
Subsidiaries are the investees over which the Company is able to exercise control.
Associates are the investees that the Group has significant influence on their financial and
operating decisions.
Investments in subsidiaries are presented using the cost method in the Company’s
financial statements, and adjusted to the equity method when preparing the consolidated
financial statements. Investments in associates are accounted for using the equity
method.
(a) Determination of investment cost
For long-term equity investments acquired through a business combination: for long-term
equity investments acquired through a business combination involving enterprises under
common control, the investment cost shall be the absorbing party’s share of the carrying
amount of owners’ equity of the party being absorbed in the consolidated financial
statements of the ultimate controlling party at the combination date; for long-term equity
investments acquired through a business combination involving enterprises not under
common control, the investment cost shall be the combination cost.
For long-term equity investments acquired not through a business combination: for long-
term equity investments acquired by payment in cash, the initial investment cost shall be
the purchase price actually paid; for long-term equity investments acquired by issuing
equity securities, the initial investment cost shall be the fair value of the equity securities
issued.
(b) Subsequent measurement and recognition of profit or loss
Long-term equity investments accounted for using the cost method are measured at the
initial investment cost. Cash dividend or profit distribution declared by an investee is
recognised as investment income into profit or loss for the current period.
Where the initial investment cost exceeds the Group’s share of the fair value of the
investee’s identifiable net assets at the time of acquisition, the investment is initially
measured at that cost. Where the initial investment cost is less than the Group’s share of
the fair value of the investee’s identifiable net assets at the time of acquisition, the
difference is included in profit or loss for the current period and the cost of the long-term
equity investment is adjusted upwards accordingly.
44
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(10) Long-term equity investments (Cont’d)
(b) Subsequent measurement and recognition of profit or loss (Cont’d)
For long-term equity investments accounted for using the equity method, the Group
recognises the investment income or losses according to its share of net profit or loss of
the investee. The Group does not recognise further losses when the carrying amounts of
the long-term equity investments together with any long-term interests that, in substance,
form part of the Group’s net investment in investees are reduced to zero. However, if the
Group has obligations for additional losses and the criteria with respect to recognition of
provisions are satisfied, the Group continues recognising the investment losses and the
provisions at the amount it expects to undertake. The Group’s share of the changes in
investee’s owner's equity other than those arising from the net profit or loss, other
comprehensive income and profit distribution is recognised in capital surplus with a
corresponding adjustment to the carrying amounts of the long-term equity investment. The
carrying amount of the investment is reduced by the Group’s share of the profit distribution
or cash dividends declared by the investees. Unrealised gains or losses on transactions
between the Group and its investees are eliminated to the extent of the Group’s equity
interest in the investees, based on which the investment income or losses are recognised.
Any losses resulting from transactions between the Group and its investees, which are
attributable to asset impairment losses are not eliminated.
(c) Basis for determining existence of control and significant influence over investees
Control is the power over investees that can bring variable returns through involvement in
related activities of investees and the ability to influence the returns by using such power
over investees.
Significant influence is the power to participate in making decisions on financial and
operating policies of investees, but is not control or joint control over making those
policies.
(d) Impairment of long-term equity investments
The carrying amounts of long-term equity investments in subsidiaries and associates is
reduced to the recoverable amounts when the recoverable amounts are below their
carrying amount (Note 2(15)).
(11) Fixed assets
(a) Recognition and initial measurement of fixed assets
Fixed assets comprise buildings, machinery and equipment, motor vehicles, moulds, and
electronic and other equipment.
Fixed assets are recognised when it is probable that the related economic benefits will
flow to the Group and the costs can be reliably measured. Fixed assets purchased or
constructed by the Group are initially measured at cost at the time of acquisition. The fixed
assets contributed by the state-owned shareholders upon the restructuring of the
Company are recorded at the valued amount determined by the state-owned asset
administration department.
45
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(11) Fixed assets (Cont’d)
(a) Recognition and initial measurement of fixed assets (Cont’d)
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed
asset when it is probable that the associated economic benefits will flow to the Group and
the related cost can be reliably measured. The carrying amount of the replaced part is
derecognised. All the other subsequent expenditures are recognised in profit or loss for
the period in which they are incurred.
(b) Depreciation methods of fixed assets
Fixed assets are depreciated using the straight-line method to allocate the cost of the
assets to their estimated net residual values over their estimated useful lives. For the fixed
assets that have been provided for impairment loss, the related depreciation charge is
prospectively determined based upon the adjusted carrying amounts over their remaining
useful lives.
The estimated useful lives, the estimated net residual values expressed as a percentage
of cost and the annual depreciation rates of fixed assets are as follows:
Estimated useful Estimated net Annual depreciation
lives residual values rates
Buildings 35 to 40 years 4% 2.4% to 2.7%
Machinery and
equipment 10 to 15 years 4% 6.4% to 9.6%
Motor vehicles 6 to 10 years 4% 9.6% to 16%
Moulds 5 years - 20%
Electronic and other
equipment 5 to 7 years 4% 13.7% to 19.2%
The estimated useful life and the estimated net residual value of a fixed asset and the
depreciation method applied to the asset are reviewed, and adjusted as appropriate at
each year-end.
(c) The carrying amount of a fixed asset is reduced to the recoverable amount when the
recoverable amount is below the carrying amount (Note 2(15)).
(d) Disposal of fixed assets
A fixed asset is derecognised on disposal or when no future economic benefits are
expected from its use or disposal. The amount of proceeds from disposals on sale,
transfer, retirement or damage of a fixed asset net of its carrying amount and related taxes
and expenses is recognised in profit or loss for the current period.
46
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(12) Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction
costs, installation costs, borrowing costs that are eligible for capitalisation and other costs
necessary to bring the fixed assets ready for their intended use. Construction in progress
is transferred to fixed assets when the assets are ready for their intended use, and
depreciation is charged starting from the following month. The carrying amount of
construction in progress is reduced to the recoverable amount when the recoverable
amount is below the carrying amount (Note 2(15)).
(13) Borrowing costs
The borrowing costs that are directly attributable to acquisition and construction of an
asset that needs a substantially long period of time for its intended use commence to be
capitalised and recorded as part of the cost of the asset when expenditures for the asset
and borrowing costs have been incurred, and the activities relating to the acquisition and
construction that are necessary to prepare the asset for its intended use have
commenced. The capitalisation of borrowing costs ceases when the asset under
acquisition or construction becomes ready for its intended use and the borrowing costs
incurred thereafter are recognised in profit or loss for the current period. Capitalisation of
borrowing costs is suspended during periods in which the acquisition or construction of an
asset is interrupted abnormally and the interruption lasts for more than 3 months, until the
acquisition or construction is resumed.
The capitalised amount of specific borrowings intended to be used for the acquisition or
construction of qualifying assets is determined by the interest expenses incurred in the
period less interest income of the unused borrowings deposited at bank or investment
income from temporary investments.
The capitalised amount of general borrowings intended to be used for the acquisition or
construction of qualifying assets is determined by the weighted average of the excess of
accumulated capital expenditure over capital expenditure of the special borrowings
multiplied by the weighted average effective interest rate of the utilised general
borrowings. The effective interest rate is the rate at which the future cash flows of the
borrowings over the expected lifetime or a shorter applicable period are discounted into
the initial recognised amount of the borrowings.
(14) Intangible assets
Intangible assets include land use rights, software use fees, non-patent technologies and
after-sales service management mode, and are measured at cost.
(a) Land use rights
Land use rights are amortised on the straight-line basis over their approved use period of
50 years. If the acquisition costs of the land use rights and the buildings located thereon
cannot be reasonably allocated between the land use rights and the buildings, all of the
acquisition costs are recognised as fixed assets.
47
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(14) Intangible assets (Cont’d)
(b) Software use fees
Software use fees are amortised on a straight-line basis over the estimated useful life of 5
years.
(c) Non-patent technologies
Non-patent technologies are amortised on the straight-line basis over the useful life of 5
years.
(d) Periodical review of useful life and amortisation method
For an intangible asset with a finite useful life, review of its useful life and amortisation
method is performed at each year-end, with adjustment made as appropriate.
(e) Research and development
The expenditure on an internal research and development project is classified into
expenditure on the research phase and expenditure on the development phase based on
its nature and whether there is material uncertainty that the research and development
activities can form an intangible asset at the end of the project.
Expenditure on the research phase related to planned survey, evaluation and selection for
research on manufacturing technique of automobile products is recognised in profit or loss
in the period in which it is incurred. Prior to mass production, expenditure on the
development phase related to the design and testing phase in regards to the final
application of manufacturing technique of automobile products is capitalised only if all of
the following conditions are satisfied:
the development of manufacturing technique of automobile products has been fully
demonstrated by technical team;
management intends to complete the development of manufacturing technique of
automobile products, and use or sell it;
the research and analysis of preliminary market survey indicate that products
manufactured with manufacturing technique of automobile products are marketable;
adequate technical and financial supports are available for development of
manufacturing techniques of automobile products and subsequent mass production;
and,
expenditure on development of manufacturing techniques of automobile products can
be reliably collected.
Other expenditures on the development phase that do not meet the conditions above are
recognised in profit or loss in the period in which they are incurred. Development
expenditures previously recognised as profit or loss are not recognised as an asset in a
subsequent period. Capitalised expenditure on the development phase is presented as
development expenditures in the balance sheet and transferred to intangible assets at the
date when the asset is ready for its intended use.
(f) Impairment of intangible assets
The carrying amounts of intangible assets are reduced to the recoverable amounts when
the recoverable amounts are below their carrying amounts (Note 2(15)).
48
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(15) Impairment of long-term assets
Fixed assets, construction in progress, right-of-use assets, intangible assets with finite
useful lives and long-term equity investments in subsidiaries and associates are tested for
impairment if there is any indication that the assets may be impaired at the balance sheet
date; intangible assets that are not yet available for their intended use are tested for
impairment at least annually, irrespective of whether there is any indication of impairment.
If the result of the impairment test indicates that the recoverable amount of an asset is
less than its carrying amount, a provision for impairment and an impairment loss are
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 the present value of the future cash flows expected to be derived from the asset.
Provision for asset impairment is determined and recognised on the individual asset basis.
If it is not possible to estimate the recoverable amount of an individual asset, the
recoverable amount of a group of assets to which the asset belongs is determined. A
group of assets is the smallest group of assets that is able to generate independent cash
inflows.
Goodwill that is separately presented in the financial statements is tested at least annually
for impairment, irrespective of whether there is any indication that it may be impaired. In
conducting the test, the carrying amount of goodwill is allocated to the related asset group
or groups of asset groups which are expected to benefit from the synergies of the
business combination. If the result of the test indicates that the recoverable amount of an
asset group or a group of asset groups, including the allocated goodwill, is lower than its
carrying amount, the corresponding impairment loss is recognised. The impairment loss is
first deducted from the carrying amount of goodwill that is allocated to the asset group or
group of asset groups, and then deducted from the carrying amounts of other assets
within the asset group or group of asset groups in proportion to the carrying amounts of
assets other than goodwill.
Once the above asset impairment loss is recognised, it will not be reversed for the value
recovered in the subsequent periods.
(16) Employee benefits
Employee benefits refer to all forms of consideration or compensation given by the Group
in exchange for service rendered by employees or for termination of employment
relationship, which include short-term employee benefits, post-employment benefits,
termination benefits and other long-term employee benefits.
(a) Short-term employee benefits
Short-term employee benefits include wages or salaries, bonus, allowances and
subsidies, staff welfare, premiums or contributions on medical insurance, work injury
insurance and maternity insurance, housing funds, union running costs and employee
education costs, short-term paid absences, etc. The short-term employee benefits actually
occurred are recognised as a liability in the accounting period in which the service is
rendered by the employees, with a corresponding charge to the profit or loss for the
current period or the cost of relevant assets. Non-monetary benefits are measured at fair
value.
49
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(16) Employee benefits (Cont'd)
(b) Post-employment benefits
The Group classifies post-employment benefit plans as either defined contribution plans or
defined benefit plans. Defined contribution plans are post-employment benefit plans under
which the Group pays fixed contributions into a separate fund and will have no obligation
to pay further contributions; and defined benefit plans are post-employment benefit plans
other than defined contribution plans. During the reporting period, premiums or
contributions on basic pensions and unemployment insurance paid for employees belong
to defined contribution plans; supplementary retirement benefits for employees are defined
benefit plans.
(i) Defined contribution plans
Basic pensions
The Group’s employees participate in the basic pension plan set up and administered by
local authorities of the Ministry of Human Resources and Social Security. Monthly
payments of premiums on the basic pensions are calculated according to the bases and
percentage prescribed by the relevant local authorities. When employees retire, the
relevant local authorities are obliged to pay the basic pensions to them. The amounts
based on the above calculations are recognised as liabilities in the accounting period in
which the service has been rendered by the employees, with a corresponding charge to
the profit or loss for the current period or the cost of relevant assets.
(ii) Defined benefit plans
The Group also provides employees with supplementary retirement benefits outside the
insurance system prescribed by the State. Such supplementary retirement benefits belong
to defined benefit plans. The defined benefit liabilities recognised on the balance sheet
represent the present value of defined benefit obligations less the fair value of the plan
assets. The defined benefit obligations are calculated annually by an independent actuary
using projected unit credit method at the interest rate of treasury bonds with similar
obligation term and currency. Service costs related to supplementary retirement benefits
(including current service costs, historical service costs and settled gains or losses) and
net interest are recognised in profit or loss for the current period or the cost of related
assets, and changes arising from remeasurement of net liabilities or net assets of defined
benefit plans are recognised in other comprehensive income.
(c) Termination benefits
The Group provides compensation for terminating the employment relationship with
employees before the end of the employment contracts or as an offer to encourage
employees to accept voluntary redundancy before the end of the employment contracts.
The Group recognises a liability arising from compensation for termination of the
employment relationship with employees, with a corresponding charge to profit or loss for
the current period at the earlier of the following dates: 1) when the Group cannot
unilaterally withdraw an employment termination plan or a curtailment proposal; 2) when
the Group recognises costs or expenses for a restructuring that involves the payment of
termination benefits.
50
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(16) Employee benefits (Cont'd)
(c) Termination benefits (Cont’d)
Early retirement benefits
The Group offers early retirement benefits to those employees who accept early
retirement arrangements. The early retirement benefits refer to the salaries and social
security contributions to be paid to and for the employees who accept voluntary retirement
before the normal retirement date prescribed by the State, as approved by the
management. The Group pays early retirement benefits to those early retired employees
from the early retirement date until the normal retirement date. The Group accounts for the
early retirement benefits in accordance with the treatment for termination benefits, in
which the salaries and social security contributions to be paid to and for the early retired
employees from the off-duty date to the normal retirement date are recognised as
liabilities with a corresponding charge to the profit or loss for the current period. The
differences arising from the changes in the respective actuarial assumptions of the early
retirement benefits and the adjustments of benefit standards are recognised in profit or
loss in the period in which they occur.
The termination benefits expected to be paid within one year since the balance sheet date
are classified as employee benefits payable.
(17) Dividend distribution
Cash dividends are recognised as liabilities in the period in which the dividends are
approved at the shareholders’ meeting.
(18) Provisions
Provisions for product warranties, onerous contracts, etc. are recognised when the Group
has a present obligation, it is probable that an outflow of economic benefits will be
required to settle the obligation, and the amount of the obligation can be measured
reliably.
A provision is initially measured at the best estimate of the expenditure required to settle
the related present obligation. Factors surrounding a contingency, such as the risks,
uncertainties and the time value of money, are taken into account as a whole in reaching
the best estimate of a provision. Where the effect of the time value of money is material,
the best estimate is determined by discounting the related future cash outflows. The
increase in the discounted amount of the provision arising from passage of time is
recognised as interest expense.
The carrying amount of provisions is reviewed at each balance sheet date and adjusted to
reflect the current best estimate.
The provisions expected to be settled within one year since the balance sheet date are
classified as current liabilities.
51
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(19) Revenue
The Group manufactures and sells a range of automobiles and automobile parts to
dealers and ending customers. Besides, the Group also provides automobile maintenance
and additional warranty services. The Group recognises revenue when the customer
obtains control of the goods and services. The revenue is recognised based on the
consideration to which the Group expects to be entitled in exchange for transferring
promised goods or services to customers.
(a) Selling automobiles and automobile parts to dealers and ending customers
The Group manufactures automobiles and automobile parts and sells such products to
distributors and end customers. Sales of automobiles are recognised when automobiles
are delivered out of warehouse as prescribed in the contract, being when the customers
have accepted the products and the delivery documents have been signed by both
parties. Sales of automobile parts are recognised when they are delivered to the
designated location as prescribed in the contract, being when customers have accepted
the products and the delivery documents have been signed by both parties.
When the contracts include two performance obligations, selling automobiles and
providing shipping services, the transaction price will be allocated to each performance
obligation based on the stand-alone selling prices on the commence date of the contract.
Where these are not directly observable, they are estimated considering market
information, expected cost plus margin ect.
The credit periods granted by the Group to dealers and ending customers are generally
within one year and no more than two years, which is consistent with the industry practice,
and there is no significant financing component. The Group provides product warranties
for automobiles and automobile parts as required by laws and regulations, and recognises
the corresponding provisions (Note 2(18)).
The Group provides dealers and end customers with sales discounts based on sales
volume, and related revenue is recognised at contract consideration net of the discount
amount estimated based on historical experience and using the expected value method.
(b) Rendering of services
The Group provides customers with automobile maintenance and additional quality
warranty services. Revenue is recognised based on the progress of service provision
within a certain period. The progress of obligation fulfilment is determined on the basis of
inputs to the satisfaction of the performance obligation relative to the total expected inputs
to the satisfaction of that performance obligation.
When the Group recognises revenue based on the stage of completion, the amount with
unconditional collection right obtained by the Group is recognised as accounts receivable,
and the rest is recognised as contract assets. Meanwhile, loss provision for accounts
receivable and contract assets are recognised on the basis of ECLs (Note 2(8)). If the
contract consideration received or receivable exceeds the amount for the completed
service, the excess portion will be recognised as contract liabilities. Contract assets and
contract liabilities under the same contract are presented on a net basis.
52
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(20) Government grants
Government grants refer to the monetary or non-monetary assets obtained by the Group
from the government, including support funds for enterprise development, financial
subsidies, etc.
Government grants are recognised when the grants can be received and the Group can
comply with all attached conditions. If a government grant is a monetary asset, it will be
measured at the amount received or receivable. If a government grant is a non-monetary
asset, it will be measured at its fair value. If it is unable to obtain its fair value reliably, it will
be measured at its nominal amount.
Government grants related to assets refer to government grants which are obtained by the
Group for the purposes of purchase, construction or acquisition of the long-term assets.
Government grants related to income refer to the government grants other than those
related to assets.
Government grants related to assets are recorded as deferred income and recognised in
profit or loss on a reasonable and systemic basis over the useful lives of the assets.
Government grants related to income that compensate future costs, expenses or losses
are recorded as deferred income and recognised in profit or loss; government grants
related to income that compensate incurred costs, expenses or losses are recognised in
profit or loss directly for the current period.
The Group applies the presentation method consistently to the similar government grants
in the financial statements.
Government grants related to ordinary activities are included in operating profit.
Otherwise, they are recorded in non-operating income.
53
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(21) Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the
differences arising between the tax bases of assets and liabilities and their carrying
amounts (temporary differences). Deferred tax asset is recognised for the deductible
losses that can be carried forward to subsequent years for deduction of the taxable profit
in accordance with the tax laws. No deferred tax liability is recognised for a temporary
difference arising from the initial recognition of goodwill. No deferred tax asset or deferred
tax liability is recognised for the temporary differences resulting from the initial recognition
of assets or liabilities due to a transaction other than a business combination, which
affects neither accounting profit nor taxable profit (or deductible losses). At the balance
sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates
that are expected to apply to the period when the asset is realised or the liability is settled.
Deferred tax assets are only recognised for deductible temporary differences, deductible
losses and tax credits to the extent that it is probable that taxable profit will be available in
the future against which the deductible temporary differences, deductible losses and tax
credits can be utilised.
Deferred tax liabilities are recognised for taxable temporary differences arising from
investments in subsidiaries and associates, except where the Group is able to control the
timing of reversal of such temporary differences, and it is probable that the temporary
differences will not reverse in the foreseeable future. When it is probable that the
deductible temporary differences arising from investments in subsidiaries and associates
will be reversed in the foreseeable future and that the taxable profit will be available in the
future against which the deductible temporary differences can be utilised, the
corresponding deferred tax assets are recognised.
Deferred tax assets and deferred tax liabilities are offset when:
the deferred tax assets and deferred tax liabilities are related to the same tax payer
within the Group and the same taxation authority; and,
that tax payer within the Group has a legally enforceable right to offset current tax
assets against current tax liabilities.
54
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(22) Leases
A contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
The Group as the lessee
At the commencement date, the Group shall recognise the right-of-use asset and measure
the lease liabilities at the present value of the lease payments that are not paid at that
date. Lease payments include fixed payments, the exercise price of a purchase option if
the lessee is reasonably certain to exercise that option, and payments of penalties for
terminating the lease if the lessee exercises an option to terminate the lease. Variable
lease payments in proportion to sales are excluded from lease payments and recognised
in profit or loss as incurred. Lease liabilities that are due within one year (inclusive) as
from the balance sheet date are included in the current portion of non-current liabilities.
The Group's right-of-use assets are leased buildings. Right-of-use assets are measured
initially at cost which comprises the amount of the initial measurement of lease liabilities,
any lease payments made at or before the commencement date and any initial direct
costs, less any lease incentives received. If there is reasonable certainty that the Group
will obtain ownership of the underlying asset by the end of the lease term, the asset is
depreciated over its remaining useful life; otherwise the asset is depreciated over the
shorter of the lease term and its remaining useful life. The carrying amounts of the right-of-
use assets are reduced to the recoverable amounts when the recoverable amounts are
below their carrying amounts (Note 2(15)).
For short-term leases with a term of 12 months or less and leases of an individual asset
(when new) of low value, instead of recognising right-of-use assets and lease liabilities,
the Group recognisedthe lease payments in the cost of the underlying assets or in profit or
loss for the current period on a straight-line basis over the lease term.
The Group as the lessor
A lease is classified as a finance lease if it transfers substantially all the risks and rewards
incidental to ownership of an underlying asset. An operating lease is a lease other than a
finance lease.
As the lessor, the Group does not hold any finance lease. Where the Group leases out
self-owned buildings under operating leases, rental income therefrom is recognised on a
straight-line basis over the lease term.
55
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(23) Held for sale
A non-current asset or a disposal group is classified as held for sale when all of the
following conditions are satisfied: (1) the non-current asset or the disposal group is
available for immediate sale in its present condition subject only to terms that are usual
and customary for sales of such non-current asset or disposal group; (2) the Group has
entered a legally enforceable sales agreement with other parties and obtained relevant
approval, and the sales transaction is expected to be completed within one year.
Non-current assets (except for financial assets, investment properties measured at fair
value and deferred tax assets) that meet the recognition criteria for held for sale are
recognised at the amount equal to the lower of the fair value less costs to sell and the
carrying amount, and the excess of the original carrying amount over the fair value less
costs to sell is recognised as asset impairment loss.
Such non-current assets and assets and liabilities included in disposal groups classified
as held for sale are classified as current assets and current liabilities respectively, and are
separately presented in the balance sheet.
(24) Segment information
The Group identifies operating segments based on the internal organisation structure,
management requirements and internal reporting system, and discloses segment
information of reportable segments which is determined on the basis of operating
segments.
An operating segment is a component of the Group that satisfies all of the following
conditions: (1) the component is able to earn revenues and incur expenses from its
ordinary activities; (2) whose operating results are regularly reviewed by the Group’s
management to make decisions about resources to be allocated to the segment and to
assess its performance, and (3) for which the information on financial position, operating
results and cash flows is available to the Group. Two or more operating segments that
have similar economic characteristics and satisfy certain conditions can be aggregated
into one single operating segment.
56
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Critical accounting estimates and judgements
The Group continually evaluates the critical accounting estimates and key judgements
applied based on historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
(a) Critical judgements in applying the accounting policies
The critical accounting estimates and key assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the
next accounting year are outlined below:
(i) Classification of financial assets
Significant judgements made by the Group in the classification of financial assets include
business model and analysis on contractual cash flow characteristics.
The Group determines the business model for financial assets management on the group
basis, and factors to be considered include the methods for evaluating the financial assets
performance and reporting such performance to key management personnel, the risks
relating to the financial assets performance and corresponding management methods, the
ways in which related business management personnel are remunerated, etc.
When assessing whether contractual cash flow characteristics of financial assets are
consistent with basic lending arrangement, key judgements made by the Group include:
the possibility of changes in time schedule or amount of the principal during the lifetime
due to reasons such as repayment in advance; whether interest only includes time value
of money, credit risk, other basic lending risks and considerations for costs and profits For
example, whether the repayment in advance reflects only the principal outstanding and
corresponding interest and reasonable compensation paid for early termination of the
contract.
(ii) Judgement on significant increase in credit risk
Judgement made by the Group for significant increase in credit risk is mainly based on
whether the overdue days exceed 30 days, or whether one or more of the following
indicators change significantly: business environment of the debtor, internal and external
credit rating, significant changes in actual or expected operating results, significant
decrease in value of collateral or credit rate of guarantor, etc.
Judgement made by the Group for the occurrence of credit impairment is mainly based on
whether the overdue days exceed 90 days (i.e., a default has occurred), or whether one or
more of the following conditions is/are satisfied: the debtor is suffering significant financial
difficulties, the debtor is undergoing other debt restructuring, or the debtor probably goes
bankrupt, etc.
57
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Critical accounting estimates and judgements (Cont’d)
(a) Critical judgements in applying the accounting policies (Cont’d)
(iii) Judgement on capitalisation of development expenditures
Development expenditures are capitalised when the criteria in Note 2(14)(e) are fulfilled.
The assessments on whether the criteria for capitalisation of development expenditures
have been met involve judgements of the Group, including the technical feasibility of the
project, the likelihood of the project generating sufficient future economic benefits and the
timing to start capitalisation particularly. The Group makes the judgements on the
capitalisation of development expenditures and records the process in meeting minutes
based on feasibility analysis, regular review on the development project phase, etc.
(iv) Timing of revenue recognition
The Group sells automobiles and automobile parts to distributors and ending customers. As
prescribed in the contract, control of automobiles is transferred to the customers when the
good are out of the warehouse, while control of automobile parts is transferred when the
parts are out of the warehouse or shipped to the designate destination based on the
contract terms. The distributors and ending customers sign the delivery documents after
they accept the products. Thereafter, the distributors or ending customers control the
products and have the right to set the price, bear the risks of any obsolescence and loss of
the products. The distributors and ending customers have obtained the control of the
products after accepting the products. Therefore, the Group recognises the sales revenue of
the products at the time when the delivery documents have been signed.
(v) Sales with product warranties
The Group provides statutory warranty for automobiles and automobile parts, and the
periods and terms of such warranty comply with the requirements of laws and regulations
related to the products. The Group does not provide any significant additional service or
additional warranty for this purpose, thus this kind of warranty cannot be identified as a
separate performance obligation. In addition, the Group also offers additional warranty other
than the requirements of laws and regulations, which is identified as a separate
performance obligation. The Group recognises the revenue of the additional warranty over
time during the period when services are rendered.
(b) Critical accounting estimates and key assumptions
(i) Measurement of ECL
The Group calculates ECLs through default risk exposure and ECL rate, and determines the
ECL rate based on default probability and default loss rate. In determining the ECL rate, the
Group uses data such as internal historical credit loss experience, etc., and adjusts
historical data based on current conditions and forward-looking information. When
considering forward-looking information, the indicators used by the Group include the risk of
economic downturn, the expected increase in unemployment rate, the external market
environment, the technological environment and changes in customer conditions. The
Group regularly monitors and reviews assumptions related to the calculation of ECLs. In
2020, there was no significant change in the above estimation techniques and key
assumptions.
58
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Critical accounting estimates and judgements (Cont’d)
(b) Critical accounting estimates and key assumptions (Cont’d)
(ii) Provision for impairment of long-term assets
The Group assesses whether there is any indication that non-current assets other than
financial assets may be impaired at the balance sheet date. When there are indications
showing the carrying amounts of such assets cannot be recovered, an impairment test will
be performed.
When the carrying amount of non-current assets or asset groups other than financial
assets is higher than the recoverable amount, which is the higher of an asset’s fair value
less cost to sell and the present value of the future cash flows expected to be derived from
the asset, such non-current assets or asset groups are impaired.
The net value of an asset’s fair value less disposal costs is determined on the basis of the
present value of the future cash flows expected to be derived from the asset or asset
group. The present value of estimated future cash flows is determined based on the
medium or long-term business development budget plan approved by management and
adjusted with reference to market conditions.
The estimation of the present value of future cash flows involves significant judgements on
revenue growth rate, sales price growth rate, long-term growth rate of the asset or asset
group and the discount rate used in calculating the present value. The Group estimates
the recoverable amount based on all available materials, including the forecast of
production and sales volume and market information based on reasonable and
supportable assumptions.
(iii) Taxation
The Group is subject to various taxes in the PRC, including enterprise income tax, value-
added tax (“VAT”) and consumption tax. Judgements are required for recognising the
provision for such taxes. There are many transactions and events 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. When the final tax outcome of these events is different from amounts
that are initially recorded, such differences will impact the tax provisions in the period of
final tax outcome.
Deferred tax assets are recognised as management considers it is probable that taxable
income will be available against which the temporary differences can be utilised. When the
final tax outcome of such events is different from the initial expectation, such differences
will have impacts on income tax and deferred tax during the final determination period.
As at 30June 2020, the Group’s deferred tax assets calculated by management based on
the expected income rate were RMB 858,593,505. Such deferred tax assets mainly arose
from temporary differences such as provision for asset impairment, retirement benefits,
provisions, etc., and losses. Deductible temporary differences and deductible losses that
were not recognised as deferred tax assets amounted to RMB 1,420,399,732 (Note
4(17)).
59
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Critical accounting estimates and judgements (Cont’d)
(b) Critical accounting estimates and key assumptions (Cont’d)
(iv) Provisions
The Group undertakes after-sales repair or replacement obligations for sold automobiles
based on the after-sales service agreement. Management estimates related provisions
based on historical after-sales service data, including the repair and replacement provided
as well as current trends.
Factors that may impact the estimation of warranty costs include improvement of the
Group’s productivity and production quality, as well as changes in related parts and labour
costs. Any increase or decrease in provisions will have impact on profit or loss of the
Group in future years.
(v) Provision for decline in the value of inventories
The Group's inventories are stated at the lower of cost and net realisable value. Net
realisable value of inventories refers to the amount of the estimated selling price in the
ordinary course of business, less the estimated costs to completion and estimated costs
necessary to make the sales and related taxes.
If management adjusts the estimated selling prices of inventories, the estimated costs to
completion, estimated selling and distribution expenses and related taxes, and the
adjusted estimated selling prices are lower than those currently in use, or the estimated
costs to completion, estimated selling and distribution expenses and related taxes are
higher than those currently in use, the Group shall increase the provision for decline in the
value of inventories.
If the actual selling prices, costs to completion, selling and distribution expenses and
related taxes are higher or lower than management’s estimates, the Group shall recognise
the relevant differences in the consolidated income statement during the corresponding
accounting period.
60
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
3 Taxation
(1) The main categories and rates of taxes applicable to the Group are set out below:
Category Taxation basis Tax rate
Enterprise income tax (a) Taxable income 15% and 25%
VAT (b) Taxable value-added amount (Tax 13%, 9% and 6%
payable is calculated using the taxable
sales amount multiplied by the
applicable tax rate less deductible input
VAT of the current period)
Consumption tax Taxable sales amount 3%, 5% and 9%
City maintenance and The payment amount of VAT and 5% and 7%
construction tax (c) consumption tax
(a) Pursuant to the Circular on Enterprise Income Tax Policy Concerning Deductions for
Equipment and Appliances (Cai Shui [2018] No. 54) and relevant regulations issued by the
State Administration of Taxation, during the period from 1 January 2018 to 31 December
2020, the cost of newly purchased equipment with the original cost less than RMB 5 million
can be fully deducted against taxable profit in the next month after the asset is put into use,
instead of being depreciated annually for tax filing.
Pursuant to the Circular on Increasing the Pre-tax Deduction for Research and Development
Expenses (Cai Shui [2018] No. 99) issued by the Ministry of Finance, the State Administration
of Taxation and the Ministry of Science and Technology and relevant regulations, during the
period from 1 January 2018 to 31 December 2020, the Groups’ actual research and
development expenses that are not recognised as intangible assets but included in profit or
loss are allowed to 75% pre-tax additional deduction; those expenses recognised as
intangible assets can be amortised before tax at 175% of the costs of intangible assets.
(b) Pursuant to the Announcement on Relevant Policies for Deepening Value-Added Tax Reform
(Announcement [2019] No. 39) and relevant regulations jointly issued by the Ministry of
Finance, the State Administration of Taxation and the General Administration of Customs, the
Group’s taxable products sales revenue is subject to the VAT at the rate of 13% from 1 April
2019; the applicable VAT rate for the Group’s transportation business is 9%from 1 April 2019.
The interest income from its wholly-owned subsidiaries is subject to VAT at the rate of 6%.
(c) Pursuant to the Circular of the State Council on Unifying the Collection of City Construction
and Maintenance Tax and Educational Surcharge on Domestic and Foreign-Owned
Enterprises and Individuals (Guo Fa [2010] No. 35) issued by the State Council, the Group is
subject to city construction and maintenance tax at the rates of 5% and 7%.
(2) Tax preference
Pursuant to the Circular of Jiangxi High-Tech Enterprise Certification Leading Group on the
Announcement of the First Batch of High-Tech Enterprises of Jiangxi Province for the year
2018 (Gan Gao Qi Ren Fa [2018] No. 3), the Company is certified as a high-tech enterprise,
and the valid term is three years. During the period from 1 January 2018 to 31 December
2020, the Company is subject to enterprise income tax at the rate of 15%.
In 2020, the Company’s wholly-owned companies, including JMC Heavy Duty Vehicle Co.,
Ltd. (“JMCH”), Jiangling Motor Sales Co., Ltd. (“JMCS”), Shenzhen Fujiang New Energy
Automobile Sales Co., Ltd. (“SZFJ”), Guangzhou Fujiang New Energy Automobile Sales Co.,
Ltd. (“GZFJ”), were subject to the enterprise income tax at the rate of 25%.
61
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements
(1) Cash at bank and on hand
30June 2020 31 December 2019
Cash at bank (a) 7,872,553,804 8,937,936,658
Other cash(b) 49,718,600 -
7,922,272,404 8,937,936,658
(a) As at 30 June 2020, cash at bank of the Group deposited with Jiangling Motor Group
Finance Company (“JMCF”) was RMB 618,877,485 (31 December 2019: RMB
967,750,294) (Note 7(6)), and interest was calculated at 1.725% (2019: 0.455% to 3.30%)
per annum, which was the interest rate applied to deposits with the same term. JMCF, a
holding subsidiary of Jiangling Motors Group Co., Ltd (“JMCG”), is a non-banking financial
institution. JMCG holds 50% equity capital of Nanchang Jiangling Investment Co., Ltd.
(“JIC”), a main shareholder of the Company.
(b) As at 30 June 2020, the restricted cashamount of RMB 49,718,600(31 December 2019:
Nil) was restricted for the issuance of acceptance bill.
(2) Transactional financial assets
30June 2020 31 December 2019
Structural deposits 2,725,990,657 -
(3) Derivative financial assets and derivative financial liabilities
30June 2020 31 December 2019
Derivative financial assets -
Forward exchange contracts 1,475,752 -
Derivative financial liabilities -
Forward exchange contracts - 545,632
As at 30June 2020 and 31 December 2019, derivative financial assets and derivative
financial liabilities mainly represented forward exchange contracts
(4) Notes receivable
30June 2020 31 December 2019
Bank acceptance notes i) 42,368,305 85,816,311
(a) As at 30June 2020, the Group had no pledged notes receivable.
62
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(4) Notes receivable (Cont'd)
(b) As at 30June 2020, the Group had no notes receivable that have been endorsed or
discounted but not yet matured presented in notes receivable.
i) In the six months ended 30June 2020, certain bank acceptance notes receivable of the
Group were held to maturity for the purpose of daily treasury management, and were
classified as financial assets measured at amortised cost. Meanwhile, certain bank
acceptance notes of the Group were endorsed for the purpose of daily treasury
management, and were therefore classified as financial assets at fair value through other
comprehensive income and recognised as receivables financing (Note 4(6)).
(c) Provision for bad debts
For notes receivable arising from sales of goods and rendering of services in the ordinary
course of operating activities, the Group measures the loss provision based on the lifetime
ECL regardless of whether there is a significant financing component.
As 30June 2020 and 31 December 2019, the acceptors of the Groups’ notes receivable
were mainly four major state-owned banks or national joint stock banks. Therefore, the
Group expected there was no significant loss on related notes receivable arising from non-
performance by these banks.
(5) Accounts receivable
30June 2020 31 December 2019
Accounts receivable 3,253,139,024 2,362,312,151
Less: Provision for bad debts (220,393,044) (154,075,531)
3,032,745,980 2,208,236,620
63
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(5) Accounts receivable (Cont’d)
(a) The aging of accounts receivable is analysed as follows:
30June 2020 31 December 2019
Within 1 year 2,718,317,770 1,761,105,893
1 to 2 years 516,202,759 584,836,934
2 to 3 years 9,907,003 7,736,444
Over 3 years 8,711,492 8,632,880
3,253,139,024 2,362,312,151
(b) As at 30June 2020, the five largest accounts receivable were analysed by debtor as
follows:
Amount of
provision for % of total
Balance bad debts balance
Company 1 485,135,536 (1,090,986) 14.91%
Company 2 195,467,552 (254,926) 6.01%
Company 3 166,407,359 (314,427) 5.12%
Company 4 100,168,520 (6,290,583) 3.08%
Company 5 90,571,702 (123,722) 2.78%
1,037,750,669 (8,074,644) 31.90%
(c) Provision for bad debts
For accounts receivable, the Group measures the loss provision based on the lifetime
ECL regardless of whether there is a significant financing component.
(i) Accounts receivable for which provision for bad debts is made on the individual basis are
analysed as follows:
30June 2020
Book balance Provision for bad debts
Amount Lifetime ECL (%) Amount
Receivables for
automobiles i) 89,652,880 100% (89,652,880)
New energy subsidies
receivable ii) 103,180,418 100% (103,180,418)
192,833,298 (192,833,298)
64
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(5) Accounts receivable (Cont’d)
(c) Provision for bad debts (Cont’d)
(i) Accounts receivable for which provision for bad debts is made on the individual basis are
analysed as follows (Cont’d):
i) As at 30June 2020, since aforesaid companies in debts had difficulties in operation and
were involved in several legal proceedings, the Group considered that it was difficult to
recover such receivables, so related provision for bad debts was made in full amount.
ii) As at 30June 2020, government subsidies receivable for new energy automobiles
amounted to RMB 103,180,418. Since the estimated mileage of such new energy
automobiles may not meet the target within two years, the Group considered it was difficult
to recover such subsidies, so related provision for bad debts was made in full amount.
31 December 2019
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Receivables for
automobiles i) 89,652,880 100% (89,652,880)
New energy subsidies
receivable ii) 20,410,500 100% (20,410,500)
110,063,380 (110,063,380)
i) As at 31 December 2019, since these companies in debts were involved in several legal
proceedings, the Group considered that it was difficult to recover such receivables, so
related provision for bad debts was made in full amount.
ii) As at 31 December 2019, government subsidies receivable for new energy automobiles
amounted to RMB 20,410,500. Since the estimated mileage of such new energy
automobiles may not meet the target within two years, the Group considered it was difficult
to recover such subsidies, so related provision for bad debts was made in full amount.
(ii) Accounts receivable for which provision for bad debts is made on the grouping basis are
analysed as follows:
Grouping - Sales of general automobiles:
30June 2020
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Not overdue 2,299,299,704 0.13% (3,010,933)
Overdue for 1 to 30 days 17,580,652 0.13% (23,022)
Overdue for 31 to 60 days 11,000,750 4.02% (441,768)
Overdue for 61 to 90 days 1,530,698 5.49% (83,964)
Overdue over 90 days 7,143,797 9.01% (643,403)
2,336,555,601 (4,203,090)
65
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(5) Accounts receivable (Cont’d)
(c) Provision for bad debts (Cont’d)
(ii) Accounts receivable for which provision for bad debts is made on the grouping basis are
analysed as follows (Cont’d):
Grouping - Sales of general automobiles (Cont’d):
31 December 2019
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Not overdue 1,152,290,771 0.05% (557,709)
Overdue for 1 to 30 days 15,981,120 0.05% (7,735)
Overdue for 31 to 60 days 2,840,000 1.20% (34,020)
Overdue for 61 to 90 days 322,500 1.97% (6,361)
Overdue over 90 days 31,805,044 4.63% (1,473,940)
1,203,239,435 (2,079,765)
Grouping - Sales of new energy automobiles:
30June 2020
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Not overdue 345,079,551 6.05% (20,868,674)
31 December 2019
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Not overdue 476,963,589 5.53% (26,383,009)
66
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(5) Accounts receivable (Cont’d)
(c) Provision for bad debts (Cont’d)
(ii) Accounts receivable for which provision for bad debts is made on the grouping basis are
analysed as follows (Cont’d):
Grouping - Sales of other automobiles:
30June 2020
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Not overdue 9,968,000 0.21% (20,830)
Overdue for 1 to 30 days - - -
Overdue for 31 to 60 days - - -
Overdue for 61 to 90 days 218,000 5.71% (12,458)
Overdue over 90 days 9,217,087 6.74% (621,171)
19,403,087 (654,459)
31 December 2019
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Not overdue 40,409,688 5.88% (2,377,114)
Overdue for 1 to 30 days 17,872,947 6.49% (1,160,830)
Overdue for 31 to 60 days 5,835,616 26.08% (1,521,779)
Overdue for 61 to 90 days 1,202,062 28.14% (338,307)
Overdue over 90 days 28,182,682 30.07% (8,474,046)
93,502,995 (13,872,076)
67
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(5) Accounts receivable (Cont’d)
(c) Provision for bad debts (Cont’d)
(ii) Accounts receivable for which provision for bad debts is made on the grouping basis are
analysed as follows (Cont’d):
Grouping - automobile parts:
30June 2020
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Not overdue 242,226,442 0.30% (746,318)
Overdue for 1 to 30 days 79,865,426 0.30% (241,457)
Overdue for 31 to 60 days 18,899,555 0.50% (94,498)
Overdue for 61 to 90 days 3,694,374 0.60% (22,166)
Overdue over 90 days 14,581,690 5.00% (729,084)
359,267,487 (1,833,523)
31 December 2019
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Not overdue 437,010,972 0.30% (1,296,939)
Overdue for 1 to 30 days 29,418,407 0.30% (88,255)
Overdue for 31 to 60 days 4,207,971 0.50% (21,040)
Overdue for 61 to 90 days 2,822,814 0.60% (16,937)
Overdue over 90 days 5,082,588 5.00% (254,130)
478,542,752 (1,677,301)
(iii) For the six months ended 30June 2020,the provision for bad debts for the year amounted
to RMB 82,769,918 and the provision for bad debts reversed amounted to
RMB16,452,405.
(d) For the six months ended 30June 2020,none of accounts receivable has been written off
during the year.
(e) As at 30June 2020 and 31 December 2019, there were no accounts receivable pledged.
68
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(6) Receivables financing
30June 2020 31 December 2019
Receivables financing 270,951,837 289,044,373
The Group endorses some of the bank acceptance notes as required by daily fund
management, which also met the criteria for derecognition, and therefore classifies these
bank acceptance notes as financial assets at fair value through other comprehensive
income.
The Group had no bank acceptance notes for which the provision for impairment loss was
made on individual basis, and measured provision for bad debts based on the lifetime
ECL. As 30June 2020 and 31 December 2019, the acceptors of the Groups’ notes
receivable mainly comprised four major state-owned banks or national joint stock banks.
Therefore, the Group expected there was no significant loss on related notes receivable
from non-performance by these banks.
As 30June 2020, receivables financing with a carrying amount of RMB 22,182,906(31
December 2019: RMB 34,196,500) were pledged as collateral for the notes payable.(Note
4(20)).
As at 30June 2020, the Group's notes receivable, presented in receivables financing, that
have been endorsed or discounted but not yet matured were as follows:
Derecognised Not derecognised
Bank acceptance notes 222,142,685 -
69
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(7) Advances to suppliers
(a) The aging of advances to suppliers is analysed as follows:
30June 2020 31 December 2019
% of total % of total
Amount balance Amount balance
Within 1 year 553,294,163 100% 517,122,502 100%
(b) As at 30June 2020, the five largest advances to suppliers are analysed by debtors as
follows:
% of total advances to
Amount suppliers
Company 1 503,623,198 91.02%
Company 2 30,109,553 5.44%
Company 3 11,313,363 2.04%
Company 4 4,001,653 0.72%
Company 5 1,839,838 0.33%
550,887,605 99.55%
(8) Other receivables
30June 2020 31 December 2019
Import working capital advances 35,000,000 35,000,000
Interest receivable from cash at bank 31,645,317 32,092,621
Advances for gas fee 9,778,950 13,208,651
Deposits receivable 5,497,100 7,280,273
Advances for research and
development projects 4,580,134 6,141,895
Reserves receivable 832,236 1,530,488
Others 7,847,072 21,076,025
95,180,809 116,329,953
Less: Provision for bad debts (272,114) (346,816)
94,908,695 115,983,137
70
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(8) Other receivables (Cont’d)
(a) The aging of other receivables is analysed as follows:
30June 2020 31 December 2019
Within 1 year 91,579,450 113,830,378
1 to 2 years 2,381,912 786,581
2 to 3 years 343,570 429,695
Over 3 years 875,877 1,283,299
95,180,809 116,329,953
(b) Provision for losses and changes in book balance statement:
Stage 1 Stage 3
Lifetime ECL
12-month ECL (grouping) (credit-impaired) Total
Provision Provision Provision
Book for bad Book for bad for bad
balance debts balance debts debts
31 December 2019 114,128,008 (246,106) 2,201,945 (100,710) (346,816)
Increase in the current
period — - — - -
Reversal in the current
period — 59,399 — 15,303 74,702
Write-off in the current
period — - — - -
Including: Charge-off in
the current
period — - — - -
Derecognition — - — - -
30June 2020 93,880,964 (186,707) 1,299,845 (85,407) (272,114)
The Group had no other receivables transferred from Stage 1 to Stage 3, and no other
receivables reversed from Stage 3 to Stage 1.
71
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(8) Other receivables (Cont’d)
(b) Provision for losses and changes in book balance statement (Cont’d):
As at 30June 2020 and 31 December 2019, the Group did not have any other receivables
at Stage 2. Other receivables at Stage 1 and Stage 3 were analysed below:
(i) As at 30June 2020 and 31 December 2019, the Group had no other receivables with
provision for bad debts on individual basis.
(ii) As at 30June 2020 and 31 December 2019, the Group’s other receivables with provision
for bad debts on grouping basis were analysed below:
Other receivables with provision on the grouping basis at Stage 1:
30June 2020 31 December 2019
Book Book
balance Provision for losses balance Provision for losses
Provision Provision
Amount ratio Amount Amount ratio Amount
Grouping of
interest from
cash at bank i):
Within 1 year 31,645,317 - - 32,092,621 - -
Grouping of
operating
advances and
guarantees:
Within 1 year 59,934,133 0.30% (179,802) 81,737,757 0.30% (245,213)
Over 1 year 2,301,514 0.30% (6,905) 297,630 0.30% (893)
93,880,964 (186,707) 114,128,008 (246,106)
i) As at 30June 2020 and 31 December 2019, the Group’s interest receivable from cash at
bank mainly came from four major state-owned banks or national joint stock banks.
Therefore, the Group expected there was no significant loss on related interest receivable
from non-performance by these banks.
Other receivables with provision on the grouping basis at Stage 3:
30June 2020 31 December 2019
Book Book
balance Provision for losses balance Provision for losses
Provision Provision
Amount ratio Amount Amount ratio Amount
Grouping of
operating
advances and
guarantees:
Over 1 year 1,299,845 6.57% (85,407) 2,201,945 4.57% (100,710)
72
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(8) Other receivables (Cont’d)
(c) The provision for bad debts in the current period amounted to RMB 74,702. The reversal in
the current period is due to the actual receipt of other receivables relating to the provision for
bad debts made in the prior period.
(d) No other receivables have been written off in the current period.
(e) As at 30June 2020, other receivables from top five debtors in respect of outstanding
balance are analysed as follows:
% of total Provision
other for bad
Nature Balance Aging receivables debts
Company 1 Advances 35,029,720 Within 1 36.80% (106,189)
classified as year
expenses
Company 2 Advances 6,291,984 Within 1 6.61% (18,876)
classified as year
expenses
Company 3 Advances 4,480,000 Within 1 4.71% (13,440)
classified as year
expenses
Company 4 Advances 3,486,966 Within 1 3.66% (10,461)
classified as year
expenses
Company 5 Advances 1,520,227 Within 2 1.60% (6,081)
classified as year
expenses
50,808,897 53.38% (155,047)
(9) Inventories
(a) Inventories are summarised by categories as follows:
30June 2020 31 December 2019
Provision for Provision for
decline in the decline in
Book value of Carrying the value of Carrying
balance inventories amount Book balance inventories amount
Raw materials 1,027,476,599 (68,360,967) 959,115,632 928,829,697 (73,152,658) 855,677,039
Work in progress 188,468,341 (581,113) 187,887,228 158,440,370 (357,692) 158,082,678
Finished goods 309,661,919 (7,522,633) 302,139,286 624,485,048 - 624,485,048
Materials in transit 76,702,488 - 76,702,488 92,258,083 - 92,258,083
Low value
consumables 150,758,686 (10,522,966) 140,235,720 168,917,445 (9,812,965) 159,104,480
Materials
processed on
commission 28,345,769 - 28,345,769 57,261,764 - 57,261,764
1,781,413,802 (86,987,679) 1,694,426,123 2,030,192,407 (83,323,315) 1,946,869,092
73
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(9) Inventories (Cont'd)
(b) Provision for decline in the value of inventories is analysed as follows:
Increase in the
31 December current period Decrease in the current period 30 June
2019 Provision Reversal Write-off 2020
Raw materials (73,152,658) (10,359,424) 2,658,465 12,492,650 (68,360,967)
Work in progress (357,692) (365,220) 15,797 126,002 (581,113)
Finished goods - (12,588,225) - 5,065,592 (7,522,633)
Low value
consumables (9,812,965) (3,287,005) 69,016 2,507,988 (10,522,966)
(83,323,315) (26,599,874) 2,743,278 20,192,232 (86,987,679)
(c) Provision for decline in the value of inventories is as follows:
Specific basis for determining net Reason for current period reversal
realisable value or write-off of provision for
decline in the value of
inventories
Raw materials/ Based on the estimated selling Increase in the net realisable
work in progress/ price, less the estimated costs to value of the inventories of which
Finished goods/ completion, estimated selling and a provision for decline in the
low value distribution expenses and related value had been made in prior
consumables taxes years or sales realised
(10) Other current assets
30 June 2020 31 December 2019
Taxs to be deducted and prepaid 807,965,374 961,430,941
Input VAT to be verified - 11,995,125
807,965,374 973,426,066
74
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(11) Long-term equity investments
30 June 2020 31 December 2019
Associate
- Hanon Systems (Nanchang) Co., Ltd. (Hanon Systems) 37,910,003 40,934,557
Less: Provision for impairment of long-term equity investments - -
37,910,003 40,934,557
Associate
Movements for the current period
Cash
Share of net dividends Provision Ending
Increase or profit/(loss) declared by Provision for balance of
31 December decrease in under equity joint impairment 30 June Shareholding Voting provision for
2019 investment method ventures loss 2020 (%) rights (%) impairment
Hanon Systems 40,934,557 - (3,024,554) - - 37,910,003 19.15% 33.33% -
Related information of equity in associates is set forth in Note 5(2).
75
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(12) Fixed assets
30 June 2020 31 December 2019
Fixed assets (a) 5,226,203,286 5,714,483,873
Fixed assets pending for disposal (b) 4,576,160 5,704
5,230,779,446 5,714,489,577
(a) Fixed assets
Machinery and Electronic and
. Buildings equipment Motor vehicles Moulds other equipment Total
Cost
31 December 2019 2,294,038,213 3,820,737,800 350,288,109 3,030,590,946 3,671,943,742 13,167,598,810
Increase in the
current period
Transfers from
construction in
progress 9,358,762 3,299,553 2,711,935 34,956,767 29,698,122 80,025,139
Decrease in the
current period
Disposal or
retirement (25,492,641) (37,882,770) (5,689,816) (31,675,863) (65,877,225) (166,618,315)
Other decrease - - - - (47,379) (47,379)
30 June 2020 2,277,904,334 3,786,154,583 347,310,228 3,033,871,850 3,635,717,260 13,080,958,255
Accumulated
depreciation
31 December 2019 (519,318,152) (2,278,813,606) (204,218,309) (2,085,299,039) (2,324,170,685) (7,411,819,791)
Increase in the
current period
Provision (28,738,819) (118,790,978) (17,472,582) (171,636,650) (180,999,521) (517,638,550)
Decrease in the
current period
Disposal or
retirement 2,960,554 29,019,712 5,091,505 25,200,086 49,664,559 111,936,416
Other decrease - - - - 132,670 132,670
30 June 2020 (545,096,417) (2,368,584,872) (216,599,386) (2,231,735,603) (2,455,372,977) (7,817,389,255)
Provision for
impairment loss
31 December 2019 - (25,422,141) (120,218) (12,544,916) (3,207,871) (41,295,146)
Increase in the
current period
Provision - (2,518,345) (4,254) (6,368,056) (1,360,459) (10,251,114)
Decrease in the
current period
Disposal or -
retirement 6,817,782 81,795 5,820,387 1,460,582 14,180,546
30 June 2020 - (21,122,704) (42,677) (13,092,585) (3,107,748) (37,365,714)
Carrying amount
30 June 2020 1,732,807,917 1,396,447,007 130,668,165 789,043,662 1,177,236,535 5,226,203,286
31 December 2019 1,774,720,061 1,516,502,053 145,949,582 932,746,991 1,344,565,186 5,714,483,873
For the six months ended 30June 2020, depreciation charged to fixed assets amounted to RMB
517,638,550 (the six months ended 30June 2019: RMB 475,243,004), of which the amounts
charged to cost of sales, selling expenses, general and administrative expenses, and research and
development expenses were RMB 398,894,781 (the six months ended 30 June 2019: RMB
407,307,847), RMB 1,516,970 (the six months ended 30 June 2019: RMB 1,639,280), RMB
81,887,718 (the six months ended 30 June 2019: RMB 37,469,266) and RMB 35,339,081 (the six
months ended 30 June 2019: RMB 28,826,611) respectively.
76
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(12) Fixed assets (Cont’d)
(a) Fixed assets (Cont’d)
The cost of fixed assets transferred from construction in progress amounted to RMB
80,025,139 (the six months ended 30 June 2019: RMB 251,536,427).
(i) Temporarily idle fixed assets
As at 30 June 2020, the fixed assets with a carrying amount of RMB 13,364,123 (a cost of
RMB 170,300,819) (31 December 2019: a carrying amount of RMB 6,376,873 and a cost
of RMB 155,507,908) were temporarily idle due to product process adjustment and other
reasons. The analysis is as follows:
Provision for
Accumulated impairment Carrying
Cost depreciation loss amount
Buildings 10,477,140 (4,429,208) - 6,047,932
Machinery and
equipment 130,920,989 (105,330,006) (21,122,704) 4,468,279
Motor vehicles 3,481,663 (1,839,356) (42,677) 1,599,630
Moulds 4,016,618 (3,359,520) (547,669) 109,429
Electronic and
other equipment 21,404,409 (17,157,808) (3,107,748) 1,138,853
170,300,819 (132,115,898) (24,820,798) 13,364,123
(ii) Fixed assets with pending certificates of ownership:
Reasons for not obtaining
Carrying amount certificates of ownership
Buildings 953,427,141 Pending procedures
(iii) Assessment on impairment of asset groups
The Company's subsidiary, JMCH, has shown signs of impairment of long-term assets due
to accumulated losses. Management tested the entire assets of JMCH as an asset group
for impairment. The method and key assumptions of impairment test of JMCH asset group
are set out in Note 4(16). After testing, no impairment provision was made for fixed assets
and construction in progress in JMCH asset group in the current period.
(b) Fixed assets pending for disposal
30 June 2020 31 December 2019
Electronic and other
equipment 3,997,633 3,208
Motor vehicles 4,168 2,496
Moulds 382,500 -
Machinery and equipment 191,859 -
4,576,160 5,704
77
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(13) Construction in progress
30 June 2020 31 December 2019
Provision for Provision for
impairment Carrying impairment Carrying
Book balance loss amount Book balance loss amount
Fushan new plant
investment project 867,470,733 - 867,470,733 843,501,521 - 843,501,521
JMC capacity
optimization 125,207,148 125,207,148 - - -
Engine construction
project 113,435,977 - 113,435,977 132,731,701 - 132,731,701
Gasoline engine
processing capacity
expansion project 107,210,357 - 107,210,357 96,957,862 - 96,957,862
CX756 project 72,363,052 - 72,363,052 57,798,588 - 57,798,588
Vehicles capacity
investment project 68,110,689 - 68,110,689 72,757,444 - 72,757,444
N356 project 67,065,496 - 67,065,496 56,765,898 - 56,765,898
Construction of
Xiaolan 600 mu Phase
3 plan 50,897,386 - 50,897,386 35,720,297 - 35,720,297
Collision Simulation
Laboratory 32,697,323 - 32,697,323 27,073,143 - 27,073,143
JF8/CX743 project 14,828,370 - 14,828,370 21,392,593 - 21,392,593
V348 conversion
project 13,189,975 - 13,189,975 5,168,412 - 5,168,412
Independently
developed gasoline
engine project 12,678,592 - 12,678,592 12,192,019 - 12,192,019
Stamping/frame
capacity improvement
project 11,078,149 - 11,078,149 14,273,769 - 14,273,769
Technology research
institute project 9,896,039 - 9,896,039 19,292,516 - 19,292,516
Xiaolan gasoline
engine assembly
Phase 2 project 4,122,311 - 4,122,311 4,122,311 - 4,122,311
N806 project 599,007 - 599,007 1,837,618 - 1,837,618
J09 project 441,190 - 441,190 - - -
New energy laboratory
project 164,517 - 164,517 164,517 - 164,517
J28 project - - - 1,049,999 - 1,049,999
Other miscellaneous
and pending
installation projects 96,364,825 (691,646) 95,673,179 96,016,216 (691,646) 95,324,570
1,667,821,136 (691,646) 1,667,129,490 1,498,816,424 (691,646) 1,498,124,778
78
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(13) Construction in progress (Cont’d)
(i) Movements of significant projects of construction in progress
Including:
Capitalised
Accumulated borrowing
% of project capitalised costs in the
Budget 31 December Increase in the Transfer to Decrease of 30 June investment Progress borrowing current Source of
Project name (in RMB 0’000) 2019 current period fixed assets other 2020 in budget of project costs period fund
Fushan new plant investment Self-owned
project 205,200 843,501,521 24,786,063 (816,851) - 867,470,733 42% 42% - - funds
Self-owned
JMC capacity optimization 179,462 - 125,207,148 - - 125,207,148 7% 7% - - funds
Self-owned
Engine construction project 67,000 132,731,701 - (8,381,138) (10,914,586) 113,435,977 66% 66% - - funds
Gasoline engine processing Self-owned
capacity expansion project 16,445 96,957,862 10,252,495 - - 107,210,357 65% 65% - - funds
Self-owned
CX756 project 21,688 57,798,588 15,724,931 (1,160,467) - 72,363,052 34% 34% - - funds
Vehicles capacity investment Self-owned
project 100,200 72,757,444 2,863,302 (7,510,057) - 68,110,689 93% 93% - - funds
Self-owned
N356 project 11,269 56,765,898 18,651,593 (8,351,995) - 67,065,496 80% 80% - - funds
Construction of Xiaolan 600 mu Self-owned
Phase 3 plan 20,977 35,720,297 15,249,417 (72,328) - 50,897,386 24% 24% - - funds
Self-owned
Collision Simulation Laboratory 9,651 27,073,143 5,624,180 - - 32,697,323 34% 34% - - funds
Self-owned
JF8/CX743 project 14,000 21,392,593 1,023,620 (7,587,843) - 14,828,370 90% 90% - - funds
V348 major transformation Self-owned
project 6,037 5,168,412 8,282,351 (260,788) - 13,189,975 23% 23% - - funds
Independently developed Self-owned
gasoline engine project 43,200 12,192,019 486,573 - - 12,678,592 92% 92% - - funds
Stamping/frame capacity Self-owned
improvement project 56,778 14,273,769 2,811,547 (6,007,167) - 11,078,149 81% 81% - - funds
Technology research institute Self-owned
project 97,000 19,292,516 48,078 (9,444,555) - 9,896,039 20% 20% - - funds
Xiaolan gasoline engine Self-owned
assembly Phase 2 project 3,612 4,122,311 - - - 4,122,311 92% 92% - - funds
Self-owned
N806 project 2,860 1,837,618 730,695 (1,969,306) - 599,007 99% 99% - - funds
79
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(13) Construction in progress (Cont’d)
(i) Movements of significant projects of construction in progress (Cont’d)
Including:
Capitalised
Accumulated borrowing
% of project capitalised costs in the
Budget 31 December Increase in the Transfer to Decrease of 30 June investment in Progress borrowing current Source of
Project name (in RMB 0’000) 2019 current period fixed assets other 2020 budget of project costs period fund
Self-owned
J09 project 61,800 - 966,790 (525,600) - 441,190 93% 93% - - funds
New energy laboratory Self-owned
project 7,049 164,517 - - - 164,517 78% 78% - - funds
Self-owned
J28 project 6,224 1,049,999 42,334 (1,092,333) - - 83% 83% - - funds
Self-owned
Other miscellaneous and funds
pending installation and
projects 96,016,216 29,397,569 (26,844,711) (2,204,249) 96,364,825 292,897 - borrowings
1,498,816,424 262,148,686 (80,025,139) (13,118,835) 1,667,821,136
(ii) Provision for impairment of construction in progress
Increase in the Decrease in the
31 December 2019 current period current period 30 June 2020 Reason for provision
Other miscellaneous
and pending The recoverable amount is below
installation projects (691,646) - - (691,646) the carrying amount
80
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(14) Right-of-use assets
Buildings
Cost
31 December 2019 48,809,592
Increase in the current period
New lease contracts -
30 June 2020 48,809,592
Accumulated depreciation
31 December 2019 (12,769,701)
Increase in the current period
Provision (7,225,828)
30 June 2020 (19,995,529)
Provision for impairment loss
31 December 2019 -
Increase in the current period
Provision -
30 June 2020 -
Carrying amount
30 June 2020 28,814,063
31 December 2019 36,039,891
For the six months ended 30June 2020, depreciation of right-of-use assets amounted to
RMB 7,225,828, of which RMB 5,775,094 and RMB 1,450,734 were included in cost of
sales and selling expenses.
81
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(15) Intangible assets
After-sales
services
Land use Software Non-patent management
rights use fees technologies model Others Total
Cost
31 December 2019 886,309,822 176,542,395 290,025,954 36,979,184 1,648,171 1,391,505,526
Increase in the
current period
Transfers from
construction in
progress - 2,204,249 - - - 2,204,249
Internal research
and development - - 182,923,172 - - 182,923,172
Decrease in the
current period
Disposal - - - - - -
30 June 2020 886,309,822 178,746,644 472,949,126 36,979,184 1,648,171 1,576,632,947
Accumulated
amortisation
31 December 2019 (166,614,748) (109,014,815) (128,492,763) (36,979,184) (1,648,171) (442,749,681)
Increase in the
current period
Provision (9,138,270) (10,938,489) (38,148,754) - - (58,225,513)
Decrease in the
current period
Disposal - - - - - -
30 June 2020 (175,753,018) (119,953,304) (166,641,517) (36,979,184) (1,648,171) (500,975,194)
Provision for
impairment loss
31 December 2019 - - - - - -
Increase in the
current period
Provision - - - - - -
Decrease in the
current period
Disposal - - - - - -
30 June 2020 - - - - - -
Carrying amount
30 June 2020 710,556,804 58,793,340 306,307,609 - - 1,075,657,753
31 December 2019 719,695,074 67,527,580 161,533,191 - - 948,755,845
For the six months ended 30June 2020, amortisation charged to intangible assets
amounted to RMB 58,225,513 (the six months ended 30June 2019: RMB 42,950,608), of
which the amounts charged to cost of sales, selling expenses, general and administrative
expenses, and research and development expenses were RMB 273,069, RMB 179,314,
RMB 18,893,016 and RMB 38,880,114 respectively. (the six months ended 30 June 2019:
RMB 248,998, RMB 169,811, RMB 17,156,357 and RMB 25,375,442).
The Group's development expenditures are set out below:
Decrease in the current period
Recognised
31 December Increase in the Charged to as intangible
2019 current period profit or loss assets 30 June 2020
Automobile
products
development
project 125,142,080 127,364,508 - (182,923,172) 69,583,416
82
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(15) Intangible assets (Cont’d)
Expenditures on research and development of the Group incurred in the six months ended
30June 2020 amounted to RMB 823,946,960 (the six months ended 30June 2019: RMB
914,828,651) in total, of which RMB 696,582,452 (the six months ended 30June2019:
RMB 837,430,636) was recognised in profit or loss for the current period, RMB 86,341,229
(the six months ended 30June 2019: RMB 4,781,497) was recognised as intangible assets
for the current period and RMB 41,023,279 (the six months ended 30June2019: RMB
72,616,518) was included in the ending balance of development expenditures. As at 30
June 2020, the intangible assets developed by the Group accounted for 28.5% (31
December 2019: 17.0%) of the carrying amount of intangible assets.
(16) Goodwill
31 December Increase in the Decrease in the
2019 current period current period 30 June 2020
Goodwill -
JMCH 89,028,412 - - 89,028,412
Less: Provision for
impairment (a) -
JMCH (89,028,412) - - (89,028,412)
- - - -
(a) Impairment
Management tested the entire assets of JMCH as an asset group for impairment. The
recoverable amount of the asset group is based on a seven-year budget plan approved by
management for medium- and long-term business development, adjusted for market
conditions, using future cash flow forecast to calculate the net value of the fair value less
disposal costs. Cash flows beyond the seven-year period are extrapolated using the
estimated long-term growth rate. The long-term growth rate does not exceed the average
growth rate for the heavy duty automobile business in which the asset group operates.
The key assumptions used by management and forecast period are consistent with the
heavy duty automobile industry. Management determines budgeted gross margins based
on industrial and past experience and forecast on future market development. The discount
rates used by management are the after-tax interest rates that are able to reflect the risks
specific to the asset groups. The fair value measurement is categorised within level 3 of the
fair value hierarchy.
83
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(17) Deferred tax assets and deferred tax liabilities
(a) Deferred tax assets before offsetting
30 June 2020 31 December 2019
Deductible Deductible
temporary temporary
differences and Deferred differences and Deferred
deductible losses tax assets deductible losses tax assets
Accrued expenses and
provisions 3,564,341,232 806,804,151 3,561,590,960 802,898,159
Recoverable losses 1,589,944,713 238,526,420 1,589,820,677 238,495,412
Provision for asset
impairments 322,989,941 52,708,810 246,399,757 39,468,025
Retirement benefits plan 66,032,485 16,275,873 68,441,000 16,637,150
Non-patent technologies 83,320,759 20,830,190 64,246,382 16,061,596
Deferred income 34,693,362 5,204,004 34,389,578 5,158,437
Employee education
funds unpaid 32,982,026 5,123,845 20,980,066 3,248,820
Others 39,673,028 6,821,550 36,034,838 6,154,413
5,733,977,546 1,152,294,843 5,621,903,258 1,128,122,012
Including:
Expected to be recovered
within one year
(inclusive) 876,639,535 855,992,754
Expected to be recovered
after one year 275,655,308 272,129,258
1,152,294,843 1,128,122,012
(b) Deferred tax liabilities before offsetting
30 June 2020 31 December 2019
Taxable Taxable
temporary Deferred tax temporary Deferred tax
differences liabilities differences liabilities
Depreciation of fixed assets 1,200,337,561 283,859,248 1,161,290,511 260,407,296
Differences between the fair
value of the identifiable
net assets and book
value arising from
business combinations
not under common
control 100,091,548 25,022,887 101,359,924 25,339,981
Amortisation of intangible
assets 35,603,191 8,341,346 32,088,825 6,968,005
Others 9,789,542 1,500,744 558,420 139,605
1,345,821,842 318,724,225 1,295,297,680 292,854,887
Including:
Expected to be recovered
within one year
(inclusive) 64,715,843 47,363,058
Expected to be recovered
after one year 254,008,382 245,491,829
318,724,225 292,854,887
84
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(17) Deferred tax assets and deferred tax liabilities (Cont’d)
(c) Deductible temporary differences and deductible losses that are not recognised as
deferred tax assets are analysed as follows:
30 June 2020 31 December 2019
Deductible temporary differences 152,732,113 165,067,939
Deductible losses 1,267,667,619 1,006,172,312
1,420,399,732 1,171,240,251
(d) Deductible losses that are not recognised as deferred tax assets will be expired in
following years:
30 June 2020 31 December 2019
2020 72,469,642 72,469,642
2021 115,819,543 115,819,543
2022 150,713,078 150,713,078
2023 240,678,736 240,678,736
2024 351,896,252 426,491,313
2025 336,090,368 -
1,267,667,619 1,006,172,312
(e) The net balances of deferred tax assets and liabilities after offsetting are as follows:
30 June 2020 31 December 2019
Offsetting Balance after Offsetting Balance after
amount offsetting amount offsetting
Deferred tax assets (293,701,338) 858,593,505 (267,514,906) 860,607,106
Deferred tax liabilities (293,701,338) 25,022,887 (267,514,906) 25,339,981
85
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(18) Provision for asset impairment and losses
31 December Increase in the Decrease in the current period
2019 current period Reversal Write-off 30 June 2020
Provision for bad debts of accounts receivable 154,075,531 82,769,918 (16,452,405) - 220,393,044
Including: Provision for bad debts on individual
basis 110,063,380 82,769,918 - - 192,833,298
Provision for bad debts on grouping
basis 44,012,151 - (16,452,405) - 27,559,746
Provision for bad debts of other receivables 346,816 - (74,702) - 272,114
Sub-total 154,422,347 82,769,918 (16,527,107) - 220,665,158
Provision for decline in the value of inventories 83,323,315 26,599,874 (2,743,278) (20,192,232) 86,987,679
Provision for impairment of fixed assets 41,295,146 10,251,114 - (14,180,546) 37,365,714
Provision for impairment of construction in
progress 691,646 - - - 691,646
Provision for impairment of goodwill 89,028,412 - - - 89,028,412
Sub-total 214,338,519 36,850,988 (2,743,278) (34,372,778) 214,073,451
368,760,866 119,620,906 (19,270,385) (34,372,778) 434,738,609
86
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(19) Short-term borrowings
30 June 2020 31 December 2019
Bank credit loan 1,300,000,000 -
As at 30 June 2020,the weighted average interest rate ofShort-term borrowings is 2.79%
(20) Notes payable
30 June 2020 31 December 2019
Bank acceptance notes 71,901,506 31,400,000
As at 30 June 2020, the subsidiary of the Group, JMCH’s notes receivable of RMB
71,901,506 (31 December 2019: 31,400,000) were secured by its receivables financing
with a carrying amount of RMB 22,182,906 (31 December 2019: RMB 34,196,500) (Note
4(6)) and other cash amount of RMB49,718,600 (31 December 2019: Nil) (Note 4(1)).
(21) Accounts payable
30 June 2020 31 December 2019
Payable for spare parts 8,460,559,600 7,874,660,108
Payable for raw and auxiliary
materials 275,400,826 241,509,481
8,735,960,426 8,116,169,589
As at 30 June 2020, accounts payable with aging over 1 year amounted to RMB
444,858,938 (31 December 2019: RMB 329,574,913), which mainly represented materials
payable for which a settlement price has not yet been determined, and such payables had
not been finally settled yet.
(22) Contract liabilities
30 June 2020 31 December 2019
Advances for automobiles and
automobile parts 112,774,231 227,774,183
Advances for maintenance and
warranty services 115,151,087 102,109,762
227,925,318 329,883,945
Less: Contract liabilities expected to
be included in revenue
after one year (Note 4(33)) (78,768,315) (61,713,791)
149,157,003 268,170,154
87
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(23) Employee benefits payable
30 June 2020 31 December 2019
Short-term employee benefits payable (a) 440,143,879 379,453,114
Defined contribution plans payable (b) 57,458,431 -
Defined benefit plans payable (c) 3,430,000 3,430,000
Termination benefits payable (d) 2,664,176 2,664,176
503,696,486 385,547,290
(a) Short-term employee benefits
31 December Increase in the Decrease in the 30 June
2019 current period current period 2020
Wages and salaries,
bonus, allowances
and subsidies 333,252,396 920,923,479 (876,752,571) 377,423,304
Staff welfare 20,408,093 41,153,420 (39,493,221) 22,068,292
Social security
contributions - 39,015,571 (37,269,269) 1,746,302
Including: Medical
insurance - 34,229,353 (34,229,353) -
Work injury
insurance - 2,268,425 (522,123) 1,746,302
Maternity
insurance - 2,517,793 (2,517,793) -
Housing funds - 66,580,205 (66,580,205) -
Labour union funds
and employee
education funds 25,792,625 30,544,972 (18,328,240) 38,009,357
Other short-term
employee benefits - 2,598,126 (1,701,502) 896,624
379,453,114 1,100,815,773 (1,040,125,008) 440,143,879
(b) Defined contribution plans
Increase in Decrease in
31 December the current the current 30 June
2019 period period 2020
Basic pensions - 75,334,835 (19,627,370) 55,707,465
Supplementary
pensions - 10,400,000 (10,400,000) -
Unemployment
insurance - 2,454,439 (703,473) 1,750,966
- 88,189,274 (30,730,843) 57,458,431
(c) Defined benefit plans
Decrease in
31 December Increase in the the current 30 June
2019 current period period 2020
Post-retirement
benefits payable
(Note 4(32)) 3,430,000 1,821,577 (1,821,577) 3,430,000
88
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(23) Employee benefits payable (Cont'd)
(d) Termination benefits payable
30 June 2020 31 December 2019
Early retirement benefits payable
(Note 4(32)) 1,326,000 1,326,000
Other termination benefits (i) 1,338,176 1,338,176
2,664,176 2,664,176
(i) For the Six Months Ended 30 June 2020, other termination benefits paid by the Group
for termination of the employment relationship is RMB 8,856,721.
(24) Taxes payable
30 June 2020 31 December 2019
Consumption tax payable 12,426,520 99,080,033
Enterprise income tax payable 12,509,633 75,018,772
Land use tax payable 4,850,904 5,399,750
Others 14,717,678 19,278,549
44,504,735 198,777,104
(25) Other payables
30 June 2020 31 December 2019
Promotion expenses 1,918,512,087 1,848,583,722
Research and development project
expenses 856,944,969 1,016,587,970
Construction expenses 246,825,695 372,865,433
Goods transportation expenses 147,695,477 231,965,841
Advertising and new product
planning fees 230,527,561 208,380,148
Guarantees 116,624,164 95,201,388
Trademark management fees 12,730,883 18,127,537
Technological transformation project
expenses 17,943,759 17,135,118
Ordinary share dividends payable 66,863,535 6,790,176
Consulting expenses 22,628,093 5,425,621
Others 346,626,353 324,203,884
3,983,922,576 4,145,266,838
89
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(25) Other payables (Cont’d)
As at 30 June 2020, other payables with aging over 1 year of RMB 767,334,106 (31
December 2019: RMB 721,562,900) mainly comprised deposits collected from logistics
companies, distributors and repair stations, payables for projects and payables for
research and development expenses. Such payables had not been finally settled yet in
view of the continuing business transactions with distributors, engineering projects and
research and development projects that have not yet been accepted and completed.
(26) Current portion of non-current liabilities
30 June 2020 31 December 2019
Current portion of lease liabilities
(Note 4(29)) 10,115,277 13,386,576
Current portion of long-term
borrowings (Note 4(28)) 463,595 456,830
10,578,872 13,843,406
(27) Other current liabilities
30 June 2020 31 December 2019
Provisions expected to be settled
within one year (Note 4(30)) 258,553,238 234,948,279
Others 14,660,650 29,610,644
273,213,888 264,558,923
(28) Long-term borrowings
30 June 2020 31 December 2019
Secured borrowings 3,476,963 3,654,644
Less: Current portion of long-term
borrowings (463,595) (456,830)
3,013,368 3,197,814
The above secured borrowings were long-term borrowings amounting to USD 491,131
secured by Jiangling Motor Group Finance Company, borrowed from Industrial and
Commercial Bank of China ("ICBC"), Nanchang Ganjiang Sub-branch with interest
payable every 6 months and the principal due for payment in instalments between 10
December 2007 and 27 October 2027. In the six months ended 30June 2020, the interest
rate of long-term borrowings was 1.5% (the six months ended 30June 2019: 1.5%).
30 June 2020 31 December 2019
Amount in Amount in
Starting Maturity Interest foreign RMB foreign RMB
date date Currency rate (%) currency equivalent currency equivalent
ICBC
Nanchang
Ganjiang 27 February 27 October
Sub-branch 1998 2027 USD 1.5% 491,131 3,476,963 523,873 3,654,644
90
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(29) Lease liabilities
30 June 2020 31 December 2019
Lease liabilities 29,254,791 35,978,828
Less: Current portion of non-
current liabilities (Note
4(26)) (10,115,277) (13,386,576)
19,139,514 22,592,252
(30) Provisions
Increase in
31 December the current Decrease in the 30 June
2019 period current period 2020
Product warranties i) 401,635,739 155,588,778 (122,604,317) 434,620,200
Less: Provisions expected
to be settled
within one year
(Note 4(27)) (234,948,279) (258,553,238)
166,687,460 176,066,962
i) Product warranties are expenses expected to be incurred during the warranty period from
free after-sales services, product warranty and other services for the finished vehicles sold.
(31) Deferred income
Increase in Decrease in
31 December the current the current 30 June
2019 period period 2020 Reason
Government Subsidy for
grants (a) 34,389,578 800,000 (496,216) 34,693,362 projects
(a) Government grants
Decrease in
Increase in the the current Asset
current period period related/
31 December Recognised in 30 June Income
2019 other income 2020 related
Research and
development -
related Income
subsidies 34,065,060 800,000 (496,216) 34,368,844 related
Income
Others 324,518 - - 324,518 related
34,389,578 800,000 (496,216) 34,693,362
91
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(32) Long-term employee benefits payable
30 June 2020 31 December 2019
Supplementary retirement benefits
and early-retirement benefits
eligible for recognition of provisions 66,032,485 68,441,000
Less: Payable within one year (4,756,000) (4,756,000)
61,276,485 63,685,000
The retirement and early-retirement benefits payable within one year are included in
employee benefits payable.
For retired and early-retired employees, the Group provides them with a certain amount of
supplementary benefits during their retirement or early-retirement period. The amount of
benefits depends on the employee's position, length of service and salary at the time of
retirement or early-retirement, and is adjusted in accordance with inflation rate and other
factors. The Group's obligations for supplementary retirement and early-retirement benefits
as at the balance sheet date are calculated using projected unit credit method and are
reviewed by an external independent actuary.
(a) Movements of retirement and early-retirement benefits of the Group are as follows:
Present value of the obligations of the defined
benefit plan
30 June 2020 31 December 2019
Opening balance 68,020,000 68,020,000
Cost of defined benefit plan
recognised in profit or loss for the
current period
- Current service cost - 1,203,000
- Past service cost - (1,523,000)
- Actuarial losses recognised
immediately - 1,420,000
- Net interest - 2,300,000
Remeasurement of net liabilities for
defined benefit plan -
- Actuarial losses - 1,623,000
Other changes -
- Benefits paid (2,408,515) (4,602,000)
Ending balance 66,032,485 68,441,000
92
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(32) Long-term employee benefits payable (Cont'd)
(b) The actuarial assumptions used to determine the present value of defined benefit plan
obligations
30 June 2020 31 December 2019
Discount rates —— 3.5%
Inflation rate —— 2.0%
Salaries and benefits growth
rates —— 0%-6%
Future mortality assumptions were determined based on the China Life Insurance
Mortality Table (2010-2013), which is publicly available statistical information for the
Chinese region.
(33) Other non-current liabilities
30 June 2020 31 December 2019
Contract liabilities expected to be
included in revenue after one
year (Note 4(22)) 78,768,315 61,713,791
Others 39,998 80,000
78,808,313 61,793,791
93
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(34) Share capital
Movements for the current period
Shares Transfer
31 December newly Bonus from capital 30 June
2019 issued share surplus Others Sub-total 2020
Shares subject to trading restriction -
Other domestic shares 750,915 - - - (75) (75) 750,840
Including: Shares held by
domestic non-state-
owned legal persons 749,940 - - - - - 749,940
Shares held by
domestic natural
persons 975 - - - (75) (75) 900
750,915 - - - (75) (75) 750,840
Shares not subject to trading
restriction -
Ordinary shares denominated in
RMB 518,463,085 - - - 75 75 518,463,160
Domestically listed foreign shares 344,000,000 - - - - - 344,000,000
862,463,085 - - - 75 75 862,463,160
863,214,000 - - - - - 863,214,000
Since the implementation of the Company's Scheme on Share Split Reform on 13 February 2006, as at 30 June 2020, there are 750,840 shares
currently unavailable for trading.
94
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(34) Share capital (Cont’d)
Movements for the current year
Shares Transfer
31 December newly Bonus from capital 31 December
2018 issued share surplus Others Sub-total 2019
Shares subject to trading restriction -
Other domestic shares 786,840 - - - (35,925) (35,925) 750,915
Including: Shares held by
domestic non-state-
owned legal persons 785,940 - - - (36,000) (36,000) 749,940
Shares held by
domestic natural
persons 900 - - - 75 75 975
786,840 - - - (35,925) (35,925) 750,915
Shares not subject to trading
restriction -
Ordinary shares denominated in
RMB 518,427,160 - - - 35,925 35,925 518,463,085
Domestically listed foreign shares 344,000,000 - - - - - 344,000,000
862,427,160 - - - 35,925 35,925 862,463,085
863,214,000 - - - - - 863,214,000
Since the implementation of the Company's Scheme on Share Split Reform on 13 February 2006, as at 31 December 2019, there are 750,915
shares currently unavailable for trading. During the reporting period, 35,925 shares with trading restrictions were released from the restricted
conditions on 30 December 2019 and converted to unrestricted ordinary shares denominated in RMB.
95
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(35) Capital surplus
Increase in Decrease in
31 December the current the current 30 June
2019 period period 2020
Capital premium 816,609,422 - - 816,609,422
Other capital surplus 22,833,068 - - 22,833,068
839,442,490 - - 839,442,490
Increase in Decrease in
31 December the current the current 31 December
2018 year year 2019
Capital premium 816,609,422 - - 816,609,422
Other capital surplus 22,833,068 - - 22,833,068
839,442,490 - - 839,442,490
96
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(36) Other comprehensive income
Other comprehensive income in the Other comprehensive income in the income statement for
balance sheet the six months ended 30 June 2020
Amount
incurred Less: Transfer-
before out of previous
Attributable income tax other Attributable
31 to the parent for the comprehensive Less: to the parent
December company 30 June current income in the Income tax company
2019 after tax 2020 period current period expenses after tax
Other comprehensive income items which
will not be reclassified to profit or loss
Actuarial gains on defined benefit plans (11,395,500) - (11,395,500) - - - -
Other comprehensive income in the Other comprehensive income in the income statement for
balance sheet the year ended 31 December 2019
Amount Less: Transfer-
incurred out of previous
Attributable before other Attributable
31 to the parent income tax comprehensive Less: to the parent
December company 31 December for the income in the Income tax company
2018 after tax 2019 current year current year expenses after tax
Other comprehensive income items which
will not be reclassified to profit or loss
Actuarial gains on defined benefit plans (10,178,250) (1,217,250) (11,395,500) (1,623,000) - 405,750 (1,217,250)
97
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(37) Surplus reserve
Increase in Decrease in
31 December the current the current 30 June
2019 period period 2020
Statutory surplus
reserve 431,607,000 - - 431,607,000
Increase in Decrease in
31 December the current the current 31 December
2018 year year 2019
Statutory surplus
reserve 431,607,000 - - 431,607,000
In accordance with the Company Law, the Company’s Articles of Association and the
resolution of the Board of Directors, the Company should appropriate 10% of net profit for
the year to the statutory surplus reserve, and the Company can cease appropriation when
the statutory surplus reserve accumulated to more than 50% of the registered capital. The
statutory surplus reserve can be used to make up for the loss or increase the share capital
upon approval from the appropriate authorities. As the accumulated appropriation to the
statuary surplus reserve exceeded 50% of the registered capital, no appropriation was
made in the current year. (2019: Nil).
The Company appropriates for the discretionary surplus reserve after the shareholders’
meeting approves the proposal from the Board of Directors. The discretionary surplus
reserve can be used to compensate for the losses incurred in prior years or increase the
share capital upon approval from appropriate authorities.
(38) Undistributed profits
Six months ended 30 June
2020 2019
Undistributed profits at the beginning
of the year 8,373,695,791 8,260,412,273
Add: Net profit attributable to
shareholders of the parent
company for the current
period 207,771,782 58,861,816
Less: Ordinary share dividends
payable (a) (60,424,980) (34,528,560)
Undistributed profits at the end of the
year 8,521,042,593 8,284,745,529
(a) In accordance with the resolution of the Board of Directors dated on 24 March 2020, the
Company proposed a cash dividend to the shareholders at RMB 0.07 per share,
amounting to RMB 60,424,980 calculated by 863,214,000 issued shares, and the proposal
was approved at the Shareholders’ Meeting on 19 June 2020.
98
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(39) Revenue and cost of sales
Six months ended 30 June
2020 2019
Revenue from main operations 13,877,590,851 13,540,006,632
Revenue from other operations 195,827,027 181,946,870
14,073,417,878 13,721,953,502
Six months ended 30 June
2020 2019
Cost of sales from main operations 11,670,570,165 11,511,538,229
Cost of sales from other operations 189,552,200 167,121,115
11,860,122,365 11,678,659,344
(a) Revenue and cost of sales from main operations
Six months ended 30 June
2020 2019
Revenue from Cost of sales from Revenue from Cost of sales from
main operations main operations main operations main operations
Sales of
automobiles 13,030,304,986 11,046,531,024 12,327,573,061 10,656,458,637
Sales of
automobile
parts 809,320,498 582,437,916 1,168,533,129 813,069,826
Auto
maintenance
services 37,965,367 41,601,225 43,900,442 42,009,766
13,877,590,851 11,670,570,165 13,540,006,632 11,511,538,229
(b) Revenue and cost of sales from other operations
Six months ended 30 June
2020 2019
Cost of sales Cost of sales
Revenue from from other Revenue from from other
other operations operations other operations operations
Sales of
materials 162,807,656 155,071,014 136,882,045 121,423,387
Others 33,019,371 34,481,186 45,064,825 45,697,728
195,827,027 189,552,200 181,946,870 167,121,115
99
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(39) Revenue and cost of sales (Cont’d)
(c) The Group's revenue in Six months ended 30 June 2020 was broken down as follows:
Six months ended 30 June 2020
Automobiles
Automobile Maintenance Materials and
Automobiles parts services others Total
Revenue from main
operations 13,030,304,986 809,320,498 37,965,367 - 13,877,590,851
Including: Recognised at a
time point 13,030,304,986 809,320,498 - - 13,839,625,484
Recognised
within a
certain period - - 37,965,367 - 37,965,367
Revenue from other
operations - - - 195,827,027 195,827,027
13,030,304,986 809,320,498 37,965,367 195,827,027 14,073,417,878
(i) As at 30 June 2020, the amount of revenue corresponding to the performance obligation of
the Group that has been contracted but not yet performed or not fulfilled was RMB
115,151,087, which were expected to be recognised between 2020 and 2025.
(40) Taxes and surcharges
Six months ended 30 June
2020 2019
Consumption tax 271,679,866 267,437,345
City maintenance and construction
tax 50,598,211 41,419,650
Educational surcharge 43,310,138 36,956,574
Land use tax 9,774,064 10,568,114
Real estate tax 8,220,537 9,228,680
Stamp tax 2,779,740 2,765,628
Others 216,586 599,504
386,579,142 368,975,495
100
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(41) Selling expenses
Six months ended 30 June
2020 2019
Advertising and new product
planning fees 138,350,765 228,204,105
Warranties 155,588,778 159,699,478
Promotion expenses 91,894,222 106,690,658
Salaries and benefits 70,754,094 73,092,162
Sales network construction
expenses 41,733,973 59,324,214
Storage expenses 17,822,522 9,830,994
Packaging material expenses 14,586,046 27,992,517
Others 61,456,920 41,041,134
592,187,320 705,875,262
(42) General and administrative expenses
Six months ended 30 June
2020 2019
Salaries and benefits 264,648,937 249,176,100
Depreciation and amortisation 100,780,734 54,625,623
Trademark management fees 20,627,894 40,360,050
Repair expenses 7,181,637 5,022,003
General office expenses 7,103,298 7,915,410
Travel expenses 2,092,846 4,283,270
Others 56,692,100 75,772,234
459,127,446 437,154,690
(43) Research and development expenses
Six months ended 30 June
2020 2019
Salaries and benefits 277,417,893 265,452,232
Design fee 145,947,582 243,683,558
Technology development expenses 102,381,915 76,309,417
Depreciation and amortisation 74,219,195 54,202,053
Material expenses 27,797,465 61,923,254
Others 68,818,402 135,860,122
696,582,452 837,430,636
101
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(44) Financial expenses
Six months ended 30 June
2020 2019
Interest costs 18,259,820 106,053
Add: Interest expenses on lease
liabilities 802,145 -
Interest expenses 19,061,965 106,053
Less: Interest income from bank
deposits (89,499,630) (87,147,016)
Fund occupation fee (a) (4,740,888) (5,618,157)
Interest income (94,240,518) (92,765,173)
Exchange gains or losses 7,561,075 450,836
Others 885,665 2,517,680
(66,731,813) (89,690,604)
(a) The fund occupancy fee is a fee paid to the Group at a mutually agreed rate when a
distributor defers payment or settles by bill of exchange.
(45) Expenses by nature
The cost of sales, selling and distribution expenses, general and administrative expenses
and research and development expenses in the income statement are listed as follows by
nature:
Six months ended 30 June
2020 2019
Changes in inventories of finished
goods and work in progress 280,051,275 101,187,742
Consumed raw materials and low
value consumables, etc. 10,272,137,288 10,151,019,516
Employee benefits 1,196,965,144 1,246,622,679
Depreciation of fixed assets 517,638,550 475,243,004
Amortisation of intangible assets 58,225,513 42,950,608
Depreciation of right-of-use assets 7,225,828 -
Transportation expenses 255,909,419 332,654,242
Design fee 145,947,582 243,683,558
Advertising and new product
planning fees 138,350,765 228,204,105
Warranties 155,588,778 159,699,476
Promotion expenses 91,894,222 106,690,658
Fixed asset repair and maintenance
expenses 41,966,653 40,472,764
Others 446,118,566 530,691,580
13,608,019,583 13,659,119,932
102
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(46) Asset impairment losses
Six months ended 30 June
2020 2019
Decline in the value of inventories 23,856,596 5,309,701
Impairment of fixed assets 10,251,114 3,125,543
34,107,710 8,435,244
(47) Credit impairment losses
Six months ended 30 June
2020 2019
Losses on bad debts of accounts
receivable 66,317,513 (1,132,652)
Losses on bad debts of other
receivables (74,702) 76,528
66,242,811 (1,056,124)
(48) Other income
Six months ended 30 June
Asset related/
2020 2019 Income related
Research and
development
activities related
subsidies 26,672,716 60,800,000 Income related
Subsidy for other
operating activities 138,966,751 11,762,205 Income related
165,639,467 72,562,205
103
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(49) Investment income
Six months ended 30 June
2020 2019
Investment income from financial assets
held for trading 32,619,541 18,446,866
Investment income from long-term
equity investment under equity
method (3,024,554) 333,625
Investment loss from forward exchange
settlement (1,316,987) (4,939,846)
28,278,000 13,840,645
There is no significant restriction on recovery of investment income of the Group.
(50) Gains on changes in fair value
Six months ended 30 June
2020 2019
Derivative financial assets and derivative financial
liabilities -
(Losses)/Gains on forward exchange contracts 2,021,384 (3,556,991)
Financial assets held for trading 7,990,657 -
10,012,041 (3,556,991)
(51) Gains on disposals of assets
Six months ended 30 June
Amount recognised in
non-recurring profit or
loss inSix months
2020 2019 ended 30 June 2020
Losses on disposal of
assets (581,955) (2,212,045) (581,955)
104
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(52) Non-operating income
Six months ended 30 June
Amount recognised in
non-recurring profit or
loss inSix months
2020 2019 ended 30 June 2020
Government grants (a) 40,000 157,717,070 40,000
Compensation and
penalty income 1,434,743 652,679 1,434,743
Others 2,124,450 17,546 2,124,450
3,599,193 158,387,295 3,599,193
(a) Details of government grants
Six months ended 30 June
Asset related/
2020 2019 Income related
Enterprise
development
support fund - 157,677,070 Income related
Others 40,000 40,000
40,000 157,717,070
(53) Non-operating expenses
Six months ended 30 June
Amount recognised in
non-recurring profit or
loss inSix months
2020 2019 ended 30 June 2020
Losses on scrapping
of assets 25,278,620 2,200,188 25,278,620
Donations 4,936,682 11,730 4,936,682
Others 22,950 419,308 22,950
30,238,252 2,631,226 30,238,252
(54) Income tax expenses
Six months ended 30 June
2020 2019
Current income tax calculated based
on tax law and related regulations 12,440,650 40,510
Deferred income tax 1,696,507 (46,342,884)
14,137,157 (46,302,374)
105
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(54) Income tax expenses (Cont’d)
The reconciliation from income tax calculated based on the applicable tax rates and total
profit presented in the consolidated income statement to the income tax expenses is listed
below:
Six months ended 30 June
2020 2019
Total profit 221,908,939 12,559,442
Income tax expenses calculated at
applicable tax rates 4,273,820 (38,027,978)
Effect of change in the tax rates 16,397,340 18,924,390
Tax credit (68,983) (8,791)
Super deduction (74,643,356) (64,123,564)
Non-taxable income 453,683 (882,321)
Costs, expenses and losses not deductible
for tax purposes 143,379 293,905
Utilisation of previously unrecognised
deductible temporary differences (16,441,318) -
Deductible temporary differences for which
no deferred tax asset was recognised - 4,195,231
Deductible losses for which no deferred tax
asset was recognised 84,022,592 33,326,754
Income tax expenses 14,137,157 (46,302,374)
(55) Earnings per share
(a) Basic earnings per share
Basic earnings per share are calculated by dividing consolidated net profit attributable to
ordinary shareholders of the parent company by the weighted average number of
outstanding ordinary shares of the parent company:
Six months ended 30 June
2020 2019
Consolidated net profit attributable to the
owners of the Company 207,771,782 58,861,816
Weighted average number of ordinary shares
outstanding issued by the Company 863,214,000 863,214,000
Basic earnings per share 0.24 0.07
(b) Diluted earnings per share
Diluted earnings per share are calculated by dividing consolidated net profit attributable to
ordinary shareholders of the parent company adjusted based on the dilutive potential
ordinary shares by the adjusted weighted average number of outstanding ordinary shares
of the Company. As there were no dilutive potential ordinary shares in Six months ended
30 June 2020 (Six months ended 30 June 2019: Nil), diluted earnings per share equalled
to basic earnings per share.
106
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(56) Notes to the cash flow statement
(a) Cash received relating to other operating activities
Six months ended 30 June
2020 2019
Government grants 164,857,450 263,419,275
Deposits for bidding 28,090,361 32,565,950
Input VAT refund 23,559,902 -
Security deposits from distributors 22,539,331 46,069,304
Quality claims 530,263 1,655,279
Others 6,343,077 5,811,454
245,920,384 349,521,262
(b) Cash paid relating to other operating activities
Six months ended 30 June
2020 2019
Research and development
expenses 515,676,803 475,334,955
Promotion expenses 147,975,736 130,074,334
Warranties 136,325,584 159,626,148
Advertising expenses 122,999,651 132,128,111
Maintenance expenses 20,729,104 36,873,253
Guarantees 17,904,238 33,100,907
Travel expenses 12,873,171 32,625,056
Others 255,310,888 338,540,178
1,229,795,175 1,338,302,942
(c) Cash received relating to other investing activities
Six months ended 30 June
2020 2019
Interest from cash at bank 89,946,934 95,386,009
Interest from acceptance notes 4,229,944 4,264,256
Interest from credit sales 1,983,609 915,686
Investment income from forward
611,945 2,650,477
exchange settlement
96,772,432 103,216,428
107
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(56) Notes to the cash flow statement (Cont’d)
(d) Cash paid relating to other financing activities
Six months ended 30 June
2020 2019
Repayments of lease liabilities 4,800,032 -
(57) Supplementary information to the cash flow statement
(a) Supplementary information to the cash flow statement
Reconciliation from net profit to cash flows from operating activities
Six months ended 30 June
2020 2019
Net profit 207,771,782 58,861,816
Add: Provision for asset impairment
(Note 4(46)) 34,107,710 8,435,244
Provision for credit impairment
(Note 4(47)) 66,242,811 (1,056,124)
Depreciation of fixed assets (Note
4(12)) 517,638,550 475,243,004
Amortisation of intangible assets
(Note 4(15)) 58,225,513 42,950,608
Depreciation of right-of-use assets
(Note 4(14)) 7,225,828 -
Increase/(Decrease) in provisions 32,984,461 18,994,179
Losses/(Gains) on disposal of fixed
assets 25,860,575 4,412,233
Financial expenses (67,128,763) (90,143,990)
Investment income (Note 4(49)) (28,278,000) (13,840,645)
Loss/(Gains) on changes in fair
value (Note 4(50)) (10,012,041) 3,556,991
Increase in deferred tax assets 2,013,602 (45,995,068)
Decrease in deferred tax liabilities (317,095) (347,816)
Decrease/(Increase) in inventories 216,420,338 333,470,124
Increase in restricted cash (49,718,600) (20,000,917)
Decrease/(Increase) in operating
receivables (728,501,730) 368,708,756
Increase/(Decrease) in operating
payables 449,748,686 292,103,169
Net cash flows from operating activities 734,283,627 1,435,351,564
108
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(57) Supplementary information to the cash flow statement (Cont’d)
(b) Net increase/(decrease) in cash
Six months ended 30 June
2020 2019
Cash at the end of the year 7,872,553,804 8,367,456,770
Less: Cash at the beginning of the year (8,937,936,658) (7,616,879,976)
Net increase/(decrease) in cash (1,065,382,854) 750,576,794
(c) Cash and cash equivalents
30 June 2020 31 December 2019
Cash on hand 7,872,553,804 8,937,936,658
(58) Monetary items denominated in foreign currency
30 June 2020
Amounts
denominated in Translation
foreign currencies exchange rate Amounts in RMB
Other receivables -
EUR 3,733 7.9610 29,720
Long-term borrowings -
USD 491,131 7.0795 3,476,963
Other payables -
USD 23,682,266 7.0795 167,658,599
EUR 3,309,512 7.9610 26,347,025
JPY 106,157,109 0.0658 6,985,987
200,991,611
109
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
5 Interests in other entities
(1) Interests in subsidiaries
Structure of the enterprise group
Place of
major Place of
Subsidiaries business registration Nature of business Shareholding (%) Method of acquisition
Direct Indirect
Nanchang, Nanchang, Retail, wholesale and
JMCS Jiangxi Jiangxi lease of automobiles 100% — Set up by investment
Business combinations
Taiyuan, Taiyuan, Manufacture and sales of involving enterprises not
JMCH Shanxi Shanxi automobiles 100% — under common control
Shenzhen, Shenzhen, Retail, wholesale and
SZFJ Guangdong Guangdong lease of automobiles 100% — Set up by investment
Guangzhou, Guangzhou, Retail, wholesale and
GZFJ Guangdong Guangdong lease of automobiles 100% — Set up by investment
110
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
5 Interests in other entities (Cont’d)
(2) Interests in associates
Summarised information of insignificant associates
Six months ended 30 June
2020 2019
Aggregated carrying amount of investments 37,910,003 40,445,302
Aggregate of the following items in proportion
Net profit (i) (3,024,554) 333,625
Other comprehensive income (i) - -
Total comprehensive income (3,024,554) 333,625
(i) The net profit and other comprehensive income have taken into account the impacts of both the fair value of the identifiable assets and liabilities
upon the acquisition of investment in joint ventures and associates and the unification of accounting policies adopted by the joint ventures and the
associates to those adopted by the Group.
6 Segment information
Revenue and profits of the Group mainly arise from production and domestic sales of automobiles, and the primary assets of the Group are all
located in China. Management of the Group assesses the operating performance of the Group as a whole. Therefore, no segment report is
prepared for the current year.
111
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions
(1) Information of main shareholders
(a) General information of main shareholders
Type of Place of Legal Code of
enterprise registration representative Nature of business organisation
State-
owned Nanchang, Investment and 91360125MA38LU
JIC enterprise China Qiu Tiangao asset management R91F
Ford Motor
Company Foreign United William Clay Manufacture and
(“Ford”) enterprise States Ford, Jr. sales of automobiles Not applicable
(b) Registered capital and changes in main shareholders
31 December Increase in the Decrease in the 30June
2019 current period current period 2020
RMB RMB
JIC 1,000,000,000 - - 1,000,000,000
Ford USD 41,000,000 - - USD 41,000,000
(c) The percentages of shareholding and voting rights in the Company held by main
shareholders
30June 2020 31 December 2019
Shareholding Voting Shareholding Voting
(%) rights (%) (%) rights (%)
JIC 41.03% 41.03% 41.03% 41.03%
Ford 32% 32% 32% 32%
(2) Information of the subsidiaries
The general information and other related information of the subsidiaries are set out in
Note 5(1).
(3) Information of the associates
The information of associates that have related party transactions with the Group is set
out in Note 5(2).
112
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(4) Information of other related parties
Relationship with the Group
JMCG Shareholder of JIC
Chongqing Changan Automobile Co., Ltd. Shareholder of JIC
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. Subsidiary of JMCG
Jiangling Material Co., Ltd. Subsidiary of JMCG
Jiangxi JMCG Industry Co., Ltd. Subsidiary of JMCG
Nanchang Gear Co., Ltd. Subsidiary of JMCG
Jiangxi Lingrui Recycling Resources Development
Corporation Subsidiary of JMCG
JMCG Property Management Co. Subsidiary of JMCG
JMCG Jingma Motors Co., Ltd. Subsidiary of JMCG
Jiangxi Jiangling Chassis Co., Ltd. Subsidiary of JMCG
Nanchang JMCG Shishun Logistics Co., Ltd. Subsidiary of JMCG
Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd. Subsidiary of JMCG
Nanchang JMCG Xinchen Auto Component Co., Ltd. Subsidiary of JMCG
JMCF Subsidiary of JMCG
Jingdezhen Shishun Logistics Co., Ltd. Subsidiary of JMCG
Fuzhou Shishun Logistics Co., Ltd. Subsidiary of JMCG
Ford Global Technologies,LLC Subsidiary of Ford
Ford Motor (China) Co., Ltd. Subsidiary of Ford
Ford Motor Research & Engineering (Nanjing) Co.,
Ltd. Subsidiary of Ford
Ford Motor Co., Thailand Ltd. Subsidiary of Ford
Ford Otomotiv Sanayi A.S. Subsidiary of Ford
Auto Alliance (Thailand) Co., Ltd. Subsidiary of Ford
Ford Vietnam Limited Subsidiary of Ford
Changan Ford Automobile Co., Ltd. Joint venture of Ford
Nanchang JMCG Liancheng Auto Component Co.,
Ltd. Subsidiary of JMCG
Nanchang Lianda Machinery Co., Ltd. Subsidiary of JMCG
Jiangling Aowei Automobile Spare Part Co., Ltd. Subsidiary of JMCG
Jiangxi Biaohong Engine Tappet Co., Ltd. Subsidiary of JMCG
Jiangxi JMCG boya brake system Co., Ltd Subsidiary of JMCG
NC.Gear Forging Factory Subsidiary of JMCG
Jiangxi JMCG Shangrao Industrial Co., Ltd. Subsidiary of JMCG
JMCG Jiangxi Engineering Construction Co., Ltd. Subsidiary of JMCG
Nanchang JMCG Frame Co., Ltd Subsidiary of JMCG
Jiangling Motor Electricity Vehicle Sales Co.,Ltd Subsidiary of JMCG
Dali Wanfu Vehicle Sales & Service Co., Ltd. Subsidiary of JIC’s shareholder
Yunan Wanfu Vehicle Sales & Service Co., Ltd. Subsidiary of JIC’s shareholder
Beijing Beifang Changfu Vehicle Sales & Service Co.,
Ltd. Subsidiary of JIC’s shareholder
China Changan Group Hefei Investing Co., Ltd. Subsidiary of JIC’s shareholder
Chongqing Anfu Vehicle Marketing Co., Ltd. Subsidiary of JIC’s shareholder
Guizhou Wanfu Vehicle Sales & Service Co., Ltd. Subsidiary of JIC’s shareholder
Chengdu Wanxing Vehicle Sales & Service Co., Ltd. Subsidiary of JIC’s shareholder
Chongqing Anbo Vehicle Sales Co., Ltd. Subsidiary of JIC’s shareholder
Beijing Baiwang Changfu Vehicle Sales & Service Co.,
Ltd. Subsidiary of JIC’s shareholder
Honghe Wanfu Vehicle Sales & Service Co., Ltd. Subsidiary of JIC’s shareholder
113
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(4) Other related parties (Cont'd)
Nanchang Jiangling HuaXiang Auto Components Co., Ltd. Joint venture of JMCG
Jiangxi Jiangling Lear Interior System Co., Ltd. Joint venture of JMCG
Nanchang Unistar Electric & Electronics Co., Ltd. Joint venture of JMCG
Nanchang Yinlun Heat-exchanger Co., Ltd. Joint venture of JMCG
Jiangxi ISUZU Engine Co., Ltd. Joint venture of JMCG
Jiangxi ISUZU Co., Ltd. Joint venture of JMCG
Nanchang Baojiang Steel Processing Distribution Co., Ltd. Associate of JMCG
GETRAG (Jiangxi) Transmission Company Associate of JMCG
Faurecia Emissions Control Technologies (Nanchang) Co., Ltd. Associate of JMCG
Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd. Associate of JMCG
Jiangling Motor Holdings Co., Ltd. Associate of JMCG
Jiangxi Jiangling Group Special Vehicle Co., Ltd. Associate of JMCG
Jiangxi JMCG Specialty Vehicles Co., Ltd. Associate of JMCG
Nanchang Hengou Industry Co., Ltd. Associate of JMCG
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. Associate of JMCG
Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. Associate of JMCG
Jiangxi Jiangling Overseas Automobile Sales and Service Co.,
Ltd. Associate of JMCG
Jiangxi Lingyun Automobile Industry Technology Co.,Ltd Associate of JMCG
Jiujiang Fuwantong Vehicle Co., Ltd. Subsidiary of JMCG
Jiangxi Fuxiang Vehicle Co., Ltd. Subsidiary of JMCG
Yichun Xinfu Vehicle Co., Ltd. Subsidiary of JMCG
Ji'an Qingyuan District Yongfuda Vehicle Co., Ltd. Subsidiary of JMCG
Jiangxi Jiangling Group Health Science and Technology Co.,
Ltd. Subsidiary of JMCG
Jiangling Motor Electricity Vehicle Co., Ltd. Subsidiary of JMCG
Jiangxi Zhonglian Intelligent Logistics Co., Ltd. Subsidiary of JMCG
114
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(5) Related party transactions
(a) Purchase and sales of goods, provision and receipt of service
Purchase of goods:
Six months ended 30 June
Nature of related party
Related parties transactions 2020 2019
Nanchang Baojiang Steel Processing Distribution Co.,
Ltd. Purchase of raw materials 405,185,757 356,064,379
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. Purchase of spare parts 383,892,896 360,406,734
Jiangxi Jiangling Chassis Co., Ltd. Purchase of spare parts 355,113,008 341,935,348
GETRAG (Jiangxi) Transmission Company Purchase of spare parts 336,800,228 316,959,364
Ford Purchase of spare parts 331,917,143 187,925,124
Nanchang Jiangling HuaXiang Auto Components Co.,
Ltd. Purchase of spare parts 272,438,364 341,795,713
Faurecia Emissions Control Technologies (Nanchang)
Co., Ltd. Purchase of spare parts 211,129,621 95,763,670
Jiangxi Jiangling Lear Interior System Co., Ltd. Purchase of spare parts 203,467,840 255,708,959
Nanchang JMCG Shishun Logistics Co., Ltd. Purchase of spare parts 180,731,669 86,295,892
Nanchang JMCG Liancheng Auto Component Co.,
Ltd. Purchase of spare parts 178,564,686 170,539,394
Nanchang Unistar Electric & Electronics Co., Ltd. Purchase of spare parts 130,765,035 105,848,474
Hanon Systems Purchase of spare parts 86,204,275 87,085,773
JMCG Purchase of spare parts 71,583,876 53,907,443
Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd. Purchase of spare parts 45,571,842 50,766,740
Auto Alliance (Thailand) Co., Ltd. Purchase of spare parts 45,263,124 11,702,847
Nanchang Lianda Machinery Co., Ltd. Purchase of spare parts 32,528,800 30,230,608
Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd. Purchase of spare parts 32,436,589 33,619,724
Nanchang Yinlun Heat-exchanger Co., Ltd. Purchase of spare parts 30,324,257 32,419,358
Ford Otomotiv Sanayi A.S. Purchase of spare parts 25,895,662 12,312,393
Jiangxi JMCG Specialty Vehicles Co., Ltd. Purchase of spare parts 20,244,154 26,961,562
Jiangling Motor Holdings Co., Ltd. Purchase of spare parts 19,423,653 20,879,223
115
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(5) Related party transactions (Cont’d)
(a) Purchase and sales of goods, provision and receipt of service (Cont'd)
Purchase of goods (Cont'd):
Six months ended 30 June
Nature of related party
Related parties transactions 2020 2019
Jiangxi Jiangling Group Special Vehicle Co., Ltd. Purchase of spare parts 18,057,702 12,366,281
Changan Ford Automobile Co., Ltd. Purchase of spare parts 16,159,043 2,401,348
Jiangxi ISUZU Engine Co., Ltd. Purchase of spare parts 11,670,041 7,415,880
Jiangling Material Co., Ltd. Purchase of spare parts 10,789,819 13,022,298
Jiangling Aowei Automobile Spare Part Co., Ltd. Purchase of spare parts 9,133,485 10,039,195
Nanchang JMCG Xinchen Auto Component Co., Ltd. Purchase of spare parts 6,833,446 8,682,763
Jiangxi JMCG boya brake system Co., Ltd Purchase of spare parts 6,169,098 2,113,558
Jiangxi Lingyun Automobile Industry Technology
Co.,Ltd Purchase of spare parts 5,462,414 -
Jiangxi Lingrui Recycling Resources Development
Corporation Purchase of spare parts 4,876,295 3,012,461
Nanchang Gear Co., Ltd. Purchase of spare parts 3,700,664 5,921,454
Ford Motor Co. Thailand Ltd. Purchase of spare parts 3,620,884 -
Jiangxi Biaohong Engine Tappet Co., Ltd. Purchase of spare parts 3,475,864 3,133,788
NC.Gear Forging Factory Purchase of spare parts 3,436,975 3,283,036
Jiangxi Jiangling Group Health Science and Purchase of epidemic
Technology Co., Ltd. prevention materials 2,214,000 -
Jiangxi JMCG Shangrao Industrial Co., Ltd. Purchase of spare parts 1,383,417 1,458,728
Jiangxi JMCG Industry Co., Ltd. 270,582 5,746,130
Other related parties Purchase of spare parts 180,104 151,666
3,506,916,312 3,057,877,308
The products purchased by the Group from related parties are divided into two categories: purchase of imported parts and purchase of domestic
parts.
The pricing on imported parts purchased from Ford or its suppliers is based on the agreed price by both parties.
The pricing on domestic accessories purchased from other related parties is determined through quotation, cost accounting, and negotiation
between the two parties, and is adjusted regularly.
116
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(5) Related party transactions (Cont’d)
(a) Purchase and sales of goods, provision and receipt of service (Cont'd)
Receipt of services:
Six months ended 30 June
Related parties Nature of related party transactions
2020 2019
Nanchang JMCG Shishun Logistics Co.,
Ltd. Truckage/Transportation 145,365,321 141,953,754
JMCG Jiangxi Engineering Construction Engineering construction and
Co., Ltd. maintenance fee 126,634,929 969,426
Ford Engineering service and design 115,463,584 106,017,941
Ford Global Technologies,LLC Royalty fee 111,064,126 110,123,099
Changan Ford Automobile Co., Ltd. Service fee/Labor costs 26,903,713 58,387,301
Ford Secondments costs 13,361,478 17,446,343
Ford Otomotiv Sanayi A.S. Royalty fee 12,345,203 7,507,715
Jiangxi JMCG Industry Co., Ltd. Working meal 10,620,614 12,668,922
Ford Motor (China) Co., Ltd. Regional personnel costs 5,607,007 4,460,566
Ford Motor Research & Engineering
(Nanjing) Co., Ltd. Regional personnel costs 5,380,878 3,279,094
GETRAG (Jiangxi) Transmission
Company Design fee 4,551,480 460,005
Jiangxi JMCG Specialty Vehicles Co.,
Ltd. Promotion fee 4,099,057 160,377
117
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(5) Related party transactions (Cont’d)
(a) Purchase and sales of goods, provision and receipt of service (Cont'd)
Receipt of services (Cont’d):
Six months ended 30 June
Nature of related party
Related parties transactions 2020 2019
Agent business of
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. importation 3,720,284 2,438,503
Transportation and
Jiangxi Zhonglian Intelligent Logistics Co., Ltd. processing services 2,143,309 —
Ford Otomotiv Sanayi A.S. Secondments costs 1,607,809 3,348,792
Chongqing Changan Automobile Co., Ltd. Secondments costs 638,559 -
Labor costs /Secondments
Jiangling Motor Holdings Co., Ltd. costs 100,700 6,978,676
Nanchang Hengou Industry Co., Ltd. Packing/Truckage - 12,062,788
Engineering service and
Ford Otomotiv Sanayi A.S. design - 25,936,605
Jiangxi JMCG Specialty Vehicles Sales
Corporation, Ltd. Promotion fee - 2,901,526
Other related parties 3,543,314 2,275,448
593,151,365 519,376,881
The Group’s pricing on services received from related parties is based on the agreed price by both parties.
118
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(5) Related party transactions (Cont’d)
(a) Purchase and sales of goods, provision and receipt of service (Cont'd)
Sales of goods:
Six months ended 30 June
Related parties Nature of related party transactions
2020 2019
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. Sales of automobiles and accessories 515,648,431 474,714,048
Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. Sales of automobiles 247,784,771 63,909,306
Jiangxi JMCG Specialty Vehicles Co., Ltd. Sales of automobiles and accessories 116,257,012 12,666,706
Sales of automobiles and accessories,
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. utilities 99,880,081 9,065,509
Jiangxi Lingrui Recycling Resources Development
Corporation Scrapping materials and utilities 37,417,132 36,017,577
Jiangxi Jiangling Chassis Co., Ltd. Sales of automobiles 25,066,364 23,932,221
Dali Wanfu Vehicle Sales & Service Co., Ltd. Sales of automobiles and accessories 22,654,665 -
JMCG Jingma Motors Co., Ltd. Sales of automobiles and accessories 21,175,865 20,101,266
Nanchang JMCG Liancheng Auto Component Co., Ltd. Sales of accessories 20,393,560 17,109,318
Jiangxi Jiangling Group Special Vehicle Co., Ltd. Sales of automobiles 19,430,202 41,557,246
Nanchang JMCG Shishun Logistics Co., Ltd. Sales of automobiles and accessories 11,258,826 4,499,315
Guizhou Wanfu Vehicle Sales & Service Co., Ltd. Sales of automobiles and accessories 11,046,682 -
China Changan Group Hefei Investing Co., Ltd. Sales of automobiles and accessories 8,700,430 -
Jiujiang Fuwantong Vehicle Co., Ltd. Sales of automobiles and accessories 8,476,498 -
Beijing Beifang Changfu Vehicle Sales & Service Co., Ltd. Sales of automobiles and accessories 8,291,761 -
Chongqing Anfu Vehicle Marketing Co., Ltd. Sales of automobiles and accessories 5,983,015 -
Chongqing Anbo Vehicle Sales Co., Ltd. Sales of automobiles and accessories 5,520,116 -
Nanchang Jiangling HuaXiang Auto Components Co., Ltd. Sales of accessories 3,933,437 3,385,165
Chengdu Wanxing Vehicle Sales & Service Co., Ltd. Sales of automobiles and accessories 3,839,113 -
Nanchang Hengou Industry Co., Ltd. Sales of accessories 3,794,800 4,245,457
119
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(5) Related party transactions (Cont’d)
(a) Purchase and sales of goods, provision and receipt of service (Cont'd)
Sales of goods (Cont'd):
Six months ended 30 June
Nature of related party transactions
Related parties 2020 2019
Yunan Wanfu Vehicle Sales & Service Co., Ltd. Sales of automobiles and accessories 3,000,142 -
Jingdezhen Shishun Logistics Co., Ltd. Sales of automobiles 2,389,380 -
Jiangxi Jiangling Lear Interior System Co., Ltd. Sales of accessories 2,349,992 1,722,622
Sales of automobiles and accessories,
Jiangxi Fuxiang Vehicle Co., Ltd. utilities 1,962,208 -
Honghe Wanfu Vehicle Sales & Service Co., Ltd. Sales of automobiles and accessories 1,553,651 -
Sales of accessories andscrapping mate
Jiangxi JMCG Industry Co., Ltd. rials,utilities 1,532,473 2,302,598
Ji'an Qingyuan District Yongfuda Vehicle Co., Ltd. Sales of automobiles and accessories 1,404,914 -
Beijing Baiwang Changfu Vehicle Sales & Service Co.,
Ltd. Sales of automobiles and accessories 1,312,986 -
Yichun Xinfu Vehicle Co., Ltd. Sales of automobiles and accessories 1,178,868 -
Jiangxi Jiangling Overseas Automobile Sales and
Service Co., Ltd. Sales of automobiles and accessories 911,369 4,341,320
Nanchang Lianda Machinery Co., Ltd. Sales of accessories 273,615 1,025,899
Jiangxi JMCG Yichehang Second-hand Motors Sales
Co., Ltd. i) Sales of automobiles — 7,639,660
Other related parties 2,908,251 1,612,130
1,217,330,610 729,847,363
i) In July 2019, due to the change of equity, Jiangxi JMCG Yichehang Second-hand Motors Sales Co., Ltd. was no longer a related party of the
Group.
The Group’s pricing on goods sold to related parties is based on the agreed price by both parties.
120
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(5) Related party transactions (Cont’d)
(b) Leases
(i) The Group as the lessor:
Name of the lessee Type of the leased asset Lease income recognised in Lease income recognised in
six months ended 30 June six months ended 30 June
2020 2019
Jiangxi ISUZU Co., Ltd. Buildings 53,411 -
GETRAG (Jiangxi) Transmission Company Buildings - 7,494
Jiangling Motor Holdings Co., Ltd. Buildings - 3,160
53,411 10,654
(ii) Interest expenses on lease liabilities in the current period with the Group as the lessee:
Six months ended 30 June
2020 2019
JMCG 305,570 -
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 41,038 -
346,608 -
121
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(5) Related party transactions (Cont’d)
(c) Guarantee received
Guarantor Guaranteed amount Starting date Ending date Fully performed or not
Jiangling Motor Group Finance
Company (“JMCF”) 3,476,963 5 March 2001 30 October 2029 Not fully performed
2020 first half-year, JMCF provided guarantees for some bank borrowings of the Group, with a maximum guarantee limit of USD 2,282,123. As at
30 June 2020, JMCF provided borrowing guarantee to the bank borrowing of USD 491,131, equivalent to RMB 3,476,963 (31 December 2019:
USD 523,873, equivalent to RMB 3,654,644) guaranteed by the Group.
(d) Transfer of assets
Six months ended 30 June
Nature of related party
Related parties transactions 2020 2019
Jiangxi JMCG Industry Co., Ltd. Sales of fixed assets 1,447 402
Nanchang JMCG Shishun Logistics Co., Ltd. Sales of fixed assets - 298,982
1,447 299,384
The pricing on transfer of assets between the Group and related parties is based on the agreed price by both parties.
122
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(5) Related party transactions (Cont’d)
(e) Purchase of assets
Six months ended 30 June
Nature of related party
Related parties transactions 2020 2019
GETRAG (Jiangxi) Transmission Company Purchase of fixed assets 3,480,000 -
Jiangxi Jiangling Special Purpose Vehicle Co.,
Ltd. Purchase of fixed assets 1,370,067 -
Jiangling Motor Holdings Co., Ltd. Purchase of fixed assets 337,660 -
Nanchang Jiangling HuaXiang Auto
Components Co., Ltd. Purchase of fixed assets - 6,336,960
5,187,727 6,336,960
The pricing on purchase of assets between the Group and related parties is based on the agreed price by both parties.
(f) Provision of technology sharing
Six months ended 30 June
Nature of related party
Related parties transactions 2020 2019
Ford Vietnam Limited Technical service 11,123,000 2,874,000
Ford Motor Research & Engineering (Nanjing)
Co., Ltd. Technical service 8,290,000 -
Ford Technical service 6,974,000 28,810,000
26,387,000 31,684,000
The Group’s pricing on technology sharing provided to related parties is based on the agreed price by both parties.
123
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(5) Related party transactions (Cont’d)
Six months ended 30 June
(g) Purchase of fuel consumption integral
Related party 2020 2019
Jiangling Motor Electricity Vehicle
Co., Ltd.
23,315,612 -
The Group’s pricing on fuel consumption integral purchased from JMH is based on the
agreed price by both parties.
(h) Remuneration of key management
2020 2019
Remuneration of key management 6,783,165 6,361,409
(i) Interest income
2020 2019
Jiangling Motor Group Finance
Company (“JMCF”) 8,942,382 6,771,234
124
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(6) Receivables from and payables to related parties
Receivables from related parties:
30June 2020 31 December 2019
Provision for bad Provision for bad
Amount debts Amount debts
Accounts receivable
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 485,135,536 (1,090,986) 272,986,397 (712,320)
Jiangxi JMCG Specialty Vehicles Sales
Corporation, Ltd. 76,245,326 (99,119) 19,328,984 (9,664)
Jiangxi Jiangling Chassis Co., Ltd. 14,051,875 (42,156) 13,054,052 (39,162)
Ford Vietnam Limited 11,123,000 (55,615) 5,980,000 (29,900)
JMCG Jingma Motors Co., Ltd. 10,916,815 (32,750) 5,563,310 (16,690)
Jiangxi Jiangling Group Special Vehicle Co.,
Ltd. 6,742,249 (8,765) - -
Nanchang JMCG Liancheng Auto Component
Co., Ltd. 5,867,879 (17,604) 12,767,031 (38,301)
Nanchang JMCG Frame Co., Ltd 5,574,403 (278,720) 5,574,403 (16,723)
Jiangxi Jiangling Special Purpose Vehicle Co.,
Ltd. 3,364,388 (10,093) 2,131,677 (6,395)
Ford Motor Research & Engineering (Nanjing)
Co., Ltd. 2,438,000 (12,190) 9,529,400 (47,647)
Nanchang Jiangling HuaXiang Auto
Components Co., Ltd. 2,160,598 (6,482) 2,128,387 (6,385)
Jiangxi Jiangling Lear Interior System Co., Ltd. 1,342,818 (4,028) 1,082,578 (3,248)
Jiangxi JMCG Specialty Vehicles Co., Ltd. 747,727 (2,243) 58,148,451 (30,290)
Ford 320,000 (1,600) 21,554,000 (107,770)
Nanchang JMCG Shishun Logistics Co., Ltd. - - 6,279,155 (178,666)
Jiangling Motor Electricity Vehicle Sales
Co.,Ltd - - 5,961,020 (374,352)
Other related parties 2,564,363 (10,090) 1,357,184 (7,984)
628,594,977 (1,672,441) 443,426,029 (1,625,497)
125
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(6) Receivables from and payables to related parties (Cont’d)
Receivables from related parties (Cont'd):
30June 2020 31 December 2019
Provision for bad Provision for bad
Amount debts Amount debts
Other receivables
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 35,029,720 (106,189) 35,208,392 (106,725)
Other related parties 540,498 (1,621) 41,481 (125)
35,570,218 (107,810) 35,249,873 (106,850)
126
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(6) Receivables from and payables to related parties (Cont’d)
Receivables from related parties (Cont'd):
30June 31 December
2020 2019
Advances to Nanchang Baojiang Steel Processing
suppliers Distribution Co., Ltd. 503,623,198 492,604,607
Ford Otomotiv Sanayi A.S. 1,839,838 -
505,463,036 492,604,607
Receivables Jiangxi Jiangling Motors Imp. & Exp.
financing Co., Ltd. 717,942 17,148,451
JMCG Jingma Motors Co., Ltd. - 32,000,000
717,942 49,148,451
Jiangling Motor Group Finance
Cash at bank Company (“JMCF”) 618,877,485 967,750,294
127
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(6) Receivables from and payables to related parties (Cont’d)
Payables to related parties:
30June 31 December
2020 2019
Accounts payable
Nanchang Jiangling HuaXiang Auto
Components Co., Ltd. 448,855,710 468,877,821
Jiangxi Jiangling Special Purpose Vehicle Co.,
Ltd. 350,666,967 269,635,441
Jiangxi Jiangling Chassis Co., Ltd. 328,068,328 247,903,618
Jiangxi Jiangling Lear Interior System Co., Ltd. 307,780,416 275,328,167
GETRAG (Jiangxi) Transmission Company 241,059,134 241,934,120
Ford 198,530,541 145,686,393
Nanchang JMCG Shishun Logistics Co., Ltd. 131,317,801 135,343,920
Nanchang JMCG Liancheng Auto Component
Co., Ltd. 130,713,541 133,716,243
Faurecia Emissions Control Technologies
(Nanchang) Co., Ltd. 117,075,030 127,516,031
Hanon Systems 93,271,572 86,208,726
Nanchang Unistar Electric & Electronics Co.,
Ltd. 86,484,570 81,834,768
JMCG 77,184,767 41,122,001
Changan Ford Automobile Co., Ltd. 65,230,878 57,562,568
Nanchang JMCG Mekra-Lang Vehicle Mirror
Co., Ltd. 47,994,084 38,644,169
Nanchang Yinlun Heat-exchanger Co., Ltd. 26,386,239 23,001,840
Jiangxi JMCG Specialty Vehicles Co., Ltd. 26,049,713 20,671,039
Jiangxi Lingge Non-ferrous Metal Die-casting
Co., Ltd. 25,569,213 22,458,920
Nanchang Lianda Machinery Co., Ltd. 25,394,841 20,459,811
Auto Alliance (Thailand) Co., Ltd. 18,305,158 797,030
Jiangxi ISUZU Engine Co., Ltd. 17,627,677 5,957,636
Jiangxi Jiangling Group Special Vehicle Co., Ltd. 16,772,072 8,983,517
Jiangling Motor Holdings Co., Ltd. 15,057,395 23,805,405
Jiangling Aowei Automobile Spare Part Co., Ltd. 8,571,868 14,676,461
Jiangxi JMCG boya brake system Co., Ltd 6,527,242 2,917,900
Nanchang JMCG Xinchen Auto Component Co.,
Ltd. 6,422,296 3,207,475
Jiangxi Lingrui Recycling Resources
Development Corporation 4,679,241 5,037,812
Jiangxi Lingyun Automobile Industry Technology
Co.,Ltd 4,133,996 5,019,020
NC.Gear Forging Factory 3,753,048 11,566
Ford Otomotiv Sanayi A.S. 2,980,941 5,715,771
Nanchang Gear Co., Ltd. 2,605,245 2,600,649
Jiangxi Zhonglian Intelligent Logistics Co., Ltd. 2,143,309 -
Jiangxi Biaohong Engine Tappet Co., Ltd. 2,089,092 1,982,683
Jiangling Material Co., Ltd. 1,578,752 1,505,272
Jiangxi JMCG Shangrao Industrial Co., Ltd. 1,563,223 1,139,163
Jiangxi JMCG Industry Co., Ltd. 423,031 9,408,467
Ford Motor Co., Thailand Ltd. 615,725 -
2,843,482,656 2,530,671,423
128
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(6) Receivables from and payables to related parties (Cont’d)
Payables to related parties (Cont'd):
30June 31 December
2020 2019
Other
payables
Ford 99,756,238 188,389,590
Ford Global Technologies,LLC 62,971,290 67,275,297
Ford Otomotiv Sanayi A.S. 31,272,061 47,911,656
Jiangling Motor Electricity Vehicle Co., Ltd. 23,315,612 -
Jiangxi JMCG Specialty Vehicles Sales
Corporation, Ltd. 22,730,921 25,676,673
GETRAG (Jiangxi) Transmission Company 19,957,494 13,132,392
Changan Ford Automobile Co., Ltd. 15,169,355 26,537,316
Nanchang JMCG Shishun Logistics Co., Ltd. 9,394,565 6,916,458
JMCG Jiangxi Engineering Construction Co.,
Ltd. 8,763,829 10,407,756
Faurecia Emissions Control Technologies
(Nanchang) Co., Ltd. 7,471,471 7,616,969
Jiangxi Jiangling Group Special Vehicle Co., Ltd. 6,786,002 6,983,776
JMCG 2,103,538 -
Nanchang Baojiang Steel Processing
Distribution Co., Ltd. 2,087,023 2,087,023
Jiangxi JMCG Industry Co., Ltd. 1,890,241 2,502,826
Jiangxi Jiangling Group Health Science and
Technology Co., Ltd. 1,890,000 -
Ford Motor (China) Co., Ltd. 1,864,234 3,325,531
Ford Motor Research & Engineering (Nanjing)
Co., Ltd. 1,836,416 2,518,692
Jiangxi JMCG Specialty Vehicles Co., Ltd. 1,461,613 -
Jiangxi Jiangling Special Purpose Vehicle Co.,
Ltd. 1,412,743 4,064,490
Nanchang Unistar Electric & Electronics Co.,
Ltd. 1,258,872 1,326,940
Jiangxi Jiangling Lear Interior System Co., Ltd. 1,225,170 1,207,000
Hanon Systems 755,000 4,362,412
Chongqing Changan Automobile Co., Ltd. 638,559 -
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 608,955 1,779,455
Nanchang JMCG Mekra-Lang Vehicle Mirror
Co., Ltd. 181,739 1,061,739
Nanchang Jiangling HuaXiang Auto
Components Co., Ltd. 100,000 22,080,240
Other related parties 1,889,067 2,595,805
328,792,008 449,760,036
129
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(6) Receivables from and payables to related parties (Cont’d)
Payables to related parties (Cont'd):
Contract 30June 31 December
liabilities 2020 2019
Jiangxi Jiangling Group Special Vehicle Co.,
Ltd. - 2,681,847
Yunan Wanfu Vehicle Sales & Service Co.,
Ltd. 241,652 1,213,244
Other related parties 1,852,667 918,571
2,094,319 4,813,662
Lease
liabilities
JMCG 10,874,815 12,672,782
Jiangxi Jiangling Motors Imp. & Exp.
Co., Ltd. 1,187,433 2,343,048
12,062,248 15,015,830
130
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
7 Related parties and related party transactions (Cont’d)
(7) Commitments in relation to related parties
Capital expenditure commitments 30June 2020 31 December 2019
JMCG Jiangxi Engineering
Construction Co., Ltd. 563,684,390 23,174,665
Guarantee of commitments in relation to related parties is set out in (Note 7(5)(c)).
8 Contingencies
As at 30 June 2020, the Group had no contingencies that needed to be accounted for in
the notes to the financial statements.
9 Commitments
Capital commitments
Capital expenditures contracted for by the Group but are not yet necessary to be
recognised on the balance sheet as at the balance sheet date are as follows:
30 June 2020 31 December 2019
Buildings, machinery and equipment 1,220,164,000 701,817,000
10 Events after the balance sheet date
Evaluation of the impact on the outbreak of Coronavirus Disease.
After the outbreak of Coronavirus Disease 2019 (“COVID-19 outbreak”) in January 2020, a
series of precautionary and control measures have continued to be implemented across
the country. The Group will continue to earnestly implement the guaranteed supply for key
medical materials for epidemic prevention and control, and support epidemic prevention
and control work.
The epidemic has certain impacts on enterprise operation of some provinces and cities
such as Hubei province and certain industries as well as overall economic operation.
Thus, it is probable that the epidemic may affect the risk of the Group’s financial
instruments or operating performance to a certain extent. The degree of impact depends
on the situation and duration of epidemic prevention and control, and various regulation
and control measures implemented.
The Group will continually pay close attention to the development of the epidemic,
evaluate and actively respond to its impacts on the Company’s financial position and
operating results. As at the date on which the financial statements were authorised for
issue, the assessment work was still under progress and no material adverse effects had
been identified.
131
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
11 Financial instrument and risk
The Group's activities expose it to a variety of financial risks: market risk (primarily
including foreign exchange risk and interest rate risk), credit risk and liquidity risk. The
above financial risks and the Group's risk management policies to mitigate the risks are as
follows:
The Board of Directors is responsible for planning and establishing the Group's risk
management framework, formulating the Group's risk management policies, and
supervising the implementation of risk management measures. The Group has established
risk management policies to identify and analyse the risks faced by the Group. These risk
management policies specify the risks such as market risk, credit risk and liquidity risk
management. The Group regularly evaluates the market environment and changes in the
Group's operating activities to determine whether to update the risk management policies
or not. The Group's risk management is carried out under policies approved by the Board
of Directors. The business departments of the Group work closely to identify and evaluate
related risks, and determine countermeasures with management to avoid or reduce the
adverse impact of the related risks on the Company. The internal audit department of the
Group conducts periodical audit to the controls and procedures for risk management and
reports the audit results to the Risk Management Committee of the Group.
(1) Market risk
(a) Foreign exchange risk
The Group’s major operational activities are carried out in Mainland China and a majority
of the transactions are denominated in RMB. The Group is exposed to foreign exchange
risk arising from the recognised assets and liabilities, and future transactions denominated
in foreign currencies, primarily with respect to USD. The Group’s monitors the amount of
assets and liabilities, and transactions denominated in foreign currencies to minimise the
foreign exchange risk. Therefore, the Group can consider entering into forward exchange
contracts to mitigate the foreign exchange risk (Note 4(3)).
The financial assets and the financial liabilities denominated in foreign currencies, which
were held by the Company and the subsidiaries of the Group, whose recording currencies
were RMB, were expressed in RMB as at 30 June 2020 and 31 December 2019 as
follows:
30 June 2020
USD EUR Others Total
Financial assets
denominated in
foreign currency -
Derivative financial
assets 1,475,752 - - 1,475,752
Other receivables - 29,720 - 29,720
1,475,752 29,720 - 1,505,472
Financial liabilities
denominated in
foreign currency -
Current portion of
long-term
borrowings 463,595 - - 463,595
Long-term borrowings 3,013,368 - - 3,013,368
Other payables 167,658,599 26,347,025 6,985,987 200,991,611
171,135,562 26,347,025 6,985,987 204,468,574
132
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
11 Financial instrument and risk (Cont’d)
(1) Market risk (Cont’d)
(a) Foreign exchange risk (Cont’d)
31 December 2019
USD EUR Others Total
Financial assets
denominated in
foreign currency -
Other receivables - 29,722 - 29,722
Financial liabilities
denominated in
foreign currency -
Derivative financial
liabilities 545,632 - - 545,632
Current portion of
long-term
borrowings 456,830 - - 456,830
Long-term borrowings 3,197,814 - - 3,197,814
Other payables 260,962,447 42,659,103 5,574,005 309,195,555
265,162,723 42,659,103 5,574,005 313,395,831
As at 30 June 2020, if the RMB had strengthened/weakened by 10% against the USD
while all other variables had been held constant, the Group’s net profit would have been
approximately RMB 14,436,603 (31 December 2019: approximately RMB 22,553,091)
higher/lower for the financial assets and liabilities dominated in foreign currencies whose
recording currency is RMB; if the RMB had strengthened/weakened by 10% against the
EUR while all other variables had been held constant, the Group’s net profit would have
been approximately RMB 2,297,312 higher/lower(31 December 2019: approximately
RMB 4,000,039).
(b) Interest rate risk
The Group's revenue and operating cash flows are hardly affected by the fluctuation of
the market interest rate. As at 30 June 2020, interest of most of the Group’s cash at bank
was accrued at floating rate; interest of all bank borrowings was accrued at fixed rate. The
Group does not take any measure to hedge interest risk at present.
As at 30 June 2020, if the interest rate of the Group’s cash at bank increased or
decreased by 10% while all other circumstances had been held constant, the Group's net
profit for the year would have been approximately RMB 7,543,808 higher/lower (31
December 2019: approximately RMB 16,235,358).
As at 30 June 2020 and 31 December 2019, the fair value of the Group’s cash at bank
accrued at fixed rate was a reasonable approximation of its carrying amount.
133
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
11 Financial instrument and risk (Cont’d)
(2) Credit risk
Credit risk mainly arises from cash at bank and on hand, notes receivable, accounts
receivable, receivables financing, other receivables, and derivative financial assets at fair
value through profit or loss that are not included in the impairment assessment scope.
The carrying amount of the Group’s financial assets reflects its maximum credit exposure
on the balance sheet date.
The Group expects that there is no significant credit risk associated with cash at bank and
on hand since they are deposited at state-owned banks and other medium or large size
listed banks with good reputation and high credit rating. The Group does not expect that
there will be significant losses from non-performance by these banks.
In addition, the Group has policies to limit the credit exposure on notes receivable,
accounts receivable, receivables financing and other receivables. The Group assesses
the credit quality of and sets credit limits on its customers by taking into account their
financial position, the availability of guarantee from third parties, their credit history and
other factors such as current market conditions. The credit history of the customers is
regularly monitored by the Group. In respect of customers with a poor credit history, the
Group will use written payment reminders, or shorten or cancel credit periods, to ensure
the overall credit risk of the Group is limited to a controllable extent.
As at 30 June 2020, the Group had no significant collateral or other credit enhancements
held as a result of the debtor's mortgage.
(3) Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by
the Group’s finance department in its headquarters. The Group’s monitors rolling
forecasts of the Group's short-term and long-term liquidity requirements to ensure it has
sufficient cash and securities that are readily convertible to cash to meet operational
needs, while maintaining sufficient headroom on its undrawn committed borrowing
facilities from major financial institutions so that the Group does not breach borrowing
limits or covenants on any of its borrowing facilities to meet the short-term and long-term
liquidity requirements.
The financial liabilities of the Group at the balance sheet date are analysed by their
maturity date below at their undiscounted contractual cash flows :
30 June 2020
1 to 2 Over 5
Within 1 year years 2 to 5 years years Total
Short-term
borrowings
- Principal 1,300,000,000 - - - 1,300,000,000
- Interest 15,312,083 - - - 15,312,083
Notes payable 71,901,506 - - - 71,901,506
Accounts - - -
payable 8,735,960,426 8,735,960,426
Other payables 3,983,922,576 - - - 3,983,922,576
Lease liabilities 10,115,277 7,152,848 11,986,666 - 29,254,791
Long-term
borrowings
- Principal 463,595 463,595 1,390,785 1,158,988 3,476,963
- Interest 50,416 43,462 88,663 26,077 208,618
14,117,725,879 7,659,905 13,466,114 1,185,065 14,140,036,963
134
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
11 Financial instrument and risk (Cont’d)
(3) Liquidity risk (Cont’d)
31 December 2019
Over 5
Within 1 year 1 to 2 years 2 to 5 years years Total
Derivative financial
liabilities 545,632 - - - 545,632
Notes payable 31,400,000 - - - 31,400,000
Accounts payable 8,116,169,589 - - - 8,116,169,589
Other payables 4,145,266,838 - - - 4,145,266,838
Lease liabilities 13,386,576 6,987,287 15,604,965 - 35,978,828
Long-term borrowings
- Principal 456,830 456,830 1,370,492 1,370,492 3,654,644
- Interest 53,107 46,254 97,648 35,975 232,984
12,307,278,572 7,490,371 17,073,105 1,406,467 12,333,248,515
12 Fair value estimates
The level in which fair value measurement is categorised is determined by the level of the
fair value hierarchy of the lowest level input that is significant to the entire fair value
measurement:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
135
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
12 Fair value estimates (Cont’d)
(1) Assets and liabilities measured at fair value on a recurring basis
As at 30 June 2020, the assets measured at fair value on a recurring basis by the above
three levels were analysed below:
Level 1 Level 2 Level 3 Total
Financial assets -
Derivative financial - 1,475,752 - 1,475,752
Financial assets held for
trading 2,725, 990,657 2,725,990,657
Receivables financing - - 270,951,837 270,951,837
1,475,752 2,996,942,494 2,998,418,246
As at 30 June 2020, the Group had no liabilities measured at fair value:
As at 31 December 2019, the assets measured at fair value on a recurring basis by the
above three levels were analysed below:
Level 1 Level 2 Level 3 Total
Financial assets -
Receivables financing - - 289,044,373 289,044,373
As at 31 December 2019, the liabilities measured at fair value on a recurring basis by the
above three levels were analysed below.
Level 1 Level 2 Level 3 Total
Financial liabilities -
Derivative financial liabilities - 545,632 - 545,632
The Group takes the date on which events causing the transfers between the levels take
place as the timing specific for recognising the transfers. There is no transfer between
Level 1 and Level 2 for the current year.
The fair value of financial instruments traded in an active market is determined at the
quoted market price; and the fair value of those not traded in an active market is
determined by the Group using valuation technique. The valuation models used mainly
comprise discounted cash flow model and market comparable corporate model. The inputs
of the valuation technique mainly include risk-free interest rate, benchmark rate and
exchange rate.
- 136
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
12 Fair value estimates (Cont’d)
(1) Assets and liabilities measured at fair value on a recurring basis (Cont'd)
The changes in Level 3 financial assets are analysed below:
Changes in unrealised
gains or losses included in
profit or loss for the current
period with respect to
Gains assets still held as at 30
Transfer Transfer recognised in June 2020 - gains or
31 December into out of 30 June profit or loss losses arising from
2019 Increase Decrease Level 3 Level 3 2020 (a) changes in fair value
Financial assets
Financial assets
held for trading -
Structural
deposits - 9,189,000,000 (6,471,000,000) - - 2,718,000,000 32,619,541 7,990,657
Receivables
financing -
Notes
receivable 289,044,373 328,944,967 (347,037,503) - - 270,951,837 - -
Total assets 289,044,373 9,517,944,967 (6,818,037,503) - - 2,988,951,837 32,619,541 7,990,657
(a) Gains recognised in profit or loss is recognised in investment income in the income statement.
137
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
12 Fair value estimates (Cont’d)
(1) Assets and liabilities measured at fair value on a recurring basis (Cont'd)
The changes in Level 3 financial assets are analysed below:
Changes in unrealised
gains or losses
included in profit or loss
for the current year with
respect to assets still
Gains held as at 31
Transfer Transfer recognised in December 2019 - gains
31 December into out of 31 December profit or loss or losses arising from
2018 Increase Decrease Level 3 Level 3 2019 (a) changes in fair value
Financial assets
Financial assets held for
trading -
Monetary fund - 3,300,000,000 (3,300,000,000) - - - 5,739,140 -
Structural deposits - 5,900,000,000 (5,900,000,000) - - - 41,646,567 -
Other current assets -
Notes receivable 6,246,244 1,654,757,442 (1,371,959,313) - - 289,044,373 - -
Total assets 6,246,244 10,854,757,442 (10,571,959,313) - - 289,044,373 47,385,707 -
(a) Gains recognised in profit or loss for the current period has been recognised in investment income in the income statement.
138
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
12 Fair value estimates (Cont’d)
(2) Assets measured at fair value on a non-recurring basis
As at 30 June 2020 and 31 December 2019, the Group did not have assets measured at
fair value on a non-recurring basis.
(3) Assets and liabilities not measured at fair value but for which the fair value is disclosed
Financial assets and liabilities measured at amortised cost mainly include notes
receivable, accounts receivable, other receivables, payables and long-term borrowings,
etc.
The carrying amount of the Group's financial assets and liabilities not measured at fair
value is a reasonable approximation of their fair value.
The fair value of long-term borrowings is the present value of the contractually determined
stream of future cash flows discounted at the rate of interest applied at that time by the
market to instruments of comparable credit status and providing substantially the same
cash flows on the same terms, and categorised within Level 3 of the fair value hierarchy.
13 Capital management
The Group’s capital management policies aim 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, refund capital to shareholders, issue new shares or sell
assets to reduce debts.
The Group's total capital is calculated as “shareholders’ equity” as shown in the
consolidated balance sheet. The Group is not subject to external mandatory capital
requirements, and monitors capital on the basis of equity ratio.
As at 30 June 2020 and 31 December 2019, the Group's equity ratio was as follows:
30 June 2020 31 December 2019
Total borrowings 1,303,476,963 3,654,644
Total equities 10,643,910,583 10,496,563,781
11,947,387,546 10,500,218,425
Equity ratio 10.91% 0.03%
139
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
14 Notes to the Company’s financial statements
(1) Accounts receivable
30 June 2020 31 December 2019
Accounts receivable 1,260,745,851 980,998,110
Less: Provision for bad debts (177,082,301) (115,069,813)
1,083,663,550 865,928,297
(a) The aging of accounts receivable is analysed as follows:
30 June 2020 31 December 2019
Within 1 year 782,355,884 489,899,574
1 to 2 years 475,240,745 490,230,937
2 to 3 years 3,149,222 867,599
1,260,745,851 980,998,110
(b) As at 30 June 2020, the five largest accounts receivable were analysed by debtors as
follows:
Amount of
provision for bad
Balance debts % of total balance
Company 1 477,414,335 (1,060,063) 37.87%
Company 2 167,183,588 - 13.26%
Company 3 81,020,000 (81,020,000) 6.43%
Company 4 75,716,600 (98,432) 6.01%
Company 5 26,016,000 (33,821) 2.06%
827,350,523 (82,212,316) 65.63%
(c) Provision for bad debts
For accounts receivable, irrespective of whether a significant financing component exists,
the Company measures the loss provision according to the lifetime expected credit losses.
140
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
13 Notes to the Company’s financial statements (Cont’d)
(1) Accounts receivable (Cont’d)
(c) Provision for bad debts (Cont’d)
(i) Accounts receivable for which provision for bad debts is made on the individual basis are
analysed as follows:
30 June 2020
Book balance Provision for bad debts
Provision for bad
Amount Lifetime ECL (%) debts
Receivables from related
parties within the Group
i) 184,202,828 - -
Accounts receivable for
automobiles ii) 81,020,000 100% (81,020,000)
New energy subsidies
receivable iii) 84,903,126 100% (84,903,126)
350,125,954 (165,923,126)
31 December 2019
Book balance Provision for bad debts
Provision for bad
Amount Lifetime ECL (%) debts
Receivables from related
parties within the Group
i) 179,138,311 - -
Accounts receivable for
automobiles ii) 81,020,000 100% (81,020,000)
New energy subsidies
receivable iii) 20,410,500 100% (20,410,500)
280,568,811 (101,430,500)
i) As at 30 June 2020, the Company's accounts receivable from subsidiaries JMCH,SZFJ
and GZFJ were RMB 14,132,531,RMB 167,183,587 and RMB 2,886,710 respectively,
totalling RMB 184,202,828. The Company carried out individual assessment on receivables
from subsidiaries. Based on the judgement of credit risk, there is no significant credit risk on
the accounts receivable from subsidiaries, and there is no overdue or impairment.
As at 31 December 2019, the Company's accounts receivable from subsidiaries JMCH and
SZFJ were RMB 10,847,413 and RMB 168,290,898 respectively, totalling RMB
179,138,311. The Company carried out individual assessment on receivables from
subsidiaries. Based on the judgement of credit risk, there is no significant credit risk on the
accounts receivable from subsidiaries, and there is no overdue or impairment.
ii) As at 30 June 2020, since these companies in debts were involved in several legal
proceedings, the Company considered that it was difficult to recover such receivables, so
related provision for bad debts was made in full amount.
iii) As at 30 June 2020, state subsidies for new energy automobiles receivable amounted to
RMB 84,903,126. Since the estimated mileage of such new energy automobiles may not
meet the target within two years, the Company considered it was difficult to recover the
state subsidies, so related provision for bad debts was made is full amount.
141
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
14 Notes to the Company’s financial statements (Cont’d)
(1) Accounts receivable (Cont’d)
(c) Provision for bad debts (Cont’d)
(ii) Accounts receivable for which provision for bad debts is made on the grouping basis are
analysed as follows:
Grouping - Sales of general automobiles:
30 June 2020
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Not overdue 490,454,337 0.13% (642,250)
Overdue for 1 to 30
days 395,139 0.13% (517)
490,849,476 (642,767)
31 December 2019
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Not overdue 52,890,945 0.05% (25,599)
Grouping - Sales of new energy automobiles:
30 June 2020
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Not overdue 156,460,813 5.77% (9,023,417)
31 December 2019
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Not overdue 252,014,858 4.86% (12,256,229)
142
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
14 Notes to the Company’s financial statements (Cont’d)
(1) Accounts receivable (Cont’d)
(c) Provision for bad debts (Cont’d)
(ii) Accounts receivable for which provision for bad debts is made on the grouping basis are
analysed as follows (Cont’d):
Grouping - spare parts:
30 June 2020
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Not overdue 150,821,834 0.30% (452,466)
Overdue for 1 to 30
days 77,138,981 0.30% (231,417)
Overdue for 31 to
60 days 17,688,642 0.50% (88,443)
Overdue for 61 to
90 days 3,689,604 0.60% (22,138)
Overdue over 90
days 13,970,547 5.00% (698,527)
263,309,608 (1,492,991)
31 December 2019
Book balance Provision for bad debts
Lifetime ECL
Amount (%) Amount
Not overdue 357,250,172 0.30% (1,071,751)
Overdue for 1 to 30
days 28,373,832 0.30% (85,122)
Overdue for 31 to
60 days 3,849,541 0.50% (19,248)
Overdue for 61 to
90 days 2,752,993 0.60% (16,518)
Overdue over 90
days 3,296,958 5.00% (164,846)
395,523,496 (1,357,485)
(iii) The provision for bad debts for the year amounted to RMB 64,492,626 andreversed the
provision for bad debts RMB 2,480,138.
(d) In thesix months ended 30 June 2020, no accounts receivable had been written off.
(e) As at 30 June 2020 and 31 December 2019, the Company did not have accounts
receivable that were pledged.
143
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
14 Notes to the Company’s financial statements (Cont’d)
(2) Other receivables
30 June 2020 31 December 2019
Receivables from JMCH 3,182,043,677 3,023,189,184
Import working capital advances 35,000,000 35,000,000
Interest receivable from cash at bank 28,851,270 30,719,215
Deposits receivable 5,409,600 7,192,773
Advances for research and
development projects 1,014,184 2,109,522
Reserves receivable 385,973 959,945
Others 15,233,214 19,385,731
3,267,937,918 3,118,556,370
Less: Provision for bad debts (189,179) (238,665)
3,267,748,739 3,118,317,705
(a) The aging of other receivables is analysed as follows:
30 June 2020 31 December 2019
Within 1 year 3,186,165,678 3,043,832,479
1 to 2 years 18,044,507 16,684,253
2 to 3 years 14,258,459 13,253,240
Over 3 years 49,469,274 44,786,398
3,267,937,918 3,118,556,370
144
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
14 Notes to the Company’s financial statements (Cont’d)
(2) Other receivables (Cont'd)
(b) Provision for losses and changes in book balance statements
Stage 1 Stage 3
Expected credit losses in Expected credit losses in the
the following 12 months following 12 months (individual) Lifetime ECL (Credit
(grouping) Sub-total impaired) Total
Provision Provision Provision
Book for bad for bad for bad Book Provision for Provision for
balance debts Book balance debts debts balance bad debts bad debts
31 December 2019 94,158,526 (190,319) 3,023,189,184 - (190,319) 1,208,660 (48,346) (238,665)
Increase in the current
period — - — - - — - -
Reversal in the current
period — 20,522 — - 20,522 — 28,964 49,486
Write-off in the current
period — - — - - — - -
Including: Charge-off in
the
current
period — - — - - — - -
Derecognition — - — - - — - -
30 June 2020 85,450,202 (169,797) 3,182,043,677 - (169,797) 444,039 (19,382) (189,179)
As at 30 June 2020, the Group had no other receivables transferred from Stage 1 to Stage 3, and no other receivables reversed from Stage 3 to
Stage 1.
145
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
14 Notes to the Company’s financial statements (Cont’d)
(2) Other receivables (Cont'd)
(b) Provision for losses and changes in book balance statements (Cont’d)
As at 30 June 2020 and 31 December 2019, the Company did not have any other receivables
at Stage 2. Other receivables at Stage 1 and Stage 3 were analysed below:
(i) As at 30 June 2020 and 31 December 2019, provision for bad debts of other receivables on
individual basis was analysed as follows:
30 June 2020
12-month ECL Provision for
Stage 1 Book balance (%) bad debts Reason
Receivables from JMCH 3,182,043,677 - - i)
31 December 2019
12-month ECL Provision for
Stage 1 Book balance (%) bad debts Reason
Receivables from JMCH 3,023,189,184 - - i)
i) As at 30 June 2020, the Company’s other receivables from subsidiary JMCH were RMB
3,182,043,677 (31 December 2019: RMB 3,023,189,184). The Company carried out individual
assessment on receivables from subsidiaries. Based on the judgement of credit risk, there is
no significant credit risk on the accounts receivable from subsidiaries, and there is no overdue
or impairment.
146
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
14 Notes to the Company’s financial statements (Cont’d)
(2) Other receivables (Cont'd)
(b) Provision for losses and changes in book balance statements (Cont’d)
(ii) As at 30 June 2020 and 31 December 2019, the Company’s other receivables with provision
for bad debts on grouping basis were analysed below:
Other receivables with provision on the grouping basis at Stage 1:
30 June 2020 31 December 2019
Book Provision for bad Book Provision for bad
balance debts balance debts
Amount % Amount Amount % Amount
Grouping of
interest
receivable
from cash at
bank i):
Within 1 year 28,851,270 - - 30,719,215 - -
Grouping of
operating
advances and
guarantees:
Within 1 year 56,598,932 0.30% (169,797) 63,439,311 0.30% (190,319)
85,450,202 (169,797) 94,158,526 (190,319)
i) As at 30 June 2020 and 31 December 2019, the Company’s interest receivable from cash at
bank mainly came from four major state-owned banks or national joint stock banks. Therefore,
the Company expected there was no significant loss on related interest receivable from non-
performance by these banks.
Other receivables with provision on the grouping basis at Stage 3:
30 June 2020 31 December 2019
Book Provision for bad Book Provision for bad
balance debts balance debts
Amount % Amount Amount % Amount
Grouping of
operating
advances and
guarantees:
Over 1 year 444,039 4.36% (19,382) 1,208,660 4.00% (48,346)
147
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
14 Notes to the Company’s financial statements (Cont’d)
(2) Other receivables (Cont'd)
(c) In thesix months ended 30 June 2020, the Company did not increase any provision for bad
debts. The provision for bad debts reversed amounted to RMB 49,486. The reversal in the
current period was due to the actual receipt of other receivables relating to the provision for
bad debts made in the prior period.
(d) In thesix months ended 30 June 2020, no other receivables had been written off.
(e) As at 30 June 2020, other receivables from top five debtors in respect of outstanding balance
were analysed as follows:
Provision
% of total for bad
Nature Balance Aging balance debts
Subsidiary
current
accounts
and
personnel Within 6
Company 1 costs, etc. 3,182,043,677 years 97.38% -
Within 1
Company 2 Advances 35,000,000 year 1.07% (105,000)
Within 1
Company 3 Advances 6,291,984 year 0.19% (18,876)
Within 1
Company 4 Advances 4,480,000 year 0.14% (13,440)
Within 1
Company 5 Advances 3,486,966 year 0.11% (10,461)
3,231,302,627 98.89% (147,777)
148
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
14 Notes to the Company’s financial statements (Cont’d)
(3) Long-term equity investments
30 June 2020 31 December 2019
Subsidiaries (a) 340,000,000 340,000,000
Associates (b) 37,910,003 40,934,557
377,910,003 380,934,557
Less: Provision for impairment of long-term equity investments - -
377,910,003 380,934,557
(a) Subsidiaries
Ending Provision for Cash
Movements for balance of impairment in dividends
Accounting Investment 31 December the current Classified as 30 June Shareholding Voting provision for the current declared in the
method cost 2019 period held for sale 2020 (%) rights (%) impairment period current period
JMCH Cost method 270,000,000 270,000,000 - - 270,000,000 100% 100% - - - -
JMCS Cost method 50,000,000 50,000,000 - - 50,000,000 100% 100% - - - -
SZFJ Cost method 10,000,000 10,000,000 - - 10,000,000 100% 100% - - - -
GZFJ Cost method 10,000,000 10,000,000 - - 10,000,000 100% 100% - - - -
340,000,000 - - 340,000,000 - - - -
(b) Associates
Refer to Note 4(11).
149
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
14 Notes to the Company’s financial statements (Cont’d)
(4) Revenue and cost of sales
Six months ended 30 June
2020 2019
Revenue from main operations 12,901,713,333 12,797,370,935
Revenue from other operations 198,396,600 177,166,683
13,100,109,933 12,974,537,618
Six months ended 30 June
2020 2019
Cost of sales from main operations 11,010,954,908 11,065,887,460
Cost of sales from other operations 186,559,118 161,068,277
11,197,514,026 11,226,955,737
(a) Revenue and cost of sales from main operations
Six months ended 30 June
2020 2019
Revenue from Cost of sales Revenue from Cost of sales
main from main main from main
operations operations operations operations
Sales of
automobiles 12,091,989,040 10,397,191,187 11,636,452,656 10,215,567,046
Sales of
automobile
parts 771,758,926 572,162,496 1,117,017,837 808,310,648
Automobile
maintenance
services 37,965,367 41,601,225 43,900,442 42,009,766
12,901,713,333 11,010,954,908 12,797,370,935 11,065,887,460
(b) Revenue and cost of sales from other operations
Six months ended 30 June
2020 2019
Revenue from Cost of sales Cost of sales
other from other Revenue from from other
operations operations other operations operations
Sales of
materials 157,745,817 149,930,871 130,017,203 114,894,018
Others 40,650,783 36,628,247 47,149,479 46,174,259
198,396,600 186,559,118 177,166,683 161,068,277
150
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
14 Notes to the Company’s financial statements (Cont’d)
(4) Revenue and cost of sales (Cont’d)
(c) The breakdown of revenue earned in the six months ended 30 June 2020 were as follows:
Six months ended 30 June 2020
Auto
Automobile maintenance Materials and
Automobiles parts services others Total
Revenue from main
operations 12,091,989,040 771,758,926 37,965,367 - 12,901,713,333
Including: Recognised at
a time
point 12,091,989,040 771,758,926 - - 12,863,747,965
Recognised
within a
certain
period - - 37,965,367 - 37,965,367
Revenue from other
operations - - - 198,396,600 198,396,600
12,091,989,040 771,758,926 37,965,367 198,396,600 13,100,109,933
(i) As at 30 June 2020, the amount of revenue corresponding to the performance obligation of
the Company that had been contracted but not yet performed or not fulfilled was RMB
104,206,171, which was expected to be recognised between 2020 and 2025.
(5) Investment income
Six months ended 30 June
2020 2019
Investment income from financial assets
held for trading 32,619,541 18,446,866
Investment income from long-term equity
investment under equity method (3,024,554) 333,625
Investment loss from forward exchange
settlement (1,316,987) (4,939,846)
28,278,000 13,840,645
There is no significant restriction on the remittance of investment income to the Company.
151
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
1 Statement of non-recurring profit or loss
Six months ended 30 June
2020 2019
Profit or loss on disposal of non-current
assets (25,860,575) (4,412,233)
Government grants recognised in profit or
loss for the current period 165,679,468 230,279,274
Gains and losses arising from changes in
fair value of financial assets and
liabilities held at fair value through profit
or loss, and investment gains and losses
from disposal of related financial assets
and liabilities 41,314,596 9,950,029
Fund occupation fee received from non-
financial institutions 4,740,888 5,618,157
Net amount of other non-operating income
and expenses (1,400,440) 239,188
184,473,937 241,674,415
Effect of income tax (26,053,489) (47,882,915)
Effect of gains and losses on minority
interests (net of tax) - -
158,420,448 193,791,500
Basis for preparation of statement of non-recurring profit or loss
Under the requirements in the Explanatory Announcement No. 1 on Information Disclosure
by Companies Offering Securities to the Public - Non-recurring Profit or Loss [2008] from
CSRC, non-recurring profit or loss refers to that arises from transactions and events that
are not directly relevant to ordinary activities, or that are relevant to ordinary activities, but
are extraordinary and not expected to recur frequently that would have an influence on
users of financial statements making economic decisions on the financial performance and
profitability of an enterprise.
152
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
2 Return on net assets and earnings per share
Return on weighted Earnings per share
average rate net Basic earnings per Diluted earnings per
assets (%) share share
Six months ended 30 June
2020 2019 2020 2019 2020 2019
Net profit attributable to
ordinary shareholders of
the Company 1.96% 0.57% 0.24 0.07 0.24 0.07
Net profit attributable to
ordinary shareholders of
the Company after
deducting non-recurring
profit or loss 0.47% -1.30% 0.06 (0.16) 0.06 (0.16)
153
Chapter XI Catalogue on Documents for
Reference
1. Originals of 2020 Half-year financial statements signed by Chairman, Chief
Financial Officer and Chief of Finance Department.
2. Originals of all the documents and public announcements disclosed in
newspapers designated by CSRC in the first half of 2020.
3. The Half-year Report in the China GAAP.
Board of Directors
Jiangling Motors Corporation, Ltd.
August 28, 2020
154
