Jiangling Motors Corporation, Ltd.
2020Half-year Report
2020-08
Chapter I Important Notes, Contents and Abbreviations
Important NoteThe 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 confirmthat the information disclosed herein does not contain any false statement,misrepresentation or major omission.
Chairman Qiu Tiangao, CFO Li Weihua and Chief of Finance Department, Ding Ni,confirm that the Financial Statements in this Half-year Report are truthful,accurate and complete.
All Directors were present at the Board meeting to review this Half-year Report.
Neither cash dividend nor stock dividend was distributed. The Board decided notto convert capital reserve to share capital this time.
The Half-year Report is prepared in Chinese and English. In case of discrepancy,the Chinese version will prevail.
Contents
Chapter I Important Notes, Contents and Abbreviations ...... 2
Chapter II Brief Introduction ...... 4
Chapter III Operating Overview ...... 6
Chapter IV Management Discussion and Analysis ...... 8
Chapter V Major Events ...... 14
Chapter VI Share Capital Changes & Shareholders ...... 20
Chapter VII Preferred Shares ...... 24
Chapter VIII Convertible Bond ...... 26
Chapter IX Directors, Supervisors and Senior Management ...... 26
Chapter X Company Bond ...... 27
Chapter XI Financial Statements ...... 28
Chapter XII Catalogue on Documents for Reference ...... 153
Abbreviations:
JMC, or the Company Jiangling Motors Corporation, Ltd.JIC Nanchang Jiangling Investment Co.,Ltd.Ford Ford Motor CompanyCSRC China Securities Regulatory CommissionJMCG Jiangling Motors Group Co., Ltd.JMCH JMC Heavy Duty Vehicle Co., Ltd.EVP Executive Vice PresidentCFO Chief Financial OfficerVP Vice President
Chapter II Brief Introduction
1. Company’s information
Share’s name
| Share’s name | Jiangling Motors, Jiangling B | Share’s Code | 000550,200550 |
| Place of listing | Shenzhen Stock Exchange | ||
| Company’s Chinese name | 江铃汽车股份有限公司 | ||
| English name | Jiangling Motors Corporation, Ltd. | ||
| Abbreviation | JMC | ||
| Company legal representative | Qiu Tiangao | ||
2. Contact person and method
| Board Secretary | Securities Affairs Representative | |
| Name | Wan Hong | Quan Shi |
| Address | No. 509, Northern Yingbin Avenue, Nanchang City, Jiangxi Province, P.R.C | No. 509, Northern Yingbin Avenue, Nanchang City, Jiangxi Province, P.R.C |
| Tel | 86-791-85266178 | 86-791-85266178 |
| Fax | 86-791-85232839 | 86-791-85232839 |
| relations@jmc.com.cn | relations@jmc.com.cn |
3. Other
I. Contact methodsChanges of registered address, headquarter address, postal code, website and e-mail in the reporting period
□Applicable √Not Applicable
There is no change of registered address, headquarter address, postal code,website and e-mail. Please refer to 2019 Annual Report for details.
II. Changes of newspapers for information disclosure, website for publication ofJMC’s half-year report and place for achieving half-year report in the reportingperiod
□Applicable √Not Applicable
There is no change of newspapers for information disclosure, website designatedby CSRC for publication of JMC’s Half-year Report and place for achieving Half-year Report. Please refer to 2019 Annual Report for details.
4. Main accounting data and financial ratios
Unit: RMB
| Reporting period (2020 first half) | Same period last year | Change (%) | |
| Revenue | 14,073,417,878 | 13,721,953,502 | 2.56 |
| Profit Attributable to the Equity Holders of the Company | 207,771,782 | 58,861,816 | 252.98 |
| Net Cash Generated From Operating Activities | 734,283,627 | 1,435,351,564 | -48.84 |
| Basic Earnings Per Share (RMB) | 0.24 | 0.07 | 252.98 |
| Diluted Earnings Per Share (RMB) | 0.24 | 0.07 | 252.98 |
| Weighted Average Return on Equity Ratio | 1.96% | 0.57% | Up 1.39 percentage points |
| At the end of reporting period | At the end of the previous year | Change (%) | |
| Total Assets | 26,114,866,966 | 24,298,528,593 | 7.48 |
| Shareholders’ Equity Attributable to the Equity Holders of the Company | 10,643,910,583 | 10,496,563,781 | 1.40 |
5. Accounting data difference between domestic and foreign accounting standards
I. Differences in net profit and net assets disclosed respectively per IFRS andPRC GAAP.
□Applicable √Not Applicable
There is no difference between IFRS and PRC GAAP in net profit and net assets.
II. Differences in net profit and net assets disclosed respectively per GAAP andPRC GAAP.
□Applicable √Not Applicable
There is no difference between GAAP and PRC GAAP in net profit and net assets.
Chapter III Operating Overview
1. Company’s Core Business during the Reporting Period
JMC’s core business is production and sales of commercial vehicles, SUV andrelated components. JMC’s major products include JMC series light truck, heavytruck, pickup and light bus; Yusheng SUV; Ford-brand light bus, MPV and SUV.The Company also produces and sells engines, castings and other componentsfor sales to domestic and overseas markets.
2. Major Change of Main Assets
I. Major Change of Main Assets
There’s no major change of main assets during the reporting period.
II. Main Overseas Assets
□Applicable √Not Applicable
3. Core Competitiveness Analysis
JMC is a sino-foreign joint venture auto company with R&D, manufacturing andsales operations. With leading position and advanced technology of commercialvehicles, JMC is China auto industry pioneer providing excellent products andsolutions to smart logistics, which is certificated as a national high-tech enterprise,national innovative pilot enterprise, national enterprise technology centre, nationalindustrial design centre, national intellectual property demonstration enterprisesand national automobile export base; and had been ranked among the top 100most valuable global brands for consecutive years.
On traditional business, with the support from Ford's advanced technology andmanagement experience, JMC's influence over auto industry is improving steadily,making considerable progress both in new product development and technicalequipment. With the implementation of the national phase six emission standards,JMC as the "bellwether" of the commercial vehicle market, rapidly responds to thenational policy to upgrade the emission of vehicle products by virtue of itsadvanced product research and development technology and high-qualitymanufacturing capacity. Successively launched the JMC brand light truck EVI,Ford brand light bus EVI, Kaiyun blue whale and other series of products. Thenew Ford Territory SUVS, based on deep insights into Chinese consumers, notonly has leading space and size at the same level, but also takes the lead inintroducing domestic technologies such as the Miller cycle engine, 48V micro-hybrid power, and Feiyu Intelligent Voice Control System,On-board WeChat.Respond quickly to market demands, increase comfort, intelligent networkconnectivity and assisted driving, including 16 all-standard 28-class leadingconfigurations, which have been widely recognized by the market and customerssince launched. High standard Xiaolan manufacturing site continues to expandmodern plants of vehicle, engine and frame, which will further ensure JMC'sproduct production and quality improvement. With the construction of Fushan newenergy base, JMC will deliver more new energy vehicles in the future which willlay a solid foundation for JMC’s sustainable and healthy growth.
While continuous consolidating the traditional advantages, JMC has beendeveloping new business areas and innovative business models in response tothe new trend of overseas and domestic industries. In the new business field ofintelligent driving, as one of the first demonstration companies certified by thevehicle networking product of China's self-developed global satellite positioningsystem Beidou system, based on 5G and vehicle networking technologyapplication, the company has researched and developed the first domesticintelligent driving pure electric TeShun light bus product with autonomous drivingtechnology on the mass production model, achieve multiple functions such ashigh-speed automatic formation, automatic remove formation, automatic obstacleavoidance, automatic pull over, etc. Cooperated with Jiangxi provincialDepartment of Transportation, China mobile, Huawei and other leadingenterprises to complete the Changjiu intelligent high-speed formation autonomousdriving demonstration project, Yingtan international IoT conference collaborationand presentation project, 2019 World VR industry conference collaboration andpresentation project, etc. Based on the company's new energy light truck platform,cooperate with partners to build a full series of large-tonnage autonomous specialvehicles for environmental sanitation，the vehicles will be used in municipalenvironmental sanitation and other demonstration projects. Combining with theabove intelligent driving cooperation projects, the Company has become amember of National Science and Technology Major Project, joint National Scienceand Technology Major Project -- "Zhi Gan Xing" subject research. In the field ofnew energy technology, based on the commercial scenario, the Companyvigorously promotes the research and sales of pure electric vehicle, and developshydrogen fuel and methanol fuel vehicle technology with advantageous partners.In the new business ecology field, the Company participates in the construction ofthe automobile business ecosystem, and creates a new ecology of cross-industryintelligent service for commercial vehicles with domestic financial enterprises,communication enterprises, logistics enterprises and mobile travel operatingenterprises.
Chapter IV Management Discussion and Analysis
1. Summary
In the first half of 2020, due to the impact of the COVID-19, China’s economy hasdeclined slightly, and China’s auto market has slowed down. In the first half of2020 total sales volume was 10.25 million units, decreased 16.91% comparedwith the same period last year.
During the reporting period, to cope with more severe competition, more stringentregulatory requirement and intensifying cost pressures, the Company focused onquality improvement, new product development, operating cost control andproduction efficiency enhancement. Simultaneously, the Company introducedseries of sales policy to respond the market risk. In the first half of 2020, JMCachieved sales volume of 141,193 units, increased 3.33% compared with thesame period last year, achieved revenue of RMB 14.07 billion, increased 2.56%compared with the same period last year, achieved net profit of RMB 208 million,increased 252.98% compared with the same period last year. It mainly reflectssales volume increase and sales structure improvement, continuous promotion ofcost reduction and efficiency enhancement and strict control of expenses.
2. Core Business Analysis
Year-over-Year Changes of Main Financial Data
Unit: RMB
| 2020 1H | 2019 1H | YOY change（%） | Reason | |
| Revenue | 14,073,417,878 | 13,721,953,502 | 2.56% | |
| Cost of sales | 11,860,122,365 | 11,678,659,344 | 1.55% | |
| Distribution costs | 592,187,320 | 705,875,262 | -16.11% | |
| Administrative expenses | 459,127,446 | 437,154,690 | 5.03% | |
| Finance expense | -66,731,813 | -89,690,604 | 25.60% | |
| Income tax expense | 14,137,157 | -46,302,374 | 130.53% | Due to profits rise |
| Researchand DevelopmentExpenditure | 823,946,960 | 914,828,651 | -9.93% | |
| Net cash generated from operating activities | 734,283,627 | 1,435,351,564 | -48.84% | Due to cash received from sales decrease |
| Net cash used in investing activities | -3,076,090,849 | -684,404,814 | -349.45% | Due to the purchase of structured deposits |
| Net cash used in financing activities | 1,276,424,368 | -369,956 | 345,120.59% | Due to the new added short-term loan |
| Net increase/(decrease) in cash and cash equivalents | -1,065,382,854 | 750,576,794 | -241.94% | Due to the increase in cash paid for investments |
Composition of Core Business
Unit: RMB
| 2020 1H | 2019 1H | YOY change（%） | |||
| Amount | Proportion (%) | Amount | Proportion (%) | ||
| Revenue | 14,073,417,878 | 100% | 13,721,953,502 | 100% | 2.56% |
| By Industry | |||||
| Automobile Industry | 14,073,417,878 | 100% | 13,721,953,502 | 100% | 2.56% |
| By Products | |||||
| Vehicle | 13,030,304,986 | 92.59% | 12,327,573,061 | 89.84% | 5.70% |
| Components | 809,320,498 | 5.75% | 1,168,533,129 | 8.52% | -30.74% |
| Automobile Maintenance services | 37,965,367 | 0.27% | 43,900,442 | 0.32% | -13.52% |
| Material & Others | 195,827,027 | 1.39% | 181,946,870 | 1.32% | 7.63% |
| By region | |||||
| China | 14,073,417,878 | 100% | 13,721,953,502 | 100% | 2.56% |
Reach to 10% of Revenue or Profit by Industry, Product or Region
√Applicable □Not Applicable
Unit: RMB
| Turnover | Cost | Gross Margin | Y-O-Yturnover change (%) | Y-O-Y Cost Change(%) | Y-O-Y gross margin change (points) | |
| By Industry | ||||||
| Automobile Industry | 14,073,417,878 | 11,860,122,365 | 15.73% | 2.56% | 1.55% | 0.84% |
| By Products | ||||||
| Vehicle | 13,030,304,986 | 11,046,531,024 | 15.22% | 5.70% | 3.65% | 1.67% |
| By Region | ||||||
| China | 14,073,417,878 | 11,860,122,365 | 15.73% | 2.56% | 1.55% | 0.84% |
Explanation on the above 30% year-on-year change of related data
√Applicable □Not Applicable
Affected by the epidemic situation, the sales of spare parts decreased.
3. Non- core business analysis
□Applicable √Not Applicable
4. Analysis of Assets and Liabilities
I. Major changes
Unit: RMB
Asset item
| Asset item | June 30, 2020 | December 31, 2019 | YOY | ||
| Proportion change | |||||
| Amount | Proportion | Amount | Proportion | (Points) | |
| Cash at bank and on hand | 7,922,272,404 | 30.34% | 8,937,936,658 | 36.78% | -6.44% |
| Accounts receivables | 3,032,745,980 | 11.61% | 2,208,236,620 | 9.09% | 2.52% |
| Inventories | 1,694,426,123 | 6.49% | 1,946,869,092 | 8.01% | -1.52% |
| Long-term equity investments | 37,910,003 | 0.15% | 40,934,557 | 0.17% | -0.02% |
| Fixed assets | 5,230,779,446 | 20.03% | 5,714,489,577 | 23.52% | -3.49% |
| Construction in progress | 1,667,129,490 | 6.38% | 1,498,124,778 | 6.17% | 0.21% |
| Short-term borrowings | 1,300,000,000 | 4.98% | 0 | 0.00% | 4.98% |
| Long-term borrowings | 3,013,368 | 0.01% | 3,197,814 | 0.01% | 0.00% |
II. The fair value of the assets and liabilities.
√Applicable □Not Applicable
Unit: RMB
| Item | Beginning of the period | Loss/profit in faire value in the period | Cumulative changes in fair value recorded into equity | Impairment in the period | Purchase in the period | Sell in the periond | Other changes | End of the peridod | |
| financial assets | |||||||||
| 1.Trading financial assets (excluding derivative financial assets) | 0 | 7,990,657 | 0 | 0.00 | 9,189,000,000 | 6,471,000,000 | 0 | 2,725,990,657 | |
| 2. Receivables financing | 289,044,373 | 0 | 0 | 0.00 | 328,944,967 | 347,037,503 | 0 | 270,951,837 | |
| Subtotal | 289,044,373 | 7,990,657 | 0 | 0.00 | 9,517,944,967 | 6,818,037,503 | 0 | 2,996,942,494 | |
| Financial liabilities | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Whether there is a significant change in the measurement attributes of theCompany's main assets during the reporting period
□Applicable √Not Applicable
III. Restriction on Assets Rights as of the End of the Reporting PeriodThere was no major restriction on assets rights as of the end of the reportingperiod.
5. Investment
I. Summary
□Applicable √Not Applicable
II. Obtained Major Equity Investment during the Reporting Period
□Applicable √Not Applicable
III. Ongoing Major Non-Equity Investment during the Reporting Period
√Applicable □Not Applicable
Unit: RMB
ProjectName
| Project Name | Investment Method/ source | Fixed Assets (Y/N) | Spending in 2020 (RMB Mils) | Investment Committed (RMB Mils) | Progress | Index | |||||
| Fushan Site | Self-funded | Y | 28,203,000 | 889,203,000 | 43% | Announcement of this project (NO:2017-044) was published in the website http://www.cninfo.com.cn | |||||
| Total | -- | -- | 28,203,000 | 889,203,000 | 43% | -- | 0.00 |
IV.Financial assets measured at fair value
√Applicable □Not Applicable
Unit: RMB
| Category of Assets | Initial investment cost | Loss/profit in faire value in the period | Cumulative changes in fair value recorded into equity | Purchase in the reporting period | Sell in the reporting period | Accumulated investment income | End of the period | Source of funds |
| Others | 289,044,373.00 | 7,990,657.00 | 0.00 | 9,517,944,967.00 | 6,818,037,503.00 | 32,619,541.00 | 2,996,942,494.00 | Self-funded |
| Total | 289,044,373.00 | 7,990,657.00 | 0.00 | 9,517,944,967.00 | 6,818,037,503.00 | 32,619,541.00 | 2,996,942,494.00 | -- |
V. Financial Assets Investment(a) Stock Investment
□Applicable √Not Applicable
(b) Derivative Investment
□Applicable √Not Applicable
6. Sales of Major Assets and Equity
I. Sale of Major Assets
□Applicable √Not Applicable
II. Sales of Major Equity
□Applicable √Not Applicable
7. Operating Results of Main Subsidiaries and Joint-Stock Companies whoseimpact on JMC’s net profit more than 10%
Unit: RMB’000
Name ofCompanies
| Name of Companies | Type of Companies | Main Business | Registered Capital | Assets | Net Assets | Turnover | Operating Profit | Net Profit |
| Jiangling Motors Sales Co., Ltd. | Subsidiary | Sale of vehicles, service parts | 50,000 | 3,590,858 | 222,591 | 12,723,312 | -11,773 | -8,881 |
| JMC Heavy Duty Vehicle Co., Ltd. | Subsidiary | Production and sale of heavy commercial vehicles, engines, components, and related service | 281,793 | 2,677,165 | -1,239,673 | 308,100 | -260,225 | -259,471 |
Acquisition and disposal of the subsidiary
□Applicable √Not Applicable
8. Structured Entities Controlled by JMC
□Applicable √Not Applicable
9．Business performance prediction of the first nine monthes of 2020Warning and explanations as to the situation that accumulated net profit duringthe period from year beginning to the end of next reporting period may benegative or, compared with the same period last year, may have a substantialchange
√ Applicable □ Not Applicable
Preliminary results: net profit was positive, with a year-on-year increase of morethan 50%Data type of performance forecast: Interval number
| Beginning of year to end of next reporting period | Same period last year | Change | ||||||
| Profit Attributable to the Equity Holders of the Company(RMB) | 31,534 | -- | 39,417.5 | 15,767 | up | 100.00% | -- | 150.00% |
| Basic earnings per share(RMB) | 0.36 | -- | 0.45 | 0.18 | up | 100.00% | -- | 150.00% |
| Explanation on changes in performance | The main reasons are: 1. the Company's operating conditions in the first half of 2020 were good, and the net profit in the first half of the year was 208 million, increased 252.98% compared with the same period last year; 2. the third quarter of 2020 is expected to continue the good operating conditions as in the first half of the year and steadily increase the Company's profits. | |||||||
10. Potential Challenges and Solutions
Affected by the epidemic in 2020, the Company faces huge growth tests,increased industry competition, stricter regulatory requirements, rising costpressures, and slowing economic growth. To maintain steady growth, theCompany will continue to focus on the following areas:
(1)Based on the stable epidemic prevention and control, continue to steadilypromote the production and operation of the factory;
(2)Insight into customer needs design and release customer-oriented products,improve channel performance, and achieve customer-centric business growth;
(3)Accelerate product platform, redefine product portfolio, enrich pedigree andnetwork connection configuration to better meet customer needs; promote thedevelopment of modified vehicle business, and improve market performance andindustrial share in special modified vehicle fields such as medical rescue, logisticsand transportation;
(4)Implement capacity optimization projects and continue to optimize JMC's leanproduction, improve production efficiency and product quality level;
(5)Improve supplier capabilities and component quality, and continue to reducecomponent 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 efficientorganization to respond flexibly to market changes;
The Company will focus on light commercial vehicle with the support of SUV,maximize its own advantage and fully take advantage of shareholders resource torealize sustainable profit. Strengthen channel coverage, improve financing serviceability; promote new products development and R&D ability improvement, toaccelerate the progress of launching new competitive products to the market;develop more proactive cost reduction plan to improve the Company’s profit ability.The Company will accelerate the development and cultivation of the heavy truckmarket and increase the company's influence in the field of commercial vehicles.Guided by the new strategy, the Company will continuously implement all thespecific initiatives to accelerate the strategic target achievement.
Chapter V Major Events
1. Annual and special shareholders’ meeting
I. Shareholders’ meeting during the reporting period
Meetiing
| Meetiing | Type of meeting | Investors Attending Percentage (%) | Convening Date | Announcement Date | Announcement Index |
| 2019 Annual Shareholders’ Meeting | Annual Shareholders’ Meeting | 76.42% | June 19, 2020 | June 19, 2020 | Number 2020-024, published on the website www.cninfo.com.cn. |
II. Share holders who hold vote right restored preferred shares apply to hold aspecial shareholders’ meeting
□Applicable √Not Applicable
2. Proposal on profit distribution and converting capital reserve to share capital forthe reporting period
□Applicable √Not Applicable
The Company planned that neither cash dividend nor stock dividend wasdistributed, and not to convert capital reserve to share capital for the first half of2020.
3. Commitments of actual controlling parties, shareholders, related parties,acquirers and the Company finished in the reporting period or overdue unfinishedby the end of the reporting period
□Applicable √Not Applicable
There is no commitmentsof actual controlling parties, shareholders, related parties,acquirers and the Company finished in the reporting period or overdue unfinishedby the end of the reporting period.
4. Appointment or dismissal of accounting firm
Whether the 2020 half-year report is audited?
□Yes √No
JMC 2020 half-year report is not audited.
5. Explanation of the board of directors, the supervisory board to abnormalopinions from accounting firm for the reporting period
□Applicable √Not Applicable
6. Explanation of the board of directors to abnormal opinions from accounting firmin 2020 half-year report
□Applicable √Not Applicable
7. Related matters regarding bankruptcy
□Applicable √Not Applicable
The Company did not go bankrupt during the reporting period.
8. Litigation or arbitration
Significant litigation or arbitration
□Applicable √Not Applicable
There is no significant litigation or arbitration in the reporting period.
Other litigation
□Applicable √Not Applicable
9.Media questions
□Applicable √Not Applicable
There is no Media questions in the reporting period.
10. Punishment
□Applicable √Not Applicable
The Company have not been punished by regulatory authorities.
11. Honesty and credit of JMC and its controlling shareholder or actual controllingparty
□Applicable √Not Applicable
12. Implementation of equity incentive plan, employee stock ownership plan andother employee incentive method
□Applicable √Not Applicable
13. Major related transactions
I. Routine operation related party transactions
√Applicable □Not Applicable
Please refer to the note 7 “Related party Transactions” to the financial statementsfor details.
II. Major related party transaction concerning transfer of assets or equity
□Applicable √Not Applicable
There was no major related party transaction concerning transfer of assets orequity during the reporting period.
III.Related party transaction concerning outside co-investment
□Applicable √Not Applicable
There was no outside co-investment during the reporting period.
IV.Related credit and debt
√Applicable □Not Applicable
Is there non-operating related credit and debt?
□Yes √No
The Company had no non-operating related credit and debt during the reportingperiod.
V. Other major related party transactions
√Applicable □Not Applicable
Please refer to the note 7 “Related party Transactions” to the financial statementsfor details.Index for the Announcement of Major related party transactions:
Announcement Title
| Announcement Title | Announcement Disclosure Date | Website for Disclosure |
| Jiangling Motors Corporation, Ltd. Public Announcement on Related Party Transactions | March 04, 2020 | http://www.cninfo.com.cn |
Jiangling Motors Corporation, Ltd.Public Announcement on Forecast ofthe Routine Related Party Transactions in2020
| Jiangling Motors Corporation, Ltd. Public Announcement on Forecast of the Routine Related Party Transactions in 2020 | March 26, 2020 | http://www.cninfo.com.cn |
| Jiangling Motors Corporation, Ltd. Public Announcement on Related Party Transactions | April 08,2020 | http://www.cninfo.com.cn |
14. Non-operating funding in the Company occupied by controlling shareholderand its affiliates
□Applicable √Not Applicable
There was no non-operating funding in the Company occupied by controllingshareholder and its affiliates during the reporting period.
15. Major contracts and execution
I. Entrustment, contract or leasea. Entrustment
□Applicable √Not Applicable
There was no entrustment during the reporting period.
b. Contract
□Applicable √Not Applicable
There was no contract during the reporting period.
c. Lease
√Applicable □Not Applicable
See the note 7(b) to financial statements for lease of related parties.
Project earns more than 10% of net profit.
□Applicable √Not Applicable
II Major Guarantee
□Applicable √Not Applicable
The Company had no outside guarantee during the reporting period.
III.Entrusted financial management
□Applicable √Not Applicable
IV. Other Major Contracts
□Applicable √Not Applicable
There was no other major contract in the reporting period.
16. Corporation social responsibilities
I. Environmental protectionWhether the Company and affiliates is the key pollution discharge unit publishedby environmental protection administration?
√Yes □No
| Main Pollutants | Emission Ways | Emission OutletNumber | Emission Outlet Distribution | Emission Concentration | Emission Standard | Emission Amount | Emission Standard Amount | Meet Standard or Not |
Wastewater(COD, NH-
N)
| Wastewater (COD, NH-N) | continuous discharge | 7 | 3 in Mainsite, 1 in Xiaolan Site, 1 in Cast Plant ,1 in Axle Plant and 1 in JMCH | "COD:145.4mg/L NH-N:12.64mg/L" | “Wastewater Discharge Standard”(GB 8978-1996) | COD: 55.15t,NH-N: 1.66t | COD≤841.68t, NH-N≤83.1414t | Meet Standard |
| Exhaust gas (SO2, NOx, smoke, toluol,dimethylbenzene,NMHC） | continuous discharge | 148 | 51 in Mainsite, 58 in Xiaolan Site, 33 in Cast Plant and 6 in Axle Plant | SO2: 7mg/m3, NOx: 61mg/m3, solid: 20mg/m3, toluol: 0.419mg/m3, dimethylbenzene: 2.66mg/m3 , NMHC: 3.34mg/m3 | "The Emission Standard of Air Pollutants”,” Emission Standard of Air Pollutants for Boiler”（GB 13271-2014） | SO2: 8.39t, NOx: 12.17t | SO2≤37.69t, NMHC≤2533.54t | Meet Standard |
The construction and operation of environmental protection facilitiesSince 2006, JMC has invested more than RMB 30 million to construct sevenwastewater treatment stations (including the wastewater treatment station in theeast plant area and Xiaolan wastewater treatment station), with the treatmentcapacity as high as 9,000t/d. The treated wastewater reached the nationaldischarge standard. In 2019,the company built Jiangling Fushan factorywastewater station.In 2020, the company will build a 600 mu frame wastewatertreatment station, which is planned to be put into use early next year.
For up-to-standard emission of waste gases, JMC has taken new controlmeasures over the years. In 2012, the Company invested RMB 10 million toreconstruct the cupola furnace in the casting plant. In 2013, Xiaolan Branchinvested RMB 14 million to install a TNV waste gas incinerator. In 2014, JMCinvested RMB 14.6 million to construct the boiler coal-gas-switch project in thesouth district. In 2017, the casting plant reconstructed the ventilation & dustremoval system for the smelting furnace in the large-size and middle & small-sized parts workshop, and installed efficient environmental-friendly dust removalequipment, effectively reducing the environmental pollution by dust.In 2018, thecompany invested 3.6 million Yuan to upgrade and transform the dust remover ofthe foundry, added electric furnace dust removal equipment, removed the existingsupporting dust remover, and installed two sets of "forward flow" reverse blowingflat bag filter system, effectively reducing environmental pollution.In 2019, thecompany set up a set of zealot runner device + a set of regenerative thermaloxidizer system (RTO) in the coating workshop of Fushan factory. In 2020, theVOC online of finishing paint drying outlet of Xiaolan painting truck has beenonline.
For noise reduction, JMC took different measures to reduce the environmentalimpact, such as increase of protective sound-proof doors & windows,establishment of noise enclosure for air blower, installation of muffler andtransformation of sound-proof doors & windows. All these measures can makesure up-to-standard discharge of noise at the plant boundary.
In the process of waste management, JMC managed from the source, and dividedthe generation of wastes. JMC established a temporary storage yard for solidwastes. Warning graphic symbols have been posted at the temporary storage siteof hazardous wastes. Besides, signboards have been provided as well, so as toremind the passer-by of probable hazards in the storage process of hazardouswastes. In 2017, JMC extend Xiaolan storage yard for solid wastes. In 2018 JMChas renovated the engine plant garbage station. According to the requirements of
the law on the prevention and control of solid waste, solid waste should beprevented from leakage, spreading and loss, and should not be stored in the openair.After the transformation of anti pollution, anti-seepage and classified treatment,leakage and pollution can be avoided, which meets the requirements of laws andregulations.In 2019, the company will build the solid waste station of JanglingFushan factory, and expand the temporary storage of hazardous waste in Xiaolangasoline engine and cheqiao plant in 2020.
EIA on construction project and other administrative permits for environmentalprotectionThe Company strictly implements the construction project environmental impactassessment system. With respect to new construction, expansion andreconstruction, JMC comprehensively planned environmental protection andevaluated the “Three Simultaneities”. From the source of design, JMC carried outthe philosophy of energy saving and low carbon all the time. The Company carrieson 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 ofenvironmental pollution to the minimum. In 2020, the company obtained the EIAapproval of parts relocation optimization project, Xiaolan simulation collisionlaboratory and other construction projects, and obtained the pollution dischargepermit of the foundry factory.
Emergency plan on emergency environmental incidentsIn order to dilute or prevent environmental risks, JMC established an emergencypreparation and response procedure and specific environmental emergency planswhich were submitted to the Environmental Protection Bureau for the record,so asto formulate corresponding control methods for potential accidents andemergences occurred or that may probably occur. JMC organized emergencydrills every year to ensure the efficiency of emergency plan.
Environmental self-monitoring schemeIn 2020, the company obtained the EIA approval of parts relocation optimizationproject, Xiaolan simulation collision laboratory and other construction projects,and obtained the pollution discharge permit of the foundry factory.
Other information related to environmental protectionJMC paid high attention to environmental protection and pollution source control,taking resource saving and cost reduction as the primary task. Moreover, theCompany also took full advantage of 6sigma, and controlled from the source, soas to achieve the effect of environmental improvement. In the new expansion andreconstruction projects, JMC laid emphasis on improving the environmentalperformance, strictly implemented the system of “Three Simultaneities”,transacted the EIA procedure according to national standards, stipulated thepreventive and control measures for environmental pollution, and reported tocompetent administrative departments on environmental protection for approval.
II.One-to-one poverty alleviationa. Plan on one-to-one poverty alleviationThe Company joined the one-to-one poverty alleviation, depending on JMCG, inQianmo Village, Dai Jiapu Township, Suichuang County, Jiangxi Province andXianting Village, Songhu Town, Xinjian District, Nanchang City in accordance withthe working arrangement of Jiangxi Provincial Party Committee and Provincial
Government. The overall goal is: to help the registered poor households will belifted out of povertyand poor village to achieve a well-off standard of living before2020 by cooperating with the local government.
b. Summary of one-to-one poverty alleviation in the first halfThe Company regards the realization of precision poverty relief as the basicstrategy of precision poverty alleviation. The Company continued to consolidateefforts of one-to-one poverty alleviation in the first half of 2020.
c. Status of targeted measures in poverty alleviation
Item
| Item | Unit | Amount/Progress |
| I. Brief Introduction | —— | —— |
| 2. Sum converted from the materials | RMB (‘000) | 34.4 |
| II. Investments | —— | —— |
| 1. Anti-poverty depending on industry development | —— | —— |
| 2. Anti-poverty depending on employment transfer | —— | —— |
| 3. Anti-poverty depending on relocation | —— | —— |
| 4. Anti-poverty depending on education | —— | —— |
| including：4.1 Grants in aid to poor students | RMB (‘000) | 2 |
| 4.2 Subsidize the number of poor students | People | 12 |
| 5. Health Anti-poverty | —— | —— |
| 6. Ecological protection anti-poverty | —— | —— |
| 7. Miscellaneous provisions | —— | —— |
| including：7.1 Investments on stay-at-home children, women and elderly | RMB (’000) | 32.4 |
| 7.2 Help the number of " stay-at-home"children, women and elderly | People | 34 |
| 8. Social anti-poverty | —— | —— |
| 9. Other | —— | —— |
| III. Awards | —— | —— |
d. On-going plan regarding targeted measures in poverty alleviationThe year 2020 will be a decisive year in the fight against poverty, JMC willunswervingly implement the strategy of targeted poverty alleviation, strengthenthe combination of aiding the poor with wisdom, help all the registered poorhouseholds to stabilize poverty alleviation, consolidate and improve theeffectiveness of poverty alleviation, and resolutely win the battle against poverty.
17. Other major events
√Applicable □Not Applicable
JMC received government incentives about RMB 160 million appropriated byNanchang City, Nanchang Xiaolan Economic and Technological DevelopmentZone, Nanchang County and Shanxi Transformation and Comprehensive ReformDemonstration Zone during the reporting period, which is to support JMC’sdevelopment.
18. Major event of JMC subsidiary
√Applicable □Not Applicable
JMC Heavy Duty Vehicle Co., Ltd., a whole-owned subsidiary of JMC, wasseparated per vehicle and engine business into the surviving company “JMCHeavy Duty Vehicle Co., Ltd.” and the derived new company “Taiyuan Jiangling
Power Co., Ltd.” in August 2020. Before the separation, the registered capital ofJMC Heavy Duty Vehicle Co., Ltd. was RMB 281,793,174; after the separation,the registered capital of JMC Heavy Duty Vehicle Co., Ltd. is changed to RMB181,793,174, and the registered capital of Taiyuan Jiangling Power Co., Ltd. isRMB 100,000,000.
Chapter VIShare Capital Changes & Shareholders
1. Changes of Shareholding Structure
I. Changes of shareholding structure
| Before the change | Change (+, -) | After the change | |||||||
| Shares | Proportion of total shares (%) | New shares | Bonus Shares | Reserve- converted shares | Others | Subtotal | Shares | Proportion of total shares (%) | |
| I. Limited tradable A shares | 750,915 | 0.09% | -75 | -75 | 750,840 | 0.09% | |||
| 1. Other domestic shares | 750,915 | 0.09% | -75 | -75 | 750,840 | 0.09% | |||
| Including: | |||||||||
| Domestic legal person shares | 749,940 | 0.09% | 749,940 | 0.09% | |||||
| Domestic natural person shares | 975 | 0.00% | -75 | -75 | 900 | 0.00% | |||
| II. Unlimited tradable shares | 862,463,085 | 99.91% | 75 | 75 | 862,463,160 | 99.91% | |||
| 1. A shares | 518,463,085 | 60.06% | 75 | 75 | 518,463,160 | 60.06% | |||
| 2. B shares | 344,000,000 | 39.85% | 344,000,000 | 39.85% | |||||
| III. Total | 863,214,000 | 100.00% | 863,214,000 | 100.00% | |||||
Causes of shareholding changes
√Applicable □Not Applicable
Former senior executive Zhu Shuixing left office for more than half a year, andhis shares were released on January 1, 2020.
Approval of changes of shareholding structure
□Applicable √Not Applicable
Shares transfer
□Applicable √Not Applicable
Impact on accounting data, such as the latest EPS, diluted EPS, shareholders’equity attributable to the equity holders of the Company, generated fromshares changes
□Applicable √Not Applicable
Others to be disclosed necessarily or per the requirements of securitiesregulator
□Applicable √Not Applicable
II.Changes of limited tradable shares
√Applicable □Not Applicable
Name of shareholder
| Name of shareholder | Number of restricted shares at the beginning of the period | Number of shares released in the current period | Increase of restricted shares in the current period | Number of restricted shares at the end of the period | Reasons | Release date |
| Zhu Shuixing | 75 | 75 | 0 | 0 | Senior executives leave for more than half a year | January 1, 2020 |
| total | 75 | 75 | 0 | 0 | -- | -- |
2. Securities issuance and listing
□Applicable √Not Applicable
3. Shareholders and shareholding status
| Total shareholders (as of June 30, 2020) | JMC had 30,427 shareholders, including 24,876 A-share holders, and 5,551 B-share holders. | ||||||
| Top ten shareholders | |||||||
| Shareholder Name | Shareholder Type | Shareholding Percentage (%) | Shares at the End of Year | Change (+,-) | Shares with Trading Restriction | Shares due to Mortgage or Frozen | |
| Nanchang Jiangling Investment Co., Ltd. | State-owned legal person | 41.03% | 354,176,000 | 0 | 0 | 0 | |
| Ford Motor Company | Foreign legal person | 32.00% | 276,228,394 | 0 | 0 | 0 | |
| China Securities Corporation Limited | Domestic non-State-owned legal persons | 2.72% | 23,458,066 | 0 | 0 | 0 | |
| Shanghai Automotive Co., Ltd. | State-owned Legal person | 1.51% | 13,019,610 | 0 | 0 | 0 | |
| Hong Kong Securities Clearing Company Ltd. (HKSCC) | Foreign legal person | 0.99% | 8,514,486 | 3,849,984 | 0 | 0 | |
| Central Huijin Investment Ltd. | State-owned Legal person | 0.83% | 7,186,600 | 0 | 0 | 0 | |
| GAOLING FUND, L.P. | Foreign legal person | 0.63% | 5,453,086 | 0 | 0 | 0 | |
| INVESCO FUNDS SICAV | Foreign legal person | 0.56% | 4,841,889 | 0 | 0 | 0 | |
| Yang Wenting | Domestic natural person | 0.44% | 3,827,921 | 3,827,921 | 0 | 0 | |
| LSV EMERGING MARKETS EQUITY FUND, L.P. | Foreign legal person | 0.35% | 2,996,400 | 0 | 0 | 0 | |
| Notes on association among above-mentioned shareholders | None. | ||||||
| Top ten shareholders holding unlimited tradable shares | |||||||
| Shareholder Name | Shares without Trading Restriction | Share Type | |||||
| Nanchang Jiangling Investment Co., Ltd. | 354,176,000 | A share | |||||
| Ford Motor Company | 276,228,394 | B share | |||||
| China Securities Corporation Limited | 23,458,066 | A share | |||||
| Shanghai Automotive Co., Ltd. | 13,019,610 | A share | |||||
| Hong Kong Securities Clearing Company Ltd. (HKSCC) | 8,514,486 | A share | |||||
| Central Huijin Investment Ltd. | 7,186,600 | A share | |||||
GAOLING FUND, L.P.
| GAOLING FUND, L.P. | 5,453,086 | B share |
| INVESCO FUNDS SICAV | 4,841,889 | B share |
| Yang Wenting | 3,827,921 | A share |
| LSV EMERGING MARKETS EQUITY FUND, L.P. | 2,996,400 | B share |
| Notes on association among above-mentioned shareholders | None. | |
Stock buy-back by top ten shareholders or top ten shareholders holdingunlimited tradable shares in the reporting period
□Yes √No
There is no stock buy-back by top ten shareholders or top ten shareholdersholding unlimited tradable shares in the reporting period.
4. Change of controlling shareholders or actual controlling partiesChange of controlling shareholders
□Applicable √Not Applicable
There was no change of controlling shareholders during the reporting period.
Change of actual controlling parties
□Applicable √Not Applicable
There was no change of actual controlling parties during the reporting period.
Chapter VIIPreferred Shares
□Applicable √Not Applicable
JMC have no preferred shares during the reporting period.
Chapter VIII Convertible Bond
□Applicable √Not Applicable
JMC have no Convertible Bond during the reporting period.
Chapter IX Directors, Supervisors and Senior Management
1. Changes of shares held by directors, supervisors and senior management
□Applicable √Not Applicable
There was no change of shares held by Directors, Supervisors and seniormanagement in the reporting period. Please refer to 2018 annual report fordetails.
2. Changes of directors, supervisors and senior management
√Applicable □Not Applicable
Name
| Name | Position | Status | Date | Reason |
| Lu Song | Independent Director | Leave | June 19, 2020 | Term expired |
| Wang Kun | Independent Director | Leave | June 19, 2020 | Term expired |
| Mike Chang | VP | Leave | August 01,2020 | Work rotation. |
| Jerry Lin | VP | Appointed | August 01,2020 |
Chapter X Company BondWhether the Company owns the corporate bond that is lists in the securitiesexchange and undue or is not paid in full although it’s due.
□Yes √No
Chapter XI Financial Statements
JIANGLING MOTORS CORPORATION, LTD.
FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30JUNE 2020
JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY BALANCE SHEET AS AT 30 JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
Assets
| Assets | Note | 30 June 2020 Consolidated* | 31 December 2019 Consolidated | 30 June 2020 Company* | 31 December 2019 Company |
| Current assets | |||||
| Cash at bank and on hand | 4(1) | 7,922,272,404 | 8,937,936,658 | 7,165,034,132 | 8,677,928,946 |
| Transactional financial assets | 4(2) | 2,725,990,657 | - | 2,725,990,657 | - |
| Derivative financial assets | 4(3) | 1,475,752 | - | 1,475,752 | - |
| Notes receivables | 4(4)、14(1) | 42,368,305 | 85,816,311 | 4,905 | 20,792,000 |
| Accounts receivables | 4(5) | 3,032,745,980 | 2,208,236,620 | 1,083,663,550 | 865,928,297 |
| Receivables financing | 4(6) | 270,951,837 | 289,044,373 | 507,260,468 | 52,811,157 |
| Advances to suppliers | 4(7) | 553,294,163 | 517,122,502 | 542,256,373 | 504,562,617 |
| Other receivables | 4(8)、14(2) | 94,908,695 | 115,983,137 | 3,267,748,739 | 3,118,317,705 |
| Inventories | 4(9) | 1,694,426,123 | 1,946,869,092 | 1,339,814,288 | 1,471,931,881 |
| Other current assets | 4(10) | 807,965,374 | 973,426,066 | 634,657,841 | 821,783,113 |
| Total current assets | 17,146,399,290 | 15,074,434,759 | 17,267,906,705 | 15,534,055,716 | |
| Non-current assets | |||||
| Long-term equity investments | 4(11)、14(3) | 37,910,003 | 40,934,557 | 377,910,003 | 380,934,557 |
| Fixed assets | 4(12) | 5,230,779,446 | 5,714,489,577 | 4,039,863,217 | 4,462,909,152 |
| Construction in progress | 4(13) | 1,667,129,490 | 1,498,124,778 | 1,450,890,333 | 1,244,963,653 |
| Right-of-use asset | 4(14) | 28,814,063 | 36,039,891 | 27,363,329 | 33,138,423 |
| Intangible assets | 4(15) | 1,075,657,753 | 948,755,845 | 645,298,032 | 513,529,416 |
| Development costs | 4(15) | 69,583,416 | 125,142,080 | 46,386,709 | 100,271,663 |
| Deferred tax assets | 4(17) | 858,593,505 | 860,607,106 | 166,881,320 | 182,248,610 |
| Totalnon-current assets | 8,968,467,676 | 9,224,093,834 | 6,754,592,943 | 6,917,995,474 | |
| Total assets | 26,114,866,966 | 24,298,528,593 | 24,022,499,648 | 22,452,051,190 |
JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY BALANCE SHEET AS AT 30 JUNE 2020 (continued)(All amounts in thousands of RMB unless otherwise stated)
Liabilities and owners' equity
| Liabilities and owners' equity | Note | 30 June 2020 Consolidated* | 31 December 2019 Consolidated | 30 June 2020 Company* | 31 December 2019 Company |
| Current liabilities | |||||
| Short-term borrowings | 4(19) | 1,300,000,000 | - | 1,300,000,000 | - |
| Derivative financial liabilities | 4(3) | - | 545,632 | - | 545,632 |
| Notes payables | 4(20) | 71,901,506 | 31,400,000 | - | - |
| Accounts payables | 4(21) | 8,735,960,426 | 8,116,169,589 | 8,456,366,479 | 7,908,815,398 |
| Contract liabilities | 4(22) | 149,157,003 | 268,170,154 | 156,055,834 | 77,585,490 |
| Employee benefits payable | 4(23) | 503,696,486 | 385,547,290 | 447,103,193 | 312,170,895 |
| Taxes payable | 4(24) | 44,504,735 | 198,777,104 | 36,995,015 | 119,431,418 |
| Other payables | 4(25) | 3,983,922,576 | 4,145,266,838 | 1,370,448,674 | 2,227,351,456 |
| Current portion of non-current liabilities | 4(26) | 10,578,872 | 13,843,406 | 9,391,439 | 11,500,358 |
| Other current liabilities | 4(27) | 273,213,888 | 264,558,923 | 25,389,602 | 13,333,551 |
| Total current liabilities | 15,072,935,492 | 13,424,278,936 | 11,801,750,236 | 10,670,734,198 | |
| Non-current liabilities | |||||
| Long-term borrowings | 4(28) | 3,013,368 | 3,197,814 | 3,013,368 | 3,197,814 |
| Lease liabilities | 4(29) | 19,139,514 | 22,592,252 | 19,139,514 | 22,592,252 |
| Provisions | 4(30) | 176,066,962 | 166,687,460 | - | - |
| Deferred income | 4(31) | 34,693,362 | 34,389,578 | 34,693,362 | 34,389,578 |
| Long-term employee benefits payable | 4(32) | 61,276,485 | 63,685,000 | 60,976,485 | 63,385,000 |
| Deferred tax liabilities | 4(17) | 25,022,887 | 25,339,981 | - | - |
| Other non-current liabilities | 4(33) | 78,808,313 | 61,793,791 | 68,780,832 | 50,930,075 |
| Total non-current liabilities | 398,020,891 | 377,685,876 | 186,603,561 | 174,494,719 | |
| Total liabilities | 15,470,956,383 | 13,801,964,812 | 11,988,353,797 | 10,845,228,917 | |
| Owners' equity | |||||
| Share capital | 4(34) | 863,214,000 | 863,214,000 | 863,214,000 | 863,214,000 |
| Capital surplus | 4(35) | 839,442,490 | 839,442,490 | 839,442,490 | 839,442,490 |
| Other comprehensive income | 4(36) | (11,395,500) | (11,395,500) | (11,616,750) | (11,616,750) |
| Surplus reserve | 4(37) | 431,607,000 | 431,607,000 | 431,607,000 | 431,607,000 |
| Undistributed profits | 4(38) | 8,521,042,593 | 8,373,695,791 | 9,911,499,111 | 9,484,175,533 |
| Total equity attributable to equity owners of the Company | 10,643,910,583 | 10,496,563,781 | 12,034,145,851 | 11,606,822,273 | |
| Minority interests | - | - | - | - | |
| Total owners' equity | 10,643,910,583 | 10,496,563,781 | 12,034,145,851 | 11,606,822,273 | |
| Total Liabilities and owners' equity | 26,114,866,966 | 24,298,528,593 | 24,022,499,648 | 22,452,051,190 |
note：* Unaudited financial indexesLegal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY INCOME STATEMENTS FOR 2020 FIRSTHALF-YEAR(All amounts in RMB Yuan unless otherwise stated)
Item
| Item | Note | 2020 First Half-year Consolidated* | 2019 First Half-year Consolidated* | 2020 First Half-year Company* | 2019 First Half-year Company* |
| Revenue | 4(39)、14(4) | 14,073,417,878 | 13,721,953,502 | 13,100,109,933 | 12,974,537,618 |
| Less: Cost of sales | 4(39)、4(45)、14(4) | (11,860,122,365) | (11,678,659,344) | (11,197,514,026) | (11,226,955,738) |
| Taxes and surcharges | 4(40) | (386,579,142) | (368,975,495) | (374,566,719) | (356,492,502) |
| Selling expenses | 4(41)、4(45) | (592,187,320) | (705,875,262) | (106,442,789) | (116,506,548) |
| General and administrative expenses | 4(42)、4(45) | (459,127,446) | (437,154,690) | (358,155,678) | (379,137,935) |
| Research and development expenses | 4(43)、4(45) | (696,582,452) | (837,430,636) | (694,302,769) | (761,825,538) |
| Financial expenses | 4(44) | 66,731,813 | 89,690,604 | 67,945,339 | 111,649,983 |
| Including: Interest expenses | (19,061,965) | (106,053) | (16,322,688) | (106,053) | |
| Interest income | 94,240,518 | 92,765,173 | 91,873,400 | 112,414,620 | |
| Add: Other income | 4(48) | 165,639,467 | 72,562,205 | 145,105,792 | 12,562,205 |
| Investment income | 4(49)、14(5) | 28,278,000 | 13,840,645 | 28,278,000 | 13,840,645 |
| Including: Share of profit of associates and joint ventures | (3,024,554) | 333,625 | (3,024,554) | 333,625 | |
| Profit arising from changes in fair value | 4(50) | 10,012,041 | (3,556,991) | 10,012,041 | (3,556,991) |
| Credit impairment losses | 4(47) | (66,242,811) | 1,056,124 | (61,963,003) | 1,397,263 |
| Asset impairment losses | 4(46) | (34,107,710) | (8,435,244) | (20,994,208) | (7,931,633) |
| Gains on disposals of assets | 4(51) | (581,955) | (2,212,045) | (1,145,364) | (2,136,061) |
| Operating profit | 248,547,998 | (143,196,627) | 536,366,549 | 259,444,768 | |
| Add: Non-operating income | 4(52) | 3,599,193 | 158,387,295 | 3,052,524 | 150,453,025 |
| Less: Non-operating expenses | 4(53) | (30,238,252) | (2,631,226) | (30,104,671) | (2,273,380) |
| Total profit | 221,908,939 | 12,559,442 | 509,314,402 | 407,624,413 | |
| Less: Income tax expenses | 4(54) | (14,137,157) | 46,302,374 | (21,565,844) | (16,530,546) |
| Net profit | 207,771,782 | 58,861,816 | 487,748,558 | 391,093,867 | |
| Classified by continuity of operations | |||||
| Net profit from continuing operations | 207,771,782 | 58,861,816 | 487,748,558 | 391,093,867 | |
| Net profit from discontinued operations | - | - | - | - | |
| Classified by ownership of the equity | |||||
| Minority interests | - | - | - | - | |
| Attributable to equity owners of the Company | 207,771,782 | 58,861,816 | 487,748,558 | 391,093,867 | |
| Other comprehensive income, net of tax | - | - | - | - | |
| Changes arising from remesurement of net liability or net asset of defined benefit plan | 4(36) | ||||
| Total comprehensive income | 207,771,782 | 58,861,816 | 487,748,558 | 391,093,867 | |
| Attributable to equity owners of the Company | 4(36) | 207,771,782 | 58,861,816 | 487,748,558 | 391,093,867 |
| Attributable to minority interests | - | - | - | - | |
| Earnings per share | |||||
| Basic earnings per share(RMB Yuan) | 4(55) | 0.24 | 0.07 | —— | —— |
| Dilutedearnings per share(RMB Yuan) | 4(55) | 0.24 | 0.07 | —— | —— |
note：* Unaudited financial indexesLegal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS FOR 2020 FIRSTHALF-YEAR(All amounts in thousands of RMB unless otherwise stated)
Item
| Item | Note | 2020 First Half-year Consolidated* | 2019 First Half-year Consolidated* | 2020 First Half-year Company* | 2019 First Half-year Company* |
| Cash flows from operating activities | |||||
| Cash received from sales of goods or rendering of services | 14,440,474,744 | 15,268,525,172 | 12,911,082,079 | 14,492,403,355 | |
| Cash received relating to other operating activities | 4(56) | 245,920,384 | 349,521,262 | 187,369,975 | 268,605,042 |
| Sub-total of cash inflows | 14,686,395,128 | 15,618,046,434 | 13,098,452,054 | 14,761,008,397 | |
| Cash paid for goods and services | (10,617,165,843) | (10,518,805,139) | (10,193,382,381) | (10,053,954,409) | |
| Cash paid to and on behalf of employees | (1,084,107,268) | (1,205,849,910) | (962,774,043) | (1,072,966,988) | |
| Payments of taxes and surcharges | (1,021,043,215) | (1,119,736,879) | (838,116,455) | (927,033,121) | |
| Cash paid relating to other operating activities | 4(56) | (1,229,795,175) | (1,338,302,942) | (768,797,800) | (805,267,011) |
| Sub-total of cash outflows | (13,952,111,501) | (14,182,694,870) | (12,763,070,679) | (12,859,221,529) | |
| Net cash flows from operating activities | 4(57) | 734,283,627 | 1,435,351,564 | 335,381,375 | 1,901,786,868 |
| Cash flows from investing activities | |||||
| Cash received from disposal of investments | 6,471,000,000 | 4,700,000,000 | 9,238,976,131 | 6,847,500,000 | |
| Cash received from returns on investments | 32,619,541 | 18,446,866 | 32,619,541 | 18,446,866 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 7,983,584 | 2,989,695 | 7,062,524 | 2,762,095 | |
| Cash received relating to other investing activities | 4(56) | 96,772,432 | 103,216,428 | 164,343,358 | 159,332,398 |
| Sub-total of cash inflows | 6,608,375,557 | 4,824,652,989 | 9,443,001,554 | 7,028,041,359 | |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | (493,537,475) | (801,467,480) | (480,691,940) | (638,723,096) | |
| Cash paid to acquire investments | (9,189,000,000) | (4,700,000,000) | (12,088,976,131) | (7,157,500,000) | |
| Cash paid relating to other investing activities | (1,928,931) | (7,590,323) | (1,928,931) | (7,590,323) | |
| Sub-total of cash outflows | (9,684,466,406) | (5,509,057,803) | (12,571,597,002) | (7,803,813,419) | |
| Net cash flows from investing activities | (3,076,090,849) | (684,404,814) | (3,128,595,448) | (775,772,060) | |
| Cash flows from financing activities | |||||
| Cash received from borrowings | 1,800,000,000 | - | 1,800,000,000 | - | |
| Sub-total of cash inflows | 1,800,000,000 | - | 1,800,000,000 | - | |
| Cash repayments of borrowings | (500,231,444) | (219,935) | (500,231,444) | (219,935) | |
| Cash payments for distribution of dividends, profits or interestexpenses | (18,544,156) | (150,021) | (15,845,917) | (150,021) | |
| Cash payments relating to other financing activities | 4(56) | (4,800,032) | - | (3,603,380) | - |
| Sub-total of cash outflows | (523,575,632) | (369,956) | (519,680,741) | (369,956) | |
| Net cash flows from financing activities | 1,276,424,368 | (369,956) | 1,280,319,259 | (369,956) | |
| Effect of foreign exchange rate changes on cash and cash equivalents | - | - | - | - | |
| Net increase in cash and cash equivalents | 4(57) | (1,065,382,854) | 750,576,794 | (1,512,894,814) | 1,125,644,852 |
| Add: Cash and cash equivalents at beginning of year | 4(57) | 8,937,936,658 | 7,616,879,976 | 8,677,928,946 | 6,244,682,576 |
| Cash and cash equivalents at end of period | 4(57) | 7,872,553,804 | 8,367,456,770 | 7,165,034,132 | 7,370,327,428 |
note：* Unaudited financial indexesLegal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED STATEMENT OF CHANGES IN OWNERS' EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2020(All amounts in thousands of RMB unless otherwise stated)
Item
| Item | Note | Attributable to equity owners of the Company | Minority interests | Total owners' equity | |||||
| Sharecapital | Capital surplus | Other comprehensive income | Surplus reserves | Undistributed profits | |||||
| Balance at 1 January 2019 | 863,214,000 | 839,442,490 | (10,178,250) | 431,607,000 | 8,260,412,273 | - | 10,384,497,513 | ||
| Movements for the six months ended 30 June 2020* | - | - | - | - | 24,333,256 | - | 24,333,256 | ||
| Total comprehensive income | |||||||||
| Net profit | - | - | - | - | 58,861,816 | - | 58,861,816 | ||
| Other comprehensive income | - | - | - | - | - | - | - | ||
| Total comprehensive income for the year | - | - | - | - | 58,861,816 | - | 58,861,816 | ||
| Profit distribution | |||||||||
| Profit distribution to equity owners | 4(38) | - | - | - | - | (34,528,560) | - | (34,528,560) | |
| Balance at 30 June 2020* | 863,214,000 | 839,442,490 | (10,178,250) | 431,607,000 | 8,284,745,529 | - | 10,408,830,769 | ||
| Balance at 1 January 2020 | 863,214,000 | 839,442,490 | (11,395,500) | 431,607,000 | 8,373,695,791 | - | 10,496,563,781 | ||
| Movements for the six months ended 30 June 2020* | - | - | - | - | 147,346,802 | - | 147,346,802 | ||
| Total comprehensive income | |||||||||
| Net profit | - | - | - | - | 207,771,782 | - | 207,771,782 | ||
| Other comprehensive income | - | - | - | - | - | - | - | ||
| Total comprehensive income for the year | - | - | - | - | 207,771,782 | - | 207,771,782 | ||
| Profit distribution | |||||||||
| Profit distribution to equity owners | 4(38) | - | - | - | - | (60,424,980) | - | (60,424,980) | |
| Balance at 30 June 2020* | 863,214,000 | 839,442,490 | (11,395,500) | 431,607,000 | 8,521,042,593 | - | 10,643,910,583 | ||
note：* Unaudited financial indexesLegal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
JIANGLING MOTORS CORPORATION, LTD.COMPANY STATEMENT OF CHANGES IN OWNERS' EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2020(All amounts in thousands of RMB unless otherwise stated)
Item
| Item | Note | Share capital | Capital surplus | Other comprehensive income | Surplus reserves | Undistributed profits | Total owners' equity | |
| Balance at 1 January 2019 | 863,214,000 | 839,442,490 | (10,395,750) | 431,607,000 | 9,040,459,451 | 11,164,327,191 | ||
| Movements for the six months ended 30 June 2020* | - | - | - | - | 356,565,307 | 356,565,307 | ||
| Total comprehensive income | ||||||||
| Net profit | - | - | - | - | 391,093,867 | 391,093,867 | ||
| Other comprehensive income | - | - | - | - | - | - | ||
| Total comprehensive income for the year | - | - | - | - | 391,093,867 | 391,093,867 | ||
| Profit distribution | ||||||||
| Profit distribution to equity owners | 4(38) | - | - | - | - | (34,528,560) | (34,528,560) | |
| Balance at 30 June 2020* | 863,214,000 | 839,442,490 | (10,395,750) | 431,607,000 | 9,397,024,758 | 11,520,892,498 | ||
| Balance at 1 January 2020 | 863,214,000 | 839,442,490 | (11,616,750) | 431,607,000 | 9,484,175,533 | 11,606,822,273 | ||
| Movements for the six months ended 30 June 2020* | - | - | - | - | 427,323,578 | 427,323,578 | ||
| Total comprehensive income | ||||||||
| Net profit | - | - | - | - | 487,748,558 | 487,748,558 | ||
| Other comprehensive income | - | - | - | - | - | - | ||
| Total comprehensive income for the year | - | - | - | - | 487,748,558 | 487,748,558 | ||
| Profit distribution | ||||||||
| Profit distribution to equity owners | 4(38) | - | - | - | - | (60,424,980) | (60,424,980) | |
| Balance at 30 June 2020* | 863,214,000 | 839,442,490 | (11,616,750) | 431,607,000 | 9,911,499,111 | 12,034,145,851 | ||
note：* Unaudited financial indexesLegal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 1 | General information |
| Jiangling Motors Corporation, Ltd. (hereinafter “the Company”) is a Sino-foreign joint stock enterprise established under the approval of Hongban (1992) No. 005 of Nanchang Revolution and Authorisation Group of Company’s Joint Stock on the basis of Jiangxi Motors Manufacturing Factory on 16 June 1992. The registration number of the enterprise business license is No. 913600006124469438. The registered address of the Company and the address of its headquarters are both Nanchang City, Jiangxi Province of the People’s Republic of China (“the PRC”). | |
| On 23 July 1993, with the approval of the China Securities Regulatory Commission (hereinafter “CSRC”) (Zheng Jian Fa Shen Zi [1993] No. 22) and (Zheng Jian Han Zi [1993] No. 86), the Company was listed on the Stock Exchange of Shenzhen on 1 December 1993, issuing 494,000,000 shares in total. On 8 April 1994, a total of 25,214,000 shares were distributed for the 1993 dividend distribution programme with the approval of the shareholders’ meeting and Jiangxi Securities Management Leading Group (Gan Securities [1994] No. 02). In 1995, with the approval of CSRC (Zheng Jian Fa Zi [1995] No. 144) and the Shenzhen Securities Management Office (Shenzhen Office Fu [1995] No. 92), the Company issued 174,000,000 ordinary shares (“B shares”). In 1998, with the approval of CSRC (Zheng Jian Fa Zi [1998] No. 19), the Company issued additional 170,000,000 B shares. | |
| According to the resolution of the shareholders’ meeting regarding the split share structure reform on 11 January 2006, the Company implemented the Scheme on Split Share Structure Reform on 13 February 2006. After the implementation, the Company’s total paid-in capital remains the same. Related details are disclosed in Note 4(32). | |
| As at 30 June 2020, the Company’s paid-in capital totalled RMB 863,214,000, with par value of RMB 1 per share. | |
| The business scope of the Company and its subsidiaries (hereinafter “the Group”) includes production and sales of automobile assemblies such as automobiles, special (modified) vehicles, engines and chassis and other automobile parts, and provision of related after-sales services; retail and wholesale of imported E series automobiles of Ford Motor (China) Co., Ltd. (“FORD”) as the dealer; import and export of automobiles and parts; dealership of used cars; provision enterprise management and consulting services related to production and sales of automobiles. | |
| Subsidiaries included in the consolidation scope for the current year are detailed in Note 5. | |
| These financial statements were authorised for issue by the Company's Board of Directors on 26August 2020. | |
| 2 | Summary of significant accounting policies and accounting estimates |
| The Group determines specific accounting policies and estimates based on the features of its production and operation, which mainly comprise the measurement of expected credit losses (“ECLs”) on receivables (Note 2(8)), valuation of inventories (Note 2(9)), depreciation of fixed assets and amortisation of intangible assets (Note 2(11), (14)), criteria for capitalisation of development expenditures (Note 2(14)), recognition and measurement of revenue (Note 2(19)), etc. Key judgements applied by the Group on the determination of significant accounting policies are set out in Note 2(25). |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (1) | Basis of preparation |
| The financial statements are prepared in accordance with the Accounting Standards for Business Enterprises - Basic Standard, specific accounting standards and relevant regulations issued by the Ministry of Finance on 15 February 2006 and in subsequent periods (hereinafter collectively referred to as “the Accounting Standards for Business Enterprises” or “CASs”) and the disclosure requirements in the Preparation Convention of Information Disclosure by Companies Offering Securities to the Public No.15 - General Rules on Financial Reporting issued by CSRC. The financial statements are prepared on a going concern basis. | |
| (2) | Statement of compliance with the Accounting Standards for Business Enterprises |
| The financial statements of the Company For the Six Months Ended 30 June 2020 are in compliance with the Accounting Standards for Business Enterprises, and truly and completely present the consolidated and company’s financial position of the Company as at 30 June 2020 and their financial performance, cash flows and other information for the year then ended. | |
| (3) | Accounting year |
| The Company’s accounting year starts on 1 January and ends on 31 December. | |
| (4) | Recording currency |
| The recording currency is Renminbi (“RMB”). The financial statements are presented in RMB. | |
| (5) | Preparation of consolidated financial statements |
| The consolidated financial statements comprise the financial statements of the Company and all of its subsidiaries. | |
| Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidated from the date that such control ceases. For a subsidiary that is acquired in a business combination involving enterprises under common control, it is included in the consolidated financial statements from the date when it, together with the Company, comes under common control of the ultimate controlling party. The portion of the net profits realised before the combination date is presented separately in the consolidated income statement. | |
| In preparing the consolidated financial statements, where the accounting policies or the accounting periods of the Company and subsidiaries are inconsistent, the financial statements of the subsidiaries are adjusted in accordance with the accounting policies and the accounting period of the Company. For subsidiaries acquired from business combinations involving enterprises not under common control, the individual financial statements of the subsidiaries are adjusted based on the fair value of the identifiable net assets at the acquisition date. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (5) | Preparation of consolidated financial statements (Cont'd) |
| All significant intra-group balances, transactions and unrealised profits are eliminated in the consolidated financial statements. The portion of subsidiaries’ shareholders' equity and the portion of subsidiaries’ net profits and losses and comprehensive income for the period not attributable to the Company are recognised as minority interests, net profit attributed to minority interests and total comprehensive income attributed to minority interests, and presented separately in the consolidated financial statements under shareholders' equity, net profits and total comprehensive income respectively. Unrealised profits and losses resulting from the sale of assets by the Company to its subsidiaries are fully eliminated against net profit attributable to owners of the parent. Unrealised profits and losses resulting from the sale of assets by a subsidiary to the Company are eliminated and allocated between net profit attributable to owners of the parent and net profit attributed to minority interests in accordance with the allocation proportion of the parent in the subsidiary. Unrealised profits and losses resulting from the sale of assets by one subsidiary to another are eliminated and allocated between net profit attributable to owners of the parent and net profit attributed to minority interests in accordance with the allocation proportion of the parent in the subsidiary. If the accounting treatment of a transaction is inconsistent in the financial statements at the Group level and at the Company or its subsidiary level, adjustment will be made from the perspective of the Group. | |
| (6) | Cash and cash equivalents |
| Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand, and short-term and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. | |
| (7) | Foreign currency translation |
| Foreign currency transactions | |
| Foreign currency transactions are translated into recording currency using the exchange rates prevailing at the dates of the transactions. | |
| At the balance sheet date, monetary items denominated in foreign currencies are translated into recording currency using the spot exchange rates on the balance sheet date. Exchange differences arising from these translations are recognised in profit or loss for the current period, except for those attributable to foreign currency borrowings that have been taken out specifically for acquisition or construction of qualifying assets, which are capitalised as part of the cost of those assets. Non-monetary items denominated in foreign currencies that are measured at historical costs are translated at the balance sheet date using the spot exchange rates at the date of the transactions. The effect of exchange rate changes on cash is presented separately in the cash flow statement. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (8) | Financial instruments |
| A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. A financial asset or a financial liability is recognised when the Group becomes a party to the contractual provisions of the instrument. | |
| (a) | Financial assets |
| (i) | Classification and measurement |
| Based on the business model for managing the financial assets and the contractual cash flow characteristics of the financial assets, financial assets are classified as: (1) financial assets at amortised cost; (2) financial assets at fair value through other comprehensive income; (3) financial assets at fair value through profit or loss. | |
| The financial assets are measured at fair value at initial recognition. Related transaction costs that are attributable to the acquisition of the financial assets are included in the initially recognised amounts, except for the financial assets at fair value through profit or loss, the related transaction costs of which are recognised directly in profit or loss for the current period. Accounts receivable or notes receivable arising from sales of products or rendering of services (excluding or without regard to significant financing components) are initially recognised at the consideration that is entitled to be charged by the Group as expected. | |
| Debt instruments | |
| The debt instruments held by the Group refer to the instruments that meet the definition of financial liabilities from the perspective of the issuer, and are measured in the following three ways: | |
| Measured at amortised cost: | |
| The objective of the Group’s business model is to hold the financial assets to collect the contractual cash flows, and the contractual cash flow characteristics are consistent with a basic lending arrangement, which gives rise on specified dates to the contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. The interest income of such financial assets is recognised using the effective interest method. Such financial assets mainly include cash at bank and on hand, notes receivable, accounts receivable, other receivables, etc. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | |
| (8) | Financial instruments (Cont'd) | |
| (a) | Financial assets (Cont’d) | |
| (i) | Classification and measurement (Cont’d) | |
| Measured at fair value through other comprehensive income: | ||
| The objective of the Group’s business model is to hold the financial assets to both collect the contractual cash flows and sell such financial assets, and the contractual cash flow characteristics are consistent with a basic lending arrangement. Such financial assets are measured at fair value through other comprehensive income, except for the impairment gains or losses, foreign exchange gains and losses, and interest income calculated using the effective interest method which are recognised in profit or loss for the current period. Such financial assets mainly include receivables financing, etc. | ||
| Measured at fair value through profit or loss: | ||
| Debt instruments held by the Group that are not divided into those at amortised cost, or those measured at fair value through other comprehensive income, are measured at fair value through profit or loss and included in financial assets held for trading. At initial recognition, the Group does not designate a portion of financial assets as at fair value through profit or loss to eliminate or significantly reduce an accounting mismatch. Financial assets that are due within one year (inclusive) as from the balance sheet date and are expected to be held over one year are included in other non-current financial assets. | ||
| Equity instruments | ||
| Investments in equity instruments, over which the Group has no control, joint control and significant influence, are measured at fair value through profit or loss under financial assets held for trading; investments in equity instruments expected to be held over one year as from the balance sheet date are included in other non-current financial assets. The Group had no related equity instruments. Investments in equity instruments not held for trading can be designated as financial assets at fair value through other comprehensive income, and included in other investments in equity instruments. The relevant dividend income of such financial assets is recognised in profit or loss for the current period. The Group had no related equity instruments not held for trading. | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (8) | Financial instruments (Cont'd) |
| (a) | Financial assets (Cont’d) |
| (ii) | Impairment |
| Loss provision for financial assets at amortised cost and investments in debt instruments at fair value through other comprehensive income is recognised on the basis of ECLs. | |
| Giving consideration to reasonable and supportable information on past events, current conditions and forecasts of future economic conditions, as well as the default risk weight, the Group recognises the ECL as the probability-weighted amount of the present value of the difference between the cash flows receivable from the contract and the cash flows expected to collect. | |
| As at each balance sheet date, the ECLs of financial instruments at different stages are measured respectively. 12-month ECL provision is recognised for financial instruments in Stage 1 that have not had a significant increase in credit risk since initial recognition; lifetime ECL provision is recognised for financial instruments in Stage 2 that have had a significant increase in credit risk yet without credit impairment since initial recognition; and lifetime ECL provision is recognised for financial instruments in Stage 3 that have had credit impairment since initial recognition. | |
| For the financial instruments with lower credit risk on the balance sheet date, the Group assumes there is no significant increase in credit risk since initial recognition and recognises the 12-month ECL provision. | |
| For the financial instruments in Stage 1, Stage 2 and with lower credit risk, the Group calculates the interest income by applying the effective interest rate to the gross carrying amount (before deduction of the impairment provision). For the financial instrument in Stage 3, the interest income is calculated by applying the effective interest rate to the amortised cost (after deduction of the impairment provision from the gross carrying amount). | |
| For notes receivable, accounts receivable and receivables financing arising from sales of goods and rendering of services in the ordinary course of operating activities, the Group measures the lifetime ECL provision regardless of whether there is a significant financing component. | |
| In case the ECLs of an individually assessed financial asset can be evaluated with reasonable cost, the Group determines the ECLs based on impairment assessment of an individual financial asset. In case the ECLs of an individually assessed financial asset cannot be evaluated with reasonable cost, the Group divides the receivables into certain groupings based on credit risk characteristics, and calculates the ECLs for the groupings. Basis for determining groupings and related provision method are as follows: |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | |
| (8) | Financial instruments (Cont'd) | |
| (a) | Financial assets (Cont’d) | |
| (ii) | Impairment (Cont’d) | |
| Bank acceptance notes | State-owned banks and joint stock banks | |
| General group of automobiles | Customers of general automobiles | |
| Group of new energy automobiles | Customers of new energy automobiles | |
| Group of other automobiles | Customers of other automobiles | |
| Group of automobile parts | Customers of automobile parts | |
| Group of interest from cash at bank | Accrued interest on cash at bank | |
| Group of operating advances and warranties | Operating advances and warranties etc | |
| For accounts receivable that are classified into the groups and notes receivables and receivables financing arising from sales of goods and rendering of services in the ordinary course of operating activities, the Group calculates the ECLs with reference to historical credit losses experience, current conditions and forecasts of future economic conditions, and based on the exposure at default and the lifetime ECL rate. For other notes receivable, receivables financing and other receivables classified into groupings, the Group calculates the ECLs with reference to the historical credit loss experience, current conditions and forecasts of future economic conditions, and based on the exposure at default and the 12-month or lifetime ECL rate. | ||
| The Group recognises the loss provision made or reversed into profit or loss for the current period. For debt instruments held at fair value through other comprehensive income, the Group adjusts other comprehensive income while the impairment loss or gain is recognised in profit or loss for the current period. | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (8) | Financial instruments (Cont'd) |
| (a) | Financial assets (Cont’d) |
| (iii) | Derecognition |
| A financial asset is derecognised when: (i) the contractual rights to the cash flows from the financial asset expire, (ii) the financial asset has been transferred and the Group transfers substantially all the risks and rewards of ownership of the financial asset to the transferee, or (iii) the financial asset has been transferred and the Group has not retained control of the financial asset, although the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset. When a financial asset is derecognised, the difference between the carrying amount and the sum of the consideration received and the cumulative changes in fair value that are previously recognised directly in other comprehensive income is recognised in profit or loss for the current period, except for those as investments in other equity instruments, the difference aforementioned is recognised in retained earnings instead. | |
| (b) | Financial liabilities |
| Financial liabilities are classified as financial liabilities at amortised cost and financial liabilities at fair value through profit or loss at initial recognition. Financial liabilities of the Group mainly comprise financial liabilities at amortised cost, including notes payable, accounts payable, other payables, borrowings, etc. Such financial liabilities are initially recognised at fair value, net of transaction costs incurred, and subsequently measured using the effective interest method. Financial liabilities that are due within one year (inclusive) are classified as current liabilities; those with maturities over one year but are due within one year (inclusive) as from the balance sheet date are classified as current portion of non-current liabilities. Others are classified as non-current liabilities. | |
| A financial liability is derecognised or partly derecognised when the underlying present obligation is discharged or partly discharged. The difference between the carrying amount of the derecognised part of the financial liability and the consideration paid is recognised in profit or loss for the current period. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (8) | Financial instruments (Cont'd) |
| (c) | Determination of fair value of financial instruments |
| The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the active market. The fair value of a financial instrument that is not traded in an active market is determined by using a valuation technique. In valuation, the Group adopts valuation techniques applicable in the current situation and supported by adequate available data and other information, selects inputs with the same characteristics as those of assets or liabilities considered in relevant transactions of assets or liabilities by market participants, and gives priority to the use of relevant observable inputs. When relevant observable inputs are not available or feasible, unobservable inputs are adopted. |
| (9) | Inventories |
| (a) | Classification |
| Inventories include raw materials, work in progress, finished goods, materials in transit, low value consumables, materials consigned for processing, etc., and are measured at the lower of cost and net realisable value. | |
| (b) | Costing of inventories |
| Cost is determined using the weighted average method. The cost of finished goods and work in progress comprise raw materials, direct labour and systematically allocated production overhead based on the normal production capacity. | |
| (c) | Basis for determining net realisable value of inventories and method for making provision for decline in the value of inventories |
| Provision for decline in the value of inventories is determined at the excess amount of the carrying amounts of the inventories over their net realisable value. Net realisable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sale and related taxes. | |
| (d) | The Group adopts the perpetual inventory system. |
| (e) | Amortisation methods of low value consumables |
| Low value consumables are amortised into expenses in full when issued for use. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (10) | Long-term equity investments |
| Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries and the Group’s long-term equity investments in its associates. | |
| Subsidiaries are the investees over which the Company is able to exercise control. Associates are the investees that the Group has significant influence on their financial and operating decisions. | |
| Investments in subsidiaries are presented using the cost method in the Company’s financial statements, and adjusted to the equity method when preparing the consolidated financial statements. Investments in associates are accounted for using the equity method. | |
| (a) | Determination of investment cost |
| For long-term equity investments acquired through a business combination: for long-term equity investments acquired through a business combination involving enterprises under common control, the investment cost shall be the absorbing party’s share of the carrying amount of owners’ equity of the party being absorbed in the consolidated financial statements of the ultimate controlling party at the combination date; for long-term equity investments acquired through a business combination involving enterprises not under common control, the investment cost shall be the combination cost. For long-term equity investments acquired not through a business combination: for long-term equity investments acquired by payment in cash, the initial investment cost shall be the purchase price actually paid; for long-term equity investments acquired by issuing equity securities, the initial investment cost shall be the fair value of the equity securities issued. | |
| (b) | Subsequent measurement and recognition of profit or loss |
| Long-term equity investments accounted for using the cost method are measured at the initial investment cost. Cash dividend or profit distribution declared by an investee is recognised as investment income into profit or loss for the current period. | |
| Where the initial investment cost exceeds the Group’s share of the fair value of the investee’s identifiable net assets at the time of acquisition, the investment is initially measured at that cost. Where the initial investment cost is less than the Group’s share of the fair value of the investee’s identifiable net assets at the time of acquisition, the difference is included in profit or loss for the current period and the cost of the long-term equity investment is adjusted upwards accordingly. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (10) | Long-term equity investments (Cont’d) |
| (b) | Subsequent measurement and recognition of profit or loss (Cont’d) |
| For long-term equity investments accounted for using the equity method, the Group recognises the investment income or losses according to its share of net profit or loss of the investee. The Group does not recognise further losses when the carrying amounts of the long-term equity investments together with any long-term interests that, in substance, form part of the Group’s net investment in investees are reduced to zero. However, if the Group has obligations for additional losses and the criteria with respect to recognition of provisions are satisfied, the Group continues recognising the investment losses and the provisions at the amount it expects to undertake. The Group’s share of the changes in investee’s owner's equity other than those arising from the net profit or loss, other comprehensive income and profit distribution is recognised in capital surplus with a corresponding adjustment to the carrying amounts of the long-term equity investment. The carrying amount of the investment is reduced by the Group’s share of the profit distribution or cash dividends declared by the investees. Unrealised gains or losses on transactions between the Group and its investees are eliminated to the extent of the Group’s equity interest in the investees, based on which the investment income or losses are recognised. Any losses resulting from transactions between the Group and its investees, which are attributable to asset impairment losses are not eliminated. | |
| (c) | Basis for determining existence of control and significant influence over investees |
| Control is the power over investees that can bring variable returns through involvement in related activities of investees and the ability to influence the returns by using such power over investees. | |
| Significant influence is the power to participate in making decisions on financial and operating policies of investees, but is not control or joint control over making those policies. | |
| (d) | Impairment of long-term equity investments |
| The carrying amounts of long-term equity investments in subsidiaries and associates is reduced to the recoverable amounts when the recoverable amounts are below their carrying amount (Note 2(15)). | |
| (11) | Fixed assets |
| (a) | Recognition and initial measurement of fixed assets |
| Fixed assets comprise buildings, machinery and equipment, motor vehicles, moulds, and electronic and other equipment. | |
| Fixed assets are recognised when it is probable that the related economic benefits will flow to the Group and the costs can be reliably measured. Fixed assets purchased or constructed by the Group are initially measured at cost at the time of acquisition. The fixed assets contributed by the state-owned shareholders upon the restructuring of the Company are recorded at the valued amount determined by the state-owned asset administration department. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | |||
| (11) | Fixed assets (Cont’d) | |||
| (a) | Recognition and initial measurement of fixed assets (Cont’d) | |||
| Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable that the associated economic benefits will flow to the Group and the related cost can be reliably measured. The carrying amount of the replaced part is derecognised. All the other subsequent expenditures are recognised in profit or loss for the period in which they are incurred. | ||||
| (b) | Depreciation methods of fixed assets | |||
| Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their estimated net residual values over their estimated useful lives. For the fixed assets that have been provided for impairment loss, the related depreciation charge is prospectively determined based upon the adjusted carrying amounts over their remaining useful lives. | ||||
| The estimated useful lives, the estimated net residual values expressed as a percentage of cost and the annual depreciation rates of fixed assets are as follows: | ||||
| Estimated useful lives | Estimated net residual values | Annual depreciation rates | ||
| Buildings | 35 to 40 years | 4% | 2.4% to 2.7% | |
| Machinery and equipment | 10 to 15 years | 4% | 6.4% to 9.6% | |
| Motor vehicles | 6 to 10 years | 4% | 9.6% to 16% | |
| Moulds | 5 years | - | 20% | |
| Electronic and other equipment | 5 to 7 years | 4% | 13.7% to 19.2% | |
| The estimated useful life and the estimated net residual value of a fixed asset and the depreciation method applied to the asset are reviewed, and adjusted as appropriate at each year-end. | ||||
| (c) | The carrying amount of a fixed asset is reduced to the recoverable amount when the recoverable amount is below the carrying amount (Note 2(15)). | |||
| (d) | Disposal of fixed assets | |||
| A fixed asset is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The amount of proceeds from disposals on sale, transfer, retirement or damage of a fixed asset net of its carrying amount and related taxes and expenses is recognised in profit or loss for the current period. | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (12) | Construction in progress |
| Construction in progress is measured at actual cost. Actual cost comprises construction costs, installation costs, borrowing costs that are eligible for capitalisation and other costs necessary to bring the fixed assets ready for their intended use. Construction in progress is transferred to fixed assets when the assets are ready for their intended use, and depreciation is charged starting from the following month. The carrying amount of construction in progress is reduced to the recoverable amount when the recoverable amount is below the carrying amount (Note 2(15)). | |
| (13) | Borrowing costs |
| The borrowing costs that are directly attributable to acquisition and construction of an asset that needs a substantially long period of time for its intended use commence to be capitalised and recorded as part of the cost of the asset when expenditures for the asset and borrowing costs have been incurred, and the activities relating to the acquisition and construction that are necessary to prepare the asset for its intended use have commenced. The capitalisation of borrowing costs ceases when the asset under acquisition or construction becomes ready for its intended use and the borrowing costs incurred thereafter are recognised in profit or loss for the current period. Capitalisation of borrowing costs is suspended during periods in which the acquisition or construction of an asset is interrupted abnormally and the interruption lasts for more than 3 months, until the acquisition or construction is resumed. | |
| The capitalised amount of specific borrowings intended to be used for the acquisition or construction of qualifying assets is determined by the interest expenses incurred in the period less interest income of the unused borrowings deposited at bank or investment income from temporary investments. | |
| The capitalised amount of general borrowings intended to be used for the acquisition or construction of qualifying assets is determined by the weighted average of the excess of accumulated capital expenditure over capital expenditure of the special borrowings multiplied by the weighted average effective interest rate of the utilised general borrowings. The effective interest rate is the rate at which the future cash flows of the borrowings over the expected lifetime or a shorter applicable period are discounted into the initial recognised amount of the borrowings. | |
| (14) | Intangible assets |
| Intangible assets include land use rights, software use fees, non-patent technologies and after-sales service management mode, and are measured at cost. | |
| (a) | Land use rights |
| Land use rights are amortised on the straight-line basis over their approved use period of 50 years. If the acquisition costs of the land use rights and the buildings located thereon cannot be reasonably allocated between the land use rights and the buildings, all of the acquisition costs are recognised as fixed assets. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (14) | Intangible assets (Cont’d) |
| (b) | Software use fees |
| Software use fees are amortised on a straight-line basis over the estimated useful life of 5 years. | |
| (c) | Non-patent technologies |
| Non-patent technologies are amortised on the straight-line basis over the useful life of 5 years. | |
| (d) | Periodical review of useful life and amortisation method |
| For an intangible asset with a finite useful life, review of its useful life and amortisation method is performed at each year-end, with adjustment made as appropriate. | |
| (e) | Research and development |
| The expenditure on an internal research and development project is classified into expenditure on the research phase and expenditure on the development phase based on its nature and whether there is material uncertainty that the research and development activities can form an intangible asset at the end of the project. | |
| Expenditure on the research phase related to planned survey, evaluation and selection for research on manufacturing technique of automobile products is recognised in profit or loss in the period in which it is incurred. Prior to mass production, expenditure on the development phase related to the design and testing phase in regards to the final application of manufacturing technique of automobile products is capitalised only if all of the following conditions are satisfied: ? the development of manufacturing technique of automobile products has been fully demonstrated by technical team; ? management intends to complete the development of manufacturing technique of automobile products, and use or sell it; ? the research and analysis of preliminary market survey indicate that products manufactured with manufacturing technique of automobile products are marketable; ? adequate technical and financial supports are available for development of manufacturing techniques of automobile products and subsequent mass production; and, ? expenditure on development of manufacturing techniques of automobile products can be reliably collected. | |
| Other expenditures on the development phase that do not meet the conditions above are recognised in profit or loss in the period in which they are incurred. Development expenditures previously recognised as profit or loss are not recognised as an asset in a subsequent period. Capitalised expenditure on the development phase is presented as development expenditures in the balance sheet and transferred to intangible assets at the date when the asset is ready for its intended use. | |
| (f) | Impairment of intangible assets |
| The carrying amounts of intangible assets are reduced to the recoverable amounts when the recoverable amounts are below their carrying amounts (Note 2(15)). |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (15) | Impairment of long-term assets |
| Fixed assets, construction in progress, right-of-use assets, intangible assets with finite useful lives and long-term equity investments in subsidiaries and associates are tested for impairment if there is any indication that the assets may be impaired at the balance sheet date; intangible assets that are not yet available for their intended use are tested for impairment at least annually, irrespective of whether there is any indication of impairment. If the result of the impairment test indicates that the recoverable amount of an asset is less than its carrying amount, a provision for impairment and an impairment loss are recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognised on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows. | |
| Goodwill that is separately presented in the financial statements is tested at least annually for impairment, irrespective of whether there is any indication that it may be impaired. In conducting the test, the carrying amount of goodwill is allocated to the related asset group or groups of asset groups which are expected to benefit from the synergies of the business combination. If the result of the test indicates that the recoverable amount of an asset group or a group of asset groups, including the allocated goodwill, is lower than its carrying amount, the corresponding impairment loss is recognised. The impairment loss is first deducted from the carrying amount of goodwill that is allocated to the asset group or group of asset groups, and then deducted from the carrying amounts of other assets within the asset group or group of asset groups in proportion to the carrying amounts of assets other than goodwill. | |
| Once the above asset impairment loss is recognised, it will not be reversed for the value recovered in the subsequent periods. | |
| (16) | Employee benefits |
| Employee benefits refer to all forms of consideration or compensation given by the Group in exchange for service rendered by employees or for termination of employment relationship, which include short-term employee benefits, post-employment benefits, termination benefits and other long-term employee benefits. | |
| (a) | Short-term employee benefits |
| Short-term employee benefits include wages or salaries, bonus, allowances and subsidies, staff welfare, premiums or contributions on medical insurance, work injury insurance and maternity insurance, housing funds, union running costs and employee education costs, short-term paid absences, etc. The short-term employee benefits actually occurred are recognised as a liability in the accounting period in which the service is rendered by the employees, with a corresponding charge to the profit or loss for the current period or the cost of relevant assets. Non-monetary benefits are measured at fair value. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (16) | Employee benefits (Cont'd) |
| (b) | Post-employment benefits |
| The Group classifies post-employment benefit plans as either defined contribution plans or defined benefit plans. Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into a separate fund and will have no obligation to pay further contributions; and defined benefit plans are post-employment benefit plans other than defined contribution plans. During the reporting period, premiums or contributions on basic pensions and unemployment insurance paid for employees belong to defined contribution plans; supplementary retirement benefits for employees are defined benefit plans. | |
| (i) | Defined contribution plans |
| Basic pensions | |
| The Group’s employees participate in the basic pension plan set up and administered by local authorities of the Ministry of Human Resources and Social Security. Monthly payments of premiums on the basic pensions are calculated according to the bases and percentage prescribed by the relevant local authorities. When employees retire, the relevant local authorities are obliged to pay the basic pensions to them. The amounts based on the above calculations are recognised as liabilities in the accounting period in which the service has been rendered by the employees, with a corresponding charge to the profit or loss for the current period or the cost of relevant assets. | |
| (ii) | Defined benefit plans |
| The Group also provides employees with supplementary retirement benefits outside the insurance system prescribed by the State. Such supplementary retirement benefits belong to defined benefit plans. The defined benefit liabilities recognised on the balance sheet represent the present value of defined benefit obligations less the fair value of the plan assets. The defined benefit obligations are calculated annually by an independent actuary using projected unit credit method at the interest rate of treasury bonds with similar obligation term and currency. Service costs related to supplementary retirement benefits (including current service costs, historical service costs and settled gains or losses) and net interest are recognised in profit or loss for the current period or the cost of related assets, and changes arising from remeasurement of net liabilities or net assets of defined benefit plans are recognised in other comprehensive income. | |
| (c) | Termination benefits |
| The Group provides compensation for terminating the employment relationship with employees before the end of the employment contracts or as an offer to encourage employees to accept voluntary redundancy before the end of the employment contracts. The Group recognises a liability arising from compensation for termination of the employment relationship with employees, with a corresponding charge to profit or loss for the current period at the earlier of the following dates: 1) when the Group cannot unilaterally withdraw an employment termination plan or a curtailment proposal; 2) when the Group recognises costs or expenses for a restructuring that involves the payment of termination benefits. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (16) | Employee benefits (Cont'd) |
| (c) | Termination benefits (Cont’d) |
| Early retirement benefits | |
| The Group offers early retirement benefits to those employees who accept early retirement arrangements. The early retirement benefits refer to the salaries and social security contributions to be paid to and for the employees who accept voluntary retirement before the normal retirement date prescribed by the State, as approved by the management. The Group pays early retirement benefits to those early retired employees from the early retirement date until the normal retirement date. The Group accounts for the early retirement benefits in accordance with the treatment for termination benefits, in which the salaries and social security contributions to be paid to and for the early retired employees from the off-duty date to the normal retirement date are recognised as liabilities with a corresponding charge to the profit or loss for the current period. The differences arising from the changes in the respective actuarial assumptions of the early retirement benefits and the adjustments of benefit standards are recognised in profit or loss in the period in which they occur. | |
| The termination benefits expected to be paid within one year since the balance sheet date are classified as employee benefits payable. | |
| (17) | Dividend distribution |
| Cash dividends are recognised as liabilities in the period in which the dividends are approved at the shareholders’ meeting. | |
| (18) | Provisions |
| Provisions for product warranties, onerous contracts, etc. are recognised when the Group has a present obligation, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be measured reliably. | |
| A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factors surrounding a contingency, such as the risks, uncertainties and the time value of money, are taken into account as a whole in reaching the best estimate of a provision. Where the effect of the time value of money is material, the best estimate is determined by discounting the related future cash outflows. The increase in the discounted amount of the provision arising from passage of time is recognised as interest expense. | |
| The carrying amount of provisions is reviewed at each balance sheet date and adjusted to reflect the current best estimate. | |
| The provisions expected to be settled within one year since the balance sheet date are classified as current liabilities. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (19) | Revenue |
| The Group manufactures and sells a range of automobiles and automobile parts to dealers and ending customers. Besides, the Group also provides automobile maintenance and additional warranty services. The Group recognises revenue when the customer obtains control of the goods and services. The revenue is recognised based on the consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to customers. | |
| (a) | Selling automobiles and automobile parts to dealers and ending customers |
| The Group manufactures automobiles and automobile parts and sells such products to distributors and end customers. Sales of automobiles are recognised when automobiles are delivered out of warehouse as prescribed in the contract, being when the customers have accepted the products and the delivery documents have been signed by both parties. Sales of automobile parts are recognised when they are delivered to the designated location as prescribed in the contract, being when customers have accepted the products and the delivery documents have been signed by both parties. When the contracts include two performance obligations, selling automobiles and providing shipping services, the transaction price will be allocated to each performance obligation based on the stand-alone selling prices on the commence date of the contract. Where these are not directly observable, they are estimated considering market information, expected cost plus margin ect. The credit periods granted by the Group to dealers and ending customers are generally within one year and no more than two years, which is consistent with the industry practice, and there is no significant financing component. The Group provides product warranties for automobiles and automobile parts as required by laws and regulations, and recognises the corresponding provisions (Note 2(18)). The Group provides dealers and end customers with sales discounts based on sales volume, and related revenue is recognised at contract consideration net of the discount amount estimated based on historical experience and using the expected value method. | |
| (b) | Rendering of services |
| The Group provides customers with automobile maintenance and additional quality warranty services. Revenue is recognised based on the progress of service provision within a certain period. The progress of obligation fulfilment is determined on the basis of inputs to the satisfaction of the performance obligation relative to the total expected inputs to the satisfaction of that performance obligation. | |
| When the Group recognises revenue based on the stage of completion, the amount with unconditional collection right obtained by the Group is recognised as accounts receivable, and the rest is recognised as contract assets. Meanwhile, loss provision for accounts receivable and contract assets are recognised on the basis of ECLs (Note 2(8)). If the contract consideration received or receivable exceeds the amount for the completed service, the excess portion will be recognised as contract liabilities. Contract assets and contract liabilities under the same contract are presented on a net basis. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (20) | Government grants |
| Government grants refer to the monetary or non-monetary assets obtained by the Group from the government, including support funds for enterprise development, financial subsidies, etc. | |
| Government grants are recognised when the grants can be received and the Group can comply with all attached conditions. If a government grant is a monetary asset, it will be measured at the amount received or receivable. If a government grant is a non-monetary asset, it will be measured at its fair value. If it is unable to obtain its fair value reliably, it will be measured at its nominal amount. | |
| Government grants related to assets refer to government grants which are obtained by the Group for the purposes of purchase, construction or acquisition of the long-term assets. Government grants related to income refer to the government grants other than those related to assets. | |
| Government grants related to assets are recorded as deferred income and recognised in profit or loss on a reasonable and systemic basis over the useful lives of the assets. Government grants related to income that compensate future costs, expenses or losses are recorded as deferred income and recognised in profit or loss; government grants related to income that compensate incurred costs, expenses or losses are recognised in profit or loss directly for the current period. | |
| The Group applies the presentation method consistently to the similar government grants in the financial statements. | |
| Government grants related to ordinary activities are included in operating profit. Otherwise, they are recorded in non-operating income. | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (21) | Deferred tax assets and deferred tax liabilities |
| Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differences arising between the tax bases of assets and liabilities and their carrying amounts (temporary differences). Deferred tax asset is recognised for the deductible losses that can be carried forward to subsequent years for deduction of the taxable profit in accordance with the tax laws. No deferred tax liability is recognised for a temporary difference arising from the initial recognition of goodwill. No deferred tax asset or deferred tax liability is recognised for the temporary differences resulting from the initial recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or deductible losses). At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. | |
| Deferred tax assets are only recognised for deductible temporary differences, deductible losses and tax credits to the extent that it is probable that taxable profit will be available in the future against which the deductible temporary differences, deductible losses and tax credits can be utilised. | |
| Deferred tax liabilities are recognised for taxable temporary differences arising from investments in subsidiaries and associates, except where the Group is able to control the timing of reversal of such temporary differences, and it is probable that the temporary differences will not reverse in the foreseeable future. When it is probable that the deductible temporary differences arising from investments in subsidiaries and associates will be reversed in the foreseeable future and that the taxable profit will be available in the future against which the deductible temporary differences can be utilised, the corresponding deferred tax assets are recognised. | |
| Deferred tax assets and deferred tax liabilities are offset when: ? the deferred tax assets and deferred tax liabilities are related to the same tax payer within the Group and the same taxation authority; and, ? that tax payer within the Group has a legally enforceable right to offset current tax assets against current tax liabilities. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (22) | Leases |
| A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. | |
| The Group as the lessee | |
| At the commencement date, the Group shall recognise the right-of-use asset and measure the lease liabilities at the present value of the lease payments that are not paid at that date. Lease payments include fixed payments, the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and payments of penalties for terminating the lease if the lessee exercises an option to terminate the lease. Variable lease payments in proportion to sales are excluded from lease payments and recognised in profit or loss as incurred. Lease liabilities that are due within one year (inclusive) as from the balance sheet date are included in the current portion of non-current liabilities. | |
| The Group's right-of-use assets are leased buildings. Right-of-use assets are measured initially at cost which comprises the amount of the initial measurement of lease liabilities, any lease payments made at or before the commencement date and any initial direct costs, less any lease incentives received. If there is reasonable certainty that the Group will obtain ownership of the underlying asset by the end of the lease term, the asset is depreciated over its remaining useful life; otherwise the asset is depreciated over the shorter of the lease term and its remaining useful life. The carrying amounts of the right-of-use assets are reduced to the recoverable amounts when the recoverable amounts are below their carrying amounts (Note 2(15)). | |
| For short-term leases with a term of 12 months or less and leases of an individual asset (when new) of low value, instead of recognising right-of-use assets and lease liabilities, the Group recognisedthe lease payments in the cost of the underlying assets or in profit or loss for the current period on a straight-line basis over the lease term. | |
| The Group as the lessor | |
| A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. An operating lease is a lease other than a finance lease. | |
| As the lessor, the Group does not hold any finance lease. Where the Group leases out self-owned buildings under operating leases, rental income therefrom is recognised on a straight-line basis over the lease term. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (23) | Held for sale |
| A non-current asset or a disposal group is classified as held for sale when all of the following conditions are satisfied: (1) the non-current asset or the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such non-current asset or disposal group; (2) the Group has entered a legally enforceable sales agreement with other parties and obtained relevant approval, and the sales transaction is expected to be completed within one year. | |
| Non-current assets (except for financial assets, investment properties measured at fair value and deferred tax assets) that meet the recognition criteria for held for sale are recognised at the amount equal to the lower of the fair value less costs to sell and the carrying amount, and the excess of the original carrying amount over the fair value less costs to sell is recognised as asset impairment loss. | |
| Such non-current assets and assets and liabilities included in disposal groups classified as held for sale are classified as current assets and current liabilities respectively, and are separately presented in the balance sheet. | |
| (24) | Segment information |
| The Group identifies operating segments based on the internal organisation structure, management requirements and internal reporting system, and discloses segment information of reportable segments which is determined on the basis of operating segments. | |
| An operating segment is a component of the Group that satisfies all of the following conditions: (1) the component is able to earn revenues and incur expenses from its ordinary activities; (2) whose operating results are regularly reviewed by the Group’s management to make decisions about resources to be allocated to the segment and to assess its performance, and (3) for which the information on financial position, operating results and cash flows is available to the Group. Two or more operating segments that have similar economic characteristics and satisfy certain conditions can be aggregated into one single operating segment. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (25) | Critical accounting estimates and judgements |
| The Group continually evaluates the critical accounting estimates and key judgements applied based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. | |
| (a) | Critical judgements in applying the accounting policies |
| The critical accounting estimates and key assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next accounting year are outlined below: | |
| (i) | Classification of financial assets |
| Significant judgements made by the Group in the classification of financial assets include business model and analysis on contractual cash flow characteristics. | |
| The Group determines the business model for financial assets management on the group basis, and factors to be considered include the methods for evaluating the financial assets performance and reporting such performance to key management personnel, the risks relating to the financial assets performance and corresponding management methods, the ways in which related business management personnel are remunerated, etc. | |
| When assessing whether contractual cash flow characteristics of financial assets are consistent with basic lending arrangement, key judgements made by the Group include: the possibility of changes in time schedule or amount of the principal during the lifetime due to reasons such as repayment in advance; whether interest only includes time value of money, credit risk, other basic lending risks and considerations for costs and profits For example, whether the repayment in advance reflects only the principal outstanding and corresponding interest and reasonable compensation paid for early termination of the contract. | |
| (ii) | Judgement on significant increase in credit risk |
| Judgement made by the Group for significant increase in credit risk is mainly based on whether the overdue days exceed 30 days, or whether one or more of the following indicators change significantly: business environment of the debtor, internal and external credit rating, significant changes in actual or expected operating results, significant decrease in value of collateral or credit rate of guarantor, etc. | |
| Judgement made by the Group for the occurrence of credit impairment is mainly based on whether the overdue days exceed 90 days (i.e., a default has occurred), or whether one or more of the following conditions is/are satisfied: the debtor is suffering significant financial difficulties, the debtor is undergoing other debt restructuring, or the debtor probably goes bankrupt, etc. | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (25) | Critical accounting estimates and judgements (Cont’d) |
| (a) | Critical judgements in applying the accounting policies (Cont’d) |
| (iii) | Judgement on capitalisation of development expenditures |
| Development expenditures are capitalised when the criteria in Note 2(14)(e) are fulfilled. The assessments on whether the criteria for capitalisation of development expenditures have been met involve judgements of the Group, including the technical feasibility of the project, the likelihood of the project generating sufficient future economic benefits and the timing to start capitalisation particularly. The Group makes the judgements on the capitalisation of development expenditures and records the process in meeting minutes based on feasibility analysis, regular review on the development project phase, etc. | |
| (iv) | Timing of revenue recognition |
| The Group sells automobiles and automobile parts to distributors and ending customers. As prescribed in the contract, control of automobiles is transferred to the customers when the good are out of the warehouse, while control of automobile parts is transferred when the parts are out of the warehouse or shipped to the designate destination based on the contract terms. The distributors and ending customers sign the delivery documents after they accept the products. Thereafter, the distributors or ending customers control the products and have the right to set the price, bear the risks of any obsolescence and loss of the products. The distributors and ending customers have obtained the control of the products after accepting the products. Therefore, the Group recognises the sales revenue of the products at the time when the delivery documents have been signed. | |
| (v) | Sales with product warranties |
| The Group provides statutory warranty for automobiles and automobile parts, and the periods and terms of such warranty comply with the requirements of laws and regulations related to the products. The Group does not provide any significant additional service or additional warranty for this purpose, thus this kind of warranty cannot be identified as a separate performance obligation. In addition, the Group also offers additional warranty other than the requirements of laws and regulations, which is identified as a separate performance obligation. The Group recognises the revenue of the additional warranty over time during the period when services are rendered. | |
| (b) | Critical accounting estimates and key assumptions |
| (i) | Measurement of ECL |
| The Group calculates ECLs through default risk exposure and ECL rate, and determines the ECL rate based on default probability and default loss rate. In determining the ECL rate, the Group uses data such as internal historical credit loss experience, etc., and adjusts historical data based on current conditions and forward-looking information. When considering forward-looking information, the indicators used by the Group include the risk of economic downturn, the expected increase in unemployment rate, the external market environment, the technological environment and changes in customer conditions. The Group regularly monitors and reviews assumptions related to the calculation of ECLs. In 2020, there was no significant change in the above estimation techniques and key assumptions. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (25) | Critical accounting estimates and judgements (Cont’d) |
| (b) | Critical accounting estimates and key assumptions (Cont’d) |
| (ii) | Provision for impairment of long-term assets |
| The Group assesses whether there is any indication that non-current assets other than financial assets may be impaired at the balance sheet date. When there are indications showing the carrying amounts of such assets cannot be recovered, an impairment test will be performed. | |
| When the carrying amount of non-current assets or asset groups other than financial assets is higher than the recoverable amount, which is the higher of an asset’s fair value less cost to sell and the present value of the future cash flows expected to be derived from the asset, such non-current assets or asset groups are impaired. | |
| The net value of an asset’s fair value less disposal costs is determined on the basis of the present value of the future cash flows expected to be derived from the asset or asset group. The present value of estimated future cash flows is determined based on the medium or long-term business development budget plan approved by management and adjusted with reference to market conditions. | |
| The estimation of the present value of future cash flows involves significant judgements on revenue growth rate, sales price growth rate, long-term growth rate of the asset or asset group and the discount rate used in calculating the present value. The Group estimates the recoverable amount based on all available materials, including the forecast of production and sales volume and market information based on reasonable and supportable assumptions. | |
| (iii) | Taxation |
| The Group is subject to various taxes in the PRC, including enterprise income tax, value-added tax (“VAT”) and consumption tax. Judgements are required for recognising the provision for such taxes. There are many transactions and events for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. When the final tax outcome of these events is different from amounts that are initially recorded, such differences will impact the tax provisions in the period of final tax outcome. Deferred tax assets are recognised as management considers it is probable that taxable income will be available against which the temporary differences can be utilised. When the final tax outcome of such events is different from the initial expectation, such differences will have impacts on income tax and deferred tax during the final determination period. | |
| As at 30June 2020, the Group’s deferred tax assets calculated by management based on the expected income rate were RMB 858,593,505. Such deferred tax assets mainly arose from temporary differences such as provision for asset impairment, retirement benefits, provisions, etc., and losses. Deductible temporary differences and deductible losses that were not recognised as deferred tax assets amounted to RMB 1,420,399,732 (Note 4(17)). | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (25) | Critical accounting estimates and judgements (Cont’d) |
| (b) | Critical accounting estimates and key assumptions (Cont’d) |
| (iv) | Provisions |
| The Group undertakes after-sales repair or replacement obligations for sold automobiles based on the after-sales service agreement. Management estimates related provisions based on historical after-sales service data, including the repair and replacement provided as well as current trends. Factors that may impact the estimation of warranty costs include improvement of the Group’s productivity and production quality, as well as changes in related parts and labour costs. Any increase or decrease in provisions will have impact on profit or loss of the Group in future years. | |
| (v) | Provision for decline in the value of inventories |
| The Group's inventories are stated at the lower of cost and net realisable value. Net realisable value of inventories refers to the amount of the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sales and related taxes. | |
| If management adjusts the estimated selling prices of inventories, the estimated costs to completion, estimated selling and distribution expenses and related taxes, and the adjusted estimated selling prices are lower than those currently in use, or the estimated costs to completion, estimated selling and distribution expenses and related taxes are higher than those currently in use, the Group shall increase the provision for decline in the value of inventories. | |
| If the actual selling prices, costs to completion, selling and distribution expenses and related taxes are higher or lower than management’s estimates, the Group shall recognise the relevant differences in the consolidated income statement during the corresponding accounting period. | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 3 | Taxation | ||
| (1) | The main categories and rates of taxes applicable to the Group are set out below: | ||
| Category | Taxation basis | Tax rate | |
| Enterprise income tax (a) | Taxable income | 15% and 25% | |
| VAT (b) | Taxable value-added amount (Tax payable is calculated using the taxable sales amount multiplied by the applicable tax rate less deductible input VAT of the current period) | 13%, 9% and 6% | |
| Consumption tax | Taxable sales amount | 3%, 5% and 9% | |
| City maintenance and construction tax (c) | The payment amount of VAT and consumption tax | 5% and 7% | |
| (a) | Pursuant to the Circular on Enterprise Income Tax Policy Concerning Deductions for Equipment and Appliances (Cai Shui [2018] No. 54) and relevant regulations issued by the State Administration of Taxation, during the period from 1 January 2018 to 31 December 2020, the cost of newly purchased equipment with the original cost less than RMB 5 million can be fully deducted against taxable profit in the next month after the asset is put into use, instead of being depreciated annually for tax filing. Pursuant to the Circular on Increasing the Pre-tax Deduction for Research and Development Expenses (Cai Shui [2018] No. 99) issued by the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology and relevant regulations, during the period from 1 January 2018 to 31 December 2020, the Groups’ actual research and development expenses that are not recognised as intangible assets but included in profit or loss are allowed to 75% pre-tax additional deduction; those expenses recognised as intangible assets can be amortised before tax at 175% of the costs of intangible assets. |
| (b) | Pursuant to the Announcement on Relevant Policies for Deepening Value-Added Tax Reform (Announcement [2019] No. 39) and relevant regulations jointly issued by the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs, the Group’s taxable products sales revenue is subject to the VAT at the rate of 13% from 1 April 2019; the applicable VAT rate for the Group’s transportation business is 9%from 1 April 2019. The interest income from its wholly-owned subsidiaries is subject to VAT at the rate of 6%. |
| (c) | Pursuant to the Circular of the State Council on Unifying the Collection of City Construction and Maintenance Tax and Educational Surcharge on Domestic and Foreign-Owned Enterprises and Individuals (Guo Fa [2010] No. 35) issued by the State Council, the Group is subject to city construction and maintenance tax at the rates of 5% and 7%. |
| (2) | Tax preference |
| Pursuant to the Circular of Jiangxi High-Tech Enterprise Certification Leading Group on the Announcement of the First Batch of High-Tech Enterprises of Jiangxi Province for the year 2018 (Gan Gao Qi Ren Fa [2018] No. 3), the Company is certified as a high-tech enterprise, and the valid term is three years. During the period from 1 January 2018 to 31 December 2020, the Company is subject to enterprise income tax at the rate of 15%. | |
| In 2020, the Company’s wholly-owned companies, including JMC Heavy Duty Vehicle Co., Ltd. (“JMCH”), Jiangling Motor Sales Co., Ltd. (“JMCS”), Shenzhen Fujiang New Energy Automobile Sales Co., Ltd. (“SZFJ”), Guangzhou Fujiang New Energy Automobile Sales Co., Ltd. (“GZFJ”), were subject to the enterprise income tax at the rate of 25%. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements | ||||
| (1) | Cash at bank and on hand | ||||
| 30June 2020 | 31 December 2019 | ||||
| Cash at bank (a) | 7,872,553,804 | 8,937,936,658 | |||
| Other cash(b) | 49,718,600 | - | |||
| 7,922,272,404 | 8,937,936,658 | ||||
| (a) | As at 30 June 2020, cash at bank of the Group deposited with Jiangling Motor Group Finance Company (“JMCF”) was RMB 618,877,485 (31 December 2019: RMB 967,750,294) (Note 7(6)), and interest was calculated at 1.725% (2019: 0.455% to 3.30%) per annum, which was the interest rate applied to deposits with the same term. JMCF, a holding subsidiary of Jiangling Motors Group Co., Ltd (“JMCG”), is a non-banking financial institution. JMCG holds 50% equity capital of Nanchang Jiangling Investment Co., Ltd. (“JIC”), a main shareholder of the Company. | ||||
| (b) | As at 30 June 2020, the restricted cashamount of RMB 49,718,600(31 December 2019: Nil) was restricted for the issuance of acceptance bill. | ||||
| (2) | Transactional financial assets | ||||
| 30June 2020 | 31 December 2019 | ||||
| Structural deposits | 2,725,990,657 | - | |||
| (3) | Derivative financial assets and derivative financial liabilities | |||
| 30June 2020 | 31 December 2019 | |||
| Derivative financial assets - | ||||
| Forward exchange contracts | 1,475,752 | - | ||
| Derivative financial liabilities - | ||||
| Forward exchange contracts | - | 545,632 | ||
| As at 30June 2020 and 31 December 2019, derivative financial assets and derivative financial liabilities mainly represented forward exchange contracts |
| (4) | Notes receivable | |||
| 30June 2020 | 31 December 2019 | |||
| Bank acceptance notes i) | 42,368,305 | 85,816,311 | ||
| (a) | As at 30June 2020, the Group had no pledged notes receivable. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (4) | Notes receivable (Cont'd) |
| (b) |
| i) In the six months ended 30June 2020, certain bank acceptance notes receivable of the Group were held to maturity for the purpose of daily treasury management, and were classified as financial assets measured at amortised cost. Meanwhile, certain bank acceptance notes of the Group were endorsed for the purpose of daily treasury management, and were therefore classified as financial assets at fair value through other comprehensive income and recognised as receivables financing (Note 4(6)). |
| (c) | Provision for bad debts | |||
| For notes receivable arising from sales of goods and rendering of services in the ordinary course of operating activities, the Group measures the loss provision based on the lifetime ECL regardless of whether there is a significant financing component. | ||||
| As 30June 2020 and 31 December 2019, the acceptors of the Groups’ notes receivable were mainly four major state-owned banks or national joint stock banks. Therefore, the Group expected there was no significant loss on related notes receivable arising from non-performance by these banks. | ||||
| (5) | Accounts receivable | |||
| 30June 2020 | 31 December 2019 | |||
| Accounts receivable | 3,253,139,024 | 2,362,312,151 | ||
| Less: Provision for bad debts | (220,393,044) | (154,075,531) | ||
| 3,032,745,980 | 2,208,236,620 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||
| (5) | Accounts receivable (Cont’d) | |||
| (a) | The aging of accounts receivable is analysed as follows: | |||
| 30June 2020 | 31 December 2019 | |||
| Within 1 year | 2,718,317,770 | 1,761,105,893 | ||
| 1 to 2 years | 516,202,759 | 584,836,934 | ||
| 2 to 3 years | 9,907,003 | 7,736,444 | ||
| Over 3 years | 8,711,492 | 8,632,880 | ||
| 3,253,139,024 | 2,362,312,151 | |||
| (b) | As at 30June 2020, the five largest accounts receivable were analysed by debtor as follows: | |||||
| Balance | Amount of provision for bad debts | % of total balance | ||||
| Company 1 | 485,135,536 | (1,090,986) | 14.91% | |||
| Company 2 | 195,467,552 | (254,926) | 6.01% | |||
| Company 3 | 166,407,359 | (314,427) | 5.12% | |||
| Company 4 | 100,168,520 | (6,290,583) | 3.08% | |||
| Company 5 | 90,571,702 | (123,722) | 2.78% | |||
| 1,037,750,669 | (8,074,644) | 31.90% | ||||
| (c) | Provision for bad debts | |||||
| For accounts receivable, the Group measures the loss provision based on the lifetime ECL regardless of whether there is a significant financing component. | ||||||
| (i) | Accounts receivable for which provision for bad debts is made on the individual basis are analysed as follows: | |||||
| 30June 2020 | |||||||
| Book balance | Provision for bad debts | ||||||
| Amount | Lifetime ECL (%) | Amount | |||||
| Receivables for automobiles i) | 89,652,880 | 100% | (89,652,880) | ||||
| New energy subsidies receivable ii) | 103,180,418 | 100% | (103,180,418) | ||||
| 192,833,298 | (192,833,298) | ||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (5) | Accounts receivable (Cont’d) |
| (c) | Provision for bad debts (Cont’d) |
| (i) | Accounts receivable for which provision for bad debts is made on the individual basis are analysed as follows (Cont’d): |
| i) As at 30June 2020, since aforesaid companies in debts had difficulties in operation and were involved in several legal proceedings, the Group considered that it was difficult to recover such receivables, so related provision for bad debts was made in full amount. | |
| ii) As at 30June 2020, government subsidies receivable for new energy automobiles amounted to RMB 103,180,418. Since the estimated mileage of such new energy automobiles may not meet the target within two years, the Group considered it was difficult to recover such subsidies, so related provision for bad debts was made in full amount. |
| 31 December 2019 | |||||||
| Book balance | Provision for bad debts | ||||||
| Amount | Lifetime ECL (%) | Amount | |||||
| Receivables for automobiles i) | 89,652,880 | 100% | (89,652,880) | ||||
| New energy subsidies receivable ii) | 20,410,500 | 100% | (20,410,500) | ||||
| 110,063,380 | (110,063,380) | ||||||
| i) As at 31 December 2019, since these companies in debts were involved in several legal proceedings, the Group considered that it was difficult to recover such receivables, so related provision for bad debts was made in full amount. ii) As at 31 December 2019, government subsidies receivable for new energy automobiles amounted to RMB 20,410,500. Since the estimated mileage of such new energy automobiles may not meet the target within two years, the Group considered it was difficult to recover such subsidies, so related provision for bad debts was made in full amount. |
| (ii) | Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows: |
| Grouping - Sales of general automobiles: |
| 30June 2020 | |||||||
| Book balance | Provision for bad debts | ||||||
| Amount | Lifetime ECL (%) | Amount | |||||
| Not overdue | 2,299,299,704 | 0.13% | (3,010,933) | ||||
| Overdue for 1 to 30 days | 17,580,652 | 0.13% | (23,022) | ||||
| Overdue for 31 to 60 days | 11,000,750 | 4.02% | (441,768) | ||||
| Overdue for 61 to 90 days | 1,530,698 | 5.49% | (83,964) | ||||
| Overdue over 90 days | 7,143,797 | 9.01% | (643,403) | ||||
| 2,336,555,601 | (4,203,090) | ||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (5) | Accounts receivable (Cont’d) |
| (c) | Provision for bad debts (Cont’d) |
| (ii) | Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows (Cont’d): |
| Grouping - Sales of general automobiles (Cont’d): |
| 31 December 2019 | |||||||
| Book balance | Provision for bad debts | ||||||
| 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: |
| 30June 2020 | |||||||
| Book balance | Provision for bad debts | ||||||
| Amount | Lifetime ECL (%) | Amount | |||||
| Not overdue | 345,079,551 | 6.05% | (20,868,674) | ||||
| 31 December 2019 | |||||||
| Book balance | Provision for bad debts | ||||||
| Amount | Lifetime ECL (%) | Amount | |||||
| Not overdue | 476,963,589 | 5.53% | (26,383,009) | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (5) | Accounts receivable (Cont’d) |
| (c) | Provision for bad debts (Cont’d) |
| (ii) | Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows (Cont’d): |
| Grouping - Sales of other automobiles: | |||||||
| 30June 2020 | |||||||
| Book balance | Provision for bad debts | ||||||
| Amount | Lifetime ECL (%) | Amount | |||||
| Not overdue | 9,968,000 | 0.21% | (20,830) | ||||
| Overdue for 1 to 30 days | - | - | - | ||||
| Overdue for 31 to 60 days | - | - | - | ||||
| Overdue for 61 to 90 days | 218,000 | 5.71% | (12,458) | ||||
| Overdue over 90 days | 9,217,087 | 6.74% | (621,171) | ||||
| 19,403,087 | (654,459) | ||||||
| 31 December 2019 | |||||||
| Book balance | Provision for bad debts | ||||||
| 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) | ||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (5) | Accounts receivable (Cont’d) |
| (c) | Provision for bad debts (Cont’d) |
| (ii) | Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows (Cont’d): |
| Grouping - automobile parts: | |||||||
| 30June 2020 | |||||||
| Book balance | Provision for bad debts | ||||||
| Amount | Lifetime ECL (%) | Amount | |||||
| Not overdue | 242,226,442 | 0.30% | (746,318) | ||||
| Overdue for 1 to 30 days | 79,865,426 | 0.30% | (241,457) | ||||
| Overdue for 31 to 60 days | 18,899,555 | 0.50% | (94,498) | ||||
| Overdue for 61 to 90 days | 3,694,374 | 0.60% | (22,166) | ||||
| Overdue over 90 days | 14,581,690 | 5.00% | (729,084) | ||||
| 359,267,487 | (1,833,523) | ||||||
| 31 December 2019 | |||||||
| Book balance | Provision for bad debts | ||||||
| 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) | ||||||
| (iii) | For the six months ended 30June 2020,the provision for bad debts for the year amounted to RMB 82,769,918 and the provision for bad debts reversed amounted to RMB16,452,405. |
| (d) | For the six months ended 30June 2020,none of accounts receivable has been written off during the year. |
| (e) | As at 30June 2020 and 31 December 2019, there were no accounts receivable pledged. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (6) | Receivables financing | |||
| 30June 2020 | 31 December 2019 | |||
| Receivables financing | 270,951,837 | 289,044,373 | ||
| The Group endorses some of the bank acceptance notes as required by daily fund management, which also met the criteria for derecognition, and therefore classifies these bank acceptance notes as financial assets at fair value through other comprehensive income. | ||||
| The Group had no bank acceptance notes for which the provision for impairment loss was made on individual basis, and measured provision for bad debts based on the lifetime ECL. As 30June 2020 and 31 December 2019, the acceptors of the Groups’ notes receivable mainly comprised four major state-owned banks or national joint stock banks. Therefore, the Group expected there was no significant loss on related notes receivable from non-performance by these banks. | ||||
| As 30June 2020, receivables financing with a carrying amount of RMB 22,182,906(31 December 2019: RMB 34,196,500) were pledged as collateral for the notes payable.(Note 4(20)). | ||||
| As at 30June 2020, the Group's notes receivable, presented in receivables financing, that have been endorsed or discounted but not yet matured were as follows: | ||||
| Derecognised | Not derecognised | |||
| Bank acceptance notes | 222,142,685 | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (7) | Advances to suppliers | ||||||||||
| (a) | The aging of advances to suppliers is analysed as follows: | ||||||||||
| 30June 2020 | 31 December 2019 | ||||||||||
| Amount | % of total balance | Amount | % of total balance | ||||||||
| Within 1 year | 553,294,163 | 100% | 517,122,502 | 100% | |||||||
| (b) | As at 30June 2020, the five largest advances to suppliers are analysed by debtors as follows: | ||||||||||
| Amount | % of total advances to suppliers | ||||||||||
| Company 1 | 503,623,198 | 91.02% | |||||||||
| Company 2 | 30,109,553 | 5.44% | |||||||||
| Company 3 | 11,313,363 | 2.04% | |||||||||
| Company 4 | 4,001,653 | 0.72% | |||||||||
| Company 5 | 1,839,838 | 0.33% | |||||||||
| 550,887,605 | 99.55% | ||||||||||
| (8) | Other receivables | |||
| 30June 2020 | 31 December 2019 | |||
| Import working capital advances | 35,000,000 | 35,000,000 | ||
| Interest receivable from cash at bank | 31,645,317 | 32,092,621 | ||
| Advances for gas fee | 9,778,950 | 13,208,651 | ||
| Deposits receivable | 5,497,100 | 7,280,273 | ||
| Advances for research and development projects | 4,580,134 | 6,141,895 | ||
| Reserves receivable | 832,236 | 1,530,488 | ||
| Others | 7,847,072 | 21,076,025 | ||
| 95,180,809 | 116,329,953 | |||
| Less: Provision for bad debts | (272,114) | (346,816) | ||
| 94,908,695 | 115,983,137 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (8) | Other receivables (Cont’d) |
| (a) | The aging of other receivables is analysed as follows: | |||
| 30June 2020 | 31 December 2019 | |||
| Within 1 year | 91,579,450 | 113,830,378 | ||
| 1 to 2 years | 2,381,912 | 786,581 | ||
| 2 to 3 years | 343,570 | 429,695 | ||
| Over 3 years | 875,877 | 1,283,299 | ||
| 95,180,809 | 116,329,953 | |||
| (b) | Provision for losses and changes in book balance statement: | ||||||||
| Stage 1 | Stage 3 | ||||||||
| 12-month ECL (grouping) | Lifetime ECL (credit-impaired) | Total | |||||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | Provision for bad debts | |||||
| 31 December 2019 | 114,128,008 | (246,106) | 2,201,945 | (100,710) | (346,816) | ||||
| Increase in the current period | — | - | — | - | - | ||||
| Reversal in the current period | — | 59,399 | — | 15,303 | 74,702 | ||||
| Write-off in the current period | — | - | — | - | - | ||||
| Including: Charge-off in the current period | — | - | — | - | - | ||||
| Derecognition | — | - | — | - | - | ||||
| 30June 2020 | 93,880,964 | (186,707) | 1,299,845 | (85,407) | (272,114) | ||||
| The Group had no other receivables transferred from Stage 1 to Stage 3, and no other receivables reversed from Stage 3 to Stage 1. | |||||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (8) | Other receivables (Cont’d) |
| (b) | Provision for losses and changes in book balance statement (Cont’d): |
| As at 30June 2020 and 31 December 2019, the Group did not have any other receivables at Stage 2. Other receivables at Stage 1 and Stage 3 were analysed below: |
| (i) | As at 30June 2020 and 31 December 2019, the Group had no other receivables with provision for bad debts on individual basis. |
| (ii) | As at 30June 2020 and 31 December 2019, the Group’s other receivables with provision for bad debts on grouping basis were analysed below: |
| Other receivables with provision on the grouping basis at Stage 1: |
| 30June 2020 | 31 December 2019 | |||||||||
| Book balance | Provision for losses | Book balance | Provision for losses | |||||||
| Amount | Provision ratio | Amount | Amount | Provision ratio | Amount | |||||
| Grouping of interest from cash at bank i): | ||||||||||
| Within 1 year | 31,645,317 | - | - | 32,092,621 | - | - | ||||
| Grouping of operating advances and guarantees: | ||||||||||
| Within 1 year | 59,934,133 | 0.30% | (179,802) | 81,737,757 | 0.30% | (245,213) | ||||
| Over 1 year | 2,301,514 | 0.30% | (6,905) | 297,630 | 0.30% | (893) | ||||
| 93,880,964 | (186,707) | 114,128,008 | (246,106) | |||||||
| i) As at 30June 2020 and 31 December 2019, the Group’s interest receivable from cash at bank mainly came from four major state-owned banks or national joint stock banks. Therefore, the Group expected there was no significant loss on related interest receivable from non-performance by these banks. |
| Other receivables with provision on the grouping basis at Stage 3: |
| 30June 2020 | 31 December 2019 | |||||||||
| Book balance | Provision for losses | Book balance | Provision for losses | |||||||
| Amount | Provision ratio | Amount | Amount | Provision ratio | Amount | |||||
| Grouping of operating advances and guarantees: | ||||||||||
| Over 1 year | 1,299,845 | 6.57% | (85,407) | 2,201,945 | 4.57% | (100,710) | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (8) | Other receivables (Cont’d) |
| (c) | The provision for bad debts in the current period amounted to RMB 74,702. The reversal in the current period is due to the actual receipt of other receivables relating to the provision for bad debts made in the prior period. |
| (d) | No other receivables have been written off in the current period. | |||||||||
| (e) | As at 30June 2020, other receivables from top five debtors in respect of outstanding balance are analysed as follows: | |||||||||
| Nature | Balance | Aging | % of total other receivables | Provision for bad debts | ||||||
| Company 1 | Advances classified as expenses | 35,029,720 | Within 1 year | 36.80% | (106,189) | |||||
| Company 2 | Advances classified as expenses | 6,291,984 | Within 1 year | 6.61% | (18,876) | |||||
| Company 3 | Advances classified as expenses | 4,480,000 | Within 1 year | 4.71% | (13,440) | |||||
| Company 4 | Advances classified as expenses | 3,486,966 | Within 1 year | 3.66% | (10,461) | |||||
| Company 5 | Advances classified as expenses | 1,520,227 | Within 2 year | 1.60% | (6,081) | |||||
| 50,808,897 | 53.38% | (155,047) | ||||||||
| (9) | Inventories | |||||||||||
| (a) | Inventories are summarised by categories as follows: | |||||||||||
| 30June 2020 | 31 December 2019 | |||||||||||
| Book balance | Provision for decline in the value of inventories | Carrying amount | Book balance | Provision for decline in the value of inventories | Carrying amount | |||||||
| Raw materials | 1,027,476,599 | (68,360,967) | 959,115,632 | 928,829,697 | (73,152,658) | 855,677,039 | ||||||
| Work in progress | 188,468,341 | (581,113) | 187,887,228 | 158,440,370 | (357,692) | 158,082,678 | ||||||
| Finished goods | 309,661,919 | (7,522,633) | 302,139,286 | 624,485,048 | - | 624,485,048 | ||||||
| Materials in transit | 76,702,488 | - | 76,702,488 | 92,258,083 | - | 92,258,083 | ||||||
| Low value consumables | 150,758,686 | (10,522,966) | 140,235,720 | 168,917,445 | (9,812,965) | 159,104,480 | ||||||
| Materials processed on commission | 28,345,769 | - | 28,345,769 | 57,261,764 | - | 57,261,764 | ||||||
| 1,781,413,802 | (86,987,679) | 1,694,426,123 | 2,030,192,407 | (83,323,315) | 1,946,869,092 | |||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (9) | Inventories (Cont'd) |
| (b) | Provision for decline in the value of inventories is analysed as follows: | |||||||||
| 31 December | Increase in the current period | Decrease in the current period | 30 June | |||||||
| 2019 | Provision | Reversal | Write-off | 2020 | ||||||
| Raw materials | (73,152,658) | (10,359,424) | 2,658,465 | 12,492,650 | (68,360,967) | |||||
| Work in progress | (357,692) | (365,220) | 15,797 | 126,002 | (581,113) | |||||
| Finished goods | - | (12,588,225) | - | 5,065,592 | (7,522,633) | |||||
| Low value consumables | (9,812,965) | (3,287,005) | 69,016 | 2,507,988 | (10,522,966) | |||||
| (83,323,315) | (26,599,874) | 2,743,278 | 20,192,232 | (86,987,679) | ||||||
| (c) | Provision for decline in the value of inventories is as follows: | ||||
| Specific basis for determining net realisable value | Reason for current period reversal or write-off of provision for decline in the value of inventories | ||||
| Raw materials/ work in progress/ Finished goods/ low value consumables | Based on the estimated selling price, less the estimated costs to completion, estimated selling and distribution expenses and related taxes | Increase in the net realisable value of the inventories of which a provision for decline in the value had been made in prior years or sales realised | |||
| (10) | Other current assets | |||
| 30 June 2020 | 31 December 2019 | |||
| Taxs to be deducted and prepaid | 807,965,374 | 961,430,941 | ||
| Input VAT to be verified | - | 11,995,125 | ||
| 807,965,374 | 973,426,066 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | ||||||||||||||||||
| (11) | Long-term equity investments | ||||||||||||||||||
| 30 June 2020 | 31 December 2019 | ||||||||||||||||||
| Associate | |||||||||||||||||||
| - Hanon Systems (Nanchang) Co., Ltd. (Hanon Systems) | 37,910,003 | 40,934,557 | |||||||||||||||||
| Less: Provision for impairment of long-term equity investments | - | - | |||||||||||||||||
| 37,910,003 | 40,934,557 | ||||||||||||||||||
| Associate | |||||||||||||||||||
| Movements for the current period | |||||||||||||||||||
| 31 December 2019 | Increase or decrease in investment | Share of net profit/(loss) under equity method | Cash dividends declared by joint ventures | Provision Provision for impairment loss | 30 June 2020 | Shareholding (%) | Voting rights (%) | Ending balance of provision for impairment | |||||||||||
| Hanon Systems | 40,934,557 | - | (3,024,554) | - | - | 37,910,003 | 19.15% | 33.33% | - | ||||||||||
Related information of equity in associates is set forth in Note 5(2).
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||
| (12) | Fixed assets | |||
| 30 June 2020 | 31 December 2019 | |||
| Fixed assets (a) | 5,226,203,286 | 5,714,483,873 | ||
| Fixed assets pending for disposal (b) | 4,576,160 | 5,704 | ||
| 5,230,779,446 | 5,714,489,577 | |||
| (a) | Fixed assets | |||
| . | Buildings | Machinery and equipment | Motor vehicles | Moulds | Electronic and other equipment | Total | |
| Cost | |||||||
| 31 December 2019 | 2,294,038,213 | 3,820,737,800 | 350,288,109 | 3,030,590,946 | 3,671,943,742 | 13,167,598,810 | |
| Increase in the current period | |||||||
| Transfers from construction in progress | 9,358,762 | 3,299,553 | 2,711,935 | 34,956,767 | 29,698,122 | 80,025,139 | |
| Decrease in the current period | |||||||
| Disposal or retirement | (25,492,641) | (37,882,770) | (5,689,816) | (31,675,863) | (65,877,225) | (166,618,315) | |
| Other decrease | - | - | - | - | (47,379) | (47,379) | |
| 30 June 2020 | 2,277,904,334 | 3,786,154,583 | 347,310,228 | 3,033,871,850 | 3,635,717,260 | 13,080,958,255 | |
| Accumulated depreciation | |||||||
| 31 December 2019 | (519,318,152) | (2,278,813,606) | (204,218,309) | (2,085,299,039) | (2,324,170,685) | (7,411,819,791) | |
| Increase in the current period | |||||||
| Provision | (28,738,819) | (118,790,978) | (17,472,582) | (171,636,650) | (180,999,521) | (517,638,550) | |
| Decrease in the current period | |||||||
| Disposal or retirement | 2,960,554 | 29,019,712 | 5,091,505 | 25,200,086 | 49,664,559 | 111,936,416 | |
| Other decrease | - | - | - | - | 132,670 | 132,670 | |
| 30 June 2020 | (545,096,417) | (2,368,584,872) | (216,599,386) | (2,231,735,603) | (2,455,372,977) | (7,817,389,255) | |
| Provision for impairment loss | |||||||
| 31 December 2019 | - | (25,422,141) | (120,218) | (12,544,916) | (3,207,871) | (41,295,146) | |
| Increase in the current period | |||||||
| Provision | - | (2,518,345) | (4,254) | (6,368,056) | (1,360,459) | (10,251,114) | |
| Decrease in the current period | |||||||
| Disposal or retirement | - | 6,817,782 | 81,795 | 5,820,387 | 1,460,582 | 14,180,546 | |
| 30 June 2020 | - | (21,122,704) | (42,677) | (13,092,585) | (3,107,748) | (37,365,714) | |
| Carrying amount | |||||||
| 30 June 2020 | 1,732,807,917 | 1,396,447,007 | 130,668,165 | 789,043,662 | 1,177,236,535 | 5,226,203,286 | |
| 31 December 2019 | 1,774,720,061 | 1,516,502,053 | 145,949,582 | 932,746,991 | 1,344,565,186 | 5,714,483,873 |
| For the six months ended 30June 2020, depreciation charged to fixed assets amounted to RMB 517,638,550 (the six months ended 30June 2019: RMB 475,243,004), of which the amounts charged to cost of sales, selling expenses, general and administrative expenses, and research and development expenses were RMB 398,894,781 (the six months ended 30 June 2019: RMB 407,307,847), RMB 1,516,970 (the six months ended 30 June 2019: RMB 1,639,280), RMB 81,887,718 (the six months ended 30 June 2019: RMB 37,469,266) and RMB 35,339,081 (the six months ended 30 June 2019: RMB 28,826,611) respectively. | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||||||||||||
| (12) | Fixed assets (Cont’d) | |||||||||||||
| (a) | Fixed assets (Cont’d) | |||||||||||||
| The cost of fixed assets transferred from construction in progress amounted to RMB 80,025,139 (the six months ended 30 June 2019: RMB 251,536,427). | ||||||||||||||
| (i) | Temporarily idle fixed assets | |||||||||||||
| As at 30 June 2020, the fixed assets with a carrying amount of RMB 13,364,123 (a cost of RMB 170,300,819) (31 December 2019: a carrying amount of RMB 6,376,873 and a cost of RMB 155,507,908) were temporarily idle due to product process adjustment and other reasons. The analysis is as follows: | ||||||||||||||
| Cost | Accumulated depreciation | Provision for impairment loss | Carrying amount | |||||||||||
| Buildings | 10,477,140 | (4,429,208) | - | 6,047,932 | ||||||||||
| Machinery and equipment | 130,920,989 | (105,330,006) | (21,122,704) | 4,468,279 | ||||||||||
| Motor vehicles | 3,481,663 | (1,839,356) | (42,677) | 1,599,630 | ||||||||||
| Moulds | 4,016,618 | (3,359,520) | (547,669) | 109,429 | ||||||||||
| Electronic and other equipment | 21,404,409 | (17,157,808) | (3,107,748) | 1,138,853 | ||||||||||
| 170,300,819 | (132,115,898) | (24,820,798) | 13,364,123 | |||||||||||
| (ii) | Fixed assets with pending certificates of ownership: | |||||||||||||
| Carrying amount | Reasons for not obtaining certificates of ownership | |||||||||||||
| Buildings | 953,427,141 | Pending procedures | ||||||||||||
| (iii) | Assessment on impairment of asset groups | |||||||||||||
| The Company's subsidiary, JMCH, has shown signs of impairment of long-term assets due to accumulated losses. Management tested the entire assets of JMCH as an asset group for impairment. The method and key assumptions of impairment test of JMCH asset group are set out in Note 4(16). After testing, no impairment provision was made for fixed assets and construction in progress in JMCH asset group in the current period. | ||||||||||||||
| (b) | Fixed assets pending for disposal | |||||||||||||
| 30 June 2020 | 31 December 2019 | |||||||||||||
| Electronic and other equipment | 3,997,633 | 3,208 | ||||||||||||
| Motor vehicles | 4,168 | 2,496 | ||||||||||||
| Moulds | 382,500 | - | ||||||||||||
| Machinery and equipment | 191,859 | - | ||||||||||||
| 4,576,160 | 5,704 | |||||||||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (13) | Construction in progress |
| 30 June 2020 | 31 December 2019 | |||||||||||
| Book balance | Provision for impairment loss | Carrying amount | Book balance | Provision for impairment loss | Carrying amount | |||||||
| Fushan new plant investment project | 867,470,733 | - | 867,470,733 | 843,501,521 | - | 843,501,521 | ||||||
| JMC capacity optimization | 125,207,148 | 125,207,148 | - | - | - | |||||||
| Engine construction project | 113,435,977 | - | 113,435,977 | 132,731,701 | - | 132,731,701 | ||||||
| Gasoline engine processing capacity expansion project | 107,210,357 | - | 107,210,357 | 96,957,862 | - | 96,957,862 | ||||||
| CX756 project | 72,363,052 | - | 72,363,052 | 57,798,588 | - | 57,798,588 | ||||||
| Vehicles capacity investment project | 68,110,689 | - | 68,110,689 | 72,757,444 | - | 72,757,444 | ||||||
| N356 project | 67,065,496 | - | 67,065,496 | 56,765,898 | - | 56,765,898 | ||||||
| Construction of Xiaolan 600 mu Phase 3 plan | 50,897,386 | - | 50,897,386 | 35,720,297 | - | 35,720,297 | ||||||
| Collision Simulation Laboratory | 32,697,323 | - | 32,697,323 | 27,073,143 | - | 27,073,143 | ||||||
| JF8/CX743 project | 14,828,370 | - | 14,828,370 | 21,392,593 | - | 21,392,593 | ||||||
| V348 conversion project | 13,189,975 | - | 13,189,975 | 5,168,412 | - | 5,168,412 | ||||||
| Independently developed gasoline engine project | 12,678,592 | - | 12,678,592 | 12,192,019 | - | 12,192,019 | ||||||
| Stamping/frame capacity improvement project | 11,078,149 | - | 11,078,149 | 14,273,769 | - | 14,273,769 | ||||||
| Technology research institute project | 9,896,039 | - | 9,896,039 | 19,292,516 | - | 19,292,516 | ||||||
| Xiaolan gasoline engine assembly Phase 2 project | 4,122,311 | - | 4,122,311 | 4,122,311 | - | 4,122,311 | ||||||
| N806 project | 599,007 | - | 599,007 | 1,837,618 | - | 1,837,618 | ||||||
| J09 project | 441,190 | - | 441,190 | - | - | - | ||||||
| New energy laboratory project | 164,517 | - | 164,517 | 164,517 | - | 164,517 | ||||||
| J28 project | - | - | - | 1,049,999 | - | 1,049,999 | ||||||
| Other miscellaneous and pending installation projects | 96,364,825 | (691,646) | 95,673,179 | 96,016,216 | (691,646) | 95,324,570 | ||||||
| 1,667,821,136 | (691,646) | 1,667,129,490 | 1,498,816,424 | (691,646) | 1,498,124,778 | |||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||||||||||||||
| (13) | Construction in progress (Cont’d) | |||||||||||||||
| (i) | Movements of significant projects of construction in progress | |||||||||||||||
| Project name | Budget (in RMB 0’000) | 31 December 2019 | Increase in the current period | Transfer to fixed assets | Decrease of other | 30 June 2020 | % of project investment in budget | Progress of project | Accumulated capitalised borrowing costs | Including: Capitalised borrowing costs in the current period | Source of fund | |||||
| Fushan new plant investment project | 205,200 | 843,501,521 | 24,786,063 | (816,851) | - | 867,470,733 | 42% | 42% | - | - | Self-owned funds | |||||
| JMC capacity optimization | 179,462 | - | 125,207,148 | - | - | 125,207,148 | 7% | 7% | - | - | Self-owned funds | |||||
| Engine construction project | 67,000 | 132,731,701 | - | (8,381,138) | (10,914,586) | 113,435,977 | 66% | 66% | - | - | Self-owned funds | |||||
| Gasoline engine processing capacity expansion project | 16,445 | 96,957,862 | 10,252,495 | - | - | 107,210,357 | 65% | 65% | - | - | Self-owned funds | |||||
| CX756 project | 21,688 | 57,798,588 | 15,724,931 | (1,160,467) | - | 72,363,052 | 34% | 34% | - | - | Self-owned funds | |||||
| Vehicles capacity investment project | 100,200 | 72,757,444 | 2,863,302 | (7,510,057) | - | 68,110,689 | 93% | 93% | - | - | Self-owned funds | |||||
| N356 project | 11,269 | 56,765,898 | 18,651,593 | (8,351,995) | - | 67,065,496 | 80% | 80% | - | - | Self-owned funds | |||||
| Construction of Xiaolan 600 mu Phase 3 plan | 20,977 | 35,720,297 | 15,249,417 | (72,328) | - | 50,897,386 | 24% | 24% | - | - | Self-owned funds | |||||
| Collision Simulation Laboratory | 9,651 | 27,073,143 | 5,624,180 | - | - | 32,697,323 | 34% | 34% | - | - | Self-owned funds | |||||
| JF8/CX743 project | 14,000 | 21,392,593 | 1,023,620 | (7,587,843) | - | 14,828,370 | 90% | 90% | - | - | Self-owned funds | |||||
| V348 major transformation project | 6,037 | 5,168,412 | 8,282,351 | (260,788) | - | 13,189,975 | 23% | 23% | - | - | Self-owned funds | |||||
| Independently developed gasoline engine project | 43,200 | 12,192,019 | 486,573 | - | - | 12,678,592 | 92% | 92% | - | - | Self-owned funds | |||||
| Stamping/frame capacity improvement project | 56,778 | 14,273,769 | 2,811,547 | (6,007,167) | - | 11,078,149 | 81% | 81% | - | - | Self-owned funds | |||||
| Technology research institute project | 97,000 | 19,292,516 | 48,078 | (9,444,555) | - | 9,896,039 | 20% | 20% | - | - | Self-owned funds | |||||
| Xiaolan gasoline engine assembly Phase 2 project | 3,612 | 4,122,311 | - | - | - | 4,122,311 | 92% | 92% | - | - | Self-owned funds | |||||
| N806 project | 2,860 | 1,837,618 | 730,695 | (1,969,306) | - | 599,007 | 99% | 99% | - | - | Self-owned funds | |||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | ||||||||||||||||
| (13) | Construction in progress (Cont’d) | ||||||||||||||||
| (i) | Movements of significant projects of construction in progress (Cont’d) | ||||||||||||||||
| Project name | Budget (in RMB 0’000) | 31 December 2019 | Increase in the current period | Transfer to fixed assets | Decrease of other | 30 June 2020 | % of project investment in budget | Progress of project | Accumulated capitalised borrowing costs | Including: Capitalised borrowing costs in the current period | Source of fund | ||||||
| J09 project | 61,800 | - | 966,790 | (525,600) | - | 441,190 | 93% | 93% | - | - | Self-owned funds | ||||||
| New energy laboratory project | 7,049 | 164,517 | - | - | - | 164,517 | 78% | 78% | - | - | Self-owned funds | ||||||
| J28 project | 6,224 | 1,049,999 | 42,334 | (1,092,333) | - | - | 83% | 83% | - | - | Self-owned funds | ||||||
| Other miscellaneous and pending installation projects | 96,016,216 | 29,397,569 | (26,844,711) | (2,204,249) | 96,364,825 | 292,897 | - | Self-owned funds and borrowings | |||||||||
| 1,498,816,424 | 262,148,686 | (80,025,139) | (13,118,835) | 1,667,821,136 | |||||||||||||
| (ii) | Provision for impairment of construction in progress | |||||||||
| 31 December 2019 | Increase in the current period | Decrease in the current period | 30 June 2020 | Reason for provision | ||||||
| Other miscellaneous and pending installation projects | (691,646) | - | - | (691,646) | The recoverable amount is below the carrying amount | |||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (14) | Right-of-use assets |
| Buildings | |||
| Cost | |||
| 31 December 2019 | 48,809,592 | ||
| Increase in the current period | |||
| New lease contracts | - | ||
| 30 June 2020 | 48,809,592 | ||
| Accumulated depreciation | |||
| 31 December 2019 | (12,769,701) | ||
| Increase in the current period | |||
| Provision | (7,225,828) | ||
| 30 June 2020 | (19,995,529) | ||
| Provision for impairment loss | |||
| 31 December 2019 | - | ||
| Increase in the current period | |||
| Provision | - | ||
| 30 June 2020 | - | ||
| Carrying amount | |||
| 30 June 2020 | 28,814,063 | ||
| 31 December 2019 | 36,039,891 |
| For the six months ended 30June 2020, depreciation of right-of-use assets amounted to RMB 7,225,828, of which RMB 5,775,094 and RMB 1,450,734 were included in cost of sales and selling expenses. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | ||||||
| (15) | Intangible assets | ||||||
| Land use rights | Software use fees | Non-patent technologies | After-sales services management model | Others | Total | ||
| Cost | |||||||
| 31 December 2019 | 886,309,822 | 176,542,395 | 290,025,954 | 36,979,184 | 1,648,171 | 1,391,505,526 | |
| Increase in the current period | |||||||
| Transfers from construction in progress | - | 2,204,249 | - | - | - | 2,204,249 | |
| Internal research and development | - | - | 182,923,172 | - | - | 182,923,172 | |
| Decrease in the current period | |||||||
| Disposal | - | - | - | - | - | - | |
| 30 June 2020 | 886,309,822 | 178,746,644 | 472,949,126 | 36,979,184 | 1,648,171 | 1,576,632,947 | |
| Accumulated amortisation | |||||||
| 31 December 2019 | (166,614,748) | (109,014,815) | (128,492,763) | (36,979,184) | (1,648,171) | (442,749,681) | |
| Increase in the current period | |||||||
| Provision | (9,138,270) | (10,938,489) | (38,148,754) | - | - | (58,225,513) | |
| Decrease in the current period | |||||||
| Disposal | - | - | - | - | - | - | |
| 30 June 2020 | (175,753,018) | (119,953,304) | (166,641,517) | (36,979,184) | (1,648,171) | (500,975,194) | |
| Provision for impairment loss | |||||||
| 31 December 2019 | - | - | - | - | - | - | |
| Increase in the current period | |||||||
| Provision | - | - | - | - | - | - | |
| Decrease in the current period | |||||||
| Disposal | - | - | - | - | - | - | |
| 30 June 2020 | - | - | - | - | - | - | |
| Carrying amount | |||||||
| 30 June 2020 | 710,556,804 | 58,793,340 | 306,307,609 | - | - | 1,075,657,753 | |
| 31 December 2019 | 719,695,074 | 67,527,580 | 161,533,191 | - | - | 948,755,845 | |
| For the six months ended 30June 2020, amortisation charged to intangible assets amounted to RMB 58,225,513 (the six months ended 30June 2019: RMB 42,950,608), of which the amounts charged to cost of sales, selling expenses, general and administrative expenses, and research and development expenses were RMB 273,069, RMB 179,314, RMB 18,893,016 and RMB 38,880,114 respectively. (the six months ended 30 June 2019: RMB 248,998, RMB 169,811, RMB 17,156,357 and RMB 25,375,442). | ||||||||||
| The Group's development expenditures are set out below: | ||||||||||
| 31 December 2019 | Increase in the current period | Decrease in the current period | 30 June 2020 | |||||||
| Charged to profit or loss | Recognised as intangible assets | |||||||||
| Automobile products development project | 125,142,080 | 127,364,508 | - | (182,923,172) | 69,583,416 | |||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (15) | Intangible assets (Cont’d) |
| Expenditures on research and development of the Group incurred in the six months ended 30June 2020 amounted to RMB 823,946,960 (the six months ended 30June 2019: RMB 914,828,651) in total, of which RMB 696,582,452 (the six months ended 30June2019: RMB 837,430,636) was recognised in profit or loss for the current period, RMB 86,341,229 (the six months ended 30June 2019: RMB 4,781,497) was recognised as intangible assets for the current period and RMB 41,023,279 (the six months ended 30June2019: RMB 72,616,518) was included in the ending balance of development expenditures. As at 30 June 2020, the intangible assets developed by the Group accounted for 28.5% (31 December 2019: 17.0%) of the carrying amount of intangible assets. |
| (16) | Goodwill | |||||||
| 31 December 2019 | Increase in the current period | Decrease in the current period | 30 June 2020 | |||||
| Goodwill - | ||||||||
| JMCH | 89,028,412 | - | - | 89,028,412 | ||||
| Less: Provision for impairment (a) - | ||||||||
| JMCH | (89,028,412) | - | - | (89,028,412) | ||||
| - | - | - | - | |||||
| (a) | Impairment | |||||||
| Management tested the entire assets of JMCH as an asset group for impairment. The recoverable amount of the asset group is based on a seven-year budget plan approved by management for medium- and long-term business development, adjusted for market conditions, using future cash flow forecast to calculate the net value of the fair value less disposal costs. Cash flows beyond the seven-year period are extrapolated using the estimated long-term growth rate. The long-term growth rate does not exceed the average growth rate for the heavy duty automobile business in which the asset group operates. | ||||||||
| The key assumptions used by management and forecast period are consistent with the heavy duty automobile industry. Management determines budgeted gross margins based on industrial and past experience and forecast on future market development. The discount rates used by management are the after-tax interest rates that are able to reflect the risks specific to the asset groups. The fair value measurement is categorised within level 3 of the fair value hierarchy. | ||||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||||||
| (17) | Deferred tax assets and deferred tax liabilities | |||||||
| (a) | Deferred tax assets before offsetting | |||||||
| 30 June 2020 | 31 December 2019 | |||||||
| Deductible temporary differences and deductible losses | Deferred tax assets | Deductible temporary differences and deductible losses | Deferred tax assets | |||||
| Accrued expenses and provisions | 3,564,341,232 | 806,804,151 | 3,561,590,960 | 802,898,159 | ||||
| Recoverable losses | 1,589,944,713 | 238,526,420 | 1,589,820,677 | 238,495,412 | ||||
| Provision for asset impairments | 322,989,941 | 52,708,810 | 246,399,757 | 39,468,025 | ||||
| Retirement benefits plan | 66,032,485 | 16,275,873 | 68,441,000 | 16,637,150 | ||||
| Non-patent technologies | 83,320,759 | 20,830,190 | 64,246,382 | 16,061,596 | ||||
| Deferred income | 34,693,362 | 5,204,004 | 34,389,578 | 5,158,437 | ||||
| Employee education funds unpaid | 32,982,026 | 5,123,845 | 20,980,066 | 3,248,820 | ||||
| Others | 39,673,028 | 6,821,550 | 36,034,838 | 6,154,413 | ||||
| 5,733,977,546 | 1,152,294,843 | 5,621,903,258 | 1,128,122,012 | |||||
| Including: | ||||||||
| Expected to be recovered within one year (inclusive) | 876,639,535 | 855,992,754 | ||||||
| Expected to be recovered after one year | 275,655,308 | 272,129,258 | ||||||
| 1,152,294,843 | 1,128,122,012 | |||||||
| (b) | Deferred tax liabilities before offsetting | |||||||
| 30 June 2020 | 31 December 2019 | |||||||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |||||
| Depreciation of fixed assets | 1,200,337,561 | 283,859,248 | 1,161,290,511 | 260,407,296 | ||||
| Differences between the fair value of the identifiable net assets and book value arising from business combinations not under common control | 100,091,548 | 25,022,887 | 101,359,924 | 25,339,981 | ||||
| Amortisation of intangible assets | 35,603,191 | 8,341,346 | 32,088,825 | 6,968,005 | ||||
| Others | 9,789,542 | 1,500,744 | 558,420 | 139,605 | ||||
| 1,345,821,842 | 318,724,225 | 1,295,297,680 | 292,854,887 | |||||
| Including: | ||||||||
| Expected to be recovered within one year (inclusive) | 64,715,843 | 47,363,058 | ||||||
| Expected to be recovered after one year | 254,008,382 | 245,491,829 | ||||||
| 318,724,225 | 292,854,887 | |||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | ||||||||
| (17) | Deferred tax assets and deferred tax liabilities (Cont’d) | ||||||||
| (c) | Deductible temporary differences and deductible losses that are not recognised as deferred tax assets are analysed as follows: | ||||||||
| 30 June 2020 | 31 December 2019 | ||||||||
| Deductible temporary differences | 152,732,113 | 165,067,939 | |||||||
| Deductible losses | 1,267,667,619 | 1,006,172,312 | |||||||
| 1,420,399,732 | 1,171,240,251 | ||||||||
| (d) | Deductible losses that are not recognised as deferred tax assets will be expired in following years: | ||||||||
| 30 June 2020 | 31 December 2019 | ||||||||
| 2020 | 72,469,642 | 72,469,642 | |||||||
| 2021 | 115,819,543 | 115,819,543 | |||||||
| 2022 | 150,713,078 | 150,713,078 | |||||||
| 2023 | 240,678,736 | 240,678,736 | |||||||
| 2024 | 351,896,252 | 426,491,313 | |||||||
| 2025 | 336,090,368 | - | |||||||
| 1,267,667,619 | 1,006,172,312 | ||||||||
| (e) | The net balances of deferred tax assets and liabilities after offsetting are as follows: | ||||||||
| 30 June 2020 | 31 December 2019 | ||||||||
| Offsetting amount | Balance after offsetting | Offsetting amount | Balance after offsetting | ||||||
| Deferred tax assets | (293,701,338) | 858,593,505 | (267,514,906) | 860,607,106 | |||||
| Deferred tax liabilities | (293,701,338) | 25,022,887 | (267,514,906) | 25,339,981 | |||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (18) | Provision for asset impairment and losses |
| 31 December 2019 | Increase in the current period | Decrease in the current period | 30 June 2020 | |||||||
| Reversal | Write-off | |||||||||
| Provision for bad debts of accounts receivable | 154,075,531 | 82,769,918 | (16,452,405) | - | 220,393,044 | |||||
| Including: Provision for bad debts on individual basis | 110,063,380 | 82,769,918 | - | - | 192,833,298 | |||||
| Provision for bad debts on grouping basis | 44,012,151 | - | (16,452,405) | - | 27,559,746 | |||||
| Provision for bad debts of other receivables | 346,816 | - | (74,702) | - | 272,114 | |||||
| Sub-total | 154,422,347 | 82,769,918 | (16,527,107) | - | 220,665,158 | |||||
| Provision for decline in the value of inventories | 83,323,315 | 26,599,874 | (2,743,278) | (20,192,232) | 86,987,679 | |||||
| Provision for impairment of fixed assets | 41,295,146 | 10,251,114 | - | (14,180,546) | 37,365,714 | |||||
| Provision for impairment of construction in progress | 691,646 | - | - | - | 691,646 | |||||
| Provision for impairment of goodwill | 89,028,412 | - | - | - | 89,028,412 | |||||
| Sub-total | 214,338,519 | 36,850,988 | (2,743,278) | (34,372,778) | 214,073,451 | |||||
| 368,760,866 | 119,620,906 | (19,270,385) | (34,372,778) | 434,738,609 | ||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (19) | Short-term borrowings | |||
| 30 June 2020 | 31 December 2019 | |||
| Bank credit loan | 1,300,000,000 | - | ||
| As at 30 June 2020,the weighted average interest rate ofShort-term borrowings is 2.79% | ||||
| (20) | Notes payable | |||
| 30 June 2020 | 31 December 2019 | |||
| Bank acceptance notes | 71,901,506 | 31,400,000 | ||
| As at 30 June 2020, the subsidiary of the Group, JMCH’s notes receivable of RMB 71,901,506 (31 December 2019: 31,400,000) were secured by its receivables financing with a carrying amount of RMB 22,182,906 (31 December 2019: RMB 34,196,500) (Note 4(6)) and other cash amount of RMB49,718,600 (31 December 2019: Nil) (Note 4(1)). |
| (21) | Accounts payable | |||
| 30 June 2020 | 31 December 2019 | |||
| Payable for spare parts | 8,460,559,600 | 7,874,660,108 | ||
| Payable for raw and auxiliary materials | 275,400,826 | 241,509,481 | ||
| 8,735,960,426 | 8,116,169,589 | |||
| As at 30 June 2020, accounts payable with aging over 1 year amounted to RMB 444,858,938 (31 December 2019: RMB 329,574,913), which mainly represented materials payable for which a settlement price has not yet been determined, and such payables had not been finally settled yet. | ||||
| (22) | Contract liabilities | |||
| 30 June 2020 | 31 December 2019 | |||
| Advances for automobiles and automobile parts | 112,774,231 | 227,774,183 | ||
| Advances for maintenance and warranty services | 115,151,087 | 102,109,762 | ||
| 227,925,318 | 329,883,945 | |||
| Less: Contract liabilities expected to be included in revenue after one year (Note 4(33)) | (78,768,315) | (61,713,791) | ||
| 149,157,003 | 268,170,154 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||
| (23) | Employee benefits payable | |||
| 30 June 2020 | 31 December 2019 | |||
| Short-term employee benefits payable (a) | 440,143,879 | 379,453,114 | ||
| Defined contribution plans payable (b) | 57,458,431 | - | ||
| Defined benefit plans payable (c) | 3,430,000 | 3,430,000 | ||
| Termination benefits payable (d) | 2,664,176 | 2,664,176 | ||
| 503,696,486 | 385,547,290 | |||
| (a) | Short-term employee benefits | |||||||
| 31 December 2019 | Increase in the current period | Decrease in the current period | 30 June 2020 | |||||
| Wages and salaries, bonus, allowances and subsidies | 333,252,396 | 920,923,479 | (876,752,571) | 377,423,304 | ||||
| Staff welfare | 20,408,093 | 41,153,420 | (39,493,221) | 22,068,292 | ||||
| Social security contributions | - | 39,015,571 | (37,269,269) | 1,746,302 | ||||
| Including: Medical insurance | - | 34,229,353 | (34,229,353) | - | ||||
| Work injury insurance | - | 2,268,425 | (522,123) | 1,746,302 | ||||
| Maternity insurance | - | 2,517,793 | (2,517,793) | - | ||||
| Housing funds | - | 66,580,205 | (66,580,205) | - | ||||
| Labour union funds and employee education funds | 25,792,625 | 30,544,972 | (18,328,240) | 38,009,357 | ||||
| Other short-term employee benefits | - | 2,598,126 | (1,701,502) | 896,624 | ||||
| 379,453,114 | 1,100,815,773 | (1,040,125,008) | 440,143,879 | |||||
| (b) | Defined contribution plans | |||||||
| 31 December 2019 | Increase in the current period | Decrease in the current period | 30 June 2020 | |||||
| Basic pensions | - | 75,334,835 | (19,627,370) | 55,707,465 | ||||
| Supplementary pensions | - | 10,400,000 | (10,400,000) | - | ||||
| Unemployment insurance | - | 2,454,439 | (703,473) | 1,750,966 | ||||
| - | 88,189,274 | (30,730,843) | 57,458,431 | |||||
| (c) | Defined benefit plans | |||||||
| 31 December 2019 | Increase in the current period | Decrease in the current period | 30 June 2020 | |||||
| Post-retirement benefits payable (Note 4(32)) | 3,430,000 | 1,821,577 | (1,821,577) | 3,430,000 | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (23) | Employee benefits payable (Cont'd) |
| (d) | Termination benefits payable | |||
| 30 June 2020 | 31 December 2019 | |||
| Early retirement benefits payable (Note 4(32)) | 1,326,000 | 1,326,000 | ||
| Other termination benefits (i) | 1,338,176 | 1,338,176 | ||
| 2,664,176 | 2,664,176 | |||
| (i) For the Six Months Ended 30 June 2020, other termination benefits paid by the Group for termination of the employment relationship is RMB 8,856,721. | ||||
| (24) | Taxes payable | |||
| 30 June 2020 | 31 December 2019 | |||
| Consumption tax payable | 12,426,520 | 99,080,033 | ||
| Enterprise income tax payable | 12,509,633 | 75,018,772 | ||
| Land use tax payable | 4,850,904 | 5,399,750 | ||
| Others | 14,717,678 | 19,278,549 | ||
| 44,504,735 | 198,777,104 | |||
| (25) | Other payables | |||
| 30 June 2020 | 31 December 2019 | |||
| Promotion expenses | 1,918,512,087 | 1,848,583,722 | ||
| Research and development project expenses | 856,944,969 | 1,016,587,970 | ||
| Construction expenses | 246,825,695 | 372,865,433 | ||
| Goods transportation expenses | 147,695,477 | 231,965,841 | ||
| Advertising and new product planning fees | 230,527,561 | 208,380,148 | ||
| Guarantees | 116,624,164 | 95,201,388 | ||
| Trademark management fees | 12,730,883 | 18,127,537 | ||
| Technological transformation project expenses | 17,943,759 | 17,135,118 | ||
| Ordinary share dividends payable | 66,863,535 | 6,790,176 | ||
| Consulting expenses | 22,628,093 | 5,425,621 | ||
| Others | 346,626,353 | 324,203,884 | ||
| 3,983,922,576 | 4,145,266,838 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (25) | Other payables (Cont’d) |
| As at 30 June 2020, other payables with aging over 1 year of RMB 767,334,106 (31 December 2019: RMB 721,562,900) mainly comprised deposits collected from logistics companies, distributors and repair stations, payables for projects and payables for research and development expenses. Such payables had not been finally settled yet in view of the continuing business transactions with distributors, engineering projects and research and development projects that have not yet been accepted and completed. |
| (26) | Current portion of non-current liabilities | ||||
| 30 June 2020 | 31 December 2019 | ||||
| Current portion of lease liabilities (Note 4(29)) | 10,115,277 | 13,386,576 | |||
| Current portion of long-term borrowings (Note 4(28)) | 463,595 | 456,830 | |||
| 10,578,872 | 13,843,406 | ||||
| (27) | Other current liabilities | |||
| 30 June 2020 | 31 December 2019 | |||
| Provisions expected to be settled within one year (Note 4(30)) | 258,553,238 | 234,948,279 | ||
| Others | 14,660,650 | 29,610,644 | ||
| 273,213,888 | 264,558,923 | |||
| (28) | Long-term borrowings | |||
| 30 June 2020 | 31 December 2019 | |||
| Secured borrowings | 3,476,963 | 3,654,644 | ||
| Less: Current portion of long-term borrowings | (463,595) | (456,830) | ||
| 3,013,368 | 3,197,814 | |||
| The above secured borrowings were long-term borrowings amounting to USD 491,131 secured by Jiangling Motor Group Finance Company, borrowed from Industrial and Commercial Bank of China ("ICBC"), Nanchang Ganjiang Sub-branch with interest payable every 6 months and the principal due for payment in instalments between 10 December 2007 and 27 October 2027. In the six months ended 30June 2020, the interest rate of long-term borrowings was 1.5% (the six months ended 30June 2019: 1.5%). |
| Starting date | Maturity date | Currency | Interest rate (%) | 30 June 2020 | 31 December 2019 | |||||||
| Amount in foreign currency | RMB equivalent | Amount in foreign currency | RMB equivalent | |||||||||
| ICBC Nanchang Ganjiang Sub-branch | 27 February 1998 | 27 October 2027 | USD | 1.5% | 491,131 | 3,476,963 | 523,873 | 3,654,644 | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (29) | Lease liabilities | ||||
| 30 June 2020 | 31 December 2019 | ||||
| Lease liabilities | 29,254,791 | 35,978,828 | |||
| Less: Current portion of non-current liabilities (Note 4(26)) | (10,115,277) | (13,386,576) | |||
| 19,139,514 | 22,592,252 | ||||
| (30) | Provisions | |||||||
| 31 December 2019 | Increase in the current period | Decrease in the current period | 30 June 2020 | |||||
| Product warranties i) | 401,635,739 | 155,588,778 | (122,604,317) | 434,620,200 | ||||
| Less: Provisions expected to be settled within one year (Note 4(27)) | (234,948,279) | (258,553,238) | ||||||
| 166,687,460 | 176,066,962 | |||||||
| i) Product warranties are expenses expected to be incurred during the warranty period from free after-sales services, product warranty and other services for the finished vehicles sold. |
| (31) | Deferred income | |||||||
| 31 December 2019 | Increase in the current period | Decrease in the current period | 30 June 2020 | Reason | ||||
| Government grants (a) | 34,389,578 | 800,000 | (496,216) | 34,693,362 | Subsidy for projects | |||
| (a) | Government grants | |||||||
| 31 December 2019 | Increase in the current period | Decrease in the current period | 30 June 2020 | Asset related/ Income related | ||||
| Recognised in other income | ||||||||
| Research and development -related subsidies | 34,065,060 | 800,000 | (496,216) | 34,368,844 | Income related | |||
| Others | 324,518 | - | - | 324,518 | Income related | |||
| 34,389,578 | 800,000 | (496,216) | 34,693,362 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (32) | Long-term employee benefits payable | |||
| 30 June 2020 | 31 December 2019 | |||
| Supplementary retirement benefits and early-retirement benefits eligible for recognition of provisions | 66,032,485 | 68,441,000 | ||
| Less: Payable within one year | (4,756,000) | (4,756,000) | ||
| 61,276,485 | 63,685,000 | |||
| The retirement and early-retirement benefits payable within one year are included in employee benefits payable. | ||||
| For retired and early-retired employees, the Group provides them with a certain amount of supplementary benefits during their retirement or early-retirement period. The amount of benefits depends on the employee's position, length of service and salary at the time of retirement or early-retirement, and is adjusted in accordance with inflation rate and other factors. The Group's obligations for supplementary retirement and early-retirement benefits as at the balance sheet date are calculated using projected unit credit method and are reviewed by an external independent actuary. | ||||
| (a) | Movements of retirement and early-retirement benefits of the Group are as follows: | ||||
| Present value of the obligations of the defined benefit plan | |||||
| 30 June 2020 | 31 December 2019 | ||||
| Opening balance | 68,020,000 | 68,020,000 | |||
| Cost of defined benefit plan recognised in profit or loss for the current period | |||||
| - Current service cost | - | 1,203,000 | |||
| - Past service cost | - | (1,523,000) | |||
| - Actuarial losses recognised immediately | - | 1,420,000 | |||
| - Net interest | - | 2,300,000 | |||
| Remeasurement of net liabilities for defined benefit plan | - | ||||
| - Actuarial losses | - | 1,623,000 | |||
| Other changes | - | ||||
| - Benefits paid | (2,408,515) | (4,602,000) | |||
| Ending balance | 66,032,485 | 68,441,000 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (32) | Long-term employee benefits payable (Cont'd) |
| (b) | The actuarial assumptions used to determine the present value of defined benefit plan obligations | ||||
| 30 June 2020 | 31 December 2019 | ||||
| Discount rates | —— | 3.5% | |||
| Inflation rate | —— | 2.0% | |||
| Salaries and benefits growth rates | —— | 0%-6% | |||
| Future mortality assumptions were determined based on the China Life Insurance Mortality Table (2010-2013), which is publicly available statistical information for the Chinese region. | |||||
| (33) | Other non-current liabilities | |||
| 30 June 2020 | 31 December 2019 | |||
| Contract liabilities expected to be included in revenue after one year (Note 4(22)) | 78,768,315 | 61,713,791 | ||
| Others | 39,998 | 80,000 | ||
| 78,808,313 | 61,793,791 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||||||||||||
| (34) | Share capital | |||||||||||||
| 31 December 2019 | Movements for the current period | 30 June 2020 | ||||||||||||
| Shares newly issued | Bonus share | Transfer from capital surplus | Others | Sub-total | ||||||||||
| Shares subject to trading restriction - | ||||||||||||||
| Other domestic shares | 750,915 | - | - | - | (75) | (75) | 750,840 | |||||||
| Including: Shares held by domestic non-state-owned legal persons | 749,940 | - | - | - | - | - | 749,940 | |||||||
| Shares held by domestic natural persons | 975 | - | - | - | (75) | (75) | 900 | |||||||
| 750,915 | - | - | - | (75) | (75) | 750,840 | ||||||||
| Shares not subject to trading restriction - | ||||||||||||||
| Ordinary shares denominated in RMB | 518,463,085 | - | - | - | 75 | 75 | 518,463,160 | |||||||
| Domestically listed foreign shares | 344,000,000 | - | - | - | - | - | 344,000,000 | |||||||
| 862,463,085 | - | - | - | 75 | 75 | 862,463,160 | ||||||||
| 863,214,000 | - | - | - | - | - | 863,214,000 | ||||||||
| Since the implementation of the Company's Scheme on Share Split Reform on 13 February 2006, as at 30 June 2020, there are 750,840 shares currently unavailable for trading. | ||||||||||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||||||||||||
| (34) | Share capital (Cont’d) | |||||||||||||
| 31 December 2018 | Movements for the current year | 31 December 2019 | ||||||||||||
| Shares newly issued | Bonus share | Transfer from capital surplus | Others | Sub-total | ||||||||||
| Shares subject to trading restriction - | ||||||||||||||
| Other domestic shares | 786,840 | - | - | - | (35,925) | (35,925) | 750,915 | |||||||
| Including: Shares held by domestic non-state-owned legal persons | 785,940 | - | - | - | (36,000) | (36,000) | 749,940 | |||||||
| Shares held by domestic natural persons | 900 | - | - | - | 75 | 75 | 975 | |||||||
| 786,840 | - | - | - | (35,925) | (35,925) | 750,915 | ||||||||
| Shares not subject to trading restriction - | ||||||||||||||
| Ordinary shares denominated in RMB | 518,427,160 | - | - | - | 35,925 | 35,925 | 518,463,085 | |||||||
| Domestically listed foreign shares | 344,000,000 | - | - | - | - | - | 344,000,000 | |||||||
| 862,427,160 | - | - | - | 35,925 | 35,925 | 862,463,085 | ||||||||
| 863,214,000 | - | - | - | - | - | 863,214,000 | ||||||||
| Since the implementation of the Company's Scheme on Share Split Reform on 13 February 2006, as at 31 December 2019, there are 750,915 shares currently unavailable for trading. During the reporting period, 35,925 shares with trading restrictions were released from the restricted conditions on 30 December 2019 and converted to unrestricted ordinary shares denominated in RMB. | ||||||||||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||||||
| (35) | Capital surplus | |||||||
| 31 December 2019 | Increase in the current period | Decrease in the current period | 30 June 2020 | |||||
| Capital premium | 816,609,422 | - | - | 816,609,422 | ||||
| Other capital surplus | 22,833,068 | - | - | 22,833,068 | ||||
| 839,442,490 | - | - | 839,442,490 | |||||
| 31 December 2018 | Increase in the current year | Decrease in the current year | 31 December 2019 | |||||
| Capital premium | 816,609,422 | - | - | 816,609,422 | ||||
| Other capital surplus | 22,833,068 | - | - | 22,833,068 | ||||
| 839,442,490 | - | - | 839,442,490 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | ||||||||
| (36) | Other comprehensive income | ||||||||
| Other comprehensive income in the balance sheet | Other comprehensive income in the income statement for the six months ended 30 June 2020 | ||||||||
| 31 December 2019 | Attributable to the parent company after tax | 30 June 2020 | Amount incurred before income tax for the current period | Less: Transfer-out of previous other comprehensive income in the current period | Less: Income tax expenses | Attributable to the parent company after tax | |||
| Other comprehensive income items which will not be reclassified to profit or loss | |||||||||
| Actuarial gains on defined benefit plans | (11,395,500) | - | (11,395,500) | - | - | - | - | ||
| Other comprehensive income in the balance sheet | Other comprehensive income in the income statement for the year ended 31 December 2019 | ||||||||
| 31 December 2018 | Attributable to the parent company after tax | 31 December 2019 | Amount incurred before income tax for the current year | Less: Transfer-out of previous other comprehensive income in the current year | Less: Income tax expenses | Attributable to the parent company after tax | |||
| Other comprehensive income items which will not be reclassified to profit or loss | |||||||||
| Actuarial gains on defined benefit plans | (10,178,250) | (1,217,250) | (11,395,500) | (1,623,000) | - | 405,750 | (1,217,250) | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||||||
| (37) | Surplus reserve | |||||||
| 31 December 2019 | Increase in the current period | Decrease in the current period | 30 June 2020 | |||||
| Statutory surplus reserve | 431,607,000 | - | - | 431,607,000 | ||||
| 31 December 2018 | Increase in the current year | Decrease in the current year | 31 December 2019 | |||||
| Statutory surplus reserve | 431,607,000 | - | - | 431,607,000 |
| In accordance with the Company Law, the Company’s Articles of Association and the resolution of the Board of Directors, the Company should appropriate 10% of net profit for the year to the statutory surplus reserve, and the Company can cease appropriation when the statutory surplus reserve accumulated to more than 50% of the registered capital. The statutory surplus reserve can be used to make up for the loss or increase the share capital upon approval from the appropriate authorities. As the accumulated appropriation to the statuary surplus reserve exceeded 50% of the registered capital, no appropriation was made in the current year. (2019: Nil). | |
| The Company appropriates for the discretionary surplus reserve after the shareholders’ meeting approves the proposal from the Board of Directors. The discretionary surplus reserve can be used to compensate for the losses incurred in prior years or increase the share capital upon approval from appropriate authorities. |
| (38) | Undistributed profits | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Undistributed profits at the beginning of the year | 8,373,695,791 | 8,260,412,273 | ||
| Add: Net profit attributable to shareholders of the parent company for the current period | 207,771,782 | 58,861,816 | ||
| Less: Ordinary share dividends payable (a) | (60,424,980) | (34,528,560) | ||
| Undistributed profits at the end of the year | 8,521,042,593 | 8,284,745,529 | ||
| (a) | In accordance with the resolution of the Board of Directors dated on 24 March 2020, the Company proposed a cash dividend to the shareholders at RMB 0.07 per share, amounting to RMB 60,424,980 calculated by 863,214,000 issued shares, and the proposal was approved at the Shareholders’ Meeting on 19 June 2020. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||
| (39) | Revenue and cost of sales | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Revenue from main operations | 13,877,590,851 | 13,540,006,632 | ||
| Revenue from other operations | 195,827,027 | 181,946,870 | ||
| 14,073,417,878 | 13,721,953,502 | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Cost of sales from main operations | 11,670,570,165 | 11,511,538,229 | ||
| Cost of sales from other operations | 189,552,200 | 167,121,115 | ||
| 11,860,122,365 | 11,678,659,344 | |||
| (a) | Revenue and cost of sales from main operations | |||||
| Six months ended 30 June | ||||||
| 2020 | 2019 | |||||
| Revenue from main operations | Cost of sales from main operations | Revenue from main operations | Cost of sales from main operations | |||
| Sales of automobiles | 13,030,304,986 | 11,046,531,024 | 12,327,573,061 | 10,656,458,637 | ||
| Sales of automobile parts | 809,320,498 | 582,437,916 | 1,168,533,129 | 813,069,826 | ||
| Auto maintenance services | 37,965,367 | 41,601,225 | 43,900,442 | 42,009,766 | ||
| 13,877,590,851 | 11,670,570,165 | 13,540,006,632 | 11,511,538,229 | |||
| (b) | Revenue and cost of sales from other operations | |||||
| Six months ended 30 June | ||||||
| 2020 | 2019 | |||||
| Revenue from other operations | Cost of sales from other operations | Revenue from other operations | Cost of sales from other operations | |||
| Sales of materials | 162,807,656 | 155,071,014 | 136,882,045 | 121,423,387 | ||
| Others | 33,019,371 | 34,481,186 | 45,064,825 | 45,697,728 | ||
| 195,827,027 | 189,552,200 | 181,946,870 | 167,121,115 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||||
| (39) | Revenue and cost of sales (Cont’d) | |||||
| (c) | The Group's revenue in Six months ended 30 June 2020 was broken down as follows: | |||||
| Six months ended 30 June 2020 | ||||||
| Automobiles | Automobile parts | Automobiles Maintenance services | Materials and others | Total | ||
| Revenue from main operations | 13,030,304,986 | 809,320,498 | 37,965,367 | - | 13,877,590,851 | |
| Including: Recognised at a time point | 13,030,304,986 | 809,320,498 | - | - | 13,839,625,484 | |
| Recognised within a certain period | - | - | 37,965,367 | - | 37,965,367 | |
| Revenue from other operations | - | - | - | 195,827,027 | 195,827,027 | |
| 13,030,304,986 | 809,320,498 | 37,965,367 | 195,827,027 | 14,073,417,878 | ||
| (i) | As at 30 June 2020, the amount of revenue corresponding to the performance obligation of the Group that has been contracted but not yet performed or not fulfilled was RMB 115,151,087, which were expected to be recognised between 2020 and 2025. |
| (40) | Taxes and surcharges | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Consumption tax | 271,679,866 | 267,437,345 | ||
| City maintenance and construction tax | 50,598,211 | 41,419,650 | ||
| Educational surcharge | 43,310,138 | 36,956,574 | ||
| Land use tax | 9,774,064 | 10,568,114 | ||
| Real estate tax | 8,220,537 | 9,228,680 | ||
| Stamp tax | 2,779,740 | 2,765,628 | ||
| Others | 216,586 | 599,504 | ||
| 386,579,142 | 368,975,495 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||
| (41) | Selling expenses | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Advertising and new product planning fees | 138,350,765 | 228,204,105 | ||
| Warranties | 155,588,778 | 159,699,478 | ||
| Promotion expenses | 91,894,222 | 106,690,658 | ||
| Salaries and benefits | 70,754,094 | 73,092,162 | ||
| Sales network construction expenses | 41,733,973 | 59,324,214 | ||
| Storage expenses | 17,822,522 | 9,830,994 | ||
| Packaging material expenses | 14,586,046 | 27,992,517 | ||
| Others | 61,456,920 | 41,041,134 | ||
| 592,187,320 | 705,875,262 | |||
| (42) | General and administrative expenses | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Salaries and benefits | 264,648,937 | 249,176,100 | ||
| Depreciation and amortisation | 100,780,734 | 54,625,623 | ||
| Trademark management fees | 20,627,894 | 40,360,050 | ||
| Repair expenses | 7,181,637 | 5,022,003 | ||
| General office expenses | 7,103,298 | 7,915,410 | ||
| Travel expenses | 2,092,846 | 4,283,270 | ||
| Others | 56,692,100 | 75,772,234 | ||
| 459,127,446 | 437,154,690 | |||
| (43) | Research and development expenses | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Salaries and benefits | 277,417,893 | 265,452,232 | ||
| Design fee | 145,947,582 | 243,683,558 | ||
| Technology development expenses | 102,381,915 | 76,309,417 | ||
| Depreciation and amortisation | 74,219,195 | 54,202,053 | ||
| Material expenses | 27,797,465 | 61,923,254 | ||
| Others | 68,818,402 | 135,860,122 | ||
| 696,582,452 | 837,430,636 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||
| (44) | Financial expenses | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Interest costs | 18,259,820 | 106,053 | ||
| Add: Interest expenses on lease liabilities | 802,145 | - | ||
| Interest expenses | 19,061,965 | 106,053 | ||
| Less: Interest income from bank deposits | (89,499,630) | (87,147,016) | ||
| Fund occupation fee (a) | (4,740,888) | (5,618,157) | ||
| Interest income | (94,240,518) | (92,765,173) | ||
| Exchange gains or losses | 7,561,075 | 450,836 | ||
| Others | 885,665 | 2,517,680 | ||
| (66,731,813) | (89,690,604) | |||
| (a) | ||||
| (45) | Expenses by nature | |||
| The cost of sales, selling and distribution expenses, general and administrative expenses and research and development expenses in the income statement are listed as follows by nature: | ||||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Changes in inventories of finished goods and work in progress | 280,051,275 | 101,187,742 | ||
| Consumed raw materials and low value consumables, etc. | 10,272,137,288 | 10,151,019,516 | ||
| Employee benefits | 1,196,965,144 | 1,246,622,679 | ||
| Depreciation of fixed assets | 517,638,550 | 475,243,004 | ||
| Amortisation of intangible assets | 58,225,513 | 42,950,608 | ||
| Depreciation of right-of-use assets | 7,225,828 | - | ||
| Transportation expenses | 255,909,419 | 332,654,242 | ||
| Design fee | 145,947,582 | 243,683,558 | ||
| Advertising and new product planning fees | 138,350,765 | 228,204,105 | ||
| Warranties | 155,588,778 | 159,699,476 | ||
| Promotion expenses | 91,894,222 | 106,690,658 | ||
| Fixed asset repair and maintenance expenses | 41,966,653 | 40,472,764 | ||
| Others | 446,118,566 | 530,691,580 | ||
| 13,608,019,583 | 13,659,119,932 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (46) | Asset impairment losses | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Decline in the value of inventories | 23,856,596 | 5,309,701 | ||
| Impairment of fixed assets | 10,251,114 | 3,125,543 | ||
| 34,107,710 | 8,435,244 | |||
| (47) | Credit impairment losses | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Losses on bad debts of accounts receivable | 66,317,513 | (1,132,652) | ||
| Losses on bad debts of other receivables | (74,702) | 76,528 | ||
| 66,242,811 | (1,056,124) | |||
| (48) | Other income | |||||
| Six months ended 30 June | ||||||
| 2020 | 2019 | Asset related/ Income related | ||||
| Research and development activities related subsidies | 26,672,716 | 60,800,000 | Income related | |||
| Subsidy for other operating activities | 138,966,751 | 11,762,205 | Income related | |||
| 165,639,467 | 72,562,205 | |||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (49) | Investment income | ||||||
| Six months ended 30 June | |||||||
| 2020 | 2019 | ||||||
| Investment income from financial assets held for trading | 32,619,541 | 18,446,866 | |||||
| Investment income from long-term equity investment under equity method | (3,024,554) | 333,625 | |||||
| Investment loss from forward exchange settlement | (1,316,987) | (4,939,846) | |||||
| 28,278,000 | 13,840,645 | ||||||
| There is no significant restriction on recovery of investment income of the Group. | |||||||
| (50) | Gains on changes in fair value | ||||||
| Six months ended 30 June | |||||||
| 2020 | 2019 | ||||||
| Derivative financial assets and derivative financial liabilities - | |||||||
| (Losses)/Gains on forward exchange contracts | 2,021,384 | (3,556,991) | |||||
| Financial assets held for trading | 7,990,657 | - | |||||
| 10,012,041 | (3,556,991) | ||||||
| (51) | Gains on disposals of assets | |||||
| Six months ended 30 June | ||||||
| 2020 | 2019 | Amount recognised in non-recurring profit or loss inSix months ended 30 June 2020 | ||||
| Losses on disposal of assets | (581,955) | (2,212,045) | (581,955) | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||||
| (52) | Non-operating income | |||||
| Six months ended 30 June | ||||||
| 2020 | 2019 | Amount recognised in non-recurring profit or loss inSix months ended 30 June 2020 | ||||
| Government grants (a) | 40,000 | 157,717,070 | 40,000 | |||
| Compensation and penalty income | 1,434,743 | 652,679 | 1,434,743 | |||
| Others | 2,124,450 | 17,546 | 2,124,450 | |||
| 3,599,193 | 158,387,295 | 3,599,193 | ||||
| (a) | Details of government grants | |||||
| Six months ended 30 June | ||||||
| 2020 | 2019 | Asset related/ Income related | ||||
| Enterprise development support fund | - | 157,677,070 | Income related | |||
| Others | 40,000 | 40,000 | ||||
| 40,000 | 157,717,070 | |||||
| (53) | Non-operating expenses | |||||
| Six months ended 30 June | ||||||
| 2020 | 2019 | Amount recognised in non-recurring profit or loss inSix months ended 30 June 2020 | ||||
| Losses on scrapping of assets | 25,278,620 | 2,200,188 | 25,278,620 | |||
| Donations | 4,936,682 | 11,730 | 4,936,682 | |||
| Others | 22,950 | 419,308 | 22,950 | |||
| 30,238,252 | 2,631,226 | 30,238,252 | ||||
| (54) | Income tax expenses | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Current income tax calculated based on tax law and related regulations | 12,440,650 | 40,510 | ||
| Deferred income tax | 1,696,507 | (46,342,884) | ||
| 14,137,157 | (46,302,374) | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (54) | Income tax expenses (Cont’d) |
| The reconciliation from income tax calculated based on the applicable tax rates and total profit presented in the consolidated income statement to the income tax expenses is listed below: | ||||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Total profit | 221,908,939 | 12,559,442 | ||
| Income tax expenses calculated at applicable tax rates | 4,273,820 | (38,027,978) | ||
| Effect of change in the tax rates | 16,397,340 | 18,924,390 | ||
| Tax credit | (68,983) | (8,791) | ||
| Super deduction | (74,643,356) | (64,123,564) | ||
| Non-taxable income | 453,683 | (882,321) | ||
| Costs, expenses and losses not deductible for tax purposes | 143,379 | 293,905 | ||
| Utilisation of previously unrecognised deductible temporary differences | (16,441,318) | - | ||
| Deductible temporary differences for which no deferred tax asset was recognised | - | 4,195,231 | ||
| Deductible losses for which no deferred tax asset was recognised | 84,022,592 | 33,326,754 | ||
| Income tax expenses | 14,137,157 | (46,302,374) | ||
| (55) | Earnings per share | |||
| (a) | Basic earnings per share | |||
| Basic earnings per share are calculated by dividing consolidated net profit attributable to ordinary shareholders of the parent company by the weighted average number of outstanding ordinary shares of the parent company: | ||||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Consolidated net profit attributable to the owners of the Company | 207,771,782 | 58,861,816 | ||
| Weighted average number of ordinary shares outstanding issued by the Company | 863,214,000 | 863,214,000 | ||
| Basic earnings per share | 0.24 | 0.07 | ||
| (b) | Diluted earnings per share | |||
| Diluted earnings per share are calculated by dividing consolidated net profit attributable to ordinary shareholders of the parent company adjusted based on the dilutive potential ordinary shares by the adjusted weighted average number of outstanding ordinary shares of the Company. As there were no dilutive potential ordinary shares in Six months ended 30 June 2020 (Six months ended 30 June 2019: Nil), diluted earnings per share equalled to basic earnings per share. | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) | |||
| (56) | Notes to the cash flow statement | |||
| (a) | Cash received relating to other operating activities | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Government grants | 164,857,450 | 263,419,275 | ||
| Deposits for bidding | 28,090,361 | 32,565,950 | ||
| Input VAT refund | 23,559,902 | - | ||
| Security deposits from distributors | 22,539,331 | 46,069,304 | ||
| Quality claims | 530,263 | 1,655,279 | ||
| Others | 6,343,077 | 5,811,454 | ||
| 245,920,384 | 349,521,262 | |||
| (b) | Cash paid relating to other operating activities | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Research and development expenses | 515,676,803 | 475,334,955 | ||
| Promotion expenses | 147,975,736 | 130,074,334 | ||
| Warranties | 136,325,584 | 159,626,148 | ||
| Advertising expenses | 122,999,651 | 132,128,111 | ||
| Maintenance expenses | 20,729,104 | 36,873,253 | ||
| Guarantees | 17,904,238 | 33,100,907 | ||
| Travel expenses | 12,873,171 | 32,625,056 | ||
| Others | 255,310,888 | 338,540,178 | ||
| 1,229,795,175 | 1,338,302,942 | |||
| (c) | Cash received relating to other investing activities | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Interest from cash at bank | 89,946,934 | 95,386,009 | ||
| Interest from acceptance notes | 4,229,944 | 4,264,256 | ||
| Interest from credit sales | 1,983,609 | 915,686 | ||
| Investment income from forward exchange settlement | 611,945 | 2,650,477 | ||
| 96,772,432 | 103,216,428 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (56) | Notes to the cash flow statement (Cont’d) |
| (d) | Cash paid relating to other financing activities |
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Repayments of lease liabilities | 4,800,032 | - | ||
| (57) | Supplementary information to the cash flow statement | |||
| (a) | Supplementary information to the cash flow statement | |||
| Reconciliation from net profit to cash flows from operating activities | ||||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Net profit | 207,771,782 | 58,861,816 | ||
| Add: Provision for asset impairment (Note 4(46)) | 34,107,710 | 8,435,244 | ||
| Provision for credit impairment (Note 4(47)) | 66,242,811 | (1,056,124) | ||
| Depreciation of fixed assets (Note 4(12)) | 517,638,550 | 475,243,004 | ||
| Amortisation of intangible assets (Note 4(15)) | 58,225,513 | 42,950,608 | ||
| Depreciation of right-of-use assets (Note 4(14)) | 7,225,828 | - | ||
| Increase/(Decrease) in provisions | 32,984,461 | 18,994,179 | ||
| Losses/(Gains) on disposal of fixed assets | 25,860,575 | 4,412,233 | ||
| Financial expenses | (67,128,763) | (90,143,990) | ||
| Investment income (Note 4(49)) | (28,278,000) | (13,840,645) | ||
| Loss/(Gains) on changes in fair value (Note 4(50)) | (10,012,041) | 3,556,991 | ||
| Increase in deferred tax assets | 2,013,602 | (45,995,068) | ||
| Decrease in deferred tax liabilities | (317,095) | (347,816) | ||
| Decrease/(Increase) in inventories | 216,420,338 | 333,470,124 | ||
| Increase in restricted cash | (49,718,600) | (20,000,917) | ||
| Decrease/(Increase) in operating receivables | (728,501,730) | 368,708,756 | ||
| Increase/(Decrease) in operating payables | 449,748,686 | 292,103,169 | ||
| Net cash flows from operating activities | 734,283,627 | 1,435,351,564 | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 4 | Notes to the consolidated financial statements (Cont’d) |
| (57) | Supplementary information to the cash flow statement (Cont’d) |
| (b) | Net increase/(decrease) in cash | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Cash at the end of the year | 7,872,553,804 | 8,367,456,770 | ||
| Less: Cash at the beginning of the year | (8,937,936,658) | (7,616,879,976) | ||
| Net increase/(decrease) in cash | (1,065,382,854) | 750,576,794 | ||
| (c) | Cash and cash equivalents | |||
| 30 June 2020 | 31 December 2019 | |||
| Cash on hand | 7,872,553,804 | 8,937,936,658 | ||
| (58) | Monetary items denominated in foreign currency | |||||
| 30 June 2020 | ||||||
| Amounts denominated in foreign currencies | Translation exchange rate | Amounts in RMB | ||||
| Other receivables - | ||||||
| EUR | 3,733 | 7.9610 | 29,720 | |||
| Long-term borrowings - | ||||||
| USD | 491,131 | 7.0795 | 3,476,963 | |||
| Other payables - | ||||||
| USD | 23,682,266 | 7.0795 | 167,658,599 | |||
| EUR | 3,309,512 | 7.9610 | 26,347,025 | |||
| JPY | 106,157,109 | 0.0658 | 6,985,987 | |||
| 200,991,611 | ||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 5 | Interests in other entities | ||||||
| (1) | Interests in subsidiaries | ||||||
| Structure of the enterprise group | |||||||
| Subsidiaries | Place of major business | Place of registration | Nature of business | Shareholding (%) | Method of acquisition | ||
| Direct | Indirect | ||||||
| JMCS | Nanchang, Jiangxi | Nanchang, Jiangxi | Retail, wholesale and lease of automobiles | 100% | — | Set up by investment | |
| JMCH | Taiyuan, Shanxi | Taiyuan, Shanxi | Manufacture and sales of automobiles | 100% | — | Business combinations involving enterprises not under common control | |
| SZFJ | Shenzhen, Guangdong | Shenzhen, Guangdong | Retail, wholesale and lease of automobiles | 100% | — | Set up by investment | |
| GZFJ | Guangzhou, Guangdong | Guangzhou, Guangdong | Retail, wholesale and lease of automobiles | 100% | — | Set up by investment | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 5 | Interests in other entities (Cont’d) |
| (2) | Interests in associates |
| Summarised information of insignificant associates |
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Aggregated carrying amount of investments | 37,910,003 | 40,445,302 | ||
| Aggregate of the following items in proportion | ||||
| Net profit (i) | (3,024,554) | 333,625 | ||
| Other comprehensive income (i) | - | - | ||
| Total comprehensive income | (3,024,554) | 333,625 | ||
| (i) The net profit and other comprehensive income have taken into account the impacts of both the fair value of the identifiable assets and liabilities upon the acquisition of investment in joint ventures and associates and the unification of accounting policies adopted by the joint ventures and the associates to those adopted by the Group. | ||||
| 6 | Segment information | |||
| Revenue and profits of the Group mainly arise from production and domestic sales of automobiles, and the primary assets of the Group are all located in China. Management of the Group assesses the operating performance of the Group as a whole. Therefore, no segment report is prepared for the current year. | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions | |||||
| (1) | Information of main shareholders | |||||
| (a) | General information of main shareholders | |||||
| Type of enterprise | Place of registration | Legal representative | Nature of business | Code of organisation | ||
| JIC | State-owned enterprise | Nanchang, China | Qiu Tiangao | Investment and asset management | 91360125MA38LUR91F | |
| Ford Motor Company (“Ford”) | Foreign enterprise | United States | William Clay Ford, Jr. | Manufacture and sales of automobiles | Not applicable | |
| (b) | Registered capital and changes in main shareholders | ||||
| 31 December 2019 | Increase in the current period | Decrease in the current period | 30June 2020 | ||
| JIC | RMB 1,000,000,000 | - | - | RMB 1,000,000,000 | |
| Ford | USD 41,000,000 | - | - | USD 41,000,000 | |
| (c) | The percentages of shareholding and voting rights in the Company held by main shareholders | |||||
| 30June 2020 | 31 December 2019 | |||||
| Shareholding (%) | Voting rights (%) | Shareholding (%) | Voting rights (%) | |||
| JIC | 41.03% | 41.03% | 41.03% | 41.03% | ||
| Ford | 32% | 32% | 32% | 32% | ||
| (2) | Information of the subsidiaries |
| The general information and other related information of the subsidiaries are set out in Note 5(1). | |
| (3) | Information of the associates |
| The information of associates that have related party transactions with the Group is set out in Note 5(2). |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) | ||
| (4) | Information of other related parties | ||
| Relationship with the Group | |||
| JMCG | Shareholder of JIC | ||
| Chongqing Changan Automobile Co., Ltd. | Shareholder of JIC | ||
| Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | Subsidiary of JMCG | ||
| Jiangling Material Co., Ltd. | Subsidiary of JMCG | ||
| Jiangxi JMCG Industry Co., Ltd. | Subsidiary of JMCG | ||
| Nanchang Gear Co., Ltd. | Subsidiary of JMCG | ||
| Jiangxi Lingrui Recycling Resources Development Corporation | Subsidiary of JMCG | ||
| JMCG Property Management Co. | Subsidiary of JMCG | ||
| JMCG Jingma Motors Co., Ltd. | Subsidiary of JMCG | ||
| Jiangxi Jiangling Chassis Co., Ltd. | Subsidiary of JMCG | ||
| Nanchang JMCG Shishun Logistics Co., Ltd. | Subsidiary of JMCG | ||
| Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd. | Subsidiary of JMCG | ||
| Nanchang JMCG Xinchen Auto Component Co., Ltd. | Subsidiary of JMCG | ||
| JMCF | Subsidiary of JMCG | ||
| Jingdezhen Shishun Logistics Co., Ltd. | Subsidiary of JMCG | ||
| Fuzhou Shishun Logistics Co., Ltd. | Subsidiary of JMCG | ||
| Ford Global Technologies,LLC | Subsidiary of Ford | ||
| Ford Motor (China) Co., Ltd. | Subsidiary of Ford | ||
| Ford Motor Research & Engineering (Nanjing) Co., Ltd. | Subsidiary of Ford | ||
| Ford Motor Co., Thailand Ltd. | Subsidiary of Ford | ||
| Ford Otomotiv Sanayi A.S. | Subsidiary of Ford | ||
| Auto Alliance (Thailand) Co., Ltd. | Subsidiary of Ford | ||
| Ford Vietnam Limited | Subsidiary of Ford | ||
| Changan Ford Automobile Co., Ltd. | Joint venture of Ford | ||
| Nanchang JMCG Liancheng Auto Component Co., Ltd. | Subsidiary of JMCG | ||
| Nanchang Lianda Machinery Co., Ltd. | Subsidiary of JMCG | ||
| Jiangling Aowei Automobile Spare Part Co., Ltd. | Subsidiary of JMCG | ||
| Jiangxi Biaohong Engine Tappet Co., Ltd. | Subsidiary of JMCG | ||
| Jiangxi JMCG boya brake system Co., Ltd | Subsidiary of JMCG | ||
| NC.Gear Forging Factory | Subsidiary of JMCG | ||
| Jiangxi JMCG Shangrao Industrial Co., Ltd. | Subsidiary of JMCG | ||
| JMCG Jiangxi Engineering Construction Co., Ltd. | Subsidiary of JMCG | ||
| Nanchang JMCG Frame Co., Ltd | Subsidiary of JMCG | ||
| Jiangling Motor Electricity Vehicle Sales Co.,Ltd | Subsidiary of JMCG | ||
| Dali Wanfu Vehicle Sales & Service Co., Ltd. | Subsidiary of JIC’s shareholder | ||
| Yunan Wanfu Vehicle Sales & Service Co., Ltd. | Subsidiary of JIC’s shareholder | ||
| Beijing Beifang Changfu Vehicle Sales & Service Co., Ltd. | Subsidiary of JIC’s shareholder | ||
| China Changan Group Hefei Investing Co., Ltd. | Subsidiary of JIC’s shareholder | ||
| Chongqing Anfu Vehicle Marketing Co., Ltd. | Subsidiary of JIC’s shareholder | ||
| Guizhou Wanfu Vehicle Sales & Service Co., Ltd. | Subsidiary of JIC’s shareholder | ||
| Chengdu Wanxing Vehicle Sales & Service Co., Ltd. | Subsidiary of JIC’s shareholder | ||
| Chongqing Anbo Vehicle Sales Co., Ltd. | Subsidiary of JIC’s shareholder | ||
| Beijing Baiwang Changfu Vehicle Sales & Service Co., Ltd. | Subsidiary of JIC’s shareholder | ||
| Honghe Wanfu Vehicle Sales & Service Co., Ltd. | Subsidiary of JIC’s shareholder | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) |
| (4) | Other related parties (Cont'd) |
| Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | Joint venture of JMCG | |
| Jiangxi Jiangling Lear Interior System Co., Ltd. | Joint venture of JMCG | |
| Nanchang Unistar Electric & Electronics Co., Ltd. | Joint venture of JMCG | |
| Nanchang Yinlun Heat-exchanger Co., Ltd. | Joint venture of JMCG | |
| Jiangxi ISUZU Engine Co., Ltd. | Joint venture of JMCG | |
| Jiangxi ISUZU Co., Ltd. | Joint venture of JMCG | |
| Nanchang Baojiang Steel Processing Distribution Co., Ltd. | Associate of JMCG | |
| GETRAG (Jiangxi) Transmission Company | Associate of JMCG | |
| Faurecia Emissions Control Technologies (Nanchang) Co., Ltd. | Associate of JMCG | |
| Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd. | Associate of JMCG | |
| Jiangling Motor Holdings Co., Ltd. | Associate of JMCG | |
| Jiangxi Jiangling Group Special Vehicle Co., Ltd. | Associate of JMCG | |
| Jiangxi JMCG Specialty Vehicles Co., Ltd. | Associate of JMCG | |
| Nanchang Hengou Industry Co., Ltd. | Associate of JMCG | |
| Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | Associate of JMCG | |
| Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. | Associate of JMCG | |
| Jiangxi Jiangling Overseas Automobile Sales and Service Co., Ltd. | Associate of JMCG | |
| Jiangxi Lingyun Automobile Industry Technology Co.,Ltd | Associate of JMCG | |
| Jiujiang Fuwantong Vehicle Co., Ltd. | Subsidiary of JMCG | |
| Jiangxi Fuxiang Vehicle Co., Ltd. | Subsidiary of JMCG | |
| Yichun Xinfu Vehicle Co., Ltd. | Subsidiary of JMCG | |
| Ji'an Qingyuan District Yongfuda Vehicle Co., Ltd. | Subsidiary of JMCG | |
| Jiangxi Jiangling Group Health Science and Technology Co., Ltd. | Subsidiary of JMCG | |
| Jiangling Motor Electricity Vehicle Co., Ltd. | Subsidiary of JMCG | |
| Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | Subsidiary of JMCG |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) | |||||
| (5) | Related party transactions | |||||
| (a) | Purchase and sales of goods, provision and receipt of service | |||||
| Purchase of goods: | ||||||
| Six months ended 30 June | ||||||
| Related parties | Nature of related party transactions | 2020 | 2019 | |||
| Nanchang Baojiang Steel Processing Distribution Co., Ltd. | Purchase of raw materials | 405,185,757 | 356,064,379 | |||
| Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | Purchase of spare parts | 383,892,896 | 360,406,734 | |||
| Jiangxi Jiangling Chassis Co., Ltd. | Purchase of spare parts | 355,113,008 | 341,935,348 | |||
| GETRAG (Jiangxi) Transmission Company | Purchase of spare parts | 336,800,228 | 316,959,364 | |||
| Ford | Purchase of spare parts | 331,917,143 | 187,925,124 | |||
| Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | Purchase of spare parts | 272,438,364 | 341,795,713 | |||
| Faurecia Emissions Control Technologies (Nanchang) Co., Ltd. | Purchase of spare parts | 211,129,621 | 95,763,670 | |||
| Jiangxi Jiangling Lear Interior System Co., Ltd. | Purchase of spare parts | 203,467,840 | 255,708,959 | |||
| Nanchang JMCG Shishun Logistics Co., Ltd. | Purchase of spare parts | 180,731,669 | 86,295,892 | |||
| Nanchang JMCG Liancheng Auto Component Co., Ltd. | Purchase of spare parts | 178,564,686 | 170,539,394 | |||
| Nanchang Unistar Electric & Electronics Co., Ltd. | Purchase of spare parts | 130,765,035 | 105,848,474 | |||
| Hanon Systems | Purchase of spare parts | 86,204,275 | 87,085,773 | |||
| JMCG | Purchase of spare parts | 71,583,876 | 53,907,443 | |||
| Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd. | Purchase of spare parts | 45,571,842 | 50,766,740 | |||
| Auto Alliance (Thailand) Co., Ltd. | Purchase of spare parts | 45,263,124 | 11,702,847 | |||
| Nanchang Lianda Machinery Co., Ltd. | Purchase of spare parts | 32,528,800 | 30,230,608 | |||
| Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd. | Purchase of spare parts | 32,436,589 | 33,619,724 | |||
| Nanchang Yinlun Heat-exchanger Co., Ltd. | Purchase of spare parts | 30,324,257 | 32,419,358 | |||
| Ford Otomotiv Sanayi A.S. | Purchase of spare parts | 25,895,662 | 12,312,393 | |||
| Jiangxi JMCG Specialty Vehicles Co., Ltd. | Purchase of spare parts | 20,244,154 | 26,961,562 | |||
| Jiangling Motor Holdings Co., Ltd. | Purchase of spare parts | 19,423,653 | 20,879,223 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) | ||||||||||||
| (5) | Related party transactions (Cont’d) | ||||||||||||
| (a) | Purchase and sales of goods, provision and receipt of service (Cont'd) | ||||||||||||
| Purchase of goods (Cont'd): | |||||||||||||
| Six months ended 30 June | |||||||||||||
| Related parties | Nature of related party transactions | 2020 | 2019 | ||||||||||
| Jiangxi Jiangling Group Special Vehicle Co., Ltd. | Purchase of spare parts | 18,057,702 | 12,366,281 | ||||||||||
| Changan Ford Automobile Co., Ltd. | Purchase of spare parts | 16,159,043 | 2,401,348 | ||||||||||
| Jiangxi ISUZU Engine Co., Ltd. | Purchase of spare parts | 11,670,041 | 7,415,880 | ||||||||||
| Jiangling Material Co., Ltd. | Purchase of spare parts | 10,789,819 | 13,022,298 | ||||||||||
| Jiangling Aowei Automobile Spare Part Co., Ltd. | Purchase of spare parts | 9,133,485 | 10,039,195 | ||||||||||
| Nanchang JMCG Xinchen Auto Component Co., Ltd. | Purchase of spare parts | 6,833,446 | 8,682,763 | ||||||||||
| Jiangxi JMCG boya brake system Co., Ltd | Purchase of spare parts | 6,169,098 | 2,113,558 | ||||||||||
| Jiangxi Lingyun Automobile Industry Technology Co.,Ltd | Purchase of spare parts | 5,462,414 | - | ||||||||||
| Jiangxi Lingrui Recycling Resources Development Corporation | Purchase of spare parts | 4,876,295 | 3,012,461 | ||||||||||
| Nanchang Gear Co., Ltd. | Purchase of spare parts | 3,700,664 | 5,921,454 | ||||||||||
| Ford Motor Co. Thailand Ltd. | Purchase of spare parts | 3,620,884 | - | ||||||||||
| Jiangxi Biaohong Engine Tappet Co., Ltd. | Purchase of spare parts | 3,475,864 | 3,133,788 | ||||||||||
| NC.Gear Forging Factory | Purchase of spare parts | 3,436,975 | 3,283,036 | ||||||||||
| Jiangxi Jiangling Group Health Science and Technology Co., Ltd. | Purchase of epidemic prevention materials | 2,214,000 | - | ||||||||||
| Jiangxi JMCG Shangrao Industrial Co., Ltd. | Purchase of spare parts | 1,383,417 | 1,458,728 | ||||||||||
| Jiangxi JMCG Industry Co., Ltd. | 270,582 | 5,746,130 | |||||||||||
| Other related parties | Purchase of spare parts | 180,104 | 151,666 | ||||||||||
| 3,506,916,312 | 3,057,877,308 | ||||||||||||
| The products purchased by the Group from related parties are divided into two categories: purchase of imported parts and purchase of domestic parts. ? The pricing on imported parts purchased from Ford or its suppliers is based on the agreed price by both parties. ? The pricing on domestic accessories purchased from other related parties is determined through quotation, cost accounting, and negotiation between the two parties, and is adjusted regularly. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) |
| (5) | Related party transactions (Cont’d) |
| (a) | Purchase and sales of goods, provision and receipt of service (Cont'd) |
| Receipt of services: | |||||
| Six months ended 30 June | |||||
| Related parties | Nature of related party transactions | 2020 | 2019 | ||
| Nanchang JMCG Shishun Logistics Co., Ltd. | Truckage/Transportation | 145,365,321 | 141,953,754 | ||
| JMCG Jiangxi Engineering Construction Co., Ltd. | Engineering construction and maintenance fee | 126,634,929 | 969,426 | ||
| Ford | Engineering service and design | 115,463,584 | 106,017,941 | ||
| Ford Global Technologies,LLC | Royalty fee | 111,064,126 | 110,123,099 | ||
| Changan Ford Automobile Co., Ltd. | Service fee/Labor costs | 26,903,713 | 58,387,301 | ||
| Ford | Secondments costs | 13,361,478 | 17,446,343 | ||
| Ford Otomotiv Sanayi A.S. | Royalty fee | 12,345,203 | 7,507,715 | ||
| Jiangxi JMCG Industry Co., Ltd. | Working meal | 10,620,614 | 12,668,922 | ||
| Ford Motor (China) Co., Ltd. | Regional personnel costs | 5,607,007 | 4,460,566 | ||
| Ford Motor Research & Engineering (Nanjing) Co., Ltd. | Regional personnel costs | 5,380,878 | 3,279,094 | ||
| GETRAG (Jiangxi) Transmission Company | Design fee | 4,551,480 | 460,005 | ||
| Jiangxi JMCG Specialty Vehicles Co., Ltd. | Promotion fee | 4,099,057 | 160,377 | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) | ||||
| (5) | Related party transactions (Cont’d) | ||||
| (a) | Purchase and sales of goods, provision and receipt of service (Cont'd) | ||||
| Receipt of services (Cont’d): | |||||
| Six months ended 30 June | |||||
| Related parties | Nature of related party transactions | 2020 | 2019 | ||
| Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | Agent business of importation | 3,720,284 | 2,438,503 | ||
| Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | Transportation and processing services | 2,143,309 | — | ||
| Ford Otomotiv Sanayi A.S. | Secondments costs | 1,607,809 | 3,348,792 | ||
| Chongqing Changan Automobile Co., Ltd. | Secondments costs | 638,559 | - | ||
| Jiangling Motor Holdings Co., Ltd. | Labor costs /Secondments costs | 100,700 | 6,978,676 | ||
| Nanchang Hengou Industry Co., Ltd. | Packing/Truckage | - | 12,062,788 | ||
| Ford Otomotiv Sanayi A.S. | Engineering service and design | - | 25,936,605 | ||
| Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. | Promotion fee | - | 2,901,526 | ||
| Other related parties | 3,543,314 | 2,275,448 | |||
| 593,151,365 | 519,376,881 | ||||
| The Group’s pricing on services received from related parties is based on the agreed price by both parties. | |||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) | ||||
| (5) | Related party transactions (Cont’d) | ||||
| (a) | Purchase and sales of goods, provision and receipt of service (Cont'd) | ||||
| Sales of goods: | |||||
| Six months ended 30 June | |||||
| Related parties | Nature of related party transactions | 2020 | 2019 | ||
| Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | Sales of automobiles and accessories | 515,648,431 | 474,714,048 | ||
| Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. | Sales of automobiles | 247,784,771 | 63,909,306 | ||
| Jiangxi JMCG Specialty Vehicles Co., Ltd. | Sales of automobiles and accessories | 116,257,012 | 12,666,706 | ||
| Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | Sales of automobiles and accessories, utilities | 99,880,081 | 9,065,509 | ||
| Jiangxi Lingrui Recycling Resources Development Corporation | Scrapping materials and utilities | 37,417,132 | 36,017,577 | ||
| Jiangxi Jiangling Chassis Co., Ltd. | Sales of automobiles | 25,066,364 | 23,932,221 | ||
| Dali Wanfu Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 22,654,665 | - | ||
| JMCG Jingma Motors Co., Ltd. | Sales of automobiles and accessories | 21,175,865 | 20,101,266 | ||
| Nanchang JMCG Liancheng Auto Component Co., Ltd. | Sales of accessories | 20,393,560 | 17,109,318 | ||
| Jiangxi Jiangling Group Special Vehicle Co., Ltd. | Sales of automobiles | 19,430,202 | 41,557,246 | ||
| Nanchang JMCG Shishun Logistics Co., Ltd. | Sales of automobiles and accessories | 11,258,826 | 4,499,315 | ||
| Guizhou Wanfu Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 11,046,682 | - | ||
| China Changan Group Hefei Investing Co., Ltd. | Sales of automobiles and accessories | 8,700,430 | - | ||
| Jiujiang Fuwantong Vehicle Co., Ltd. | Sales of automobiles and accessories | 8,476,498 | - | ||
| Beijing Beifang Changfu Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 8,291,761 | - | ||
| Chongqing Anfu Vehicle Marketing Co., Ltd. | Sales of automobiles and accessories | 5,983,015 | - | ||
| Chongqing Anbo Vehicle Sales Co., Ltd. | Sales of automobiles and accessories | 5,520,116 | - | ||
| Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | Sales of accessories | 3,933,437 | 3,385,165 | ||
| Chengdu Wanxing Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 3,839,113 | - | ||
| Nanchang Hengou Industry Co., Ltd. | Sales of accessories | 3,794,800 | 4,245,457 | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) | ||||||
| (5) | Related party transactions (Cont’d) | ||||||
| (a) | Purchase and sales of goods, provision and receipt of service (Cont'd) | ||||||
| Sales of goods (Cont'd): | |||||||
| Six months ended 30 June | |||||||
| Related parties | Nature of related party transactions | 2020 | 2019 | ||||
| Yunan Wanfu Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 3,000,142 | - | ||||
| Jingdezhen Shishun Logistics Co., Ltd. | Sales of automobiles | 2,389,380 | - | ||||
| Jiangxi Jiangling Lear Interior System Co., Ltd. | Sales of accessories | 2,349,992 | 1,722,622 | ||||
| Jiangxi Fuxiang Vehicle Co., Ltd. | Sales of automobiles and accessories, utilities | 1,962,208 | - | ||||
| Honghe Wanfu Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 1,553,651 | - | ||||
| Jiangxi JMCG Industry Co., Ltd. | Sales of accessories andscrapping materials,utilities | 1,532,473 | 2,302,598 | ||||
| Ji'an Qingyuan District Yongfuda Vehicle Co., Ltd. | Sales of automobiles and accessories | 1,404,914 | - | ||||
| Beijing Baiwang Changfu Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 1,312,986 | - | ||||
| Yichun Xinfu Vehicle Co., Ltd. | Sales of automobiles and accessories | 1,178,868 | - | ||||
| Jiangxi Jiangling Overseas Automobile Sales and Service Co., Ltd. | Sales of automobiles and accessories | 911,369 | 4,341,320 | ||||
| Nanchang Lianda Machinery Co., Ltd. | Sales of accessories | 273,615 | 1,025,899 | ||||
| Jiangxi JMCG Yichehang Second-hand Motors Sales Co., Ltd. i) | Sales of automobiles | — | 7,639,660 | ||||
| Other related parties | 2,908,251 | 1,612,130 | |||||
| 1,217,330,610 | 729,847,363 | ||||||
| i) In July 2019, due to the change of equity, Jiangxi JMCG Yichehang Second-hand Motors Sales Co., Ltd. was no longer a related party of the Group. | |||||||
| The Group’s pricing on goods sold to related parties is based on the agreed price by both parties. | |||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) |
| (5) | Related party transactions (Cont’d) |
| (b) | Leases |
| (i) | The Group as the lessor: | ||||
| Name of the lessee | Type of the leased asset | Lease income recognised in six months ended 30 June 2020 | Lease income recognised in six months ended 30 June 2019 | ||
| Jiangxi ISUZU Co., Ltd. | Buildings | 53,411 | - | ||
| GETRAG (Jiangxi) Transmission Company | Buildings | - | 7,494 | ||
| Jiangling Motor Holdings Co., Ltd. | Buildings | - | 3,160 | ||
| 53,411 | 10,654 | ||||
| (ii) | Interest expenses on lease liabilities in the current period with the Group as the lessee: | ||||
| Six months ended 30 June | |||||
| 2020 | 2019 | ||||
| JMCG | 305,570 | - | |||
| Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 41,038 | - | |||
| 346,608 | - | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) | ||||
| (5) | Related party transactions (Cont’d) | ||||
| (c) | Guarantee received | ||||
| Guarantor | Guaranteed amount | Starting date | Ending date | Fully performed or not | |
| Jiangling Motor Group Finance Company (“JMCF”) | 3,476,963 | 5 March 2001 | 30 October 2029 | Not fully performed | |
| 2020 first half-year, JMCF provided guarantees for some bank borrowings of the Group, with a maximum guarantee limit of USD 2,282,123. As at 30 June 2020, JMCF provided borrowing guarantee to the bank borrowing of USD 491,131, equivalent to RMB 3,476,963 (31 December 2019: USD 523,873, equivalent to RMB 3,654,644) guaranteed by the Group. | |||||
| (d) | Transfer of assets | ||||
| Six months ended 30 June | |||||
| Related parties | Nature of related party transactions | 2020 | 2019 | ||
| Jiangxi JMCG Industry Co., Ltd. | Sales of fixed assets | 1,447 | 402 | ||
| Nanchang JMCG Shishun Logistics Co., Ltd. | Sales of fixed assets | - | 298,982 | ||
| 1,447 | 299,384 | ||||
| The pricing on transfer of assets between the Group and related parties is based on the agreed price by both parties. | |||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) | ||||
| (5) | Related party transactions (Cont’d) | ||||
| (e) | Purchase of assets | ||||
| Six months ended 30 June | |||||
| Related parties | Nature of related party transactions | 2020 | 2019 | ||
| GETRAG (Jiangxi) Transmission Company | Purchase of fixed assets | 3,480,000 | - | ||
| Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | Purchase of fixed assets | 1,370,067 | - | ||
| Jiangling Motor Holdings Co., Ltd. | Purchase of fixed assets | 337,660 | - | ||
| Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | Purchase of fixed assets | - | 6,336,960 | ||
| 5,187,727 | 6,336,960 | ||||
| The pricing on purchase of assets between the Group and related parties is based on the agreed price by both parties. | |||||
| (f) | Provision of technology sharing | ||||
| Six months ended 30 June | |||||
| Related parties | Nature of related party transactions | 2020 | 2019 | ||
| Ford Vietnam Limited | Technical service | 11,123,000 | 2,874,000 | ||
| Ford Motor Research & Engineering (Nanjing) Co., Ltd. | Technical service | 8,290,000 | - | ||
| Ford | Technical service | 6,974,000 | 28,810,000 | ||
| 26,387,000 | 31,684,000 | ||||
| The Group’s pricing on technology sharing provided to related parties is based on the agreed price by both parties. | |||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) | ||||
| (5) | Related party transactions (Cont’d) | ||||
| Six months ended 30 June | |||||
| (g) | Purchase of fuel consumption integral | ||||
| Related party | 2020 | 2019 | |||
| Jiangling Motor Electricity Vehicle Co., Ltd. | 23,315,612 | - | |||
| The Group’s pricing on fuel consumption integral purchased from JMH is based on the agreed price by both parties. | |||||
| (h) | Remuneration of key management | ||||
| 2020 | 2019 | ||||
| Remuneration of key management | 6,783,165 | 6,361,409 | |||
| (i) | Interest income | ||||
| 2020 | 2019 | ||||
| Jiangling Motor Group Finance Company (“JMCF”) | 8,942,382 | 6,771,234 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) | |||||||
| (6) | Receivables from and payables to related parties | |||||||
| Receivables from related parties: | ||||||||
| 30June 2020 | 31 December 2019 | |||||||
| Amount | Provision for bad debts | Amount | Provision for bad debts | |||||
| Accounts receivable | ||||||||
| Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 485,135,536 | (1,090,986) | 272,986,397 | (712,320) | ||||
| Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. | 76,245,326 | (99,119) | 19,328,984 | (9,664) | ||||
| Jiangxi Jiangling Chassis Co., Ltd. | 14,051,875 | (42,156) | 13,054,052 | (39,162) | ||||
| Ford Vietnam Limited | 11,123,000 | (55,615) | 5,980,000 | (29,900) | ||||
| JMCG Jingma Motors Co., Ltd. | 10,916,815 | (32,750) | 5,563,310 | (16,690) | ||||
| Jiangxi Jiangling Group Special Vehicle Co., Ltd. | 6,742,249 | (8,765) | - | - | ||||
| Nanchang JMCG Liancheng Auto Component Co., Ltd. | 5,867,879 | (17,604) | 12,767,031 | (38,301) | ||||
| Nanchang JMCG Frame Co., Ltd | 5,574,403 | (278,720) | 5,574,403 | (16,723) | ||||
| Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | 3,364,388 | (10,093) | 2,131,677 | (6,395) | ||||
| Ford Motor Research & Engineering (Nanjing) Co., Ltd. | 2,438,000 | (12,190) | 9,529,400 | (47,647) | ||||
| Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | 2,160,598 | (6,482) | 2,128,387 | (6,385) | ||||
| Jiangxi Jiangling Lear Interior System Co., Ltd. | 1,342,818 | (4,028) | 1,082,578 | (3,248) | ||||
| Jiangxi JMCG Specialty Vehicles Co., Ltd. | 747,727 | (2,243) | 58,148,451 | (30,290) | ||||
| Ford | 320,000 | (1,600) | 21,554,000 | (107,770) | ||||
| Nanchang JMCG Shishun Logistics Co., Ltd. | - | - | 6,279,155 | (178,666) | ||||
| Jiangling Motor Electricity Vehicle Sales Co.,Ltd | - | - | 5,961,020 | (374,352) | ||||
| Other related parties | 2,564,363 | (10,090) | 1,357,184 | (7,984) | ||||
| 628,594,977 | (1,672,441) | 443,426,029 | (1,625,497) | |||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) | |||||||
| (6) | Receivables from and payables to related parties (Cont’d) | |||||||
| Receivables from related parties (Cont'd): | ||||||||
| 30June 2020 | 31 December 2019 | |||||||
| Amount | Provision for bad debts | Amount | Provision for bad debts | |||||
| Other receivables | ||||||||
| Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 35,029,720 | (106,189) | 35,208,392 | (106,725) | ||||
| Other related parties | 540,498 | (1,621) | 41,481 | (125) | ||||
| 35,570,218 | (107,810) | 35,249,873 | (106,850) | |||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) | ||||
| (6) | Receivables from and payables to related parties (Cont’d) | ||||
| Receivables from related parties (Cont'd): | |||||
| 30June 2020 | 31 December 2019 | ||||
| Advances to suppliers | Nanchang Baojiang Steel Processing Distribution Co., Ltd. | 503,623,198 | 492,604,607 | ||
| Ford Otomotiv Sanayi A.S. | 1,839,838 | - | |||
| 505,463,036 | 492,604,607 | ||||
| Receivables financing | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 717,942 | 17,148,451 | ||
| JMCG Jingma Motors Co., Ltd. | - | 32,000,000 | |||
| 717,942 | 49,148,451 | ||||
| Cash at bank | Jiangling Motor Group Finance Company (“JMCF”) | 618,877,485 | 967,750,294 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) | |||
| (6) | Receivables from and payables to related parties (Cont’d) | |||
| Payables to related parties: | ||||
| 30June 2020 | 31 December 2019 | |||
Accounts payable
| Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | 448,855,710 | 468,877,821 | |||||||||||
| Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | 350,666,967 | 269,635,441 | |||||||||||
| Jiangxi Jiangling Chassis Co., Ltd. | 328,068,328 | 247,903,618 | |||||||||||
| Jiangxi Jiangling Lear Interior System Co., Ltd. | 307,780,416 | 275,328,167 | |||||||||||
| GETRAG (Jiangxi) Transmission Company | 241,059,134 | 241,934,120 | |||||||||||
| Ford | 198,530,541 | 145,686,393 | |||||||||||
| Nanchang JMCG Shishun Logistics Co., Ltd. | 131,317,801 | 135,343,920 | |||||||||||
| Nanchang JMCG Liancheng Auto Component Co., Ltd. | 130,713,541 | 133,716,243 | |||||||||||
| Faurecia Emissions Control Technologies (Nanchang) Co., Ltd. | 117,075,030 | 127,516,031 | |||||||||||
| Hanon Systems | 93,271,572 | 86,208,726 | |||||||||||
| Nanchang Unistar Electric & Electronics Co., Ltd. | 86,484,570 | 81,834,768 | |||||||||||
| JMCG | 77,184,767 | 41,122,001 | |||||||||||
| Changan Ford Automobile Co., Ltd. | 65,230,878 | 57,562,568 | |||||||||||
| Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd. | 47,994,084 | 38,644,169 | |||||||||||
| Nanchang Yinlun Heat-exchanger Co., Ltd. | 26,386,239 | 23,001,840 | |||||||||||
| Jiangxi JMCG Specialty Vehicles Co., Ltd. | 26,049,713 | 20,671,039 | |||||||||||
| Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd. | 25,569,213 | 22,458,920 | |||||||||||
| Nanchang Lianda Machinery Co., Ltd. | 25,394,841 | 20,459,811 | |||||||||||
| Auto Alliance (Thailand) Co., Ltd. | 18,305,158 | 797,030 | |||||||||||
| Jiangxi ISUZU Engine Co., Ltd. | 17,627,677 | 5,957,636 | |||||||||||
| Jiangxi Jiangling Group Special Vehicle Co., Ltd. | 16,772,072 | 8,983,517 | |||||||||||
| Jiangling Motor Holdings Co., Ltd. | 15,057,395 | 23,805,405 | |||||||||||
| Jiangling Aowei Automobile Spare Part Co., Ltd. | 8,571,868 | 14,676,461 | |||||||||||
| Jiangxi JMCG boya brake system Co., Ltd | 6,527,242 | 2,917,900 | |||||||||||
| Nanchang JMCG Xinchen Auto Component Co., Ltd. | 6,422,296 | 3,207,475 | |||||||||||
| Jiangxi Lingrui Recycling Resources Development Corporation | 4,679,241 | 5,037,812 | |||||||||||
| Jiangxi Lingyun Automobile Industry Technology Co.,Ltd | 4,133,996 | 5,019,020 | |||||||||||
| NC.Gear Forging Factory | 3,753,048 | 11,566 | |||||||||||
| Ford Otomotiv Sanayi A.S. | 2,980,941 | 5,715,771 | |||||||||||
| Nanchang Gear Co., Ltd. | 2,605,245 | 2,600,649 | |||||||||||
| Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | 2,143,309 | - | |||||||||||
| Jiangxi Biaohong Engine Tappet Co., Ltd. | 2,089,092 | 1,982,683 | |||||||||||
| Jiangling Material Co., Ltd. | 1,578,752 | 1,505,272 | |||||||||||
| Jiangxi JMCG Shangrao Industrial Co., Ltd. | 1,563,223 | 1,139,163 | |||||||||||
| Jiangxi JMCG Industry Co., Ltd. | 423,031 | 9,408,467 | |||||||||||
| Ford Motor Co., Thailand Ltd. | 615,725 | - | |||||||||||
| 2,843,482,656 | 2,530,671,423 | ||||||||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) |
| (6) | Receivables from and payables to related parties (Cont’d) |
| Payables to related parties (Cont'd): | ||||||||||||
| 30June 2020 | 31 December 2019 | |||||||||||
| Other payables | ||||||||||||
| Ford | 99,756,238 | 188,389,590 | ||||||||||
| Ford Global Technologies,LLC | 62,971,290 | 67,275,297 | ||||||||||
| Ford Otomotiv Sanayi A.S. | 31,272,061 | 47,911,656 | ||||||||||
| Jiangling Motor Electricity Vehicle Co., Ltd. | 23,315,612 | - | ||||||||||
| Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. | 22,730,921 | 25,676,673 | ||||||||||
| GETRAG (Jiangxi) Transmission Company | 19,957,494 | 13,132,392 | ||||||||||
| Changan Ford Automobile Co., Ltd. | 15,169,355 | 26,537,316 | ||||||||||
| Nanchang JMCG Shishun Logistics Co., Ltd. | 9,394,565 | 6,916,458 | ||||||||||
| JMCG Jiangxi Engineering Construction Co., Ltd. | 8,763,829 | 10,407,756 | ||||||||||
| Faurecia Emissions Control Technologies (Nanchang) Co., Ltd. | 7,471,471 | 7,616,969 | ||||||||||
| Jiangxi Jiangling Group Special Vehicle Co., Ltd. | 6,786,002 | 6,983,776 | ||||||||||
| JMCG | 2,103,538 | - | ||||||||||
| Nanchang Baojiang Steel Processing Distribution Co., Ltd. | 2,087,023 | 2,087,023 | ||||||||||
| Jiangxi JMCG Industry Co., Ltd. | 1,890,241 | 2,502,826 | ||||||||||
| Jiangxi Jiangling Group Health Science and Technology Co., Ltd. | 1,890,000 | - | ||||||||||
| Ford Motor (China) Co., Ltd. | 1,864,234 | 3,325,531 | ||||||||||
| Ford Motor Research & Engineering (Nanjing) Co., Ltd. | 1,836,416 | 2,518,692 | ||||||||||
| Jiangxi JMCG Specialty Vehicles Co., Ltd. | 1,461,613 | - | ||||||||||
| Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | 1,412,743 | 4,064,490 | ||||||||||
| Nanchang Unistar Electric & Electronics Co., Ltd. | 1,258,872 | 1,326,940 | ||||||||||
| Jiangxi Jiangling Lear Interior System Co., Ltd. | 1,225,170 | 1,207,000 | ||||||||||
| Hanon Systems | 755,000 | 4,362,412 | ||||||||||
| Chongqing Changan Automobile Co., Ltd. | 638,559 | - | ||||||||||
| Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 608,955 | 1,779,455 | ||||||||||
| Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd. | 181,739 | 1,061,739 | ||||||||||
| Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | 100,000 | 22,080,240 | ||||||||||
| Other related parties | 1,889,067 | 2,595,805 | ||||||||||
| 328,792,008 | 449,760,036 | |||||||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) |
| (6) | Receivables from and payables to related parties (Cont’d) |
Payables to related parties (Cont'd):
| Contract liabilities | 30June 2020 | 31 December 2019 | ||||||||||
| Jiangxi Jiangling Group Special Vehicle Co., Ltd. | - | 2,681,847 | ||||||||||
| Yunan Wanfu Vehicle Sales & Service Co., Ltd. | 241,652 | 1,213,244 | ||||||||||
| Other related parties | 1,852,667 | 918,571 | ||||||||||
| 2,094,319 | 4,813,662 | |||||||||||
| Lease liabilities | ||||||||||||
| JMCG | 10,874,815 | 12,672,782 | ||||||||||
| Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 1,187,433 | 2,343,048 | ||||||||||
| 12,062,248 | 15,015,830 | |||||||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 7 | Related parties and related party transactions (Cont’d) | |||
| (7) | Commitments in relation to related parties | |||
| Capital expenditure commitments | 30June 2020 | 31 December 2019 | ||
| JMCG Jiangxi Engineering Construction Co., Ltd. | 563,684,390 | 23,174,665 | ||
| Guarantee of commitments in relation to related parties is set out in (Note 7(5)(c)). | ||||
| 8 | Contingencies | |||
| As at 30 June 2020, the Group had no contingencies that needed to be accounted for in the notes to the financial statements. | ||||
| 9 | Commitments | |||
| Capital commitments | ||||
| Capital expenditures contracted for by the Group but are not yet necessary to be recognised on the balance sheet as at the balance sheet date are as follows: | ||||
| 30 June 2020 | 31 December 2019 | |||
| Buildings, machinery and equipment | 1,220,164,000 | 701,817,000 | ||
| 10 | Events after the balance sheet date |
| Evaluation of the impact on the outbreak of Coronavirus Disease. | |
| After the outbreak of Coronavirus Disease 2019 (“COVID-19 outbreak”) in January 2020, a series of precautionary and control measures have continued to be implemented across the country. The Group will continue to earnestly implement the guaranteed supply for key medical materials for epidemic prevention and control, and support epidemic prevention and control work. | |
| The epidemic has certain impacts on enterprise operation of some provinces and cities such as Hubei province and certain industries as well as overall economic operation. Thus, it is probable that the epidemic may affect the risk of the Group’s financial instruments or operating performance to a certain extent. The degree of impact depends on the situation and duration of epidemic prevention and control, and various regulation and control measures implemented. | |
| The Group will continually pay close attention to the development of the epidemic, evaluate and actively respond to its impacts on the Company’s financial position and operating results. As at the date on which the financial statements were authorised for issue, the assessment work was still under progress and no material adverse effects had been identified. | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 11 | Financial instrument and risk |
| The Group's activities expose it to a variety of financial risks: market risk (primarily including foreign exchange risk and interest rate risk), credit risk and liquidity risk. The above financial risks and the Group's risk management policies to mitigate the risks are as follows: The Board of Directors is responsible for planning and establishing the Group's risk management framework, formulating the Group's risk management policies, and supervising the implementation of risk management measures. The Group has established risk management policies to identify and analyse the risks faced by the Group. These risk management policies specify the risks such as market risk, credit risk and liquidity risk management. The Group regularly evaluates the market environment and changes in the Group's operating activities to determine whether to update the risk management policies or not. The Group's risk management is carried out under policies approved by the Board of Directors. The business departments of the Group work closely to identify and evaluate related risks, and determine countermeasures with management to avoid or reduce the adverse impact of the related risks on the Company. The internal audit department of the Group conducts periodical audit to the controls and procedures for risk management and reports the audit results to the Risk Management Committee of the Group. |
| (1) | Market risk | ||||||||
| (a) | Foreign exchange risk | ||||||||
| The Group’s major operational activities are carried out in Mainland China and a majority of the transactions are denominated in RMB. The Group is exposed to foreign exchange risk arising from the recognised assets and liabilities, and future transactions denominated in foreign currencies, primarily with respect to USD. The Group’s monitors the amount of assets and liabilities, and transactions denominated in foreign currencies to minimise the foreign exchange risk. Therefore, the Group can consider entering into forward exchange contracts to mitigate the foreign exchange risk (Note 4(3)). | |||||||||
| The financial assets and the financial liabilities denominated in foreign currencies, which were held by the Company and the subsidiaries of the Group, whose recording currencies were RMB, were expressed in RMB as at 30 June 2020 and 31 December 2019 as follows: | |||||||||
| 30 June 2020 | |||||||||
| USD | EUR | Others | Total | ||||||
| Financial assets denominated in foreign currency - | |||||||||
| Derivative financial assets | 1,475,752 | - | - | 1,475,752 | |||||
| Other receivables | - | 29,720 | - | 29,720 | |||||
| 1,475,752 | 29,720 | - | 1,505,472 | ||||||
| Financial liabilities denominated in foreign currency - | |||||||||
| Current portion of long-term borrowings | 463,595 | - | - | 463,595 | |||||
| Long-term borrowings | 3,013,368 | - | - | 3,013,368 | |||||
| Other payables | 167,658,599 | 26,347,025 | 6,985,987 | 200,991,611 | |||||
| 171,135,562 | 26,347,025 | 6,985,987 | 204,468,574 | ||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 11 | Financial instrument and risk (Cont’d) | ||||||||
| (1) | Market risk (Cont’d) | ||||||||
| (a) | Foreign exchange risk (Cont’d) | ||||||||
| 31 December 2019 | |||||||||
| USD | EUR | Others | Total | ||||||
| Financial assets denominated in foreign currency - | |||||||||
| Other receivables | - | 29,722 | - | 29,722 | |||||
| Financial liabilities denominated in foreign currency - | |||||||||
| Derivative financial liabilities | 545,632 | - | - | 545,632 | |||||
| Current portion of long-term borrowings | 456,830 | - | - | 456,830 | |||||
| Long-term borrowings | 3,197,814 | - | - | 3,197,814 | |||||
| Other payables | 260,962,447 | 42,659,103 | 5,574,005 | 309,195,555 | |||||
| 265,162,723 | 42,659,103 | 5,574,005 | 313,395,831 | ||||||
| As at 30 June 2020, if the RMB had strengthened/weakened by 10% against the USD while all other variables had been held constant, the Group’s net profit would have been approximately RMB 14,436,603 (31 December 2019: approximately RMB 22,553,091) higher/lower for the financial assets and liabilities dominated in foreign currencies whose recording currency is RMB; if the RMB had strengthened/weakened by 10% against the EUR while all other variables had been held constant, the Group’s net profit would have been approximately RMB 2,297,312 higher/lower(31 December 2019: approximately RMB 4,000,039). |
| (b) | Interest rate risk |
| The Group's revenue and operating cash flows are hardly affected by the fluctuation of the market interest rate. As at 30 June 2020, interest of most of the Group’s cash at bank was accrued at floating rate; interest of all bank borrowings was accrued at fixed rate. The Group does not take any measure to hedge interest risk at present. | |
| As at 30 June 2020, if the interest rate of the Group’s cash at bank increased or decreased by 10% while all other circumstances had been held constant, the Group's net profit for the year would have been approximately RMB 7,543,808 higher/lower (31 December 2019: approximately RMB 16,235,358). | |
| As at 30 June 2020 and 31 December 2019, the fair value of the Group’s cash at bank accrued at fixed rate was a reasonable approximation of its carrying amount. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 11 | Financial instrument and risk (Cont’d) |
| (2) | Credit risk |
| Credit risk mainly arises from cash at bank and on hand, notes receivable, accounts receivable, receivables financing, other receivables, and derivative financial assets at fair value through profit or loss that are not included in the impairment assessment scope. The carrying amount of the Group’s financial assets reflects its maximum credit exposure on the balance sheet date. | |
| The Group expects that there is no significant credit risk associated with cash at bank and on hand since they are deposited at state-owned banks and other medium or large size listed banks with good reputation and high credit rating. The Group does not expect that there will be significant losses from non-performance by these banks. |
| In addition, the Group has policies to limit the credit exposure on notes receivable, accounts receivable, receivables financing and other receivables. The Group assesses the credit quality of and sets credit limits on its customers by taking into account their financial position, the availability of guarantee from third parties, their credit history and other factors such as current market conditions. The credit history of the customers is regularly monitored by the Group. In respect of customers with a poor credit history, the Group will use written payment reminders, or shorten or cancel credit periods, to ensure the overall credit risk of the Group is limited to a controllable extent. | |
| As at 30 June 2020, the Group had no significant collateral or other credit enhancements held as a result of the debtor's mortgage. |
| (3) | Liquidity risk | ||||||||||
| Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the Group’s finance department in its headquarters. The Group’s monitors rolling forecasts of the Group's short-term and long-term liquidity requirements to ensure it has sufficient cash and securities that are readily convertible to cash to meet operational needs, while maintaining sufficient headroom on its undrawn committed borrowing facilities from major financial institutions so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities to meet the short-term and long-term liquidity requirements. | |||||||||||
| The financial liabilities of the Group at the balance sheet date are analysed by their maturity date below at their undiscounted contractual cash flows : | |||||||||||
| 30 June 2020 | |||||||||||
| Within 1 year | 1 to 2 years | 2 to 5 years | Over 5 years | Total | |||||||
| Short-term borrowings | |||||||||||
| - Principal | 1,300,000,000 | - | - | - | 1,300,000,000 | ||||||
| - Interest | 15,312,083 | - | - | - | 15,312,083 | ||||||
| Notes payable | 71,901,506 | - | - | - | 71,901,506 | ||||||
| Accounts payable | 8,735,960,426 | - | - | - | 8,735,960,426 | ||||||
| Other payables | 3,983,922,576 | - | - | - | 3,983,922,576 | ||||||
| Lease liabilities | 10,115,277 | 7,152,848 | 11,986,666 | - | 29,254,791 | ||||||
| Long-term borrowings | |||||||||||
| - Principal | 463,595 | 463,595 | 1,390,785 | 1,158,988 | 3,476,963 | ||||||
| - Interest | 50,416 | 43,462 | 88,663 | 26,077 | 208,618 | ||||||
| 14,117,725,879 | 7,659,905 | 13,466,114 | 1,185,065 | 14,140,036,963 | |||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 11 | Financial instrument and risk (Cont’d) | ||||||||||
| (3) | Liquidity risk (Cont’d) | ||||||||||
| 31 December 2019 | |||||||||||
| 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 | 13,386,576 | 6,987,287 | 15,604,965 | - | 35,978,828 | ||||||
| Long-term borrowings | |||||||||||
| - Principal | 456,830 | 456,830 | 1,370,492 | 1,370,492 | 3,654,644 | ||||||
| - Interest | 53,107 | 46,254 | 97,648 | 35,975 | 232,984 | ||||||
| 12,307,278,572 | 7,490,371 | 17,073,105 | 1,406,467 | 12,333,248,515 | |||||||
| 12 | Fair value estimates |
| The level in which fair value measurement is categorised is determined by the level of the fair value hierarchy of the lowest level input that is significant to the entire fair value measurement: | |
| Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. | |
| Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. | |
| Level 3: Unobservable inputs for the asset or liability. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
-
| 12 | Fair value estimates (Cont’d) | ||||||
| (1) | Assets and liabilities measured at fair value on a recurring basis | ||||||
| As at 30 June 2020, the assets measured at fair value on a recurring basis by the above three levels were analysed below: | |||||||
| Level 1 | Level 2 | Level 3 | Total | ||||
| Financial assets - | |||||||
| Derivative financial | - | 1,475,752 | - | 1,475,752 | |||
| Financial assets held for trading | 2,725, 990,657 | 2,725,990,657 | |||||
| Receivables financing | - | - | 270,951,837 | 270,951,837 | |||
| 1,475,752 | 2,996,942,494 | 2,998,418,246 | |||||
| As at 30 June 2020, the Group had no liabilities measured at fair value: As at 31 December 2019, the assets measured at fair value on a recurring basis by the above three levels were analysed below: | |||||||
| Level 1 | Level 2 | Level 3 | Total | ||||
| Financial assets - | |||||||
| Receivables financing | - | - | 289,044,373 | 289,044,373 | |||
| As at 31 December 2019, the liabilities measured at fair value on a recurring basis by the above three levels were analysed below. | ||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||
| Financial liabilities - | ||||||||
| Derivative financial liabilities | - | 545,632 | - | 545,632 | ||||
| The Group takes the date on which events causing the transfers between the levels take place as the timing specific for recognising the transfers. There is no transfer between Level 1 and Level 2 for the current year. | ||||||||
| The fair value of financial instruments traded in an active market is determined at the quoted market price; and the fair value of those not traded in an active market is determined by the Group using valuation technique. The valuation models used mainly comprise discounted cash flow model and market comparable corporate model. The inputs of the valuation technique mainly include risk-free interest rate, benchmark rate and exchange rate. | ||||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 12 | Fair value estimates (Cont’d) | ||
| (1) | Assets and liabilities measured at fair value on a recurring basis (Cont'd) | ||
| The changes in Level 3 financial assets are analysed below: | |||
| (a) | Gains recognised in profit or loss is recognised in investment income in the income statement. |
| 31 December 2019 | Increase | Decrease | Transfer into Level 3 | Transfer out of Level 3 | Gains recognised in profit or loss (a) | Changes in unrealised gains or losses included in profit or loss for the current period with respect to assets still held as at 30 June 2020 - gains or losses arising from changes in fair value | |||||||||
| 30 June 2020 | |||||||||||||||
| Financial assets | |||||||||||||||
| Financial assets held for trading - | |||||||||||||||
| Structural deposits | - | 9,189,000,000 | (6,471,000,000) | - | - | 2,718,000,000 | 32,619,541 | 7,990,657 | |||||||
| Receivables financing - | |||||||||||||||
| Notes receivable | 289,044,373 | 328,944,967 | (347,037,503) | - | - | 270,951,837 | - | - | |||||||
| Total assets | 289,044,373 | 9,517,944,967 | (6,818,037,503) | - | - | 2,988,951,837 | 32,619,541 | 7,990,657 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 12 | Fair value estimates (Cont’d) | ||
| (1) | Assets and liabilities measured at fair value on a recurring basis (Cont'd) | ||
| The changes in Level 3 financial assets are analysed below: | |||
| (a) | Gains recognised in profit or loss for the current period has been recognised in investment income in the income statement. |
| 31 December 2018 | Increase | Decrease | Transfer into Level 3 | Transfer out of Level 3 | Gains recognised in profit or loss (a) | Changes in unrealised gains or losses included in profit or loss for the current year with respect to assets still held as at 31 December 2019 - gains or losses arising from changes in fair value | ||||||||||
| 31 December 2019 | ||||||||||||||||
| Financial assets | ||||||||||||||||
| Financial assets held for trading - | ||||||||||||||||
| Monetary fund | - | 3,300,000,000 | (3,300,000,000) | - | - | - | 5,739,140 | - | ||||||||
| Structural deposits | - | 5,900,000,000 | (5,900,000,000) | - | - | - | 41,646,567 | - | ||||||||
| Other current assets - | ||||||||||||||||
| Notes receivable | 6,246,244 | 1,654,757,442 | (1,371,959,313) | - | - | 289,044,373 | - | - | ||||||||
| Total assets | 6,246,244 | 10,854,757,442 | (10,571,959,313) | - | - | 289,044,373 | 47,385,707 | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 12 | Fair value estimates (Cont’d) |
| (2) | Assets measured at fair value on a non-recurring basis |
| As at 30 June 2020 and 31 December 2019, the Group did not have assets measured at fair value on a non-recurring basis. | |
| (3) | Assets and liabilities not measured at fair value but for which the fair value is disclosed |
| Financial assets and liabilities measured at amortised cost mainly include notes receivable, accounts receivable, other receivables, payables and long-term borrowings, etc. | |
| The carrying amount of the Group's financial assets and liabilities not measured at fair value is a reasonable approximation of their fair value. | |
| The fair value of long-term borrowings is the present value of the contractually determined stream of future cash flows discounted at the rate of interest applied at that time by the market to instruments of comparable credit status and providing substantially the same cash flows on the same terms, and categorised within Level 3 of the fair value hierarchy. |
| 13 | Capital management |
| The Group’s capital management policies aim to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital. | |
| The Group's total capital is calculated as “shareholders’ equity” as shown in the consolidated balance sheet. The Group is not subject to external mandatory capital requirements, and monitors capital on the basis of equity ratio. | ||||
| As at 30 June 2020 and 31 December 2019, the Group's equity ratio was as follows: | ||||
| 30 June 2020 | 31 December 2019 | |||
| Total borrowings | 1,303,476,963 | 3,654,644 | ||
| Total equities | 10,643,910,583 | 10,496,563,781 | ||
| 11,947,387,546 | 10,500,218,425 | |||
| Equity ratio | 10.91% | 0.03% | ||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 14 | Notes to the Company’s financial statements |
| (1) | Accounts receivable | |||
| 30 June 2020 | 31 December 2019 | |||
| Accounts receivable | 1,260,745,851 | 980,998,110 | ||
| Less: Provision for bad debts | (177,082,301) | (115,069,813) | ||
| 1,083,663,550 | 865,928,297 | |||
| (a) | The aging of accounts receivable is analysed as follows: | |||
| 30 June 2020 | 31 December 2019 | |||
| Within 1 year | 782,355,884 | 489,899,574 | ||
| 1 to 2 years | 475,240,745 | 490,230,937 | ||
| 2 to 3 years | 3,149,222 | 867,599 | ||
| 1,260,745,851 | 980,998,110 | |||
| (b) | As at 30 June 2020, the five largest accounts receivable were analysed by debtors as follows: | |||||
| Balance | Amount of provision for bad debts | % of total balance | ||||
| Company 1 | 477,414,335 | (1,060,063) | 37.87% | |||
| Company 2 | 167,183,588 | - | 13.26% | |||
| Company 3 | 81,020,000 | (81,020,000) | 6.43% | |||
| Company 4 | 75,716,600 | (98,432) | 6.01% | |||
| Company 5 | 26,016,000 | (33,821) | 2.06% | |||
| 827,350,523 | (82,212,316) | 65.63% | ||||
| (c) | Provision for bad debts |
| For accounts receivable, irrespective of whether a significant financing component exists, the Company measures the loss provision according to the lifetime expected credit losses. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 13 | Notes to the Company’s financial statements (Cont’d) |
| (1) | Accounts receivable (Cont’d) |
| (c) | Provision for bad debts (Cont’d) |
| (i) | Accounts receivable for which provision for bad debts is made on the individual basis are analysed as follows: |
| 30 June 2020 | |||||
| Book balance | Provision for bad debts | ||||
| Amount | Lifetime ECL (%) | Provision for bad debts | |||||
| Receivables from related parties within the Group i) | 184,202,828 | - | - | ||||
| Accounts receivable for automobiles ii) | 81,020,000 | 100% | (81,020,000) | ||||
| New energy subsidies receivable iii) | 84,903,126 | 100% | (84,903,126) | ||||
| 350,125,954 | (165,923,126) |
| 31 December 2019 | |||||||
| Book balance | Provision for bad debts | ||||||
| Amount | Lifetime ECL (%) | Provision for bad debts | |||||
| Receivables from related parties within the Group i) | 179,138,311 | - | - | ||||
| Accounts receivable for automobiles ii) | 81,020,000 | 100% | (81,020,000) | ||||
| New energy subsidies receivable iii) | 20,410,500 | 100% | (20,410,500) | ||||
| 280,568,811 | (101,430,500) | ||||||
| i) As at 30 June 2020, the Company's accounts receivable from subsidiaries JMCH,SZFJ and GZFJ were RMB 14,132,531,RMB 167,183,587 and RMB 2,886,710 respectively, totalling RMB 184,202,828. The Company carried out individual assessment on receivables from subsidiaries. Based on the judgement of credit risk, there is no significant credit risk on the accounts receivable from subsidiaries, and there is no overdue or impairment. As at 31 December 2019, the Company's accounts receivable from subsidiaries JMCH and SZFJ were RMB 10,847,413 and RMB 168,290,898 respectively, totalling RMB 179,138,311. The Company carried out individual assessment on receivables from subsidiaries. Based on the judgement of credit risk, there is no significant credit risk on the accounts receivable from subsidiaries, and there is no overdue or impairment. | |
| ii) As at 30 June 2020, since these companies in debts were involved in several legal proceedings, the Company considered that it was difficult to recover such receivables, so related provision for bad debts was made in full amount. | |
| iii) As at 30 June 2020, state subsidies for new energy automobiles receivable amounted to RMB 84,903,126. Since the estimated mileage of such new energy automobiles may not meet the target within two years, the Company considered it was difficult to recover the state subsidies, so related provision for bad debts was made is full amount. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 14 | Notes to the Company’s financial statements (Cont’d) |
| (1) | Accounts receivable (Cont’d) |
| (c) | Provision for bad debts (Cont’d) |
| (ii) | Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows: |
| Grouping - Sales of general automobiles: | |||||||
| 30 June 2020 | |||||||
| Book balance | Provision for bad debts | ||||||
| Amount | Lifetime ECL (%) | Amount | |||||
| Not overdue | 490,454,337 | 0.13% | (642,250) | ||||
| Overdue for 1 to 30 days | 395,139 | 0.13% | (517) | ||||
| 490,849,476 | (642,767) | ||||||
| 31 December 2019 | |||||||
| Book balance | Provision for bad debts | ||||||
| Amount | Lifetime ECL (%) | Amount | |||||
| Not overdue | 52,890,945 | 0.05% | (25,599) | ||||
| Grouping - Sales of new energy automobiles: | |||||||
| 30 June 2020 | |||||||
| Book balance | Provision for bad debts | ||||||
| Amount | Lifetime ECL (%) | Amount | |||||
| Not overdue | 156,460,813 | 5.77% | (9,023,417) | ||||
| 31 December 2019 | |||||||
| Book balance | Provision for bad debts | ||||||
| Amount | Lifetime ECL (%) | Amount | |||||
| Not overdue | 252,014,858 | 4.86% | (12,256,229) | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 14 | Notes to the Company’s financial statements (Cont’d) |
| (1) | Accounts receivable (Cont’d) |
| (c) | Provision for bad debts (Cont’d) |
| (ii) | Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows (Cont’d): |
| Grouping - spare parts: |
| 30 June 2020 | |||||||
| Book balance | Provision for bad debts | ||||||
| Amount | Lifetime ECL (%) | Amount | |||||
| Not overdue | 150,821,834 | 0.30% | (452,466) | ||||
| Overdue for 1 to 30 days | 77,138,981 | 0.30% | (231,417) | ||||
| Overdue for 31 to 60 days | 17,688,642 | 0.50% | (88,443) | ||||
| Overdue for 61 to 90 days | 3,689,604 | 0.60% | (22,138) | ||||
| Overdue over 90 days | 13,970,547 | 5.00% | (698,527) | ||||
| 263,309,608 | (1,492,991) | ||||||
| 31 December 2019 | |||||||
| Book balance | Provision for bad debts | ||||||
| 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 for the year amounted to RMB 64,492,626 andreversed the provision for bad debts RMB 2,480,138. |
| (d) | In thesix months ended 30 June 2020, no accounts receivable had been written off. |
| (e) | As at 30 June 2020 and 31 December 2019, the Company did not have accounts receivable that were pledged. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 14 | Notes to the Company’s financial statements (Cont’d) |
| (2) | Other receivables |
| 30 June 2020 | 31 December 2019 | |||
| Receivables from JMCH | 3,182,043,677 | 3,023,189,184 | ||
| Import working capital advances | 35,000,000 | 35,000,000 | ||
| Interest receivable from cash at bank | 28,851,270 | 30,719,215 | ||
| Deposits receivable | 5,409,600 | 7,192,773 | ||
| Advances for research and development projects | 1,014,184 | 2,109,522 | ||
| Reserves receivable | 385,973 | 959,945 | ||
| Others | 15,233,214 | 19,385,731 | ||
| 3,267,937,918 | 3,118,556,370 | |||
| Less: Provision for bad debts | (189,179) | (238,665) | ||
| 3,267,748,739 | 3,118,317,705 |
| (a) | The aging of other receivables is analysed as follows: | |||
| 30 June 2020 | 31 December 2019 | |||
| Within 1 year | 3,186,165,678 | 3,043,832,479 | ||
| 1 to 2 years | 18,044,507 | 16,684,253 | ||
| 2 to 3 years | 14,258,459 | 13,253,240 | ||
| Over 3 years | 49,469,274 | 44,786,398 | ||
| 3,267,937,918 | 3,118,556,370 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 14 | Notes to the Company’s financial statements (Cont’d) | |||||||||||||
| (2) | Other receivables (Cont'd) | |||||||||||||
| (b) | Provision for losses and changes in book balance statements | |||||||||||||
| Stage 1 | Stage 3 | Total | ||||||||||||
| Expected credit losses in the following 12 months (grouping) | Expected credit losses in the following 12 months (individual) | Sub-total | Lifetime ECL (Credit impaired) | |||||||||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | Provision for bad debts | Book balance | Provision for bad debts | Provision for bad debts | |||||||
| 31 December 2019 | 94,158,526 | (190,319) | 3,023,189,184 | - | (190,319) | 1,208,660 | (48,346) | (238,665) | ||||||
| Increase in the current period | — | - | — | - | - | — | - | - | ||||||
| Reversal in the current period | — | 20,522 | — | - | 20,522 | — | 28,964 | 49,486 | ||||||
| Write-off in the current period | — | - | — | - | - | — | - | - | ||||||
| Including: Charge-off in the current period | — | - | — | - | - | — | - | - | ||||||
| Derecognition | — | - | — | - | - | — | - | - | ||||||
| 30 June 2020 | 85,450,202 | (169,797) | 3,182,043,677 | - | (169,797) | 444,039 | (19,382) | (189,179) | ||||||
| As at 30 June 2020, the Group had no other receivables transferred from Stage 1 to Stage 3, and no other receivables reversed from Stage 3 to Stage 1. | ||||||||||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 14 | Notes to the Company’s financial statements (Cont’d) |
| (2) | Other receivables (Cont'd) |
| (b) | Provision for losses and changes in book balance statements (Cont’d) |
| As at 30 June 2020 and 31 December 2019, the Company did not have any other receivables at Stage 2. Other receivables at Stage 1 and Stage 3 were analysed below: | |
| (i) | As at 30 June 2020 and 31 December 2019, provision for bad debts of other receivables on individual basis was analysed as follows: |
| 30 June 2020 | |||||||
| Stage 1 | Book balance | 12-month ECL (%) | Provision for bad debts | Reason | |||
| Receivables from JMCH | 3,182,043,677 | - | - | i) | |||
| 31 December 2019 | |||||||
| Stage 1 | Book balance | 12-month ECL (%) | Provision for bad debts | Reason | |||
| Receivables from JMCH | 3,023,189,184 | - | - | i) | |||
| i) As at 30 June 2020, the Company’s other receivables from subsidiary JMCH were RMB 3,182,043,677 (31 December 2019: RMB 3,023,189,184). The Company carried out individual assessment on receivables from subsidiaries. Based on the judgement of credit risk, there is no significant credit risk on the accounts receivable from subsidiaries, and there is no overdue or impairment. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 14 | Notes to the Company’s financial statements (Cont’d) |
| (2) | Other receivables (Cont'd) |
| (b) | Provision for losses and changes in book balance statements (Cont’d) |
| (ii) | As at 30 June 2020 and 31 December 2019, the Company’s other receivables with provision for bad debts on grouping basis were analysed below: |
| Other receivables with provision on the grouping basis at Stage 1: |
| 30 June 2020 | 31 December 2019 | |||||||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | |||||||
| Amount | % | Amount | Amount | % | Amount | |||||
| Grouping of interest receivable from cash at bank i): | ||||||||||
| Within 1 year | 28,851,270 | - | - | 30,719,215 | - | - | ||||
| Grouping of operating advances and guarantees: | ||||||||||
| Within 1 year | 56,598,932 | 0.30% | (169,797) | 63,439,311 | 0.30% | (190,319) | ||||
| 85,450,202 | (169,797) | 94,158,526 | (190,319) | |||||||
| i) As at 30 June 2020 and 31 December 2019, the Company’s interest receivable from cash at bank mainly came from four major state-owned banks or national joint stock banks. Therefore, the Company expected there was no significant loss on related interest receivable from non-performance by these banks. |
| Other receivables with provision on the grouping basis at Stage 3: |
| 30 June 2020 | 31 December 2019 | |||||||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | |||||||
| Amount | % | Amount | Amount | % | Amount | |||||
| Grouping of operating advances and guarantees: | ||||||||||
| Over 1 year | 444,039 | 4.36% | (19,382) | 1,208,660 | 4.00% | (48,346) | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 14 | Notes to the Company’s financial statements (Cont’d) |
| (2) | Other receivables (Cont'd) |
| (c) | In thesix months ended 30 June 2020, the Company did not increase any provision for bad debts. The provision for bad debts reversed amounted to RMB 49,486. The reversal in the current period was due to the actual receipt of other receivables relating to the provision for bad debts made in the prior period. |
| (d) | In thesix months ended 30 June 2020, no other receivables had been written off. |
| (e) | As at 30 June 2020, other receivables from top five debtors in respect of outstanding balance were analysed as follows: | |||||||||
| Nature | Balance | Aging | % of total balance | Provision for bad debts | ||||||
| Company 1 | Subsidiary current accounts and personnel costs, etc. | 3,182,043,677 | Within 6 years | 97.38% | - | |||||
| Company 2 | Advances | 35,000,000 | Within 1 year | 1.07% | (105,000) | |||||
| Company 3 | Advances | 6,291,984 | Within 1 year | 0.19% | (18,876) | |||||
| Company 4 | Advances | 4,480,000 | Within 1 year | 0.14% | (13,440) | |||||
| Company 5 | Advances | 3,486,966 | Within 1 year | 0.11% | (10,461) | |||||
| 3,231,302,627 | 98.89% | (147,777) | ||||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 14 | Notes to the Company’s financial statements (Cont’d) | |||
| (3) | Long-term equity investments | |||
| 30 June 2020 | 31 December 2019 | |||
| Subsidiaries (a) | 340,000,000 | 340,000,000 | ||
| Associates (b) | 37,910,003 | 40,934,557 | ||
| 377,910,003 | 380,934,557 | |||
| Less: Provision for impairment of long-term equity investments | - | - | ||
| 377,910,003 | 380,934,557 | |||
| (a) | Subsidiaries | |||||||||||||||||||
| Accounting method | Investment cost | 31 December 2019 | Movements for the current period | Classified as held for sale | 30 June 2020 | Shareholding (%) | Voting rights (%) | Ending balance of provision for impairment | Provision for impairment in the current period | Cash dividends declared in the current period | ||||||||||
| JMCH | Cost method | 270,000,000 | 270,000,000 | - | - | 270,000,000 | 100% | 100% | - | - | - | - | ||||||||
| JMCS | Cost method | 50,000,000 | 50,000,000 | - | - | 50,000,000 | 100% | 100% | - | - | - | - | ||||||||
| SZFJ | Cost method | 10,000,000 | 10,000,000 | - | - | 10,000,000 | 100% | 100% | - | - | - | - | ||||||||
| GZFJ | Cost method | 10,000,000 | 10,000,000 | - | - | 10,000,000 | 100% | 100% | - | - | - | - | ||||||||
| 340,000,000 | - | - | 340,000,000 | - | - | - | - | |||||||||||||
| (b) | Associates | |||||||||||||||||||
| Refer to Note 4(11). | ||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 14 | Notes to the Company’s financial statements (Cont’d) | |||
| (4) | Revenue and cost of sales | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Revenue from main operations | 12,901,713,333 | 12,797,370,935 | ||
| Revenue from other operations | 198,396,600 | 177,166,683 | ||
| 13,100,109,933 | 12,974,537,618 | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Cost of sales from main operations | 11,010,954,908 | 11,065,887,460 | ||
| Cost of sales from other operations | 186,559,118 | 161,068,277 | ||
| 11,197,514,026 | 11,226,955,737 | |||
| (a) | Revenue and cost of sales from main operations | |||||
| Six months ended 30 June | ||||||
| 2020 | 2019 | |||||
| Revenue from main operations | Cost of sales from main operations | Revenue from main operations | Cost of sales from main operations | |||
| Sales of automobiles | 12,091,989,040 | 10,397,191,187 | 11,636,452,656 | 10,215,567,046 | ||
| Sales of automobile parts | 771,758,926 | 572,162,496 | 1,117,017,837 | 808,310,648 | ||
| Automobile maintenance services | 37,965,367 | 41,601,225 | 43,900,442 | 42,009,766 | ||
| 12,901,713,333 | 11,010,954,908 | 12,797,370,935 | 11,065,887,460 | |||
| (b) | Revenue and cost of sales from other operations | |||||
| Six months ended 30 June | ||||||
| 2020 | 2019 | |||||
| Revenue from other operations | Cost of sales from other operations | Revenue from other operations | Cost of sales from other operations | |||
| Sales of materials | 157,745,817 | 149,930,871 | 130,017,203 | 114,894,018 | ||
| Others | 40,650,783 | 36,628,247 | 47,149,479 | 46,174,259 | ||
| 198,396,600 | 186,559,118 | 177,166,683 | 161,068,277 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 14 | Notes to the Company’s financial statements (Cont’d) | |||||
| (4) | Revenue and cost of sales (Cont’d) | |||||
| (c) | The breakdown of revenue earned in the six months ended 30 June 2020 were as follows: | |||||
| Six months ended 30 June 2020 | ||||||
| Automobiles | Automobile parts | Auto maintenance services | Materials and others | Total | ||
| Revenue from main operations | 12,091,989,040 | 771,758,926 | 37,965,367 | - | 12,901,713,333 | |
| Including: Recognised at a time point | 12,091,989,040 | 771,758,926 | - | - | 12,863,747,965 | |
| Recognised within a certain period | - | - | 37,965,367 | - | 37,965,367 | |
| Revenue from other operations | - | - | - | 198,396,600 | 198,396,600 | |
| 12,091,989,040 | 771,758,926 | 37,965,367 | 198,396,600 | 13,100,109,933 | ||
| (i) | As at 30 June 2020, the amount of revenue corresponding to the performance obligation of the Company that had been contracted but not yet performed or not fulfilled was RMB 104,206,171, which was expected to be recognised between 2020 and 2025. |
| (5) | Investment income | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Investment income from financial assets held for trading | 32,619,541 | 18,446,866 | ||
| Investment income from long-term equity investment under equity method | (3,024,554) | 333,625 | ||
| Investment loss from forward exchange settlement | (1,316,987) | (4,939,846) | ||
| 28,278,000 | 13,840,645 | |||
| There is no significant restriction on the remittance of investment income to the Company. | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020
(All amounts in RMB Yuan unless otherwise stated)
| 1 | Statement of non-recurring profit or loss | |||
| Six months ended 30 June | ||||
| 2020 | 2019 | |||
| Profit or loss on disposal of non-current assets | (25,860,575) | (4,412,233) | ||
| Government grants recognised in profit or loss for the current period | 165,679,468 | 230,279,274 | ||
| Gains and losses arising from changes in fair value of financial assets and liabilities held at fair value through profit or loss, and investment gains and losses from disposal of related financial assets and liabilities | 41,314,596 | 9,950,029 | ||
| Fund occupation fee received from non-financial institutions | 4,740,888 | 5,618,157 | ||
| Net amount of other non-operating income and expenses | (1,400,440) | 239,188 | ||
| 184,473,937 | 241,674,415 | |||
| Effect of income tax | (26,053,489) | (47,882,915) | ||
| Effect of gains and losses on minority interests (net of tax) | - | - | ||
| 158,420,448 | 193,791,500 | |||
| Basis for preparation of statement of non-recurring profit or loss | ||||
| Under the requirements in the Explanatory Announcement No. 1 on Information Disclosure by Companies Offering Securities to the Public - Non-recurring Profit or Loss [2008] from CSRC, non-recurring profit or loss refers to that arises from transactions and events that are not directly relevant to ordinary activities, or that are relevant to ordinary activities, but are extraordinary and not expected to recur frequently that would have an influence on users of financial statements making economic decisions on the financial performance and profitability of an enterprise. | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30JUNE 2020(All amounts in RMB Yuan unless otherwise stated)
| 2 | Return on net assets and earnings per share | ||||||
| Return on weighted average rate net assets (%) | Earnings per share | ||||||
| Basic earnings per share | Diluted earnings per share | ||||||
| Six months ended 30 June | |||||||
| 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||
| Net profit attributable to ordinary shareholders of the Company | 1.96% | 0.57% | 0.24 | 0.07 | 0.24 | 0.07 | |
| Net profit attributable to ordinary shareholders of the Company after deducting non-recurring profit or loss | 0.47% | -1.30% | 0.06 | (0.16) | 0.06 | (0.16) | |
Chapter XI Catalogue on Documents forReference
1. Originals of 2020 Half-year financial statements signed by Chairman, ChiefFinancial Officer and Chief of Finance Department.
2. Originals of all the documents and public announcements disclosed innewspapers designated by CSRC in the first half of 2020.
3. The Half-year Report in the China GAAP.
Board of DirectorsJiangling Motors Corporation, Ltd.August 28, 2020