Jiangling Motors Corporation, Ltd.
2020 Annual Report
2021-03
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 Annual Report are truthful and
complete.
All Directors were present at the Board meeting to review this Annual Report.
The year 2020 profit distribution proposal approved by the Board of Directors is
as follows:
A cash dividend of RMB 34.76 (including tax) will be distributed for every 10
shares held based on the total share capital of 863,214,000 shares, and there is
no stock dividend. The Board decided not to convert capital reserve to share
capital this time.
2
Contents
Chapter I Important Notes, Contents and Abbreviations ............................... 2
Chapter II Brief Introduction and Operating Highlight .................................... 4
Chapter III Operating Overview ...................................................................... 8
Chapter IV Management Discussion and Analysis ......................................... 11
Chapter V Major Events ............................................................................... 28
Chapter VI Share Capital Changes & Shareholders ...................................... 39
Chapter VII Preferred Shares.......................................................................... 44
Chapter VIII Convertible Bond ......................................................................... 45
Chapter IX Directors, Supervisors, Senior Management and Employees ...... 46
Chapter X Corporate Governance Structure ................................................. 59
Chapter XI Corporate Bond............................................................................ 66
Chapter XII Financial Statements ................................................................... 67
Chapter XIII Catalog on Documents for Reference ....................................... 209
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 and Operating Highlight
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
No. 509, Northern Yingbin Avenue, Nanchang City, Jiangxi
Registered Address
Province, P.R.C
Postal Code of
330001
Registered Address
No. 509, Northern Yingbin Avenue, Nanchang City, Jiangxi
Headquarters Address
Province, P.R.C
Postal Code of
330001
Headquarters Address
Website http://www.jmc.com.cn
E-mail relations@jmc.com.cn
2. Contact Person and Method
Board Secretary Securities Affairs Representative
Name Xu Lanfeng Quan Shi
No. 509, Northern Yingbin Avenue, No. 509, Northern Yingbin Avenue,
Address Nanchang City, Jiangxi Province, Nanchang City, Jiangxi Province,
P.R.C 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. Information Disclosure and Place for Achieving Annual Report
Newspapers for information China Securities, Securities Times, Hong Kong
disclosure Commercial Daily
Website designated by CSRC for
http://www.cninfo.com.cn
publication of JMC’s Annual Report
Securities Department, Jiangling Motors
Place for Achieving Annual Report
Corporation, Ltd.
4
4. Changes of Registration
Organization Code 913600006124469438
Changes in the Main
No change.
Business since the Listing
On December 1, 1993, JMC A shares were listed on
Shenzhen Stock Exchange, while JMCG, the founder-
member, was the controlling shareholder of the Company.
On September 29, 1995 and November 12, 1998, JMC
issued additional 344 million B shares totally, while, after the
additional B share issuance, JMCG and Ford were the
controlling shareholders of the Company. On December 8,
2005, the 354.176 million JMC shares held by JMCG, the
former controlling shareholder, were transferred to Jiangling
Changes of Controlling
Motor Holdings Co., Ltd. After the transference, Jiangling
Shareholders
Motor Holdings Co., Ltd. and Ford were the controlling
shareholders of the Company.
In 2019, Jiangling Motor Holdings Co., Ltd., the former
controlling shareholder, was divided and separated into
Jangling Motor Holdings Co., Ltd. and Nanchang Jiangling
Investment Co., Ltd., and transferred the 354.176 million
JMC shares it held to Nanchang Jiangling Investment Co.,
Ltd. Presently, Nanchang Jiangling Investment Co., Ltd. and
Ford are the controlling shareholders of the Company.
5. Other Information
Accounting Firm Appointed by JMC for Audit
PricewaterhouseCoopers Zhong Tian LLP
Name
(‘PwC Zhong Tian’)
11/F, PricewaterhouseCoopers Center Link Square 2, 202 Hu
Headquarters Address
Bin Road, Huangpu District, Shanghai 200021, PRC
Names of Signed
Lei Fang, Ye Dan
Accountants
5
6. Main accounting data and financial ratios
Unit: RMB
Change
2020 2019 2018
(%)
Revenue 33,095,733,665.00 29,173,636,262.00 13.44% 28,249,339,672.00
Profit Attributable to the
Equity Holders of the 550,698,958.00 147,812,078.00 272.57% 91,833,346.00
Company
Net Profit Attributable to
Shareholders of Listed
Company After Deducting 405,188,533.00 -308,254,449.00 231.45% -277,870,024.00
Non-Recurring Profit or
Loss
Net Cash Generated From
3,698,342,828.00 2,736,867,238.00 35.13% -101,590,551.00
Operating Activities
Basic Earnings Per Share
0.64 0.17 272.57% 0.11
(RMB)
Diluted Earnings Per
0.64 0.17 272.57% 0.11
Share (RMB)
Weighted Average Return
5.13% 1.42% 3.71% 0.83%
on Equity Ratio
Change
End of Year 2020 End of Year 2019 End of Year 2018
(%)
Total Assets 28,185,185,418.00 24,298,528,593.00 16.00% 23,396,529,475.00
Shareholders’ Equity
Attributable to the Equity 10,986,474,009.00 10,496,563,781.00 4.67% 10,384,497,513.00
Holders of the Company
7. Accounting data difference between China GAAP and IFRS
I. Differences in net profit and net assets in financial statements between in
accordance with international accounting standards and Chinese accounting
standards
□Applicable □√Not Applicable
II. Differences in net profit and net assets in financial statements between in
accordance with overseas accounting standards and Chinese accounting
standards
□Applicable □√Not Applicable
6
8. Main accounting data quarterly
Unit: RMB
Q1 Q2 Q3 Q4
Revenue 4,619,180,560.00 9,454,237,318.00 8,005,447,973.00 11,016,867,814.00
Profit Attributable to the
Equity Holders of the 69,462,263.00 138,309,519.00 150,811,264.00 192,115,912.00
Company
Net Profit Attributable to
Shareholders of Listed
Company After -86,612,788.00 135,964,122.00 126,751,664.00 229,085,535.00
Deducting Non-
Recurring Profit or Loss
Net Cash Generated
From Operating -3,209,160,716.00 3,943,444,343.00 124,978,829.00 2,839,080,372.00
Activities
7
Chapter III Operating Overview
1. Company’s Core Business during the Reporting Period
In 2020, the whole production and sales volume in China auto industry was
25.225 million and 25.311 million units respectively, with YOY decline of 2.0%
and 1.9%. However, the sales volume kept increasing for nine months
consecutively, with weaker and weaker impact from the epidemic. In 2020, driven
by such factors as Stage III auto phase-out, stricter overload supervision and
infrastructure investment, the annual production and sales volume of CV
segment increased dramatically, which was 5,231,000 and 5,133,000 units, with
20.0% and 18.7% increase respectively, creating the record new high. Trucks are
the major support for market growth. In 2020, the production and sales volume of
trucks were 4,778,000 and 4,685,000 units, with 22.9% and 21.7% growth
respectively. The production and sales volume of buses in 2020 were 453,000
and 448,000 units, with 4.2% and 5.6% YOY decline respectively. Compared
with last year, light bus witnessed slight increase in terms of production and sales
volume, but big and small sized buses suffered rapid decrease. In 2020, the
production and sales volume of PV segment were 19,994,000 and 20,178,000
units, with YOY drop of 6.5% and 6.0% respectively.
The newly revised 2020 Edition Vehicle Classification of the Toll for Highway
implemented on January 1, 2020 has made corresponding modifications to the
classification of passenger and goods vehicles. Such move lowered the charging
standard for corresponding models, made it more acceptable for the majority of
vehicle users, and stimulated the consumption demand of corresponding vehicle
segment market.
JMC’s core business is production and sales of commercial vehicles, SUV and
related components. JMC’s major products include JMC series light truck, pickup
and light bus; Yusheng SUV; Ford-brand light bus, MPV and Ford SUV. The
Company also produces and sells engines, castings and other components for
sales to domestic and overseas markets.
In the CV segment that JMC is involved, influenced by dual circulation, E-
commerce, refined tourism and customized transportation development, the light
bus sales volume get further improved. With gradually loosened restriction on
urban access, together with people’s pursuit for better life and the development
of modern agriculture, the demands for Pickup shall be further released. With the
new urbanization and the construction of city circles, there will be more demands
on short and medium-distance transportation, which shall be an incentive to the
light truck market. With the continuously improving income of people, SUV
market shall gradually resume growth. The segments that JMC are involved shall
enjoy further development with more incremental volume.
8
In the whole year of 2020, the Company continued to increase its technical
reserves and resource investment in new products, intelligent networking, new
energy, lightweight and other aspects. Regarding vehicles, the Company
developed car functions such as automatic driving and intelligent networking and
formed the third largest space with vehicles as carriers, realizing more function
expansion. Meanwhile, the Company strengthened the construction of digital
operation capacity, involving in many key value spheres such as social
networking and financial payment. A wide-area ecosystem was formed. The
overall performance was excellent within the auto market.
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 a 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. JMC light buses
ranked No.1 in the segment with 31.8% market share. JMC Pickup ranked No.2
in the segment with 14.4% market share. JMC light trucks ranked No.5 in the
segment with 7.6% market share.
Three core CV models of JMC always take customer demands as the center,
covering various scenarios. JMC light buses deeply studied various demands of
SVO customers under different operation scenarios. While strengthening product,
JMC also improved the modification feasibility and customer experience, thus
constructing a competitive ecological chains. The newly launched Ford new-
generation Transit Pro provided Uptime 100% for the first time, thus continuously
consolidating the leader’s position. Yuhu 9, the American style high-end diesel
Pickup that kicked the market in this April, was a top Pickup product in China,
which demonstrated JMC’s technical power. It’s a versatile product that can
satisfy family use, outdoors trips, goods transportation and minor off-road. Yuhu
7 AT model was equipped with ZF 8AT transmission and provided excellent
comfort and great cost performance, which gained high popularity just after
launch. Brand new JMC Baodian pickup owned the leading load capacity and
9
fuel economy among peers, thus winning the honor of Economical Pickup of the
Year. Newly launched Blue Whale light truck and Shunda small truck made
breakthroughs in power performance, light weight and price, with leading quality
and fuel economy as always. Kaiyun Blue Whale won the honor of 2020 Light
Truck with Top Quality.
New Ford Territory SUV, with leading space dimension, Miller engine and 48V
MHEV technology, carries such technology as Feiyu smart mobility and Tencent
Wechat smart voice control system. JMC quickly responded to the market, and is
to launch more spacious mid-sized SUV and upgraded Territory SUV, with more
comfort and more advanced intelligent connectivity, L2 level smart driving
assistant system, OTA remote control and totally 26 standard options, 30 leading
features.
To comply with the international and domestic industry development, JMC
accelerated transformation and upgrade, explored new business and innovate
business mode.
(1) JMC has made digitalization transformation strategy, focused on marketing
service market, customer data insight, production supply chain, new product
development and other management fields. JMC specified the digitalization
transformation strategy and roadmap, with data middle platform constructed.
(2) JMC planned for smart connectivity industry. The newly established branch in
Shenzhen organized a technical team with core capability in software and
hardware development of key electronic components and system integration, etc.,
with auto Internet architecture, in-car connectivity terminal TBOX and V2X,
VCU/BMS industrialization development, thus supporting the study on such
leading technology as domain controller, smart cabin and software algorithm.
(3) Several new products were included in Key New Product Plan of Jiangxi
Province, for example, military Pickup, brand-new Baodian Pickup, Stage VI
special load light truck, no-contact distributing truck and mid or big sized Ford
SUV, etc. The project Key Technology Development of Smart Logistics Vehicle-
Road Synergy based on 5G-V2X was rated as the key local science &
technology tackling subject. This project aimed at integrating 5G technology and
vehicle-road synergy technology, with V2X smart logistics as the key scenario
and vehicle-road synergy smart logistics park based on 5G communication
constructed. This project is to be built as an industrialization modelling program
based on 5G and V2X technology in Jiangxi Province.
(4) JMC promotes the construction of cross-industry ecological circle and has
conducted strategic ecological cooperation with such top enterprises in the
industry as Pingan Bank, Huawei, Ali, Tencent and Iflytek, thus continuously
creating the stable ecology for cross-industry smart service of CV.
10
Chapter IV Management Discussion and Analysis
1. Summary
In 2020, impacted by Covid-19 epidemic, China’s economy growth slowed down.
The overall auto market in China witnessed downturn. The annual sales volume
was 25,311,000 units, with YOY decline of 1.9%. 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 2020, JMC achieved sales volume of 331,098 units,
increased 14.15% compared with last year, achieved revenue of RMB 33.096
billion, increased 13.44% compared with last year, achieved net profit of RMB
551 million, increased 272.57% compared with last year. JMC achieved nine
months’ positive growth in sales volume, which demonstrated good tenacity. In
LCV segment, JMC light bus, light truck and Pickup kept leading position in the
industry. In PV segment, JMC Yusheng SUV, Ford SUV kept making
breakthroughs with overseas market exploration.
In 2020, JMC planned for capacity of 330,000 units, with 102% productivity
utilization. In 2020, Fushan Plant investment was RMB 182 million, with 49%
completion.
Vehicle manufacturing and operation
□√Applicable □Not Applicable
Production and Sales Volume Information
Production Volume (Unit) Sales Volume (Unit)
YOY YOY
2020 FY 2019 FY change 2020 FY 2019 FY change
(%) (%)
By Products
Light Bus 94,945 81,312 16.77% 92,994 81,601 13.96%
Truck 128,949 96,513 33.61% 128,875 96,915 32.98%
Pickup 66,209 58,368 13.43% 65,204 59,486 9.61%
SUV 46,212 51,881 -10.93% 44,025 52,056 -15.43%
Total 336,315 288,074 16.75% 331,098 290,058 14.15%
By Region
China 336,315 288,074 16.75% 331,098 290,058 14.15%
Explanation on the above 30% year-on-year change of related date.
□√Applicable □Not Applicable
Truck sales volume growth of 32.98% year on year is mainly due to the recovery
of the light truck industry.
11
Component Kit System Construction
JMC owns the independent R&D and production capability of such key
components as engine, body parts, frame, and front axle, etc. JMC also tries to
create the sustainable swift supply system. By innovative mindset and
digitalization, JMC established complete supplier admission, capability
improvement and supplier control mechanism in terms of quality, cost and
delivery. For traditional business, JMC kept the in-depth strategic cooperation
with such leading companies in the industry as Bosch, Honeywell, Yunnei Power,
ZF and GKN, etc. For CASE, JMC cooperated with CATL, Huawei, Tencent and
Hengrun, etc. The diversified cooperation modes laid foundation for the high
quality development of supply system.
Production and operation of auto parts during the reporting period
□Applicable □√Not Applicable
The company carries out auto finance business
□Applicable □√Not Applicable
The company carries out new energy vehicle related business
□√Applicable □Not Applicable
Production and operation of new energy vehicles and parts
Production Sales Volume Revenue
Product Category Capacity(Unit)
Volume (Unit) (Unit) (RMB)
New Energy Bus
50,000 154 140 26,421,471.00
Series
New Energy
Passenger
50,000 288 285 48,347,966.00
Vehicles and
Pickup
New Energy
30,000 116 117 18,940,813.00
Truck
130,000
Note: all new energy
Total 558 542 93,710,250.00
vehicles are collinear with
corresponding fuel vehicles.
BEV Subsidy
In 2020, JMC received BEV subsidy of RMB 9,960,000. Ministry of Industry and
Information Technology revised Regulation on BEV Manufacturer and Product
Admission, in the future, there will be more compliant BEV models being
admitted for inspection. As for BEV subsidy, the state extended the BEV
purchase subsidy and vehicle purchase subsidy exemption policy for another two
years since the end of 2020. This is beneficial to BEV market expansion and
BEV product sales of JMC.
12
2. Core Business Analysis
I. Summary
In 2020, JMC sales volume achieved 331,098 units, increased 14.15% compared
with last year, including 92,994 units light bus, 128,875 units truck, 65,204 units
pickup, and 44,025 units SUV.
Total production volume in 2020 was 336,315 units, increased 16.75% compared
with last year, including 94,945 units light bus, 128,949 units truck, 66,209 units
pickup, and 46,212 units SUV.
JMC total sales revenue in 2020 was RMB 33.10 billion, increased 13.44%
compared with last year.
II. Revenue and Cost
(a) Composition of Sales Revenue
Unit: RMB
2020 FY 2019 FY YOY
Proportion Proportion change
Amount Amount
(%) (%) (%)
Revenue 33,095,733,665 100.00% 29,173,636,262 100.00% 13.44%
By Industry
Automobile Industry 33,095,733,665 100.00% 29,173,636,262 100.00% 13.44%
By Products
Vehicle 30,666,834,098 92.66% 26,252,631,564 89.98% 16.81%
Components 1,774,007,492 5.36% 2,351,979,223 8.06% -24.57%
Automobile
94,435,844 0.29% 103,582,678 0.36% -8.83%
Maintenance Services
Material & Others 560,456,231 1.69% 465,442,797 1.60% 20.41%
By Region
China 33,095,733,665 100.00% 29,173,636,262 100.00% 13.44%
13
(b) Reach to 10% of Revenue or Profit by Industry, Product or Region
□√Applicable □Not Applicable
Unit: RMB
YOY YOY gross
YOY Cost
Gross turnover margin
Turnover Cost Change
Margin change change
(%)
(%) (points)
By Industry
Automobile
33,095,733,665 27,518,509,913 16.85% 13.44% 12.18% 0.94%
Industry
By Products
Vehicle 30,666,834,098 25,638,598,860 16.40% 16.81% 14.95% 1.36%
By Region
China 33,095,733,665 27,518,509,913 16.85% 13.44% 12.18% 0.94%
If the Company’s core business scope is adjusted during the reporting period, the
Company’s core business data of last year need to be adjusted per the scope in
this year
□Applicable □√Not Applicable
(c) Whether Company’s Goods Revenue Higher Than Service Revenue
□√Yes □No
Industry Item Unit 2020 2019 Change (%)
Sales Volume unit 331,098 290,058 14.15%
Automobile Production Volume unit 336,315 288,074 16.75%
Inventory Volume unit 11,821 7,045 67.79%
Explanation on YOY change of over 30%
□√Applicable □Not Applicable
At the end of 2020, the inventory volume is within the reasonable ratio of
inventory volume to sales volume .The increase of 67.79% in inventory volume
from the same period last year were due to the increased sales, and considering
the spread of COVID-19 in China in the first quarter of 2021 and the uncertainty
of COVID-19 in the world, the Company took the initiative to increase inventory to
deal with the impact of supply chain fluctuations.
(d) Execution of Company’s Signed Major Sales Contract
□Applicable □√Not Applicable
14
(e) Composition of Operating Cost
Unit: RMB
2020 FY 2019 FY
YOY
Product Proportion Proportion Change
Cost Cost
(%) (%) （%）
Vehicle 25,638,598,860 93.17% 22,303,937,803 90.92% 14.95%
Components 1,250,772,343 4.54% 1,696,042,274 6.92% -26.25%
Automobile
95,282,459 0.35% 98,395,291 0.40% -3.16%
Maintenance Services
Material & Others 533,856,251 1.94% 432,481,782 1.76% 23.44%
(f) Whether Consolidated Scope was Changed During the Reporting Period
□√Yes □No
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
Power Co., Ltd.” in August 2020. After the separation, JMC Heavy Duty Vehicle
Co., Ltd. and the new derivative company Taiyuan Jiangling Power Co., Ltd. are
included in the consolidated scope.
(g) Major Change or Adjustment on Business, Products or Services During the
Reporting Period
□Applicable □√Not Applicable
(h) Main Customers and Suppliers
Top 5 Customers:
Total sales value to top 5 customers（RMB） 4,061,691,344
Accounted for the proportion of JMC’s total annual turnover 12.27%
Included related party transaction accounted for the
4.55%
proportion of JMC’s total annual turnover
15
Percentage of
Sales Value
No. Name of the Customer JMC’s Total
(RMB)
Turnover (%)
Jiangxi Jiangling Motors Imp. & Exp. Co.,
1 1,505,218,690 4.55%
Ltd.
2 Zhejiang Jiangling Motors Sales Company 1,084,917,009 3.28%
Hunan Transit Jiangling Motors Sales
3 534,725,621 1.62%
Company
4 Beijing Jinglingshun Auto Sales Company 493,165,189 1.49%
Shanghai Keda Zhoupu Auto Sales
5 443,664,835 1.34%
Company
Total 4,061,691,344 12.27%
Other introduction to main customers
□√Applicable □Not Applicable
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. is a related party of the Company.
VP Li Xiaojun holds the position of Director of Jiangxi Jiangling Motors Imp. &
Exp. Co., Ltd.
Top 5 Suppliers:
Total purchase value from top 5 suppliers（RMB） 4,767,424,905
Accounted for the proportion of JMC’s total annual purchase
19.38%
amount
Included related party transaction accounted for the proportion of
11.26%
JMC’s total annual purchase amount
Percentage of
Purchase JMC’s Total
No. Name of the Supplier
Value (RMB) Annual Purchase
Amount (%)
Bosch Auto Diesel System (Wuxi)
1 1,220,870,750 4.96%
Company
Nanchang Baojiang Steel Processing
2 963,538,705 3.92%
Distribution Co., Ltd.
3 Jiangxi Jiangling Chassis Co., Ltd. 925,826,174 3.76%
Jiangxi Jiangling Special Purpose
4 880,431,974 3.58%
Vehicle Co., Ltd.
Bosch Automotive Diesel System Co.,
5 776,757,302 3.16%
Ltd.
Total 4,767,424,905 19.38%
Other introduction to main suppliers
□√Applicable □Not Applicable
16
Among the top five suppliers, except Bosch Auto Diesel System (Wuxi) Company
and Bosch Automotive Diesel System Co., Ltd., the other three suppliers are
related parties of the Company.
III. Expense Analysis
Unit: RMB
2020 2019 YOY Change
Distribution Expenses 1,544,737,028.00 1,525,883,194.00 1.24%
Administrative Expenses 1,012,347,173.00 955,566,805.00 5.94%
Finance Income-net -197,567,513.00 -189,506,963.00 -4.25%
R & D Expenses 1,343,812,092.00 1,776,320,646.00 -24.35%
IV. Research & Development
In 2020, the Company is committed to the research and development of new
products, and the R & D expenditure will be mainly used for the development of
new product projects and meeting the requirements of policies and regulations.
This includes new models, new loads, new profiles, power enhancements, and
meeting government environmental and safety regulations. These competitive
R&D expenditures will ensure solid growth in sales and profitability in the future.
R&D expenditures in 2020 were RMB 1.665 billion, accounting for 15.15% of the
Company's net assets and 5.03% of operating revenue.
R&D
2020 2019 Change (%)
R&D Staff (person) 2,393 2,758 -13.23%
R&D Staff as % of Total
17.73% 18.65% -0.92%
Employees
R&D Investment (RMB) 1,664,559,872 1,937,077,557 -14.07%
R&D Investment as % of Revenue 5.03% 6.64% -1.61%
Capitalization of R&D Investment 320,747,780 160,756,911 99.52%
Capitalization of R&D Investment
19.27% 8.30% 10.97%
as % of R&D Investment
Major change of R&D Investment as % of revenue
□Applicable □√Not Applicable
Major change of Capitalization of R&D Investment
□√Applicable □Not Applicable
Reason of the change is due to the increase in the amount of R & D investment
eligible for capitalization this year. Please refer to "note II (14) (E) research and
development of financial statements" and "note IV (14) intangible assets" in
"section XII financial report" for details.
17
V. Cash Flow Analysis
RMB
Change
Item 2020 2019
(%)
Cash received from operating
35,570,910,131.00 32,798,796,157.00 8.45%
activities
Cash outflows from operating
31,872,567,303.00 30,061,928,919.00 6.02%
activities
Net cash flows from operating
3,698,342,828.00 2,736,867,238.00 35.13%
activities
Cash received from investing
15,608,879,156.00 9,464,689,154.00 64.92%
activities
Cash outflows from investing activities 17,522,317,586.00 10,829,783,077.00 61.80%
Net cash flows from investing
-1,913,438,430.00 -1,365,093,923.00 -40.17%
activities
Cash received from financing
2,291,211,222.00 200,000,000.00 1,045.61%
activities
Cash outflows from financing
1,892,097,149.00 250,716,633.00 654.68%
activities
Net cash flows from financing
399,114,073.00 -50,716,633.00 886.95%
activities
Net increase/(decrease) in cash and
2,184,018,471.00 1,321,056,682.00 65.32%
cash equivalents
Explanation on the major factors regarding major change of related data
□√Applicable □Not Applicable
Year on year increase of the net cash flow generated by operating activities
reflected the increase in cash received from the sale of goods and the provision
of services as a result of the increase in income.
Year on year decrease of the net cash flow from investment activities was mainly
due to the purchase of structured deposits.
Year on year increase of the net cash flow from financing activities was mainly
attributable to the increase in the bank's short-term lending business.
Year on year increase of the net increase in cash and cash equivalents was
mainly attributable to the increase in net cash flow from operating activities.
Explanation on significant difference between net cash generated from operating
activities and net profit during the reporting period.
□Applicable □√Not Applicable
18
3. Non- core business analysis
□√Applicable □Not Applicable
Unit: RMB
Proportion Sustainability
Item Amount Explanation
of PBT （Y/N）
It’s mainly due to the
accrued assets impairment
provisions concerning the
relevant assets that will be
discontinue used, because
of the business
restructuring of JMC Heavy
Impairment of
681,884,784 150.97% Duty Vehicle Co., Ltd., a N
Assets
wholly-owned subsidiary of
JMC; and the spare parts,
equipment and molds that
are not expected to be
used, resulting from the
Company’s Qingyunpu
Factory Relocation Project.
It mainly reflects, as a result
of business restructuring of
the wholly owned
Non Operating
172,753,545 38.25% subsidiary JMC Heavy Duty N
Expenses
Vehicle Co., Ltd., related
land and above-ground
building disposal loss.
19
4. Analysis of Assets and Liabilities
I. Major changes
Unit: RMB
YOY Major
Changes
December 31, 2020 December 31, 2019
Asset item Proportion Explanati
change on
Amount Proportion Amount Proportion (Points)
Cash at bank and
11,121,955,129 39.46% 8,937,936,658 36.78% 2.68%
on hand
Accounts
2,999,883,212 10.64% 2,208,236,620 9.09% 1.55%
receivables
Inventories 2,086,605,692 7.40% 1,946,869,092 8.01% -0.61%
Long-term equity
39,496,548 0.14% 40,934,557 0.17% -0.03%
investments
Fixed assets 5,165,956,410 18.33% 5,714,489,577 23.52% -5.19%
Construction in
1,535,497,770 5.45% 1,498,124,778.00 6.17% -0.72%
progress
Increased
short-
Short-term
500,000,000 1.77% - - 1.77% term
borrowings
lending
by banks
Long-term
2,563,666 0.01% 3,197,814 0.01% -
borrowings
20
II. The fair value of the assets and liabilities.
Unit: RMB
1.Trading
financial assets
financial 2.Receivables Financial
Item (excluding Subtotal
assets financing liabilities
derivative
financial assets)
Beginning of
- 289,044,373 289,044,373 545,632
the period
Loss/profit in
faire value in 3,892,985 - 3,892,985 3,171,095
the period
Cumulative
changes in fair
- - - -
value recorded
into equity
Impairment in
- - - -
the period
Purchase in the
16,107,000,000 2,325,165,208 18,432,165,208 -
period
Sell in the
15,307,000,000 1,798,625,912 17,105,625,912 -
period
Other changes - - - -
End of the
803,892,985 815,583,669 1,619,476,654 3,716,727
period
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
□Applicable □√Not Applicable
III. Ongoing Major Non-Equity Investment during the Reporting Period
□√Applicable □Not Applicable
21
Project Name Fushan Plant
Investment Method/source Self-funded
Fixed Assets (Y/N) Y
Spending in 2020 (RMB mils) 182
Cumulative Actual Investment (RMB mils) 1,043
Progress 49%
Index *
*The announcement (No. 2017-044) was published on November 15, 2017 on
the website: www.cninfo.com.cn.
IV. Financial Assets Investment
(a) Stock Investment
□Applicable □√Not Applicable
(b)Derivative Investment
□Applicable □√Not Applicable
V. Usage of Raised Fund
□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
22
Counterparty Yunnan Yunnei Power Group Co., Ltd.
60% equity of Taiyuan Jiangling Power Co., Ltd., a
Sold equity
wholly-owned subsidiary
Yunnan Yunnei Power Group Co., Ltd was delisted
Date of sale on January 6, 2021 and is still in the process of
transfer.
Transaction price (RMB mils) 360
Net profit contributed by the equity to
the listed company from the beginning RMB -14.05 million in 2020.
of the current period to the selling date
The purpose of this transaction is to sell the
Impact of the sale on the Company Transaction Equity to external strategic partner to
develop heavy engine business.
Proportion of net profit contributed by
equity sale to the total net profit of the Not applicable.
listed company
Equity sale pricing principle Public bidding process.
Whether it is a related transaction No.
Association with the counterparty No relationship.
Whether all the equity involved has
No.
been transferred
Whether the plan is implemented as
scheduled, if not, the reason and the Yes.
measures taken by the company
Date of disclosure October 13, 2020 and January 7, 2021.
The announcement (No. 2020-040,2021-002) was
Index
published on the website: www.cninfo.com.cn
7. Operating Results of Main Subsidiaries and Joint-Stock Companies whose
impact on JMC’s net profit more than 10%
Unit: RMB’000
Type of Registered Operating
Main Business Assets Net Assets Turnover Net Profit
Companies Capital Profit
Jiangling
Motors Sales Sales vehicle,
Subsidiary 50,000 5,759,031 230,181 29,752,125 -1,581 -1,332
Corporation, service parts
Ltd
Production and
sales of
JMC Heavy
automobiles,
Duty Vehicle Subsidiary 181,793 897,891 -395,953 698,547 -389,650 -523,751
engines and
Co., Ltd.
other automotive
parts
Taiyuan Design,
Jiangling assemble and
Subsidiary 600,000 589,802 585,953 436 -18,682 -14,047
Power Co., sell engines and
Ltd. their spare parts
23
Acquisition and disposal of the subsidiaries
□√Applicable □Not Applicable
Acquisition and disposal of
Name of Companies Influence
the subsidiaries
A new derivative company It is convenient for JMCH's
through surviving separation business restructuring and
Taiyuan Jiangling Power Co., Ltd. of the Company's original
wholly owned subsidiary has no material impact on
JMCH. the Company's performance.
8. Structured Entities Controlled by JMC
□Applicable □√Not Applicable
9. Outlook
I. Industry Competition and Development Trend
(I). Industry Development Trend
Currently China is still undergoing modernization and new urbanization process
and China economy remains reasonable, with continuous growing macro
economy, stable import & export, and balanced BOP account. While the
domestic demands are stable, innovation was encouraged. Internet integrated
with industry required further deepening. In 2021, China’s economy shall keep
steady growth, the whole year GDP growth was estimated to be above 6%.
Looking forward to 2021, the commercial vehicle market is expected to remain at
a high level driven by a series of favourable factors such as the continuous
expansion of new and old infrastructure investment, the initial establishment of
duel circulation (domestic and international circulation) development pattern, the
development of urban agglomeration, the National Stage IV traffic restrictions,
and the control of overload or over-limited. However, the non-sustainable early
policies such as free highway and tax and fee cuts of enterprise amid the
epidemic will lead to a certain decline in the commercial vehicle market. It is
expected that the sales volume of commercial vehicles will achieve 4.4 million
units in 2021, a year-on-year decrease of 14.0%. The passenger cars market will
show a recovery growth, due to the weakened epidemic, the more normal
purchase intention of cars, and the rapid recovery of consumer demands. The
users to buy one more or change a new car and the post-90s young group have
become the backbone of consumption. It is estimated that the sales volume of
passenger cars will reach 21.81 million in 2021, up 8.0% year over year. In
conclusion, the total vehicle sales in 2021 are expected to be 26.2 million units, a
3.5% increase over last year.
In 2021, the value chain of the automobile industry is expected to be
reconstructed and will transfer to software. With the accelerated penetration of
NEVs, the underlying electronic and electrical architecture of vehicles are
gradually transformed from distributed to centralized; real-time operating system
comes into existence; ICVs are gradually approaching; the attributes of vehicles
24
will be defined by software, and then bring about the reconstruction of industrial
value chain. Energy-saving and New Energy Vehicle Technology Roadmap 2.0
proposed that the sales volume (from 2020 to 2025) of PA-level (L2, partial
autonomous driving) and CA-level (L3, conditional autonomous driving) ICVs will
account for more than 50% of the total sales volume of vehicles in that year; HA-
level (L4, highly autonomous driving) ICVs will start to enter the market; the
assembly rate of new vehicles at C-V2X terminal will reach 50%, and HA-level
vehicles will be commercialized in specific scenarios and limited areas. In the
field of passenger cars, the large-scale application of CA-level and the
preliminary application of HA-level are expected to realize in 2025; the large-
scale application of HA-level will be realized in 2030; and the application of FA-
level (L5, full autonomous driving) will come into use in 2035. The pace of
development in the CVs field is similar with that of PVs.
(II) The Company adheres to the development vision of "becoming a leader in the
light commercial vehicle industry and a provider of Ford's cost-effective
products," and the values of "integrity, dedication, innovation and cooperation".
The Company's commercial vehicles are positioned as a supplier of
comprehensive solutions for urban and mainline logistics products and services,
and passenger cars have made breakthroughs and large developments in the
small and medium-sized markets. In the future, the Company will focus on
innovation and services, promote structural adjustment, continue to vigorously
implement product innovation-driven development, integrate resources to
strengthen technological innovation, and promote product innovation in the
market; deepen transformation and adjustment, adhere to business model
innovation; and comprehensively enhance product core competitiveness. The
Company will focus on core business, concentrate on intensive cultivation in
segmented areas, pursue a customer-oriented service, improve market
awareness of the whole value chain, and actively build the company's products
into market segment leaders. The Company will also aim at the new trends in the
automotive industry and promote the implementation of the "new four
modernization" development strategy of "electrification, intelligent networking,
sharing, and autonomous driving". The layout has completed in the core fields of
NEVs, ICVs, and autonomous driving, etc. and through the overall coordination
and integration of the four modernizations, the construction of a future-oriented
and globally competitive business ecosystem is accelerated.
(III) Business plan
The Company is targeting 2021 sales volume level at 400 thousand units and
revenue level at RMB 40 billion, up 21% and 21% respectively from 2020. To
enhance revenue and profitability, the Company is committed to the following
plans in 2021:
1. Always take the customer as the core, continuously improve the customer
service capacity, have an deep insight into customer needs, creatively
integrate big data, marketing, customer service, channel development and so
25
forth, ensuring that customer experience improved and customer benefits
maximized;
2. Continue to consolidate and enhance the Company's leading edge in the field
of light commercial vehicles, strengthen the construction of marketing system
and dealers' capacity building, and maintain and expand the growth
momentum of light commercial vehicles;
3. Continue to launch Ford brand cost-effective passenger cars, provide
customers with the best experience in the auto industry through the upgraded
JMC- Ford passenger car channels, vigorously increase the popularity and
sales of passenger vehicles;
4. Accelerate the R&D of new generation upgrade products of light commercial
vehicles, perfect the vehicle lineages; promote the upgrading of intelligent
networking functions of products, better meet the needs of customers, and
accelerate the formulation and implementation of new energy strategies;
5. Promote digital transformation, build intelligent middle platform and
manufacturing factories, and establish and internalize core software
competitiveness;
6. Strengthen corporate governance, improve risk assessment and control
mechanisms, and boost the systematic construction of key strategic elements
such as business strategy, competition strategy, capacity building, accelerator,
etc.
7. Continue to advance cost reduction and efficiency increase, optimize
production capacity and lean management to lay a solid foundation for the
implementation of the Company's overall strategy;
8. Expand finished vehicle exports and OEM components sales business.
(IV) Potential Challenges and Solutions
Amid regional outbreaks of global COVID-19 in 2021, there is still uncertainty in
the recovery and growth of the world economy. China is actively promoting the
construction of the new dual circulation development pattern. Stimulating
consumption will be a long-term policy orientation, and both supply and demand
will usher in dual upgrading. With the rise of new car-making forces, stricter legal
requirements and rising raw material prices, industry competition will be further
intensified. To maintain steady growth, the Company will continue to focus on the
following areas:
1. Continue to make efforts in the prevention and control of the epidemic, and
steadily promote the Company's production and sales;
2. Show an in-depth insight into customer needs and changes in the market
environment, find new business growth points, and gain market in disruptive
industry changes;
3. Vigorously develop intelligent and digital products, transform from product
providers to full ecological providers, improve customer experience and open
up new sources of profits;
4. Focus continuously on national regulations and policies and energy
conservation and environmental protection requirements, keep up with the
pace of policies, and actively promote the upgrading of product technology;
26
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 vehicles with the support of SUV,
continue to consolidate the core business, and lay a solid foundation; at the
same time, the Company will speed up its digital transformation, expand new
businesses and profit models, and build a stable platform for sustainable
development in the future. By strengthening sales channel construction, market
awareness and consumer satisfaction are enhanced; Furthermore, the Company
will promote new products design and development, achieve the quality and cost
targets for new products to accelerate the progress of launching new competitive
products to the market, continue to expand market share, boost profits, create
stable cash flow to support future business development, and improve the
company's profitability.
10. External research and media interview to the Company
I. Table of external research, communication and media interviews with the
Company in the reporting period
□√Applicable □Not Applicable
Date Communication Type of Information
Method Object Discussed and
Materials offered
July 07, 2020 On-the-spot Institution JMC Operating
research highlights
July 17, 2020 Other Individual JMC Operating
Investors highlights
Reception times 2
Visiting institution number 9
Visiting person number 16
Other objects 0
Whether to disclose, reveal or divulge the None
undisclosed material information
27
Chapter V Major Events
1. Profit distribution and capital reserve conversion regarding common stock
Establishment, implementation or adjustment of profit distribution policy, esp. cash
dividend distribution policy, regarding common stock during the reporting period
□√Applicable □Not Applicable
In accordance with the requirements of laws, regulations and the Articles of
Association of the Company, the Company's profit distribution policy maintains
continuity and stability, and the Company pays attention to the reasonable return
to investors. The Company gives priority to cash dividend, and subject to the
provisions of laws, regulations and the Articles of Association of the Company, the
Board of Directors can put forward a mid-term or special profit distribution
proposal. The Company's profit distribution policy is in line with the CSRC's
guidance on encouraging cash dividends for listed companies.
Special Explanation on Cash Dividend Policy
Whether to comply with the requirements of the Articles of Association of
Y
JMC or resolution of the Shareholders’ Meeting (Y/N)
Whether the standards and proportion of dividends on profit distribution are
Y
clear (Y/N)
Whether the procedures are valid and legal (Y/N) Y
Whether the Independent Director fulfil their duties (Y/N) Y
Whether middle and small shareholders have opportunities to claim their
Y
appeals and their legal rights and interests are completely protected (Y/N)
Whether the condition and procedure are reasonable and transparent when
Y
the cash dividend policy is being changed (Y/N)
Profit distribution plan or proposal in the recent three years
(1) Proposal on Year 2020 Profit Distribution
The Board of Directors approved to submit to the 2020 Annual Shareholders’
Meeting the following proposal on year 2020 profit distribution:
A cash dividend of RMB 34.76 (including tax) will be distributed for every 10
shares held. Based on the total share capital of 863,214,000 shares as of
December 31, 2020, the total cash dividend distribution amounts shall be RMB
3,000,531,864.
The cash dividend on B share shall be paid in Hong Kong Dollars and converted
at the middle rate of the HK dollar’s exchange rate against RMB quoted by the
People’s Bank of China on the first working day following the relevant resolution
adopted by the Company’s Annual Shareholders’ Meeting.
The Board decided not to convert the capital reserve to the share capital this time.
(2) Year 2019 Profit Distribution Plan
28
A cash dividend of RMB 0.7 (including tax) was distributed for every 10 shares
held. Based on the total share capital of 863,214,000 shares as of December 31,
2019, total cash dividend distribution amounts were RMB 60,424,980.
The cash dividend on B share was paid in Hong Kong Dollars and converted at
the middle rate of the HK dollar’s exchange rate against RMB quoted by the
People’s Bank of China on the first working day following the relevant resolution
adopted by the Company’s Annual Shareholders’ Meeting.
The Board decided not to convert the capital reserve to the share capital this time.
(3) Year 2018 Profit Distribution Plan
A cash dividend of RMB 0.4 (including tax) was distributed for every 10 shares
held. Based on the total share capital of 863,214,000 shares as of December 31,
2018, the total cash dividend distribution amounts were RMB 34,528,560.
B share dividend was paid in Hong Kong Dollars and converted based on the
HKD-to-RMB standard exchange rate published by the People’s Bank of China on
the first working day following the approval on the profit distribution proposal by
the Shareholders’ Meeting of the Company.
The Board decided not to convert capital reserve to share capital this time.
Table of cash dividend in the recent three years
Unit: RMB’000
Profit attributable to the Cash dividend as % of profit
Cash dividend
equity holders of the attributable to the equity
(Including tax)
Company in that year holders of the Company
2020 3,000,532 550,699 544.86%
2019 60,425 147,812 40.88%
2018 34,529 91,833 37.60%
The Company made a profit during the reporting period and the profit of the parent
company distributable to the common shareholders is positive, but a distribution
plan of cash dividends for the common shares is not put forward
□Applicable □√Not Applicable
2. Proposal on Year 2020 Profit Distribution Plan or Capital Reserve Conversion
□√Applicable □Not Applicable
Stock dividend (share) for every 10 shares 0
Cash Dividend (RMB) for every 10 shares (including tax) 34.76
Total share capital (share) 863,214,000
Total cash dividend distribution amounts (RMB) (including tax) 3,000,531,864
Amount of cash dividend (RMB) in other ways (e.g. repurchase of shares) 0
Total cash dividend amounts (RMB) (including other ways) 3,000,531,864
Distributable profit (RMB) 8,863,969,769
Total cash dividends (including other ways) as a proportion of total profit
100%
distribution
Cash dividend status
If the development stage of the Company is not easy to distinguish but there are major fund
expenditure arrangements, the minimum proportion of cash dividends in this profit distribution shall
reach 20% when the profit distribution is carried out.
Detailed description of profit distribution or capital reverse conversion proposal
29
Audited by PricewaterhouseCoopers Zhong Tian LLP, the Company achieved the net profit of
RMB 550,698,958 in 2020, plus the undistributed profits of RMB 8,373,695,791 at the beginning of
2020, and deducting the 2019 cash dividend of RMB 60,424,980 paid out on July 22, 2020, the
Company's distributable profit for shareholders is RMB 8,863,969,769 as of December 31, 2020,
The Company plans to distribute a cash dividend of RMB 34.76 (including tax) for every 10 shares
held. Based on the total share capital of 863,214,000 shares as of December 31, 2020, the total
cash dividend distribution amounts shall be RMB 3,000,531,864. The cash dividend on B share
shall be paid in Hong Kong Dollars and converted at the middle rate of the HK dollar’s exchange
rate against RMB quoted by the People’s Bank of China on the first working day following the
relevant resolution adopted by the Company’s Annual Shareholders’ Meeting. The Board decided
not to convert the capital reserve to the share capital this time. The proposal is subject to the
approval of the Company’s 2020 annual shareholders’ meeting.
3. Commitments
(1) Commitments of the Company, the shareholder, the actual controlling party,
the acquirer, the Director, the Supervisor, the senior executive or other related
party of the Company
□Applicable □√Not Applicable
(2) Earnings forecast of the assets or project and the explanations
□Applicable □√Not Applicable
4. 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.
5. Explanation of the Board of Directors, Supervisory Committee and Independent
Directors to abnormal opinions from accounting firm
□Applicable □√Not Applicable
6. Explanation on the changes of accounting policy, accounting estimates,
estimation method compared with that of last year
□Applicable □√Not Applicable
There is no change in accounting policies, accounting estimates and accounting
methods during the reporting period.
7. Explanation on major accounting errors that shall be restated during the
reporting period
□Applicable □√Not Applicable
There was no major accounting error that shall be restated during the reporting
period.
8. Explanation on consolidated scope change compared with that of last year
□√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
Power Co., Ltd.” in August 2020. After the separation, JMC Heavy Duty Vehicle
30
Co., Ltd. and the new derivative company Taiyuan Jiangling Power Co., Ltd. are
included in the consolidated scope.
9. Appointment or Dismissal of Accounting Firm
Current accounting firm
Name PricewaterhouseCoopers Zhong Tian LLP
Compensation (RMB’000) 2,000
Consecutive years offering audit services 19
Names of signed accountants Lei Fang, Ye Dan
Consecutive years offering audit
Lei Fang 4 year, Ye Dan 3 year
services of signed accountants
Dismissal of accounting firm
□Applicable □√Not Applicable
Appointment of C-SOX auditor, financial consultant or sponsor
□√Applicable □Not Applicable
Upon the approval of 2017 Annual Shareholders’ Meeting, JMC agreed to appoint
PricewaterhouseCoopers Zhong Tian LLP as JMC’s 2019 to 2021 C-SOX auditor.
In 2020, JMC paid RMB 550 thousand to PricewaterhouseCoopers Zhong Tian
LLP for the C-SOX audit.
10. Suspension and Termination of Listing after Annual Report Disclosed
□Applicable □√Not Applicable
11. Related Matters regarding Bankruptcy
□Applicable □√Not Applicable
There was no matter involving bankruptcy during the reporting period.
12. Major Litigation or Arbitration
□Applicable □√Not Applicable
There was no major litigation or arbitration during the reporting period.
13. Punishment
□Applicable □√Not Applicable
Neither JMC nor its Directors or senior management were punished by regulatory
authorities during the reporting period.
14. Honesty and credit of JMC and its controlling shareholder or actual controlling
party
□Applicable □√Not Applicable
15. Implementation of Equity Incentive Plan, Employee Stock Ownership Plan and
Other Employee Incentive Method
□Applicable □√Not Applicable
There was neither equity incentive plan or ESOP, nor other employee incentive
method during the reporting period.
16. Major Related Transactions
(1) Routine related party transactions
31
Please refer to the Note 7 related party transactions of the notes to the
consolidated financial statements in the Chapter XII Financial Statements for
details.
(2) 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 in the reporting period.
(3) Related party transaction concerning outside co-investment
□Applicable □√Not Applicable
There was no outside co-investment in the reporting period.
(4) 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 in the reporting period.
(5) Other major related party transactions
□√Applicable □Not Applicable
The announcement on Related Party Transactions
Name Disclosure Date Index
The announcement (No: 2020-
Public Announcement on Related
March 4, 2020 006) was published in the website
Party Transactions
www.cninfo.com.cn.
Public Announcement on the 2020 The announcement (No: 2020-
Forecast Routine Related Party March 26, 2020 009) was published in the website
Transactions www.cninfo.com.cn.
The announcement (No: 2020-
Public Announcement on Related
April 8, 2020 015) was published in the website
Party Transactions
www.cninfo.com.cn.
The announcement (No: 2020-
Public Announcement on Related
September 5, 2020 038) was published in the website
Party Transactions
www.cninfo.com.cn.
Public Announcement on the 2021 The announcement (No: 2020-
Forecast Routine Related Party December 8, 2020 048) was published in the website
Transactions www.cninfo.com.cn.
17. Major Contracts and Execution
(1) Entrustment, contract or lease
a. Entrustment
□Applicable □√Not Applicable
There was no entrustment in the reporting period.
b. Contract
□Applicable □√Not Applicable
There was no contract in the reporting period.
32
c. Lease
□√Applicable □Not Applicable
Please refer to the Note 4 (13), note 4 (28) and note 7 (5) (b) of the financial
statements in the Chapter XII Financial Statements for detail.
Project with more than 10% of net profit
□Applicable □√Not Applicable
There was no lease project with more than 10% of net profit in the reporting period.
(2) Major guarantee
□Applicable □√Not Applicable
The Company had no outside guarantee in the reporting period.
(3) Entrustment on cash asset management
a. Trust investment
□Applicable □√Not Applicable
There was no trust investment in the reporting period.
b. Entrusted loan
□Applicable □√Not Applicable
There was no entrusted loan in the reporting period.
(4) Major contracts for daily operation
□Applicable □√Not Applicable
(5) Other major contract
□Applicable □√Not Applicable
18. Corporation Social Responsibilities
(1) Corporation Social Responsibilities
In 2020, the world has experienced a sudden new corona virus epidemic. The
epidemic has caused a comprehensive and profound impact on personal life and
work, on company operations, and on the automotive industry and social and
economic development. All these bring huge challenges to society. JMC assumed
the responsibility of a corporate citizen in the epidemic, and donated 10 Ford
Transit negative pressure ambulances known as the "first vehicle in the fight" to
Wuhan in the first time.
JMC always consciously undertake social responsibility and create brand public-
benefit “Jiangling Xiqiao Project” with the aim of “Green, Love, and Safe”. By 2020,
JMC invested a total of more than RMB 32.38 million to build 412 river bridges
distributed in 25 provinces, municipalities, and autonomous regions, and 128
counties more than 600,000 villagers benefited.
During the reporting period, the Company operated according to law and
regulations, upheld the interest of the shareholders, especially small & medium-
sized shareholders, protected the legitimate rights and interests of employees, and
treated suppliers, customers and consumers sincerely. Simultaneously, JMC paid
attention to environmental protection, energy saving and consumption reduction,
33
fully reduced energy consumption and pollutant discharge, and actively fulfilled
corporate social responsibility.
JMC 2020 Corporation Social Responsibilities Report can be downloaded from
JMC official website: www.jmc.com.cn or the website: www.cninfo.com.cn.
(2) Targeted Measures in Poverty Alleviation
a. Plan on poverty alleviation
First, The Company joined the one-to-one poverty alleviation, depending on JMCG,
in Qianmo Village, Dai Jiapu Township, Suichuang County, Jiangxi Province and
Xianting Village, Songhu Town, Xinjian District, Nanchang City in accordance with
the working arrangement of Jiangxi Provincial Party Committee and Provincial
Government. The overall goal is: to help all registered poor households will be
lifted out of poverty and the poor village to achieve a well-off standard of living
before 2020 by cooperating with the local government.
Second, Jiangling Xiqiao Project, founded in 2007, was jointly initiated by the
China Foundation for Poverty Alleviation, China Automobile News and Jiangling
Motors Co., Ltd. And this project aims at “Establishing Love and Providing Bridges
for People”. It provides funds for the construction of caring bridges in some
underdeveloped areas of our country and carries out charitable activities such as
donating funds to aid students, books donations, teaching assistants and clothes
donations.
b. Summary of poverty alleviation in 2020
First, the Company regards the realization of precision poverty relief as the basic
strategy of precision poverty alleviation. All registered poor households had been
lifted out of poverty by October 2020. Second, JMC has donated RMB 2 million to
the "Jiangling Xi Bridge Project" in 2020 to provide funds to build convenient
bridge.
c. Status of targeted measures in poverty alleviation
Item Unit Amount/Progress
I. Brief Introduction —— ——
including：1. Funding RMB (’000) 2,000
2. Sum converted from the materials RMB (’000) 74.8
3. Persons get rid of poverty Persons 4
II. Investments —— ——
1. Anti-poverty depending on industry
—— ——
development
including：1.1 Type ——
1.2 Projects Number
1.3 Investment amount RMB (’000)
1.4 Persons get rid of poverty Persons
2. Anti-poverty depending on employment
—— ——
transfer
including：2.1 Investments on vocational skills RMB (’000)
2.2 Training persons regarding
Persons
vocational skills
2.3 Employment Persons Persons
34
3. Anti-poverty depending on relocation —— ——
including：3.1 Employment persons among
Persons
relocated persons
4. Anti-poverty depending on education —— ——
including：4.1 Grants in aid to poor students RMB (’000) 10
4.2 Poor students in aid Persons 12
4.3 Investments on the improvement
of educational source in poverty- RMB (’000)
stricken are
5. Health Anti-poverty —— ——
Including: 5.1 Investments on medical and
RMB (’000)
health services in poverty-stricken area
6. Ecological protection anti-poverty —— ——
including：6.1 Project type ——
6.2 Investment amount RMB (’000)
7. Miscellaneous provisions —— ——
including：7.1 Investments on stay-at-home
RMB (’000) 64.8
children, women and elderly
7.2 Number of stay-at-home children,
Persons 34
women and elderly in aid
7.3 Investments on poor & disable
RMB (’000)
people
7.4 Number of poor & disable people
Persons
in aid
8. Social anti-poverty —— ——
including：8.1 Investments on cooperation
between West China and East RMB (’000)
China
8.2 Investments on one-to-one anti-
RMB (’000)
poverty
8.3 Investments from anti-poverty
RMB (’000)
charity fund
9. Other —— ——
including：9.1.Project Number 1
9.2.Investment amount RMB (’000) 2,000
9.3. Persons getting rid of poverty Persons
III. Awards —— ——
d. On-going plan regarding targeted measures in poverty alleviation
First, JMC will consolidate the achievements of poverty alleviation in Qianmo
Village, Dai Jiapu Township, Suichuang County, Jiangxi Province and Xianting
Village, Songhu Town, Xinjian District, Nanchang City, and link up the work of
rural revitalization. Second, JMC will continue to invest in the "Jiangling Xiqiao
Project", so that more residents can travel safely and provide new historical
opportunities for the local economic development.
(4) Environmental protection
Whether the Company and affiliates is the key pollution discharge unit published
by environmental protection administration?
□√Yes □No
35
Name of principal Wastewater (COD, NH-N) Exhaust gas
pollutant and (SO2,NOx,smoke,toluol,xylene）
specific pollutant
Mode of discharge continuous discharge continuous discharge
Number of 6 148
discharge outlet
Distribution of 51 in Mainsite, 58 in Xiaolan
3 in Mainsite, 1 in Xiaolan
discharge outlet Site, 33 in Cast Plant and 6 in
Site, 1 in Cast Plant and
1 in Axle Plant Axle Plant
Discharge "COD:82mg/L SO2: 3mg/m3; NOx :74mg/m3;
concentration NH-N:1.24mg/L" smoke:
20mg/m3; toluol :0.263mg/m3;
dimethylbenzene:9.93mg/m3;
Applicable “Wastewater Discharge "The Emission Standard of Air
standard for Standard”(GB 8978-1996) Pollutants”, "Emission Standard
pollutant discharge of Air Pollutants for Boiler”（GB
13271-2014）
Total amount of COD: 63.92t; NOx : 9.26t
discharge NH-N: 1.19
Total amount of COD≤841.68t; NH- NOx≤37.69t
discharge N≤83.1414t
audited
Excessive Meet Standard Meet Standard
discharge
The construction and operation of pollutant preventive and control facilities
In 2020, the Company has controlled the casting odor in the plant to ensure the
exhaust gas pollutants up to the standard. And the Company has built a 600-mu
（equivalent to 98.842 acres）wastewater treatment station for the Xiaolan Frame
Plant to reach the requirements for wastewater discharge standards. JMC has
started the VOCs control project of the Xiaolan Plant to consistent with regulatory
compliance standards. The Company built Jiangling Fushan factory waste water
station and solid waste storage station. Solid waste storage station strictly
according to the requirements stored general solid waste and hazardous waste to
meet the requirements of the regulations. JMC has implemented the painting
energy-saving renovation project, and this project investment is RMB 5.88 million,
saving 480 tons of standard coal per year.
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. The Company obtains the parts relocation
transformation project, the automobile production line adjustment transformation
36
and the capacity optimization project (Fushan factory) the environmental impact
assessment approval.
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,
so as to formulate corresponding control methods for potential accidents and
emergences occurred or that may probably occur, and has been filed with the
environmental protection bureau.JMC organize various emergency drills to the
effectiveness of the plan.
Environmental self-monitoring scheme
JMC’s Qingyunpu Main Plant Area and Xiaolan Plant Areawere listed as a key
pollutant discharging organization of wastewater/hazardous wastes, and its
monitored by itself in strict accordance with the Method for Self-monitoring and
Information Disclosure of State Key Monitoring Enterprises (Trial). Its self-
monitoring schemes, monitoring results and annual monitoring reports on pollution
sources were disclosed on the “Jiangxi Province pollution source enterprise portal
system”.
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.
19. Other Major Events
□√Applicable □Not Applicable
In 2020, the Company received government incentives of approximate RMB 292
million appropriated from Nanchang City, Nanchang Xiaolan Economic and
Technological Development Zone, Nanchang County and Shanxi Comprehensive
Transformation Reform Demonstration Zone, which is to support the daily
operation and development of the Company.
20. 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
Power Co., Ltd.” in August 2020. The Board of Directors approved in October
2020 to sell 60% of the equity ("Transaction Equity") of Taiyuan Jiangling Power
Co., Ltd. through the public bidding process at Shanghai United Assets and Equity
Exchange at a price of no less than RMB 359,975.1 thousand. At the expiration of
the bidding announcement period, the above subject matter is solicited to an
intended transferee, Yunnan Yunnei Power Group Co., Ltd. (hereinafter referred to
as “Yunnei Group”), with a delisting price of RMB 360 million. In January 2021, the
37
Company and Yunnei Group signed by consensus the corresponding assets and
equity transaction contract in accordance with the relevant trading rules of
Shanghai United Assets and Equity Exchange. As of the date of disclosure of the
report, the relevant transactions between the Company and Yunnei Group are still
in progress.
38
Chapter VI Share Capital Changes & Shareholders
1. Changes of shareholding structure
I. Table of the changes of shareholding structure
Before the change Change (+, -) After the change
Proportion New Reserve- Proportion
Bonus
Shares of total share converted Others Subtotal Shares of total
Shares
shares (%) s shares shares (%)
I. Limited tradable
750,915 0.09% -75 -75 750,840 0.09%
A shares
1. Other domestic
750,915 0.09% -75 -75 750,840 0.09%
shares
Including:
Domestic legal
749,940 0.09% -4,800 -4,800 745,140 0.09%
person shares
Domestic natural
975 4,725 4,725 5,700
person shares
II. Unlimited
862,463,085 99.91% 75 75 862,463,160 99.91%
tradable 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% 0 0 863,214,000 100.00%
Causes of shareholding changes
□√Applicable □Not Applicable
JMC did not issue shares or derivative securities during the past three years as of
December 31, 2020. JMC’s total shares remained unchanged in 2020, and the
change in shareholding structure was caused by the former executive Zhu
Shuixing left the Company for more than half a year, and the trading restriction on
his JMC shares was relived on January 1, 2020; and the limited A shares of 4,800
shares, held by Shenzhen Airport Terminal Building Co., Ltd., a domestic legal
person shareholder, were transferred to nature person shareholders in July 2020.
Approval of changes of shareholding structure
□Applicable □√Not Applicable
Shares Transfer
□√Applicable □Not Applicable
The limited A shares of 4,800 shares, held by Shenzhen Airport Terminal Building
Co., Ltd., a domestic legal person shareholder, were transferred to nature person
shareholders in July 2020.
Impact on accounting data, such as the latest EPS, diluted EPS, shareholders’
equity attributable to the equity holders of the Company, generated from shares
transfer
□Applicable □√Not Applicable
Others to be disclosed necessarily or per the requirements of securities regulator
□Applicable □√Not Applicable
39
II. Changes of limited A shares
□√Applicable □Not Applicable
Number of Number of
Increase of Number of
restricted restricted Reasons for
Name of restricted shares released
shares at the shares at the trading Release date
shareholder shares in the in the current
beginning of the end of the restriction
current period period
period period
Held by a
January 1,
Zhu Shuixing 75 0 75 0 senior
2020
executive
total 75 0 75 0 -- --
2. Securities Issuance and Listing
I. Securities issuance (not including preferred shares) in the reporting period
□Applicable □√Not Applicable
II. Explanation on changes of shares, shareholding structure, assets and liabilities
structure
□Applicable □√Not Applicable
III. Current staff shares
□Applicable □√Not Applicable
3. Shareholders and actual controlling parties
I. Total shareholders, top ten shareholders, and top ten shareholders holding
unlimited tradable shares
Total shareholders as JMC had 45,681 shareholders, including 39,915 A-share holders, and 5,766 B-share
of the end of the holders, as of December 31, 2020.
reporting period
Total shareholders as JMC had 37,731 shareholders, including 32,153 A-share holders, and 5,578 B-share
of the last month-end holders, as of February 28, 2021.
prior to the disclosure
date of the Report
Top ten shareholders
Shares Shares
Shareholding Shares at
Shareholder Change with due to
Shareholder Name Percentage the End of
Type (+,-) Trading mortgage
(%) Year
Restriction or frozen
Nanchang Jiangling State-owned
41.03 354,176,000 0 0 0
Investment Co., Ltd. legal person
Ford Motor Company Foreign legal
32 276,228,394 0 0 0
person
China Securities Domestic non-
Corporation Limited State-owned 2.33 20,106,899 -3,351,167 0 0
legal persons
Shanghai Automotive State-owned
1.51 13,019,610 0 0 0
Co., Ltd. legal person
Central Huijin State-owned
0.83 7,186,600 0 0 0
Investment Ltd. legal person
Hong Kong Central Foreign legal
0.71 6,170,576 1,506,074 0 0
Clearing Limited person
Foreign legal
GAOLING FUND, L.P. 0.63 5,453,086 0 0 0
person
INVESCO FUNDS Foreign legal 0.56 4,841,889 0 0 0
40
SICAV person
LSV EMERGING
MARKETS Foreign legal
0.31 2,706,200 -290,200 0 0
EQUITY FUND, person
L.P.
Domestic
Jin Xin 0.30 2,596,400 2,596,400 0 0
Natural Person
Notes on association among above-mentioned None.
shareholders
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 20,106,899 A share
Shanghai Automotive Co., Ltd. 13,019,610 A share
Central Huijin Investment Ltd. 7,186,600 A share
Hong Kong Central Clearing Limited 6,170,576 A share
GAOLING FUND, L.P. 5,453,086 B share
INVESCO FUNDS SICAV 4,841,889 B share
LSV EMERGING MARKETS EQUITY
2,706,200 B share
FUND, L.P.
Jin Xin 2,596,400 B share
Notes on association among above- None.
mentioned shareholders
Stock buy-back by top ten shareholders or top ten shareholders holding unlimited
tradable shares in the reporting period
□Applicable □√Not Applicable
II. Controlling Shareholders
Nature of controlling shareholders: Central/Local government holdings, foreign
holdings
Type: Legal person
Legal Establishe Organization
Name Main scope of business
representative d Date code
investment management, industrial
Nanchang Jiangling May 28, 91360125MA
Qiu Tiangao investment, asset management
Investment Co., Ltd. 2019 38LUR91F
and other business.
to design, manufacture, market,
and service a full line of Ford cars,
trucks, sport utility vehicles
(“SUVs”), electrified vehicles, and
Ford Motor William Clay Ford, January 1, Lincoln luxury vehicles, provide
Company Jr. 1903 financial services through Ford
Motor Credit Company LLC, and
be pursuing leadership positions in
electrification, autonomous
vehicles, and mobility solutions.
Change of controlling shareholders
□Applicable □√Not Applicable
41
III. Actual Controlling Parties
Nature of controlling shareholders: Central/Local State-owned Assets Supervision
and Administration
Type: Legal person
Legal Established Organization
Name Main scope of business
representative Date code
manufacturing of automobiles, engines,
chassis, specialty vehicle, transmission,
other products, automotive quality testing,
sales of self-produced products and raw
materials, equipment, electronic products,
9136000015
JMCG Qiu Tiangao July 27, 1991 parts and others, as well as related after-
8263759R
sales services and maintenance services;
development of products derived from JMC
brand light vehicle; overseas auto project-
contracting, export equipment, material and
related labour services.
development, manufacturing, sales, import &
Chongqing
export business of auto (including sedan),
Changan October 31, 9150000020
Zhu Huarong engine, automotive components, die, tools,
Automobile 1996 286320X6
installation of machinery, technological
Co., Ltd.
consultant services.
Equity of listed company in domestic and aboard
market held by the entity controlled by the actual None
controlling party during the reporting period
Change of actual controlling parties
□Applicable □√Not Applicable
There was no change of actual controlling parties in the reporting period.
Ownership and control relations between the Company and the actual controlling
parties are shown as follows:
SASAC
Nanchang State-owned Assets Supervision
and Administration Committee
44.17% 100%
Chongqing Changan Automobile Co., Ltd. JMCG
50% 50%
Nanchang Jiangling Investment Co., Ltd. Ford Motor Company
41.03% 32%
Jiangling Motors Co., Ltd.
Actual controlling parties control the Company by the way of trust or other assets
management
□Applicable □√Not Applicable
42
IV. Other legal person shareholder holding more than 10% of total equity of the
Company
□Applicable □√Not Applicable
V. Shareholding reducing restriction to controlling shareholders, actual controlling
parties, restructuring parties and other commitment-making entities
□Applicable □√Not Applicable
43
Chapter VII Preferred Shares
□Applicable □√Not Applicable
JMC had no preferred shares in the reporting period.
44
Chapter VIII Convertible Bond
□Applicable √Not Applicable
JMC have no Convertible Bond during the reporting period.
45
Chapter IX Directors, Supervisors, Senior Management and
Employees
1. Changes of Shares held by Directors, Supervisors and Senior Management
Name Position Gender Age Term of Shares Share Shares
Office at the Change at the
period- in the period-
beginning reporting end
period
2020.06.19-
Qiu Tiangao Chairman Male 54 0 0 0
2023.06.18
2020.06.19-
Anning Chen Vice Chairman Male 59 0 0 0
2023.06.18
2020.06.19-
Wan Jianrong Director Male 55 0 0 0
2023.06.18
Thomas Peter 2020.06.19-
Director Male 43 0 0 0
Hilditch 2023.06.18
Director & 2020.06.19-
Manto Wong Male 58 0 0 0
President 2023.06.18
2020.06.19-
Jin Wenhui Director & EVP Male 53 0 0 0
2023.06.18
Chen Independent 2020.06.19-
Male 41 0 0 0
Jiangfeng Director 2023.06.18
Independent 2020.06.19-
Wang Yue Female 42 0 0 0
Director 2023.06.18
Independent 2020.06.19-
Li Xianjun Male 53 0 0 0
Director 2023.06.18
Chief 2020.06.19-
Xiao Hu Male 52 0 0 0
supervisor 2023.06.18
2020.06.19-
Alvin Qing Liu Supervisor Male 63 0 0 0
2023.06.18
2020.06.19-
Zhang Jian Supervisor Male 51 40 0 40
2023.06.18
Ding 2020.06.19-
Supervisor Male 51 20 0 20
Zhaoyang 2023.06.18
2020.06.19-
Chen Guang Supervisor Male 47 0 0 0
2023.06.18
Xiong 2020.06.19-
EVP Female 56 1,200 0 1,200
Chunying 2023.06.18
2020.06.19-
Li Weihua CFO Female 43 0 0 0
2023.06.18
2020.06.19-
Wan Hong VP Male 59 0 0 0
2023.06.18
2020.06.19-
Li Xiaojun VP Male 45 0 0 0
2023.06.18
2020.06.19-
Ding Wenmin VP Male 48 0 0 0
2023.06.18
2021.02.01-
Eric Hermann VP Male 46 0 0 0
2023.06.18
2020.06.19-
Liu Shuying VP Female 58 0 0 0
2023.06.18
2020.08.01-
Jerry Lin VP Male 44 0 0 0
2023.06.18
2020.06.19-
Wu Xiaojun VP Male 46 0 0 0
2023.06.18
46
2020.06.19-
Luo Xiaofang VP Female 42 0 0 0
2023.06.18
2020.06.19-
Yu Jianbin VP Male 52 0 0 0
2023.06.18
Board 2020.12.04-
Xu Lanfeng Female 52 0 0 0
Secretary 2023.06.18
Ex-
Lu Song Independent Male 63 2017.06.29- 0 0 0
Director 2020.06.18
Ex-
Wang Kun Independent Female 44 2017.06.29- 0 0 0
Director 2020.06.18
2017.06.29-
Mike Chang Ex-VP Male 54 0 0 0
2020.07.31
2020.06.19-
Milton Wong Ex-VP Male 46 0 0 0
2021.01.31
Ex- Board 2020.06.19-
Wan Hong Male 59 0 0 0
Secretary 2020.12.03
Total 1260 0 1260
2. Changes of Directors, Supervisors and Senior Management
Name Position Status Date Reason
Independent The term of office has
Lu Song Leave
Director 2020.06.18 expired
Independent The term of office has
Wang Kun Leave
Director 2020.06.18 expired
Mike Chang VP Leave 2020.07.31 Work rotation
Wan Hong Board Secretary Leave 2020.12.03 Work rotation
Milton Wong VP Leave 2021.01.31 Work rotation
3. Particulars about working experience of Directors, Supervisors and senior
management
Directors:
Mr. Qiu Tiangao, born in 1966, holds a Bachelor Degree in Mechanical
Manufacturing and a Master Degree in Industrial Engineering from Huazhong
University of Science and Technology, and is the Chairman of JMCG, Chairman of
Nanchange Jiangling Investment Co., Ltd., and Chairman of JMC. Mr. Qiu
Tiangao held various positions including General Manager, Chairman of
Nanchang Gear Co., Ltd., Chairman of Jiangxi JMCG Gear Co., Ltd., Vice
President of Jiangling Motor Holdings Co., Ltd., and Director & General Manager
of JMCG.
Mr. Anning Chen, born in 1961, holds a Ph.D. in Engineering from the University
of Cincinnati, Ohio, U.S. and MBA from the University of Michigan Ross Business
School, Ann Arbor, Michigan, U.S., and is a Group Vice President and President
of Ford China for Ford Motor Company, President and CEO of Ford Motor (China)
Ltd., and Vice Chairman of JMC. Mr. Anning Chen first began his distinguished
career at Ford Motor Company in 1992, and during his seventeen years at Ford,
he held various executive management roles. Most recently, Mr. Anning Chen was
CEO of Chery Automobile LTD, China as well as Chairman of the Board of
Directors for Chery Jaguar Land Rover Automotive, China.
47
Mr. Wan Jianrong, born in 1965, holds a Bachelor’s Degree in Mechanical
Manufacturing from Central China Engineering College and a MBA from Jiangxi
University of Finance & Economics. He is Director and General Manager of JMCG,
Director of Nanchange Jiangling Investment Co., Ltd. and Director of JMC. Mr.
Wan Jianrong has held various positions including Deputy Manager and Manager
for Engineer Plant of JMC, Assistant to the President and Vice President of JMC,
Deputy General Manger of JMCG, and Executive Deputy General Manager and
General Manager of Jiangxi Isuzu Automobile Co., Ltd.
Mr. Thomas Peter Hilditch, born in 1977, holds a Bachelor’s Degree in Chemistry
from University of London and a Master’s Degree in Management Accounting from
the Chartered Institute of Management Accountants, and is Director and Chief
Financial Officer of Ford Motor (China) Ltd. and Director of JMC. Mr. Hilditch held
various positions including Controller of Ford Otosan, Purchasing Controller of
Ford Asia Pacific, Chief Financial Officer of Ford Sollers, and Chief Operating
Officer of Ford Sollers.
Mr. Manto Wong, born in 1962, holds a Bachelor’s Degree in Computer
Engineering and a Master’s Degree in Business Administration from the University
of Michigan, U.S.A., and is Director and President of JMC. Mr. Manto Wong held
various positions including Manger of U.S. Market Analysis Department of Ford,
Chief Financial Officer of JMC, Chief Financial Officer of Ford Japan operations,
Director of Business Strategy for Asia Pacific of Ford, Vice President and Chief
Financial Officer for Ford Motor (China) Ltd., and Vice President of Finance for
Changan Ford.
Mr. Jin Wenhui, born in 1967, senior engineer, holds a Bachelor’s Degree in
Mechanical Manufacturing, a Master’s Degree in Mechanical Engineering from
Huazhong University of Science and Technology and an EMBA Degree in China
Europe International Business School, and is Director & First Executive Vice
President of JMC, in charge of marketing sales & service, and assist the President
to manage the Company. Mr. Jin Wenhui held various positions including Chief of
Manufacturing Department, Assistant to the President, Vice President of JMC,
Director, General Manager of JMCG Jingma Motors Co., Ltd., and Executive Vice
General Manager of Jiangxi-Isuzu Motors Co., Ltd., and Executive Vice President
of JMC.
Mr. Li Xianjun, born in 1967, holds a Bachelor’s Degree in Industrial Management
from Jilin University of Technology and a MBA, a Doctor’s Degree in Political
Economy from Jilin University, and is Head and Academic Director of School of
Automotive Engineering of Tsinghua University, and an Independent Director of
JMC. Mr. Li Xianjun has held various positions including Planner of Engine Plant
of FAW, Secretary of General Manager of Jilin Province Agricultural Machine
Corporation, General Manager of Planning Department of Jilin Province Feed
Company, and Lecturer of School of Business of Jilin University.
Mr. Chen Jiangfeng, born in 1979, holds a Bachelor’s Degree and Master’s
Degree in Law from International Law Department, Foreign Affairs College, and is
Senior Deputy General Counsel & Executive Director of Gilead (Shanghai)
Pharmaceutical Technology Co., and an Independent Director of JMC. Mr. Chen
Jiangfeng has held various positions including Legal Counsel of Ford Motor (China)
48
Ltd., Legal Counsel of Ford Motor Research & Engineering (Nanjing) Co., Ltd./
Changan Ford Mazda Automobile Corporation, Ltd., Nanjing Company/Changan
Ford Mazda Engine Company, Ltd., Senior Legal Counsel & Compliance Officer of
Ford Asia Pacific & Africa, Senior Legal Counsel of BMW China Automotive
Trading Ltd., and Member of China Country Council, Head of legal, Director,
Merck Healthcare China.
Ms. Wang Yue, born in 1978, holds a Bachelor’s Degree in Accountancy from
Henan University, a Master’s Degree in Accountancy from Zhongnan University of
Economics and Law, and a Doctor’s Degree in Accountancy from Shanghai
University of Financial and Economics, and is an Associate Professor of School of
Accountancy for Shanghai University of Financial and Economics, an Independent
Director of JMC, an Independent Director of Shanghai Xinhua Media Co., Ltd., an
Independent Director of Zhuhai Letong Chemical Co., Ltd., an Independent
Director of Meishe International Logistics Group Co., Ltd., an Independent
Director of Jiangsu Hongde Special Components Co., Ltd., and an Independent
Director of Guangdong Yangshan United Precision Manufacturing Co., Ltd. Ms.
Wang Yue has served as Research Assistant at The Hong Kong Polytechnic
University and China Europe International School, and during 2012~2013, served
as Visiting Scholar at Zimmerman Center for University of Illinois at Urbana-
Champaign.
Supervisors:
Mr. Xiao Hu, born in 1968, holds a Bachelor’s Degree in Radio from Information
Science & Electronic Engineering Department of Zhejiang University, and is a
member of the Standing Committee of the CPC, the secretary of Discipline
Inspection Commission and Chairman of Supervisory Board for JMCG, and Chief
Supervisor of JMC. Mr. Xiao Hu has served as a cadre in the General Office of the
Nanchang Municipal People's Government, deputy director of the Office of the
Working Committee of the Nanchang Hi-tech Industrial Development Zone, deputy
director of the Software Industry Office of the Nanchang Hi-tech Industry
Development Zone Administrative Committee, deputy head of the Organization
Department of the Working Committee of Nanchang Hi-tech Industry Development
Zone, deputy director of the Personnel and Labor Bureau of the Nanchang Hi-tech
Industry Development Zone Administrative Committee, Head of the Organization
Department of the Working Committee of Nanchang Hi-tech Industry Development
Zone, and the Director of the Personnel Bureau of the Nanchang Hi-tech Industry
Development Zone Administrative Committee.
Mr. Alvin Qing Liu, born in 1957, holds a Master’s Degree in International
Economics and a Jurisprudence Doctor’s Degree from Marquette University,
U.S.A, and is a Director of Ford Motor (China) Ltd, and a Supervisor of JMC. Mr.
Liu was a practicing attorney at Ruder, Ware and Michler Law Firm, U.S.A.,
counsel of Asia Pacific Region, Chrysler Corporation, U.S.A., counsel of Mergers
and Acquisitions Group and Northeast Asia Operations, Daimler-Chrysler A.G.,
Germany, an International Counsel in the Office of General Counsel, Ford Motor
Company, and Vice President & General Counsel of Ford Motor (China), Ltd.
Mr. Zhang Jian, born in 1969, holds a College Degree in Secretarial Professional
from North China University of Technology, and is Chairman of JMCG Labor
Union, Chairman of Supervisor Board of Nanchang Jiangling Investment Co., Ltd.,
49
and a Supervisor of JMC. Mr. Zhang Jian held various positions including
Secretary of Chairman and Deputy Director of Office for JMC, Director of Office,
Director of Communist Party Office, Chief of Publicity Department for JMCG,
Assistant to General Manger of JMCG, and Senior Vice Chairman of JMCG Labor
Union.
Mr. Ding Zhaoyang, born in 1969, holds a MBA Degree from Université de Poitiers,
France, and is a Supervisor of JMC and Chief of Public & legal Affair Department
for JMC. Mr. Ding Zhaoyang held various positions including Deputy Chief, Chief
of Public Relationship Department of JMC.
Mr. Chen Guang, born in 1973, holds a Bachelor’s Degree in Automobile
Engineering from Hunan University, and is a Supervisor of JMC and Executive
Deputy Director of the engine plant for JMC. Mr. Chen Guang held various
positions including Deputy Chief of Quality Management Department, Deputy
Plant Manager of Assembly Plant for Jiangling-Isuzu Motors Company Limited,
and Plant Manager of Assembly Plant for JMC, a Vice General Manager of JMC
Heavy Duty Vehicle Co., Ltd. and a Vice General Manager of Taiyuan Jiangling
Power Co., Ltd.
Senior management:
Mr. Manto Wong, please refer to the part of Directors for his resume.
Mr. Jin Wenhui, please refer to the part of Directors for his resume.
Ms. Xiong Chunying, born in 1964, senior engineer, holds a Bachelor Degree in
Automobile Engineering from Jiangsu Engineering College, a Master Degree in
Industrial Economics from Jiangxi University of Finance and Economics and an
EMBA Degree from China Europe International Business School, and is Executive
Vice President of JMC, in charge of the Company's product research and
development. Ms. Xiong Chunying held various positions including Chief of
Quality Management Department, Assistant to the President, Vice President, and
a Director for JMC.
Ms. Li Weihua, born in 1977, holds a Bachelor’s Degree in International Economic
Law from Shanghai University of Finance and Economics and a MBA from
Canada York University Schulich School of Business, and is the CFO of JMC, in
charge of the Company’s financial management. Ms. Li Weihua has held various
positions including Finance Analyst of Ford China, Finance Analyst, and Finance
Manager of Ford Motor Research & Engineering (Nanjing) Co., Ltd., MFG Finance
Manager, PD Finance Manager, MFG Finance Controller, and PD Finance
Controller for C and C SUV of Ford AP, and CFO of Ford Lioho.
Mr. Wan Hong, born in 1961, holds a Master of Business Administration Degree
from Jiangxi University of Finance & Economics, and is a Vice President of JMC,
in charge of the Company’s human resources. Mr. Wan Hong held various
positions including Chief of Labour and Personnel Department, and Assistant to
the President for JMC.
Mr. Li Xiaojun, born in 1975, senior engineer, holds a Bachelor’s Degree in
Mechanical Design & Manufacturing from Jiangxi University of Science and
50
Technology and a Master’s Degree in Industrial Engineering from Huazhong
University of Science and Technology, and is a Vice President of JMC, in charge
of the Company’s quality, information and strategic planning. Mr. Li Xiaojun held
various positions including Chief of JMC Quality Management Department, Plant
Manager of Assembly Plant and Assistant to the President for JMC.
Mr. Ding Wenming, born in 1972, holds a Bachelor’s Degree in Automobile
Exertion from Wuhan University of Technology, and is a Vice President of JMC, in
charge of the Company's product research and development. Mr. Ding Wenming
held various positions including Deputy Chief of Product Development Center,
Chief of Product Planning & Program Management Department, and Assistant to
the President for JMC.
Mr Eric Hermann, born in 1964, holds a Bachelor’s Degree in Engineering
Mechanical and a Master’s Degree in Engineering Mechanical from University of
Michigan, and is a Vice President of JMC, in charge of the Company's product
research and development. Mr. Eric Hermann held various positions in Ford Motor
Company including Light Truck Exhaust Design Engineer, Vehicle NVH
Supervisor, VE Launch Leader, Exhaust, AIS & Clutch Supervisor, AIS, Cooling,
Exhaust & CAE Manager, BoF Cooling & Mounts Manager, Unibody Exhaust &
AIS Manager, and Global AIS Manager, as well as the Director of Powertrain
Engineering Department and Assistant President for JMC.
Ms. Liu Shuying, born in 1962, senior engineer, holds a Bachelor’s Degree in
Mechanical Manufacturing from Jiangxi University of Technology, and is a Vice
President of JMC, in charge of the Company's product research and development.
Ms. Liu Shuying held various positions including Chief of Quality & Supervision
Department of Jiangling-Isuzu Motors Company Limited, Director of Product
Development Center and Assistant to the President of JMC.
Mr. Jerry Lin, born in 1976, holds a Bachelor’s Degree in Aerospace Engineering
and a Master’s Degree in Aerospace Engineering from Tamkang University, China
Taiwan, and is a Vice President of JMC, in charge of Xiaolan Plant and Engine
Plant. Mr. Jerry Lin held various positions including AE TCF & Powertrain Lead
Engineer, AE TCF & Powertrain Supervisor, TCF MPE Superintendent for Ford
Lio Ho Motor Co., Ltd., Program Manager of Ford Motor Company, Plant Lauch &
FPS Manager, TCF Area Manager, Body Area Manager, and Plant Manger of
Changan Ford Automobile Co., Ltd..
Mr. Wu Xiaojun, born in 1974, holds a Bachelor’s Degree from Wuhan University
of Technology and a MBA from Jiangxi University of Finance and Economics, and
is a Vice President of JMC and General Manager of JMC Heavy Duty Vehicle Co.,
Ltd., Legal representative, executive director and general manager of Taiyuan
Jiangling Power Co., Ltd., in charge of the Company’s heavy duty truck business.
Mr. Wu Xiaojun held various positions including Chief of Quality Department,
Assistant to the President for JMC, and Executive Deputy General Manager of
JMC Heavy Duty Vehicle Co., Ltd.
Ms. Luo Xiaofang, born in 1978, holds a Bachelor’s Degree in Economics from
Central South University, China and a MBA from Maastricht University,
51
Netherlands, and is a Vice President of JMC, in charge of the Company’s
purchasing business. Ms. Luo Xiaofang held various positions including Raw
Materials Purchasing Supervisor for Irving Schweizer Asia, and Senior Purchasing
Manager for Ford AP.
Mr. Yu Jianbin, born in 1968, holds a Bachelor’s Degree in Forging from Xi’an
Jiaotong University, and is a Vice President of JMC, in charge of the Company’s
manufacturing operations. Mr. Yu Jianbin has held various positions including
Manager for the Engineering Department, Manager for the Manufacturing &
Logistics Department for Jiangling Motor Holdings Co., Ltd., Assistant to General
Manager of Jiangxi Fire-fighting Vehicle Plant, Deputy General Manager of
Jiangxi-Isuzu Motors Co., Ltd., and Deputy General Manager of JMCG Jingma
Motors Co., Ltd.
Ms. Xu Lanfeng, born in 1969, holds a Bachelor’s Degree in Forging Technology
and Equipment from Jiangxi Industry University and a MBA from University of
International Business and Economics, and is the Board Secretary and Assistant
to the President of JMC, in charge of the Company’s relevant duties of Board
Secretary. Ms. Xu Lanfeng held various positions in JMC including Deputy Plant
Manager of Framing Plant, Deputy Chief, Chief of Manufacture Department of
JMC.
Positions at the shareholder entities
□√Applicable □Not Applicable
Name Sharehold Title Term of Compensation
er Entity Office Paid by
Shareholder
Entity (Y/N)
Qiu Tiangao JIC Chairman 2019.05.28 N
Group Vice 2018.10.24 Y
Anning Chen Ford President and
President, Ford China
Wan Jianrong JIC Director 2019.05.28 N
Thomas Peter 2019.08.01 Y
Ford CFO, Ford China
Hilditch
Zhang Jian JIC Chairman of 2019.05.28 N
Supervisor Board
Jin Wenhui JIC Director 2019.05.28 N
Particulars about positions and concurrent positions in other entities other than
shareholder entities
□√Applicable □Not Applicable
Compensation
Name Entity Title Paid by Other
Entities (Y/N)
JMCG Chairman Y
Jiangling Motor Holdings Co., Ltd. Chairman N
Jiangxi ISUZU Co., Ltd. Chairman N
Qiu Tiangao
JMCG New Energy Vehicle Co., Ltd. Chairman N
JMCG Jingma Motors Co., Ltd. Chairman N
Magna Powertrain (Jiangxi) Co. Ltd. Director N
52
Nanchang Jiangling Dingsheng Investment N
Chairman
Management Co. Ltd.
Nanchang Jiangling Investment Co. Ltd. Chairman N
Nanchang Institute of Intelligent New N
Chairman
Energy Vehicles
Ford Motor (China) Ltd. President & CEO N
Changan Ford Automobile Co., Ltd. Vice Chairman N
Anning Chen Lincoln Automobile Sales Service N
Chairman
(Shanghai) Co., Ltd
Fordshuttle Trading (Shanghai) Co., Ltd. Chairman N
Director & Y
JMCG General
Manager
Nanchang Jiangling Investment Co. Ltd. Director N
Jiangxi ISUZU Co., Ltd. Director N
Wan
JMCG New Energy Vehicle Co., Ltd. Director N
Jianrong
JMCG Jingma Motors Co., Ltd. Director N
Nanchang Jiangling Dingsheng Investment N
Director
Management Co. Ltd.
Jiangxi Yizhizhixing Automobile Operation N
Chairman
Service co. Ltd.
Ford Motor (China) Ltd. Director N
Changan Ford Automobile Co., Ltd. Director N
Lincoln Automobile Sales Service N
Director
Thomas (Shanghai) Co., Ltd
Peter Ford blue Mach Technology (Nanjing) Co., N
Hilditch Chairman
Ltd
Chongqing Fast Service Technology Co., N
Chairman
Ltd
Fordshuttle Trading (Shanghai) Co., Ltd. Director N
Manto Wong JMC Heavy Duty Vehicle Co., Ltd. Director N
Jiangxi Jiangling Group Special Vehicle N
Chairman
Co., Ltd.
Jiangxi Jiangling Special-Purpose Vehicle N
Director
Co., Ltd.
Nanchang Jiangling Investment Co., Ltd. Director N
Legal N
Jiangling Motor Sales Co., Ltd. Representative &
Executive
Jin Wenhui
JMC Heavy Duty Vehicle Co., Ltd. N
Director
Hanon Systems (Nanchang) Co., Ltd. Vice Chairman N
Shenzhen Fujiang New Energy Automobile Legal N
Sales Co., Ltd. Representative
Legal N
Guangzhou Fujiang New Energy
Representative &
Automobile Sales Co., Ltd.
Executive
Head and Y
Academic
Director of
Li Xianjun Tsinghua University
School of
Automotive
Engineering
Executive Y
Chen Gilead (Shanghai) Pharmaceutical director, Senior
Jiangfeng Technology Co., Ltd. Deputy General
Counsel
53
Shanghai University of Finance and Associate Y
Economics professor
Independent Y
Shanghai XinHua Media Co.,Ltd.
Director
Independent Y
Zhuhai Letong Chemical Co., Ltd.
Director
Wang Yue
Independent Y
Amass Freight International Co.,Ltd.
Director
Independent Y
Jiangsu Hongde Special Parts Co.,Ltd.
Director
Guangdong Yangshan United Precision Independent Y
Manufacting Co,.Ltd. Director
JMCG Chief supervisor Y
JMCG Jingma Motors Co., Ltd. Supervisor N
Jiangxi Jiangling Group Special Vehicle N
Supervisor
Xiao Hu Co., Ltd.
Jiangxi Jiangling Chassis Co., Ltd. Supervisor N
Jiangling Dingsheng Investment Co., Ltd. Supervisor N
Jiangxi Jiangling Real Estate Co., Ltd. Chief supervisor N
Ford Motor (China) Ltd. Director N
Changan Ford Automobile Co., Ltd. Director N
Alvin Qing Ford Motor Research (Nanjing) Co., Ltd. Supervisor N
Liu Ford Motor Research Test (Nanjing) Co., N
Supervisor
Ltd.
Fordshuttle Trading (Shanghai) Co., Ltd. Supervisor N
Chairman of the Y
JMCG
Labor Union
Nanchang Jiangling Investment Co. Ltd. Chief supervisor N
Jiangling Motor Holdings Co., Ltd. Supervisor N
JMCG New Energy Automobile Co. Ltd. Supervisor N
Jiangxi Jiangling Special-Purpose Vehicle N
Supervisor
Co., Ltd.
Jiangxi JMCG Specialty Vehicles Co., Ltd. Supervisor N
Nanchang Gear Co., Ltd. Chief supervisor N
Zhang Jian
JMCG Finance Co., Ltd. Chief supervisor N
Jiangxi Lingrui Renewable Resources N
Supervisor
Development Co., Ltd.
Jiangxi Jiangling Real Estate Co.,Ltd Supervisor N
Jiangxi Jiangling Motors Imp. & Exp. Co., N
Chief supervisor
Ltd.
Magna Powertrain (Jiangxi) Co. Ltd. Supervisor N
Jiangxi Yizhizhixing Automobile Operation N
Chief supervisor
Service Co., Ltd.
Xiong N
JMC Heavy Duty Vehicle Co., Ltd. Director
Chunying
Jiangling Motors Sales Co., Ltd. Supervisor N
JMC Heavy Duty Vehicle Co., Ltd. Director N
Taiyuan Jiangling Power Co., Ltd Supervisor
Hanon Systems (Nanchang) Co., Ltd. Director N
Li Weihua
Shenzhen Fujiang New Energy Automobile N
Supervisor
Sales Co., Ltd.
Guangzhou Fujiang New Energy N
Supervisor
Automobile Sales Co., Ltd.
Independent Y
Wan Hong Jiangxi Hongdu Aviation Industry Co., Ltd.
Director
Li Xiaojun Jiangxi Jiangling Motors Imp. & Exp. Co., Director N
54
Ltd.
Ding N
JMC Heavy Duty Vehicle Co., Ltd. Director
Wenming
Legal N
representative,
Taiyuan Jiangling Power Co., Ltd executive
Wu Xiaojun director and
general manager
Chairman and N
JMC Heavy Duty Vehicle Co., Ltd.
general manager
Penalties from securities regulator to the present and resigned Directors,
Supervisors and senior executives in the recently three years
□Applicable □√Not Applicable
4. Compensation of Directors, Supervisors and Senior Executives
Decision-making procedure, determination of basis, and actual payment regarding
the compensation of the Directors, Supervisors and senior executives
Directors and Supervisors who did not concurrently hold other management
positions in JMC were not paid by JMC. Director Qiu Tiangao, Wan Jianrong,
Supervisors Xiao Hu and Zhang Jian were paid by JMCG. Directors Anning Chen,
Thomas Peter Hilditch and Supervisor Alvin Qing Liu were paid by Ford.
(1) In accordance with JMC Executive Compensation Scheme approved by the
Board of Directors, the compensation for the Chinese-side senior management
consists of base salary and floating bonus. The base salary level is determined
according the grade of the senior executives, and the floating bones shall be paid
according to the operating performance. 70% of the bonus will be distributed in
this year, and the rest 30% will be distributed in the next three years. In 2020, the
Company paid annual compensation before tax of approximately RMB 1,650
thousand to First EVP Jin Wenhui, paid approximately RMB 1,600 thousand to
EVP Xiong Chunying, paid approximately RMB 1,200 thousand per person to VP
Wan Hong, VP Liu Shuying, paid approximately RMB 1,210 thousand to VP Li
Xiaojun, paid approximately RMB 1,210 thousand to VP Ding Wenming, paid
approximately RMB 1,350 thousand to VP Wu Xiaojun, paid approximately RMB
980 thousand to VP Yu Jianbin，paid approximately RMB 810 thousand to Board
Secretary Xu Lanfeng. Two employee-representative supervisors, Mr. Ding
Zhaoyang and Mr. Chen Guang, were paid annual compensation before tax of
about RMB 580 thousand and RMB 830 thousand respectively. The total
compensation before tax paid by JMC for the aforesaid persons was about RMB
12.62 million in the reporting period, including the long-term incentive of RMB 650
thousand deferred from the previous years.
(2) JMC pays annual compensation for Ford-seconded senior management
personnel to Ford in accordance with the Personnel Secondment Agreement
signed between JMC and Ford & Ford Affiliates. In 2020, the Company should pay
US $500 thousand to Ford for Director and President Manto Wong, pay RMB
1,100 thousand for CFO Li Weihua, pay RMB 461.7 thousand for Vice President
Jerry Lin, pay RMB 1,100 thousand for Vice President Luo Xiaofang, pay US
$220.3 thousand for Ex Vice President Mike Zhang, and pay US $500 thousand
55
for Ex Vice President Milton Wong. These payments made by JMC to Ford do not
reflect the actual salaries earned by Ford-seconded senior management.
(3) Pursuant to the resolutions of JMC 2011 Annual Shareholder’s Meeting, the
annual compensation for the JMC Independent Directors is RMB 100 thousand
per person, and JMC bears their travel-related expenses associated with JMC’s
business.
Table on compensation of the Directors, Supervisors and senior executives in the
reporting period
Unit: RMB’ 000
Compensation Compensation
Present
Name Position Gender Age Before Tax Paid by Related
(Y/N)
Paid by JMC Party (Y/N)
Qiu Tiangao Chairman Male 54 Y 0 Y
Vice
Anning Chen Male 59 Y 0 Y
Chairman
Wan Jianrong Director Male 55 Y 0 Y
Thomas
Director Male 43 Y 0 Y
Peter Hilditch
Director &
Manto Wong Male 58 Y * Y
President
Director &
Jin Wenhui Male 53 Y 165 N
EVP
Independent
Li Xianjun Male 53 Y 10 N
Director
Chen Independent
Male 41 Y 5.3 N
Jiangfeng Director
Independent
Wang Yue Female 42 Y 5.3 N
Director
Chief
Xiao Hu Male 52 Y 0 Y
supervisor
Alvin Qing Liu Supervisor Male 63 Y 0 Y
Zhang Jian Supervisor Male 51 Y 0 Y
Ding
Supervisor Male 51 Y 58 N
Zhaoyang
Chen Guang Supervisor Male 47 Y 83 N
Xiong
EVP Female 56 Y 160 N
Chunying
Li Weihua CFO Female 43 Y * Y
Wan Hong VP Male 59 Y 120 N
Li Xiaojun VP Male 45 Y 121 N
Ding Wenmin VP Male 48 Y 121 N
Liu Shuying VP Female 58 Y 120 N
Jerry Lin VP Male 44 Y * Y
Wu Xiaojun VP Male 46 Y 135 N
Luo Xiaofang VP Female 42 Y * Y
Yu Jianbin VP Male 52 Y 98 N
Board
Xu Lanfeng Female 52 Y 81 N
Secretary
Ex-
Lu Song Independent Male 63 N 4.7 N
Director
Ex-
Wang Kun Independent Female 44 N 4.7 N
Director
56
Milton Wong Ex-VP Male 46 N * Y
Mike Chang Ex-VP Male 54 N * Y
Total -- -- ---- -- 1,292 --
* Please refer to the relevant statement in the Article 4 Compensation of Directors,
Supervisors and Senior Executives of this Chapter.
Granted equity incentive to the Directors, Supervisors and senior executives in the
reporting period
□Applicable □√Not Applicable
5. Employees
(1) Employees, Professional Structure and Educational Level
Employees in parent company (persons) 12,623
Employees in subsidiaries (persons) 809
Total employees (persons) 13,432
Total employees paid compensation (persons) 14,317
Retired employees bore retirement benefits in parent company
885
and its subsidiaries
Professional Structure
Type Employees (Persons)
Production Worker 8,760
Sales Personnel 588
Technical Personnel 3,154
Finance Personnel 171
Administrative Staff 759
Total 13,432
Educational Level
Type Employees (Persons)
Master degree and higher 925
Bachelor degree 3,553
Polytechnic school degree 2,020
Below polytechnic school degree 6,934
Total 13,432
(2) Compensation Policy
The company shall comply with the disclosure requirements of Shenzhen stock
exchange industry information disclosure guidelines No. 12 - listed companies
engaged in software and information technology services
Note: a listed company shall disclose the total employee compensation (included
in the cost) and its proportion in the total cost of the company during the reporting
period, and analyze the sensitivity of the company's profits to the changes in the
total employee compensation. At the same time, the proportion of the number of
core technical personnel and the proportion of salary in the reporting period, as
well as the changes are disclosed.
57
(3) Training
With To Become Leader in Light Commercial Vehicle and Provider of Ford Value
Products as the vision, JMC takes customers as the center and provided capability
guarantee for product core competitiveness, with quality, safety and cost as the
top priority. The company improved three capability systems including leadership
development, professional technical ability development and operator’s ability
development, so as to cope with the challenges in new energy, intelligent
connectivity and smart manufacturing development that the company will
encounter in the future. The systems can provide human resource support to the
realization of the company’s strategy targets.
(4) Labour outsourcing
□Applicable □√Not Applicable
58
Chapter X Corporate Governance Structure
1. Status of the Corporate Governance in JMC
During the reporting period, the Company strictly abided by the Company Law, the
Securities Law, the Code of Corporate Governance for Listed Companies in China,
the Rules Governing Listing of Stock on Shenzhen Stock Exchange, as well as
relevant laws and regulations, to carry out corporate governance activities and
continued to improve its corporate governance.
Difference between actual situation of corporate governance in JMC and that of
requirements of listed company corporate governance promulgated by CSRC
□Applicable □√Not Applicable
2. Separation between JMC and the Controlling Shareholders in respect of
Personnel, Assets and Finance, and Independence concerning Organization and
Business:
(1) With respect to personnel matters, the positions of chairman and president are
held by different individuals; JMC’s senior management do not hold positions other
than director positions with its controlling shareholders; JMC senior management
personnel are paid by JMC; labor, personnel matters and compensation
management of JMC are completely independent.
(2) With respect to assets, JMC assets are complete. The assets utilized by JMC,
including production system, supporting production system and peripheral facilities,
and non-patent technology, are owned and/or controlled by JMC.
(3) With respect to finance, JMC has an independent finance department and
independent accounting system, and has a uniform and independent accounting
system and financial control system for its branches and subsidiaries. JMC has its
own bank accounts, and there are no bank accounts jointly owned by JMC and its
controlling shareholders. JMC pays taxes independently in accordance with
relevant laws.
(4) With respect to organization, JMC’s organization is independent, complete and
scientifically established with a sound and efficient operating mechanism. The
establishment and the operation of JMC’s corporate governance are strictly
carried out per the Articles of Association of JMC. Production and administrative
management are independent from the controlling shareholders. JMC has
established an organization structure that meets the need for ongoing
development.
(5) With respect to business, JMC has independent purchasing, production and
sales systems. The purchasing, production and sales of main materials and
products are carried out through its own purchasing, production & sales functions.
JMC is independent from the controlling shareholders in respect to its business,
and has independent and complete business and self-sufficient operating
capability.
3. Horizontal Competition
□Applicable □√Not Applicable
59
4 Introduction to the Shareholders’ Meeting
(1) Index to the Shareholders’ Meeting in the reporting period
Investor
Convening Disclosure
Meeting Meeting Type Participation Index
Date Date
Ratio
The announcement
2019 Annual Annual (No: 2020-024) was
Shareholders’ Shareholders’ 75.02% 2020.06.19 2020.06.20 published in the
Meeting Meeting website
www.cninfo.com.cn.
(2) Special Shareholders’ Meeting convened by preferred shareholders whose
voting rights were restored
□Applicable □√Not Applicable
5. Independent Directors’ Performance of Duty
(1) Particulars about the directors’ attendance to the Board meeting and the
Shareholders’ Meeting
Not to Presence at
present in the
Presence
Required person in Shareholders’
Presence in Form Presence
Name Board Absence two Meeting
in Person of Paper by Proxy
Attendance consecutive
Meeting
meetings
(Y/N)
Lu Song 8 1 7 0 0 N 0
Wang
8 1 7 0 0 N 0
Kun
Li
19 3 15 1 0 N 0
Xianjun
Chen
11 3 8 0 0 N 0
Jiangfeng
Wang
11 2 8 1 0 N 0
Yue
(2) Dissent from Independent Directors
□Yes □√No
The Independent Directors of the Company had no dissent to the relevant
proposal of the Company in the reporting period.
(3) Other introduction to Independent Directors’ Performance of Duty
□√Yes □No
JMC has appointed three Independent Directors so far. The Independent Directors
exercised their fiduciary duties on routine work and major decision-making of the
Board of Directors. They studied every proposal reviewed by the Board of
Directors thoroughly and raised their opinions, inquired about major events which
required opinions from the Independent Directors and issued their written opinions,
and actively engaged in the affairs of the Compensation Committee and the Audit
60
Committee in the reporting period, to protect the interests of the Company and all
the shareholders.
6. 2020 Diligence Report of the Committees under the Board of Directors
(1) Work of the Audit Committee
A. Work Summary Report of the Audit Committee
According to its Working Rules, the Audit Committee diligently executed its duties
and delivered guiding opinions. The primary tasks completed during the reporting
period were as follows.
i. The Audit Committee reviewed the Company’s internal control work plan and
internal control implementation results regularly.
ii. The Audit Committee reviewed the Assets Impairment Provisions and Write-off
proposal and submitted it to the Board for review and approval.
iii. The Audit Committee reviewed the independent auditor’s audit plan, letter of
engagement and risks and controls.
iv. The Audit Committee has coordinated with the independent auditor to allow the
audit and associated financial report can be submitted within the appointed
period.
v. The Audit Committee reviewed the financial statements before the certified
auditor’s on-site audit, after receiving the certified auditor’s initial and final audit
opinions. The Committee communicated with auditors face to face over
important events and major accounting estimations, audit adjustment items and
important accounting policies which potentially affect the financial statements,
and believes that the financial statements are truthful, accurate and fully reflect
the Company’s actual status.
vi. The Audit Committee has submitted the 2020 Independent Auditor Summary
Report to the Board for review.
vii. The Audit Committee reviewed the Internal Control Self-assessment Report
and agreed to submit this to the Board for approval.
B. Written Opinions on JMC Financial Statements
The Audit Committee reviewed the unaudited financial statements prepared by the
Company and issued its written opinions as follows on January 14, 2021: the Audit
Committee reviewed the financial statements compiled by JMC and believes that
the financial statements have in all material aspects reflected the actual status of
the Company. The Audit Committee would continue to keep in close contact with
the external auditor. After receiving the auditor’s initial audit comments, the
committee would review the financial statements once again.
The Audit Committee reviewed the financial statements prepared by JMC after the
external auditor issued its initial audit opinions and issued written opinions as
follows on February 20, 2021: the financial statements have been prepared
according to China GAAP and the Company’s financial policies; and, the financial
statements reported gives a true, accurate and fair view of the financial position of
the Company as at December 31, 2020, and of its financial performance and its
cash flows for the year then ended, in all material respects.
The Audit Committee made resolutions on the audited 2020 financial statements
as follows on March 3, 2021: the Audit Committee reviewed the financial
statements after the certified public auditor issued its final audit opinion, and the
Audit Committee believed that the financial statements reported, including the
61
Balance Sheet, Income Statement and Cash Flow, give a true, accurate and fair
view of the financial position of the Company as at December 31, 2020, and of its
financial performance and its cash flows for the year then ended, in all material
respects. The Audit Committee concurred to submit for Board approval.
C. 2020 Independent Audit Work Summary Report
The Audit Committee reviewed the 2020 Audit Work Plan submitted by the
independent auditing firm PwC Zhong Tian via communications with the PwC
Zhong Tian leading auditor. Agreement was achieved regarding timing and
content and both parties believe that the plan ensures a comprehensive
completion of the 2020 audit tasks.
The independent auditor thoroughly communicated with the management and the
Audit Committee Members regarding: accounting policies implementation,
revenue recognition, significant accounting estimates related to accrued expenses,
accounting treatment for eight Provisions, Impairment of long term assets, and
research and development expenses, JMCH restructured ,related party
transaction recognition and fairness and information disclosure. They have also
discussed about issues identified and the corrective actions. As a result, all parties
have a more in-depth understanding of the business status, financial status and
internal control. Therefore, a solid foundation was laid for a fair audit conclusion
issued by the independent auditor.
The Audit Committee believed that the external certified auditor had executed the
audit work consistently with the requirements of China Certified Auditor
Independent Audit Principles. The audit period was adequate and the allocation of
personnel resources was sufficient to deliver an audit report which accurately
reflects the Company’s financial position as at December 31, 2020, and the
financial performance and cash flows for the year then ended. The audit
conclusion fairly reflects the Company’s actual status.
(2) 2020 Diligence Report of the Compensation Committee
In the reporting period, the Compensation Committee exercised its duties as
follows:
i. reviewed and approved the Proposal on 2019 Year-end Bonus for the
Company’s senior executives;
ii. reviewed and approved the adjustment of the annual total cash income target of
the Company’s senior executives in 2020;
iii. reviewed and approved the 2020 Due Diligence Report of the Compensation
Committee;
iv. Reviewed and approved the KPIs for the Company’s senior executives in 2020.
The Compensation Committee’s opinions on the annual compensation of the
Directors, Supervisors and senior management disclosed in this Report are as
follows:
The 2020 annual compensation for the Chinese-side senior management was
paid upon the principles promulgated in the JMC Executive Compensation
Scheme. The 2020 annual compensation for Ford-seconded senior management
personnel was paid in accordance with the Personnel Secondment Agreement
signed between JMC and Ford & Ford Affiliates. The annual compensation for the
62
Director and Supervisor that the Company paid abided by JMC salary
management system.
In the reporting period, the annual compensation of the Directors, Supervisors and
senior executives disclosed in this Report was complied with JMC salary
management system, and there was neither breach nor inconsistency of this
system.
7. Works of Supervisory Board
Risks found by the Supervisory Board in the reporting period
□Yes □√No
The Supervisory Board had no dissent on inspection items in the reporting period.
8. Compensation & Incentive Mechanism for Senior Management in the Reporting
Period
The Compensation Committee of the Company approved the 2020 year-end
bonus plan for the senior executive based on the actual performance of the key
performance indicators for the senior executives, which is set out in JMC
Executive Compensation Scheme approved by the Board of Directors of the
Company, and approved the KPIs for the Company’s senior executives in 2021
and to adjust the Year 2021 total income target of the senior executives based on
market conditions. These plans are applicable only to the Chinese-side senior
management.
9. Internal Control
(1) Major defect of internal control in the reporting period
□Yes □√No
(2) Internal Control Self-assessment Report
Issuance date March 30, 2021
Index www.cninfo.com.cn
Total value of assets of the entities in scope counts as % of that disclosed in
100.00%
the consolidated financial statements
Total value of operating revenue of the entities in scope counts as % of that
100.00%
disclosed in the consolidated financial statements
Deficiency Determination Criteria
Type Financial Report Non-financial Report
Material Weakness: Unscientific decision
Material Weakness: An error that
making process such as incorrect
changes the trend of results, changes
decisions that result in unsuccessful
profit to loss or loss to profit Ineffective
mergers and acquisitions; Major
anti-fraud process or any fraud
regulatory compliance issues; Frequent
involving senior
media reports harmful to the Company’s
management Ineffective control over
reputation; A lack of control within key
Qualitative Criteria accounting policies Ineffective oversight
business processes or systematic
by the Audit Committee Significant
breakdown of control policies
Deficiency; Errors in management
reporting systems or Corporate
Material weakness identified in the self-
accounting records that could lead to
assessment without any action plan
incorrect management decisions;
implemented Significant Deficiency;
Actions inconsistent with Company
control deficiency, or combination of
63
values, policies and other Corporate control deficiencies, that does not meet
guidelines that are likely to significantly the criteria for material weakness but
impact cost, quality, customer deserves the concerns of the Audit
satisfaction, reputation, or competitive Committee and the Board of Directors.
advantage; Control issues in IT Minor Deficiency Any control deficiencies
infrastructure or applications that may that do not meet the criteria for material
lead to impairment of Company or significant.
operations. Any actions indicating fraud
or theft that is significant in value Minor
Deficiency; Any control deficiencies that
do not meet the criteria for material or
significant.
Material Weakness Misstatement in the
Income Statement is more than 5% of
the annual profit before taxation;
Misclassification in the Income
Statement is more than 0.4% of the
annual sales revenue
Adjustment of net assets in the Balance
Sheet is more than 1% of the
shareholders' equity Adjustment of asset
or liability in the Balance Sheet is more
than 0.6% of the total assets;
Adjustment in the Cash Flow
Statement is more than 3% of the total
net cash flow in the operating activities.
Please refer to internal control deficiency
Quantitative Significant Deficiency
over financial reporting for the criteria for
Criteria Misstatement in the Income Statement is non-financial reporting internal control.
more than 2.5% of the annual profit
before taxation; Misclassification in the
Income Statement is more than 0.2% of
the annual sales revenue; Adjustment of
net assets in the Balance Sheet is more
than 0.5% of the Shareholders’ equity;
Adjustment of asset or liability in the
Balance Sheet is more than 0.3% of the
Total assets; Adjustment in the Cash
Flow Statement is more than 1.5% of the
total net cash flow from the operating
activities. Minor Deficiency All the
deficiencies that do not meet the
quantitative criteria for significant.
Number of Material
Weakness in 0
financial report
Number of Material
Weakness in non- 0
financial report
64
Number of Significant
Deficiency in financial 0
report
Number of Significant
Deficiency in non- 0
financial report
10. Internal Control Audit Report
□√Applicable □Not Applicable
Opinions in the Internal Control Audit Report
Internal Control Audit Report Disclosed or not Disclosed
Issuance Date March 26, 2021
Index www.cninfo.com.cn
Type of Opinion Standard and unqualified opinions
Major Defect Regarding Non-financial Report or no No
Abnormal opinion issued by the accounting firm
□Yes □√No
Opinion issued by the accounting firm keeps the same with that of self-
assessment report made by the Board
□√Yes □No
65
Chapter XI Corporate Bond
Whether the Company owns the corporate bond that it lists in the securities
exchange and is undue or is not paid in full although it’s due
No.
66
Chapter XII Financial Statements
Type of Audit Report Standard and Unqualified Opinion
Signature date March 26, 2021
Name of Auditor PricewaterhouseCoopers Zhong Tian LLP
Document No. of Audit Report PwC ZT Shen Zi (2021) No. 10080
67
Auditor’s Report
PwC ZT Shen Zi (2021) No. 10080
(Page 1 of 6)
To the shareholders of Jiangling Motors Corporation, Ltd.,
Opinion
What we have audited
We have audited the accompanying financial statements of Jiangling Motors Corporation, Ltd.
(hereinafter “Jiangling Motors”), which comprise:
the consolidated and company balance sheets as at 31 December 2020;
the consolidated and company income statements for the year then ended;
the consolidated and company cash flow statements for the year then ended;
the consolidated and company statements of changes in equity for the year then ended;
and
notes to the financial statements.
Our opinion
In our opinion, the accompanying financial statements present fairly, in all material respects, the
consolidated and company’s financial position of Jiangling Motors as at 31 December 2020, and
their financial performance and cash flows for the year then ended in accordance with the
requirements of the Accounting Standards for Business Enterprises (“CASs”).
Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of Jiangling Motors in accordance with the Code of Ethics for Professional
Accountants of the Chinese Institute of Certified Public Accountants (“CICPA Code”), and we have
fulfilled our other ethical responsibilities in accordance with the CICPA Code.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
Key audit matters identified in our audit are summarised as follows:
Expenditures on research and development
Impairment of long-term assets
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PwC ZT Shen Zi (2021) No. 10080
(Page 2 of 6)
Key Audit Matters (Cont’d)
Key Audit Matters How our audit addressed the Key Audit Matter
Expenditures on research and We understood, evaluated and tested the internal controls
development related to the expenditures on research and development.
Please refer to Note 2(14)(e) and We obtained a breakdown, by value, of all individual research
Note 4(14) to the financial and development projects and reconciled this to the amounts of
statements. research and development expenses and capitalised research
and development projects, which were recorded in the general
We focussed on this matter due to ledger, identifying no reconciling differences.
the incurred amount of research
and development expenditures is We tested the projects where research and development
RMB1,664,559,872, among which expenses were in excess of RMB29,300,000, together with a
the amount of the development sample of randomly selected immaterial projects from the
costs capitalised is RMB remaining population, as follows:
320,747,780 in 2020 and the fact We obtained the lists of expenses by nature on
that there is management’s selected projects and inspected contracts and
judgement involved in assessing underlying invoices which were directly related to those
whether the criteria set out in the projects. We also checked the reasonableness of the
accounting policies(Note 2(14)(e)),
indirect expenses attributable to relevant projects,
required for capitalisation of such
including employment costs and depreciation
development costs had been met,
particularly: expenses, by understanding the allocating method and
Technical feasibility of the inspecting the supporting for the assembling and
project allocating process of those indirect expenses.
Likelihood of the generating of We compared the recorded research and development
sufficient future economic costs of the above projects to their budgeted amounts
benefits and discussed the progress of the above projects with
Timing to start capitalisation the project managers.
We had particular regard to the fact We found no material issues arising from the above
that Jiangling Motors has continued procedures.
to invest in the technical
improvements for its automobile
products, and therefore we We obtained the lists of capitalised projects and tested those
focussed on the accuracy and projects with the capitalised amounts over RMB30,000,000.
completeness of recorded research We obtained explanations from management of why those
and development expenditures and projects were considered to be capital in nature, in terms of
whether the economic benefits of how the specific requirements of CASs No. 6 - Intangible
the projects under development Assets were met. We also conducted interviews with individual
supported the amounts capitalised. project managers responsible for those projects selected to
corroborate these explanations, which enabled us to
As part of our work we also independently assess whether the projects met all the criteria
focussed on management’s for capitalisation set out in accounting standards. In addition,
judgements regarding whether we reviewed the selected projects’ inspection reports at
capitalised costs were of a different phases including the reports which indicated that the
development stage rather than subject projects entered into developmental stage and related
research stage (which would result management and board meeting minutes. We found the
in the costs being expensed rather information we gathered from those documents to be
than capitalised), and whether consistent with explanations obtained from individual project
costs, including employment costs, managers and to be in line with management’s assessment
were directly attributable to that the costs met the relevant capitalisation criteria. We
relevant projects. considered management’s judgements on whether those
selected projects should be capitalised were appropriate.
69
PwC ZT Shen Zi (2021) No. 10080
(Page 3 of 6)
Key Audit Matters (Cont’d)
Key Audit Matters How our audit addressed the Key Audit
Matter
Impairment of long-term assets We understood, evaluated and tested the
internal controls related to the long-term assets
Refer to Note 2(15), Note 2(24)(b)(ii), Note impairment.
4(11), Note 4(12) and Note 4(14) to the financial
statements. We conducted on-site inspections of the related
long-term assets, also discussed with
As at 31 December 2020, the net book value management about the reasons for the business
(after deducting the provision for impairment) of restructuring plan of heavy trucks and the further
the fixed assets, construction in progress, plans. We assessed the feasibility of the
intangible assets and development expenditures relevant plans, and also the appropriateness
related to the research and development and and reasonableness of the method used to
manufacturing of heavy trucks held by Jiangling calculate the recoverable amount.
Motors and its subsidiaries is RMB
1,250,817,841; meanwhile, the accumulated We discussed the method used to determine the
and current losses of heavy trucks business are recoverable amount with the management and
RMB2,032,889,891 and RMB537,798,017 assessed the rationality of critical estimates and
respectively, which is an indicator that the assumptions used by management when
related long-term assets may be impaired. calculating the net amount of fair value less
costs to sell for the related assets. We checked
Management evaluated and tested whether the the assets transaction contracts in an arm’s
related long-term assets were impaired. length and other best information available,
Considering the business restructuring plan of assessed the reasonableness of key estimates
heavy trucks in 2020, management calculated and assumptions used in calculating the
the recoverable amount of related long-term recoverable amount of the long-term assets and
assets based on the fair value less costs to sell. checked the accuracy of calculations.
The fair value is estimated based on the selling
price from the sale agreements of the assets in We checked the meeting minutes related to
an arm's length transaction, the market value of business restructuring plan of heavy trucks, as
similar assets or the best information available. well as meeting minutes for the impairment
assessment and the provision of the long-term
Based the test results, since the book value assets, including minutes of board meetings, to
exceeded the recoverable amount of the related further corroborate the reasonableness of the
long-term assets, the management has made long-term assets impairment provision.
impairment provision for the related long-term
assets of RMB399,788,155 in 2020. We evaluated the competence, expertise and
objectivity of the external experts engaged by
We focussed on this matter because the the management involved in evaluating the fair
impairment provision for the related long-term value of the related assets. We reviewed the
assets is significant and involved management’s work results of the external experts.
judgment on critical estimates and assumptions,
such as the feasibility of the business We discussed with internal valuation experts,
restructuring plan of heavy trucks, and the best assessing the overall appropriateness of method
estimation of the fair value. used in estimating the recoverable amount of
long-term assets and reasonableness of critical
assumptions applied by the management.
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PwC ZT Shen Zi (2021) No. 10080
(Page 4 of 6)
Key Audit Matters (Cont’d)
Key Audit Matters How our audit addressed the Key Audit Matter
Impairment of long-term assets Based on the procedures we performed,
(Cont’d) management’s judgements and assessments relating
to the impairment of long-term assets are supported
by the evidence we gathered.
Other Information
Management of Jiangling Motors is responsible for the other information. The other information
comprises all of the information included in 2020 annual report of Jiangling Motors other than the
financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report
in this regard.
Responsibilities of Management and the Audit Committee for the Financial Statements
Management of Jiangling Motors is responsible for the preparation and fair presentation of these
financial statements in accordance with the CASs, and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing these financial statements, management is responsible for assessing Jiangling Motors’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intend to liquidate Jiangling
Motors or to cease operations, or have no realistic alternative but to do so.
The Audit Committee is responsible for overseeing Jiangling Motors’s financial reporting process.
71
PwC ZT Shen Zi (2021) No. 10080
(Page 5 of 6)
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether these financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with CSAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on Jiangling Motors’s ability of
to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in these financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause Jiangling Motors to cease to continue as a going concern.
Evaluate the overall presentation (including the disclosures), structure and content of the
financial statements, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within Jiangling Motors to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance of
the group audit. We remain solely responsible for our audit opinion.
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PwC ZT Shen Zi (2021) No. 10080
(Page 6 of 6)
Auditor’s Responsibilities for the Audit of the Financial Statements (Cont’d)
We communicate with the Audit Committee regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Audit Committee, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of such communication.
PricewaterhouseCoopers Zhong Tian LLP Signing CPA
———————————
Lei Fang (Engagement Partner)
Shanghai, the People’s Republic of China Signing CPA ———————————
26 March 2021 Ye Dan
73
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED FINANCIAL STATEMENTS AND
REPORT OF THE AUDITORS
31 DECEMBER 2020
74
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETS AS AT 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
31 December 31 December 31 December 31 December
Assets Notes 2020 2019 2020 2019
Consolidated Consolidated Company Company
Current assets
Cash and cash equivalents 4(1) 11,121,955,129 8,937,936,658 8,473,562,045 8,677,928,946
Financial assets held for
trading 4(2) 803,892,985 - 502,797,917 -
Notes receivable 4(3) - 85,816,311 - 20,792,000
Accounts receivable 4(4)、14(1) 2,999,883,212 2,208,236,620 3,330,880,651 865,928,297
Financing receivables 4(5) 815,583,669 289,044,373 29,412,448 52,811,157
Advances to suppliers 4(6) 452,714,683 517,122,502 451,832,917 504,562,617
Other receivables 4(7)、14(2) 128,989,573 115,983,137 1,359,907,223 3,118,317,705
Inventories 4(8) 2,086,605,692 1,946,869,092 2,020,079,494 1,471,931,881
Other current assets 4(9) 737,369,737 973,426,066 678,079,950 821,783,113
Total current assets 19,146,994,680 15,074,434,759 16,846,552,645 15,534,055,716
Non-current assets
Long-term equity 4(10)、
investments 14(3) 39,496,548 40,934,557 1,561,496,548 380,934,557
Fixed assets 4(11) 5,165,956,410 5,714,489,577 4,331,796,677 4,462,909,152
Construction in progress 4(12) 1,535,497,770 1,498,124,778 1,429,348,858 1,244,963,653
Right-of-use assets 4(13) 28,405,890 36,039,891 28,405,890 33,138,423
Intangible assets 4(14) 931,391,553 948,755,845 637,918,837 513,529,416
Development expenditures 4(14) 173,473,242 125,142,080 173,473,242 100,271,663
Deferred tax assets 4(15) 1,163,969,325 860,607,106 370,120,915 182,248,610
Total non-current assets 9,038,190,738 9,224,093,834 8,532,560,967 6,917,995,474
TOTAL ASSETS 28,185,185,418 24,298,528,593 25,379,113,612 22,452,051,190
75
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETS (CONT'D) AS AT 31 DECEMBER 2020
(All amounts in RMB unless otherwise stated)
31 December 2020 31 December 2019 31 December 2020 31 December 2019
LIABILITIES AND EQUITY Notes Consolidated Consolidated Company Company
Current liabilities
Short-term borrowings 4(17) 500,000,000 - 500,000,000 -
Derivative financial liabilities 4(18) 3,716,727 545,632 3,716,727 545,632
Notes payable 4(19) - 31,400,000 - -
Accounts payable 4(20) 10,026,215,877 8,116,169,589 10,022,399,964 7,908,815,398
Contract liabilities 4(21) 558,526,846 268,170,154 42,397,868 77,585,490
Employee benefits payable 4(22) 759,368,606 385,547,290 687,984,808 312,170,895
Taxes payable 4(23) 218,445,227 198,777,104 95,599,544 119,431,418
Other payables 4(24) 4,153,849,625 4,145,266,838 1,495,307,482 2,227,351,456
Current portion of non-
current liabilities 4(25) 10,909,163 13,843,406 10,909,163 11,500,358
Other current liabilities 4(26) 410,899,328 264,558,923 39,220,370 13,333,551
Total current liabilities 16,641,931,399 13,424,278,936 12,897,535,926 10,670,734,198
Non-current liabilities
Long-term borrowings 4(27) 2,563,666 3,197,814 2,563,666 3,197,814
Lease liabilities 4(28) 18,998,952 22,592,252 18,998,952 22,592,252
Provisions 4(29) 195,896,139 166,687,460 - -
Deferred income 4(30) 49,944,625 34,389,578 49,944,625 34,389,578
Long-term employee
benefits payable 4(31) 62,855,000 63,685,000 62,561,000 63,385,000
Deferred tax liabilities 4(15) 126,995,164 25,339,981 102,300,000 -
Other non-current liabilities 4(32) 99,526,464 61,793,791 90,866,994 50,930,075
Total non-current liabilities 556,780,010 377,685,876 327,235,237 174,494,719
Total liabilities 17,198,711,409 13,801,964,812 13,224,771,163 10,845,228,917
Equity
Share capital 4(33) 863,214,000 863,214,000 863,214,000 863,214,000
Capital surplus 4(34) 839,442,490 839,442,490 839,442,490 839,442,490
Other comprehensive
income 4(35) (11,759,250) (11,395,500) (12,021,750) (11,616,750)
Surplus reserve 4(36) 431,607,000 431,607,000 431,607,000 431,607,000
Retained earnings 4(37) 8,863,969,769 8,373,695,791 10,032,100,709 9,484,175,533
Total equity attributable
to shareholders of
the Company 10,986,474,009 10,496,563,781 12,154,342,449 11,606,822,273
Minority interests - - - -
Total equity 10,986,474,009 10,496,563,781 12,154,342,449 11,606,822,273
TOTAL LIABILITIES AND
EQUITY 28,185,185,418 24,298,528,593 25,379,113,612 22,452,051,190
Legal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
76
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED AND COMPANY INCOME STATEMENTS FOR THE YEAR ENDED 31
DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
2020 2019 2020 2019
Item Notes
Consolidated Consolidated Company Company
Revenue 4(38)、14(4) 33,095,733,665 29,173,636,262 30,728,247,865 27,013,530,410
4(38)、 (27,518,509,913) (24,530,857,150) (26,277,296,318) (23,558,653,135)
Less: Cost of sales
4(44)、14(4)
Taxes and surcharges 4(39) (837,877,008) (744,695,131) (808,544,571) (715,214,044)
Selling and distribution expenses 4(40)、4(44) (1,544,737,028) (1,525,883,194) (226,152,644) (220,785,082)
General and administrative expenses 4(41)、4(44) (1,012,347,173) (955,566,805) (806,195,496) (776,697,100)
Research and development expenses 4(42)、4(44) (1,343,812,092) (1,776,320,646) (1,341,100,949) (1,610,563,277)
Financial expenses 4(43) 197,567,513 189,506,963 179,281,512 241,659,728
Including: Interest expenses (19,283,170) (2,903,955) (19,232,913) (2,727,224)
Interest income 215,262,461 203,950,159 196,071,590 250,902,581
Add: Other income 4(47) 268,222,289 246,880,334 246,472,249 18,046,849
Investment income 4(48)、14(5) 70,178,856 39,121,245 70,427,986 38,814,164
Including: Share of profit of 4(48) (1,438,009) 822,880 (1,438,009) 822,880
associates and joint ventures
Gains on changes in fair value 4(49) 721,890 (1,524,631) (373,178) (1,524,631)
Credit impairment losses 4(46) (79,766,249) (131,701,073) (56,761,565) (111,193,097)
Asset impairment losses 4(45) (681,884,784) (92,395,494) (1,158,304,106) (86,284,181)
Gains on disposal of assets 4(50) (713,072) (794,016) (548,969) (1,959,962)
Operating profit 612,776,894 (110,593,336) 549,151,816 229,176,642
Add: Non-operating income 4(51) 11,634,917 222,840,220 4,303,815 222,016,703
Less: Non-operating expenses 4(52) (172,753,545) (7,261,457) (30,611,761) (6,723,923)
Total profit 451,658,266 104,985,427 522,843,870 444,469,422
Less: Income tax expenses 4(53) 99,040,692 42,826,651 85,506,286 33,775,220
Net profit 550,698,958 147,812,078 608,350,156 478,244,642
Classified by continuity of operations
Net profit from continuing operations 550,698,958 147,812,078 608,350,156 478,244,642
Net profit from discontinued - - - -
operations
Classified by ownership of the equity
Minority interests - - - -
Attributable to shareholders of the 550,698,958 147,812,078 608,350,156 478,244,642
Company
Other comprehensive income, net of
tax
Attributable to shareholders of the
Company
Other comprehensive income items
which will not be reclassified to profit
or loss
Changes arising from remeasurement 4(35) (363,750) (1,217,250) (405,000) (1,221,000)
of defined benefit plan
Attributable to minority interests - - - -
Total comprehensive income 550,335,208 146,594,828 607,945,156 477,023,642
Attributable to shareholders of the 550,335,208 146,594,828 607,945,156 477,023,642
Company
Attributable to minority interests - - - -
Earnings per share
Basic earnings per share(RMB Yuan) 4(54) 0.64 0.17 —— ——
Dilutedearnings per share(RMB 4(54) 0.64 0.17 —— ——
Yuan)
Legal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
77
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS FOR THE YEAR ENDED
31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
2020 2019 2020 2019
Item Note
Consolidated Consolidated Company Company
Cash flows from operating activities
Cash received from sales of goods or
35,125,114,857 32,179,519,920 30,135,915,527 30,880,510,326
rendering of services
Cash received relating to other operating 4(55)
445,795,274 619,276,237 348,244,836 394,363,387
activities
Sub-total of cash inflows 35,570,910,131 32,798,796,157 30,484,160,363 31,274,873,713
Cash paid for goods and services (25,087,676,080) (22,813,410,129) (24,034,906,418) (21,870,900,962)
Cash paid to and on behalf of employees (2,140,291,935) (2,264,838,454) (1,934,667,949) (2,035,728,708)
Payments of taxes and surcharges (1,797,705,380) (1,892,898,668) (1,561,759,004) (1,631,618,074)
Cash paid relating to other operating 4(55)
(2,846,893,908) (3,090,781,668) (1,708,207,234) (1,942,112,583)
activities
Sub-total of cash outflows (31,872,567,303) (30,061,928,919) (29,239,540,605) (27,480,360,327)
Net cash flows from operating activities 4(56) 3,698,342,828 2,736,867,238 1,244,619,758 3,794,513,386
Cash flows from investing activities
Cash received from disposal of
15,307,000,000 9,200,000,000 17,624,568,383 11,585,692,920
investments
Cash received from returns on investments 77,849,662 47,385,707 75,400,552 47,385,707
Net cash received from disposal of fixed
assets, intangible assets and other long- 32,672,679 3,887,882 30,206,852 3,630,174
term assets
Cash received relating to other investing 4(55)
191,356,815 213,415,565 249,783,971 255,463,058
activities
Sub-total of cash inflows 15,608,879,156 9,464,689,154 17,979,959,758 11,892,171,859
Cash paid to acquire fixed assets,
intangible assets and other long-term (1,410,515,107) (1,616,840,711) (1,357,972,695) (1,312,416,494)
assets
Cash paid to acquire investments (16,107,000,000) (9,200,000,000) (18,467,738,455) (11,881,000,000)
Cash paid relating to other investing
(4,802,479) (12,942,366) (4,802,479) (12,942,366)
activities
Sub-total of cash outflows (17,522,317,586) (10,829,783,077) (19,830,513,629) (13,206,358,860)
Net cash flows from investing activities (1,913,438,430) (1,365,093,923) (1,850,553,871) (1,314,187,001)
Cash flows from financing activities
Cash received from borrowings 2,291,211,222 200,000,000 2,291,211,222 200,000,000
Sub-total of cash inflows 2,291,211,222 200,000,000 2,291,211,222 200,000,000
Cash repayments of borrowings (1,800,450,682) (200,453,605) (1,800,450,682) (200,453,605)
Cash payments for distribution of
(78,895,390) (35,456,143) (78,895,390) (35,456,143)
dividends, profits or interest expenses
Cash paid relating to other financing 4(55)
(12,751,077) (14,806,885) (10,297,938) (11,170,267)
activities
Sub-total of cash outflows (1,892,097,149) (250,716,633) (1,889,644,010) (247,080,015)
Net cash flows from financing activities 399,114,073 (50,716,633) 401,567,212 (47,080,015)
Effect of foreign exchange rate changes
- - - -
on cash and cash equivalents
Net increase/(decrease) in cash and
cash equivalents 4(56) 2,184,018,471 1,321,056,682 (204,366,901) 2,433,246,370
Add: Cash and cash equivalents at
beginning of year 4(56) 8,937,936,658 7,616,879,976 8,677,928,946 6,244,682,576
Cash and cash equivalents at end of 4(56)
year 11,121,955,129 8,937,936,658 8,473,562,045 8,677,928,946
Legal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
78
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
Attributable to equity owners of the Company
Minority
Item Notes Share Other comprehensive Surplus Retained Total equity
Capital surplus interests
capital income reserves earnings
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 year ended 31
December 2019 - - (1,217,250) - 113,283,518 - 112,066,268
Total comprehensive income
Net profit - - - - - 147,812,078 - 147,812,078
Other comprehensive income - - (1,217,250) - - - (1,217,250)
Total comprehensive income for the year - - (1,217,250) - 147,812,078 - 146,594,828
Profit distribution
Distribution to shareholders 4(37) - - - - (34,528,560) - (34,528,560)
Balance at 31 December 2019 863,214,000 839,442,490 (11,395,500) 431,607,000 8,373,695,791 - 10,496,563,781
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 year ended 31
December 2020 - - (363,750) - 490,273,978 - 489,910,228
Total comprehensive income
Net profit - - - - - 550,698,958 - 550,698,958
Other comprehensive income - - (363,750) - - - (363,750)
Total comprehensive income for the year - - (363,750) - 550,698,958 - 550,335,208
Profit distribution
Distribution to shareholders 4(37) - - - - (60,424,980) - (60,424,980)
Balance at 31 December 2020 863,214,000 839,442,490 (11,759,250) 431,607,000 8,863,969,769 - 10,986,474,009
Legal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
79
JIANGLING MOTORS CORPORATION, LTD.
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB unless otherwise stated)
Other
Capital Surplus
Item Note Share capital comprehensive Retained earnings Total equity
surplus reserves
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 year ended - - (1,221,000) - 443,716,082 442,495,082
31 December 2019
Total comprehensive income
Net profit - - - - 478,244,642 478,244,642
Other comprehensive income - - (1,221,000) - - (1,221,000)
Total comprehensive income - - (1,221,000) - 478,244,642 477,023,642
for the year
Profit distribution
Distribution to shareholders 4(37) - - - - (34,528,560) (34,528,560)
Balance at 31 December 2019 863,214,000 839,442,490 (11,616,750) 431,607,000 9,484,175,533 11,606,822,273
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 year ended - - (405,000) - 547,925,176 547,520,176
31 December 2020
Total comprehensive income
Net profit - - - - 608,350,156 608,350,156
Other comprehensive income - - (405,000) - - (405,000)
Total comprehensive income - - (405,000) - 608,350,156 607,945,156
for the year
Profit distribution
Distribution to shareholders 4(37) - - - - (60,424,980) (60,424,980)
Balance at 31 December 2020 863,214,000 839,442,490 (12,021,750) 431,607,000 10,032,100,709 12,154,342,449
Legal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
80
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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(33).
As at 31 December 2020, the Company’s paid-in capital totalled RMB863,214,000, with
par value of RMB1 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 26 March 2021.
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 (“ECL”) on receivables (Note 2(8)), valuation of inventories (Note 2(9)), depreciation
of fixed assets and amortisation of intangible assets and right-of-use assets (Note 2(11),
(14), (22)), criteria for capitalisation of development expenditures (Note 2(14)), recognition
and measurement of revenue (Note 2(19)), etc.
Key judgements and critical accounting estimates and key assumptions applied by the
Group on the determination of significant accounting policies are set out in Note 2(24).
81
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 year ended 31 December 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 31 December 2020 and their financial performance, cash flows and other information for
the year then ended.
(3) Fiscal year
The Company’s fiscal 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 not involving enterprises 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.
82
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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. If the subsidiaries’ loss for the
current period attributed to the minority shareholders exceeds their share in the opening
shareholder’s equity, the excess will be deducted against the minority interests. 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.
83
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 and other receivables, etc.
84
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 financing receivables, 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. 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 in more than one year as from the
balance sheet date and are expected to be held for over one year are included in other
non-current financial assets, and the others are included in financial assets held for
trading.
85
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 ECL.
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 ECL 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 low 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 low 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 financing receivables 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.
86
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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)
In case the ECL of an individually assessed financial asset can be evaluated with
reasonable cost, the Group determines the ECL based on impairment assessment of an
individual financial asset. In case the ECL 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 ECL for the groupings.
Basis for determining groupings and related provision method are as follows:
Grouping - Bank acceptance notes State-owned banks and joint stock banks
Grouping - Sales of general automobiles Customers of general automobiles
Grouping - Sales of new energy automobiles Customers of new energy automobiles
Grouping - Sales of other automobiles Customers of other automobiles
Grouping - Sales of automobile parts Customers of automobile parts
Grouping - Interest from cash at bank Accrued interest on cash at bank
Grouping - Operating advances and Operating advances and guarantees
guarantees
For accounts receivable that are classified into groupings and notes receivable and
financing receivables arising from sales of goods and rendering of services in the ordinary
course of operating activities, the Group calculates the ECL 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,
financing receivables and other receivables classified into groupings, the Group calculates
the ECL 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.
87
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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.
(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.
88
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 products, 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 inventories
Provision for 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.
89
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 a 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 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 not involving
enterprises under common control, the investment cost shall be the combination cost.
For long-term equity investments acquired not through a business combination, such as
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.
90
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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.
91
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 5 to 10 years 4% 9.6% to 19.2%
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.
92
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 next 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.
93
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 appropriately.
(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)).
94
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 once a year, 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 asset 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
disposal costs 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 once a
year 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 and
termination 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.
95
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 in addition to
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 national debt 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.
96
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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, compensation to suppliers, 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 on 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.
97
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(19) Revenue
The Group manufactures automobiles and automobile parts and sells them to distributors
and end customers. In addition, the Group also provides customers with auto maintenance
and additional quality warranty services. The Group recognises revenue at the amount of
the consideration that is entitled to be charged by the Group as expected when the
customer obtains control over relevant goods or services.
(a) Selling automobiles and automobile parts to distributors and end customers
The Group manufactures automobiles and automobile parts and sells such products to
distributors and end customers. The Group recognises revenue from sales of automobiles
after they are delivered as prescribed in the contract, customers have accepted the
products and the delivery documents have been signed by both parties. The Group
recognises revenue from sales of parts after they are delivered to the designated location
as prescribed in the contract, customers have accepted the products and the delivery
documents have been signed by both parties.
Where two or more obligations are included in a contract between the Group and the
customers, at the beginning date of the contract, the Group allocates the transaction price
to individual obligation in the relative proportion to the individual selling prices of products
or services committed in each individual obligation. When the individual selling price is
unobservable, the Group makes reasonable estimates on the individual selling price with
comprehensive consideration to all available information, and by using market adjustment
method, cost plus method, etc.
The credit periods granted by the Group to distributors and end 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 distributors 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 car maintenance and additional quality assurance
services, and recognizes revenue within a period of time based on the progress of the
performance of the services provided. According to the nature of the service provided, the
performance progress is determined in accordance with the value of the labour provided to
the customer to the customer or the cost of the provided labour to the total labour cost.
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 ECL (Note 2(8)). If the
contract price 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.
98
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 adopts the same presentation method for similar government grants.
Government grants related to ordinary activities are included in operating profit. Otherwise,
they are recorded in non-operating income.
Financial discounts directly received by the Group are deducted against related borrowing
costs.
99
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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.
100
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 represent 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 initially
direct costs, less any lease incentives received. If it is reasonably probable 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, the Group may, instead of recognising right-of-use assets and
lease liabilities, recognise the 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 shall account for a lease modification as a separate lease if both: (1) the
modification extends the scope of the lease by adding the right to use one or more
underlying assets; (2) the increased consideration is equivalent to the amount of the
individual price of the expanded part of the lease scope adjusted according to the contract
conditions.
For a lease modification that is not accounted for as a separate lease, the Group shall
redetermine the lease term at the effective date of the lease modification, and remeasure
the lease liability by discounting the revised lease payments using a revised discount rate,
except for the simplified method for contract changes directly caused by COVID-19. For a
lease modification which narrows the scope of the lease or shortens the lease term, the
Group decreases the carrying amount of the right-of-use asset, and recognises in profit or
loss any gain or loss relating to the partial or full termination of the lease. For other
changes which lead to the remeasurement of lease liabilities, the Group correspondingly
adjusts the carrying amount of the right-of-use asset.
For the rental waivers due to COVID-19 and for the period ended before 30 June 2021
only, the Group applies the simplified method, records the undiscounted waivers in profit or
loss and adjusts lease liability when the agreement is reached to dismiss the original
payment obligation.
101
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(22) Leases (Cont’d)
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 a lessor, the Group has no financing liabilities. When the Group leases free buildings,
the rental income from operating leases is recognized on a straight-line basis during the
lease term.
(23) 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 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.
102
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(24) 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 on applying the accounting policies
(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 only reflects 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.
103
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(24) 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 or end customers. The
Group recognises revenue from sales of automobiles after they are delivered as prescribed
in the contract, distributors or end customers have accepted the products and the delivery
documents have been signed by both parties. The Group recognises revenue from sales of
parts after they are delivered to the designated location as prescribed in the contract,
distributors or end customers have accepted the products and the delivery documents are
signed by both parties. Thereafter, the distributors or end customers own the products,
have the right to set prices independently, and bear the risks from price fluctuation or
damage of the products. The distributors or end 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.
104
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(24) Critical accounting estimates and judgements (Cont’d)
(b) Critical accounting estimates and key assumptions
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 fiscal year are outlined below:
(i) Measurement of ECL
The Group calculates ECL 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 Group considers different
macroeconomic scenarios. In 2020, the weights of “base”, “bad” and “good” are 68%, 16%
and 16% under three economic scenarios respectively for the consideration of forward-
looking information. The Group regularly monitors and reviews important macroeconomic
assumptions and parameters related to the calculation of ECL rate, including the risks of
economic downturn, external market environment, changes of technological environment
and customer, gross domestic product and money supply etc. In 2020, the Group has
considered the uncertainty caused by the COVID-19 and updated relevant assumptions
and parameters accordingly. The key macroeconomic parameters used in each scenario
are listed as follows:
Scenarios
Base Bad Good
Gross domestic product 14.25% 14.15% 14.34%
Money supply 9.20% 7.72% 10.68%
105
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(24) Critical accounting estimates and judgements (Cont’d)
(b) Critical accounting estimates and key assumptions (Cont’d)
(ii) 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 disposal costs and the present value of the future cash flows expected to be derived
from the asset, it shows non-current assets or asset groups are impaired.
The amount of an asset’s fair value less disposal costs was determined by the price of a
sale agreement in a fair trade, less the costs that are directly attributable to the disposal of
the asset. Where there is no sales agreement but there is an active market of assets, the
amount is determined by the market price less the costs that are directly attributable to the
disposal of the asset. The market price of assets is determined by the considerations
provided by the buyer. Where there is no sales agreement or active market of assets, the
amount of an asset’s fair value less disposal costs was determined based on the best
information available, with reference to the latest transaction price or results of similar
assets of the same industry.
Disposal costs include legal cost, taxes and handling fee related to asset disposal, and
direct costs incurred to bring the assets to a saleable state..
106
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(24) Critical accounting estimates and judgements (Cont’d)
(b) Critical accounting estimates and key assumptions (Cont’d)
(iii) Income tax and deferred income tax
The Group is subject to enterprise income tax in multiple regions. There are some
transactions and events for which the ultimate tax treatment is uncertain during the
ordinary course of business. Significant judgement is required from the Group in
determining the provision for income taxes in each of these regions. Where the final tax
outcome of these matters is different from the amounts that were initially recorded, such
differences will impact the income tax and deferred tax provisions in the period in which
such determination is made.
As stated in Note 3(2), the Company is a high-tech enterprise. The “High-Tech Enterprise
Certificate” is effective for three years. Upon expiration, application for high-tech enterprise
assessment should be submitted again to the relevant government authorities. Based on
the past experience of reassessment for high-tech enterprise upon expiration and its actual
conditions, the Company considers that it is able to obtain the qualification for high-tech
enterprises in the next 3 years, and therefore a preferential tax rate of 15% is used to
calculate the corresponding deferred income tax. If the Company cannot obtain the
qualification for high-tech enterprise upon expiration, the Company is subject to a statutory
tax rate of 25% for the calculation of income tax, which further influences the recognised
deferred tax assets, deferred tax liabilities and income tax expenses.
Deferred tax assets are recognised for the deductible tax losses that can be carried
forward to subsequent years to the extent that it is probable that taxable profit will be
available in the future against which the deductible tax losses can be utilised. Taxable
profit that will be available in the future includes the taxable profit that will be realised
through ordinary course of business and the taxable profit that will be increased upon the
reversal of taxable temporary differences incurred in prior periods. Judgements and
estimates are required to determine the time and amounts of taxable profit in the future.
Any difference between the reality and the estimate may result in adjustment to the
carrying amount of deferred tax assets.
(iv) Provisions
The Group undertakes after-sales repair or replacement obligations for automobiles sold
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 the future.
107
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(24) Critical accounting estimates and judgements (Cont’d)
(b) Critical accounting estimates and key assumptions (Cont’d)
(v) Provision for inventories
The Group's inventories are stated at the lower of cost and net realisable value. Net
realisable value of inventories is 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 the management revises the estimated selling price of the inventory, the estimated costs
to be incurred by the time of completion, and the estimated selling expenses and related
taxes, the revised estimated selling price is lower than the currently adopted estimated
selling price, or the revised until The estimated costs, estimated sales expenses, and
related taxes and fees at the completion of the project are higher than the currently
adopted estimates, the Group needs to make provision for inventory.
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.
(25) Significant changes in accounting policies
In 2020, the Ministry of Finance issued the Circular on Accounting Regulations of Rental
Waivers Against COVID-19 (Cai Kuai [2020] No. 10) and the Questions and Answers on
the Implementation of Accounting Standards for Business Enterprises (issued on
December 11, 2020). The Group has adopted the aforementioned notice and
implementation Q&A to prepare the 2020 financial statements. The effects on the financial
statements of the Group and the Company are listed below:
(a) Accounting treatment on the rental waivers related to COVID-19
For the rental waivers that were directly caused by the COVID-19, and agreed with lessees
and lessors respectively for the period ended 30 June 2021, the Group and the Company
as the lessees have applied the practical expedient following the circular above for the
preparation of the financial statements for the year ended on 31 December 2020(Note
4(44)). No impact on the Group and the Company as lessor with the issue of the Circular.
(b) the Questions and Answers on the Implementation of Accounting Standards for Business
Enterprises
The Questions and Answers on the Implementation of Accounting Standards for Business
Enterprises (issued on December 11, 2020) has no impact on the Group's and the
Company's financial reports for the year ended on 31 December 2020.
108
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
3 Taxation
(1) The main categories and rates of taxes applicable to the Group are set out below:
Category Taxation basis Tax rate
Corporate income tax (a) Taxable income 15% and 25%
VAT (b) Taxable value-added amount (Tax 13%, 9% and 6%
payable is calculated by multiplying the
taxable sales amount by the applicable
tax rate less deductible input VAT of
the current period)
Consumption tax (c) Taxable sales amount 3%, 5% and 9%
City maintenance and The payment amount of VAT and 5% and 7%
construction tax (d) 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 Taxation Administration, during the period from 1 January 2018 to 31 December
2020, the cost of newly purchased equipment with the original cost less than RMB5 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 Taxation Administration 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 Taxation Administration and the General Administration of
Customs, the Group’s taxable products sales revenue is subject to the VAT at the rate of
13%. The Group's real estate leasing business is subject to the VAT at the rate of 9%.
The interest income from its wholly-owned subsidiaries is subject to VAT at the rate of 6%.
(c) Pursuant to the Interim Regulations of the People's Republic of China on Consumption Tax
promulgated by the State Council (Order No. 539 of the State Council of the People's
Republic of China) and the Notice of Ministry of Finance and State Taxation Administration
on Adjusting Consumption Tax Policies for Passenger Cars (Cai Shui [2008] No. 105), the
consumption tax rates of the Group's taxable products are 3%, 5% and 9%.
109
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
3 Taxation (Cont’d)
(1) The main categories and rates of taxes applicable to the Group are set out below(Cont’d):
(d) 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 was subject to enterprise income tax at the rate of 15%.
In 2020, except for the Company, the Company’s wholly-owned companies, including JMC
Heavy Duty Vehicle Co., Ltd. (“JMCH”), Taiyuan Jiangling Motive Power Co., Ltd.
(“JMPC”), Jiangling Motor Sales Co., Ltd. (“JMCS”), Shenzhen Fujiang New Energy
Automobile Sales Co., Ltd. (“SZFJ”), and Guangzhou Fujiang New Energy Automobile
Sales Co., Ltd. (“GZFJ”),were subject to the enterprise income tax at the rate of 25%(2019:
25%).
110
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements
(1) Cash and cash equivalents
31 December 2020 31 December 2019
Bank balances (a) 11,121,955,129 8,937,936,658
(a) As at 31 December 2020, cash at bank of the Group deposited with Jiangling Motor Group
Finance Company (“JMCF”) was RMB1,231,825,734 (31 December 2019:
RMB967,750,294) (Note 7(6)), and interest was calculated at 0.455% to 3.30% (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.
(2) Financial assets held for trading
31 December 2020 31 December 2019
Structured Deposits 803,892,985 -
(3) Notes receivable
31 December 2020 31 December 2019
Bank acceptance notes - 85,816,311
(a) In 2020, bank acceptance notes of the Group were endorsed or discounted for the purpose
of daily treasury management, and were therefore classified as financial assets at fair
value through other comprehensive income and recognised as financing receivables (Note
4(5)).
(b) 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 at 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 bank acceptance notes arising from non-performance by these
banks.
(4) Accounts receivable
31 December 2020 31 December 2019
Accounts receivable 3,233,785,212 2,362,312,151
Less: Provision for bad debts (233,902,000) (154,075,531)
2,999,883,212 2,208,236,620
111
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(4) Accounts receivable (Cont’d)
(a) The ageing of accounts receivable is analysed as follows:
31 December 2020 31 December 2019
Within 1 year 2,729,338,870 1,761,105,893
1 to 2 years 18,746,837 584,836,934
2 to 3 years 477,066,625 7,736,444
Over 3 years 8,632,880 8,632,880
3,233,785,212 2,362,312,151
(b) As at 31 December 2020, the five largest accounts receivable aggregated by debtor were
analysed as follows:
Amount of
provision for bad % of total
Balance debts balance
Company 1 1,081,916,003 (2,368,381) 33.46%
Company 2 221,782,778 (1,788,200) 6.86%
Company 3 181,185,294 (380,851) 5.60%
Company 4 89,745,500 (463,481) 2.78%
Company 5 74,480,000 (74,480,000) 2.30%
1,649,109,575 (79,480,913) 51.00%
(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:
31 December 2020
Book balance Provision for bad debts
Amount Lifetime ECL (%) Amount
New energy subsidies
receivable i) 103,180,418 100% (103,180,418)
Receivables for automobiles
ii) 83,112,880 100% (83,112,880)
186,293,298 (186,293,298)
112
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(4) 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):
31 December 2019
Book balance Provision for bad debts
Amount Lifetime ECL (%) Amount
New energy subsidies
receivable i) 20,410,500 100% (20,410,500)
Receivables for automobiles
ii) 89,652,880 100% (89,652,880)
110,063,380 (110,063,380)
i) As at 31 December 2020, government subsidies receivable for new energy automobiles
amounted to RMB103,180,418 (31 December 2019: RMB20,410,500). As the
corresponding new energy vehicles may not meet the corresponding subsidy policy
standards, the Group considered the receivables cannot be collected, therefore, full
provision was made for those receivables.
ii) As at 31 December 2020 and 31 December 2019, since aforesaid companies in debts
had difficulties in operation and were involved in several legal proceedings, the Group
considered the receivables cannot be collected, therefore, full provision was made for
those receivables.
(ii) Accounts receivable for which provision for bad debts is made on the grouping basis are
analysed as follows:
Grouping - Sales of general automobiles:
31 December 2020
Book balance Provision for bad debts
Amount Lifetime ECL (%) Amount
Not overdue 2,092,329,084 0.21% (4,395,983)
Overdue for 1 to 30 days 262,730,035 0.21% (551,996)
Overdue for 31 to 60 days 345,798 6.35% (21,961)
Overdue for 61 to 90 days 1,936,800 10.74% (208,085)
Overdue over 90 days 17,757,747 17.59% (3,123,783)
2,375,099,464 (8,301,808)
113
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(4) 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
Amount Lifetime ECL (%) 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:
31 December 2020
Book balance Provision for bad debts
Amount Lifetime ECL (%) Amount
Not overdue 149,343,763 6.28% (9,378,788)
Overdue for 1 to 30 days - — -
Overdue for 31 to 60 days 194,083,088 14.52% (28,173,753)
Overdue for 61 to 90 days - — -
Overdue over 90 days 3,993,700 16.25% (649,037)
347,420,551 (38,201,578)
31 December 2019
Book balance Provision for bad debts
Amount Lifetime ECL (%) Amount
Not overdue 476,963,589 5.53% (26,383,009)
114
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(4) 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:
31 December 2020
Book balance Provision for bad debts
Amount Lifetime ECL (%) Amount
Not overdue - — -
31 December 2019
Book balance Provision for bad debts
Amount Lifetime ECL (%) 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)
Grouping - Spare parts:
31 December 2020
Book balance Provision for bad debts
Amount Lifetime ECL (%) Amount
Not overdue 288,024,625 0.30% (864,074)
Overdue for 1 to 30 days 21,425,030 0.30% (64,275)
Overdue for 31 to 60 days 11,544,651 0.50% (57,723)
Overdue for 61 to 90 days 1,809,917 0.60% (10,860)
Overdue over 90 days 2,167,676 5.00% (108,384)
324,971,899 (1,105,316)
31 December 2019
Book balance Provision for bad debts
Amount Lifetime ECL (%) 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)
115
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(4) Accounts receivable (Cont’d)
(c) Provision for bad debts (Cont’d)
(iii) The provision for bad debts in the current year amounted to RMB86,397,936, of which
RMB6,540,000 was reversed. The book balance was RMB6,540,000. The significant
amounts collected or reversed were as follows:
Basis and justification for Amount of
Reasons for determining the provision for reversal/ Recovery
reversal/recovery bad debts recovery method
Accounts receivable 1 The actual receipt of The aforesaid companies in 6,540,000 Received
account receivables debts had difficulties in
relating to the provision operation and were involved
for bad debts made in in several legal
the prior period. proceedings, the Group
considered the receivables
cannot be collected,
therefore, full provision was
made for those receivables.
(d) In 2020, RMB31,467 of the book balance of account receivables has been written off by
the Group, and the amount of bad debt reserves is RMB31,467. The reason for write-off is
that the relevant receivables can not be recovered.
(e) As at 31 December 2020 and 31 December 2019, there were no accounts receivable
pledged.
(5) Financing receivables
31 December 2020 31 December 2019
Financing receivables 815,583,669 289,044,373
The Group endorses the bank acceptance notes as required by daily fund management,
which also met the criteria for derecognition, and therefore classified those the 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 was
made on the individual basis, and measured provision for bad debts based on the lifetime
ECL. As at 31 December 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 bank acceptance
notes arising from non-performance by these banks.
As at 31 December 2020, the Group had no bank acceptance notes receivable that have
been endorsed or discounted but not yet matured presented in financing receivables.
As 31 December 2019, financing receivables with a carrying amount of RMB34,196,500
were pledged as collateral for the notes payable of RMB31,400,000 (Note 4(19)).
116
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(5) Financing receivables (Cont’d)
As at 31 December 2020, the notes receivables were endorsed or discounted by the
Group but not matured as follows:
Derecognised Not derecognised
Bank acceptance notes 555,989,673 -
(6) Advances to suppliers
(a) The ageing of advances to suppliers is analysed below:
31 December 2020 31 December 2019
% of total % of total
Amount balance Amount balance
Within 1 year 452,714,683 100% 517,122,502 100%
(b) As at 31 December 2020, the five largest advances to suppliers aggregated by debtor
were analysed as follows:
Amount % of total balance
Company 1 355,529,951 78.53%
Company 2 52,837,056 11.67%
Company 3 15,951,873 3.52%
Company 4 11,120,922 2.46%
Company 5 10,072,073 2.22%
445,511,875 98.40%
(7) Other receivables
31 December 2020 31 December 2019
Interest receivable from cash at bank 60,283,645 32,092,621
Import working capital advances 35,000,000 35,000,000
Advances for gas fee 7,367,141 13,208,651
Deposits receivable 7,152,745 7,280,273
Advances for research and
development projects 4,559,669 6,141,895
Cash advance 761,613 1,530,488
Others 14,082,669 21,076,025
129,207,482 116,329,953
Less: Provision for bad debts (217,909) (346,816)
128,989,573 115,983,137
117
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(7) Other receivables (Cont’d)
(a) The ageing of other receivables is analysed as follows:
31 December 2020 31 December 2019
Within 1 year 128,336,086 113,830,378
Over 1 year 871,396 2,499,575
129,207,482 116,329,953
(b) Provision for losses and changes in book balance statements:
Stage 1 Stage 3
12-month ECL Lifetime ECL
(grouping) (credit-impaired) Total
Provision for Provision for Provision for
Book balance bad debts Book balance bad debts bad debts
31 December 2019 114,128,008 (246,106) 2,201,945 (100,710) (346,816)
Balance increase/(decrease)
in the current year 15,079,474 — (2,201,945) — —
Including: Write-off in the
current year (7,500) — (29,720) — —
Bad debt provision reversed
in the current year — 20,697 — 70,990 91,687
Bad debt provision written off
in the current year — 7,500 — 29,720 37,220
31 December 2020 129,207,482 (217,909) - - (217,909)
The Group had no other receivables transferred from Stage 1 to Stage 3, and no other
receivables reversed from Stage 3 to Stage 1.
118
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(7) Other receivables (Cont’d)
(b) Provision for losses and changes in book balance statements (Cont’d):
As at 31 December 2020 and 31 December 2019, the Group had no other receivables at
Stage 2. The analysis of other receivables at Stage 1 and Stage 3 is stated below:
(i) As at 31 December 2020 and 31 December 2019, the Group had no other receivables with
provision for bad debts on the individual basis.
(ii) As at 31 December 2020 and 31 December 2019, the Group’s other receivables with
provision for bad debts on the grouping basis were analysed below:
Other receivables with provision on the grouping basis at Stage 1:
31 December 2020 31 December 2019
Book Book
balance Provision for losses balance Provision for losses
Provision Provision
Amount ratio Amount Amount ratio Amount
Portfolios of interest
from cash at bank i):
Within 1 year 60,283,645 - - 32,092,621 - -
Grouping - Operating
advances and
deposits:
Within 1 year 68,052,441 0.32% (215,154) 81,737,757 0.30% (245,213)
Over 1 year 871,396 0.32% (2,755) 297,630 0.30% (893)
129,207,482 (217,909) 114,128,008 (246,106)
i) As at 31 December 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 that there was no material credit risk associated with
related interest receivable and thus there was no significant losses on related interest
receivable from non-performance by these banks.
Other receivables with provision on the grouping basis at Stage 3:
31 December 2020 31 December 2019
Book Book
balance Provision for losses balance Provision for losses
Provision Provision
Amount ratio Amount Amount ratio Amount
Grouping - Operating
advances and
guarantees:
Over 1 year - - - 2,201,945 4.57% (100,710)
119
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(7) Other receivables (Cont’d)
(c) RMB91,687 of provision for bad debts was reversed in the current year. The book balance
was RMB8,452,397. 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 2020, RMB37,220 of the book balance of account receivables has been written off by
the Group, and the amount of bad debt reserves is RMB37,220. The reason for write-off is
that the relevant other receivables can not be recovered.
(e) As at 31 December 2020, the five largest other receivables aggregated by debtor were
analysed as follows:
% of total Provision for
Nature Balance Ageing balance bad debts
Advances
classified as
Company 1 expenses 35,201,661 Within 1 year 27.24% (105,605)
Advances
classified as
Company 2 expenses 4,480,000 Within 1 year 3.47% (13,440)
Advances
classified as
Company 3 expenses 4,473,131 Within 1 year 3.46% (22,366)
Advances
classified as
Company 4 expenses 4,096,234 Within 1 year 3.17% (12,289)
Advances
classified as
Company 5 expenses 3,467,920 Within 1 year 2.68% (10,404)
51,718,946 40.02% (164,104)
(8) Inventories
(a) Inventories are summarised by categories as follows:
31 December 2020 31 December 2019
Provision for Carrying Provision for Carrying
Book balance inventories amount Book balance inventories amount
Materials in
transit 98,887,111 - 98,887,111 92,258,083 - 92,258,083
Raw materials 816,201,410 (109,312,198) 706,889,212 928,829,697 (73,152,658) 855,677,039
Work in
progress 268,716,191 (175,387) 268,540,804 158,440,370 (357,692) 158,082,678
Finished goods 815,055,053 - 815,055,053 624,485,048 - 624,485,048
Low cost
consumables 160,969,525 (32,479,143) 128,490,382 168,917,445 (9,812,965) 159,104,480
Materials
processed on
commission 68,743,130 - 68,743,130 57,261,764 - 57,261,764
2,228,572,420 (141,966,728) 2,086,605,692 2,030,192,407 (83,323,315) 1,946,869,092
120
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR EDNED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(8) Inventories (Cont'd)
(b) Provision for inventories is analysed as follows:
Increase in
the current
31 December year Decrease in the current year 31 December
2019 Provision Reversal Write-off 2020
Raw materials(i) (73,152,658) (78,841,927) 5,823,491 36,858,896 (109,312,198)
Work in progress (357,692) (3,133,473) 15,797 3,299,981 (175,387)
Low cost consumables (9,812,965) (29,534,334) 70,647 6,797,509 (32,479,143)
Finished goods - (27,657,320) - 27,657,320 -
(83,323,315) (139,167,054) 5,909,935 74,613,706 (141,966,728)
(i) In 2020, due to the business restructuring plan of JMCH, the Group reserved
RMB64,906,746 of provision for inventories for raw materials related to heavy trucks.
(c) Provision for inventories is as follows:
Reason for current year
Specific basis for determining reversal or write-off of
net realisable value provision for inventories
Raw materials/Work in Based on the estimated The net realizable value of
progress/Low value selling price, less the inventories with provision has
consumables/ estimated costs to completion, increased or sales have been
Finished goods estimated selling and achieved
distribution expenses and
related taxes
(9) Other current assets
31 December 2020 31 December 2019
Taxes Prepaid, Input VAT to be
deducted and to be verified 736,953,815 973,426,066
Others 415,922 -
737,369,737 973,426,066
121
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(10) Long-term equity investments
31 December 2020 31 December 2019
Associate
- Hanon Systems (Nanchang) Co., Ltd. (“Hanon Systems”) 39,496,548 40,934,557
Less: Provision for impairment of long-term equity investments - -
39,496,548 40,934,557
Associate
Movements for the current year
Share of net Cash Ending
Increase or profit/(loss) dividends balance of
31 December decrease in under equity declared by Provision for 31 December Shareholding Voting rights provision for
2019 investment method joint ventures impairment 2020 (%) (%) impairment
Hanon Systems 40,934,557 - (1,438,009) - - 39,496,548 19.15% 33.33% -
Related information of equity in associates is set forth in Note 5(2).
122
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(11) Fixed assets
31 December 2020 31 December 2019
Fixed assets (a) 5,164,260,516 5,714,483,873
Fixed assets pending for disposal (b) 1,695,894 5,704
5,165,956,410 5,714,489,577
(a) Fixed assets
Electronic and
Machinery and other
. Buildings equipment Motor vehicles Moulds 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 year
Transfer from
construction in
progress 34,126,149 355,483,408 12,754,605 161,020,989 411,600,533 974,985,684
Decrease in the
current year
Disposal or
retirement (27,212,732) (157,880,838) (9,511,314) (37,350,631) (77,757,723) (309,713,238)
Other decreases - (7,057,370) (13,404) - (1,545,205) (8,615,979)
31 December
2020 2,300,951,630 4,011,283,000 353,517,996 3,154,261,304 4,004,241,347 13,824,255,277
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 year
Provision (57,270,163) (242,177,779) (34,858,329) (317,870,045) (332,791,697) (984,968,013)
Decrease in the
current year
Disposal or
retirement 3,003,802 127,086,650 6,466,874 30,497,382 59,448,341 226,503,049
Other decreases - 3,828,073 12,867 - 1,324,549 5,165,489
31 December
2020 (573,584,513) (2,390,076,662) (232,596,897) (2,372,671,702) (2,596,189,492) (8,165,119,266)
Provision for
impairment
31 December
2019 - (25,422,141) (120,218) (12,544,916) (3,207,871) (41,295,146)
Increase in the
current year
Provision - (93,871,519) (6,035,889) (336,291,094) (51,332,700) (487,531,202)
Decrease in the
current year
Disposal or
retirement - 24,917,537 86,049 5,820,387 3,126,880 33,950,853
31 December
2020 - (94,376,123) (6,070,058) (343,015,623) (51,413,691) (494,875,495)
Carrying amount
31 December
2020 1,727,367,117 1,526,830,215 114,851,041 438,573,979 1,356,638,164 5,164,260,516
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
123
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(11) Fixed assets (Cont'd)
(a) Fixed assets (Cont'd)
In 2020, depreciation charged to fixed assets amounted to RMB984,968,013 (2019:
RMB969,478,798), of which the depreciation expenses charged in the cost of sales, selling
and distribution expenses, general and administrative expenses and research and
development expenses were RMB747,787,243, RMB2,892,455, RMB166,883,300 and
RMB67,405,015 (2019: RMB790,992,559, RMB3,260,383, RMB115,365,782 and
RMB59,860,074), respectively.
The cost of fixed assets transferred from construction in progress amounted to
RMB974,985,684 (2019: RMB1,042,771,468) (Note 4(12)).
(i) Temporarily idle fixed assets
As at 31 December 2020, the fixed assets with a carrying amount of approximately
RMB16,532,578 (a cost of RMB483,214,712) (31 December 2019: a carrying amount of
approximately RMB6,376,873 and a cost of RMB155,507,908) were temporarily idle due to
the change of business development, product strategies and product process etc. The
analysis is as follows:
Accumulated Provision for Carrying
Cost depreciation impairment amount
Buildings 10,477,140 (4,549,839) - 5,927,301
Machinery and
equipment 55,415,375 (42,163,992) (7,620,412) 5,630,971
Motor vehicles 5,519,385 (2,016,508) (2,636,698) 866,179
Moulds 349,748,814 (24,001,151) (325,670,979) 76,684
Electronic and other
equipment 62,053,998 (44,183,452) (13,839,103) 4,031,443
483,214,712 (116,914,942) (349,767,192) 16,532,578
In 2020, due to the business restructuring plan of JMCH, the Group made a full provision
for impairment of mould, electronic equipment and machinery equipment related to heavy
trucks of RMB338,691,692 with a book value of RMB338,691,692.
(ii) Fixed assets with pending certificates of ownership:
Reasons for not
obtaining certificates of
Carrying amount ownership
Buildings 456,380,649 Pending procedures
124
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(11) Fixed assets (Cont’d)
(b) Fixed assets pending for disposal
31 December 2020 31 December 2019
Electronic and other equipment 1,639,777 3,208
Machinery and equipment 56,117 -
Motor vehicles - 2,496
1,695,894 5,704
(12) Construction in progress
31 December 2020 31 December 2019
Provision for Carrying Provision for Carrying
Book balance impairment amount Book balance impairment amount
Fushan new plant
investment project 522,070,550 - 522,070,550 843,501,521 - 843,501,521
Capacity optimization
project 504,378,481 - 504,378,481 - - -
Engine construction
project 106,148,911 - 106,148,911 132,731,701 - 132,731,701
Construction of
Xiaolan 600 mu
Phase 3 plan 105,196,107 - 105,196,107 35,720,297 - 35,720,297
CX756 project 89,516,432 - 89,516,432 57,798,588 - 57,798,588
Collision Simulation
Laboratory 45,422,684 - 45,422,684 27,073,143 - 27,073,143
N822 project 31,176,961 - 31,176,961 - - -
CX743 conversion
project 26,409,132 - 26,409,132 - - -
V348 conversion
project 23,183,603 - 23,183,603 5,168,412 - 5,168,412
N356 project 13,789,890 - 13,789,890 56,765,898 - 56,765,898
JF8/CX743 project 7,347,943 - 7,347,943 21,392,593 - 21,392,593
Independently
developed gasoline
engine project 1,041,249 - 1,041,249 12,192,019 - 12,192,019
N806 project 622,136 - 622,136 1,837,618 - 1,837,618
Stamping/frame
capacity
improvement
project 137,377 - 137,377 14,273,769 - 14,273,769
J28 project - - - 1,049,999 - 1,049,999
Xiaolan gasoline
engine assembly
Phase 2 project - - - 4,122,311 - 4,122,311
Gasoline engine
processing capacity
expansion project - - - 96,957,862 - 96,957,862
Technology research
institute project - - - 19,292,516 - 19,292,516
Vehicles capacity
investment project - - - 72,757,444 - 72,757,444
Other miscellaneous
and pending
installation projects 59,747,960 (691,646) 59,056,314 96,180,733 (691,646) 95,489,087
1,536,189,416 (691,646) 1,535,497,770 1,498,816,424 (691,646) 1,498,124,778
125
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(12) Construction in progress (Cont’d)
(a) Movement of significant projects of construction in progress
Including:
Borrowing
Transfer to Accumulative costs
fixed assets in Decrease in % of project capitalised capitalised in
Budget 31 December Increase in the the current the current 31 December investment in Progress of borrowing the current Source of
Project name (in RMB 0’000) 2019 current year year year 2020 budget project costs year fund
Fushan new plant investment Self-owned
project 205,200 843,501,521 162,786,231 (482,376,968) (1,840,234) 522,070,550 49% 49% - - funds
Self-owned
Capacity optimization project 179,462 - 505,284,481 (906,000) - 504,378,481 28% 28% - - funds
Self-owned
Engine construction project 67,000 132,731,701 - (13,631,696) (12,951,094) 106,148,911 68% 68% - - funds
Construction of Xiaolan 600 Self-owned
mu Phase 3 plan 20,977 35,720,297 71,290,851 (1,815,041) - 105,196,107 51% 51% - - funds
Self-owned
CX756 project 17,000 57,798,588 42,150,348 (10,432,504) - 89,516,432 59% 59% - - funds
Collision Simulation Self-owned
Laboratory 9,651 27,073,143 43,422,948 (25,073,407) - 45,422,684 73% 73% - - funds
Self-owned
N822 project 16,900 - 31,176,961 - - 31,176,961 18% 18% - - funds
Self-owned
CX743 conversion project 11,006 - 26,540,451 (131,319) - 26,409,132 24% 24% - - funds
Self-owned
V348 conversion project 4,390 5,168,412 20,820,504 (2,805,313) - 23,183,603 60% 60% - - funds
Self-owned
N356 project 11,802 56,765,898 37,064,554 (76,810,562) (3,230,000) 13,789,890 92% 92% - - funds
Self-owned
JF8/CX743 project 13,000 21,392,593 2,523,276 (16,567,926) - 7,347,943 98% 98% - - funds
Independently developed Self-owned
gasoline engine project 43,200 12,192,019 1,418,568 (12,569,338) - 1,041,249 92% 92% - - funds
Self-owned
N806 project 2,860 1,837,618 1,508,997 (2,724,479) - 622,136 70% 70% - - funds
Stamping/frame capacity Self-owned
improvement project 56,778 14,273,769 6,272,348 (20,408,740) - 137,377 81% 81% - - funds
Self-owned
J28 project 6,224 1,049,999 259,235 (1,309,234) - - 83% 83% - - funds
Xiaolan gasoline engine Self-owned
assembly Phase 2 project 3,612 4,122,311 401,954 (4,524,265) - - 92% 92% - - funds
Gasoline engine processing Self-owned
capacity expansion project 16,445 96,957,862 21,343,439 (118,301,301) - - 72% 72% - - funds
126
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(12) Construction in progress (Cont’d)
(a) Movements of significant projects of construction in progress (Cont’d)
Including:
Accumulative Borrowing
Transfer to amount of costs
fixed assets in Decrease in % of project capitalised capitalised in
Budget 31 December Increase in the the current the current 31 December investment in Progress of borrowing the current Source of
Project name (in RMB 0’000) 2019 current year year year 2020 budget project costs year fund
Self-owned
Technology research institute project 18,600 19,292,516 - (11,071,594) (8,220,922) - 100% 100% - - funds
Vehicles capacity investment Self-owned
project 90,200 72,757,444 - (42,832,063) (29,925,381) - 100% 100% - - funds
Self-owned
Other miscellaneous and funds and
pending installation projects 96,180,733 126,455,204 (130,693,934) (32,194,043) 59,747,960 292,897 - loans
1,498,816,424 1,100,720,350 (974,985,684) (88,361,674) 1,536,189,416 292,897
(b) Provision for impairment of construction in progress
31 December Increase in the Decrease in the 31 December
2019 current year current year 2020 Reason for provision
The recoverable
Other miscellaneous and pending amount is lower than
installation projects (691,646) - - (691,646) the book value
127
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(13) Right-of-use assets
Buildings
Cost
31 December 2019 48,809,592
Increase in the current year
New lease contracts 7,114,074
Decrease in the current year
Lease contract expires (13,187,268)
31 December 2020 42,736,398
Accumulated depreciation
31 December 2019 (12,769,701)
Increase in the current year
Provision (14,748,075)
Decrease in the current year
Lease contract expires 13,187,268
31 December 2020 (14,330,508)
Provision for impairment
31 December 2019 -
Increase in the current year -
Decrease in the current year -
31 December 2020 -
Carrying amount
31 December 2020 28,405,890
31 December 2019 36,039,891
In 2020, depreciation of right-of-use assets amounted to RMB14,748,075 (2019 ：
RMB12,769,701), of which RMB11,550,187, RMB3,112,038 and RMB85,850 were
included in cost of sales and selling, distribution expenses and research and development
expenses, respectively(2019：RMB9,868,233 and RMB2,901,468 were included in cost of
sales and selling, distribution expenses respectively).
128
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(14) Intangible assets
After-sales
services
Land use Software use Non-patent management
rights 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
year
Transfer from
construction in
progress - 31,260,212 - - - 31,260,212
Internal research and
development - - 250,127,116 - - 250,127,116
Decrease in the current
year
Disposal - (836,816) - - (48,655) (885,471)
Others(a) (134,684,155) - - - - (134,684,155)
31 December 2020 751,625,667 206,965,791 540,153,070 36,979,184 1,599,516 1,537,323,228
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
year
Provision (18,051,315) (22,449,023) (87,755,287) - - (128,255,625)
Decrease in the current
year
Disposal - 678,796 - - 48,655 727,451
Others(a) 3,153,141 - - - - 3,153,141
31 December 2020 (181,512,922) (130,785,042) (216,248,050) (36,979,184) (1,599,516) (567,124,714)
Provision for impairment
31 December 2019 - - - - - -
Increase in the current
year
Provision(b) - - (38,806,961) - - (38,806,961)
31 December 2020 - - (38,806,961) - - (38,806,961)
Carrying amount
31 December 2020 570,112,745 76,180,749 285,098,059 - - 931,391,553
31 December 2019 719,695,074 67,527,580 161,533,191 - - 948,755,845
In 2020, amortisation charged to intangible assets amounted to RMB128,255,625 (2019:
RMB90,178,977), of which the amounts charged to cost of sales, selling and distribution
expenses, general and administrative expenses, and research and development expenses
were RMB546,138 (2019: RMB502,009), RMB406,143 (2019: RMB339,623),
RMB37,768,698 (2019: RMB34,934,671) and RMB89,534,646 (2019: RMB54,402,674)
respectively.
(a) In 2020, due to the business restructuring plan of JMCH, the subsidiary of the Group,
JMCH, disposed of land related to heavy-duty vehicle research and development projects.
The original book value and net value were RMB134,684,155 and RMB131,531,014
respectively.
(b) In 2020, due to the business restructuring plan of JMCH, the Group has fully accrued an
impairment of RMB38,806,961 for non-patent technology rights related to heavy trucks that
will cease to be used.
129
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(14) Intangible assets (Cont’d)
The Group's development expenditures are set out below:
Decrease in the current year
Increase in Recognised Write off
31 December the current as intangible 31 December
2019 year assets 2020
Automobile products
development project 125,142,080 320,747,780 (250,127,116) (22,289,502) 173,473,242
Less: impairment provision
of development
expenditure - (22,289,502) - 22,289,502 -
125,142,080 173,473,242
Expenditures on research and development of the Group incurred in 2020 amounted to
RMB1,664,559,872 (2019: RMB1,937,077,557) in total, of which RMB1,343,812,092
(2019: RMB1,776,320,646) was recognised in profit or loss for the current period,
RMB147,274,538 (2019: RMB35,614,831) was recognised as intangible assets for the
current period and RMB173,473,242 (2019: RMB125,142,080) was included in the ending
balance of development expenditures. As at 31 December 2020, the intangible assets
developed by the Group accounted for 31% (31 December 2019: 17%) of the carrying
amount of intangible assets.
In 2020, due to the business restructuring plan of JMCH, the provision for the development
expenditure related to the production of heavy trucks was made by the Group at the mount
of RMB22,289,502.
130
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(15) Deferred tax assets and deferred tax liabilities
(a) Deferred tax assets before offsetting
31 December 2020 31 December 2019
Deductible Deductible
temporary temporary
differences differences
and deductible Deferred tax and deductible Deferred tax
tax losses assets losses assets
Accrued expenses
and provisions 3,918,637,644 896,970,479 3,561,590,960 802,898,159
Recoverable losses 2,032,780,205 307,105,716 1,589,820,677 238,495,412
Provision for asset
impairment 897,520,189 140,838,024 246,399,757 39,468,025
Non-patent
technology 108,124,026 23,281,348 64,246,382 16,061,596
Retirement benefits
plan 67,587,000 15,497,050 68,441,000 16,637,150
Deferred income 49,944,625 7,491,694 34,389,578 5,158,437
Employee education
funds unpaid 42,695,014 6,607,339 20,980,066 3,248,820
Others 54,068,775 8,189,817 36,034,838 6,154,413
7,171,357,478 1,405,981,467 5,621,903,258 1,128,122,012
Including:
Expected to be
recovered within
one year
(inclusive) 1,065,699,235 855,992,754
Expected to be
recovered after
one year 340,282,232 272,129,258
1,405,981,467 1,128,122,012
131
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(15) Deferred tax assets and deferred tax liabilities (Cont’d)
(b) Deferred tax liabilities before offsetting
31 December 2020 31 December 2019
Taxable Taxable
temporary Deferred tax temporary Deferred tax
differences liabilities differences liabilities
Depreciation of
fixed assets 1,247,553,627 235,959,055 1,161,290,511 260,407,296
Net losses related
to debt exemption
and equity
transactions
between parent
and subsidiary 682,000,000 102,300,000 - -
Amortisation of
intangible assets 38,367,939 5,779,320 32,088,825 6,968,005
Differences
between the fair
value of the
identifiable net
assets and
carrying amount
arising from
business
combinations not
under common
control 98,780,656 24,695,164 101,359,924 25,339,981
Others 1,095,069 273,767 558,420 139,605
2,067,797,291 369,007,306 1,295,297,680 292,854,887
Including:
Expected to be
recovered within
one year
(inclusive) 147,540,386 47,363,058
Expected to be
recovered after
one year 221,466,920 245,491,829
369,007,306 292,854,887
132
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(15) 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:
31 December 2020 31 December 2019
Deductible losses 171,901,892 952,433,909
Deductible temporary differences 3,119,574 165,067,939
175,021,466 1,117,501,848
(d) Deductible losses that are not recognised as deferred tax assets will be expired in
following years:
31 December 2020 31 December 2019
2020 — 72,469,642
2021 - 115,819,543
2022 - 150,713,078
2023 - 240,550,266
2024 171,901,892 372,881,380
171,901,892 952,433,909
(e) The net balances of deferred tax assets and liabilities after offsetting are as follows:
31 December 2020 31 December 2019
Offsetting Balance after Offsetting Balance after
amount offsetting amount offsetting
Deferred tax assets (242,012,142) 1,163,969,325 (267,514,906) 860,607,106
Deferred tax liabilities (242,012,142) 126,995,164 (267,514,906) 25,339,981
133
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(16) Provision for asset impairment and losses
31 December Increase in the Decrease in the current year 31 December
2019 current year Reversal Write-off 2020
Provision for bad debts of accounts
receivable 154,075,531 86,397,936 (6,540,000) (31,467) 233,902,000
Including: Provision for bad debts on the
individual basis 110,063,380 82,769,918 (6,540,000) - 186,293,298
Provision for bad debts on the
grouping basis 44,012,151 3,628,018 - (31,467) 47,608,702
Provision for bad debts of other receivables 346,816 - (91,687) (37,220) 217,909
Sub-total 154,422,347 86,397,936 (6,631,687) (68,687) 234,119,909
Provision for inventories 83,323,315 139,167,054 (5,909,935) (74,613,706) 141,966,728
Provision for impairment of fixed assets 41,295,146 487,531,202 - (33,950,853) 494,875,495
Provision for impairment of construction in
progress 691,646 - - - 691,646
Provision for impairment of goodwill 89,028,412 - - - 89,028,412
Provision for impairment of intangible assets - 38,806,961 - - 38,806,961
Provision for impairment of development
expenditured - 22,289,502 - (22,289,502) -
Sub-total 214,338,519 687,794,719 (5,909,935) (130,854,061) 765,369,242
368,760,866 774,192,655 (12,541,622) (130,922,748) 999,489,151
134
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(17) Short-term borrowings
31 December 2020 31 December 2019
Credit loan 500,000,000 -
As at December 31, 2020, the interest rate for the short-term loans ranged from 2.05% to
3.15% (December 31, 2019: Nil).
(18) Derivative financial assets and derivative financial liabilities
31 December 2020 31 December 2019
Derivative financial liabilities -
Forward exchange contracts 3,716,727 545,632
As at 31 December 2020 and 31 December 2019, derivative financial liabilities mainly
represented forward exchange contracts.
(19) Notes payable
31 December 2020 31 December 2019
Bank acceptance notes - 31,400,000
As at 31 December 2019, notes payable of JMCH (the subsidiary of the Group) of
RMB31,400,000 were secured by its financing receivables with a carrying amount of
RMB34,196,500 (Note 4(5)).
(20) Accounts payable
31 December 2020 31 December 2019
Payable for spare parts 9,672,652,729 7,874,660,108
Payable for raw and auxiliary
materials 353,563,148 241,509,481
10,026,215,877 8,116,169,589
As at 31 December 2020, accounts payable with ageing over 1 year amounted to
RMB431,202,897 (31 December 2019: RMB329,574,913), which mainly represented
materials payable for which settlement price has not yet been determined, and such
payables had not been finally settled yet.
135
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(21) Contract liabilities
31 December 2020 31 December 2019
Advances for automobiles and
automobile parts 521,367,837 227,774,183
Advances for maintenance and
warranty services 136,685,473 102,109,762
658,053,310 329,883,945
Less: Contract liabilities expected to
be included in revenue after
one year (Note 4(32)) (99,526,464) (61,713,791)
558,526,846 268,170,154
Contract liabilities amounting to RMB268,170,154 (2019: RMB257,892,059) included in the
carrying amount as at 31 December 2019 were transferred to the revenue of 2020,
including advances for automobiles and automobile parts amounting to RMB227,774,183
(2019: RMB212,246,322), and advances for maintenance services amounting to
RMB40,395,971 (2019: RMB45,645,737).
(22) Employee benefits payable
31 December 2020 31 December 2019
Short-term employee benefits
payable (a) 617,598,452 379,453,114
Defined contribution plans
payable (b) 135,699,978 -
Defined benefit plans payable (c) 3,415,000 3,430,000
Termination benefits payable (d) 2,655,176 2,664,176
759,368,606 385,547,290
(a) Short-term employee benefits
Increase in the Decrease in the
31 December 2019 current year current year 31 December 2020
Wages and salaries,
bonus, allowances and
subsidies 333,252,396 1,929,645,659 (1,723,521,174) 539,376,881
Staff welfare 20,408,093 112,366,522 (105,902,110) 26,872,505
Social security
contributions - 86,139,884 (82,262,418) 3,877,466
Including: Medical
insurance - 75,909,857 (75,909,857) -
Work injury
insurance - 4,436,547 (559,081) 3,877,466
Maternity
insurance - 5,793,480 (5,793,480) -
Housing funds - 140,816,275 (140,816,275) -
Labour union funds and
employee education
funds 25,792,625 59,497,302 (37,818,327) 47,471,600
Other short-term
employee benefits - 5,051,802 (5,051,802) -
379,453,114 2,333,517,444 (2,095,372,106) 617,598,452
136
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(22) Employee benefits payable (Cont’d)
(b) Defined contribution plans
Increase in the Decrease in the
31 December 2019 current year current year 31 December 2020
Basic pensions - 150,589,504 (18,969,037) 131,620,467
Supplementary pensions - 10,400,000 (10,400,000) -
Unemployment
insurance - 4,706,327 (626,816) 4,079,511
- 165,695,831 (29,995,853) 135,699,978
(c) Defined benefit plans
Increase in the Decrease in the
31 December 2019 current year current year 31 December 2020
Post-retirement benefits
payable (Note 4(31)) 3,430,000 2,883,757 (2,898,757) 3,415,000
(d) Termination benefits payable
31 December 2020 31 December 2019
Early retirement benefits payable
(Note 4(31)) 1,317,000 1,326,000
Other termination benefits (i) 1,338,176 1,338,176
2,655,176 2,664,176
(i) In 2020, other termination benefits paid by the Group for termination of the employment
relationship were RMB15,631,166 (2019: RMB8,423,213).
137
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(23) Taxes payable
31 December 2020 31 December 2019
Enterprise income tax payable 88,142,260 75,018,772
Consumption tax payable 78,952,885 99,080,033
Unpaid VAT 26,439,025 -
Land use tax payable 5,746,521 5,399,750
City maintenance and construction
tax payable 2,005,985 -
Educational surcharge payable 1,432,847 -
Others 15,725,704 19,278,549
218,445,227 198,777,104
(24) Other payables
31 December 2020 31 December 2019
Promotion expenses 2,213,691,765 1,848,583,722
Research and development project
expenses 673,089,112 1,016,587,970
Construction expenses 290,525,592 372,865,433
Advertising and new product
planning fees 161,524,470 208,380,148
Goods transportation expenses 148,274,852 231,965,841
Deposit payable 97,973,078 95,201,388
Technological transformation project
expenses 21,530,592 17,135,118
Consulting fees 10,298,545 5,425,621
Ordinary share dividends payable 6,463,836 6,790,176
Trademark management fees 2,485,538 18,127,537
Others 527,992,245 324,203,884
4,153,849,625 4,145,266,838
138
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(24) Other payables (Cont’d)
As at 31 December 2020, other payables with ageing over 1 year of RMB819,824,836 (31
December 2019: RMB721,562,900) 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 and service providers, and
engineering projects and research and development projects that have not yet been
accepted and completed.
(25) Current portion of non-current liabilities
31 December 2020 31 December 2019
Current portion of lease liabilities
(Note 4(28)) 10,481,886 13,386,576
Current portion of long-term
borrowings (Note 4(27)) 427,277 456,830
10,909,163 13,843,406
(26) Other current liabilities
31 December 2020 31 December 2019
Provisions expected to be settled
within one year (Note 4(29)) 343,121,509 234,948,279
Others 67,777,819 29,610,644
410,899,328 264,558,923
139
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(27) Long-term borrowings
31 December 2020 31 December 2019
Secured borrowings 2,990,943 3,654,644
Less: Current portion of long-term
borrowings (Note 4(25)) (427,277) (456,830)
2,563,666 3,197,814
The above secured borrowings were long-term borrowings amounting to USD 458,389
secured by JMCF, borrowed from Industrial and Commercial Bank of China (“ICBC”),
Nanchang Ganjiang Sub-branch with interest payable every half year and the principal was
paid in instalments between 10 December 2007 and 27 October 2027. In 2020, the interest
rate of long-term borrowings was 1.5% (2019: 1.5%).
31 December 2020 31 December 2019
Amount in Amount in
Starting Maturity Interest foreign RMB foreign RMB
date date Currency rate (%) currency equivalent currency equivalent
27 27
ICBC Nanchang February October
Ganjiang Sub-branch 1998 2027 USD 1.5% 458,389 2,990,943 523,873 3,654,644
(28) Lease liabilities
31 December 2020 31 December 2019
Lease liabilities 29,480,838 35,978,828
Less: Current portion of non-
current liabilities (Note
4(25)) (10,481,886) (13,386,576)
18,998,952 22,592,252
(a) As at December 31, 2020, the lease payment related to the lease contract that the Group
has signed but has not yet begun to execute is RMB361,843,200((Note 11 (3))(December
31, 2019:Nil).
140
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(29) Provisions
Increase in the Decrease in the
31 December 2019 current year current year 31 December 2020
Product warranties i) 401,635,739 470,211,035 (360,227,762) 511,619,012
provision for contracts - 101,866,132 (74,467,496) 27,398,636
401,635,739 572,077,167 (434,695,258) 539,017,648
Less: Provisions
expected to be
settled within one
year (Note 4(26)) (234,948,279) (343,121,509)
166,687,460 195,896,139
i) Product warranties are expenses expected to be incurred during the warranty period from free
after-sales services, product warranty and other services for vehicles sold.
(30) Deferred income
31 December Increase in the Decrease in the 31 December
2019 current year current year 2020 Reason
Government
grants (a) 34,389,578 26,574,501 (11,019,454) 49,944,625 Subsidy for projects
(a) Government grants
31 December Increase in 31 December
2019 the current 2020
year Decrease in the current year
Recognised in Offset financial Asset related/
other income expenses Income related
Research and
development-
related subsidies 34,065,060 15,020,000 (1,565,079) - 47,519,981 Income related
Government interest
subsidies - 11,214,500 - (9,454,375) 1,760,125 Income related
Others 324,518 340,001 - - 664,519 Income related
34,389,578 26,574,501 (1,565,079) (9,454,375) 49,944,625
141
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(31) Long-term employee benefits payable
31 December 2020 31 December 2019
Supplementary retirement benefits
and early-retirement benefits
eligible for recognition of
provisions 67,587,000 68,441,000
Less: Payable within one year (4,732,000) (4,756,000)
62,855,000 63,685,000
The retirement and early-retirement benefits payable within one year are included in
employee benefits payable(Note 4(22)(c), (d)).
For retired and early-retired employees, the Group provides them with 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
31 December 2020 31 December 2019
Opening balance 68,441,000 68,020,000
Cost of defined benefit plan
recognised in profit or loss for
the current period
- Current service cost 1,242,000 1,203,000
- Past service cost - (1,523,000)
- Actuarial (gains)/losses
recognised immediately (843,000) 1,420,000
- Net interest 2,324,000 2,300,000
Remeasurement of net liabilities
for defined benefit plan
- Actuarial losses 485,000 1,623,000
Other movements
- Benefits paid (4,062,000) (4,602,000)
Ending balance 67,587,000 68,441,000
142
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(31) Long-term employee benefits payable (Cont'd)
(b) The actuarial assumptions used to determine the present value of defined benefit plan
obligations
31 December 2020 31 December 2019
Discount rates 3.75% 3.5%
Inflation rate 2.00% 2.0%
Salaries and benefits growth rates 0%-6% 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.
(c) The sensitivity analysis of the actuarial assumptions used to determine the present value
of defined benefit plan obligations is as follows:
Effect on present value of defined benefit
Variation in obligations
assumptions Assumed increase Assumed decrease
Discount rates 0.5% Decrease of 5.6% Increase of 6.3%
Inflation rate 0.5% Increase of 2.3% Decrease of 2.1%
The above sensitivity analysis is based on a change in an assumption while holding all
other assumptions constant. In practice, changes in some of the assumptions may be
correlated. The projected unit credit method is also utilised in calculating the present value
of the defined benefit obligations in the analysis.
(d) Supplementary retirement and early-retirement benefits expose the Group to various risks,
mainly including risk of changes in the interest rate of treasury bonds, inflation risk, etc.
Decline in the interest rate of treasury bonds will lead to an increase in defined benefit plan
liabilities. Supplementary retirement and early-retirement benefits obligations keep pace
with inflation, and the rise in inflation will increase the defined benefit plan liabilities.
(32) Other non-current liabilities
31 December 2020 31 December 2019
Contract liabilities expected to be
included in revenue after one year
(Note 4(21)) 99,526,464 61,713,791
Others - 80,000
99,526,464 61,793,791
143
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(33) Share capital
Movements for the current year
31 December Shares newly Transfer from 31 December
2019 issued Bonus share capital surplus Others Sub-total 2020
Shares subject to trading restriction -
Other domestic shares
Including: Shares held by domestic non-state-
owned legal persons 749,940 - - - (4,800) (4,800) 745,140
Shares held by domestic natural
persons 975 - - - 4,725 4,725 5,700
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 31 December 2020, there were 750,840
shares currently unavailable for trading. During the reporting period, 75 shares with trading restrictions were released from the restricted conditions
on 1st January 2020 and converted to unrestricted ordinary shares denominated in RMB.
144
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(33) Share capital (Cont’d)
Movements for the current year
31 December Shares newly Transfer from 31 December
2018 issued Bonus share capital surplus Others Sub-total 2019
Shares subject to trading restriction -
Other domestic shares
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
145
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(34) Capital surplus
Decrease in
31 December Increase in the the current 31 December
2019 current year year 2020
Share premium 816,609,422 - - 816,609,422
Other capital
surplus 22,833,068 - - 22,833,068
839,442,490 - - 839,442,490
Decrease in
31 December Increase in the the current 31 December
2018 current year year 2019
Share premium 816,609,422 - - 816,609,422
Other capital
surplus 22,833,068 - - 22,833,068
839,442,490 - - 839,442,490
146
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(35) Other comprehensive income
Other comprehensive income in the income statement for the year ended
Other comprehensive income in the balance sheet 31 December 2020
Less: Transfer-
out of previous
Attributable to Amount incurred other Attributable to
the parent before income comprehensive the parent
31 December company after 31 December tax for the income in the Less: Income company after
2019 tax 2020 current year current year tax expenses tax
Other comprehensive income items which will not be
reclassified to profit or loss
Actuarial gains on defined benefit plans (11,395,500) (363,750) (11,759,250) (485,000) - 121,250 (363,750)
Other comprehensive income in the income statement for the year ended
Other comprehensive income in the balance sheet 31 December 2019
Less: Transfer-
out of previous
Attributable to Amount incurred other Attributable to
the parent before income comprehensive the parent
31 December company after 31 December tax for the income in the Less: Income company after
2018 tax 2019 current year current year tax expenses 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)
147
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(36) Surplus reserve
Decrease in
31 December Increase in the the current 31 December
2019 current year year 2020
Statutory surplus
reserve 431,607,000 - - 431,607,000
Decrease in
31 December Increase in the the current 31 December
2018 current year year 2019
Statutory surplus
reserve 431,607,000 - - 431,607,000
In accordance with the Company Law of the People's Republic of China, 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.
(37) Retained earnings
2020 2019
Retained earnings 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 year 550,698,958 147,812,078
Less: Ordinary share dividends
payable (a) (60,424,980) (34,528,560)
Retained earnings at the end of the
year 8,863,969,769 8,373,695,791
(a) According to the resolution of the general meeting of shareholders on June 19, 2020, the
Company distributed cash dividends of RMB 0.07 per share to all shareholders, calculated
on the basis of 863,214,000 issued shares, for a total of RMB60,424,980.
According to the resolution of the board of directors on March 26th, 2021, the board of
directors proposed that the Company distribute cash dividends of RMB3.476 per share to
all shareholders. Based on the issued shares of 863,214,000, the proposed cash dividends
totalled RMB3,000,531,864.
148
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(38) Revenue and cost of sales
2020 2019
Revenue from main business 32,535,277,434 28,708,193,465
Revenue from other business 560,456,231 465,442,797
33,095,733,665 29,173,636,262
2020 2019
Cost of sales from main business 26,984,653,662 24,098,375,368
Cost of sales from other business 533,856,251 432,481,782
27,518,509,913 24,530,857,150
(a) Revenue and cost of sales from main business
2020 2019
Revenue from Cost of sales from Revenue from Cost of sales from
main business main business main business main business
Sales of automobiles 30,666,834,098 25,638,598,860 26,252,631,564 22,303,937,803
Sales of automobile parts 1,774,007,492 1,250,772,343 2,351,979,223 1,696,042,274
Automobile maintenance
services 94,435,844 95,282,459 103,582,678 98,395,291
32,535,277,434 26,984,653,662 28,708,193,465 24,098,375,368
(b) Revenue and cost of sales from other business
2020 2019
Revenue from Cost of sales from Revenue from Cost of sales from
other business other business other business other business
Sales of materials 409,363,603 385,388,976 315,559,450 286,552,984
Others 151,092,628 148,467,275 149,883,347 145,928,798
560,456,231 533,856,251 465,442,797 432,481,782
149
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(38) Revenue and cost of sales (Cont’d)
(c) The Group's revenue in 2020 was broken down as follows:
2020
Automobile
Automobile maintenance Materials and
Automobiles parts services others Total
Revenue from main
business 30,666,834,098 1,774,007,492 94,435,844 - 32,535,277,434
Including: Recognised at
a time point 30,666,834,098 1,774,007,492 - - 32,440,841,590
Recognised
within a
certain
period - - 94,435,844 - 94,435,844
Revenue from other
business - - - 560,456,231 560,456,231
30,666,834,098 1,774,007,492 94,435,844 560,456,231 33,095,733,665
2019
Automobiles Automobile parts Automobile Materials and Total
maintenance others
services
Revenue from main
business 26,252,631,564 2,351,979,223 103,582,678 - 28,708,193,465
Including: Recognised at
a time point 26,252,631,564 2,351,979,223 - - 28,604,610,787
Recognised
within a certain
period - - 103,582,678 - 103,582,678
Revenue from other
business - - - 465,442,797 465,442,797
26,252,631,564 2,351,979,223 103,582,678 465,442,797 29,173,636,262
(i) As at 31 December 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
RMB136,685,473(31 December 2019: RMB102,109,762), which was expected to be
recognised between 2021 and 2026.
(39) Taxes and surcharges
2020 2019
Consumption tax 630,470,931 560,478,994
City maintenance and construction
tax 88,105,730 71,583,303
Educational surcharge 77,624,969 64,649,230
Land use tax 18,174,629 21,290,485
Real estate tax 14,724,040 18,495,809
Stamp tax 8,275,503 7,143,285
Others 501,206 1,054,025
837,877,008 744,695,131
150
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(40) Selling and distribution expenses
2020 2019
Warranties 470,211,035 383,567,832
Promotion expenses 341,416,881 276,225,281
Advertising and new product
planning fees 246,766,019 404,919,782
Salaries and benefits 146,679,411 138,963,362
Sales network construction
expenses 134,851,706 151,437,910
Storage expenses 37,410,599 19,265,911
Packaging material expenses 34,225,598 44,306,954
Depreciation and amortisation
expenses 6,410,636 6,501,474
Others 126,765,143 100,694,688
1,544,737,028 1,525,883,194
(41) General and administrative expenses
2020 2019
Salaries and benefits 536,931,919 499,408,346
Depreciation and amortisation
expenses 204,651,998 150,300,453
Trademark management fees 46,878,508 80,078,942
Repair expenses 30,893,355 32,490,413
General office expenses 20,691,777 20,884,776
Travelling expenses 9,287,476 11,352,367
Others 163,012,140 161,051,508
1,012,347,173 955,566,805
(42) Research and development expenses
2020 2019
Salaries and benefits 450,728,077 464,331,464
Design fee 239,481,179 578,195,638
Research and development
expenses 224,124,643 174,477,960
Depreciation and amortisation
expenses 157,025,511 114,262,748
Materials expenses 91,583,428 136,744,959
Others 180,869,254 308,307,877
1,343,812,092 1,776,320,646
151
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(43) Financial expenses
2020 2019
Interest costs 27,293,064 946,877
Add: Interest expenses on lease
liabilities 1,444,481 1,957,078
Less: Government subsidies (Note
4(30)) (9,454,375) -
Interest expenses 19,283,170 2,903,955
Less: Interest income from bank
deposits (207,633,739) (193,072,270)
Fund occupation fee (a) (7,628,722) (10,877,889)
Interest income (215,262,461) (203,950,159)
Exchange gains or losses (2,841,917) 6,137,676
Others 1,253,695 5,401,565
(197,567,513) (189,506,963)
(a) The fund occupation fee is the fee paid to the Group at the rate agreed by both parties
when the distributors delay payment or settle with a bill of exchange.
(44) 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:
2020 2019
Changes in inventories of finished
goods and work in progress (331,803,127) 185,845,946
Consumed raw materials, low value
consumables, etc. 24,178,117,051 21,393,300,207
Employee benefits 2,517,567,518 2,333,270,205
Depreciation of fixed assets 984,968,013 969,478,798
Amortisation of intangible assets 128,255,625 90,178,977
Depreciation of right-of-use assets 14,748,075 12,769,701
Transportation expenses 672,534,669 699,932,816
Warranties 470,211,035 383,567,832
Promotion expenses 341,416,881 276,225,281
Advertising and new product
planning fees 246,766,019 404,919,782
Design fee 239,481,179 578,195,638
Research and development
expenses 224,124,643 174,477,960
Fixed asset repair and maintenance
expenses 153,676,679 149,050,704
Others 1,579,341,946 1,137,413,948
31,419,406,206 28,788,627,795
As stated in Note 2(22), the Group directly recognises the lease payments of short-term
lease and low value lease into profit or loss for the current period. In 2020, the amount was
RMB898,733 (2019: RMB6,092,928).
152
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(44) Expenses by nature (Cont’d)
Due to the impact of COVID-19, the lessor exempted the Group from paying the rental of
RMB442,611 for the first quarter of 2020, and the Group has deducted the above rental
waivers against the rental expense for the current period.
(45) Asset impairment losses
2020 2019
Impairment of fixed assets 487,531,202 21,892,635
Provision for inventories 133,257,119 67,040,651
Intangible asset impairment loss 38,806,961 -
Development expenditure impairment 22,289,502 -
Impairment of goodwill - 3,462,208
681,884,784 92,395,494
(46) Credit impairment losses
2020 2019
Losses on bad debts of accounts
receivable 79,857,936 131,797,715
Losses on bad debts of other
receivables (91,687) (96,642)
79,766,249 131,701,073
(47) Other income
Asset related/
2020 2019 Income related
Subsidy for operating
activities 240,480,710 24,677,394 Income related
Research and
development activities
related subsidies 27,741,579 222,202,940 Income related
268,222,289 246,880,334
153
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(48) Investment income
2020 2019
Investment income from financial
assets held for trading 77,849,662 47,385,707
Losses on discount of financing
receivables (3,811,706) -
Investment loss from forward
exchange settlement (2,421,091) (9,087,342)
Investment income from long-term
equity investment under equity
method (1,438,009) 822,880
70,178,856 39,121,245
There is no significant restriction on the remittance of investment income to the Group.
(49) Gains on changes in fair value
2020 2019
Financial assets at fair value through
profit or loss —
Structural deposits 3,892,985 -
Derivative financial assets and
derivative financial liabilities -
Losses on forward exchange
contracts (3,171,095) (1,524,631)
721,890 (1,524,631)
(50) Gains on disposal of assets
Amount recognised
in non-recurring
2020 2019 profit or loss in 2020
Losses on disposal of
assets (713,072) (794,016) (713,072)
154
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(51) Non-operating income
Amount recognised
in non-recurring
2020 2019 profit or loss in 2020
Compensation and
penalty income 2,999,142 2,340,262 2,999,142
Government grants (a) 80,000 219,937,800 80,000
Others 8,555,775 562,158 8,555,775
11,634,917 222,840,220 11,634,917
(a) Details of government grants
Asset related/
2020 2019 Income related
Enterprise development
support fund - 219,857,800 Income related
Others 80,000 80,000 Income related
80,000 219,937,800
(52) Non-operating expenses
Amount recognised
in non-recurring
2020 2019 profit or loss in 2020
Losses on scrapping
and disposal of
assets(i) 167,067,708 3,418,706 167,067,708
Donations 5,198,781 2,019,093 5,198,781
Others 487,056 1,823,658 487,056
172,753,545 7,261,457 172,753,545
(i) In 2020, due to the business restructuring plan of JMCH, the disposal losses of land
and above-ground buildings amount to RMB141,186,984 was recognised in losses on
scrapping and disposal of assets..
(53) Income tax expenses
2020 2019
Current income tax calculated based
on tax law and related regulations 102,545,094 74,962,692
Deferred income tax (201,585,786) (117,789,343)
(99,040,692) (42,826,651)
155
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(53) 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:
2020 2019
Total profit 451,658,266 104,985,427
Income tax calculated at applicable
tax rates (65,608,806) (18,225,690)
Effect of change in the tax rates (38,461,745) 37,703,069
Tax credit (289,629) (8,791)
Super deduction (117,791,694) (151,180,929)
Non-taxable income 215,701 (984,303)
Equity transactions and debt
exemption between parent and
subsidiary 302,000,000 -
Costs, expenses and losses not
deductible for tax purposes 51,214,472 588,545
Utilisation of previously
unrecognised deductible
temporary differences (40,487,091) (17,341,380)
Deductible losses for which no
deferred tax asset was recognised - 106,622,828
Utilisation of the deductible loss of
the unrecognized deferred tax
asset in the previous period (189,831,900) -
Income tax expenses (99,040,692) (42,826,651)
(54) 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:
2020 2019
Consolidated net profit attributable to
ordinary shareholders of the
parent company 550,698,958 147,812,078
Weighted average number of
ordinary shares outstanding
issued by the Company 863,214,000 863,214,000
Basic earnings per share 0.64 0.17
156
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(54) Earnings per share (Cont’d)
(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 2020 (2019: Nil),
diluted earnings per share equalled to basic earnings per share.
(55) Notes to the cash flow statement
(a) Cash received relating to other operating activities
2020 2019
Government grants 291,706,526 440,897,712
Deposits for bidding 66,942,375 38,137,082
Input VAT refund 39,282,451 19,271,589
Deposits from distributors 32,766,930 81,795,814
Quality claims 678,920 10,108,256
Others 14,418,072 29,065,784
445,795,274 619,276,237
(b) Cash paid relating to other operating activities
2020 2019
Research and development
expenses 1,019,457,533 1,160,508,740
Warranties 403,917,538 366,721,293
Advertising expenses 309,656,829 306,425,361
Promotion expenses 301,960,017 264,854,581
Maintenance expenses 82,439,384 100,799,844
Guarantees 68,989,781 106,073,407
Travel expenses 33,806,899 42,890,952
Others 626,665,927 742,507,490
2,846,893,908 3,090,781,668
(c) Cash received relating to other investing activities
2020 2019
Interest from cash at bank 179,442,715 198,902,863
Interest from acceptance notes 5,836,694 6,951,334
Interest from credit sales 3,696,018 3,706,344
Investment income from forward
exchange settlement 2,381,388 3,855,024
191,356,815 213,415,565
157
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(55) Notes to the cash flow statement (Cont’d)
(d) Cash paid relating to other financing activities
2020 2019
Repayments of lease liabilities 12,717,923 14,787,842
Others 33,154 19,043
12,751,077 14,806,885
(56) 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
2020 2019
Net profit 550,698,958 147,812,078
Add: Asset impairment losses (Note
4(45)) 681,884,784 92,395,494
Credit impairment losses (Note
4(46)) 79,766,249 131,701,073
Depreciation of fixed assets
(Note 4(11)) 984,968,013 969,478,798
Amortisation of intangible
assets (Note 4(14)) 128,255,625 90,178,977
Depreciation of right-of-use
assets (Note 4(13)) 14,748,075 12,769,701
Increase in provisions 137,381,909 49,081,688
Losses on disposal of long-
term assets 167,780,780 4,212,722
Financial expenses (198,304,506) (190,393,435)
Investment income (Note
4(48)) (70,178,856) (39,121,245)
(Gains)/losses on changes in
fair value (Note 4(49)) (721,890) 1,524,631
Increase in deferred tax assets (303,240,969) (117,105,097)
Increase/(Decrease) in
deferred tax liabilities 101,655,183 (684,246)
(Increase)/Decrease in
inventories (325,788,721) 464,079,429
(Increase)/Decrease in
operating receivables (1,117,125,510) 225,970,753
Increase in operating payables 2,866,563,704 894,965,917
Net cash flows from operating
activities 3,698,342,828 2,736,867,238
158
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(56) Supplementary information to the cash flow statement (Cont’d)
(b) Net increase in cash
2020 2019
Cash at the end of the year 11,121,955,129 8,937,936,658
Less: Cash at the beginning of the
year (8,937,936,658) (7,616,879,976)
Net increase in cash 2,184,018,471 1,321,056,682
(c) Cash and cash equivalents
31 December 2020 31 December 2019
Bank deposit available for payment
at any time 11,121,955,129 8,937,936,658
(57) Monetary items denominated in foreign currency
31 December 2020
Amounts
denominated in
foreign Translation
currencies exchange rate Amounts in RMB
Long-term borrowings -
USD 458,389 6.5249 2,990,943
Other payables -
USD 10,871,700 6.5249 70,936,756
EUR 183,138 8.0250 1,469,682
72,406,438
159
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
5 Interests in other entities
(1) Interests in subsidiaries
Structure of the enterprise group
Subsidiaries Place of major business Place of registration Nature of business Shareholding (%) Method of acquisition
Direct Indirect
Retail, wholesale and lease of
JMCS Nanchang, Jiangxi Nanchang, Jiangxi automobiles 100% — Set up by investment
Business combinations not involving
JMCH Taiyuan, Shanxi Taiyuan, Shanxi Manufacture and sales of automobiles 100% — enterprises under common control
Retail, wholesale and lease of
SZFJ Shenzhen, Guangdong Shenzhen, Guangdong automobiles 100% — Set up by investment
Guangzhou, Guangzhou, Retail, wholesale and lease of
GZFJ Guangdong Guangdong automobiles 100% — Set up by investment
Establishment through split-off by
JMPC (i) Taiyuan, Shanxi Taiyuan, Shanxi Manufacture and sales of engines 100% — JMCH
(i) In 2020, according to the resolution of the Board of Directors’ meeting on June 19, 2020, JMPC was established by split-off of JMCH. The
Company directly holds 100% equity of JMPC and JMCH respectively after the split.
160
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
5 Interests in other entities (Cont’d)
(2) Interests in associates
Summarised information of insignificant associates
2020 2019
Aggregated carrying amount of investments 39,496,548 40,934,557
Aggregate of the following items in proportion
Net profit (i) (1,438,009) 822,880
Other comprehensive income (i) - -
Total comprehensive income (1,438,009) 822,880
(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 Company 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.
161
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions
(1) Information of major shareholders
(a) General information of major shareholders
Type of Place of Legal Code of
enterprise registration representative Nature of business organisation
State-owned Nanchang, Investment and asset 91360125MA
JIC enterprise China Qiu Tiangao management 38LUR91F
Ford Motor Company Foreign William Clay Manufacture and sales
(“Ford”) enterprise United States Ford, Jr. of automobiles N/A
(b) Registered capital and changes in major shareholders
31 December Increase in the Decrease in the 31 December
2019 current year current year 2020
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 major
shareholders
31 December 2020 31 December 2019
Shareholding Voting rights Shareholding Voting rights
(%) (%) (%) (%)
JIC 41.03% 41.03% 41.03% 41.03%
Ford 32% 32% 32% 32%
(2) Information of subsidiaries
The general information and other related information of subsidiaries are set out in Note
5(1).
(3) Information of associates
The information of associates that have related party transactions with the Group is set out
in Note 4(10).
162
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Cont'd)
(4) Information of other related parties
Related parties Relationship with the Group
JMCG Shareholder of JIC
Chongqing Changan Automobile Co., Ltd. Shareholder of JIC
JMCG Jingma Motors Co., Ltd. Wholly-owned subsidiary of JMCG
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. Wholly-owned subsidiary of JMCG
Jiangxi Lingrui Recycling Resources Development
Corporation Wholly-owned subsidiary of JMCG
Nanchang Gear Co., Ltd. Wholly-owned subsidiary of JMCG
Jiangling Material Co., Ltd. Wholly-owned subsidiary of JMCG
Jiangxi JMCG Industry Co., Ltd. Wholly-owned subsidiary of JMCG
JMCG Property Management Co. Wholly-owned subsidiary of JMCG
Jiangxi Jiangling Chassis Co., Ltd. Wholly-owned subsidiary of JMCG
Nanchang JMCG Shishun Logistics Co., Ltd. Wholly-owned subsidiary of JMCG
JMCF Wholly-owned subsidiary of JMCG
Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd. Wholly-owned subsidiary of JMCG
Nanchang JMCG Xinchen Auto Component Co., Ltd. Wholly-owned subsidiary of JMCG
Fuzhou Shishun Logistics Co., Ltd. Wholly-owned subsidiary of JMCG
Jingdezhen Shishun Logistics Co., Ltd. Wholly-owned subsidiary of JMCG
Ford Global Technologies,LLC Wholly-owned subsidiary of Ford
Ford Motor (China) Co., Ltd. Wholly-owned subsidiary of Ford
Ford Motor Research & Engineering (Nanjing) Co., Ltd. Wholly-owned subsidiary of Ford
Ford Motor Co. Thailand Ltd. Wholly-owned subsidiary of Ford
Ford Otomotiv Sanayi A.S. Holding subsidiary of Ford
Auto Alliance (Thailand) Co., Ltd. Holding subsidiary of Ford
Ford Vietnam Limited Holding subsidiary of Ford
Changan Ford Automobile Co., Ltd. Joint venture of Ford
Subsidiary under indirect control of
Nanchang JMCG Frame Co., Ltd JMCG
Subsidiary under indirect control of
Nanchang JMCG Liancheng Auto Component Co., Ltd. JMCG
Subsidiary under indirect control of
Jiangling Motor Electricity Vehicle Sales Co.,Ltd JMCG
163
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Cont'd)
(4) Information of other related parties (Cont’d)
Related parties Relationship with the Group
Nanchang Lianda Machinery Co., Ltd. Subsidiary under indirect control of JMCG
Jiangling Aowei Automobile Spare Part Co., Ltd. Subsidiary under indirect control of JMCG
Jiangxi JMCG Boya brake system Co., Ltd Subsidiary under indirect control of JMCG
Jiangxi JMCG Shangrao Industrial Co., Ltd. Subsidiary under indirect control of JMCG
NC.Gear Forging Factory Subsidiary under indirect control of JMCG
JMCG Jiangxi Engineering Construction Co., Ltd. Subsidiary under indirect control of JMCG
Guizhou Wanfu Vehicle Sales & Service Co., Ltd. Group subsidiary of JIC’s shareholder
Chongqing Anfu Vehicle Marketing Co., Ltd. Group subsidiary of JIC’s shareholder
Chengdu Wanxing Vehicle Sales & Service Co., Ltd. Group subsidiary of JIC’s shareholder
Chongqing Anbo Vehicle Sales Co., Ltd. Group subsidiary of JIC’s shareholder
Yunan Wanfu Vehicle Sales & Service Co., Ltd. Group subsidiary of JIC’s shareholder
Dali Wanfu Vehicle Sales & Service Co., Ltd. Group subsidiary of JIC’s shareholder
Beijing Beifang Changfu Vehicle Sales & Service Co., Ltd. Group subsidiary of JIC’s shareholder
China Changan Group Hefei Investing Co., Ltd. Group subsidiary of JIC’s shareholder
Beijing Baiwang Changfu Vehicle Sales & Service Co., Ltd. Group subsidiary of JIC’s shareholder
Honghe Wanfu Vehicle Sales & Service Co., Ltd. Group subsidiary of JIC’s shareholder
Chengdu Wanyou Vehicle Trade & Service Co., Ltd. Group subsidiary of JIC’s shareholder
Chongqing Wanyoulongrui Vehicle Sales & Service Co., Ltd. Group subsidiary of JIC’s shareholder
China Changan Group Tianjin Sales Co., Ltd. Group subsidiary of JIC’s shareholder
Jiangxi Jiangling Lear Interior System Co., Ltd. Joint venture of JMCG
Jiangxi ISUZU Co., Ltd. Joint venture of JMCG
Nanchang Jiangling HuaXiang Auto Components 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
164
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Cont'd)
(4) Information of other related parties (Cont’d)
Related parties Relationship with the Group
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. Associate of JMCG
Jiangxi JMCG Specialty Vehicles Sales Corporation,
Ltd. Associate of JMCG
Jiangxi JMCG Specialty Vehicles Co., Ltd. Associate of JMCG
Jiangxi Jiangling Group Special Vehicle Co., Ltd. Associate of JMCG
Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd. Associate of JMCG
Nanchang Baojiang Steel Processing Distribution Co.,
Ltd. Associate of JMCG
Magna PT Powertrain (Jiangxi) Co., Ltd.(i) Associate of JMCG
Faurecia Emissions Control Technologies (Nanchang)
Co., Ltd. Associate of JMCG
Jiangling Motor Holdings Co., Ltd. Associate of JMCG
Jiangxi Lingyun Automobile Industry Technology
Co.,Ltd Associate of JMCG
Nanchang Hengou Industry Co., Ltd. Associate of JMCG
Jiujiang Fuwantong Vehicle Co., Ltd. Associate of JMCG
Jiangxi Fuxiang Vehicle Co., Ltd. Associate of JMCG
Jiangxi Jiangling Overseas Automobile Sales and
Service Co., Ltd. Associate of JMCG
Ji'an Qingyuan District Yongfuda Vehicle Co., Ltd. Associate of JMCG
Yichun Xinfu Vehicle Co., Ltd. Associate of JMCG
Jiangxi Zhonglian Intelligent Logistics Co., Ltd. Associate of JMCG
Jiangling Motor Electricity Vehicle Co., Ltd. Associate of JMCG
(i)In December 2020, the GETRAG (Jiangxi) Transmission Company has been renamed to
Magna PT Powertrain (Jiangxi) Co., Ltd.
165
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Cont'd)
(5) Related party transactions
(a) Purchase and sales of goods, provision and receipt of services
Purchase of goods:
Nature of related party
Related parties transactions 2020 2019
Nanchang Baojiang Steel Processing Distribution Co., Ltd. Purchase of raw materials 963,538,705 809,328,079
Jiangxi Jiangling Chassis Co., Ltd. Purchase of spare parts 925,826,174 719,674,742
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. Purchase of spare parts 880,431,974 712,788,695
Magna PT Powertrain (Jiangxi) Co., Ltd. Purchase of spare parts 775,969,464 707,209,472
Nanchang Jiangling HuaXiang Auto Components Co., Ltd. Purchase of spare parts 754,832,828 751,247,981
Ford Purchase of spare parts 652,370,322 485,393,680
Jiangxi Jiangling Lear Interior System Co., Ltd. Purchase of spare parts 502,651,787 525,146,053
Faurecia Emissions Control Technologies (Nanchang) Co., Ltd. Purchase of spare parts 471,477,165 313,889,827
Nanchang JMCG Liancheng Auto Component Co., Ltd. Purchase of spare parts 404,381,671 372,577,977
Nanchang JMCG Shishun Logistics Co., Ltd. Purchase of spare parts 402,465,442 236,928,721
Nanchang Unistar Electric & Electronics Co., Ltd. Purchase of spare parts 313,333,686 245,137,673
Hanon Systems Purchase of spare parts 215,580,989 188,063,833
JMCG Purchase of spare parts 175,089,346 112,288,527
Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd. Purchase of spare parts 113,007,282 98,454,273
Nanchang Yinlun Heat-exchanger Co., Ltd. Purchase of spare parts 87,043,427 63,096,728
Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd. Purchase of spare parts 84,594,829 67,681,671
Nanchang Lianda Machinery Co., Ltd. Purchase of spare parts 81,935,083 64,024,535
Auto Alliance (Thailand) Co., Ltd. Purchase of spare parts 67,659,797 22,015,263
Changan Ford Automobile Co., Ltd. Purchase of spare parts 56,465,853 5,574,375
Jiangxi Jiangling Group Special Vehicle Co., Ltd. Purchase of spare parts 40,513,016 27,249,048
Jiangling Motor Holdings Co., Ltd. Purchase of spare parts 40,171,568 46,378,913
Ford Otomotiv Sanayi A.S. Purchase of spare parts 39,382,418 28,954,185
Jiangxi JMCG Specialty Vehicles Co., Ltd. Purchase of spare parts 39,104,828 26,778,093
166
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 services (Cont'd)
Purchase of goods (Cont'd):
Nature of related party
Related parties transactions 2020 2019
Purchase of raw materials and
Jiangling Material Co., Ltd. spare parts 25,302,089 27,154,698
Jiangling Aowei Automobile Spare Part Co., Ltd. Purchase of spare parts 22,474,184 23,172,469
Jiangxi JMCG Boya brake system Co., Ltd Purchase of spare parts 19,296,893 6,005,363
Jiangxi Lingyun Automobile Industry Technology Co.,Ltd Purchase of spare parts 17,290,556 13,909,931
Nanchang JMCG Xinchen Auto Component Co., Ltd. Purchase of spare parts 16,576,226 16,109,044
Jiangxi ISUZU Engine Co., Ltd. Purchase of spare parts 15,163,002 13,361,690
Jiangxi Lingrui Recycling Resources Development Corporation Purchase of spare parts 10,063,375 8,691,693
Nanchang Gear Co., Ltd. Purchase of spare parts 9,786,797 12,368,316
NC.Gear Forging Factory Purchase of spare parts 7,485,354 3,295,512
Ford Motor Co. Thailand Ltd. Purchase of spare parts 6,388,549 -
Jiangxi JMCG Shangrao Industrial Co., Ltd. Purchase of spare parts 3,075,697 3,082,823
Jiangxi JMCG Industry Co., Ltd. Purchase of spare parts 1,525,809 22,174,634
Other related parties Purchase of spare parts 3,029,920 6,635,104
8,245,286,105 6,785,843,621
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.
167
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 services (Cont'd)
Receipt of services:
Nature of related party
Related parties transactions 2020 2019
Nanchang JMCG Shishun Logistics Co., Ltd. Transportation 327,801,942 277,648,112
JMCG Jiangxi Engineering Construction Co., Ltd. Engineering construction 298,581,804 4,682,585
Trademark management
Ford Global Technologies,LLC fees/Technical development 248,378,764 239,856,115
Engineering service/
Ford Personnel costs 154,911,420 246,385,241
Changan Ford Automobile Co., Ltd. Service fee/Labor costs, etc. 63,254,852 114,468,826
Technical service/Technical
Ford Otomotiv Sanayi A.S. development/ Personnel costs 44,011,234 73,031,829
Jiangxi JMCG Industry Co., Ltd. Dinning fee 27,037,730 29,240,222
Ford Motor (China) Co., Ltd. Personnel costs 11,859,943 8,271,133
Ford Motor Research & Engineering (Nanjing) Co., Ltd. Personnel costs 10,025,252 7,906,061
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. Agent fee, etc. 9,455,440 7,682,604
Magna PT Powertrain (Jiangxi) Co., Ltd. Design fee/Experimental costs 8,721,427 753,315
Jiangling Motor Holdings Co., Ltd. Personnel costs 6,847,601 8,247,577
Jiangxi JMCG Specialty Vehicles Co., Ltd. Promotion 6,748,500 934,906
Fuzhou Shishun Logistics Co., Ltd. Truckage 3,324,306 -
Jiangxi Zhonglian Intelligent Logistics Co., Ltd. Transportation/Rental fee, etc. 3,078,267 -
Nanchang Jiangling HuaXiang Auto Components Co., Ltd. Design fee/Experimental costs 2,425,848 28,000
JMCG Property Management Co. Property management, etc. 2,280,889 2,413,141
Jingdezhen Shishun Logistics Co., Ltd. Transportation 2,279,487 -
Chongqing Changan Automobile Co., Ltd. Personnel costs 1,781,095 -
Hanon Systems Design fee/Experimental costs 1,190,000 715,019
Nanchang Hengou Industry Co., Ltd. Packaging fee 42,577 11,649,339
168
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 services (Cont'd)
Receipt of services (Cont’d):
Nature of related party
Related parties transactions 2020 2019
Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. Promotion - 2,278,000
Other related parties 4,297,045 2,735,231
1,238,335,423 1,038,927,256
The Group’s pricing on services received from related parties is based on the agreed price by both parties.
169
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 services (Cont'd)
Sales of goods
Nature of related party
Related parties transactions 2020 2019
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. Sales of automobiles and
accessories 1,503,468,690 1,093,233,543
Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. Sales of automobiles 390,031,512 133,143,912
Jiangxi JMCG Specialty Vehicles Co., Ltd. Sales of automobiles and
accessories 135,016,982 75,666,136
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. Sales of automobiles and
accessories, utilities 133,908,645 142,292,854
Jiangxi Lingrui Recycling Resources Development Corporation Scrapping materials and utilities 85,072,002 81,514,154
Jiangxi Jiangling Chassis Co., Ltd. Sales of accessories 68,495,760 51,279,717
Dali Wanfu Vehicle Sales & Service Co., Ltd. Sales of automobiles and
accessories 49,648,874 50,108,591
Jiangxi Jiangling Group Special Vehicle Co., Ltd. Sales of automobiles 41,208,636 60,985,118
JMCG Jingma Motors Co., Ltd. Sales of automobiles and
accessories 37,537,654 49,618,645
Nanchang JMCG Liancheng Auto Component Co., Ltd. Sales of accessories 36,734,587 38,950,974
Nanchang JMCG Shishun Logistics Co., Ltd. Sales of automobiles and
accessories 33,591,930 23,967,488
170
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 services (Cont'd)
Sales of goods (Cont'd):
Nature of related party
Related parties transactions 2020 2019
Jiujiang Fuwantong Vehicle Co., Ltd. Sales of automobiles and
accessories 23,066,338 16,960,055
Beijing Beifang Changfu Vehicle Sales & Service Co., Ltd. Sales of automobiles and
accessories 21,171,011 25,575,740
Guizhou Wanfu Vehicle Sales & Service Co., Ltd. Sales of automobiles and
accessories 20,243,696 18,766,320
China Changan Group Hefei Investing Co., Ltd. Sales of automobiles and
accessories 14,027,598 24,231,901
Chongqing Anbo Vehicle Sales Co., Ltd. Sales of automobiles and
accessories 12,999,033 16,564,287
Chongqing Anfu Vehicle Marketing Co., Ltd. Sales of automobiles and
accessories 10,872,595 20,913,845
Nanchang JMCG Frame Co., Ltd Sales of accessories 9,682,940 4,933,100
Chengdu Wanxing Vehicle Sales & Service Co., Ltd. Sales of automobiles and
accessories 8,760,743 16,965,191
Nanchang Hengou Industry Co., Ltd. Sales of accessories 8,496,187 8,983,585
Yunan Wanfu Vehicle Sales & Service Co., Ltd. Sales of automobiles and
accessories 6,550,243 26,020,238
Nanchang Jiangling HuaXiang Auto Components Co., Ltd. Sales of accessories 6,300,596 7,689,174
Jiangxi Jiangling Lear Interior System Co., Ltd. Sales of accessories 4,819,843 4,275,617
Jiangxi ISUZU Co., Ltd. Sales of accessories 4,581,683 1,768,033
171
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 services (Cont'd)
Sales of goods (Cont'd):
Nature of related party
Related parties transactions 2020 2019
Jiangxi Fuxiang Vehicle Co., Ltd. Sales of automobiles and
accessories 4,518,451 4,176,007
Beijing Baiwang Changfu Vehicle Sales & Service Co., Ltd. Sales of automobiles and
accessories 4,029,396 9,563,642
Jiangxi Jiangling Overseas Automobile Sales and Service Co., Sales of automobiles and
Ltd. accessories 3,451,607 9,234,982
Jiangxi JMCG Industry Co., Ltd. Sales of accessories, utilities and
scrapping materials 3,155,702 4,386,055
Ji'an Qingyuan District Yongfuda Vehicle Co., Ltd. Sales of automobiles and
accessories 2,948,093 3,066,767
Jingdezhen Shishun Logistics Co., Ltd. Sales of automobiles 2,389,380 -
Honghe Wanfu Vehicle Sales & Service Co., Ltd. Sales of automobiles and
accessories 2,204,686 6,722,778
JMCG Jiangxi Engineering Construction Co., Ltd. Sales of automobiles and utilities 1,879,341 -
Nanchang Lianda Machinery Co., Ltd. Sales of accessories 1,748,053 1,428,628
Chengdu Wanyou Vehicle Trade & Service Co., Ltd. Sales of automobiles and
accessories 1,461,334 3,516,066
Yichun Xinfu Vehicle Co., Ltd. Sales of automobiles and
accessories 1,404,832 3,805,531
Chongqing Wanyoulongrui Vehicle Sales & Service Co., Ltd. Sales of automobiles and
accessories 1,052,574 3,228,357
China Changan Group Tianjin Sales Co., Ltd. Sales of automobiles and
accessories 221,770 5,758,083
172
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 services (Cont'd)
Sales of goods (Cont'd):
Nature of related party
Related parties transactions 2020 2019
Other related parties 1,895,274 9,781,798
2,698,648,271 2,059,076,912
The Group’s pricing on goods sold to related parties is based on the agreed price by both parties.
173
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Cont'd)
(5) Related party transactions (Cont’d)
(b) Leases
(i) The lease income recognised in the current year with the Group as the lessor:
Name of the lessee Type of the leased asset 2020 2019
Jiangxi ISUZU Co., Ltd. Buildings 53,411 53,411
Jiangling Material Co., Ltd. Buildings - 121,101
Magna PT Powertrain (Jiangxi) Co., Ltd. Buildings - 7,494
Jiangling Motor Holdings Co., Ltd. Buildings - 3,160
53,411 185,166
(ii) Increase of right-of-use assets in the current year with the Group as the lessee
Name of the lessor Type of the leased asset 2020 2019
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. Buildings - 5,802,936
JMCG Buildings - 3,201,375
- 9,004,311
(iii) Interest expenses on lease liabilities in the current year of the Group as the lessee:
2020 2019
JMCG 568,210 735,950
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 50,258 176,730
618,468 912,680
174
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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
JMCF 2,990,943 5 March 2001 30 October 2029 Not fully performed
In 2020, JMCF provided guarantees for some bank borrowings of the Group, with a maximum guarantee limit of USD 2,282,123. As at 31
December 2020, JMCF provided borrowing guarantee to the bank borrowing of USD 458,389, equivalent to RMB2,990,943 (31 December 2019:
USD 523,873, equivalent to RMB3,654,644) for the Group.
(d) Transfer of assets
Nature of related party
Related parties transactions 2020 2019
Jiangxi JMCG Industry Co., Ltd. Sales of fixed assets 1,783 784
Nanchang JMCG Shishun Logistics Co., Ltd. Sales of fixed assets - 298,982
1,783 299,766
The pricing on transfer of assets between the Group and related parties is based on the agreed price by both parties.
175
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Cont'd)
(5) Related party transactions (Cont’d)
(e) Purchase of assets
Nature of related party
Related parties transactions 2020 2019
Magna PT Powertrain (Jiangxi) Co., Ltd. Purchase of fixed assets 8,120,000 -
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. Purchase of fixed assets 3,629,699 1,200,000
Jiangling Motor Holdings Co., Ltd. Purchase of fixed assets 337,660 -
Nanchang Jiangling HuaXiang Auto Components Co., Ltd. Purchase of fixed assets - 28,497,200
Hanon Systems Purchase of fixed assets - 3,820,719
Jiangxi JMCG Specialty Vehicles Co., Ltd. Purchase of fixed assets - 434,726
12,087,359 33,952,645
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
Nature of related party
Related parties transactions 2020 2019
Ford Motor Research & Engineering (Nanjing) Co., Ltd. Engineering and technical service 83,687,640 17,990,000
Ford Vietnam Limited Technical service 30,623,000 40,034,000
Ford Technical service 17,988,000 72,282,000
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. Technical service 1,750,000 -
134,048,640 130,306,000
The Group’s pricing on technology sharing provided to related parties is based on the agreed price by both parties.
176
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Cont'd)
(5) Related party transactions (Cont’d)
(g) Purchase of fuel consumption integral acquisition
Related party 2020 2019
Jiangling Motor Electricity Vehicle
Co., Ltd. 23,304,481 -
Jiangling Motor Holdings Co., Ltd. - 8,746,650
23,304,481 8,746,650
The Group’s pricing on fuel consumption integral purchased from related parties is based
on the agreed price by both parties.
(h) Remuneration of key management
2020 2019
Remuneration of key management 12,148,337 10,962,038
(i) Interest income
2020 2019
JMCF 18,598,836 12,883,036
Bank balances of the Group deposited with JMCF was calculated based on the bank
annual interest rate for RMB deposit of 0.455% to 3.30% over the same period (2019:
0.455% to 3.30%).
177
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Related parties and related party transactions (Cont'd)
(6) Receivables from and payables to related parties
Receivables from related parties:
31 December 2020 31 December 2019
Provision for bad Provision for bad
Amount debts Amount debts
Accounts receivable
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 1,081,916,003 (2,368,381) 272,986,397 (712,320)
Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. 22,613,476 (47,488) 19,328,984 (9,664)
Ford Vietnam Limited 19,500,000 (97,500) 5,980,000 (29,900)
Nanchang JMCG Frame Co., Ltd 11,499,163 (34,497) 5,574,403 (16,723)
Jiangxi JMCG Specialty Vehicles Co., Ltd. 9,705,710 (20,997) 58,148,451 (30,290)
Nanchang JMCG Liancheng Auto Component Co., Ltd. 8,906,500 (26,720) 12,767,031 (38,301)
Ford 6,304,000 (31,520) 21,554,000 (107,770)
JMCG Jingma Motors Co., Ltd. 4,953,579 (14,861) 5,563,310 (16,690)
Jiangxi Jiangling Chassis Co., Ltd. 4,786,897 (14,361) 13,054,052 (39,162)
Nanchang JMCG Shishun Logistics Co., Ltd. 4,267,697 (12,803) 6,279,155 (178,666)
Jiangxi Jiangling Group Special Vehicle Co., Ltd. 3,340,025 (7,014) - -
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. 1,539,411 (4,618) 2,131,677 (6,395)
Jiangxi Jiangling Lear Interior System Co., Ltd. 1,192,642 (3,578) 1,082,578 (3,248)
Jiangxi ISUZU Co., Ltd. 1,103,086 (3,309) 234,039 (5,023)
Ford Motor Research & Engineering (Nanjing) Co., Ltd. 890,400 (4,452) 9,529,400 (47,647)
Nanchang Jiangling HuaXiang Auto Components Co., Ltd. 807,199 (2,422) 2,128,387 (6,385)
Jiangling Motor Electricity Vehicle Sales Co.,Ltd - - 5,961,020 (374,352)
Other related parties 2,547,388 (7,635) 1,123,145 (2,961)
1,185,873,176 (2,702,156) 443,426,029 (1,625,497)
178
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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):
31 December 2020 31 December 2019
Provision for bad Provision for bad
Amount debts Amount debts
Other receivables
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 35,201,661 (105,605) 35,208,392 (106,725)
Other related parties 6,644 (20) 41,481 (125)
35,208,305 (105,625) 35,249,873 (106,850)
179
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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):
31 December 31 December
2020 2019
Advances to Nanchang Baojiang Steel
suppliers Processing Distribution Co., Ltd. 355,529,951 492,604,607
Financing Jiangxi Jiangling Motors Imp. &
receivables Exp. Co., Ltd. - 32,000,000
JMCG Jingma Motors Co., Ltd. 5,172,364 17,148,451
5,172,364 49,148,451
Prepayment Jiangxi Jiangling Motors Imp. &
for projects Exp. Co., Ltd. 1,239,661 -
Bank
balances JMCF 1,231,825,734 967,750,294
Payables to related parties:
31 December 31 December
2020 2019
Accounts Nanchang Jiangling HuaXiang Auto
payable Components Co., Ltd. 600,620,464 468,877,821
Jiangxi Jiangling Special Purpose
Vehicle Co., Ltd. 450,355,413 269,635,441
Jiangxi Jiangling Chassis Co., Ltd. 381,961,882 247,903,618
Magna PT Powertrain (Jiangxi) Co.,
Ltd. 257,203,673 241,934,120
Jiangxi Jiangling Lear Interior
System Co., Ltd. 244,023,570 275,328,167
Nanchang JMCG Liancheng Auto
Component Co., Ltd. 177,586,249 133,716,243
Ford 165,212,418 145,686,393
Faurecia Emissions Control
Technologies (Nanchang) Co.,
Ltd. 140,584,875 127,516,031
Hanon Systems 119,546,495 86,208,726
Nanchang JMCG Shishun Logistics
Co., Ltd. 112,968,126 135,343,920
JMCG 108,139,686 41,122,001
Nanchang Unistar Electric &
Electronics Co., Ltd. 107,067,804 81,834,768
Nanchang JMCG Mekra-Lang
Vehicle Mirror Co., Ltd. 84,273,999 38,644,169
Jiangxi JMCG Specialty Vehicles
Co., Ltd. 44,095,229 20,671,039
Nanchang Yinlun Heat-exchanger
Co., Ltd. 39,863,083 23,001,840
180
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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):
31 December 31 December
2020 2019
Accounts Jiangxi Lingge Non-ferrous Metal
payable Die-casting Co., Ltd. 33,997,041 22,458,920
Nanchang Lianda Machinery Co.,
Ltd. 31,713,777 20,459,811
Jiangxi Jiangling Group Special
Vehicle Co., Ltd. 17,656,588 8,983,517
Jiangling Motor Holdings Co., Ltd. 11,635,750 23,805,405
Jiangling Aowei Automobile Spare
Part Co., Ltd. 11,243,037 14,676,461
Jiangxi JMCG Boya brake system
Co., Ltd 8,797,919 2,917,900
Changan Ford Automobile Co., Ltd. 7,408,214 57,562,568
Nanchang JMCG Xinchen Auto
Component Co., Ltd. 5,721,038 3,207,475
Jiangxi Lingyun Automobile
Industry Technology Co.,Ltd 5,184,778 5,019,020
Jiangxi Lingrui Recycling
Resources Development
Corporation 4,814,171 5,037,812
Ford Otomotiv Sanayi A.S. 4,727,288 5,715,771
Auto Alliance (Thailand) Co., Ltd. 4,294,750 797,030
Nanchang Gear Co., Ltd. 3,414,942 2,600,649
Jiangling Material Co., Ltd. 1,955,537 1,505,272
Jiangxi JMCG Shangrao Industrial
Co., Ltd. 1,144,320 1,139,163
Jiangxi JMCG Industry Co., Ltd. 1,044,850 9,408,467
Jiangxi ISUZU Engine Co., Ltd. 441,696 5,957,636
Other related parties 1,931,558 1,994,249
3,190,630,220 2,530,671,423
181
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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):
31 December 31 December
2020 2019
Other
payables Ford 48,814,942 188,389,590
Jiangxi JMCG Specialty Vehicles
Sales Corporation, Ltd. 23,287,853 25,676,673
Changan Ford Automobile Co., Ltd. 18,503,441 26,537,316
Ford Global Technologies,LLC 18,050,765 67,275,297
Magna PT Powertrain (Jiangxi) Co.,
Ltd. 13,139,275 13,132,392
Jiangxi Jiangling Group Special
Vehicle Co., Ltd. 10,269,987 6,983,776
Nanchang JMCG Shishun Logistics
Co., Ltd. 8,370,326 6,916,458
JMCG Jiangxi Engineering
Construction Co., Ltd. 7,117,653 10,407,756
Ford Otomotiv Sanayi A.S. 5,265,976 47,911,656
Jiangxi JMCG Industry Co., Ltd. 3,726,567 2,502,826
Jiangxi JMCG Specialty Vehicles
Co., Ltd. 3,682,741 817,923
Faurecia Emissions Control
Technologies (Nanchang) Co.,
Ltd. 3,285,350 7,616,969
Ford Motor (China) Co., Ltd. 2,570,952 3,325,531
Nanchang Jiangling HuaXiang Auto
Components Co., Ltd. 2,481,859 22,080,240
JMCG 2,313,728 -
Nanchang Baojiang Steel
Processing Distribution Co., Ltd. 1,944,877 2,087,023
Chongqing Changan Automobile
Co., Ltd. 1,781,095 -
Jiangxi Jiangling Special Purpose
Vehicle Co., Ltd. 1,588,791 4,064,490
Jiangling Motor Holdings Co., Ltd. 1,480,192 -
Hanon Systems 1,475,000 4,362,412
Jiangxi Jiangling Motors Imp. &
Exp. Co., Ltd. 1,456,956 1,779,455
Ford Motor Research &
Engineering (Nanjing) Co., Ltd. 1,345,255 2,518,692
Jiangxi Jiangling Lear Interior
System Co., Ltd. 1,207,000 1,207,000
Nanchang Unistar Electric &
Electronics Co., Ltd. 800,915 1,326,940
Nanchang JMCG Mekra-Lang
Vehicle Mirror Co., Ltd. 181,739 1,061,739
Other related parties 4,617,673 1,777,882
188,760,908 449,760,036
182
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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):
31 December 31 December
2020 2019
Contract Jiangxi Jiangling Group Special
liabilities Vehicle Co., Ltd. - 2,681,847
Yunan Wanfu Vehicle Sales &
Service Co., Ltd. - 1,213,244
Other related parties 2,191,137 918,571
2,191,137 4,813,662
Lease
liabilities JMCG 9,033,918 12,672,782
Jiangxi Jiangling Motors Imp. &
Exp. Co., Ltd. - 2,343,048
9,033,918 15,015,830
(7) Commitments in relation to related parties
Capital commitments 31 December 2020 31 December 2019
JMCG Jiangxi Engineering
Construction Co., Ltd. 377,223,784 23,174,665
Guarantee of commitments in relation to related parties is set out in Note 7(5)(c).
8 Contingencies
As at 31 December 2020, the Group had no contingencies that needed to be accounted for
in the notes to the financial statements.
9 Commitments
Capital expenditure commitments
Capital expenditures contracted by the Group but are not yet necessary to be presented on
the balance sheet as at the balance sheet date are as follows:
31 December 2020 31 December 2019
Buildings, machinery and equipment 1,127,750,000 701,817,000
183
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
10 Events after the balance sheet date
(1) Disposal of equity in subsidiary
The Board of Directors meeting held on October 8, 2020 approved the disposal of 60% of
the wholly-owned subsidiary JMPC at no less than RMB359,975,079 through the public
listing of the Shanghai United Assets and Equity Exchange. During the public listing
period, the Company received an intention from a transferee named Yunnan Yunnei
Power Group Co., Ltd. (hereinafter referred to as "Yunnei Group"). Yunei Group intended
to purchase the 60% equity of JMPC at RMB360,000,000. In January 2021, The
Company and Yunnei Group signed the equity transaction contract in accordance with
the relevant trading rules of the Shanghai United Property Rights Exchange.
(2) Statement of profit distribution
According to the resolution of the board of directors on March 26th, 2021, the board of
directors proposed that the Company distribute cash dividends of RMB3.476 per share to
all shareholders. Based on the issued shares of 863,214,000, the proposed cash dividends
totalled RMB3,000,531,864.
184
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
11 Financial instrument and risk
The Group's activities expose it to a variety of financial risks, which mainly comprise
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 monitors the amount of
assets and liabilities, and transactions denominated in foreign currencies to minimise the
foreign exchange risk. Therefore, the Group signed forward exchange contracts to mitigate
the foreign exchange risk (Note 4(18)).
The financial assets and the financial liabilities denominated in foreign currencies, which
are held by the Company and the subsidiaries of the Group, whose recording currencies
were RMB, were expressed in RMB as at 31 December 2020 and 31 December 2019 as
follows:
31 December 2020
USD EUR Total
Financial liabilities denominated in
foreign currency -
Derivative financial liabilities 3,716,727 - 3,716,727
Current portion of long-term borrowings 427,277 - 427,277
Long-term borrowings 2,563,666 - 2,563,666
Other payables 70,936,756 1,469,682 72,406,438
77,644,426 1,469,682 79,114,108
185
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 31 December 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 RMB6,599,776 (31 December 2019: approximately RMB22,553,091)
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 RMB142,961 higher/lower (31 December 2019: approximately
RMB4,000,039).
(b) Interest rate risk
The Group's interest rate risk mainly arises from interest-bearing debts such as short-term
loans and long-term bank loans. The financial liabilities of floating interest rate expose the
Group to cash flow interest rate risk, and the financial liabilities of fixed interest rate
expose the Group to fair value interest rate risk. The Group determines the relative
proportions of fixed-rate and floating-rate contracts based on the prevailing market
environment. As of December 31, 2020, the Group’s short-term borrowings of
RMB500,000,000 (December 31, 2019: Nil) are fixed-rate borrowings, and long-term
borrowings of USD 458,389 (December 31, 2019: USD 523,873) are fixed-rate
borrowings, therefor no significant cash flow interest rate risk.
As at 31 December 2020 and 31 December 2019, no significant difference between the
fair value and the carrying amount of the Group’s borrowings with fixed-rate.
186
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
11 Financial instrument and risk (Cont’d)
(2) Credit risk
The Group’s credit risk mainly arises from cash and cash equivalent, notes receivable,
accounts receivable, financial assets held for trading, 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, financing receivables 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 31 December 2020, the Group had no significant collateral or other credit
enhancements held as a result of the debtor’s mortgage (31 December 2019: Nil).
(3) Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the
Group. The Group monitors rolling forecasts of its 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.
On the balance sheet date, the undiscounted contractual cash flows of various financial
liabilities of the Group are listed as follows based on the maturity date:
31 December 2020
Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
short-term
borrowing
—principal 500,000,000 - - - 500,000,000
—interest 2,173,333 - - - 2,173,333
Derivative financial
liabilities 3,716,727 - - - 3,716,727
Accounts payable 10,026,215,877 - - - 10,026,215,877
Other payables 4,153,849,625 - - - 4,153,849,625
Lease liabilities 11,683,625 11,419,366 8,646,930 - 31,749,921
Long-term
borrowings
- Principal 427,277 427,277 1,281,833 854,556 2,990,943
- Interest 43,262 36,853 72,103 16,023 168,241
14,698,109,726 11,883,496 10,000,866 870,579 14,720,864,667
187
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
11 Financial instrument and risk (Cont’d)
(3) Liquidity risk (Cont’d)
31 December 2019
Within 1 year 1 to 2 years 2 to 5 years Over 5 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 14,831,057 7,947,675 16,594,605 - 39,373,337
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
12,308,723,053 8,450,759 18,062,745 1,406,467 12,336,643,024
(i) As at December 31, 2020, the lease payment related to the lease contract that the Group
has signed but has not yet begun to execute as follows(Note 4(28)(a))(December 31, 2019:
Nil):
31 December 2020
Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Future
contractual
cash flows not
included in
lease liabilities 36,184,320 72,368,640 217,105,920 36,184,320 361,843,200
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.
188
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
12 Fair value estimates (Cont’d)
(1) Assets and liabilities measured at fair value on a recurring basis
As at 31 December 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 -
Financial assets held
for trading-
Structured deposits - - 803,892,985 803,892,985
Financing receivables-
Notes receivables - - 815,583,669 815,583,669
- - 1,619,476,654 1,619,476,654
As at 31 December 2020, 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 assets -
Derivative financial
liabilities-
Forward foreign
exchange contract - 3,716,727 - 3,716,727
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 -
Financing receivables
Notes receivables - - 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 assets -
Derivative financial
liabilities
Forward foreign
exchange contract - 545,632 - 545,632
189
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
12 Fair value estimates (Cont’d)
(1) Assets and liabilities measured at fair value on a recurring basis (Cont’d)
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 valuation technique mainly include risk-free interest rate, benchmark rate, exchange
rate, etc.
190
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 in 2020 with
respect to assets still held
as at 31 December 2020 -
Gains recognised in gains or losses on changes
31 December 2019 Increase Decrease 31 December 2020 profit or loss (a) in fair value
Financial assets
Financial assets held for
trading -
Monetary fund - 500,000,000 (500,000,000) - 244,059 -
Structural deposits - 15,610,892,985 (14,807,000,000) 803,892,985 77,605,603 3,892,985
Financing receivables -
Notes receivable 289,044,373 2,325,165,208 (1,798,625,912) 815,583,669 - -
Total assets 289,044,373 18,436,058,193 (17,105,625,912) 1,619,476,654 77,849,662 3,892,985
(a) Gains recognised in profit or loss is recognised in investment income in the income statement.
191
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 (Cont'd):
Changes in unrealised
gains or losses included in
profit or loss in 2019 with
respect to assets still held
as at 31 December 2019 -
Gains recognised in gains or losses on
31 December 2018 Increase Decrease 31 December 2019 profit or loss (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 -
Financing receivables -
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 is recognised in investment income in the income statement.
192
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
12 Fair value estimates (Cont’d)
(2) Assets measured at fair value on a non-recurring basis
As at 31 December 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
The Group’s financial assets and liabilities measured at amortised cost mainly comprise
notes receivable, accounts receivable, other receivables, short-term borrowing, account
payables, 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 31 December 2020 and 31 December 2019, the Group's equity ratio was as follows:
31 December 2020 31 December 2019
Total borrowings 502,990,943 3,654,644
Total equities 10,986,474,009 10,496,563,781
Equity ratio 4.58% 0.03%
193
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements
(1) Accounts receivable
31 December 2020 31 December 2019
Accounts receivable 3,502,761,954 980,998,110
Less: Provision for bad debts (171,881,303) (115,069,813)
3,330,880,651 865,928,297
(a) The ageing of accounts receivable is analysed as follows:
31 December 2020 31 December 2019
Within 1 year 3,043,074,741 489,899,574
1 to 2 years 5,223,812 490,230,937
2 to 3 years 454,463,401 867,599
3,502,761,954 980,998,110
(b) As at 31 December 2020, the five largest accounts receivable aggregated by debtor were
analysed as follows:
Amount of
provision for bad % of total
Balance debts balance
Company 1 1,605,066,624 - 45.82%
Company 2 1,078,630,906 (2,355,387) 30.79%
Company 3 167,353,472 - 4.78%
Company 4 74,480,000 (74,480,000) 2.13%
Company 5 46,649,000 (97,963) 1.33%
2,972,180,002 (76,933,350) 84.85%
(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.
194
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
14 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:
31 December 2020
Book balance Provision for bad debts
Provision for bad
Amount Lifetime ECL (%) debts
Receivables from related
parties within the Group i) 1,775,196,875 - -
New energy subsidies
receivable ii) 84,903,126 100% (84,903,126)
Accounts receivable for
automobiles iii) 74,480,000 100% (74,480,000)
1,934,580,001 (159,383,126)
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 - -
New energy subsidies
receivable ii) 20,410,500 100% (20,410,500)
Accounts receivable for
automobiles iii) 81,020,000 100% (81,020,000)
280,568,811 (101,430,500)
i) As at 31 December 2020, the Company's accounts receivable due from subsidiaries
JMCS, SZFJ and GZFJ were RMB1,605,066,624, RMB167,353,472 and RMB2,776,779
respectively, totalling to RMB1,775,196,875. The Company carried out individual
assessment on receivables from subsidiaries. Based on the judgement of credit risk, there
is no significant credit risk on receivables 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 RMB10,847,413 and RMB168,290,898 respectively, totalling to
RMB179,138,311. The Company carried out individual assessment on receivables from
subsidiaries. Based on the judgement of credit risk, there is no significant credit risk on
receivables from subsidiaries, and there is no overdue or impairment.
ii) As at 31 December 2020, state subsidies for new energy automobiles receivable
amounted to RMB84,903,126 (31 December 2019: RMB20,410,500). As the
corresponding new energy vehicles may not meet the corresponding subsidy policy
standards, the Company considered the receivables cannot be collected, therefore, full
provision was made for those receivables.
iii) As at 31 December 2020 and 31 December 2019, since these companies in debts were
involved in several legal proceedings, the Company considered that it was difficult to
recover such receivables, therefore, full provision was made for those receivables.
195
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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:
31 December 2020
Book balance Provision for bad debts
Amount Lifetime ECL (%) Amount
Not overdue 1,096,348,057 0.21% (2,303,427)
Overdue for 1 to 30 days 70,701,614 0.21% (148,544)
Overdue for 31 to 60 days 345,798 6.35% (21,961)
1,167,395,469 (2,473,932)
Grouping - Sales of general automobiles:
31 December 2019
Book balance Provision for bad debts
Amount Lifetime ECL (%) Amount
Not overdue 52,890,945 0.05% (25,599)
Grouping - Sales of new energy automobiles:
31 December 2020
Book balance Provision for bad debts
Amount Lifetime ECL (%) Amount
Not overdue 138,042,462 4.94% (6,826,200)
Overdue for 1 to 30 days - — -
Overdue for 31 to 60 days 23,243,550 10.25% (2,381,426)
161,286,012 (9,207,626)
31 December 2019
Book balance Provision for bad debts
Amount Lifetime ECL (%) Amount
Not overdue 252,014,858 4.86% (12,256,229)
196
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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:
31 December 2020
Book balance Provision for bad debts
Amount Lifetime ECL (%) Amount
Not overdue 206,087,099 0.30% (618,261)
Overdue for 1 to 30 days 19,968,933 0.30% (59,907)
Overdue for 31 to 60 days 10,595,310 0.50% (52,977)
Overdue for 61 to 90 days 1,295,045 0.60% (7,770)
Overdue over 90 days 1,554,085 5.00% (77,704)
239,500,472 (816,619)
31 December 2019
Book balance Provision for bad debts
Amount Lifetime ECL (%) 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 in the current year amounted to RMB63,351,490, of which
RMB6,540,000 was reversed. The book balance was RMB6,540,000. The significant
amounts reversed were as follows:
Basis and justification for Reasons for
Reasons for determining the provision for bad Amount of reversal/
reversal/recovery debts reversal recovery
The aforesaid companies in debts
had difficulties in operation and
The actual were involved in several legal
receipt of account proceedings, so the Group
receivables relating considered that it was difficult to
to the provision for recover such receivables, so
Accounts bad debts made in related provision for bad debts
receivable 1 the prior period. was made in full amount. 6,540,000 Received
(d) In 2020, no accounts receivable had been written off.
(e) As at 31 December 2020 and 31 December 2019, the Company did not have accounts
receivable that were pledged.
197
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Cont’d)
(2) Other receivables
31 December 2020 31 December 2019
Receivables from JMCH 1,247,724,942 3,023,189,184
Interest receivable from cash at bank 49,458,968 30,719,215
Import working capital advances 35,000,000 35,000,000
Deposits receivable 7,072,745 7,192,773
Advances for research and
development projects 4,559,669 2,109,522
Cash advance 680,403 959,945
Others 15,599,236 19,385,731
1,360,095,963 3,118,556,370
Less: Provision for bad debts (188,740) (238,665)
1,359,907,223 3,118,317,705
(a) The ageing of other receivables is analysed as follows:
31 December 2020 31 December 2019
Within 1 year 1,359,304,567 3,043,832,479
Over 1 year 791,396 74,723,891
1,360,095,963 3,118,556,370
198
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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
12-month ECL (grouping) 12-month ECL (individual) Sub-total Lifetime ECL (credit impaired) Total
Provision for Provision for Provision for Provision for Provision for
Book balance bad debts Book balance bad debts bad debts Book 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)
Balance increase/(decrease) in
the current year 18,212,495 — (1,775,464,242) — — (1,208,660) — —
Newly Reversed provision for
bad debts in the current year — 1,579 — - 1,579 — 48,346 49,925
provision for bad debts written-off
in the current year — - — - - — - -
31 December 2020 112,371,021 (188,740) 1,247,724,942 - (188,740) - - (188,740)
As at 31 December 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.
199
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 31 December 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 31 December 2020 and 31 December 2019, provision for bad debts of other
receivables on the individual basis was analysed as follows:
31 December 2020
12-month Provision for
Stage 1 Book balance ECL (%) bad debts Reason
Receivables from JMCH 1,247,724,942 - - i)
31 December 2019
12-month Provision for
Stage 1 Book balance ECL (%) bad debts Reason
Receivables from JMCH 3,023,189,184 - - i)
i) As at 31 December 2020, the Company’s other receivables from subsidiary JMCH were
RMB1,247,724,942 (31 December 2019: RMB3,023,189,184). The Company carried out
individual assessment on receivables from subsidiaries. Based on the judgement of credit
risk, there is no significant credit risk on receivables from subsidiaries, and there is no
overdue or impairment.
200
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 31 December 2020 and 31 December 2019, the Company’s other receivables with
provision for bad debts on the grouping basis were analysed below:
Other receivables with provision on the grouping basis at Stage 1:
31 December 2020 31 December 2019
Book balance Provision for losses Book balance Provision for losses
Provision Provision
Amount ratio Amount Amount ratio Amount
Grouping of interest
receivable from
cash at bank i):
Within 1 year 49,458,968 - - 30,719,215 - -
Grouping of
operating
advances and
guarantees:
Within 1 year 62,120,657 0.30% (186,365) 63,439,311 0.30% (190,319)
Over 1 year 791,396 0.30% (2,375) - — -
112,371,021 (188,740) 94,158,526 (190,319)
As at 31 December 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.
As at December 31, 2020, the Company has no other receivables in the second stage.
Other receivables with provision on the grouping basis at Stage 3:
31 December 2020 31 December 2019
Book balance Provision for losses Book balance Provision for losses
Provision Provision
Amount ratio Amount Amount ratio Amount
Grouping of
operating
advances and
guarantees:
Over 1 year - - - 1,208,660 4.00% (48,346)
201
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Cont’d)
(2) Other receivables (Cont'd)
(c) In 2020, the provision for bad debts reversed amounted to RMB49,925 and the book
balance was RMB1,734,971. 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 2020, no other receivables had been written off.
(e) As at 31 December 2020, the five largest other receivables aggregated by debtor were
analysed as follows:
% of total Provision for
Nature Balance Ageing balance bad debts
Loan to.
Company 1 subsidiary 1,247,724,942 Within 1 year 91.74% -
Company 2 Advances 35,201,661 Within 1 year 2.59% 105,605
Company 3 Advances 4,480,000 Within 1 year 0.33% 13,440
Company 4 Advances 4,096,234 Within 1 year 0.30% 12,289
Company 5 Advances 3,467,920 Within 1 year 0.25% 10,404
1,294,970,757 95.21% 141,738
202
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Cont’d)
(3) Long-term equity investments
31 December 2020 31 December 2019
Subsidiaries (a) 2,048,000,000 340,000,000
Associates (b) 39,496,548 40,934,557
2,087,496,548 380,934,557
Less: Provision for impairment of long-term equity investments (526,000,000) -
1,561,496,548 380,934,557
(a) Subsidiaries
Changes in the current year
Cash
Balance of dividends
31 December Debt Debt-to- Equity Provision for 31 December provision for declared this
2019 Split-off exemption equity transaction impairment 2020 impairment year
JMCH 270,000,000 (100,000,000) 800,000,000 - 408,000,000 (526,000,000) 852,000,000 (526,000,000) -
JMCS 50,000,000 - - - - - 50,000,000 - -
SZFJ 10,000,000 - - - - - 10,000,000 - -
GZFJ 10,000,000 - - - - - 10,000,000 - -
JMPC - 100,000,000 - 500,000,000 - - 600,000,000 - -
340,000,000 - 800,000,000 500,000,000 408,000,000 (526,000,000) 1,522,000,000 (526,000,000) -
203
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Cont’d)
(3) Long-term equity investments (Cont’d)
(a) Subsidiaries (Cont’d)
(i) According to the resolution of the Board of Directors on June 19, 2020, JMPC was
established by split-off of JMCH in August 2020 legally (Note 5 (1)). After the split-off, the
paid-in capital of JMCH decreased by RMB100,000,000, while the paid-in capital of JMPC
was RMB100,000,000.
(ii) In December 2020, agreed by the Company and JMCH, the Company exempted the debt
of RMB800,000,000 from JMCH.
(iii) In August 2020, agreed by the Company and JMPC, JMPC’s debt due to JMC amount to
RMB500,000,000 was converted to equity investment.
(iv) In December 2020, the intellectual property rights, patents and supporting documents
related to heavy trucks through the independent research and development of JMCH was
sold to JMC. The total price excluding tax was RMB408,000,000. As an equity transaction,
the transaction increased the book value of the Company's long-term equity investment to
JMCH.
(b) Associates
Refer to Note 4(10).
204
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
14 Notes to the Company’s financial statements (Cont’d)
(4) Revenue and cost of sales
2020 2019
Revenue from main business 30,175,972,435 26,553,472,396
Revenue from other business 552,275,430 460,058,014
30,728,247,865 27,013,530,410
2020 2019
Cost of sales from main business 25,758,133,679 23,134,274,769
Cost of sales from other business 519,162,639 424,378,366
26,277,296,318 23,558,653,135
(a) Revenue and cost of sales from main business
2020 2019
Revenue from Cost of sales from Revenue from Cost of sales from
main business main business main business main business
Sales of automobiles 28,382,524,670 24,423,856,544 24,210,732,597 21,353,299,012
Sales of spare parts 1,699,021,801 1,238,994,675 2,239,157,121 1,682,580,466
Automobile maintenance
services 94,425,964 95,282,460 103,582,678 98,395,291
30,175,972,435 25,758,133,679 26,553,472,396 23,134,274,769
(b) Revenue and cost of sales from other business
2020 2019
Revenue from Cost of sales from Revenue from Cost of sales from
other business other business other business other business
Sales of materials 389,754,210 366,341,033 303,146,217 274,751,261
Others 162,521,220 152,821,606 156,911,797 149,627,105
552,275,430 519,162,639 460,058,014 424,378,366
205
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 2020 was as follows:
2020
Automobile
maintenance Materials and
Automobiles Spare parts services others Total
Revenue from main
business 28,382,524,670 1,699,021,801 94,425,964 - 30,175,972,435
Including: Recognised at
a time point 28,382,524,670 1,699,021,801 - - 30,081,546,471
Recognised
within a certain
period - - 94,425,964 - 94,425,964
Revenue from other
business - - - 552,275,430 552,275,430
28,382,524,670 1,699,021,801 94,425,964 552,275,430 30,728,247,865
2019
Automobiles Spare parts Automobile Materials and Total
maintenance others
services
Revenue from main
business 24,210,732,597 2,239,157,121 103,582,678 - 26,553,472,396
Including: Recognised at
a time point 24,210,732,597 2,239,157,121 - - 26,449,889,718
Recognised
within a certain
period - - 103,582,678 - 103,582,678
Revenue from other
business - - - 460,058,014 460,058,014
24,210,732,597 2,239,157,121 103,582,678 460,058,014 27,013,530,410
(i) As at 31 December 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 RMB125,714,599(31 December 2019:RMB91,326,046), which was expected to be
recognised between 2021 and 2026.
(5) Investment income
2020 2019
Investment income from financial
assets held for trading 75,400,552 47,385,707
Investment loss from forward
exchange settlement (2,421,091) (9,087,342)
Investment income from long-term
equity investment under equity
method (1,438,009) 822,880
Losses on discounts for financing
receivables (1,113,466) -
Losses from disposal of long-term
equity investments - (307,081)
70,427,986 38,814,164
There is no significant restriction on the remittance of investment income to the Company.
206
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
1 Statement of non-recurring profit or loss
2020 2019
Profit or loss on disposal of non-
current assets (167,780,780) (4,212,722)
Government grants recognised in
profit or loss for the current period 277,756,664 466,818,134
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 76,150,461 36,773,734
Fund occupation fee received from
non-financial institutions 7,628,722 10,877,889
Reversal of provision for impairment
of receivables tested individually 6,540,000 -
Net amount of other non-operating
income and expenses 5,869,080 (940,331)
Other profit and loss items that meet
the definition of non-recurring
profit and loss (10,493,560) -
195,670,587 509,316,704
Effect of income tax (50,160,162) (53,250,177)
Effect of gains and losses on
minority interests (net of tax) - -
145,510,425 456,066,527
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.
207
JIANGLING MOTORS CORPORATION, LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Return on net assets and earnings per share
Weighted average Earnings per share
return on net assets Basic earnings per Diluted earnings per
(%) share share
2020 2019 2020 2019 2020 2019
Net profit attributable to
ordinary shareholders of
the Company 5.13% 1.42% 0.64 0.17 0.64 0.17
Net profit attributable to
ordinary shareholders of
the Company, net of non-
recurring profit or loss 3.77% -2.95% 0.47 (0.36) 0.47 (0.36)
208
Chapter XIII Catalog on Documents for Reference
1. Originals of 2020 financial statements signed by legal representative and Chief
Financial Officer.
2. Originals of the Independent Auditor’s Reports signed by Independent
accountants and stamped by the accounting firm.
3. Originals of all the documents and public announcements disclosed in
newspapers designated by CSRC in 2020.
4. The Annual Report in the China GAAP.
Board of Directors
Jiangling Motors Corporation, Ltd.
March 30, 2021
209
