FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2023 [English translation for reference only. Should there be any inconsistency between theChinese and English versions, the Chinese version shall prevail.] JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY BALANCE SHEETS AS AT 30 JUNE 2023(All amounts in RMB Yuan unless otherwise stated) | Assets | Note | 30 June 2023 Consolidated* | 31 December 2022 Consolidated | 30 June 2023 Company* | 31 December 2022 Company | | Current assets | | | | | | | Cash and cash equivalents | 4(1) | 9,875,434,450 | 8,604,977,725 | 7,481,796,932 | 6,910,646,428 | | Financial assets held for trading | 4(2) | 100,136,000 | - | - | - | | Derivative financial assets | 4(3) | 7,086,761 | 2,972,698 | 7,086,761 | 2,972,698 | | Notes receivable | 4(4) | 174,659 | 742,752,730 | 500,174,659 | 1,099,742,888 | | Accounts receivable | 4(5)、13(1) | 4,392,802,999 | 4,245,541,752 | 3,868,035,170 | 2,368,898,327 | | Financing receivables | 4(6) | 364,021,037 | 376,662,817 | 154,798,531 | 56,868,760 | | Advances to suppliers | 4(7) | 294,535,913 | 277,743,526 | 294,535,913 | 277,278,672 | | Other receivables | 4(8)、13(2) | 75,428,532 | 111,063,372 | 79,012,999 | 128,855,851 | | Inventories | 4(9) | 1,765,496,170 | 2,129,040,820 | 1,765,496,170 | 2,129,040,820 | | Current portion of non-current assets | 4(11) | 14,170,026 | 13,851,634 | 14,170,026 | 13,851,634 | | Other current assets | 4(10) | 1,232,518,771 | 1,362,502,624 | 1,180,999,559 | 1,310,164,197 | | Total current assets | | 18,121,805,318 | 17,867,109,698 | 15,346,106,720 | 14,298,320,275 | | | | | | | | Non-current assets | | | | | | | Long-term receivables | 4(12) | 24,006,049 | 31,148,044 | 24,006,049 | 31,148,044 | | Long-term equity investments | 4(13)、13(3) | 244,589,183 | 248,482,822 | 1,193,140,173 | 1,146,033,812 | | Fixed assets | 4(14) | 5,507,814,029 | 5,446,384,369 | 5,050,472,910 | 4,961,529,936 | | Construction in progress | 4(15) | 612,199,142 | 718,612,190 | 579,352,195 | 688,385,553 | | Right-of-use assets | 4(16) | 213,592,537 | 233,622,890 | 199,060,941 | 232,666,362 | | Intangible assets | 4(17) | 1,516,359,364 | 1,195,005,752 | 1,296,700,786 | 971,966,227 | | Development expenditures | 4(17) | 361,194,976 | 477,233,877 | 361,194,976 | 477,233,877 | | Deferred tax assets | 4(18) | 1,286,685,445 | 1,250,722,193 | 109,924,902 | 235,320,874 | | Total non-current assets | | 9,766,440,725 | 9,601,212,137 | 8,813,852,932 | 8,744,284,685 | | | | | | | | TOTAL ASSETS | | 27,888,246,043 | 27,468,321,835 | 24,159,959,652 | 23,042,604,960 |
JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY BALANCE SHEETS (CONT'D) AS AT 30 JUNE 2023(All amounts in RMB Yuan unless otherwise stated) note：* Unaudited financial indexes | Liabilities and equity | Note | 30 June 2023 Consolidated* | 31 December 2022 Consolidated | 30 June 2023 Company* | 31 December 2022 Company | | Current liabilities | | | | | | | Short-term borrowings | 4(20) | 1,300,000,000 | 1,100,000,000 | 800,000,000 | 1,100,000,000 | | Accounts payable | 4(21) | 8,939,531,087 | 9,015,978,354 | 8,938,374,402 | 9,015,584,820 | | Contract liabilities | 4(22) | 194,672,088 | 152,065,025 | 423,440,567 | 1,011,195 | | Employee benefits payable | 4(23) | 967,168,765 | 915,703,680 | 873,460,304 | 824,364,157 | | Taxes payable | 4(24) | 94,726,465 | 193,249,604 | 93,639,867 | 110,894,972 | | Other payables | 4(25) | 5,903,153,144 | 5,672,708,511 | 2,684,104,044 | 2,418,186,421 | | Current portion of non-current liabilities | 4(26) | 78,126,567 | 72,680,756 | 71,037,193 | 71,491,054 | | Other current liabilities | 4(27) | 385,411,966 | 386,889,542 | 87,017,709 | 29,814,619 | | Total current liabilities | | 17,862,790,082 | 17,509,275,472 | 13,971,074,086 | 13,571,347,238 | | | | | | | | Non-current liabilities | | | | | | | Long-term borrowings | 4(28) | 11,506,059 | 20,858,057 | 11,506,059 | 20,858,057 | | Lease liabilities | 4(29) | 134,278,525 | 193,090,351 | 127,154,897 | 192,887,339 | | Provisions | 4(30) | 246,591,541 | 250,762,589 | - | - | | Deferred income | 4(31) | 64,781,931 | 60,849,643 | 64,781,931 | 60,849,643 | | Long-term employee benefits payable | 4(32) | 49,230,343 | 51,293,000 | 49,004,343 | 51,067,000 | | Deferred tax liabilities | 4(18) | 22,964,666 | 23,305,359 | - | - | | Other non-current liabilities | 4(33) | 116,447,990 | 118,240,580 | - | - | | Total non-current liabilities | | 645,801,055 | 718,399,579 | 252,447,230 | 325,662,039 | | | | | | | | Total liabilities | | 18,508,591,137 | 18,227,675,051 | 14,223,521,316 | 13,897,009,277 | | | | | | | | 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) | (13,484,250) | (13,484,250) | (13,844,250) | (13,844,250) | | Special reserve | 4(37) | 9,394,050 | - | 9,394,050 | - | | Surplus reserve | 4(38) | 431,607,000 | 431,607,000 | 431,607,000 | 431,607,000 | | Retained earnings | 4(39) | 7,486,422,914 | 7,123,038,093 | 7,806,625,046 | 7,025,176,443 | | Total equity attributable to shareholders of the Company | | 9,616,596,204 | 9,243,817,333 | 9,936,438,336 | 9,145,595,683 | | Minority interests | | (236,941,298) | (3,170,549) | - | - | | Total equity | | 9,379,654,906 | 9,240,646,784 | 9,936,438,336 | 9,145,595,683 | | | | | | | | TOTAL LIABILITIES AND EQUITY | | 27,888,246,043 | 27,468,321,835 | 24,159,959,652 | 23,042,604,960 |
JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY INCOME STATEMENTS FOR 2023 FIRST HALF-YEAR(All amounts in RMB Yuan unless otherwise stated) | Item | Note | 2023 First Half-year Consolidated* | 2022 First Half-year Consolidated* | 2023 First Half-year Company* | 2022 First Half-year Company* | | Revenue | 4(40)、13(4) | 15,429,372,309 | 14,222,759,384 | 15,449,037,934 | 13,389,364,818 | | Less: Cost of sales | 4(40)、4(46) 、13(4) | (13,156,439,449) | (12,331,101,754) | (12,862,306,219) | (11,909,476,970) | | Taxes and surcharges | 4(41) | (440,363,547) | (389,826,444) | (434,553,879) | (377,488,847) | | Selling and distribution expenses | 4(42)、4(46) | (655,850,091) | (696,658,422) | (72,461,216) | (83,308,622) | | General and administrative expenses | 4(43)、4(46) | (520,114,941) | (452,056,986) | (470,830,812) | (406,986,891) | | Research and development expenses | 4(44)、4(46) | (748,135,775) | (666,994,373) | (748,135,775) | (666,994,373) | | Financial expenses | 4(45) | 93,306,361 | 80,197,351 | 60,804,106 | 54,389,966 | | Including: Interest expenses | | (17,531,522) | (28,127,051) | (17,378,308) | (28,081,558) | | Interest income | | 116,473,977 | 116,152,161 | 83,081,729 | 90,066,994 | | Add: Other income | 4(48) | 358,643,954 | 261,059,234 | 356,955,122 | 260,767,899 | | Investment income | 4(49)、13(5) | (13,413,788) | (21,941,623) | (12,981,958) | (21,583,903) | | Including: Share of profit of associates and joint ventures | | (3,893,639) | (4,151,633) | (3,893,639) | (4,151,633) | | Gains on changes in fair value | 4(50) | 4,250,063 | 5,030,223 | 4,114,063 | 5,272,552 | | Credit impairment losses | 4(47) | (2,335,878) | 14,373,447 | (2,164,265) | 6,759,141 | | Gains on disposal of assets | 4(51) | (293,630) | 395,561,300 | (236,732) | 395,626,098 | | Operating profit | | 348,625,588 | 420,401,337 | 1,267,240,369 | 646,340,868 | | Add: Non-operating income | 4(52) | 7,042,517 | 2,019,528 | 6,143,130 | 152,468 | | Less: Non-operating expenses | 4(53) | (585,439) | (506,418) | (536,187) | (501,138) | | Total profit | | 355,082,666 | 421,914,447 | 1,272,847,312 | 645,992,198 | | Less: Income tax expenses | 4(54) | 91,534,142 | 8,935 | (125,395,973) | (44,469,043) | | Net profit | | 446,616,808 | 421,923,382 | 1,147,451,339 | 601,523,155 | | Classified by continuity of operations | | | | | | | Net profit from continuing operations | | 446,616,808 | 421,923,382 | 1,147,451,339 | 601,523,155 | | Net profit from discontinued operations | | - | - | - | - | | Classified by ownership of the equity | | | | | | | Minority interests | | (282,770,749) | (30,457,640) | - | - | | Attributable to shareholders of the Company | | 729,387,557 | 452,381,022 | 1,147,451,339 | 601,523,155 | | Other comprehensive income, net of tax | | - | - | - | - | | Attributable to shareholders of the Company | | | | | | | Other comprehensive income items which will not be reclassified to profit or loss | | | | | | | Changes arising from remeasurement of defined benefit plan | 4(36) | - | - | - | - | | Attributable to minority interests | | - | - | - | - | | Total comprehensive income | | 446,616,808 | 421,923,382 | 1,147,451,339 | 601,523,155 | | Attributable to shareholders of the Company | | 729,387,557 | 452,381,022 | 1,147,451,339 | 601,523,155 | | Attributable to minority interests | | (282,770,749) | (30,457,640) | - | - |
| Earnings per share | | | | | | | Basic earnings per share (RMB Yuan) | 4(55) | 0.84 | 0.52 | —— | —— | | Diluted earnings per share (RMB Yuan) | 4(55) | 0.84 | 0.52 | —— | —— |
note：* Unaudited financial indexes JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS FOR 2023 FIRST HALF-YEAR(All amounts in RMB Yuan unless otherwise stated) | Item | Note | 2023 First Half-year Consolidated* | 2022 First Half-year Consolidated* | 2023 First Half-year Company* | 2022 First Half-year Company* | | Cash flows generated from/(uesd in) operating activities | | | | | | | Cash received from sales of goods or rendering of services | | 17,406,530,446 | 13,881,647,926 | 16,222,462,727 | 13,084,629,718 | | Refunds of taxes | | 304,302,316 | 186,169,752 | 304,302,316 | 139,724,259 | | Cash received relating to other operating activities | 4(56) | 405,291,238 | 345,024,561 | 387,595,895 | 312,654,885 | | Sub-total of cash inflows | | 18,116,124,000 | 14,412,842,239 | 16,914,360,938 | 13,537,008,862 | | Cash paid for goods and services | | -12,822,290,581 | -13,805,191,534 | -12,450,373,527 | -13,336,027,601 | | Cash paid to and on behalf of employees | | -1,214,500,391 | -1,339,385,986 | -1,096,589,996 | -1,232,176,140 | | Payments of taxes and surcharges | | -1,103,139,617 | -1,243,506,029 | -1,073,581,827 | -1,055,447,311 | | Cash paid relating to other operating activities | 4(56) | -1,319,045,074 | -1,356,305,165 | -771,371,068 | -736,258,757 | | Sub-total of cash outflows | | -16,458,975,663 | -17,744,388,714 | -15,391,916,418 | -16,359,909,809 | | Net cash flows generated from/(uesd in) operating activities | 4(57) | 1,657,148,337 | -3,331,546,475 | 1,522,444,520 | -2,822,900,947 | | Cash flows (uesd in)/generated from investing activities | | | | | | | Cash received from disposal of investments | | - | 200,000,000 | - | - | | Cash received from returns on investments | | - | 1,523,836 | - | - | | Net cash received from disposal of fixed assets, intangible assets and other long term assets | | 795,730 | 781,145,312 | 1,676,649 | 781,143,451 | | Cash received from disposal of subsidiaries and other business units | | 36,000,000 | 63,700,000 | 36,000,000 | 63,700,000 | | Cash received relating to other investing activities | 4(56) | 103,235,093 | 125,467,180 | 76,225,119 | 102,590,963 | | Sub-total of cash inflows | | 140,030,823 | 1,171,836,328 | 113,901,768 | 947,434,414 | | Cash paid to acquire fixed assets, intangible assets and other long-term assets | | -698,245,427 | -619,241,914 | -696,001,267 | -615,965,224 | | Cash paid to acquire investments | | -100,000,000 | -100,000,000 | -53,167,203 | -51,938,730 | | Cash paid relating to other investing activities | | -88,707 | -11,457,408 | -88,707 | -11,457,408 | | Sub-total of cash outflows | | -798,334,134 | -730,699,322 | -749,257,177 | -679,361,362 | | Net cash flows (uesd in)/generated from investing activities | | -658,303,311 | 441,137,006 | -635,355,409 | 268,073,052 | | Cash flows (uesd in)/generated from financing activities | | | | | | | Cash received from absorbing investments | | 49,000,000 | 49,000,000 | - | - | | Including: cash received by the subsidiary from absorbing minority shareholders' investment | | 49,000,000 | 49,000,000 | - | - | | Cash received from borrowings | | 2,586,819,167 | 2,378,749,167 | 2,091,194,167 | 2,378,749,167 | | Sub-total of cash inflows | | 2,635,819,167 | 2,427,749,167 | 2,091,194,167 | 2,378,749,167 | | Cash repayments of borrowings | | -2,406,409,044 | -1,300,208,436 | -2,406,409,044 | -1,300,208,436 | | Cash payments for distribution of dividends, profits or interest expenses | | -3,335,711 | -168,968 | -3,335,711 | -168,968 | | Cash paid relating to other financing activities | 4(56) | -509,449,108 | -6,754,924 | -5,865,317 | -6,420,903 | | Sub-total of cash outflows | | -2,919,193,863 | -1,307,132,328 | -2,415,610,072 | -1,306,798,307 |
| Net cash flows (uesd in)/generated from financing activities | | -283,374,696 | 1,120,616,839 | -324,415,905 | 1,071,950,860 | | Effect of foreign exchange rate changes on cash and cash equivalents | | - | - | - | - | | Net increase/(decrease) in cash and cash equivalents | 4(57) | 715,470,330 | -1,769,792,630 | 562,673,206 | -1,482,877,035 | | Add: Cash and cash equivalents at beginning of year | 4(57) | 8,543,193,654 | 9,569,051,314 | 6,863,577,337 | 7,706,280,711 | | Cash and cash equivalents at end of period | 4(57) | 9,258,663,984 | 7,799,258,684 | 7,426,250,543 | 6,223,403,676 |
note：* Unaudited financial indexes JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(All amounts in RMB Yuan unless otherwise stated) First half of 2023 | Item | Note | Attributable to shareholders of the parent company | Minority interests | Total equity | | Share capital | Capital surplus | Other comprehensive income | Special reserve | Surplus reserves | Retained earnings | | Balance at 1 January 2023 | | 863,214,000 | 839,442,490 | (13,484,250) | - | 431,607,000 | 7,123,038,093 | (3,170,549) | 9,240,646,784 | | Movements for the six months ended 30 June 2023* | | - | - | - | 9,394,050 | - | 363,384,821 | (233,770,749) | 139,008,122 | | Total comprehensive income | | | | | | | | | | | Net profit/(loss) | | - | - | - | - | - | 729,387,557 | (282,770,749) | 446,616,808 | | Other comprehensive income | | - | - | - | - | - | - | - | - | | Total comprehensive income for the year | | - | - | - | - | - | 729,387,557 | (282,770,749) | 446,616,808 | | Capital contributed by owners and capital decreases | | | | | | | | | | | Capital invested by shareholders | | - | - | - | - | - | - | 49,000,000 | 49,000,000 | | Profit distribution | | | | | | | | | | | Distribution to shareholders | 4(39) | - | - | - | - | - | (366,002,736) | - | (366,002,736) | | Special reserves | | | | | | | | | | | Provided | | - | - | - | 12,877,704 | - | - | - | 12,877,704 | | Ultilized | | - | - | - | (3,483,654) | - | - | - | (3,483,654) | | Balance at 30 June 2023* | | 863,214,000 | 839,442,490 | (13,484,250) | 9,394,050 | 431,607,000 | 7,486,422,914 | (236,941,298) | 9,379,654,906 |
JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONT’D)(All amounts in RMB Yuan unless otherwise stated) First half of 2022 | Item | Note | Attributable to shareholders of the parent company | Minority interests | Total equity | | Share capital | Capital surplus | Other comprehensive income | Surplus reserves | Retained earnings | | Balance at 1 January 2022 | | 863,214,000 | 839,442,490 | (16,422,750) | 431,607,000 | 6,437,603,849 | - | 8,555,444,589 | | Movements for the six months ended 30 June 2022* | | - | - | - | - | 222,766,098 | 18,542,360 | 241,308,458 | | Total comprehensive income | | | | | | | | | | Net profit | | - | - | - | - | 452,381,022 | (30,457,640) | 421,923,382 | | Other comprehensive income | | - | - | - | - | - | - | - | | Total comprehensive income for the year | | - | - | - | - | 452,381,022 | (30,457,640) | 421,923,382 | | Capital contributed by owners and capital decreases | | | | | | | | | | Capital invested by shareholders | | - | - | - | - | - | 49,000,000 | 49,000,000 | | Profit distribution | | | | | | | | | | Distribution to shareholders | 4(39) | - | - | - | - | (229,614,924) | - | (229,614,924) | | Balance at 30 June 2022* | | 863,214,000 | 839,442,490 | (16,422,750) | 431,607,000 | 6,660,369,947 | 18,542,360 | 8,796,753,047 |
note：* Unaudited financial indexes JIANGLING MOTORS CORPORATION, LTD.COMPANY STATEMENT OF CHANGES IN EQUITY(All amounts in RMB Yuan unless otherwise stated) First half of 2023 | Item | Note | Share capital | Capital surplus | Other comprehensive income | Special reserve | Surplus reserves | Retained earnings | Total equity | | Balance at 1 January 2023 | | 863,214,000 | 839,442,490 | (13,844,250) | - | 431,607,000 | 7,025,176,443 | 9,145,595,683 | | Movements for the six months ended 30 June 2023* | | - | - | - | 9,394,050 | - | 781,448,603 | 790,842,653 | | Total comprehensive income | | | | | | | | | | Net profit | | - | - | - | - | - | 1,147,451,339 | 1,147,451,339 | | Other comprehensive income | | - | - | - | - | - | - | - | | Total comprehensive income for the year | | - | - | - | - | - | 1,147,451,339 | 1,147,451,339 | | Profit distribution | | | | | | | | | | Distribution to shareholders | 4(39) | - | - | - | - | - | (366,002,736) | (366,002,736) | | Special reserves | | | | | | | | | | Provided | | - | - | - | 12,877,704 | - | - | 12,877,704 | | Ultilized | | - | - | - | (3,483,654) | - | - | (3,483,654) | | Balance at 30 June 2023* | | 863,214,000 | 839,442,490 | (13,844,250) | 9,394,050 | 431,607,000 | 7,806,625,046 | 9,936,438,336 |
JIANGLING MOTORS CORPORATION, LTD.COMPANY STATEMENT OF CHANGES IN EQUITY (CONT’D)(All amounts in RMB Yuan unless otherwise stated) First half of 2022 | Item | Note | Share capital | Capital surplus | Other comprehensive income | Surplus reserves | Retained earnings | Total equity | | Balance at 1 January 2022 | | 863,214,000 | 839,442,490 | (16,684,500) | 431,607,000 | 6,259,291,734 | 8,376,870,724 | | Movements for the six months ended 30 June 2022* | | - | - | - | - | 371,908,231 | 371,908,231 | | Total comprehensive income | | | | | | | | | Net profit | | - | - | - | - | 601,523,155 | 601,523,155 | | Other comprehensive income | | - | - | - | - | - | - | | Total comprehensive income for the year | | - | - | - | - | 601,523,155 | 601,523,155 | | Profit distribution | | | | | | | | | Distribution to shareholders | 4(39) | - | - | - | - | (229,614,924) | (229,614,924) | | Balance at 30 June 2022* | | 863,214,000 | 839,442,490 | (16,684,500) | 431,607,000 | 6,631,199,965 | 8,748,778,955 |
note：* Unaudited financial indexes NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 1 | General information | | | | Jiangling Motors Corporation, Ltd. (hereinafter “the Company”) is a Sino-foreign joint stock enterprise established under the approval of Hong ban (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(34). | | | | As at 30 June 2023, the Company’s paid-in capital totalled RMB863,214,000, with par value of RMB1 per share. | | | | The business scope of the Company and its subsidiaries (hereinafter “the Group”) includes production and sales of automobile assemblies such as automobiles, special (modified) vehicles, engines and chassis and other automobile parts, and provision of related after-sales services; retail and wholesale of imported FORD E series automobiles of Ford Motor (China) Co., Ltd. as the dealer; import and export of automobiles and parts; dealership of used cars; provision of enterprise management and consulting services related to production and sales of automobiles. | | | | Subsidiaries included in the consolidation scope for the current period are detailed in Note 5. | | | | These financial statements were authorised for issue by the Company's Board of Directors on August 28 2023. | | | | 2 | Summary of significant accounting policies and accounting estimates | | | | The Group determines specific accounting policies and estimates based on the features of its production and operation, which mainly comprise the measurement of expected credit losses (“ECL”) on receivables (Note 2(8)), valuation of inventories (Note 2(9)), depreciation of fixed assets and amortisation of intangible assets and right-of-use assets (Note 2(11), (14), (22)), criteria for capitalisation of development expenditures (Note 2(14)), recognition and measurement of revenue (Note 2(19)), etc. Key judgements and critical accounting estimates and key assumptions applied by the Group on the determination of significant accounting policies are set out in Note 2(25). |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (1) | Basis of preparation | | | | The financial statements are prepared in accordance with the Accounting Standard 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. These financial statements have been 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 2023 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 2023 and their financial performance, cash flows and other information for the period then ended. | | | | (3) | Fiscal year | | | | The Company’s fiscal year starts on 1 January and ends on 30 June. | | | | (4) | Recording currency | | | | The recording currency of the company and its subsidiaries 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. | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (5) | Preparation of consolidated financial statements (Cont'd) | | | | 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. | | | | All significant intra-group balances, transactions and unrealised profits are eliminated in the consolidated financial statements. The portion of subsidiaries’ shareholders' equity and the portion of subsidiaries’ net profits and losses and comprehensive income for the period not attributable to the Company are recognised as minority interests, net profit attributed to minority interests and total comprehensive income attributed to minority interests, and presented separately in the consolidated financial statements under shareholders' equity, net profits and total comprehensive income respectively. If the subsidiaries’ loss for the current period attributed to the minority shareholders exceeds their share in the opening shareholder’s equity, the excess will be deducted against the minority interests. Unrealised profits and losses resulting from the sales 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 sales 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 sales 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. | | | | The Group remeasure the remaining investment held at its fair value in the consolidated statement of financial position when the control is lost because of the partially disposal of the equity or other reasons. The difference between the consideration of the disposal as well as the fair value of the remaining investment and the share of net assets of the former subsidiary calculated based on the original share since the acquisition date as well as the good will is recognised in investment income in the period of control lost. In addition, the other comprehensive income and other changes in owner's equity related to the investment of the former subsidiary, are reclassified to profit or loss when the control is lost, except for the changes arising from remeasurement of net liabilities or net assets of defined benefit, the accumulated changes in fair value from the equity instruments not held for trading and designated as financial assets at fair value through other comprehensive income by the investee. | | | | (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. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (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. |
| (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: | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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 and long-term receivables, etc. The Group presents long-term receivables that are due within one year from the balance sheet date (including one year) as non-current assets due within one year. |
| Measured at fair value through other comprehensive income: | | | | The objective of the Group’s business model is to hold the financial assets to both collect the contractual cash flows and sell such financial assets, and the contractual cash flow characteristics are consistent with a basic lending arrangement. Such financial assets are measured at fair value through other comprehensive income, except for the impairment gains or losses, foreign exchange gains and losses, and interest income calculated using the effective interest method which are recognised in profit or loss for the current period. Such financial assets mainly include financing receivables, etc. | | | | Measured at fair value through profit or loss: | | | | Debt instruments held by the Group that are not divided into those at amortised cost, or those measured at fair value through other comprehensive income, are measured at fair value through profit or loss. At initial recognition, the Group does not designate a portion of financial assets as at fair value through profit or loss to eliminate or significantly reduce an accounting mismatch. Financial assets that are due in more than one year as from the balance sheet date and are expected to be held for over one year are included in other non-current financial assets, and the others are included in financial assets held for trading. | | |
| 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) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (8) | Financial instruments (Cont’d) | | | | (a) | Financial assets (Cont’d) | | | | (ii) | Impairment | | | | Loss provision for financial assets at amortised cost and receivables financing at fair value through other comprehensive income is recognised on the basis of ECL. | | | | Giving consideration to reasonable and supportable information that is related to past events, current conditions and forecasts of future economic conditions and is available without undue cost or effort at the balance sheet date, 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. | | | | For notes receivable, accounts receivable and financing receivables arising from sales of goods and rendering of services in the ordinary course of operating activities, the Group recognises the lifetime ECL regardless of whether there exists a significant financing component. | | | | Except for the above-mentioned notes receivable, accounts receivable and financing receivables, as at each balance sheet date, the ECL of financial instruments at different stages are measured respectively. 12-month ECL provision is recognised for financial instruments in Stage 1 that have not had a significant increase in credit risk since initial recognition; lifetime ECL provision is recognised for financial instruments in Stage 2 that have had a significant increase in credit risk yet without credit impairment since initial recognition; and lifetime ECL provision is recognised for financial instruments in Stage 3 that have had credit impairment since initial recognition. | | | | For the financial instruments with low credit risk on the balance sheet date, the Group assumes there is no significant increase in credit risk and identifies it in Stage 1 since initial recognition and recognises the 12-month ECL provision. | | | | For the financial instruments in Stage 1 and Stage 2, 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). | | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (8) | Financial instruments (Cont’d) | | | | (a) | Financial assets (Cont’d) | | | | (ii) | Impairment (Cont’d) | | | | In case the ECL of an individually assessed financial asset can be evaluated with reasonable cost, the Group determines the ECL based on impairment assessment of an individual financial asset. In case the ECL of an individually assessed financial asset cannot be evaluated with reasonable cost, the Group divides the receivables into certain groupings based on credit risk characteristics, and calculates the ECL for the groupings. Basis for determining groupings and related provision methods are as follows: | | | | Grouping - Bank acceptance notes | State-owned banks and joint stock banks | | Grouping - Trade acceptance notes | Customers purchasing using trade acceptance notes | | Grouping - Sales of general automobiles | Customers of general automobiles | | Grouping - Sales of new energy automobiles | Customers of new energy automobiles | | Grouping - Sales of automobile parts | Customers of automobile parts | | Grouping - Other receivables | Other receivables with the same nature | | | | For accounts receivable classified as a portfolio and financing of notes receivable and receivables resulting from daily operating activities such as sale of goods and provision of services, the Group calculates the ECL with reference to historical credit losses experience, current conditions and forecasts of future economic conditions, and based on the exposure at default and the lifetime ECL rate. For other notes receivable, financing receivables and other receivables classified into groupings, the Group calculates the ECL with reference to the historical credit loss experience, current conditions and forecasts of future economic conditions, and based on the exposure at default and the 12-month or lifetime ECL rate. | | | | The Group recognises the loss provision made or reversed into profit or loss for the current period. For debt instruments held at fair value through other comprehensive income, the Group adjusts other comprehensive income while the impairment loss or gain is recognised in profit or loss for the current period. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (8) | Financial instruments (Cont’d) | | | | (a) | Financial assets (Cont’d) | | | | (iii) | Derecognition | | | | A financial asset is derecognised when: (i) the contractual rights to the cash flows from the financial asset expire, (ii) the financial asset has been transferred and the Group transfers substantially all the risks and rewards of ownership of the financial asset to the transferee, or (iii) the financial asset has been transferred and the Group has not retained control of the financial asset, although the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset. When a financial asset is derecognised, the difference between the carrying amount and the sum of the consideration received and the cumulative changes in fair value that are previously recognised directly in other comprehensive income is recognised in profit or loss for the current period. | | | | (b) | Financial liabilities | | | | Financial liabilities are classified as financial liabilities at amortised cost and financial liabilities at fair value through profit or loss at initial recognition. Financial liabilities of the Group mainly comprise financial liabilities at amortised cost, including notes payable, accounts payable, other payables, borrowings, etc. Such financial liabilities are initially recognised at fair value, net of transaction costs incurred, and subsequently measured using the effective interest method. Financial liabilities that are due within one year (inclusive) are classified as current liabilities; those with maturities over one year but are due within one year (inclusive) as from the balance sheet date are classified as current portion of non-current liabilities. Others are classified as non-current liabilities. | | | | A financial liability is derecognised or partly derecognised when the underlying present obligation is discharged or partly discharged. The difference between the carrying amount of the derecognised part of the financial liability and the consideration paid is recognised in profit or loss for the current period. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (8) | Financial instruments (Cont’d) | | | | (c) | Determination of fair value of financial instruments | | | | The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the active market. The fair value of a financial instrument that is not traded in an active market is determined by using a valuation technique. In valuation, the Group adopts valuation techniques applicable in the current situation and supported by adequate available data and other information, selects inputs with the same characteristics as those of assets or liabilities considered in relevant transactions of assets or liabilities by market participants, and gives priority to the use of relevant observable inputs. When relevant observable inputs are not available or feasible, unobservable inputs are adopted. |
| (9) | Inventories | | | | (a) | Classification | | | | Inventories include raw materials, work-in-process, finished goods, low-value consumables, materials in transit and materials on consignment, etc., and are measured at the lower of cost or net realizable value. | | | | (b) | Costing of inventories | | | | Cost is determined using the weighted average method. The cost of finished goods and work in progress comprise raw materials, direct labour and systematically allocated production overhead based on the normal production capacity. | | | | (c) | Basis for determining net realisable value of inventories and method for making provision for inventories | | | | Provision for inventories is determined at the excess amount of the carrying amounts of the inventories over their net realisable value. Net realisable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs to completion, estimated contract fulfilment costs and estimated costs necessary to make the sale and related taxes. | | | | (d) | The Group adopts the perpetual inventory system. | | | | (e) | Amortisation method 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 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (10) | Long-term equity investments | | | | Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries, and the Group’s long-term equity investments in its associates. | | | | Subsidiaries are the investees over which the Company is able to exercise control. Associates are the investees that the Group has a significant influence on their financial and operating decisions. | | | | Investments in subsidiaries are presented using the cost method in the Company’s financial statements, and adjusted to the equity method when preparing the consolidated financial statements. Investments in associates are accounted for using the equity method. | | | | (a) | Determination of investment cost | | | | For long-term equity investments acquired through a business combination involving enterprises under common control, the investment cost shall be the absorbing party’s share of the carrying amount of owners’ equity of the party being absorbed in the consolidated financial statements of the ultimate controlling party at the combination date; for long-term equity investments acquired through a business combination not involving enterprises under common control, the investment cost shall be the combination cost. For long-term equity investments acquired not through a business combination, such as long-term equity investments acquired by payment in cash, the initial investment cost shall be the purchase price actually paid; for long-term equity investments acquired by issuing equity securities, the initial investment cost shall be the fair value of the equity securities issued. | | | | (b) | Subsequent measurement and recognition of profit or loss | | | | Long-term equity investments accounted for using the cost method are measured at the initial investment cost. Cash dividend or profit distribution declared by an investee is recognised as investment income into profit or loss for the current period. | | | | For long-term equity investments accounted for using the equity method, 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 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (10) | Long-term equity investments (Cont’d) | | | | (b) | Subsequent measurement and recognition of profit or loss (Cont’d) | | | | For long-term equity investments accounted for using the equity method, the Group recognises the investment income or losses according to its share of net profit or loss of the investee. The Group does not recognise further losses when the carrying amounts of the long-term equity investment 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 the investee 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, 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 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (11) | Fixed assets (Cont’d) | | | | (a) | Recognition and initial measurement of fixed assets (Cont’d) | | | | Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable that the associated economic benefits will flow to the Group and the related cost can be reliably measured. The carrying amount of the replaced part is derecognised. All the other subsequent expenditures are recognised in profit or loss for the period in which they are incurred. | | | | (b) | Depreciation methods of fixed assets | | | | Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their estimated net residual values over their estimated useful lives. For the fixed assets that have been provided for impairment loss, the related depreciation charge is prospectively determined based upon the adjusted carrying amounts over their remaining useful lives. | | | | The estimated useful lives, the estimated net residual values expressed as a percentage of cost and the annual depreciation rates of fixed assets are as follows: | | | | | Estimated useful 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% | | Vehicles | 2 to 10 years | 4%-22.32% | 9.6% to 42.2% | | Moulds | 5 years | - | 20% | | Electronic and other equipment | 5 to 7 years | 4% | 13.7% to 19.2% | | | | The estimated useful life and the estimated net residual value of a fixed asset and the depreciation method applied to the asset are reviewed and adjusted as appropriate at each year-end. | | | | (c) | The carrying amount of a fixed asset is reduced to the recoverable amount when the recoverable amount is below the carrying amount (Note 2(15)). | | | | (d) | Disposal of fixed assets | | | | A fixed asset is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The amount of proceeds from disposals on sale, transfer, retirement or damage of a fixed asset net of its carrying amount and related taxes and expenses is recognised in profit or loss for the current period. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (12) | Construction in progress | | | | Construction in progress is measured at actual cost. Actual cost comprises construction costs, installation costs, borrowing costs that are eligible for capitalisation and other costs necessary to bring the construction in progress 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 and construction of qualifying assets is determined by the interest expenses incurred in the current period less interest income of the unused borrowings deposited at banks 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, 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 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (14) | Intangible assets (Cont’d) | | | | (b) | Software use fees | | | | Software use fees are amortised on a straight-line basis over the estimated useful life of 5 years. | | | | (c) | Non-patent technologies | | | | Non-patent technologies are amortised on the straight-line basis over the estimated useful life of 5 to 7 years. | | | | (d) | Periodical review of useful life and amortisation method | | | | For an intangible asset with a finite useful life, review of its useful life and amortisation method is performed at each year-end, with adjustment made appropriately. | | | | (e) | Research and development | | | | The expenditure on an internal research and development project is classified into expenditure on the research phase and expenditure on the development phase based on its nature and whether there is material uncertainty that the research and development activities can form an intangible asset at the end of the project. | | | | Expenditure on the research phase related to planned survey, evaluation and selection for research on manufacturing technique of automobile products is recognised in profit or loss in the period in which it is incurred. Prior to mass production, expenditure on the development phase related to the design and testing phase in regard 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 expenses 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 that the asset is ready for its intended use. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (14) | Intangible assets (Cont’d) | | | | (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)). | | | | (15) | Impairment of long-term assets | | | | Fixed assets, construction in progress, right-of-use assets, intangible assets with finite useful lives and long-term equity investments in subsidiaries and associates are tested for impairment if there is any indication that the assets may be impaired at the balance sheet date; intangible assets that are not yet available for their intended use are tested for impairment at least once a year, irrespective of whether there is any indication of impairment. If the result of the impairment test indicates that the recoverable amount of an asset is less than its carrying amount, a provision for impairment and an asset impairment loss are recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less disposal costs and the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognised on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows. | | | | Goodwill that is separately presented in the financial statements is tested at least once a year for impairment, irrespective of whether there is any indication that it may be impaired. In conducting the test, the carrying amount of goodwill is allocated to the related asset group or groups of asset groups which are expected to benefit from the synergies of the business combination. If the result of the test indicates that the recoverable amount of an asset group or a group of asset groups, including the allocated goodwill, is lower than its carrying amount, the corresponding impairment loss is recognised. The impairment loss is first deducted from the carrying amount of goodwill that is allocated to the asset group or group of asset groups, and then deducted from the carrying amounts of other assets within the asset group or group of asset groups in proportion to the carrying amounts of assets other than goodwill. | | | | Once the above asset impairment loss is recognised, it will not be reversed for the value recovered in the subsequent periods. | | | | (16) | Employee benefits | | | | Employee benefits refer to all forms of consideration or compensation given by the Group in exchange for service rendered by employees or for termination of employment relationship, which include short-term employee benefits, post-employment benefits, termination benefits, etc. | | | | (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 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (16) | Employee benefits (Cont'd) | | | | (b) | Post-employment benefits | | | | The Group classifies post-employment benefit plans as either defined contribution plans or defined benefit plans. Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into a separate fund and will have no obligation to pay further contributions; and defined benefit plans are post-employment benefit plans other than defined contribution plans. During the reporting period, premiums or contributions on basic pensions and unemployment insurance paid for employees belong to defined contribution plans; supplementary retirement benefits for employees are defined benefit plans. | | | | (i) | Defined contribution plans | | | | Basic pensions | | | | The Group’s employees participate in the basic pension plan set up and administered by local authorities of Ministry of Human Resources and Social Security. Monthly payments of premiums on the basic pensions are calculated according to the bases and percentage prescribed by the relevant local authorities. When employees retire, the relevant local authorities are obliged to pay the basic pensions to them. The amounts based on the above calculations are recognised as liabilities in the accounting period in which the service has been rendered by the employees, with a corresponding charge to the profit or loss for the current period or the cost of relevant assets. | | | | (ii) | Defined benefit plans | | | | The Group also provides employees with supplementary retirement benefits in addition to the insurance system prescribed by the State. Such supplementary retirement benefits belong to defined benefit plans. The defined benefit liabilities recognised on the balance sheet represent the present value of defined benefit obligations less the fair value of the plan assets. The defined benefit obligations are calculated annually by an independent actuary using projected unit credit method at the interest rate of 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 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (16) | Employee benefits (Cont'd) | | | | (c) | Termination benefits (Cont’d) | | | | Early retirement benefits | | | | The Group offers early retirement benefits to those employees who accept early retirement arrangements. The early retirement benefits refer to the salaries and social security contributions to be paid to and for the employees who accept voluntary retirement before the normal retirement date prescribed by the State, as approved by the management. The Group pays early retirement benefits to those early retired employees from the early retirement date until the normal retirement date. The Group accounts for the early retirement benefits in accordance with the treatment for termination benefits, in which the salaries and social security contributions to be paid to and for the early retired employees from the off-duty date to the normal retirement date are recognised as liabilities with a corresponding charge to the profit or loss for the current period. The differences arising from the changes in the respective actuarial assumptions of the early retirement benefits and the adjustments of benefit standards are recognised in profit or loss in the period in which they occur. | | | | The termination benefits expected to be settled within one year since the balance sheet date are classified as employee benefits payable. | | | | (17) | Dividend distribution | | | | Cash dividends are recognised as liabilities in the period in which the dividends are approved at the shareholders’ meeting. | | | | (18) | Provisions | | | | Provisions for product warranties, compensation to suppliers, etc. are recognised when the Group has a present obligation, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be measured reliably. | | | | A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factors on a contingency, such as the risks, uncertainties and the time value of money, are taken into account as a whole in reaching the best estimate of a provision. Where the effect of the time value of money is material, the best estimate is determined by discounting the related future cash outflows. The increase in the discounted amount of the provision arising from passage of time is recognised as interest expense. | | | | The carrying amount of provisions is reviewed at each balance sheet date and adjusted to reflect the current best estimate. | | | | The provisions expected to be settled within one year since the balance sheet date are classified as current liabilities. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (19) | Revenue | | | | The Group sells automobiles and automobile parts to distributors or end customers. In addition, the Group also provides customers with auto maintenance and additional quality warranty services. The Group recognises revenue at the amount of the consideration that is entitled to be charged by the Group as expected when the customer obtains control over relevant goods or services. | | | | (a) | Sale of automobiles and automobile parts to distributors and end customers | | | | The Group manufactures automobiles and automobile parts and sells such products to distributors and end customers. According to the contract, the delivery is completed after the products are delivered at the contracted delivery location and acceptance by both parties. The Group recognises the revenue at the timing of delivery completion. Where two or more obligations are included in a contract between the Group and the customers, at the beginning date of the contract, the Group allocates the transaction price to individual obligation in the relative proportion to the individual selling prices of products or services committed in each individual obligation. When the individual selling price is unobservable, the Group makes reasonable estimates on the individual selling price with comprehensive consideration to all available information, and by using market adjustment method, cost plus method, etc. The credit periods granted by the Group to distributors and end customers are generally within one year, which is consistent with the industry practice, and there is no significant financing component. The Group provides product warranties for automobiles and automobile parts as required by laws and regulations, and recognises the corresponding provisions (Note 2(18)). The Group provides distributors and end customers with sales discounts based on sales volume, and related revenue is recognised at contract consideration net of the discount amount estimated based on historical experience and using the expected value method. | | | | (b) | Rendering of services | | | | The Group provides customers with automobile maintenance and additional quality warranty services, and the revenue is recognised based on the progress of service provision within a certain period. According to the nature of the service provided, the performance progress is determined in accordance with the value of the labour provided to the customer. | | | | When the Group recognises revenue based on the stage of completion, the amount with unconditional collection right obtained by the Group is recognised as accounts receivable, and the rest is recognised as contract assets. Meanwhile, loss provision for accounts receivable and contract assets are recognised on the basis of ECL (Note 2(8)). If the contract price received or receivable exceeds the amount for the completed service, the excess portion will be recognised as contract liabilities. Contract assets and contract liabilities under the same contract are presented on a net basis. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (20) | Government grants | | | | Government grants refer to the monetary or non-monetary assets obtained by the Group from the government at no consideration, 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 in reporting the related expenses; government grants related to income that compensate incurred costs, expenses or losses are recognised in profit or loss directly in the current period. | | | | The Group applies the presentation method consistently to the similar government grants in the financial statements. | | | | Government grants that are related to ordinary activities are included in operating profit, otherwise, they are recorded in non-operating income. | | | | The Group recorded at the actual amount of borrowings when received the loans at policy-based preferential interest rates received and the related borrowing costs are calculated on the basis of the principal amount borrowed and the preferential interest rate under the policy. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (21) | Deferred tax assets and deferred tax liabilities | | | | Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differences arising between the tax bases of assets and liabilities and their carrying amounts (temporary differences). Deferred tax asset is recognised for the deductible losses that can be carried forward to subsequent years for deduction of the taxable profit in accordance with the tax laws. No deferred tax liability is recognised for a temporary difference arising from the initial recognition of goodwill. No deferred tax asset or deferred tax liability is recognised for the temporary differences resulting from the initial recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or deductible loss). 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 taxpayer within the Group and the same taxation authority; and ? that taxpayer 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 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (22) | Leases | | | | A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. | | | | The Group as the lessee | | | | At the commencement date, the Group shall recognise the right-of-use asset and measure the lease liabilities at the present value of the lease payments that are not paid at that date. Lease payments include fixed payments, the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and payments of penalties for terminating the lease if the lessee exercises an option to terminate the lease. Variable lease payments in proportion to sales are excluded from lease payments and recognised in profit or loss as incurred. Lease liabilities that are due within one year (inclusive) as from the balance sheet date are included in the current portion of non-current liabilities. | | | | The Group's right-of-use assets represent leased buildings. Right-of-use assets are measured initially at cost which comprises the amount of the initial measurement of lease liabilities, any lease payments made at or before the commencement date and any initially direct costs, less any lease incentives received. If it is reasonably probable that the Group will obtain ownership of the underlying asset by the end of the lease term, the asset is depreciated over its remaining useful life; otherwise the asset is depreciated over the shorter of the lease term and its remaining useful life. The carrying amounts of the right-of- use assets are reduced to the recoverable amounts when the recoverable amounts are below their carrying amounts (Note 2(15)). | | | | For short-term leases with a term of 12 months or less and leases of an individual asset (when new) of low value, the Group may, instead of recognising right-of-use assets and lease liabilities, recognise the lease payments in the cost of the underlying assets or in profit or loss for the current period on a straight-line basis over the lease term. | | | | The Group shall account for a lease modification as a separate lease if both: (1) the modification extends the scope of the lease by adding the right to use one or more underlying assets; (2) the increased consideration is equivalent to the amount of the individual price of the expanded part of the lease scope adjusted according to the contract conditions. | | | | For a lease modification that is not accounted for as a separate lease, the Group shall redetermine the lease term at the effective date of the lease modification, and remeasure the lease liability by discounting the revised lease payments using a revised discount rate, except for the simplified method for contract changes by the regulations of the Ministry of Finance. For a lease modification which narrows the scope of the lease or shortens the lease term, the Group decreases the carrying amount of the right-of-use asset, and recognises in profit or loss any gain or loss relating to the partial or full termination of the lease. For other changes which lead to the remeasurement of lease liabilities, the Group correspondingly adjusts the carrying amount of the right-of-use asset. | | | | For the eligible rental waivers on existing lease contracts, the Group applies the simplified method, records the undiscounted waivers in profit or loss and adjusts lease liability when the agreement is reached to dismiss the original payment obligation. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (22) | Leases (Cont'd) | | | | The Group as the lessor | | | | A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. An operating lease is a lease other than a finance lease. | | | | As the lessor, the Group does not hold any finance lease. Where the Group leases out self-owned buildings and vehicles under operating leases, rental income is recognised on a straight-line basis over the lease term. |
| (23) | Specific Reserve | | | | According to the decision of the State Council on Further Strengthening the work of production safety(Guofa No.2 2004), the notice of Circular of the State Council on Further Strengthening the work of enterprise production safety (Guofa No.23 2010) and Measures for the Administration of the Extraction and Use of Enterprise Production Safety Expenses (Caizi (2022) No. 136) issued by the Ministry of Finance and the Ministry of Emergency Response in December 2022, the Group extracted safety production costs at a certain percentage of its operating revenue in the previous year, which is specifically used for safety costs. | | | | The Group's production safety expenses, which are extracted in accordance with the aforementioned national regulations, are included in the cost of relevant products or current profit or loss, and are also included in special reserves. | | | | When the safety fund is subsequently used for revenue expenditure, the specific reserve is reduced accordingly. On utilization of the safety fund for fixed assets, the specific reserve is reduced as the fixed assets are recognised, which is the time when the related assets are ready for their intended use; in such cases, an amount that corresponds to thereduction in the specific reserve is recognised in accumulated depreciation with respect to the related fixed assets. As a consequence, such fixed assets are not depreciated in subsequent periods. |
| (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 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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 | | | | (i) | Classification of financial assets | | | | Significant judgements made by the Group in the classification of financial assets include business models 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 risks, other basic lending risks and considerations for costs and profits. For example, whether the repayment in advance only reflects the principal outstanding and corresponding interest and reasonable compensation paid for early termination of the contract. | | | | (ii) | Judgement on significant increase in credit risk and occurrence of credit impairment | | | | When the Group distinguishes the different stages of financial instruments, its judgement on significant increase in credit risk and occurrence of credit impairment is as follows: | | | | 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 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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 or end customers. According to the contract, the delivery is completed after the products are delivered at the contracted delivery location and acceptance by both parties. Thereafter, the distributors or end customers own the products, have the right to set prices independently, and bear the risks from price fluctuation or damage of the products. The distributors or end customers have obtained the control of the products after accepting the products. The Group recognizes the revenue at the timing of the delivery completion. | | | | (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. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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 | | | | The critical accounting estimates and key assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year are outlined below: | | | | (i) | Measurement of ECL | | | | The Group calculates ECL through default risk exposure and ECL rate and determines the ECL rate based on default probability and default loss rate. In determining the ECL rate, the Group uses data such as internal historical credit loss experience, etc., and adjusts historical data based on current conditions and forward-looking information. When considering forward-looking information, the Group takes different macroeconomic scenarios into consideration. In the first half of 2023, the weights of “base”, “bad” and “good” are 68%, 16% and 16% (In the first half of 2022: 68%, 16% and 16%) under three economic scenarios respectively for the consideration of forward-looking information. The Group regularly monitors, and reviews important macroeconomic assumptions and parameters related to the calculation of ECL rate, including the risks of economic downturn, external market environment, changes of technological environment and customer, gross domestic product, consumer price index and broad money supply. In the first half of 2023, the Group has considered the uncertainty under different macroeconomic scenarios, updated relevant assumptions and parameters accordingly. The key macroeconomic parameters used in each scenario are listed as follows: | | | | | Scenarios | | | Base | Bad | Good | | | | | | | Gross domestic product | 4.56% | 2.02% | 7.11% | | Consumer price index | 3.45% | -33.12% | 40.02% |
| In the first half of 2022, the key macroeconomic parameters used in each scenario are listed below: | | | | | Scenarios | | | Base | Bad | Good | | | | | | | Gross domestic product | 7.81% | 4.74% | 10.89% | | Consumer price index | 1.82% | -1.38% | 5.02% |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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 long-term asset impairment | | | | The Group assesses whether there is any indication that non-current assets other than financial assets may be impaired at the balance sheet date. When there are indications showing the carrying amounts of such assets cannot be recovered, an impairment test will be performed. | | | | When the carrying amount of non-current assets or asset groups other than financial assets is higher than the recoverable amount, which is the higher of an asset’s fair value less disposal costs and the present value of the future cash flows expected to be derived from the asset, it shows non-current assets or asset groups are impaired. | | | | The amount of an asset’s fair value less disposal costs was determined by the price of a sale agreement in an arm’s length transaction, less the costs that are directly attributable to the disposal of the asset. Where there is no sales agreement but there is an active market of assets, the amount is determined by the market price less the costs that are directly attributable to the disposal of the asset. The market price of assets is determined by the considerations provided by the buyer. Where there is no sales agreement or active market of assets, the amount of an asset’s fair value less disposal costs was determined based on the best information available, with reference to the latest transaction price or results of similar assets of the same industry. | | | | Disposal costs include legal cost, taxes and handling fee related to asset disposal, and direct costs incurred to bring the assets to a saleable state. | | | | (iii) | Income tax and deferred income tax | | | | The Group is subject to enterprise income tax in multiple regions. There are some transactions and events for which the ultimate tax treatment is uncertain during the ordinary course of business. Significant judgement is required from the Group in determining the provision for income taxes in each of these regions. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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) |
| (iii) | Income tax and deferred income tax (Cont’d) | | | | As stated in Note 3(2), the Company is a high-tech enterprise. The “High-Tech Enterprise Certificate” is effective for three years. Upon expiration, application for high-tech enterprise assessment should be submitted again to the relevant government authorities. Based on the past experience of reassessment for high-tech enterprise upon expiration and its actual conditions, the Company considers that it is able to obtain the qualification for high- tech enterprises in the next 3 years, and therefore a preferential tax rate of 15% is used to calculate the corresponding deferred income tax. If the Company cannot obtain the qualification for high-tech enterprise upon expiration, then the Company is subject to a statutory tax rate of 25% for the calculation of income tax, which further influences the recognised deferred tax assets, deferred tax liabilities and income tax expenses. | | | | Deferred tax assets are recognised for the deductible tax losses that can be carried forward to subsequent years to the extent that it is probable that taxable profit will be available in the future against which the deductible tax losses can be utilised. Taxable profit that will be available in the future includes the taxable profit that will be realised through ordinary course of business and the taxable profit that will be increased upon the future reversal of taxable temporary differences incurred in prior periods. Judgements and estimates are required to determine the time and amounts of taxable profit in the future. Any difference between the reality and the estimate may result in adjustment to the carrying amount of deferred tax assets. | | | | (iv) | Provisions | | | | The Group undertakes after-sales repair or replacement obligations for automobiles sold based on the after-sales service agreement. Management estimates related provisions based on historical after-sales service data, including the repair and replacement provided as well as current trends. Factors that may impact the estimation of warranty costs include improvement of the Group’s productivity and production quality, as well as changes in related parts and labour costs. Any increase or decrease in provisions will have impact on profit or loss of the Group in the future. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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) |
| (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 is the amount of the estimated selling price in the ordinary course of business, less the estimated costs to completion, estimated contract performance costs, estimated costs necessary to make the sales and related taxes. | | | | If the management revises the estimated selling price of the inventory, the estimated costs to be incurred by the time of completion, and the estimated selling and distribution expenses and related taxes, the revised estimated selling price is lower than the currently adopted estimated selling price, or the revised until The estimated costs, estimated contract performance costs, sales expenses, and related taxes and fees at the completion of the project are higher than the currently adopted estimates, the Group needs to make provision for decline in the value of inventory. | | | | If the actual selling prices, costs to completion, estimated contract performance costs, 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 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 3 | Taxation | | | | (1) | The main categories and rates of taxes applicable to the Group are set out below: | | | | Category | Taxation basis | Tax rate | | | | | | Enterprise income tax (a) | Taxable income | 15% and 25% | | Value-added tax (“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 (c) | Taxable sales amount | 3%, 5% and 9% | | City maintenance and construction tax (d) | 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 the Announcement on Extending the Implementation Period of Certain Preferential Tax Policies (Cai Shui [2021] No. 6) issued by the State Taxation Administration and relevant regulations, during the period from 1 January 2018 to 31 December 2023, the cost of newly purchased equipment with the original cost less than RMB5 million can be fully deducted against taxable profit in the next month after the asset is put into use, instead of being depreciated annually for tax filing. | | | | (b) | Pursuant to the Announcement on Relevant Policies for Deepening Value-Added Tax Reform (Announcement [2019] No. 39) and relevant regulations jointly issued by the Ministry of Finance, the State Taxation Administration and the General Administration of Customs, the Group’s taxable products sales revenue is subject to the VAT at the rate of 13%. The Group's real estate leasing business is subject to the VAT at the rate of 9%. Revenue from provision of technical service to external parties is subject to VAT at the rate of 6%. | | | | (c) | Pursuant to the Interim Regulations of the People's Republic of China on Consumption Tax promulgated by the State Council (Order No. 539 of the State Council of the People's Republic of China) and the Notice of Ministry of Finance and State Taxation Administration on Adjusting Consumption Tax Policies for Passenger Cars (Cai Shui [2008] No. 105), the consumption tax rates of the Group's taxable products are 3%, 5% and 9%. | | | | (d) | Pursuant to the Circular of the State Council on Unifying the Collection of City Maintenance and Construction 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 maintenance and construction tax at the rates of 5% and 7%. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 3 | Taxation (Cont’d) | | | | (2) | Tax preference | | | | Pursuant to the Circular on the Announcement of the First Batch of High-Tech Enterprises of Jiangxi Province for the year 2021 (Gan Gao Qi Ren Ban [2021] No. 8), the Company is certified as a high-tech enterprise, and the valid term is three years. Under Article 28 of the Enterprise Income Tax Law of the People's Republic of China, the income tax rate applicable to the Company for the year of 2023 is 15% (2022: 15%). | | | | In 2023, except for the Company, 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”), and Jiangling Ford Automobile Technology (Shanghai) Co., Ltd. (“Jiangling Ford (Shanghai)”) were subject to the enterprise income tax at the rate of 25% (2022: 25%). |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements | | | | (1) | Cash at bank and on hand | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Cash at bank | 8,472,449,674 | | 7,656,947,735 | | Deposits from a finance company (a) (Note 7(6)) | 786,214,310 | | 886,245,919 | | Other cash | 541,048,830 | | - | | Interest receivable | 75,721,636 | | 61,784,071 | | | 9,875,434,450 | | 8,604,977,725 | | | | | | | (a) | As at 30 June 2023, the Group's bank deposits placed with Jiangling Motor Group Finance Company Limited(“JMCF”) bear interest at the bank's annual interest rate of 1.35% - 2.25% (2022: 1.725% - 2.25%) on RMB deposits for the same period. As at 30 June 2023, Other cash was RMB 541,048,830 (31 December 2022: none), which was mainly restricted for the issuance of bank short-term borrowings of RMB 500,000,000 and litigation frozen funds of RMB 41,048,830. JMCF, a holding subsidiary of Jiangling Motors Group Co., Ltd (“JMCG”), is a non-banking financial institution. JMCG holds 50% equity capital of Nanchang Jiangling Investment Co., Ltd. (“JIC”), a main shareholder of the Company. | | | | (2) | Financial assets held for trading | | | | | 30 June 2023 | | 31 December 2022 | | | | | | Structural deposits | 100,136,000 | | - |
| (3) | Derivative financial assets | | | | 30 June 2023 | | 31 December 2022 | | | | | | Derivative financial assets - | | | | | Forward exchange contracts | 7,086,761 | | 2,972,698 | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) |
| (4) | Notes receivable | | | | 30 June 2023 | | 31 December 2022 | | | | | | Trade acceptance notes | 174,800 | | 743,071,151 | | Less: Provision for bad debts | (141) | | (318,421) | | 174,659 | | 742,752,730 |
| As at 30 June 2023, the Group had no notes receivable from Jiangxi Jiangling Import & Export Co., Ltd. (31 December 2022: RMB 600,000,000) (Note 7(6)). | | | | (a) | As at 30 June 2023, there were no notes receivable pledged. |
| (b) | As at 30 June 2023, the Group's notes receivable presented as endorsed or discounted but not yet due are as follows. | | | | (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 at 30 June 2023, The Group measures the provision for bad debts on the basis of expected credit losses throughout its life and the related amount is RMB141 (31 December 2022: RMB318,421). the amount of provision for bad debts reversed was RMB318,280,The reason is that the amounts for which bad debts had been accrued were recovered in the current period. |
| (5) | Accounts receivable | | | | 30 June 2023 | | 31 December 2022 | | | | | | Accounts receivable | 4,517,096,603 | | 4,367,065,120 | | Less: Provision for bad debts | (124,293,604) | | (121,523,368) | | 4,392,802,999 | | 4,245,541,752 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (5) | Accounts receivable (Cont’d) | | | | (a) | The ageing of accounts receivable is analysed as follows: | | | | | 30 June 2023 | | 31 December 2022 | | | | | | Within 1 year | 4,320,998,284 | | 4,183,936,645 | | 1 to 2 years | 37,430,780 | | 12,186,785 | | Over 2 years | 158,667,539 | | 170,941,690 | | | 4,517,096,603 | | 4,367,065,120 |
| (b) | As at 30 June 2023, the top five accounts receivable ranked by remaining balances are analysed as follows: | | | | | Balance | | Amount of provision for bad debts | | % of total balance | | | | | | | | | Company 1 | 2,779,801,800 | | (3,379,001) | | 61.54% | | Company 2 | 90,614,670 | | (162,990) | | 2.01% | | Company 3 | 75,114,809 | | (158,069) | | 1.66% | | Company 4 | 73,504,160 | | (59,300) | | 1.63% | | Company 5 | 72,230,000 | | (72,230,000) | | 1.60% | | | 3,091,265,439 | | (75,989,360) | | 68.44% | | | | (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: |
| | | 30 June 2023 | | | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | New energy subsidies receivable | | 37,924,214 | | 100% | | (37,924,214) | | Receivables for automobiles | | 72,230,000 | | 100% | | (72,230,000) | | | | 110,154,214 | | | | (110,154,214) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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): |
| | | 31 December 2022 | | | | | | | | | | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | New energy subsidies receivable | | 37,924,214 | | 100% | | (37,924,214) | | Receivables for automobiles | | 72,230,000 | | 100% | | (72,230,000) | | | | 110,154,214 | | | | (110,154,214) |
| As at 30 June 2023 and 31 December 2022, The Group assessed the expected credit losses on the related accounts receivables, the Group considered the receivables cannot be collected, therefore, full provision was made for those receivables. |
| (ii) | Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows: | | | | Grouping - Sales of general automobiles: |
| | | 30 June 2023 | | | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | Not overdue | | 3,284,726,202 | | 0.08% | | (2,656,109) | | Overdue for 1 to 30 days | | 171,755,788 | | 0.08% | | (138,575) | | Overdue for 31 to 60 day | | 52,527,514 | | 1.32% | | (691,778) | | Overdue for 61 to 90 days | | 28,856,941 | | 1.97% | | (569,164) | | Overdue over 90 days | | 173,227,815 | | 2.85% | | (4,934,044) | | | | 3,711,094,260 | | | | (8,989,670) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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 2022 | | | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | Not overdue | | 3,342,241,063 | | 0.04% | | (1,433,732) | | Overdue for 1 to 30 days | | 191,926,407 | | 0.04% | | (82,244) | | Overdue for 31 to 60 days | | 60,431,806 | | 1.07% | | (645,450) | | Overdue for 61 to 90 days | | 28,747,850 | | 2.07% | | (596,073) | | Overdue over 90 days | | 132,725,554 | | 3.14% | | (4,170,090) | | | | 3,756,072,680 | | | | (6,927,589) |
| Grouping - Sales of new energy automobiles: |
| | | 30 June 2023 | | | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | Overdue over 90 days | | 8,413,260 | | 30.47% | | (2,563,287) |
| | | 31 December 2022 | | | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | Overdue over 90 days | | 8,803,260 | | 31.06% | | (2,734,591) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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: | | | | | | 30 June 2023 | | | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | Not overdue | | 662,225,720 | | 0.30% | | (1,986,677) | | Overdue for 1 to 30 days | | 12,592,533 | | 0.30% | | (37,778) | | Overdue for 31 to 60 days | | 1,516,525 | | 0.50% | | (7,583) | | Overdue for 61 to 90 days | | 13,853 | | 0.60% | | (83) | | Overdue over 90 days | | 11,086,238 | | 5.00% | | (554,312) | | | | 687,434,869 | | | | (2,586,433) |
| | | 31 December 2022 | | | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | Not overdue | | 467,350,948 | | 0.30% | | (1,402,053) | | Overdue for 1 to 30 days | | 16,889,558 | | 0.30% | | (50,669) | | Overdue for 31 to 60 days | | 1,741,552 | | 0.50% | | (8,708) | | Overdue for 61 to 90 days | | 1,297,746 | | 0.60% | | (7,786) | | Overdue over 90 days | | 4,755,162 | | 5.00% | | (237,758) | | | | 492,034,966 | | | | (1,706,974) |
| (iii) | The amount of provision for bad debts for the period was RMB2,770,236 . |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (5) | Accounts receivable (Cont’d) | | | | (d) | For the six months ended 30 June 2023, The group has no actual write-off accounts receivable. | | | | (e) | As at 30 June 2023 and 31 December 2022, there were no accounts receivable pledged. | | | | (6) | Financing receivables | | | | 30 June 2023 | | 31 December 2022 | | | | | | Bank acceptance notes | 364,021,037 | | 376,662,817 | | | | The Group endorses the bank acceptance notes as required by daily fund management, which also met the criteria for derecognition, and therefore classified those the bank acceptance notes as financial assets at fair value through other comprehensive income. | | | | The Group had no bank acceptance notes for which the provision for impairment was made on the individual basis. As at 30 June 2023, the Group measures the loss provision of financing receivables based on the lifetime ECL. As at 30 June 2023, the acceptors of the Groups’ notes receivable were mainly major state-owned banks or large and medium-sized banks with good reputation and credit ranking. Therefore, the Group expected there was no significant loss on related bank acceptance notes arising from bank default. | | | | As at 30 June 2023, the Group had no pledged bank acceptance notes receivable presented in financing receivables. | | | | As at 30 June 2023, the Group's bank acceptance notes had been endorsed or discounted but not yet matured were RMB1,060,822,483 and were derecognised. | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (7) | Advances to suppliers | | | | (a) | The ageing of advances to suppliers is analysed as below: | | | | | 30 June 2023 | | 31 December 2022 | | | Amount | | % of total balance | | Amount | | % of total balance | | | | | | | | | | | Within 1 year | 294,535,913 | | 100% | | 277,743,526 | | 100% |
| (b) | As at 30 June 2023, the top five advances to suppliers ranked by remaining balances are analysed as follows: | | | | | | | Amount | | % of total balance | | | | | | | | | Company 1 | 249,319,087 | | 84.65% | | | Company 2 | 18,839,581 | | 6.40% | | | Company 3 | 8,444,594 | | 2.87% | | | Company 4 | 7,223,907 | | 2.45% | | | Company 5 | 4,593,189 | | 1.56% | | | | 288,420,358 | | 97.93% | | | | | (8) | Other receivables | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | | Receivable for subsidiary disposal | 24,900,000 | | 60,900,000 | | | Import working capital | 7,000,000 | | 10,000,000 | | | Disposal of assets | 4,604,745 | | 4,604,745 | | | Others | 39,165,837 | | 35,893,235 | | | | 75,670,582 | | 111,397,980 | | | | | | | | | Less: Provision for bad debts | (242,050) | | (334,608) | | | | 75,428,532 | | 111,063,372 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (8) | Other receivables (Cont’d) |
| (a) | The ageing of other receivables is analysed as follows: | | | | | 30 June 2023 | | 31 December 2022 | | | | | | Within 1 year | 40,075,543 | | 47,163,619 | | Over 1 year | 35,595,039 | | 64,234,361 | | | 75,670,582 | | 111,397,980 |
| (b) | Provision for losses and changes in book balance statements: |
| | | Stage 1 | | | | | 12-month ECL (grouping) | | Total | | | Book balance | Provision for bad debts | | Provision for bad debts | | | | | | | | 31 December 2022 | | 111,397,980 | (334,608) | | (334,608) | | Net decrease in the current period | | (35,727,398) | - | | - | | Bad debt provision reversed in the current period | | - | 92,558 | | 92,558 | | 30 June 2023 | | 75,670,582 | (242,050) | | (242,050) |
| As at 30 June 2023 and 31 December 2022, the Group had no other receivables at Stage 2 and Stage 3. The analysis of other receivables at Stage 1 is stated below: |
| (i) | As at 30 June 2023 and 31 December 2022, the Group had no other receivables with provision for bad debts on the individual basis. |
| (ii) | As at 30 June 2023, the Group’s other receivables with provision for bad debts on the grouping basis were analysed below: |
| | Book balance | | Expected credit loss ratio within the next 12 months | | Provision for bad debts | | Rationale | | | | | | | | | | | Portfolio accrual： | | | | | | | | | Receivable for subsidiary disposal | 24,900,000 | | 0.30% | | (74,700) | | Expected credit losses | | Import working capital | 7,000,000 | | 0.30% | | (21,000) | | Expected credit losses | | Disposal of assets | 4,604,745 | | 0.30% | | (13,814) | | Expected credit losses | | Others | 39,165,837 | | 0.34% | | (132,536) | | Expected credit losses | | 75,670,582 | | | | (242,050) | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (8) | Other receivables (Cont’d) | | | | (ii) | As at 31 December 2022, the Group’s other receivables with provision for bad debts on the grouping basis were analysed below: |
| | Book balance | | Expected credit loss ratio within the next 12 months | | Provision for bad debts | | Rationale | | | | | | | | | | | Portfolio accrual： | | | | | | | | | Receivable for subsidiary disposal | 60,900,000 | | 0.30% | | (182,700) | | Expected credit losses | | Import working capital | 10,000,000 | | 0.30% | | (30,000) | | Expected credit losses | | Disposal of assets | 4,604,745 | | 0.30% | | (13,814) | | Expected credit losses | | Others | 35,893,235 | | 0.30% | | (108,094) | | Expected credit losses | | 111,397,980 | | | | (334,608) | | |
| (c) | RMB92,558 of provision for bad debts was reversed in the current period. |
| (d) | As at 30 June 2023, the top five other receivables by the balance of the debtors are listed as follows: | | | | | Nature | | Balance | | Ageing | | % of total balance | | Provision for bad debts | | | | | | | | | | | | Company 1 | Receivable for subsidiary disposal | | 24,900,000 | | More than one year | | 32.91% | | (74,700) | | Company 2 | Prepayment | | 13,980,264 | | Within one year | | 18.48% | | (41,941) | | Company 3 | Import working capital, etc. | | 7,572,820 | | Within one year | | 10.01% | | (22,718) | | Company 4 | Asset disposal payments, etc. | | 4,614,745 | | More than one year | | 6.10% | | (13,844) | | Company 5 | Guarantees | | 2,645,744 | | More than one year | | 3.50% | | (7,937) | | | | 53,713,573 | | | | 71.00% | | (161,140) |
| (9) | Inventories | | | | (a) | Inventories are summarised by categories as follows: | | | | | | | | 30 June 2023 | | 31 December 2022 | | | 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 | 1,035,312,166 | | (70,413,441) | | 964,898,725 | | 1,077,387,177 | | (70,415,497) | 1,006,971,680 | | Finished goods | 444,235,711 | | - | | 444,235,711 | | 695,697,324 | | - | 695,697,324 | | Work in progress | 211,279,723 | | (808,074) | | 210,471,649 | | 254,199,491 | | (857,711) | 253,341,780 | | Low value consumables | 89,797,146 | | - | | 89,797,146 | | 93,411,573 | | (537,572) | 92,874,001 | | Materials in transit | 32,132,208 | | - | | 32,132,208 | | 42,989,505 | | - | 42,989,505 | | Materials consigned for processing | 23,960,731 | | - | | 23,960,731 | | 37,166,530 | | - | 37,166,530 | | | 1,836,717,685 | | (71,221,515) | | 1,765,496,170 | | 2,200,851,600 | | (71,810,780) | 2,129,040,820 | | | | | | | | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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 2022 | | Increase in the current period | Decrease in the current period | | 30 June 2023 | | | | | Provision | Reversal | Write-off | | | | | | | | | | | | | Raw materials | (70,415,497) | | - | - | 2,056 | | (70,413,441) | | Low value consumables | (537,572) | | - | - | 537,572 | | - | | Work in progress | (857,711) | | - | - | 49,637 | | (808,074) | | | (71,810,780) | | - | - | 589,265 | | (71,221,515) | | |
| (c) | Provision for decline in the value of inventories is analysed as follows: | | | | | | Specific basis for determining net realisable value | | Reason for current period write-off of provision for decline in the value of inventories | | | | | | | | Raw materials/Work in progress/Low value consumables | | Based on the estimated selling price, less the estimated costs to completion, estimated contract performance costs and selling and distribution expenses and related taxes | | Sales realised |
| (10) | Other current assets | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Taxes prepaid, input VAT to be deducted and to be verified | 1,232,518,771 | | 1,362,502,624 | | | | | | | (11) | Current portion of non-current assets | | | | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Current portion of long-term receivables (Note 4(12)) | 14,170,026 | | 13,851,634 |
| (12) | Long-term receivables | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Long-term receivables | 40,855,427 | | 48,695,467 | | Less: Unearned financing income | (2,556,786) | | (3,549,703) | | Provision for bad debts | (122,566) | | (146,086) | | Current portion of long-term receivables(Note 4(11)) | (14,170,026) | | (13,851,634) | | | 24,006,049 | | 31,148,044 |
| As at 30 June 2023, the Group's long-term receivables were generated by instalment collections from disposal of fixed assets, which will be recovered from 2023 to 2026. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (13) | Long-term equity investments | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Associates | | | | | - Shanxi Yunnei Power Co., Ltd. (“The Power Company”) | 208,609,672 | | 211,055,689 | | - Hanon Systems (Nanchang) Co., Ltd. (“Hanon Systems”) | 35,979,511 | | 37,427,133 | | | | | | | Less: Provision for impairment of long-term equity investments | - | | - | | | 244,589,183 | | 248,482,822 | | | | Associates | | | | | | | Movements for the current period | | | 31 December 2022 | | Increase/ decreace in the current period | | Share of net profit/(loss) under equity method | | Cash dividends declared | | Provision for impairment | | 30 June 2023 | | Shareholding (%) | | Voting rights (%) | | Ending balance of provision for impairment | | | | | | | | | | | | | | | | | | | | The Power Company | 211,055,689 | | - | | (2,446,017) | | - | | - | | 208,609,672 | | 40% | | 40% | | - | | Hanon Systems | 37,427,133 | | - | | (1,447,622) | | - | | - | | 35,979,511 | | 19.15% | | 33.33% | | - | | Total | 248,482,822 | | - | | (3,893,639) | | - | | - | | 244,589,183 | | | | | | - |
Related information of equity in associates is set forth in Note 5(2). NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (14) | Fixed assets | | | | | 30 June 2023 | | 31 December 2022 | | | | | | Fixed assets (a) | 5,505,890,597 | | 5,446,006,505 | | Fixed assets pending for disposal (b) | 1,923,432 | | 377,864 | | 5,507,814,029 | | 5,446,384,369 | | | | (a) | Fixed assets |
| . | | Buildings | Machinery and equipment | Vehicles | Moulds | Electronic and other equipment | Total | | | | | | | | | | Cost | | | | | | | | 31 December 2022 | 2,213,414,020 | 3,153,309,149 | 475,545,179 | 3,454,685,625 | 4,168,066,138 | 13,465,020,111 | | Increase in the current period | | | | | | | | Transfer from construction in progress | 2,868,477 | 57,047,957 | 3,398,186 | 359,017,169 | 83,918,124 | 506,249,913 | | Decrease in the current period | | | | | | | | Disposal or retirement | - | (3,161,279) | (2,208,865) | (11,767,268) | (5,555,154) | (22,692,566) | | Others | - | (8,903,200) | - | - | - | (8,903,200) | | 30 June 2023 | 2,216,282,497 | 3,198,292,627 | 476,734,500 | 3,801,935,526 | 4,246,429,108 | 13,939,674,258 | | | | | | | | | | Accumulated depreciation | | | | | | | | 31 December 2022 | (419,406,028) | (1,788,482,688) | (278,327,488) | (2,546,577,850) | (2,632,387,758) | (7,665,181,812) | | Increase in the current period | | | | | | | | Provision | (28,382,754) | (114,036,766) | (23,487,027) | (98,380,111) | (178,631,565) | (442,918,223) | | Decrease in the current period | | | | | | | | Disposal or retirement | - | 2,162,076 | 1,813,139 | 9,832,802 | 5,138,715 | 18,946,732 | | Others | - | 2,093,104 | - | - | - | 2,093,104 | | 30 June 2023 | (447,788,782) | (1,898,264,274) | (300,001,376) | (2,635,125,159) | (2,805,880,608) | (8,087,060,199) | | | | | | | | | | Provision for impairment | | | | | | | | 31 December 2022 | - | (12,392,150) | (2,571,080) | (323,447,442) | (15,421,122) | (353,831,794) | | Increase in the current period | | | | | | | | Provision | - | - | - | - | - | - | | Decrease in the current period | | | | | | | | Disposal or retirement | - | 6,934,687 | - | - | 173,645 | 7,108,332 | | 30 June 2023 | - | (5,457,463) | (2,571,080) | (323,447,442) | (15,247,477) | (346,723,462) | | | | | | | | | | Carrying amount | | | | | | | | 30 June 2023 | 1,768,493,715 | 1,294,570,890 | 174,162,044 | 843,362,925 | 1,425,301,023 | 5,505,890,597 | | 31 December 2022 | 1,794,007,992 | 1,352,434,311 | 194,646,611 | 584,660,333 | 1,520,257,258 | 5,446,006,505 |
| For the six months ended 30 June 2023, depreciation charged to fixed assets amounted to RMB442,918,223 (the six months ended 30 June 2022: RMB435,117,387), of which the depreciation expenses charged in the cost of sales, selling and distribution expenses, general and administrative expenses and research and development expenses were RMB364,837,796, RMB1,135,033, RMB46,055,032 and RMB30,890,362 (the six months ended 30 June 2022: RMB353,653,366, RMB1,141,073, RMB47,510,686 and RMB32,812,262), respectively. | | | | The costs of fixed assets transferred from construction in progress amounted to RMB506,249,913 (the six months ended 30 June 2022: RMB364,904,815). |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (14) | Fixed assets (Cont’d) | | | | (a) | Fixed assets (Cont’d) | | | | (i) | Temporarily idle fixed assets | | | | As at 30 June 2023, the fixed assets with a carrying amount of approximately RMB459,419,449 (a cost of RMB1,452,686,873) (31 December 2022: a carrying amount of approximately RMB507,898,988 and a cost of RMB1,521,049,605) were temporarily idle due to the reorganisation plan of JMCH and the change of product process, etc. The analysis is as follows: | | | | | Cost | | Accumulated depreciation | | Provision for impairment | | Carrying amount | | | | | | | | | | | Buildings | 409,162,422 | | (101,151,588) | | - | | 308,010,834 | | Machinery and equipment | 184,323,642 | | (127,161,324) | | (5,216,580) | | 51,945,738 | | Vehicles | 67,133,078 | | (52,969,611) | | (2,473,956) | | 11,689,511 | | Moulds | 453,633,168 | | (140,338,185) | | (312,746,465) | | 548,518 | | Electronic and other equipment | 338,434,563 | | (239,439,488) | | (11,770,227) | | 87,224,848 | | | 1,452,686,873 | | (661,060,196) | | (332,207,228) | | 459,419,449 | | | | As at 30 June 2023, the fixed assets with a carrying amount of approximately RMB 440,493,790 (a cost of RMB856,841,465) were temporarily idle due to the reorganisation transaction of JMCH(Notes 5(1)) , the group will continue to actively promote the restructuring of JMCH, and there was no further impairment charged during this period. | | | | (ii) | Fixed assets with pending certificates of ownership: | | | | | | Carrying amount | | Reasons for not obtaining certificates of ownership | | | | | | | | Buildings | | 9,863,629 | | Pending procedures | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (14) | Fixed assets (Cont’d) | | | | (b) | Fixed assets pending for disposal | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Moulds | 1,812,760 | | - | | Electronic and other equipment | 85,891 | | 216,104 | | Machinery and equipment | 24,781 | | 161,363 | | Vehicles | - | | 397 | | | 1,923,432 | | 377,864 |
| (15) | Construction in progress |
| | 30 June 2023 | | 31 December 2022 | | | Book balance | | Provision for impairment | | Carrying amount | | Book balance | | Provision for impairment | | Carrying amount | | | | | | | | | | | | | | | Projects for commercial vehicles | 380,830,242 | | - | | 380,830,242 | | 537,796,267 | | - | | 537,796,267 | | Projects for passenger vehicles | 136,493,472 | | - | | 136,493,472 | | 87,126,228 | | - | | 87,126,228 | | Projects for automobiles factory | 24,749,876 | | - | | 24,749,876 | | 42,929,882 | | - | | 42,929,882 | | Projects for automobile parts factory | 11,613,896 | | - | | 11,613,896 | | 5,424,980 | | - | | 5,424,980 | | Others | 59,203,302 | | (691,646) | | 58,511,656 | | 46,026,479 | | (691,646) | | 45,334,833 | | | 612,890,788 | | (691,646) | | 612,199,142 | 719,303,836 | | (691,646) | | 718,612,190 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (15) | Construction in progress (Cont’d) | | | | (a) | Movement of significant projects of construction in progress |
| Project name | Budget (In RMB0’000) | | 31 December 2022 | | Increase in the current period | | Transfer to fixed assets in the current period | | Transfer to intangible assets in the current period | | 30 June 2023 | | % of project investment in budget | | Progress of project | | Accumulative capitalised borrowing costs | | Including: Borrowing costs capitalised in the current period | | Source of fund |
| Projects for commercial vehicles | 205,984 | | 537,796,267 | | 249,669,866 | | (406,635,891) | | - | | 380,830,242 | | 85% | | 85% | | - | | - | | Self-owned funds |
| Projects for passenger vehicles | 86,465 | | 87,126,228 | | 90,594,629 | | (40,877,827) | | (349,558) | | 136,493,472 | | 69% | | 69% | | - | | - | | Self-owned funds |
| Projects for automobiles factory | 320,105 | | 42,929,882 | | 26,391,725 | | (44,571,731) | | - | | 24,749,876 | | 74% | | 74% | | - | | - | | Self-owned funds |
| Projects for automobile parts factory | 14,070 | | 5,424,980 | | 6,222,529 | | (33,613) | | - | | 11,613,896 | | 68% | | 68% | | - | | - | | Self-owned funds |
| Others | | | 46,026,479 | | 28,776,700 | | (14,130,851) | | (1,469,026) | | 59,203,302 | | | | | | 292,897 | | - | | Self-owned funds and borrowings |
| | | 719,303,836 | | 401,655,449 | | (506,249,913) | | (1,818,584) | | 612,890,788 | | | | | | 292,897 | | - | | |
| (b) | Provision for impairment of construction in progress | | | | 31 December 2022 | | Increase in the current period | | Decrease in the current period | | 30 June 2023 | | Reason for provision | | | | | | | | | | | | Other miscellaneous and pending installation projects | (691,646) | | - | | - | | (691,646) | | The recoverable amount is lower than the carrying amount |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) |
| | | Buildings | | | | | | Cost | | | | 31 December 2022 | | 349,143,173 | | Increase in the current period | | | | New lease contracts | | 16,056,861 | | 30 June 2023 | | 365,200,034 | | | | | | Accumulated depreciation | | | | 31 December 2022 | | (115,520,283) | | Increase in the current period | | | | Provision | | (36,087,214) | | 30 June 2023 | | (151,607,497) | | | | | | Provision for impairment | | | | 31 December 2022 | | - | | Increase in the current period | | - | | Decrease in the current period | | - | | 30 June 2023 | | - | | | | | | Carrying amount | | | | 30 June 2023 | | 213,592,537 | | 31 December 2022 | | 233,622,890 |
| For the six months ended 30 June 2023, depreciation of right-of-use assets amounted to RMB36,087,214 (the six months ended 30 June 2022:RMB35,233,057), of which RMB30,709,882, RMB2,481,794, RMB2,398,823 and RMB496,715 were included in cost of sales, selling and distribution expenses, general and administrative expenses and research and development expenses, respectively (the six months ended 30 June 2022: RMB31,995,045, RMB409,941, RMB2,398,822 and RMB429,249 were included in cost of sales, selling and distribution expenses, general and administrative expenses and research and development expenses, respectively). |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (17) | Intangible assets/Development expenditures | | | | (a) | Intangible assets | | | | | Land use rights | Software use fees | Non-patent technologies | After-sales services management mode | Others | Total | | | | | | | | | | Cost | | | | | | | | 31 December 2022 | 628,964,157 | 334,638,306 | 1,086,102,005 | 36,979,184 | 1,599,516 | 2,088,283,168 | | Increase in the current period | | | | | | | | Transfer from construction in progress | - | 1,818,584 | - | - | - | 1,818,584 | | Internal research and development | - | - | 452,115,147 | - | - | 452,115,147 | | Decrease in the current period | | | | | | | | Disposal | - | - | - | - | - | - | | 30 June 2023 | 628,964,157 | 336,456,890 | 1,538,217,152 | 36,979,184 | 1,599,516 | 2,542,216,899 | | | | | | | | | | Accumulated amortisation | | | | | | | | 31 December 2022 | (139,952,223) | (191,182,266) | (484,757,266) | (36,979,184) | (1,599,516) | (854,470,455) | | Increase in the current period | | | | | | | | Provision | (6,636,555) | (21,778,719) | (104,164,845) | - | - | (132,580,119) | | Decrease in the current period | | | | | | | | Disposal | - | - | - | - | - | - | | 30 June 2023 | (146,588,778) | (212,960,985) | (588,922,111) | (36,979,184) | (1,599,516) | (987,050,574) | | | | | | | | | | Provision for impairment | | | | | | | | 31 December 2022 | - | - | (38,806,961) | - | - | (38,806,961) | | Increase in the current period | - | - | - | - | - | - | | Provision | - | - | - | - | - | - | | 30 June 2023 | - | - | (38,806,961) | - | - | (38,806,961) | | | | | | | | | | Carrying amount | | | | | | | | 30 June 2023 | 482,375,379 | 123,495,905 | 910,488,080 | - | - | 1,516,359,364 | | 31 December 2022 | 489,011,934 | 143,456,040 | 562,537,778 | - | - | 1,195,005,752 |
| For the six months ended 30 June 2023, amortisation charged to intangible assets amounted to RMB132,580,119 (the six months ended 30 June 2022: RMB90,867,377), of which RMB24,071, RMB232,310, RMB25,706,378 and RMB106,617,360 were included in cost of sales, selling and distribution expenses, general and administrative expenses and research and development expenses (the six months ended 30 June 2022: RMB24,071, RMB223,566, RMB21,185,313 and RMB69,434,427), respectively. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (17) | Intangible assets/Development expenditures (Cont’d) | | | | (b) | Development expenditures | | | | The Group’s development expenditures are set out below: | | | | | 31 December 2022 | | Increase in the current period | | Decrease in the current period | | 30 June 2023 | | Recognised in profit or loss | | Recognised as intangible assets | | | | | | | | | | | | | | Automobile products development project | 477,233,877 | | 336,076,246 | | - | | (452,115,147) | | 361,194,976 | | | | Expenditures on research and development of the Group incurred For the six months ended 30 June 2023 amounted to RMB1,084,212,021 (the six months ended 30 June 2022: RMB896,948,849) in total, of which RMB748,135,775 (the six months ended 30 June 2022: RMB666,994,373) was recognised in profit or loss for the current period, RMB336,076,246 (the six months ended 30 June 2022: RMB229,954,476) was recognised in development expenditures for the current period and RMB104,628,790 (the six months ended 30 June 2022: RMB62,429,052) transferred from development expenditures to intangible assets for the current period and RMB231,447,456 (the six months ended 30 June 2022: RMB167,525,424) was included in the ending balance of development expenditures. As at 30 June 2023, the intangible assets developed by the Group accounted for 52% (31 December 2022: 36%) of the carrying amount of intangible assets. |
| (18) | Deferred tax assets and deferred tax liabilities | | (a) | Deferred tax assets before offsetting | | | | | 30 June 2023 | | 31 December 2022 | | | Deductible temporary differences and deductible losses | | Deferred tax assets | | Deductible temporary differences and deductible losses | | Deferred tax assets | | | | | | | | | | | Accrued expenses and provisions | 4,655,366,449 | | 1,048,743,969 | | 4,978,763,776 | | 1,120,987,322 | | Recoverable losses | 3,871,185,935 | | 695,258,435 | | 3,634,617,217 | | 571,696,850 | | Provision for asset impairment | 1,086,654,228 | | 167,628,158 | | 1,092,015,809 | | 168,415,220 | | Non-patent technology | 247,609,905 | | 61,155,677 | | 208,440,047 | | 50,268,260 | | Employee education funds unpaid | 100,723,793 | | 15,734,960 | | 88,505,949 | | 13,780,833 | | Deferred income | 64,781,931 | | 9,717,290 | | 60,849,643 | | 9,127,446 | | Retirement benefits plan | 54,748,143 | | 13,344,121 | | 55,374,000 | | 13,438,000 | | Others | 178,811,615 | | 30,311,340 | | 174,643,793 | | 29,512,438 | | | 10,259,881,999 | | 2,041,893,950 | | 10,293,210,234 | | 1,977,226,369 | | | | Including: | | Expected to be recovered within 1 year (inclusive) | | | 1,340,834,385 | | | | 1,399,402,738 | | Expected to be recovered after 1 year | | | 701,059,565 | | | | 577,823,631 | | | | | 2,041,893,950 | | | | 1,977,226,369 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) |
| (18) | Deferred tax assets and deferred tax liabilities (Cont’d) | | | | (b) | Deferred tax liabilities before offsetting | | | | | 30 June 2023 | | 31 December 2022 | | | Taxable temporary differences | | Deferred tax liabilities | | Taxable temporary differences | | Deferred tax liabilities | | | | | | | | | | | Depreciation of fixed assets | 2,831,667,310 | | 677,481,992 | | 2,823,844,034 | | 652,665,271 | | Equity transactions between parent and subsidiary | 408,000,000 | | 61,200,000 | | 408,000,000 | | 61,200,000 | | Differences between the fair value of the identifiable net assets and carrying amount arising from business combinations involving enterprises not under common control | 91,858,664 | | 22,964,666 | | 93,221,436 | | 23,305,359 | | Amortisation of intangible assets | 65,688,691 | | 15,429,499 | | 56,434,371 | | 12,193,000 | | Others | 7,222,761 | | 1,097,014 | | 2,972,698 | | 445,905 | | | 3,404,437,426 | | 778,173,171 | | 3,384,472,539 | | 749,809,535 | | | | Including: | | Expected to be recovered within 1 year (inclusive) | | | 181,763,213 | | | | 145,213,640 | | Expected to be recovered after 1 year | | | 596,409,958 | | | | 604,595,895 | | | | | 778,173,171 | | | | 749,809,535 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (18) | Deferred tax assets and deferred tax liabilities (Cont’d) | | | | (c) | Deductible temporary differences and deductible losses for which no deferred tax asset was recognised are analysed as follows: | | | | | | | | 30 June 2023 | | 31 December 2022 | | | | | | Deductible temporary differences | 1,380,253,868 | | 1,380,025,289 | | Deductible losses | 253,246,661 | | 202,505,688 | | | 1,633,500,529 | | 1,582,530,977 | | | | (d) | Deductible losses for which no deferred tax asset was recognised will be expired in following years: | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | 2024 | 109,336,011 | | 109,336,011 | | 2025 | - | | - | | 2026 | - | | - | | 2027 | 93,001,631 | | 93,169,677 | | 2028 | 50,909,019 | | - | | | 253,246,661 | | 202,505,688 | | | | (e) | The net balances of deferred tax assets and deferred tax liabilities after offsetting are as follows: | | | | | 30 June 2023 | | 31 December 2022 | | | Offsetting amount | Balance after offsetting | | Offsetting amount | Balance after offsetting | | | | | | | | | Deferred tax assets | (755,208,505) | 1,286,685,445 | | (726,504,176) | 1,250,722,193 | | Deferred tax liabilities | (755,208,505) | 22,964,666 | | (726,504,176) | 23,305,359 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (19) | Provision for asset impairment and losses |
| | 31 December 2022 | | Increase in the current period | | Decrease in the current period | | | | | | | Reversal | | Write-off/Disposal | | 30 June 2023 | | | | | | | | | | | | | Provision for bad debts of notes receivable | 318,421 | | - | | (318,280) | | - | | 141 | | Provision for bad debts of accounts receivable | 121,523,368 | | 2,770,236 | | - | | - | | 124,293,604 | | Including: Provision for bad debts on the individual basis | 110,154,214 | | - | | - | | - | | 110,154,214 | | Provision for bad debts on the grouping basis | 11,369,154 | | 2,770,236 | | - | | - | | 14,139,390 | | Provision for bad debts of other receivables | 334,608 | | - | | (92,558) | | - | | 242,050 | | Provision for bad debts of long-term receivables | 146,086 | | - | | (23,520) | | - | | 122,566 | | Sub-total | 122,322,483 | | 2,770,236 | | (434,358) | | - | | 124,658,361 | | | | | | | | | | | | | Provision for decline in the value of inventories | 71,810,780 | | - | | - | | (589,265) | | 71,221,515 | | Provision for impairment of fixed assets | 353,831,794 | | - | | - | | (7,108,332) | | 346,723,462 | | Provision for impairment of construction in progress | 691,646 | | - | | - | | - | | 691,646 | | Provision for impairment of goodwill | 89,028,412 | | - | | - | | - | | 89,028,412 | | Provision for impairment of intangible assets | 38,806,961 | | - | | - | | - | | 38,806,961 | | Sub-total | 554,169,593 | | - | | - | | (7,697,597) | | 546,471,996 | | | 676,492,076 | | 2,770,236 | | (434,358) | | (7,697,597) | | 671,130,357 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (20) | Short-term borrowings | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Credit loan | 800,000,000 | | 1,100,000,000 | | Guarantees loan | 500,000,000 | | - | | | 1,300,000,000 | | 1,100,000,000 | | | | | | | As at 30 June 2023, the above short-term borrowings were all caused by bank short-term loan, which bear the interest rates ranging from 1.75% to 2.4% (31 December 2022: from 2.35% to 2.75%). | | | | (21) | Accounts payable | | | | | 30 June 2023 | | | 31 December 2022 | | | | | | | | Payable for automobile parts | 8,571,286,768 | | | 8,783,467,597 | | Payable for raw and auxiliary materials | 368,244,319 | | | 232,510,757 | | | 8,939,531,087 | | | 9,015,978,354 | | | | As at 30 June 2023, accounts payable with ageing over one year amounted to RMB696,422,634 (31 December 2022: RMB652,758,141), which mainly represented materials payable for which a settlement price had not yet been determined, and such payables had not been finally settled yet. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (22) | Contract liabilities |
| | 30 June 2023 | | 31 December 2022 | | | | | | | Advances for automobiles and automobile parts | 137,441,756 | | 94,400,145 | | Advances for maintenance and warranty services | 173,678,322 | | 175,905,460 | | | 311,120,078 | | 270,305,605 | | Less: Contract liabilities carried forward to revenue after 1 year (Note 4(33)) | (116,447,990) | | (118,240,580) | | | 194,672,088 | | 152,065,025 |
| (23) | Employee benefits payable | | | | | 30 June 2023 | | 31 December 2022 | | | | | | Short-term employee benefits payable (a) | 652,963,489 | | 631,243,123 | | Defined contribution plans payable (b) | 308,786,100 | | 279,041,381 | | Defined benefit plans payable (c) | 2,803,000 | | 2,803,000 | | Termination benefits payable (d) | 2,616,176 | | 2,616,176 | | 967,168,765 | | 915,703,680 |
| (a) | Short-term employee benefits | | | | | | | | | | | | 31 December 2022 | | Increase in the current period | | Decrease in the current period | | 30 June 2023 | | | | | | | | | | Wages and salaries, bonus, allowances and subsidies | 454,910,923 | | 993,647,218 | | (960,642,203) | | 487,915,938 | | Staff welfare | 59,167,710 | | 30,632,325 | | (39,282,026) | | 50,518,009 | | Social security contributions | 24,132,419 | | 57,917,512 | | (73,390,393) | | 8,659,538 | | Including: Medical insurance | 17,300,118 | | 56,189,463 | | (72,701,934) | | 787,647 | | Work injury insurance | 6,832,301 | | 1,728,049 | | (688,459) | | 7,871,891 | | Housing funds | 467,942 | | 99,791,391 | | (99,783,266) | | 476,067 | | Labour union funds and employee education funds | 92,564,129 | | 33,421,263 | | (20,591,455) | | 105,393,937 | | Other short-term employee benefits | - | | 3,361,960 | | (3,361,960) | | - | | | 631,243,123 | | 1,218,771,669 | | (1,197,051,303) | | 652,963,489 | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (23) | Employee benefits payable (Cont’d) |
| (b) | Defined contribution plans | | | | | 31 December 2022 | | Increase in the current period | | Decrease in the current period | | 30 June 2023 | | | | | | | | | | Basic pensions | 260,527,342 | | 123,436,987 | | (96,284,293) | | 287,680,036 | | Supplementary pensions | 10,400,000 | | - | | - | | 10,400,000 | | Unemployment insurance | 8,114,039 | | 3,847,119 | | (1,255,094) | | 10,706,064 | | 279,041,381 | | 127,284,106 | | (97,539,387) | | 308,786,100 |
| (c) | Defined benefit plans | | | | | 31 December 2022 | | Increase in the current period | | Decrease in the current period | | 30 June 2023 | | | | | | | | | | Post-retirement benefits payable (Note 4(32)) | 2,803,000 | | 1,436,800 | | (1,436,800) | | 2,803,000 |
| (d) | Termination benefits payable | | | | | | | | 30 June 2023 | | 31 December 2022 | | | | | | Early retirement benefits payable (Note 4(32)) | 1,278,000 | | 1,278,000 | | Other termination benefits (i) | 1,338,176 | | 1,338,176 | | 2,616,176 | | 2,616,176 | | | (i) For the six months ended 30 June 2023, other termination benefits paid by the Group for termination of the employment relationship were RMB10,806,089 (the six months ended 30 June 2022: RMB1,123,392). |
| (24) | Taxes payable | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Consumption tax payable | 74,246,260 | | 87,601,901 | | Land use tax payable | 4,831,953 | | 4,831,953 | | Unpaid VAT | 800,152 | | 24,542,717 | | Enterprise income tax payable | - | | 55,230,198 | | Others | 14,848,100 | | 21,042,835 | | | 94,726,465 | | 193,249,604 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (25) | Other payables | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Promotion expenses | 2,615,585,173 | | 2,566,403,266 | | Research and development project expenses | 1,164,009,858 | | 1,139,399,835 | | Construction payment | 410,501,788 | | 534,127,177 | | Ordinary share dividends payable | 374,354,271 | | 6,463,836 | | Transportation expenses | 185,504,240 | | 239,369,691 | | Advertising and new product planning fees | 150,847,930 | | 160,966,200 | | Guarantees payable | 113,399,487 | | 111,554,518 | | Technological transformation project expenses | 37,381,884 | | 51,152,889 | | Consulting fees | 27,018,361 | | 22,274,659 | | Trademark license fee | 15,699,857 | | 13,971,949 | | Others | 808,850,295 | | 827,024,491 | | | 5,903,153,144 | | 5,672,708,511 |
| As at 30 June 2023, other payables with ageing over one year of RMB2,018,296,943 (31 December 2022: RMB1,696,105,568) mainly comprised guarantees collected from logistics companies, distributors and repair stations, payables for construction projects and payables for research and development expenses. Such payables have not been finally settled yet in view of the continuing business transactions with distributors and service providers, and engineering projects and research and development projects that had not yet been accepted and completed. |
| (26) | Current portion of non-current liabilities | | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | | Current portion of lease liabilities (Note 4(29)) | | 74,653,392 | | 72,224,685 | | Current portion of long-term borrowings (Note 4(28)) | | 3,473,175 | | 456,071 | | | | 78,126,567 | | 72,680,756 |
| (27) | Other current liabilities | | | | | 30 June 2023 | | 31 December 2022 | | | | | | Provisions expected to be settled within 1 year (Note 4(30)) | 367,544,537 | | 374,617,524 | | Others | 17,867,429 | | 12,272,018 | | | 385,411,966 | | 386,889,542 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (28) | Long-term borrowings | | | | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Guaranteed loans(a) | 2,129,290 | | 2,280,355 | | Credit loans(b) | 12,849,944 | | 19,033,773 | | Less: Current portion of long-term borrowings (Note 4(26)) | (3,473,175) | | (456,071) | | | 11,506,059 | | 20,858,057 |
| (a) | As at 30 June 2023, the above guaranteed loans were long-term borrowings amounting to USD 294,679 guaranteed by JMCF, borrowed from Industrial and Commercial Bank of China (“ICBC”), Nanchang Ganjiang Sub-branch with interests paid every half year and the principal was paid in instalments between 10 December 2007 and 27 October 2027. | | | Starting date | Maturity date | Currency | Interest rate (%) | 30 June 2023 | | 31 December 2022 | | 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% | 294,679 | 2,129,290 | | 327,421 | 2,280,355 |
| (b) | As at 30 June 2023, the principal amount of bank credit borrowings is repayable in installments during 2024. For the six months ended 30 June 2023, the interest rate of long-term borrowings was 1.5-2.5% (the six months ended 30 June 2022: 1.5%). |
| (29) | Lease liabilities | | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | | Lease liabilities(a) | | 208,931,917 | | 265,315,036 | | Less: Current portion of non-current liabilities (Note 4(26)) | | (74,653,392) | | (72,224,685) | | | | 134,278,525 | | 193,090,351 | | | | (a) | As at 30 June 2023, the Group has no leases that are not included in lease liabilities but will result in potential future cash outflows. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (30) | Provisions | | | | | 31 December 2022 | | Increase in the current period | | Decrease in the current period | | 30 June 2023 | | | | | | | | | | | Product warranties (a) | 610,033,067 | | 126,130,480 | | (135,456,636) | | 600,706,911 | | Provisions for contract fulfilment | 15,347,046 | | - | | (1,917,879) | | 13,429,167 | | | 625,380,113 | | 126,130,480 | | (137,374,515) | | 614,136,078 | | Less: Provisions expected to be settled within 1 year (Note 4(27)) | (374,617,524) | | | | | | (367,544,537) | | | 250,762,589 | | | | | | 246,591,541 |
| (a) | Product warranties are expenses expected to be incurred during the warranty period from free after-sales services, product warranty and other services for the vehicles sold. | | | | (31) | Deferred income | | | | | 31 December 2022 | | Increase in the current period | | Decrease in the current period | | 30 June 2023 | | Reason | | | | | | | | | | | | | Government grants | 60,849,643 | | 6,400,000 | | (2,467,712) | | 64,781,931 | | Subsidy for projects | | | | | | | | | | | | | (a) | Government grants |
| | 31 December 2022 | | Increase in the current period | | Decrease in the current period | | | | | | Recognised in other income | | 30 June 2023 | | Asset related/ Income related | | | | | | | | | | | | | Research and development-related subsidies | 49,259,707 | | 6,000,000 | | (1,542,355) | | 53,717,352 | | Income related | | Equipment purchasing-related subsidies | 10,335,417 | | - | | (805,357) | | 9,530,060 | | Asset related | | Others | 1,254,519 | | 400,000 | | (120,000) | | 1,534,519 | | Income related | | | 60,849,643 | | 6,400,000 | | (2,467,712) | | 64,781,931 | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) |
| (32) | Long-term employee benefits payable | | | | | 30 June 2023 | | 31 December 2022 | | | | | | Supplementary retirement benefits and early-retirement benefits eligible for recognition of provisions | 53,311,343 | | 55,374,000 | | Less: Payable within 1 year | (4,081,000) | | (4,081,000) | | | 49,230,343 | | 51,293,000 |
| | | The retirement and early-retirement benefits payable within one year are included in employee benefits payable (Note 4(23)(c), (d)). | | | | 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 were calculated using projected unit credit method and were 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 2023 | | 31 December 2022 | | | | | | | | Opening balance | | 55,374,000 | | 59,941,000 | | | | | | | | Cost of defined benefit plans recognised in profit or loss for the current period | | | | | | - Current service cost | | - | | 1,161,000 | | - Past service cost | | - | | - | | - Actuarial gains or losses recognised immediately | | - | | 82,000 | | - Net interest | | - | | 1,744,000 | | | | | | | | Remeasurement of net liabilities for defined benefit plans | | | | | | - Actuarial gains | | - | | (3,918,000) | | | | | | | | Other movements | | | | | | - Benefits paid | | (2,062,657) | | (3,636,000) | | | | | | | | Ending balance | | 53,311,343 | | 55,374,000 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) |
| (32) | Long-term employee benefits payable (Cont’d) |
| (b) | The major actuarial assumptions used to determine the present value of defined benefit plan obligations | | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | | Discount rate | | 3.00% | | 3.00% | | Inflation rate | | 2.00% | | 2.00% | | Salaries and benefits growth rates | | 0%-6% | | 0%-6% | | | | | | | | Future mortality assumptions were determined based on the China Life Insurance Mortality Table (2010-2013), which is publicly available statistical information for the Chinese region. |
| (33) | Other non-current liabilities | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Contract liabilities carried forward to revenue after 1 year (Note 4(22)) | 116,447,990 | | 118,240,580 | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (34) | Share capital | | | | | 31 December 2022 | | Movements for the current period | | 30 June 2023 | | | | Shares newly issued | | Bonus share | | Transfer from capital surplus | | Others | | Sub-total | | | | | | | | | | | | | | | | | | Shares subject to trading restriction - | | | | | | | | | | | | | | | Other domestic shares | | | | | | | | | | | | | | | Including: Shares held by domestic non-state-owned legal persons | 745,140 | | - | | - | | - | | | | | | 745,140 | | Shares held by domestic natural persons | 5,700 | | - | | - | | - | | - | | - | | 5,700 | | | 750,840 | | - | | - | | - | | - | | - | | 750,840 | | | | | | | | | | | | | | | | | Shares not subject to trading restriction - | | | | | | | | | | | | | | | Ordinary shares denominated in RMB | 518,463,160 | | - | | - | | - | | - | | - | | 518,463,160 | | Domestically listed foreign shares | 344,000,000 | | - | | - | | - | | - | | - | | 344,000,000 | | | 862,463,160 | | - | | - | | - | | - | | - | | 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 2023, there were 750,840 shares currently unavailable for trading. During the reporting period, there was no shares with trading restrictions released from the restricted conditions. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (34) | Share capital (Cont’d) | | | | | 31 December 2021 | | Movements for the current year | | 31 December 2022 | | | | Shares newly issued | | Bonus share | | Transfer from capital surplus | | Others | | Sub-total | | | | | | | | | | | | | | | | | | Shares subject to trading restriction - | | | | | | | | | | | | | | | Other domestic shares | | | | | | | | | | | | | | | Including: Shares held by domestic non-state-owned legal persons | 745,140 | | - | | - | | - | | - | | - | | 745,140 | | Shares held by domestic natural persons | 5,700 | | - | | - | | - | | - | | - | | 5,700 | | | 750,840 | | - | | - | | - | | - | | - | | 750,840 | | | | | | | | | | | | | | | | | Shares not subject to trading restriction - | | | | | | | | | | | | | | | Ordinary shares denominated in RMB | 518,463,160 | | - | | - | | - | | - | | - | | 518,463,160 | | Domestically listed foreign shares | 344,000,000 | | - | | - | | - | | - | | - | | 344,000,000 | | | 862,463,160 | | - | | - | | - | | - | | - | | 862,463,160 | | | 863,214,000 | | - | | - | | - | | - | | - | | 863,214,000 | | | | | | | | | | | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (35) | Capital surplus | | | | | 31 December 2022 | | Increase in the current period | | Decrease in the current period | | 30 June 2023 | | | | | | | | | | | Share premium | 816,609,422 | | - | | - | | 816,609,422 | | Other capital surplus | 22,833,068 | | - | | - | | 22,833,068 | | | 839,442,490 | | - | | - | | 839,442,490 |
| | | | | | | | | | | 31 December 2021 | | Increase in the current year | | Decrease in the current year | | 31 December 2022 | | | | | | | | | | | Share 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 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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 2023 | | | | | | | | | | | | 31 December 2022 | Attributable to the parent company after tax | 30 June 2023 | | 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 | Attributable to the subsidiary after tax | | | | | | | | | | | | Other comprehensive income that will not be reclassified to profit or loss | | | | | | | | | | | Actuarial gains on defined benefit plans | (13,484,250) | - | (13,484,250) | | - | - | - | - | - | | | | | | Other comprehensive income in the balance sheet | | Other comprehensive income in the income statement for the year ended 31 December 2022 | | 31 December 2021 | Attributable to the parent company after tax | 31 December 2022 | | Amount incurred before income tax for the current year | Less: Transfer-out of previous other comprehensive income in the current period | Less: Income tax expenses | Attributable to the parent company after tax | Attributable to the subsidiary after tax | | | | | | | | | | | | Other comprehensive income that will not be reclassified to profit or loss | | | | | | | | | | | Actuarial gains on defined benefit plans | (16,422,750) | 2,938,500 | (13,484,250) | | 3,918,000 | - | (979,500) | 2,938,500 | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (37) | Special reserve |
| | 31 December 2022 | | Increase in the current period | | Decrease in the current period | | 30 June 2023 | | | | | | | | | | | Safety fund | - | | 12,877,704 | | (3,483,654) | | 9,394,050 |
| | 31 December 2022 | | Increase in the current period | | Decrease in the current period | | 30 June 2023 | | | | | | | | | | | Statutory surplus reserve | 431,607,000 | | - | | - | | 431,607,000 |
| | 31 December 2021 | | Increase in the current year | | Decrease in the current year | | 31 December 2022 | | | | | | | | | | | Statutory surplus reserve | 431,607,000 | | - | | - | | 431,607,000 |
| In accordance with the Company Law of the People’s Republic of China, the Company’s Articles of Association and the resolution of the Board of Directors, the Company should appropriate 10% of net profit for the year to the statutory surplus reserve, and the Company can cease appropriation when the statutory surplus reserve accumulated to more than 50% of the registered capital. The statutory surplus reserve can be used to make up for the loss or increase the share capital upon approval from the appropriate authorities. As the accumulated appropriation to the statuary surplus reserve exceeded 50% of the registered capital, no appropriation was made in the current period (2022: 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. | | | | (39) | Retained earnings | | | | | | | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Retained earnings at the beginning of the year | 7,123,038,093 | | 6,437,603,849 | | Add: Net profit attributable to shareholders of the parent company for the current period | 729,387,557 | | 452,381,022 | | Less: Ordinary share dividends payable (a) | (366,002,736) | | (229,614,924) | | Retained earnings at the end of the period | 7,486,422,914 | | 6,660,369,947 |
| (a) | According to the resolution of the meeting of board of directors on 28 March 2023, the board of directors propose to distribute cash dividends of RMB0.424 per share to all shareholders, calculated on the basis of 863,214,000 issued shares, for a total of RMB366,002,736，and the proposal was approved by the shareholders' meeting on 16 June 2023. | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (40) | Revenue and cost of sales | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Revenue from main operations | 15,204,056,146 | | 13,987,205,046 | | Revenue from other operations | 225,316,163 | | 235,554,338 | | | 15,429,372,309 | | 14,222,759,384 |
| | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Cost of sales from main operations | 12,949,555,180 | | 12,109,195,653 | | Cost of sales from other operations | 206,884,269 | | 221,906,101 | | | 13,156,439,449 | | 12,331,101,754 |
| (a) | Revenue and cost of sales from main operations | | | | | | | | Six months ended 30 June | | | 2023 | | 2022 |
| | Revenue from main operations | Cost of sales from main operations | | Revenue from main operations | Cost of sales from main operations | | | | | | | | | Sales of automobiles | 13,332,827,137 | 11,457,724,950 | | 12,865,705,605 | 11,244,951,198 | | Sales of automobile parts | 1,810,283,833 | 1,433,996,048 | | 1,060,688,066 | 803,494,300 | | Automobile maintenance services, etc. | 60,945,176 | 57,834,182 | | 60,811,375 | 60,750,155 | | | 15,204,056,146 | 12,949,555,180 | | 13,987,205,046 | 12,109,195,653 |
| (b) | Revenue and cost of sales from other operations | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | Revenue from other operations | Cost of sales from other operations | | Revenue from other operations | Cost of sales from other operations | | | | | | | | | Sales of materials | 175,794,567 | 159,216,134 | | 191,061,332 | 178,388,921 | | Others | 49,521,596 | 47,668,135 | | 44,493,006 | 43,517,180 | | | 225,316,163 | 206,884,269 | | 235,554,338 | 221,906,101 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (40) | Revenue and cost of sales (Cont’d) | | | | (c) | The Group’s revenue is broken down as follows: | | | | | | Six months ended 30 June 2023 | | Automobiles | Automobile parts | Automobile maintenance services. | Materials and others | Total | | | | | | | | Revenue from main operations | 13,332,827,137 | 1,810,283,833 | 60,945,176 | - | 15,204,056,146 | | Including: Recognised at a time point | 13,332,827,137 | 1,810,283,833 | - | - | 15,143,110,970 | | Recognised within a certain period | - | - | 60,945,176 | - | 60,945,176 | | Revenue from other operations (i) | - | - | - | 225,316,163 | 225,316,163 | | | 13,332,827,137 | 1,810,283,833 | 60,945,176 | 225,316,163 | 15,429,372,309 |
| | Six months ended 30 June 2022 | | Automobiles | Automobile parts | Automobile maintenance services. | Materials and others | Total | | | | | | | | Revenue from main operations | 12,865,705,605 | 1,060,688,066 | 50,406,375 | 10,405,000 | 13,987,205,046 | | Including: Recognised at a time point | 12,865,705,605 | 1,060,688,066 | - | 10,405,000 | 13,936,798,671 | | Recognised within a certain period | - | - | 50,406,375 | - | 50,406,375 | | Revenue from other operations (i) | - | - | - | 235,554,338 | 235,554,338 | | | 12,865,705,605 | 1,060,688,066 | 50,406,375 | 245,959,338 | 14,222,759,384 |
| (i) | The Group's Revenue from other operations includes sales of materials and technical service provided, etc. Of which, revenue from sales of materials is recognized at a certain point in time, and revenue from technical service provided is recognized within a certain period | | | | As at 30 June 2023, the amount of revenue corresponding to the performance obligations that the Group has signed but has not performed or has not yet performed is RMB311,120,078, of which the Group expects that RMB137,441,756 and RMB57,230,332 will be recognised as revenue from the sales of automobiles and parts and revenue from the sales of automobile maintenance services, etc respectively in 2023, RMB116,447,990 will be recognised as revenue from automobile maintenance services, etc during 2024 to 2028. | | | | (41) | Taxes and surcharges | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Consumption tax | 373,711,792 | | 287,322,632 | | City maintenance and construction tax | 18,963,390 | | 36,012,229 | | Educational surcharge | 18,884,757 | | 34,946,861 | | Land use tax | 10,305,123 | | 11,981,547 | | Real estate tax | 9,680,483 | | 11,253,617 | | Stamp duty | 8,613,872 | | 8,049,599 | | Others | 204,130 | | 259,959 | | | 440,363,547 | | 389,826,444 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (42) | Selling and distribution expenses | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Promotion expenses | 227,249,175 | | 206,589,048 | | Warranties | 126,130,480 | | 195,277,051 | | Employee benefits | 117,185,212 | | 106,274,641 | | Advertising and new product planning fees | 70,042,801 | | 89,719,606 | | Storage expenses | 25,782,982 | | 24,386,326 | | Packaging material expenses | 15,619,732 | | 16,349,345 | | Depreciation and amortisation expenses | 3,849,137 | | 1,774,580 | | Others | 69,990,572 | | 56,287,825 | | | 655,850,091 | | 696,658,422 |
| (43) | General and administrative expenses | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Employee benefits | 305,643,416 | | 262,789,333 | | Depreciation and amortisation expenses | 74,160,233 | | 71,094,821 | | Trademark license fee | 32,535,858 | | 29,184,964 | | Repair expenses | 10,861,777 | | 13,075,304 | | Consulting expenses | 6,821,567 | | 8,748,003 | | General office expenses | 6,348,243 | | 7,077,300 | | Others | 83,743,847 | | 60,087,261 | | | 520,114,941 | | 452,056,986 |
| (44) | Research and development expenses | | | | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Employee benefits | 256,836,007 | | 250,946,160 | | Depreciation and amortisation expenses | 138,004,437 | | 102,675,938 | | Design fee | 118,103,150 | | 107,366,166 | | Materials expenses | 85,363,612 | | 61,555,048 | | Technology development expenses | 75,714,080 | | 96,028,487 | | Others | 74,114,489 | | 48,422,574 | | | 748,135,775 | | 666,994,373 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (45) | Financial expenses | | | | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Interest costs | 12,140,837 | | 21,269,478 | | Add: Interest costs on lease liabilities | 5,390,685 | | 6,857,573 | | Interest expenses | 17,531,522 | | 28,127,051 | | Less: Interest income from cash at bank | (108,590,767) | | (107,825,929) | | Other interest income | (7,883,210) | | (8,326,232) | | Interest income | (116,473,977) | | (116,152,161) | | Exchange gains or losses | 4,937,885 | | 7,477,127 | | Others | 698,209 | | 350,632 | | | (93,306,361) | | (80,197,351) | | |
| (46) | 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 | | | 2023 | | 2022 | | | | | | | Changes in inventories of finished goods and work in progress | 294,331,743 | | 278,486,607 | | Consumed raw materials and low value consumables, etc. | 11,856,243,351 | | 10,797,906,093 | | Employee benefits | 1,356,861,864 | | 1,303,098,857 | | Depreciation of fixed assets | 442,918,223 | | 435,117,387 | | Amortisation of intangible assets | 132,580,119 | | 90,867,377 | | Depreciation of right-of-use assets | 36,087,214 | | 35,233,057 | | Transportation expenses | 259,830,610 | | 316,638,202 | | Promotion expenses | 227,249,175 | | 206,589,048 | | Warranties | 126,130,480 | | 195,277,051 | | Design fee | 118,103,150 | | 107,366,166 | | Technology development expenses | 75,714,080 | | 96,028,487 | | Advertising and new product planning fees | 70,042,801 | | 89,719,606 | | Fixed asset repair and maintenance expenses (a) | 54,578,826 | | 49,914,391 | | Others | 29,868,620 | | 144,569,206 | | | 15,080,540,256 | | 14,146,811,535 | | | | (a) | The Group includes daily maintenance expenses ineligible for the capitalisation of fixed assets regarding the production and processing of inventories into cost of inventories, which will be carried forward to cost of sales, and those regarding the R&D Department, Administrative Department, and Sales Department are included in research and development expenses, management expenses and selling and distribution expenses respectively. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | (47) | Credit impairment losses | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Losses on bad debts of accounts receivable | 2,770,236 | | (14,023,396) | | Losses on bad debts of notes receivable | (318,280) | | - | | Losses on bad debts of other receivables | (92,558) | | (326,531) | | Losses on bad debts of long-term receivables | (23,520) | | (23,520) | | 2,335,878 | | (14,373,447) |
| (48) | Other income | | | | | | | | | | Six months ended 30 June | | Asset related/ Income related | | | | | | |
| | 2023 | | 2022 | | | | | | | | | | Supporting funds by government | 350,200,000 | | 256,908,600 | | Income related | | Research and development activities related subsidies | 2,192,354 | | 93,204 | | Income related | | Equipment purchasing-related subsidies | 805,357 | | 134,226 | | Asset related | | Other subsidies related with daily operation | 5,446,243 | | 3,923,204 | | Income related | | | 358,643,954 | | 261,059,234 | | |
| (49) | Investment income | | | | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Losses on discount of financing receivables eligible for derecognition | (12,045,045) | | (8,585,648) | | Losses on long-term equity investments under equity method | (3,893,639) | | (4,151,633) | | Investment loss from forward exchange settlement | 2,524,896 | | (10,728,178) | | Investment income from financial assets held for trading | - | | 1,523,836 | | | (13,413,788) | | (21,941,623) | | | | There is no significant restriction on the remittance of investment income of the Group. | | | | (50) | Gains on changes in fair value | | | | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | Derivative financial assets - | | | | | Gains on forward exchange contracts | 4,114,063 | | 5,272,552 | | Financial assets at fair value through profit or loss - | | | | | Structural deposits | 136,000 | | (242,329) | | | 4,250,063 | | 5,030,223 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) |
| (51) | Gains on disposal of assets | | | | | | | | | | Six months ended 30 June | | Amount recognised in non-recurring profit or loss For the six months ended 30 June 2023 | | | 2023 | | 2022 | | | | | | | | | | (Losses)/Gains on disposal of assets (i) | (293,630) | | 395,561,300 | | (293,630) | | | | (i) | The gains generated from disposal of land and above-ground buildings of Qingyunpu Factory in six months ended 30 June 2022 was RMB394,117,791. |
| (52) | Non-operating income | | | | | | | | | | Six months ended 30 June | | Amount recognised in non-recurring profit or loss For the six months ended 30 June 2023 | | | 2023 | | 2022 | | | | | | | | | | Compensation and penalty income and Others | 7,042,517 | | 2,019,528 | | 7,042,517 |
| (53) | Non-operating expenses | | | | | | | | | | Six months ended 30 June | | Amount recognised in non-recurring profit or loss For the six months ended 30 June 2023 | | | 2023 | | 2022 | | | | | | | | | | Losses on scrapping of assets | 462,383 | | 249,038 | | 462,383 | | Donations | 5,050 | | 5,280 | | 5,050 | | Others | 118,006 | | 252,100 | | 118,006 | | | 585,439 | | 506,418 | | 585,439 | | | | | | | | | (54) | Income tax expenses | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Current income tax calculated based on tax law and related regulations | (173,134,972) | | (37,967,101) | | Deferred income tax | 81,600,830 | | 37,958,166 | | | (91,534,142) | | (8,935) | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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 | | | 2023 | | 2022 | | | | | | | Total profit | 355,082,666 | | 421,914,447 | | Income tax calculated at applicable tax rates | (38,901,653) | | 40,560,200 | | Effect of change in the tax rates | 20,382,054 | | 25,295,893 | | Additional deductions | (90,087,306) | | (76,963,987) | | Non-deductible investment losses | 584,046 | | 622,745 | | Deductive loss and temporary differences of the unrecognised deferred tax asset in the current period | 12,742,388 | | 11,802,338 | | Tax deduction | - | | (1,487,861) | | Costs, expenses and losses not deductible for tax purposes | 3,746,329 | | 161,737 | | Income tax expenses | (91,534,142) | | (8,935) | | | | | | | (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 | | | 2023 | | 2022 | | | | | | | Consolidated net profit attributable to ordinary shareholders of the parent company | 729,387,557 | | 452,381,022 | | Weighted average number of ordinary shares outstanding issued by the Company | 863,214,000 | | 863,214,000 | | Basic earnings per share | 0.84 | | 0.52 | | (b) | 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 For the six months ended 30 June 2023 (the six months ended 30 June 2022: Nil), diluted earnings per share equalled to basic earnings per share. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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 | | | 2023 | | 2022 | | | | | | | Government grants | 362,576,242 | | 273,306,804 | | Guarantees | 22,162,178 | | 32,972,688 | | Others | 20,552,818 | | 38,745,069 | | | 405,291,238 | 345,024,561 |
| (b) | Cash paid relating to other operating activities | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Research and development expenses | 468,474,355 | | 425,248,558 | | Promotion expenses | 209,100,546 | | 304,676,243 | | Warranties | 173,887,603 | | 193,444,885 | | Advertising expenses | 79,645,485 | | 83,599,440 | | Maintenance expenses | 43,587,238 | | 34,587,032 | | Guarantees | 33,126,160 | | 38,337,255 | | Trademark royalties | 27,447,499 | | 27,841,258 | | Consulting Fees | 25,157,593 | | 22,095,778 | | Others | 258,618,595 | | 226,474,716 | | | 1,319,045,074 | | 1,356,305,165 |
| | | (c) | Cash received relating to other investing activities | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Interest from cash at bank | 94,653,202 | | 115,825,204 | | Other interest | 8,581,891 | | 9,641,976 | | | 103,235,093 | | 125,467,180 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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 | | | 2023 | | 2022 | | | | | | | Payments of lease liabilities | 9,449,108 | | 6,754,924 | | Payments of short-term borrowings guarantees | 500,000,000 | | - | | | 509,449,108 | | 6,754,924 | | | | (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 | | | 2023 | | 2022 | | | | | | | Net profit | 446,616,808 | | 421,923,382 | | Add: Provision for credit impairment (Note 4(47)) | 2,335,878 | | (14,373,447) | | Depreciation of fixed assets (Note 4(14)) | 442,918,223 | | 435,117,387 | | Amortisation of intangible assets (Note 4(17)) | 132,580,119 | | 90,867,377 | | Depreciation of right-of-use assets (Note 4(16)) | 36,087,214 | | 35,233,057 | | (Decrease)/Increase in provisions (Note 4(30)) | (11,244,035) | | 20,674,585 | | Losses/(Gains) on disposal of long-term assets | 755,894 | | (395,312,262) | | Financial expenses | (94,004,623) | | (80,553,800) | | Investment income (Note 4(49)) | 13,413,788 | | 21,941,623 | | Gains on changes in fair value (Note 4(50)) | (4,250,063) | | (5,030,223) | | Increase in deferred tax assets | (35,963,252) | | (54,648,025) | | Decrease in deferred tax liabilities | (340,693) | | (347,556) | | Decrease in inventories | 308,145,911 | | 47,455,534 | | Increase in other cash | (41,048,830) | | - | | Decrease /(Increase) in operating receivables | 694,355,906 | | (1,823,060,996) | | Decrease in operating payables | (233,209,908) | | (2,031,433,111) | | Net cash flows generated from/(uesd in) operating activities | 1,657,148,337 | | (3,331,546,475) | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (57) | Supplementary information to the cash flow statement (Cont’d) |
| (a) | Supplementary information to the cash flow statement (Cont’d) |
| Net increase/(decrease) in cash and cash equivalents | | | | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Cash and cash equivalents at the end of the period | 9,258,663,984 | | 7,799,258,684 | | Less: Cash and cash equivalents at the beginning of the year | (8,543,193,654) | | (9,569,051,314) | | Net increase/(decrease) in cash and cash equivalents | 715,470,330 | | (1,769,792,630) |
| (b) | Cash and cash equivalents | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Cash at bank available for payment at any time | 8,472,449,674 | | 7,656,947,735 | | Cash at finance company available for payment at any time | 786,214,310 | | 886,245,919 | | | 9,258,663,984 | | 8,543,193,654 |
| (58) | Foreign currency monetary items | | | | | 30 June 2023 | | | Amounts in foreign currencies | | Translation exchange rate | | Amounts in RMB | | | | | | | | | Long-term borrowings - | | | | | | | USD | 294,679 | | 7.2258 | | 2,129,290 | | | | | | | | | Other payables - | | | | | | | USD | 21,845,028 | | 7.2258 | | 157,847,805 | | EUR | 33,288 | | 7.8771 | | 262,213 | | | | | | | 158,110,018 |
SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 5 | Equity in other entities | | | | (1) | Equity in subsidiaries | | | | Structure of the Group | | | | Subsidiaries | Main place of 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 (i) | 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 | | Jiangling Ford (Shanghai)(a) | Shanghai | Shanghai | Sales of automobiles, technical and business information consultation | 51% | - | Set up by investment | | | | (i) According to the resolution of Board of Directors held from 30 April 2021 to 6 May 2021, the Company sold 100% equity of JMCH held by the Company through Shanxi Property Rights Exchange at a price of not less than RMB764,069,207. On 9 August 2021, the listing announcement period has expired and Volvo Lastvagnar Aktiebolag(“Volvo”) became the intended transferee for the equity transaction. On 23 August 2021, the Company and Volvo reached an agreement through negotiation and signed the Equity Transaction Agreement on 100% Equity of Jiangling Heavy Duty Vehicle Co., Ltd. The benchmark price for equity transfer is RMB781,400,000. As at 30 June 2023, Due to the failure of the government approval matters required for this exchange to be completed within the agreed time, the equity transaction has been terminated, and the company will continue to actively promote the restructuring of JMCH, so JMCH remains as a subsidiary of the Company and is included in the consolidated financial statements. |
SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 5 | Interests in other entities (Cont’d) | | | | (1) | Equity in subsidiaries (Cont’d) | | | | (a) | Subsidiaries with significant minority interests | | | | Subsidiaries | Shareholding of minority shareholders | | Total profit or loss attributable to minority shareholders for the six months ended 30 June 2023 | | Dividends paid to minority shareholders for the six months ended 30 June 2023 | | Minority interests as at 30 June 2023 | | | | | | | | | | Jiangling Ford (Shanghai) | 49%5 | | (282,770,749) | | - | | (236,941,298) |
| Key financial information of the above significant non-wholly owned subsidiaries is presented below. | | | As at June 30 2023 | | | Current assets | | Non-current assets | | Total assets | | Current liabities | | Non-current liabities | | Total liabities | | | | | | | | | | | | | | Jiangling Ford (Shanghai) | 226,749,403 | | 246,859,940 | | 473,609,343 | | 950,039,385 | | 7,123,627 | | 957,163,012 |
| | The six months ended 30 June 2023 | | | Revenue | | Net profit | | Total comprehensive income | | Cash flows from operating activities | | | | | | | | | | | Jiangling Ford (Shanghai) | 61,921,303 | | (577,083,161) | | (577,083,161) | | ((57,222,688) | | |
SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 5 | Interests in other entities (Cont’d) | | | | (2) | Equity in associates | | | | (a) | General information of significant associates |
| | | Place of registration | | Shareholding (%) | | Direct | | Indirect | | | | | | | | | Associate - | | | | | | | | The Power Company | | Taiyuan, Shanxi | | 40% | | - | | | | | | | | | | (b) | Summarised financial information for significant associates |
| | 30 June 2023 | | 31 December 2022 | | The Power Company | | The Power Company | | | | | | | Current assets | 166,900,452 | | 194,926,320 | | Non-current assets | 439,254,319 | | 426,146,460 | | Total assets | 606,154,771 | | 621,072,780 | | | | | | | Current liabilities | 99,476,077 | | 107,387,068 | | Non-current liabilities | 252,684 | | 152,778 | | Total liabilities | 99,728,761 | | 107,539,846 | | | | | | | Minority interests | 202,570,404 | | 205,413,174 | | Attributable to shareholders of the parent company | 303,855,606 | | 308,119,760 | | | | | | | Share of net assets based on shareholding (i) | 202,570,404 | | 205,413,174 | | Adjustments | | | | | - Unrealised profits arising from internal transactions | (14,814,055) | | (15,210,808) | | - Others (ii) | 20,853,323 | | 20,853,323 | | | | | | | Carrying amount of equity investments in associates | 208,609,672 | | 211,055,689 | | | | | |
SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 6 | Equity in other entities (Cont’d) | | | | (2) | Equity in associates (Cont’d) | | | | (b) | Summarised financial information for significant associates (Cont’d) | | | | | | | | The six months ended 30 June | | | 2023 | | 2022 | | | The Power Company | | The Power Company | | | | | | | Revenue | 23,975,774 | | 40,592,217 | | Net loss | (12,707,406) | | (11,009,189) | | Other comprehensive income | - | | - | | Total comprehensive loss | (12,707,406) | | (11,009,189) | | | | | | | | Dividends received from associates by the Group | - | | - | | | | | | | (i) | The Group calculated the shares of net assets in proportion of the shareholdings and based on the amount attributable to the parent company of the associates in their consolidated financial statements. The amount in the consolidated financial statements of associates considers the impacts of fair value of identifiable assets and liabilities of associates at the time of acquisition and the unification of accounting policies. None of the assets involved in transactions between the Group and associates contribute to business. | | | | (ii) | Other adjustments were mainly the remeasurement for fair value of remaining equity in the consolidated financial statements, which resulted from the loss of control over the original subsidiary due to the disposal of part of the equity investment. |
| (c) | Summarised information of insignificant associates | | | | | The six months ended 30 June | | | 2023 | | 2022 | | | | | | | Aggregated carrying amount of investments | 35,979,511 | | 36,263,930 | | | | | | | Aggregate of the following items in proportion | | | | | Net loss (i) | (1,447,622) | | (144,710) | | Other comprehensive income (i) | - | | - | | Total comprehensive loss | (1,447,622) | | (144,710) |
| (i) | Net profit and other comprehensive income have taken into account the fair value of identifiable assets and liabilities at the time of acquisition of the investments and the impact of adjustments to uniform accounting policies. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 6 | Segment information | | | | Revenue and profits of the Company mainly arise from production and domestic sales of automobiles, and the primary assets of the Group are all located in China. Management of the Group assesses the operating performance of the Group as a whole. Therefore, no segment report is prepared for the current period. During the six months ended 30 June 2023, the operating revenue obtained from a single customer of the Group accounted for more than 10% of the Group's operating revenue, amounting to RMB4,775,490,540 (the six months ended 30 June 2022: RMB2,214,607,113), or 30.95% (the six months ended 30 June 2022: 15.57%) of the Group's operating revenue. | | | | 7 | Related parties and related party transactions | | | | (1) | Information of major shareholders | | | | (a) | General information of major 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 | Foreign enterprise | United States | William Clay Ford, Jr. | Manufacture and sales of automobiles | N/A | | | | (b) | Registered capital and changes in major shareholders |
| | 31 December 2022 | Increase in the current period | Decrease in the current period | 30 June 2023 | | | | | | | | JIC | 1,000,000,000 | - | - | 1,000,000,000 | | Ford | USD 42,000,000 | - | - | USD 42,000,000 | | | | (c) | The percentages of shareholding and voting rights in the Company held by major shareholders | | | | | 30 June 2023 | | | 31 December 2022 | | | Shareholding | Voting rights | | | Shareholding | Voting rights | | | | | | | | | | JIC | 41.03% | 41.03% | | | 41.03% | 41.03% | | Ford | 32% | 32% | | | 32% | 32% |
| (2) | Information of subsidiaries | | | | The general information and other related information of subsidiaries are set out in Note 5(1). | | | | (3) | Information of associates | | | | The information of associates is set out in Note 4(13). | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 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 JMCG Industry Co.,Ltd. | Wholly-owned Subsidiary of JMCG | | Jiangxi Lingrui Recycling Resources Development Corporation | Wholly-owned Subsidiary of JMCG | | Jiangling Material Co.,Ltd. | Wholly-owned Subsidiary of JMCG | | JMCG Property Management Co. | Wholly-owned Subsidiary of JMCG | | JMCG Jingma Motors Co., Ltd. | Wholly-owned Subsidiary of JMCG | | Jiangxi Jiangling Special Purpose Vehicle Co.,Ltd. | Wholly-owned Subsidiary of JMCG | | Jiangling Motor Group (Nanchang) Fushan Energy Co., LTD | Wholly-owned Subsidiary of JMCG | | JMCF | Holding subsidiary of JMCG | | Jiangxi Jiangling Chassis Co.,Ltd. | Holding subsidiary of JMCG | | Nanchang JMCG Shishun Logistics Co., Ltd. | Holding subsidiary of JMCG | | Jiangxi Lingge Non-ferrous Metal Die-casting Co.,Ltd. | Holding subsidiary of JMCG | | Jiangxi Mingfang Auto Parts Industry Co., Ltd | Holding subsidiary of JMCG | | Jiangxi JMCG Specialty Vehicles Corporation, Ltd. | Holding subsidiary of JMCG | | Jiangling Motor Electricity Vehicle Co., Ltd. | Holding subsidiary of JMCG | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | Holding subsidiary of JMCG | | Ford Motor Research & Engineering (Nanjing) Co., Ltd. | Wholly-owned Subsidiary of Ford | | Ford Global Technologies, LLC | Wholly-owned Subsidiary of Ford | | Ford Thailand Motor Co. Ltd. | Wholly-owned Subsidiary of Ford | | Ford Motor (China) Co., Ltd. | Wholly-owned Subsidiary of Ford | | Ford Trading Company, LLC | Wholly-owned Subsidiary of Ford | | Ford Vietnam Limited | Holding Subsidiary of Ford | | Auto Alliance (Thailand) Co.,Ltd. | Holding Subsidiary of Ford | | Ford Otomotiv Sanayi A.S. | Holding Subsidiary of Ford | | Changan Ford Automobile Co.,Ltd. | Joint venture of Ford | | JMCG Jiangxi Engineering Construction Co., Ltd. | Subsidiary under indirect control of JMCG | | Nanchang JMCG Liancheng Auto Component Co.,Ltd. | Subsidiary under indirect control of JMCG | | Jiangling Aowei Aotomobile Spare Part Co.,Ltd. | Subsidiary under indirect control of JMCG | | Nanchang Lianda Machinery Co.,Ltd. | Subsidiary under indirect control of JMCG | | Nanchang Gear Forging Co.,Ltd. | Subsidiary under indirect control of JMCG | | Jiangxi JMCG Boya brake system Co., Ltd. | Subsidiary under indirect control of JMCG | | Nanchang JMCG Xinchen Auto Component Co.,Ltd. | Subsidiary under indirect control of JMCG | | Jiangxi Jiangling group Fuxin Auto Parts Co., Ltd | Subsidiary under indirect control of JMCG | | Jiangxi JMCG Motorhome Co.,Ltd. | Subsidiary under indirect control of JMCG | | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (4) | Information of other related parties (Cont'd) |
| | Relationship with the Group | | | | | Nanchang Hengou Industry Co., Ltd. | Subsidiary under indirect control of JMCG | | Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. | Subsidiary under indirect control of JMCG | | Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | Subsidiary under indirect control of JMCG | | China Changan Group Tianjin Sales Co.,Ltd | Group Subsidiary of JIC's Shareholder | | Dali Wanfu Vehicle Sales & Service Co., Ltd. | Group Subsidiary of JIC's Shareholder | | Chongqing Anfu Vehicle Marketing Co., Ltd. | Group Subsidiary of JIC's Shareholder | | Chengdu Wanxing Vehicle Sales & Service Co., Ltd. | Group Subsidiary of JIC's Shareholder | | Chongqing Anbo Vehicle Sales Co., Ltd. | Group Subsidiary of JIC's Shareholder | | Guizhou Wanfu Vehicle Sales & Service Co., Ltd. | Group Subsidiary of JIC's Shareholder | | Beijing Baiwang Changfu Vehicle Sales & Service Co., Ltd. | Group Subsidiary of JIC's Shareholder | | Beijing Beifang Changfu Vehicle Sales & Service Co., Ltd. | Group Subsidiary of JIC's Shareholder | | Guizhou Wanjia Automobile Sales and Service Co. LTD | Group Subsidiary of JIC's Shareholder | | Jiangxi Jiangling Lear Interior System Co.,Ltd. | Joint venture of JMCG | | Nanchang Jiangling Hua Xiang Auto Components Co.,Ltd. | Joint venture of JMCG | | Nanchang Unistar Electric & Electronics Co.,Ltd. | Joint venture of JMCG | | Nanchang Yinlun Heat-exchanger Co.,Ltd. | Joint venture of JMCG | | Jiangxi ISUZU Engine Co.,Ltd. | Joint venture of JMCG | | Jiangxi ISUZU Co., Ltd. | Joint venture of JMCG | | Dibao transportation equipment (Nanchang) Co., Ltd | Joint venture of JMCG | | Jiangling Motor Holdings Co., Ltd | Associate of JMCG | | Magna PT Powertrain (Jiangxi) Co., Ltd | Associate of JMCG | | Nanchang Baojiang Steel Processing Distribution Co.,Ltd. | Associate of JMCG | | Faurecia Emissions Control Technologies (Nanchang) Co.,Ltd. | Associate of JMCG | | Jiangxi Jiangling Group Special Vehicle Co.,Ltd. | Associate of JMCG | | Nanchang JMCG SMR Huaxiang Mirror Co., Ltd. | Associate of JMCG | | Jiangxi Lingyun Automobile Industry Technology Co.,Ltd | Associate of JMCG | | | | | | | | | | | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | | | (5) | Related party transactions | | | | | | (a) | Purchase and sales of goods, provision and receipt of services | | | | | | | | | | Six months ended 30 June | | Related parties | Nature of related party transactions | 2023 | | 2022 | | | | | | | | | | Magna PT Powertrain (Jiangxi) Co., Ltd. | Purchase of automobile parts | 612,879,253 | | 333,486,963 | | | Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | Purchase of automobile parts | 573,081,318 | | 382,320,934 | | | Jiangxi Jiangling Lear Interior System Co., Ltd. | Purchase of automobile parts | 354,855,203 | | 242,153,680 | | | Nanchang Baojiang Steel Processing Distribution Co., Ltd. | Purchase of raw materials | 338,563,188 | | 403,267,450 | | | Jiangxi Jiangling Chassis Co., Ltd. | Purchase of automobile parts | 298,114,886 | | 339,792,672 | | | Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | Purchase of automobile parts | 296,110,915 | | 266,851,205 | | | Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | Purchase of automobile parts | 262,668,568 | | 266,044,891 | | | Faurecia Emissions Control Technologies (Nanchang) Co., Ltd. | Purchase of automobile parts | 184,385,384 | | 214,626,269 | | | Nanchang Unistar Electric & Electronics Co., Ltd. | Purchase of automobile parts | 141,928,577 | | 166,933,947 | | | Nanchang JMCG Liancheng Auto Component Co., Ltd. | Purchase of automobile parts | 134,266,900 | | 189,110,774 | | | Jiangxi Lingyun Automobile Industry Technology Co.,Ltd | Purchase of automobile parts | 100,142,856 | | 27,863,903 | | | Nanchang JMCG Shishun Logistics Co., Ltd. | Purchase of automobile parts | 94,684,781 | | 93,079,273 | | | Hanon Systems | Purchase of automobile parts | 78,188,938 | | 76,171,447 | | | Ford | Purchase of automobile parts | 70,921,401 | | 149,947,751 | | | Nanchang Yinlun Heat-exchanger Co., Ltd. | Purchase of automobile parts | 59,390,004 | | 50,988,587 | | | Nanchang JMCG SMR Huaxiang Mirror Co., Ltd. | Purchase of automobile parts | 56,603,368 | | 46,100,961 | | | Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd. | Purchase of automobile parts | 35,681,186 | | 40,574,487 | | | Dibao transportation equipment (Nanchang) Co., Ltd | Purchase of automobile parts | 26,955,832 | | 37,004,698 | | | | | | | | | | | | | | | | | | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | | | | | (5) | Related party transactions (Cont’d) | | | | | | | | (a) | Purchase and sales of goods, provision and receipt of services (Cont'd) | | | | | | | | Purchase of goods (Cont'd): | | | | | | | | Six months ended 30 June | | | Related parties | Nature of related party transactions | 2023 | | 2022 | | | | | | | | | | | | Nanchang Lianda Machinery Co., Ltd. | Purchase of automobile parts | 19,699,255 | | 22,528,774 | | | | Jiangxi Jiangling Group Special Vehicle Co., Ltd. | Purchase of automobile parts | 19,397,071 | | 20,702,602 | | | | Changan Ford Automobile Co., Ltd. | Purchase of automobile parts | 16,978,981 | | 27,868,811 | | | | Jiangxi Lingrui Recycling Resources Development Corporation | Purchase of automobile parts | 15,092,027 | | 6,687,750 | | | | Auto Alliance (Thailand) Co., Ltd. | Purchase of automobile parts | 12,302,972 | | 19,826,351 | | | | Jiangxi JMCG Boya brake system Co., Ltd | Purchase of automobile parts | 9,926,780 | | 9,985,963 | | | | Jiangling Material Co., Ltd. | Purchase of raw materials | 9,453,368 | | 14,261,806 | | | | Jiangxi JMCG Specialty Vehicles Co., Ltd. | Purchase of automobile parts | 9,438,144 | | 12,189,849 | | | | Jiangxi Jiangling group Fuxin Auto Parts Co., Ltd. | Purchase of automobile parts | 6,039,341 | | 6,121,107 | | | | Jiangxi ISUZU Engine Co., Ltd. | Purchase of automobile parts | 5,843,600 | | 14,990,491 | | | | Jiangling Aowei Automobile Spare Part Co., Ltd. | Purchase of automobile parts | 5,647,036 | | 5,589,279 | | | | Jiangling Motor Group (Nanchang) Fushan Energy Co., LTD | Purchase of raw materials | 4,674,040 | | - | | | | Nanchang JMCG Xinchen Auto Component Co., Ltd. | Purchase of automobile parts | 3,920,960 | | 3,521,896 | | | | Jiangxi Mingfang Auto Parts Industry Co., Ltd. | Purchase of automobile parts | 3,910,008 | | 2,068,147 | | | | Ford Otomotiv Sanayi A.S. | Purchase of automobile parts | 3,709,077 | | 4,123,733 | | | | Jiangling Motor Holdings Co., Ltd. | Purchase of automobile parts | 2,613,788 | | 22,122,273 | | | | JMCG | Purchase of automobile parts | 2,515,904 | | 56,308,360 | | | | Ford Motor Co. Thailand Ltd. | Purchase of automobile parts | 1,056,616 | | 1,980,663 | | | | | | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | | | (5) | Related party transactions (Cont’d) | | | | | | (a) | Purchase and sales of goods, provision and receipt of services (Cont'd) | | | | | | Purchase of goods (Cont'd): | | | | | | Six months ended 30 June | | Related parties | Nature of related party transactions | 2023 | | 2022 | | | | | | | | | | Shanxi Yunnei Power Group Co., Ltd. | Purchase of automobile parts | 580,055 | | 12,307,701 | | | Nanchang Gear Forging Co.,Ltd. | Purchase of automobile parts | 937,224 | | 2,029,108 | | | Nanchang Hengou Industry Co., Ltd. | Purchase of automobile parts | 326,857 | | 1,781,318 | | | Other related parties | Purchase of automobile parts | 454,199 | | 1,202,423 | | | | | 3,873,939,861 | | 3,594,518,297 | |
| 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 EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (5) | Related party transactions (Cont’d) | | | | (a) | Purchase and sales of goods, provision and receipt of services (Cont'd) | | | | | | | | Receipt of services: | | | | | | | | Six months ended 30 June | | Related parties | Nature of related party transactions | 2023 | | 2022 | | | | | | | | Nanchang JMCG Shishun Logistics Co., Ltd. | Transportation, removal fee, etc. | 138,271,507 | | 193,566,015 | | Ford Global Technologies,LLC | Trademark management fees, technology development | 105,294,784 | | 117,920,247 | | Ford Motor Research & Engineering (Nanjing) Co., Ltd. | Design fee, Personnel costs | 102,360,446 | | 7,304,257 | | Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | Cartage fee, storage fee, etc. | 42,263,367 | | 8,736,909 | | Ford Motor (China) Co., Ltd. | Technical services and personnel costs | 25,690,619 | | 8,952,383 | | Ford | Technical services and personnel costs | 16,941,345 | | 84,615,500 | | Jiangxi JMCG Industry Co., Ltd. | Meals | 15,784,854 | | 10,006,592 | | JMCG | Labour fee, rental fee, etc. | 9,035,774 | | 353,839 | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | Agency fee, advertising fee, etc. | 7,490,617 | | 8,769,093 | | JMCG Property Management Co. | Property fees, labour costs, etc. | 5,496,458 | | 672,170 | | JMCG Jiangxi Engineering Construction Co., Ltd. | Engineering construction | 4,494,827 | | - | | Ford Otomotiv Sanayi A.S. | Technical services and technical development | 4,048,186 | | 7,397,330 | | Changan Ford Automobile Co., Ltd. | Service fee, labour costs, etc. | 2,659,578 | | 5,099,373 | | Magna PT Powertrain (Jiangxi) Co., Ltd. | Design fee, experimental costs | 1,728,126 | | 4,036,036 | | China Changan Group Tianjin Sales Co., Ltd. | Warranty and promotion | 1,184,253 | | 236,108 | | Chongqing Changan Automobile Co., Ltd. | Personnel costs | 1,165,327 | | 1,229,023 | | Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | Design fee, experimental costs | 1,000,000 | | - | | Jiangxi JMCG Specialty Vehicles Co., Ltd. | Promotion | 474,033 | | 1,143,651 | | Shanxi Yunnei Power Group Co., Ltd. | Consulting | - | | 4,109,652 | | Jiangling Motor Holdings Co., Ltd. | Labour fee, rental fee | - | | 1,165,365 | | Other related parties | | 5,051,545 | | 4,475,115 | | | | 490,435,646 | | 469,788,658 | | | | | | | | 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 EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (5) | Related party transactions (Cont’d) | | | | (a) | Purchase and sales of goods, provision and receipt of services (Cont'd) | | | | Sales of goods and provision of services: | | | | | | Six months ended 30 June | | Related parties | Nature of related party transactions | 2023 | | 2022 | | | | | | | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | Sales of vehicles and accessories, etc. | 4,771,391,370 | | 2,209,977,113 | | Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. | Sales of vehicles | 96,069,902 | | 282,115,147 | | JMCG Jingma Motors Co., Ltd. | Sales of vehicles and accessories | 66,150,936 | | 24,715,398 | | Jiangxi JMCG Specialty Vehicles Co., Ltd. | Sales of vehicles and accessories | 36,125,691 | | 44,907,062 | | Jiangxi Lingrui Recycling Resources Development Corporation | Sales of waste materials, etc. | 29,443,114 | | 34,140,746 | | Chongqing Anfu Vehicle Marketing Co., Ltd. | Sales of vehicles and accessories | 28,322,195 | | 29,103,852 | | Guizhou Wanfu Vehicle Sales & Service Co., Ltd. | Sales of vehicles and accessories | 27,313,444 | | 22,480,856 | | Chengdu Wanxing Vehicle Sales & Service Co., Ltd. | Sales of vehicles and accessories | 25,855,442 | | 24,018,999 | | China Changan Group Tianjin Sales Co., Ltd. | Sales of vehicles and accessories | 21,666,937 | | 21,636,708 | | Jiangxi Jiangling Chassis Co., Ltd. | Sales of accessories | 21,409,740 | | 42,234,955 | | Jiangxi Jiangling Group Special Vehicle Co., Ltd. | Sales of vehicles and accessories | 18,605,372 | | 32,393,211 | | Jiangxi ISUZU Engine Co., Ltd. | Sales of accessories | 14,870,252 | | - | | Dali Wanfu Vehicle Sales & Service Co., Ltd. | Sales of vehicles and accessories | 13,177,316 | | 18,290,574 | | Beijing Baiwang Changfu Vehicle Sales & Service Co., Ltd. | Sales of vehicles and accessories | 11,354,377 | | 46,988 | | Beijing Beifang Changfu Vehicle Sales & Service Co., Ltd. | Sales of vehicles and accessories | 10,989,264 | | 8,851,241 | | Jiangxi Jiangling Lear Interior System Co., Ltd. | Sales of accessories | 10,950,458 | | 3,840,532 | | Guizhou Wanjia Automobile Sales and Service Co. LTD | Sales of vehicles and accessories | 10,915,251 | | 7,915,724 | | Jiangxi ISUZU Co., Ltd. | Sales of accessories | 10,806,891 | | 12,091,000 | | Nanchang JMCG SMR Huaxiang Mirror Co., Ltd. | Sales of accessories | 9,072,055 | | 6,383,323 | | Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | Sales of vehicles and accessories | 6,367,741 | | 42,637,998 | | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (5) | Related party transactions (Cont’d) | | | | (a) | Purchase and sales of goods, provision and receipt of services (Cont'd) | | | | Sales of goods and provision of services(Cont'd): | | | | | | Six months ended 30 June | | Related parties | Nature of related party transactions | 2023 | | 2022 | | | | | | | | Chongqing Anbo Vehicle Sales Co., Ltd. | Sales of vehicles and accessories | 6,332,539 | | 18,711,495 | | Nanchang Hengou Industry Co., Ltd. | Sales of accessories | 4,772,985 | | 4,123,832 | | Nanchang JMCG Liancheng Auto Component Co., Ltd. | Sales of accessories | 3,427,362 | | 3,283,574 | | JMCG | Sales of accessories | 1,722,665 | | - | | Jiangxi JMCG Industry Co., Ltd. | Sales of accessories and waste materials, etc. | 1,388,357 | | 1,649,088 | | Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | Sales of accessories | 1,324,600 | | 1,657,502 | | Nanchang JMCG Shishun Logistics Co., Ltd. | Sales of vehicles and accessories, etc. | 482,009 | | 1,057,296 | | Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | Sales of accessories | 448,728 | | 2,338,248 | | Other related parties | | 2,693,318 | | 2,722,934 | | | | 5,263,450,311 | | 2,903,325,396 |
| 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 EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (5) | Related party transactions (Cont’d) | | | | (b) | Leases |
| (i) | The lease income recognised in the current period with the Group as the lessor: | | | | | | Six months ended 30 June | | Name of the lessee | Type of the leased asset | 2023 | | 2022 | | | | | | | | Jiangxi JMCG Motorhome Co.,Ltd. | Buildings | - | | 2,945 | | | | | | |
| (ii) | Interest expenses on lease liabilities in the current period with the Group as the lessee: | | | | | Six months ended 30 June | | | 2023 | | 2022 | | Name of the lessor | Type of the leased asset | | | | | | | | | | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | Buildings | 162,032 | | 311,702 | | JMCG | Buildings | 114,569 | | 169,421 | | | 276,601 | | 481,123 | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | | | (5) | Related party transactions (Cont’d) | | | | | | (c) | Guarantee received | | | | Guarantor | Guaranteed amount | Starting date | Ending date | Fully performed or not | | | | | | | JMCF | 2,129,290 | 5 March 2001 | 30 October 2029 | Not fully performed |
| For the six months ended 30 June 2023, JMCF provided guarantees for some bank borrowings of the Group, with a maximum guarantee limit of USD 2,282,123. As at 30 June 2023, JMCF provided borrowing guarantee to the bank borrowing of USD 294,679, equivalent to RMB2,129,290 (31 December 2022: USD 327,421, equivalent to RMB2,280,355) for the Group. |
| (d) | Transfer of assets | | | | | | | | | | Six months ended 30 June | | Related parties | Nature of related party transactions | 2023 | | 2022 | | | | | | | | Jiangxi Lingrui Recycling Resources Development Corporation. | Sales of fixed assets | 121,707 | | - | | JMCG Jingma Motors Co., Ltd. | Sales of fixed assets | - | | 4,527,773 | | | | 121,707 | | 4,527,773 | | | | | | | | 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 EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (5) | Related party transactions (Cont’d) | | | | (e) | Purchase of assets | | | | | | Six months ended 30 June | | Related parties | Nature of related party transactions | 2023 | | 2022 | | | | | | | | Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | Purchase of fixed assets | 21,138,257 | | 14,279,803 | | Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | Purchase of fixed assets | 9,584,000 | | 6,988,280 | | Nanchang JMCG Liancheng Auto Component Co., Ltd. | Purchase of fixed assets | 4,009,591 | | 5,520,000 | | Magna PT Powertrain (Jiangxi) Co., Ltd. | Purchase of fixed assets | 2,800,000 | | - | | Jiangxi Jiangling Lear Interior System Co., Ltd. | Purchase of fixed assets | 535,980 | | - | | Jiangxi JMCG Specialty Vehicles Co., Ltd. | Purchase of fixed assets | 456,637 | | 456,637 | | | | 38,524,465 | | 27,244,720 | | | | | | | | The pricing on purchase 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 EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (5) | Related party transactions (Cont’d) | | | | (f) | Provision of technology sharing and distribution service | | | | | | Six months ended 30 June | | Related parties | Nature of related party transactions | 2023 | | 2022 | | | | | | | | Ford Motor Research & Engineering (Nanjing) Co., Ltd. | Technical service | 19,180,000 | | 13,494,000 | | Ford Motor (China) Co., Ltd. | Distribution and technical service | 5,784,640 | | 10,405,000 | | Ford Vietnam Limited | Technical service | 5,100,000 | | 7,890,000 | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | Technical service | 4,099,170 | | 4,630,000 | | Ford | Technical service | 3,283,725 | | 9,350,000 | | Jiangxi ISUZU Co., Ltd. | Technical service | 2,274,000 | | 710,000 | | Ford Trading Company, LLC | Technical service | 1,509,518 | | - | | | | 41,231,053 | | 46,479,000 | | | | | | | | 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 EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (5) | Related party transactions (Cont’d) |
| (g) | Remuneration of key management | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Remuneration of key management | 7,593,376 | | 6,880,167 | | | | (h) | Interest income | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | JMCF | 7,308,840 | | 8,304,462 | | | | Cash at bank of the Group deposited with JMCF was calculated based on the bank annual interest rate for RMBdeposit of 1.35% to 2.25% over the same period (the six months ended 30 June 2022: 1.725% to 2.25%). | | | | (i) | Interest expenses | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | 120,000 | | - | | Nanchang JMCG Shishun Logistics Co., Ltd. | 30,000 | | - | | | 150,000 | | - | | | | (j) | Purchase of CAFC credit and NEV credit | | | | | | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Jiangling Motor Electricity Vehicle Co., Ltd. | - | | 64,474,060 | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (6) | Receivables from and payables to related parties | | | | | 30 June 2023 | | 31 December 2022 | | | Amount | | Provision for bad debts | | Amount | | Provision for bad debts | | Accounts receivable | | | | | | | | | | | | | | | | | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 2,779,801,800 | | (3,379,001) | | 1,809,124,109 | | (1,495,512) | | JMCG Jingma Motors Co., Ltd. | 68,786,880 | | (649,167) | | 46,820,892 | | (140,841) | | Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | 38,737,656 | | (1,097,665) | | 105,372,893 | | (963,329) | | Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. | 20,717,536 | | (212,189) | | 60,082,649 | | (329,953) | | Jiangxi ISUZU Engine Co., Ltd. | 13,046,421 | | (39,139) | | 254,748 | | (764) | | Jiangxi Jiangling Group Special Vehicle Co., Ltd. | 8,811,051 | | (7,108) | | - | | - | | Jiangxi ISUZU Co., Ltd. | 6,140,141 | | (23,262) | | 3,650,860 | | (10,953) | | Jiangxi Jiangling Lear Interior System Co., Ltd. | 3,941,537 | | (11,825) | | 3,326,672 | | (9,980) | | Jiangxi JMCG Specialty Vehicles Co., Ltd. | 3,915,155 | | (3,657) | | 9,109,228 | | (5,477) | | Ford Vietnam Limited | 2,660,000 | | (7,980) | | 3,250,000 | | (9,750) | | JMCG | 1,946,611 | | (5,840) | | - | | - | | Nanchang JMCG Liancheng Auto Component Co., Ltd. | 1,468,881 | | (4,407) | | 1,773,035 | | (5,319) | | Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | 70,776 | | (212) | | 1,340,748 | | (4,022) | | Ford Motor Research & Engineering (Nanjing) Co., Ltd. | - | | - | | 21,973,800 | | (65,921) | | Nanchang JMCG Shishun Logistics Co., Ltd. | - | | - | | 1,735,793 | | (744) | | Ford Motor (China) Co., Ltd. | - | | - | | 1,727,858 | | (5,184) | | Other related parties | 2,937,769 | | (10,544) | | 3,645,113 | | (10,026) | | | 2,952,982,214 | | (5,451,996) | | 2,073,188,398 | | (3,057,775) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (6) | Receivables from and payables to related parties (Cont’d) | | | | Receivables from related parties (Cont'd): | | | | | 30 June 2023 | | 31 December 2022 | | | Amount | | Provision for bad debts | | Amount | | Provision for bad debts | | Other receivables | | | | | | | | | | | | | | | | | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 7,572,820 | | (22,718) | | 10,231,067 | | (30,693) | | JMCG Jingma Motors Co., Ltd. | 4,614,745 | | (13,844) | | 4,614,745 | | (13,844) | | Other related parties | 237,392 | | (712) | | 4,000 | | (12) | | | 12,424,957 | | (37,274) | | 14,849,812 | | (44,549) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (6) | Receivables from and payables to related parties (Cont’d) | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Advances to suppliers | Nanchang Baojiang Steel Processing Distribution Co., Ltd. | 249,319,087 | | 233,947,199 | | | | | | | | Advances for engineering | JMCG Jiangxi Engineering Construction Co., Ltd. | 4,899,362 | | - | | | | | | | | Financing receivables | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 116,180,759 | | 50,000,000 | | | Jiangxi JMCG Specialty Vehicles Co., Ltd. | 45,000,000 | | 40,000,000 | | | JMCG Jingma Motors Co., Ltd. | 2,951,912 | | 3,000,000 | | | Jiangxi ISUZU Co., Ltd. | 2,000,000 | | 600,000 | | | Jiangxi ISUZU Engine Co., Ltd. | 1,242,764 | | - | | | | 167,375,435 | | 93,600,000 | | | | | | | | Notes receivable | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | - | | 600,000,000 | | | | | | | | Cash at bank | JMCF | 786,214,310 | | 886,245,919 | | | | | | | | Short-term borrowings | JMCF | - | | 200,000,000 | | | | | | | | For the six months ended 30 June 2023, the sales amount settled by JMCF was RMB6,450,656,589 (the six months ended 30 June 2022: RMB6,037,852,983), of which, the amount of 0 (the six months ended 30 June 2022: RMB169,310,000) was settled through the discounted electronic commercial acceptances which interest paid by buyers. As at June 30, 2023, the Group’s commercial acceptances amounting to 0 had discounted but not yet due (December 31, 2022: 140,330,000) arising under the aforesaid business. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | | | | (6) | Receivables from and payables to related parties (Cont’d) | | | | | | | | 30 June 2023 | | 31 December 2022 | | Accounts payable | | | | | | | | | | Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | 614,311,824 | | | 538,861,064 | | Jiangxi Jiangling Lear Interior System Co., Ltd. | 391,980,977 | | | 341,829,498 | | Magna PT Powertrain (Jiangxi) Co., Ltd. | 325,733,071 | | | 295,727,129 | | Jiangxi Jiangling Chassis Co., Ltd. | 317,035,789 | | | 287,843,287 | | Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | 201,759,379 | | | 209,344,967 | | Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | 200,456,700 | | | 280,456,600 | | Nanchang JMCG Liancheng Auto Component Co., Ltd. | 133,349,385 | | | 168,502,531 | | Faurecia Emissions Control Technologies (Nanchang) Co., Ltd. | 110,339,057 | | | 142,695,801 | | Jiangxi Lingyun Automobile Industry Technology Co.,Ltd | 68,981,628 | | | 22,971,514 | | Nanchang JMCG Shishun Logistics Co., Ltd. | 64,226,594 | | | 51,617,596 | | Nanchang Unistar Electric & Electronics Co., Ltd. | 56,880,348 | | | 59,831,745 | | Hanon Systems | 44,860,026 | | | 52,260,989 | | Nanchang Yinlun Heat-exchanger Co., Ltd. | 42,414,056 | | | 38,139,971 | | Nanchang JMCG SMR Huaxiang Mirror Co., Ltd. | 36,769,592 | | | 48,052,587 | | Jiangxi JMCG Specialty Vehicles Co., Ltd. | 30,392,467 | | | 48,084,822 | | Ford | 28,981,870 | | | 63,701,961 | | Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd. | 26,805,331 | | | 29,858,865 | | Jiangxi Lingrui Recycling Resources Development Corporation | 15,836,074 | | | 15,959,512 | | Jiangxi Jiangling Group Special Vehicle Co., Ltd. | 15,258,340 | | | 15,558,679 | | Dibao transportation equipment (Nanchang) Co., Ltd | 14,598,832 | | | 29,824,381 | | Nanchang Lianda Machinery Co., Ltd. | 10,192,859 | | | 15,928,121 | | Changan Ford Automobile Co., Ltd. | 8,608,931 | | | 2,891,546 | | Jiangling Motor Holdings Co., Ltd. | 7,256,682 | | | 7,254,527 | | Jiangxi JMCG Boya brake system Co., Ltd | 7,126,823 | | | 6,664,021 | | Jiangxi Jiangling group Fuxin Auto Parts Co., Ltd. | 6,855,450 | | | 3,044,022 | | Jiangling Aowei Automobile Spare Part Co., Ltd. | 4,786,639 | | | 4,202,862 | | Jiangxi Mingfang Auto Parts Industry Co., Ltd. | 4,086,011 | | | 5,244,867 | | Nanchang JMCG Xinchen Auto Component Co., Ltd. | 3,527,402 | | | 1,532,286 | | Jiangxi ISUZU Engine Co., Ltd. | 3,313,424 | | | 407,986 | | JMCG | 1,223,749 | | | 21,226,897 | | Auto Alliance (Thailand) Co., Ltd. | 1,125,355 | | | 5,080,988 | | Jiangling Material Co., Ltd. | 31,440 | | | 1,444,482 | | Other related parties | 3,277,865 | | | 3,877,724 | | | 2,802,383,970 | | | 2,819,923,828 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (6) | Receivables from and payables to related parties (Cont’d) | | | | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Other payables | | | | | Ford | 100,824,929 | | 190,788,653 | | JMCG Jiangxi Engineering Construction Co., Ltd. | 73,015,783 | | 73,068,908 | | Ford Global Technologies,LLC | 55,673,213 | | 57,966,899 | | Ford Motor Research & Engineering (Nanjing) Co., Ltd. | 20,037,625 | | 2,397,259 | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 17,178,680 | | 17,583,786 | | Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | 15,831,586 | | 15,949,537 | | Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | 10,778,439 | | 11,939,889 | | Ford Motor (China) Co., Ltd. | 10,061,027 | | 14,421,987 | | Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. | 9,884,815 | | 18,560,568 | | Nanchang JMCG Shishun Logistics Co., Ltd. | 7,892,701 | | 7,599,823 | | JMCG | 6,875,062 | | - | | Jiangxi JMCG Specialty Vehicles Co., Ltd. | 5,829,157 | | 5,156,445 | | Jiangxi JMCG Industry Co., Ltd. | 3,073,186 | | 4,883,512 | | Jiangxi Jiangling Group Special Vehicle Co., Ltd. | 2,911,036 | | 6,064,606 | | JMCG Property Management Co. | 2,841,667 | | 22,736 | | Ford Otomotiv Sanayi A.S. | 1,606,719 | | 4,749,574 | | Hanon Systems | 1,475,000 | | 1,475,000 | | Chongqing Changan Automobile Co., Ltd. | 1,165,327 | | 2,458,047 | | Nanchang Unistar Electric & Electronics Co., Ltd. | 1,160,959 | | 1,908,865 | | Nanchang Baojiang Steel Processing Distribution Co., Ltd. | 1,121,868 | | 1,121,868 | | Other related parties | 4,443,578 | | 5,436,055 | | | 353,682,357 | | 443,554,017 |
| Contract liabilities | | | | | | | | | | Guizhou Wanfu Vehicle Sales & Service Co., Ltd. | 2,741,478 | | 1,902,370 | | Chengdu Wanxing Vehicle Sales & Service Co., Ltd. | 1,469,789 | | 1,056,081 | | Guizhou Wanjia Automobile Sales and Service Co. LTD | 1,198,415 | | 497,354 | | Chongqing Anbo Vehicle Sales Co., Ltd. | 1,099,829 | | 1,112,609 | | Jiangxi Jiangling Group Special Vehicle Co., Ltd. | 3,028 | | 1,143,867 | | Other related parties | 2,108,455 | | 1,372,066 | | | 8,620,994 | | 7,084,347 | | | | | | | Lease liabilities | | | | | | | | | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 5,505,150 | | 9,542,357 | | JMCG | 3,591,762 | | 4,732,873 | | | 9,096,912 | | 14,275,230 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (7) | Commitments in relation to related parties |
| Capital commitments | 30 June 2023 | | 31 December 2022 | | | | | | | JMCG Jiangxi Engineering Construction Co., Ltd. | 19,956,147 | | - | | Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | 15,677,612 | | 20,786,749 | | Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | 11,091,570 | | 11,091,570 | | Nanchang JMCG Liancheng Auto Component Co., Ltd. | 4,678,200 | | 4,678,200 | | Magna PT Powertrain (Jiangxi) Co., Ltd. | 791,000 | | 3,955,000 | | | 52,194,529 | | 40,511,519 | | | | Guarantee of commitments in relation to related parties is set out in Note 7(5)(c). |
| 8 | Contingencies | | | | As at 30 June 2023, the Group had no contingencies that needed to be disclosed in the notes to the financial statements. | | | | 9 | Commitments | | | | Capital expenditure 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 2023 | | 31 December 2022 | | | | | | | Buildings, machinery and equipment | 493,570,000 | | 484,700,000 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 10 | Financial instrument and risk | | | | The Group's activities expose it to a variety of financial risks, which mainly comprise market risk (primarily including foreign exchange risk and interest rate risk), credit risk and liquidity risk. The above financial risks and the Group's risk management policies to mitigate the risks are as follows: The Board of Directors is responsible for planning and establishing the Group's risk management framework, formulating the Group's risk management policies and related guidelines, 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 and systems or not. The Group’s risk management is carried out by the Risk Management Committee under policies approved by the Board of Directors. The Risk Management Committee works closely with other business departments of the Group to identify, evaluate and avoid relevant risks. 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 continuously monitors the amount of assets and liabilities, and transactions denominated in foreign currencies to minimise the foreign exchange risk. Therefore, the Group signed forward exchange contracts to mitigate the foreign exchange risk (Note 4(3)). |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 10 | Financial instrument and risk (Cont’d) | | | | | | (1) | Market risk (Cont’d) | | | | | | | | (a) | Foreign exchange risk (Cont’d) | | | | The financial assets and financial liabilities denominated in foreign currencies, which were held by the Group, were expressed in RMBas at 30 June 2023 and 31 December 2022 as follows: | | | | | | 30 June 2023 | | | | USD | | EUR | | Total | | | | | | | | | Financial assets denominated in foreign currency - | | | | | | | Derivative financial assets | | 2,469,521 | | 4,617,240 | 7,086,761 | | | | | | | | | Financial liabilities denominated in foreign currency - | | | | | | | Current portion of long-term borrowings | | 473,175 | | - | 473,175 | | Long-term borrowings | | 1,656,115 | | - | 1,656,115 | | Other payables | | 157,847,805 | | 262,213 | 158,110,018 | | | | 159,977,095 | | 262,213 | 160,239,308 |
| | | USD | | EUR | | Total | | | | | | | | | Financial assets denominated in foreign currency - | | | | | | | Derivative financial assets | | 808,826 | | 2,163,872 | 2,972,698 | | | | | | | | | Financial liabilities denominated in foreign currency - | | | | | | | Current portion of long-term borrowings | | 456,071 | | - | 456,071 | | Long-term borrowings | | 1,824,284 | | - | 1,824,284 | | Other payables | | 253,263,898 | | 247,094 | 253,510,992 | | | | 255,544,253 | | 247,094 | 255,791,347 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 10 | Financial instrument and risk (Cont’d) | | | | | | (1) | Market risk (Cont’d) | | | | | | | | (a) | Foreign exchange risk (Cont’d) |
| As at 30 June 2023, for the financial assets and liabilities dominated in foreign currencies, if the RMBhad strengthened/weakened by 10% against the USD while all other variables had been held constant, the Group’s net profit would have been approximately RMB13,351,160 (31 December 2022: approximately RMB21,592,894) higher/lower. |
| (b) | Interest rate risk | | | | The Group's interest rate risk mainly arises from interest-bearing debts such as short-term borrowings and long-term borrowings. The financial liabilities of floating interest rate expose the Group to cash flow interest rate risk, and the financial liabilities of fixed interest rate expose the Group to fair value interest rate risk. The Group determines the relative proportions of fixed-rate and floating-rate contracts based on the prevailing market environment. As at 30 June 2023, the Group’s short-term borrowings of RMB1,300,000,000 (31 December 2022: RMB1,100,000,000) were fixed-rate borrowings, and long-term borrowings of USD294,679 (31 December 2022: USD327,421) were fixed-rate contracts, long-term borrowings of RMB12,849,944 (31 December 2022: RMB 19,033,773) were fixed-rate borrowings, therefore there was no significant cash flow interest rate risk. | | | | As at 30 June 2023 and 31 December 2022, there was no significant difference between the fair value and the carrying amount of the Group’s bank borrowings with fixed rates. | | | | (2) | Credit risk | | | | The Group’s credit risk mainly arises from cash at bank and on hand, notes receivable, accounts receivable, financing receivables, other receivables, long-term 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 at 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 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. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 10 | Financial instrument and risk (Cont’d) | | | | (2) | Credit risk (Cont’d) |
| In addition, the Group has policies to limit the credit exposure on notes receivable, accounts receivable, financing receivables, other receivables and long-term 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 2023, the Group had no significant collateral or other credit enhancements held as a result of the debtor’s mortgage (31 December 2022: Nil). |
| (3) | Liquidity risk | | | | Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the Group. The Group monitors rolling forecasts of the Group's short-term and long-term liquidity requirements to ensure it has sufficient cash, 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 2023 | | | | Within 1 year | | 1 to 2 years | | 2 to 5 years | | Over 5 years | | Total | | | | | | | | | | | | | | Short-term borrowings | | 1,300,000,000 | | - | | - | | - | | 1,300,000,000 | | Accounts payable | | 8,939,531,087 | | - | | - | | - | | 8,939,531,087 | | Other payables | | 5,903,153,144 | | - | | - | | - | | 5,903,153,144 | | Lease liabilities | | 83,115,309 | | 74,761,330 | | 67,004,028 | | - | | 224,880,667 | | Long-term borrowings | | 3,538,308 | | 10,350,289 | | 1,209,554 | | - | | 15,098,151 | | | | 16,229,337,848 | | 85,111,619 | | 68,213,582 | | - | | 16,382,663,049 |
| | | 31 December 2022 | | | | Within 1 year | | 1 to 2 years | | 2 to 5 years | | Over 5 years | | Total | | | | | | | | | | | | | | Short-term borrowings | | 1,100,000,000 | | - | | - | | - | | 1,100,000,000 | | Accounts payable | | 9,015,978,354 | | - | | - | | - | | 9,015,978,354 | | Other payables | | 5,672,708,511 | | - | | - | | - | | 5,672,708,511 | | Lease liabilities | | 81,918,426 | | 71,289,585 | | 132,786,495 | | - | | 285,994,506 | | Long-term borrowings | | 488,566 | | 19,515,498 | | 1,404,129 | | - | | 21,408,193 | | | | 15,871,093,857 | | 90,805,083 | | 134,190,624 | | - | | 16,096,089,564 |
| (i) | As at 30 June 2023, the Group did not have lease contracts that had been signed but had not yet been implemented. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 11 | 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. |
| (1) | Assets and liabilities measured at fair value on a recurring basis | | | | As at 30 June 2023, the assets measured at fair value on a recurring basis by the above three levels were analysed below: | | | | | Level 1 | | Level 2 | | Level 3 | Total | | | | | | | | | | Financial assets - | | | | | | | | Financial assets held for trading- | | | | | | | | Structured deposits | - | | - | | 100,136,000 | 100,136,000 | | Financing receivables - | | | | | | | | Notes receivable | - | | - | | 364,021,037 | 364,021,037 | | Derivative financial assets - | | | | | | | | Forward foreign exchange contracts | - | | 7,086,761 | | - | 7,086,761 | | | - | | 7,086,761 | | 464,157,037 | 471,243,798 | | | | As at 30 June 2023, the group didn’t have liabilities measured at fair value on a recurring basis. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 11 | Fair value estimates (Cont’d) | | | | (1) | Assets and liabilities measured at fair value on a recurring basis (Cont'd) |
| As at 31 December 2022, the assets measured at fair value on a recurring basis by the above three levels were analysed below: | | | | | Level 1 | | Level 2 | | Level 3 | Total | | | | | | | | | | Financial assets - | | | | | | | | Financing receivables - | | | | | | | | Notes receivable | - | | - | | 376,662,817 | 376,662,817 | | Derivative financial assets - | | | | | | | | Forward foreign exchange contracts | - | | 2,972,698 | | - | 2,972,698 | | | - | | 2,972,698 | | 376,662,817 | 379,635,515 | | | | As at 31 Decmber 2022, the group didn’t have liabilities measured at fair value on a recurring basis. |
| 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 was no transfer between Level 1 and Level 2 for the six months ended 30 June 2023. | | | | The fair value of financial instruments traded in an active market is determined at the quoted market price; and the fair value of those not traded in an active market is determined by the Group using valuation technique. The valuation models used mainly comprise discounted cash flow model and market comparable corporate model. The inputs of valuation technique mainly include risk-free interest rate, benchmark rate, exchange rate, credit spreads, liquidity premium, EBITDA multiplier and liquidity lack discount. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 11 | Fair value estimates (Cont’d) | | | | | | (1) | Assets and liabilities measured at fair value on a recurring basis (Cont'd) | | | | The changes in Level 3 assets are analysed below: | | | 31 December 2022 | | Increase | | Decrease | | | 30 June 2023 | | Gains recognised in profit or loss | | Changes in unrealised gains or losses included in profit or loss For the six months ended 30 June 2023 with respect to assets still held as at 30 June 2023 - gains or losses on changes in fair value | | | | | | | | | | | | | | | Financial assets | | | | | | | | | | | | | | Financial assets held for trading - | | | | | | | | | | | | | | structural deposits | - | | 100,000,000 | | | | | 100,000,000 | | - | | 136,000 | | Financing receivables - | | | | | | | | | | | | | | Notes receivable | 376,662,817 | | 1,428,361,700 | | (1,441,003,480) | | | 364,021,037 | | - | | - | | | | | | | | | | | | | | | Total assets | 376,662,817 | | 1,528,361,700 | | (1,441,003,480) | | | 464,021,037 | | - | | 136,000 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 11 | Fair value estimates (Cont’d) | | | | | | (1) | Assets and liabilities measured at fair value on a recurring basis (Cont'd) | | | | The changes in Level 3 assets are analysed below (Cont'd): | | | 31 December 2021 | | Increase | | Decrease | | | 31 December 2022 | | Gains recognised in profit or loss | | Changes in unrealised gains or losses included in profit or loss for 2022 with respect to assets still held as at 31 December 2022 - gains or losses on changes in fair value | | | | | | | | | | | | | | | Financing receivables - | | | | | | | | | | | | | | Notes receivable | 201,511,670 | | 3,664,369,012 | | (3,489,217,865) | | | 376,662,817 | | - | | - | | | | | | | | | | | | | | | Total assets | 201,511,670 | | 3,664,369,012 | | (3,489,217,865) | | | 376,662,817 | | - | | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 11 | Fair value estimates (Cont’d) | | | | (2) | Assets measured at fair value on a non-recurring basis | | | | As at 30 June 2023 and 31 December 2022, the Group had no assets measured at fair value on a non-recurring basis. | | | | (3) | Assets and liabilities not measured at fair value but for which the fair value is disclosed | | | | The Group’s financial assets and liabilities measured at amortised cost mainly comprise notes receivable, accounts receivable, other receivables, long-term receivables, short-term borrowings, payables, lease liabilities and long-term borrowings. | | | | 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 and lease liabilities 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. |
| 12 | Capital management | | | | The Group’s capital management policies aim to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital. | | | | |
In order to maintain or adjust the capital structure, the Group may adjust the amount ofdividends paid to shareholders, refund capital to shareholders, issue new shares or sellassets to reduce debts. | | | The Group's total capital is calculated as “shareholders’ equity” as shown in the consolidated balance sheet. The Group is not subject to external mandatory capital requirements, and monitors capital on the basis of equity ratio. | | | | As at 30 June 2023 and 31 December 2022, the Group's equity ratio was as follows: | | | | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Total borrowings | 1,314,979,234 | | 1,121,314,128 | | Total shareholders’ equity | 9,379,654,906 | | 9,240,646,784 | | | | | | | Equity ratio | 14% | | 12% |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 13 | Notes to the Company’s financial statements |
| (1) | Accounts receivable | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Accounts receivable | 3,946,042,284 | | 2,444,372,969 | | Less: Provision for bad debts | (78,007,114) | | (75,474,642) | | | 3,868,035,170 | | 2,368,898,327 |
| (a) | The ageing of accounts receivable is analysed as follows: | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Within 1 year | 3,777,291,347 | | 2,281,564,617 | | Over 1 year | 168,750,937 | | 162,808,352 | | | 3,946,042,284 | | 2,444,372,969 |
| (b) | As at 30 June 2023, the top five accounts receivable ranked by remaining balances were analysed as follows: | | | | | Balance | | Amount of provision for bad debts | | % of total balance | | | | | | | | | Company 1 | 2,755,963,035 | | (3,307,484) | | 69.84% | | Company 2 | 689,713,331 | | - | | 17.48% | | Company 3 | 111,044,989 | | - | | 2.81% | | Company 4 | 90,614,670 | | (162,990) | | 2.30% | | Company 5 | 72,230,000 | | (72,230,000) | | 1.83% | | | 3,719,566,025 | | (75,700,474) | | 94.26% |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 13 | Notes to the Company’s financial statements (Cont’d) | | | | (1) | Accounts receivable (Cont’d) | | | | (c) | Provision for bad debts |
| (i) | Accounts receivable for which provision for bad debts is made on the individual basis are analysed as follows: |
| | | 30 June 2023 | | | | Book balance | | Provision for bad debts | | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | Receivables from related parties within the Group i) | | 800,758,320 | | - | | - | | Receivables for automobiles ii) | | 72,230,000 | | 100% | | (72,230,000) | | | | 872,988,320 | | | | (72,230,000) |
| | | 31 December 2022 | | | | Book balance | | Provision for bad debts | | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | Receivables from related parties within the Group i) | | 347,148,082 | | - | | - | | Receivables for automobiles ii) | | 72,230,000 | | 100% | | (72,230,000) | | | | 419,378,082 | | | | (72,230,000) |
| i) As at 30 June 2023, the Company's accounts receivable from subsidiary Jiangling Ford (Shanghai) and SZFJ was RMB689,713,331 and RMB111,044,989 (31 December 2022：the Company's accounts receivable from subsidiary Jiangling Ford (Shanghai)、SZFJ and JMCS was Nil、RMB105,318,231 and RMB241,829,851). The Company carried out individual assessment on receivables from subsidiaries. Based on the judgement of credit risk, there was no significant credit risk on receivables from subsidiaries that were overdue and impaired. | | | | ii) As at 30 June 2023, the Company assessed the expected credit losses on the related accounts receivable and expected that it was probable that such amounts would not be collected and therefore a full provision for bad debts was made. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 13 | 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 2023 | | | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | Not overdue | | 2,311,859,079 | | 0.08% | | (1,871,239) | | Overdue for 1 to 30 days | | 137,385,230 | | 0.08% | | (110,846) | | Overdue for 31 to 60 days | | 2,386,353 | | 1.32% | | (31,428) | | Overdue for 61 to 90 days | | 4,749,710 | | 1.97% | | (93,682) | | Overdue over 90 days | | 12,807,539 | | 3.00% | | (384,125) | | | | 2,469,187,911 | | | | (2,491,320) |
| | | 31 December 2022 | | | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | Not overdue | | 1,574,700,311 | | 0.04% | | (676,307) | | Overdue for 1 to 30 days | | 20,338,359 | | 0.04% | | (8,715) | | Overdue for 31 to 60 days | | 7,025,162 | | 1.07% | | (75,033) | | Overdue for 61 to 90 days | | - | | - | | - | | Overdue over 90 days | | 1,046,303 | | 3.37% | | (35,212) | | | | 1,603,110,135 | | | | (795,267) |
| Grouping - Sales of new energy automobiles: | | | | | | 30 June 2023 | | | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | Overdue over 90 days | | 4,853,760 | | 20.60% | | (999,805) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 13 | 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 - Sales of new energy automobiles (Cont’d): |
| | | 31 December 2022 | | | Book balance | | Provision for bad debts | | | | | | | | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | Overdue over 90 days | | 4,853,760 | | 20.60% | | (999,805) |
| Grouping - Automobile parts: |
| | | 30 June 2023 | | | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | Not overdue | | 576,170,043 | | 0.30% | | (1,728,510) | | Overdue for 1 to 30 days | | 11,094,273 | | 0.30% | | (33,283) | | Overdue for 31 to 60 days | | 1,404,495 | | 0.50% | | (7,022) | | Overdue for 61 to 90 days | | - | | - | | - | | Overdue over 90 days | | 10,343,482 | | 5.00% | | (517,174) | | | | 599,012,293 | | | | (2,285,989) |
| | | 31 December 2022 | | | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | Not overdue | | 400,583,282 | | 0.30% | | (1,201,749) | | Overdue for 1 to 30 days | | 10,972,629 | | 0.30% | | (32,918) | | Overdue for 31 to 60 days | | 1,307,433 | | 0.50% | | (6,537) | | Overdue for 61 to 90 days | | 377 | | 0.53% | | (2) | | Overdue over 90 days | | 4,167,271 | | 5.00% | | (208,364) | | | | 417,030,992 | | | | (1,449,570) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | (d) | In the six months ended 30 June 2023, no accounts receivable had been written off. | | | | (e) | As at 30 June 2023 and 31 December 2022, the Company did not have accounts receivable that were pledged. |
| | 30 June 2023 | | 31 December 2022 | | | | | | | Receivable for subsidiary disposal | 24,900,000 | | 60,900,000 | | Receivables from JMCH | 9,679,410 | | 9,679,410 | | Import working capital | 7,000,000 | | 10,000,000 | | Disposal of assets | 4,604,745 | | 4,604,745 | | Others | 33,056,740 | | 43,987,307 | | | 79,240,895 | | 129,171,462 | | Less: Provision for bad debts | (227,896) | | (315,611) | | | 79,012,999 | | 128,855,851 |
| (a) | The ageing of other receivables is analysed as follows: | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Within 1 year | 34,160,021 | | 55,337,691 | | Over 1 year | 45,080,874 | | 73,833,771 | | | 79,240,895 | | 129,171,462 |
| (b) | Provision for losses and changes in book balance statements |
| | | 12-month ECL (grouping) | | 12-month ECL (individual) | | | | | Book balance | Provision for bad debts | | Book balance | Provision for bad debts | | Provision for bad debts | | | | | | | | | | | 31 December 2022 | | 105,065,828 | (315,611) | | 24,105,634 | - | | (315,611) | | Net decrease in the current period | | (35,504,343) | - | | (14,426,224) | - | | - | | Provision for bad debts reserved in the current period | | - | 87,715 | | - | - | | 87,715 | | 30 June 2023 | | 69,561,485 | (227,896) | | 9,679,410 | - | | (227,896) |
| 13 | Notes to the Company’s financial statements (Cont’d) | | | | (1) | Accounts receivable (Cont’d) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 13 | 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 2023 and 31 December 2022, the Company did not have any other receivables at Stage 2 or Stage 3. Other receivables at Stage 1 were analysed below: | | | | (i) | As at 30 June 2023 and 31 December 2022, provision for bad debts of other receivables on the individual basis was analysed as follows: | | | | | 30 June 2023 | | Stage 1 | Book balance | | 12-month ECL (%) | | Provision for bad debts | Reason | | | | | | | | | Receivables from JMCH | 9,679,410 | | - | | - | i) | | | 9,679,410 | | | | - | |
| | 31 December 2022 | | Stage 1 | Book balance | | 12-month ECL (%) | | Provision for bad debts | Reason | | | | | | | | | Receivables from Jiangling Ford (Shanghai) | 14,426,224 | | - | | - | i) | | Receivables from JMCH | 9,679,410 | | - | | - | i) | | 24,105,634 | | | | - | |
| i) As of 30 June 2023, the Company had other receivables from its subsidiaries JMCH, amounting to RMB9,679,410 (31 December 2022: the Company had other receivables from its subsidiaries, JMCH and Jiangling Ford (Shanghai), amounting to RMB9,679,410 and RMB14,426,224 ).The Company assessed the receivables from subsidiaries individually and based on the judgment of credit risk, the receivables from subsidiaries are not subject to significant credit risk and are not past due and impaired. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 13 | 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 2023 and 31 December 2022, the Company’s other receivables with provision for bad debts on the grouping basis were analysed below: | | | | Other receivables with provision on the grouping basis at Stage 1: |
| (ii) | As at 30 June 2023, the Company’s other receivables with provision for bad debts on the grouping basis were analysed below: |
| | Book balance | | Expected credit loss ratio within the next 12 months | | Provision for bad debts | | Rationale | | | | | | | | | | | Portfolio accrual： | | | | | | | | | Receivable for subsidiary disposal | 24,900,000 | | 0.30% | | (74,700) | | Expected credit losses | | Import working capital | 7,000,000 | | 0.30% | | (21,000) | | Expected credit losses | | Disposal of assets | 4,604,745 | | 0.30% | | (13,814) | | Expected credit losses | | Others | 33,056,740 | | 0.36% | | (118,382) | | Expected credit losses | | 69,561,485 | | | | (227,896) | | |
| (iii) | As at 31 December 2022, the Company’s other receivables with provision for bad debts on the grouping basis were analysed below: |
| | Book balance | | Expected credit loss ratio within the next 12 months | | Provision for bad debts | | Rationale | | | | | | | | | | | Portfolio accrual： | | | | | | | | | Receivable for subsidiary disposal | 60,900,000 | | 0.30% | | (182,700) | | Expected credit losses | | Import working capital | 10,000,000 | | 0.30% | | (30,000) | | Expected credit losses | | Disposal of assets | 4,604,745 | | 0.30% | | (13,814) | | Expected credit losses | | Others | 29,561,083 | | 0.30% | | (89,097) | | Expected credit losses | | 105,065,828 | | | | (315,611) | | |
| As at 30 June 2023 and 31 December 2022, the Company had no other receivables at Stage 2 or Stage 3. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 13 | Notes to the Company’s financial statements (Cont’d) | | | | (2) | Other receivables (Cont’d) | | | | (c) | For the six months ended 30 June 2023, the provision for bad debts reversed amounted to RMB87,715. | | | | (d) | For the six months ended 30 June 2023, no other receivables were written off. |
| (e) | As at 30 June 2023, the top five other receivables ranked by remaining balances were analysed as follows: | | | | | Nature | | Balance | | Ageing | | % of total balance | | Provision for bad debts | | | | | | | | | | | | Company 1 | Receivable for subsidiary disposal | | 24,900,000 | | Over 1 year | | 31.42% | | (74,700) | | Company 2 | Advances classified as expenses | | 13,980,264 | | Within 1 year | | 17.64% | | (41,941) | | Company 3 | Receivable from subsidiary | | 9,679,410 | | Over 1 year | | 12.22% | | - | | Company 4 | Import working capital, etc. | | 7,572,820 | | Within 1 year | | 9.56% | | (22,718) | | Company 5 | Assets receivables, etc | | 4,614,745 | | Over 1 year | | 5.82% | | (13,844) | | | | 60,747,239 | | | | 76.66% | | (153,203) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 13 | Notes to the Company’s financial statements (Cont’d) | | | | (3) | Long-term equity investments | | | | | | | | 30 June 2023 | | 31 December 2022 | | | | | | | Subsidiaries (a) | 2,858,943,493 | | 2,807,943,493 | | Associates (b) | 239,740,173 | | 243,633,812 | | | 3,098,683,666 | | 3,051,577,305 | | | | | | | Less: Provision for impairment of long-term equity investments for subsidiaries | (1,905,543,493) | | (1,905,543,493) | | Provision for impairment of long-term equity investments for associates | - | | - | | | (1,905,543,493) | | (1,905,543,493) | | | | | | | | 1,193,140,173 | | 1,146,033,812 |
| | | | | Movement in the current period | | | | | | | | | | | 31 December 2022 | | Additional investments | | 30 June 2023 | | Balance of provision for impairment at the end of the period | | Cash dividends declared this period | | 30 June 2023 | | | Gross amount | | | | Gross amount | | | | | | Carrying amount | | | | | | | | | | | | | | | JMCH | | 2,686,943,493 | | - | | 2,686,943,493 | | (1,905,543,493) | | - | | 781,400,000 | | JMCS | | 50,000,000 | | - | | 50,000,000 | | - | | - | | 50,000,000 | | SZFJ | | 10,000,000 | | - | | 10,000,000 | | - | | - | | 10,000,000 | | GZFJ | | 10,000,000 | | - | | 10,000,000 | | - | | - | | 10,000,000 | | Jiangling Ford (Shanghai) | | 51,000,000 | | 51,000,000 | | 102,000,000 | | - | | - | | 102,000,000 | | | | 2,807,943,493 | | 51,000,000 | | 2,858,943,493 | | (1,905,543,493) | | - | | 953,400,000 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS EDNED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 13 | Notes to the Company’s financial statements (Cont’d) | | | | (3) | Long-term equity investments (Cont’d) | | | | (b) | Associates |
| | | | Movements in the current period | | | 31 December 2022 | | Increase in the current period | | Share of net profit/(loss) under equity method | | Cash dividends declared by joint ventures | | Provision for impairment | | 30 June 2023 | | Shareholding (%) | | Voting rights (%) | | Ending balance of provision for impairment | | | | | | | | | | | | | | | | | | | | The Power Company | 206,206,679 | | - | | (2,446,017) | | - | | - | | 203,760,662 | | 40% | | 40% | | - | | Hanon Systems | 37,427,133 | | - | | (1,447,622) | | - | | - | | 35,979,511 | | 19.15% | | 33.33% | | - | | Total | 243,633,812 | | - | | (3,893,639) | | - | | - | | 239,740,173 | | | | | | - |
SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023 (All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 13 | Notes to the Company’s financial statements (Cont’d) | | | | (4) | Revenue and cost of sales | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Revenue from main operations | 14,581,518,843 | | 13,153,777,616 | | Revenue from other operations | 867,519,091 | | 235,587,202 | | | 15,449,037,934 | | 13,389,364,818 |
| | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Cost of sales from main operations | 12,661,082,710 | | 11,688,319,077 | | Cost of sales from other operations | 201,223,509 | | 221,157,893 | | | 12,862,306,219 | | 11,909,476,970 |
| (a) | Revenue and cost of sales from main operations | | | | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | Revenue from main operations | Cost of sales from main operations | | Revenue from main operations | Cost of sales from main operations | | | | | | | | | Sales of automobiles | 12,803,883,870 | 11,227,861,094 | | 12,104,498,465 | 10,873,199,856 | | Sales of automobile parts | 1,777,634,973 | 1,433,221,616 | | 1,024,913,088 | 803,494,300 | | Automobile maintenance services | - | - | | 24,366,063 | 11,624,921 | | | 14,581,518,843 | 12,661,082,710 | | 13,153,777,616 | 11,688,319,077 |
| (b) | Revenue and cost of sales from other operations | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | Revenue from other operations | Cost of sales from other operations | | Revenue from other operations | Cost of sales from other operations | | | | | | | | | Sales of materials | 176,010,823 | 159,438,315 | | 191,377,317 | 178,704,400 | | Others | 691,508,268 | 41,785,194 | | 44,209,885 | 42,453,493 | | | 867,519,091 | 201,223,509 | | 235,587,202 | 221,157,893 |
SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 13 | Notes to the Company’s financial statements (Cont’d) | | | | (4) | Revenue and cost of sales (Cont’d) | | | | (c) | The breakdown of revenue earned was as follows: | | | | | | Six months ended 30 June 2023 | | Automobiles | Automobile parts | Automobile maintenance services | Materials and others | Total | | | | | | | | Revenue from main operations | 12,803,883,870 | 1,777,634,973 | - | - | 14,581,518,843 | | Including: Recognised at a time point | 12,803,883,870 | 1,777,634,973 | - | - | 14,581,518,843 | | Recognised within a certain period | - | - | - | - | - | | Revenue from other operations (i) | - | - | - | 867,519,091 | 867,519,091 | | | 12,803,883,870 | 1,777,634,973 | - | 867,519,091 | 15,449,037,934 |
| | Six months ended 30 June 2022 | | Automobiles | Automobile parts | Automobile maintenance services | Materials and others | Total | | | | | | | | Revenue from main operations | 12,104,498,465 | 1,024,913,088 | 24,366,063 | - | 13,153,777,616 | | Including: Recognised at a time point | 12,104,498,465 | 1,024,913,088 | - | - | 13,129,411,553 | | Recognised within a certain period | - | - | 24,366,063 | - | 24,366,063 | | Revenue from other operations (i) | - | - | - | 235,587,202 | 235,587,202 | | | 12,104,498,465 | 1,024,913,088 | 24,366,063 | 235,587,202 | 13,389,364,818 |
| (i) | The Company's revenue from other operations includes sales of materials and service provided, etc. Of which, revenue from sales of materials is recognized at a certain point in time, and revenue from service provided is recognized within a certain period. | | | | As at 30 June 2023, the amount of revenue corresponding to the performance obligations that the Company had signed but had not performed or had not yet performed was RMB423,440,567, and the Company expected that RMB423,440,567 will be recognised as revenue from the sales of automobiles and parts in 2023. | | | | (5) | Investment income | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Losses on discount of financing receivables eligible for derecognition | (11,613,214) | | (6,704,092) | | Gains on long-term equity investments under equity method | (3,893,639) | | (4,151,633) | | Investment loss from forward exchange settlement | 2,524,895 | | (10,728,178) | | | (12,981,958) | | (21,583,903) | | | | There is no significant restriction on the remittance of investment income to the Company. |
SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 June 2023(All amounts in RMBYuan unless otherwise stated)[English translation for reference only] | 1 | Statement of non-recurring profit or loss | | | | | Six months ended 30 June | | | 2023 | | 2022 | | | | | | | Government grants recognised in profit or loss for the current period | 358,643,954 | | 261,059,234 | | Gains or losses on disposal of non-current assets | (755,894) | | 395,312,262 | | Fund occupation fee received from non-financial institutions | 6,890,293 | | 7,029,072 | | Gains or losses arising from changes in fair value of financial assets and liabilities held at fair value through profit or loss, and investment losses on disposal of related financial assets and liabilities | 6,774,959 | | (4,174,119) | | Net amount of other non-operating income and expenses | 6,919,342 | | 1,762,148 | | Reversal of provision for impairment of receivables tested individually | - | | 110,068 | | Other items of profit or loss conforming to the definition of non-recurring profit or loss | (9,062,423) | | - | | | 369,410,231 | | 661,098,665 | | Effect of income tax | (57,720,416) | | (100,191,259) | | Effect of gains or losses on minority interests (net of tax) | (31,469) | | (91,808) | | | 311,658,346 | | 560,815,598 | | | | 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. |
| 2 | Return on net assets and earnings per share | | | | | Weighted average return on net assets (%) | Earnings per share | | Basic earnings per share | Diluted earnings per share | | | Six months ended 30 June | | | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | | | | | | | | | | Net profit attributable to ordinary shareholders of the Company | 7.59% | 5.02% | 0.84 | 0.52 | 0.84 | 0.52 | | Net profit attributable to ordinary shareholders of the Company, net of non-recurring profit or loss | 4.35% | (1.20%) | 0.48 | (0.13) | 0.48 | (0.13) |
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