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江铃B:2017年半年度报告(英文版)(更新后) 下载公告
公告日期:2018-06-22
Jiangling Motors Corporation, Ltd.
     2017 Half-year Report
              2017-036
Chapter I     Important Notes, Contents and Abbreviations
Important Note
The Board of Directors and its members, the Supervisory Board and its
members, and the senior executives are jointly and severally liable for the
truthfulness, accuracy and completeness of the information disclosed in the
report and confirm that the information disclosed herein does not contain false
statements, misrepresentations or major omissions.
All Directors were present at the Board meeting to review this Half-year
Report.
Neither cash dividend nor stock dividend was distributed. The Board decided
not to convert capital reserve to share capital this time.
Chairman Qiu Tiangao, CFO Gong Yuanyuan and Chief of Finance
Department, Wu Jiehong, confirm that the Financial Statements in this Half-
year Report are truthful, accurate and complete.
The prospective description regarding future business plan and development
strategy in this report does not constitute virtual commitment. The investors
shall pay attention to the risk.
All financial data in this report are prepared under International Financial
Reporting Standards (‘IFRS’) unless otherwise specified.
The Half-year Report is prepared in Chinese and English. In case of
discrepancy, the Chinese version will prevail.
                                        Contents
Chapter I      Important Notes, Contents and Abbreviations ................................. 2
Chapter II     Brief Introduction ............................................................................. 4
Chapter III    Business Profile............................................................................... 6
Chapter IV     Business Operation Discussion and Analysis ................................. 7
Chapter V      Major Events ................................................................................. 11
Chapter VI     Share Capital Changes & Shareholders ........................................ 18
Chapter VII    Preferred Shares .......................................................................... 21
Chapter VIII   Directors, Supervisors and Senior Management .......................... 22
Chapter IX     Company Bond ............................................................................. 23
Chapter X      Financial Statements ..................................................................... 24
Chapter XI     Catalogue on Documents for Reference ....................................... 82
Abbreviations:
JMC, or the Company                       Jiangling Motors Corporation, Ltd.
JMH                                       Jiangling Motor Holding Co., Ltd.
Ford                                      Ford Motor Company
Jiangling-Isuzu                           Jiangling-Isuzu Motors Company, Ltd.
CSRC                                      China Securities Regulatory Commission
JMCG                                      Jiangling Motors Company (Group)
JMCH                                      JMC Heavy Duty Vehicle Co., Ltd.
EVP                                       Executive Vice President
CFO                                       Chief Financial Officer
VP                                        Vice President
Chapter II       Brief Introduction
1. Company’s information
Share’s name        Jiangling Motors, Jiangling B Share’s Code   000550, 200550
Place of listing     Shenzhen Stock Exchange
Company’s Chinese
                     江铃汽车股份有限公司
name
English name         Jiangling Motors Corporation, Ltd.
Abbreviation         JMC
Company legal
                     Qiu Tiangao
representative
2. Contact person and method
                                                                 Securities Affairs
                                    Board Secretary
                                                                  Representative
Name                         Wan Hong                     Quan Shi
                             No. 509, Northern Yingbin    No. 509, Northern Yingbin
Address                      Avenue, Nanchang City,       Avenue, Nanchang City,
                             Jiangxi Province, P.R.C      Jiangxi Province, P.R.C
Tel                          86-791-85266178              86-791-85266178
Fax                          86-791-85232839              86-791-85232839
E-mail                       relations@jmc.com.cn         relations@jmc.com.cn
3. Other
I. Contact methods
Changes of registered address, headquarter address, postal code, website
and e-mail
□Applicable √Not Applicable
There is no change of registered address, headquarter address, postal code,
website and e-mail. Please refer to 2016 Annual Report for details.
II. Newspapers for information disclosure, website for publication of JMC’s
half-year report and place for achieving half-year report
□Applicable √Not Applicable
There is no change of newspapers for information disclosure, website
designated by CSRC for publication of JMC’s Half-year Report and place for
achieving Half-year Report. Please refer to 2016 Annual Report for details.
    4. Main accounting data and financial ratios
                                                                       Unit: RMB ‘000
                             Reporting period       Same period
                              (2017 first half)       last year            Change (%)
Revenue                             15,666,476          10,810,736                    44.92
Profit Attributable to the
Equity Holders of the                  552,903              704,517                 -21.52
Company
Net Cash Generated
                                       -899,401             987,554                -191.07
From Operating Activities
Basic Earnings Per Share
                                            0.64               0.82                 -21.52
(RMB)
Diluted Earnings Per
                                            0.64               0.82                 -21.52
Share (RMB)
Weighted Average Return                                                       Down 1.35
                                         4.36%               5.71%
on Equity Ratio                                                         percentage points
                                At the end of      At the end of the       Change (%)
                              reporting period      previous year
Total Assets                        24,199,974          24,493,789                    -1.20
Shareholders’ Equity
Attributable to the Equity          12,435,579          12,409,236                        0.21
Holders of the Company
    5. Accounting data difference between domestic and foreign accounting
    standards
    I. Differences in net profit and net assets disclosed respectively per IFRS and
    PRC GAAP.
    □Applicable √Not Applicable
    There is no difference between IFRS and PRC GAAP in net profit and net
    assets.
    II. Differences in net profit and net assets disclosed respectively per GAAP
    and PRC GAAP.
    □Applicable √Not Applicable
    There is no difference between GAAP and PRC GAAP in net profit and net
    assets.
Chapter III       Business Profile
1. Company’s core business during the reporting period
JMC’s core business is production and sales of commercial vehicles, SUV
and related components. JMC’s major products include JMC series light truck,
heavy duty trucks, pickup, Yusheng SUV, Ford-brand SUV, Ford brand MPV
Tourneo, and Transit series commercial vehicles. The Company also
produces and sells engines, castings and other components for sales to
domestic and overseas markets.
2. Major change of main assets
I. Major change of main assets
There’s no major change of main assets during the reporting period.
II. Main overseas assets
□ Applicable √ Not Applicable
3. Core competitiveness analysis
JMC is a sino-foreign joint venture auto company with R&D, manufacturing
and sales operations. As a mainstream of domestic light commercial vehicle
industry, JMC had been ranked among the top hundred Chinese listed
corporations with comprehensive strength for consecutive years; and
certificated as a national enterprise technology c0enter, high-tech enterprise
and national automobile export base which improve the company’s core
business competence.
With the support from Ford's advanced technology and management
experience, JMC's influence over auto industry is improving steadily, making
considerable progress both in new product development and technical
equipment. Series of Ford new products such as Ford brand SUV EVEREST,
Ford brand MPV Tourneo, and Ford New Transit launched further improved
JMC’s competence on R&D and manufacturing, JMC self-developed new
Yusheng SUV S330 and new generation Yusheng SUV S350 launched
further enhanced JMC’s capability of R&D, manufacturing and market
competitiveness in SUV field. JMC KaiRui N800 program won the First Prize
of China Automotive Industry Awards for Science and Technology, fully
showed JMC’s leading technology in light commercial vehicle field, High
standard Xiaolan manufacturing site continues to expand modern plants of
vehicle, engine and frame, it will further ensure JMC's products production
and quality improvement. Xiaolan national R&D Centre’s research and
development capability will also be further improved.
Chapter IV             Business Operation Discussion and Analysis
1. Summary
In the first half of 2017, China's automotive market continues to keep growth.
Total sales volume was 13.35 million units, increased 3.81% than 2016 first
half. SUV sales volume was 4.52 million units, increased 16.83% compared
with the first half of 2016. Commercial vehicle sales volume was 2.10 million
units, increased 17.39% compared with the same period last year.
During the reporting period, to cope with more severe competition, more
stringent regulatory requirement and intensifying cost pressures, the
Company focused on quality improvement, new product development,
operating cost control and production efficiency enhancement. Simultaneously,
the Company introduced series of sales policy to respond the market risk. In
the first half of 2017, JMC achieved sales volume of 153,756 units, increased
27.06% compared with the same period last year, achieved revenue of RMB
15.67 billion, increased 44.92% compared with the same period last year,
achieved net profit of RMB 0.55 billion, decreased 21.52% compared with the
same period last year. It mainly reflected the company product structure
adjustment and the sales and R&D expenses increase.
2. Core business analysis
Year-over-Year Changes of Main Financial Data
                                                                   Unit: RMB’000
                                                          YOY
                             2017 1H      2016 1H                             Reason
                                                       change(%)
                                                                      Due to the sales volume
Revenue                      15,666,476   10,810,736         44.92    increase and product
                                                                      structure change
                                                                      Due to the Sales volume
Cost of sales                12,371,957    8,356,083         48.06    increase and product
                                                                      structure change
                                                                      Marketing and sales
Distribution costs            1,270,477      757,567         67.70    promotion expense
                                                                      increase
Administrative expenses       1,193,666      937,398         27.34
Finance Income-net              125,900      109,652         14.82
Income
                                62,435        66,103         -5.55
tax expense
                                                                      Due to researches on
Research and
                               860,424       710,342         21.13    China VI Emission
Development Expenditure
                                                                      Standard in 2017
                                                                      Receivables and payment
Net cash generated from
                               -899,401      987,554       -191.07    increase due to sales
operating activities
                                                                      volume increase
Net cash used in investing
                               -282,756     -357,893         20.99
activities
Net cash used in
                                 -6,118       -7,783         21.39
financing activities
Net increase/(decrease)                                               Cash generated from
in cash and cash             -1,188,275      621,878       -291.08    operating activities
equivalents                                                           decrease
            Significant change in the profit structure or profit source of the Company
            during the reporting period.
            □ Applicable √ Not Applicable
            There is no significant change in the profit structure or profit source of the
            Company during the reporting period.
            Main Business Structure:
                                                            Gross         Y-O-Y                         Y-O-Y gross
                            Turnover          Cost                                      Y-O-Y cost
                                                            Margin       turnover                         margin
                           (RMB ‘000)     (RMB ‘000)                                   change
                                                          (RMB ‘000)     change                          change
   By Industry
   Automobile Industry       15,492,267      12,206,138      21.21%           44.86%         48.01%            -1.68%
   By Products
   Vehicle                   14,194,541      11,288,484      20.47%           49.30%         52.92%            -1.89%
   By Region
   China                     15,492,267      12,206,138      21.21%           44.86%         48.01%            -1.68%
            3. Non-core business analysis
            □ Applicable √ Not Applicable
            4. Analysis of assets and liabilities
                                                                                          Unit: RMB’000
                                                                                         YOY
                                  June 30, 2017               June 30, 2016
                                                                                                       Major Changes
       Asset item                                                                      Proportion       Explanation
                               Amount      Proportion      Amount       Proportion     change(%)
                                              (%)                          (%)
Property, plant and
                               6,587,077          27.22    6,390,229          29.99         -2.77
equipment
Inventories                    1,960,649           8.10    1,729,280           8.12         -0.02
Trade, other receivables                                                                             Due to the sales
                               3,589,508          14.83    2,253,658          10.58         4.25
and prepayments                                                                                      volume increase
Cash and cash
                              10,477,947          43.30    9,469,918          44.44         -1.14
equivalents
            5. Investment
            I. Summary
            □ Applicable √ Not Applicable
            II. Obtained major equity investment during the reporting period
            □ Applicable √ Not Applicable
            III. Ongoing major non-equity investment during the reporting period
            □Applicable √ Not Applicable
            IV. Financial assets investment
            a. Stock investment
            □ Applicable √ Not Applicable
            b. Derivative investment
                □   Applicable √ Not Applicable
                6. Sale of major assets and equity
                I. Sale of major assets
                □ Applicable √ Not Applicable
                II. Sale of major equity
                □ Applicable √ Not Applicable
                7. Operating results of main subsidiaries and joint-stock companies whose
                impact on JMC’s net profit more than 10%
                √Applicable □ Not Applicable
                                                                                                              Unit: RMB
  Name of       Type of                         Registered                                                     Operating
                             Main Products                       Assets       Net Assets       Turnover                        Net Profit
 Companies     Companies                          Capital                                                        Profit
Jiangling
Motors Sales                Sales vehicle,
               Subsidiary                        50,000,000   3,683,544,099   112,515,152    13,996,005,780    -158,145,985   -118,718,041
Corporation,                service parts
Ltd
                            Product heavy
JMC Heavy                   commercial
Duty Vehicle   Subsidiary   vehicle , engine,   281,793,174   1,472,764,115   -176,920,868      32,387,142      -90,458,534    -69,386,498
Co., Ltd                    component, and
                            related service
                8.Structured entities controlled by JMC
                □ Applicable √ Not Applicable
                9. Forecast of business performance in the first nine months of 2017.
                □ Applicable √ Not Applicable
                10. Challenges and solutions
                In 2017, the Company will continue to face fiercer competition, more stringent
                regulatory requirements, intensifying cost pressures and a slowdown in
                China’s economic growth.
                I. Macroeconomic risk, raw materials such as coal, precious metals and steel
                prices increase, which have direct impact on automobile parts purchasing cost,
                so as to affects the company's profitability.
                II. Policies and regulations risk, under the pressure of environmental
                protection, city vehicle purchase restriction / traffic control become \"normal\",
                which have negative effect on the automobile sales and use, and
                Emissions/safety regulations continuously upgrade both in domestic and
                abroad at the same time, will force companies to upgrade technology quickly,
                which will further intensify the company's investment and operating pressure.
                III. Industry environment risk, China's auto market has entered a stage of
                perfect competition, the auto market of domestic and foreign gradually
                become mature, consumer tastes have improved, which put forward higher
                requirements of the independent brand and quality of car companies. In
addition, with the growing of technical barriers in overseas markets, trade
protectionist tendencies increase, emerging economies growth slowdown,
decline of cars demand risks increase, and harder expansion for international
market.
IV. Business model risks, with the rapid development of intelligent
interconnection, big data technology, Internet companies enter the automobile
industry, which change the traditional business model.
The company will take the following measures to deal with above risks:
I. Optimizing company’s production system to improve efficiency and product
quality;
II. Optimizing dealer network and marketing spending to improve market
share ;
III. Improve suppliers’ capability and parts quality; complete the logistic
optimization plan for components and vehicle delivery; continue to reduce
parts purchasing cost;
IV. Strengthening corporate governance and application of appropriate risk
assessment and control mechanisms;
V. Sustaining the expense management to further enhance company
competitiveness to win in the very challenging market; and
VI. Optimize and execute the company’s growth strategies, as well as
strengthen the traditional advantage, gradually increase investment in new
energy company, and new intelligent interconnection, so as to pursue
sustainable long-term growth.
Chapter V Major Events
1. Annual and special shareholders’ meeting
I. Shareholders’ meeting during the reporting period
                                     Investors
                                                                  Announcement
Number           Name               Attending      Meeting Date                Announcement Index
                                                                      Date
                                  Percentage (%)
                                                                              Number 2017-018,
         2017 First Special                                                   published on the
   1                                        77.93 May 18, 2017 May 19, 2017
         Shareholders’ Meeting                                               website
                                                                              www.cninfo.com.cn.
                                                                              Number 2017-025,
         2016 Annual
                                                                              published on the
   2     Shareholders’ Meeting             77.67 June 29, 2017 June 30, 2017
                                                                              website
                                                                              www.cninfo.com.cn.
II. Share holders who hold vote right restored preferred shares apply to hold a
special shareholders’ meeting
□Applicable √Not Applicable
2. Proposal on profit distribution and converting capital reserve to share
capital for the reporting period
□Applicable √Not Applicable
3. Commitments of actual controlling parties, shareholders, related parties,
acquirers and the Company finished in the reporting period or overdue
unfinished by the end of the reporting period
□Applicable √Not Applicable
There is no commitments of actual controlling parties, shareholders, related
parties, acquirers and the Company finished in the reporting period or
overdue unfinished by the end of the reporting period.
4. Appointment or dismissal of accounting firm
Whether the 2017 half-year report is audited?
□Yes √No
JMC 2017 half-year report is not audited.
5. Explanation of the board of directors, the supervisory board to abnormal
opinions from accounting firm for the reporting period
□Applicable √Not Applicable
6. Explanation of the board of directors, the supervisory board to abnormal
opinions from accounting firm in 2016
□Applicable √Not Applicable
7. Related matters regarding bankruptcy
□Applicable √Not Applicable
The Company did not go bankrupt during the reporting period.
8. Litigation or arbitration
                    Significant litigation or arbitration
                    □Applicable √Not Applicable
                    There is no significant litigation or arbitration in the reporting period.
                    Other litigation
                    □Applicable √Not Applicable
                    9. Punishment
                    □Applicable √Not Applicable
                    The Company have not been punished by regulatory authorities.
                    10. Honesty and credit of JMC and its controlling shareholder or actual
                    controlling party
                    □Applicable √Not Applicable
                    11. Implementation of equity incentive plan, employee stock ownership plan
                    and other employee incentive method
                    □Applicable √Not Applicable
                    12. Major related transactions
                    I. Routine operation related party transactions
                    √Applicable □Not Applicable
                                                                                                                      As % of
                                                                   Pricing                               Amount         Total
  Transaction Parties             Content        Relationship                    Settlement Method
                                                                  Principle                             (RMB’000)   Purchases/
                                                                                                                      Revenue
Nanchang Bao-jiang
                          Raw materials          Associate of    Contracted
Steel Processing &                                                            Prepayment                   457,760         4.00
                          purchase               JMCG            price
Distribution Co., Ltd.
                                                 Controlling
                          Parts and components                   Contracted
Ford                                             shareholder                  D/P & T/T                    452,439         3.96
                          purchase                               price
                                                 of JMC
Jiangxi Jiangling         Parts and components   Subsidiary of   Contracted   60 days after delivery
                                                                                                           421,636         3.69
Chassis Company           purchase               JMCG            price        and invoicing
GETRAG (Jiangxi)          Parts and components   Associate of    Contracted   60 days after delivery
                                                                                                           391,606         3.42
Transmission Company      purchase               JMCG            price        and invoicing
                                                 Wholly-
Jiangxi Jiangling
                          Parts and components   owned           Contracted   30 days after delivery
Special-Purpose                                                                                            326,851         2.86
                          purchase               subsidiary of   price        and invoicing
Vehicle Co, Ltd.
                                                 JMCG
Jiangling-Lear Interior   Parts and components   Joint venture   Contracted   60 days after delivery
                                                                                                           282,853         2.47
Trim Factory              purchase               of JMCG         price        and invoicing
                                                                              40% of prepayment and
JMCG Import and                                  Associate of    Contracted
                          Sales                                               the remains paid during      452,175         2.89
Export Co., Ltd.                                 JMCG            price
                                                                              30 days after delivery
                    The Announcement of Related Party Transactions (No.: 2014-052) was
                    disclosed on Dec.16, 2014 on the website www.cninfo.com.cn.
                    II. Major related party transaction concerning transfer of assets or equity
                    □Applicable √Not Applicable
                    There was no major related party transaction concerning transfer of assets or
                    equity during the reporting period.
III. Related party transaction concerning outside co-investment
□Applicable √Not Applicable
There was no outside co-investment during the reporting period.
IV. Related credit and debt
√Applicable □Not Applicable
Is there non-operating related credit and debt?
□Applicable √Not Applicable
The Company had no non-operating related credit and debt during the
reporting period.
V. Other major related party transactions
√Applicable □Not Applicable
The balance amount of bank deposit of the Company in JMCG Finance
Company as of June 30, 2017 was RMB 963,588 thousand. The Board of
Directors reviewed and approved JMCG Finance Company Continious Risk
Assessment Report. Please refer to the website www.cninfo.com.cn for the
original of the report which was published on August 31, 2017.
13. Non-operating funding in the Company occupied by controlling
shareholder and its affiliates
□Applicable √Not Applicable
There was no non-operating funding in the Company occupied by controlling
shareholder and its affiliates during the reporting period.
14. Major contracts and execution
I. Entrustment, contract or lease
a. Entrustment
□Applicable √Not Applicable
There was no entrustment during the reporting period.
b. Contract
□Applicable √Not Applicable
There was no contract during the reporting period.
c. Lease
√Applicable □Not Applicable
See the note 31(b) to financial statements for lease of related parties.
Project earns more than 10% of net profit.
□Applicable √Not Applicable
II Major guarantee
□Applicable √Not Applicable
The Company had no outside guarantee during the reporting period.
III. Other important contracts
□Applicable √Not Applicable
There was no other important contract during the reporting period.
       15. Corporation social responsibilities
       I. One-to-one poverty alleviation
       a. Summary of one-to-one poverty alleviation
       According to arrangement of JMCG, the Company joined the one-to-one
       poverty alleviation in Qianmo Village, Daijiapu Township, Suichuan County,
       Jiangxi Province and XIanting Village, Songhu Town, Xinjian District,
       Nanchang City.
       b. Status of targeted measures in poverty alleviation for the listed company
                              Item                               Unit        Amount/Progress
I.      Brief Introduction                                       ——            ——
including:1. Funding                                          RMB (‘000)
            2. Sum converted from the materials                RMB (‘000)                     13.3
            3. Persons get rid of poverty                       Persons
II.     Investments                                              ——             ——
1. Anti-poverty depending on industry development                ——             ——
including:1.1 Type                                              ——
            1.2 Projects                                        Number
            1.3 Investment amount                              RMB (‘000)
            1.4 Persons get rid of poverty                      Persons
2. Anti-poverty depending on employment transfer                 ——             ——
including:2.1 Investments on vocational skills                RMB (‘000)
            2.2 Training persons regarding vocational skills    Persons
            2.3 Employment Persons                              Persons
3. Anti-poverty depending on relocation                          ——             ——
including:3.1 Employment persons among relocated
                                                                Persons
                persons
4. Anti-poverty depending on education                           ——             ——
including:4.1 Grants in aid to poor students                  RMB (‘000)
            4.2 Poor students in aid                            Persons
            4.3 Investments on the improvement of
                                                               RMB (‘000)
                educational source in poverty-stricken area
5. Health Anti-poverty                                            ——            ——
Including: 5.1 Investments on medical and health services
                                                               RMB (‘000)
               in poverty-stricken area
6. Ecological protection anti-poverty                            ——             ——
including:6.1 Project type                                      ——
            6.2 Investment amount                              RMB (‘000)
7. Miscellaneous provisions                                      ——             ——
including:7.1 Investments on stay-at-home children,
                                                               RMB (‘000)
               women and elderly
            7.2 Number of stay-at-home children, women
                                                                Persons
                and elderly in aid
            7.3 Investments on poor & disable people           RMB (‘000)
            7.4 Number of poor & disable people in aid          Persons
8.    Social anti-poverty                                        ——             ——
including:8.1 Investments on cooperation between West
                                                               RMB (‘000)
               China and East China
            8.2 Investments on one-to-one anti-poverty         RMB (‘000)                     56.3
            8.3 Investments from anti-poverty charity fund     RMB (‘000)
9.    Other                                                      ——             ——
including:9.1.Project                                          Number
            9.2.Investment amount                              RMB (‘000)
            9.3. Persons getting rid of poverty                 Persons
III.    Awards                                                   ——             ——
                   II. Environmental protection
                   Whether the Company and affiliates is the key pollution discharge unit
                   published by environmental protection administration?
                   √Yes □No
                                Emission                                                                              Emission       Meet
    Main         Emission                  Emission Outlet       Emission                                 Emission
                                 Outlet                                             Emission Standard                 Standard     Standard
  Pollutants      Ways                      Distribution       Concentration                              Amount
                                Number                                                                                Amount        or Not
                                           3 in Mainsite, 1
                                                                                   “Wastewater
Wastewater                                 in Xiaolan Site,                                              COD:91.11 COD≤844.92
               continuous                                   \"COD:183mg/L           Discharge                                   Meet
(COD,NH-N)                  6              1 in Cast Plant                                               t, NH-    t, NH-
               discharge                                     NH-N:12mg/L\"          Standard”(GB 8978-                         Standard
                                           and 1 in Axle                                                 N :4.897t N≤21.878t
                                                                                   1996)
                                           Plant
                                                            SO2:36mg/m3,
Exhaust gas                                                                        \"The Emission
                                           53 in Mainsite, NOx :89mg/m3,
 (SO2,NOx,s                                                                        Standard of Air
                                           34 in Xiaolan    smoke:83.9mg/m3,                                SO2:0.23t,
 moke,toluol, continuous                                                           Pollutants”,” Emission            SO2≤93.01t, Meet
                            125            Site, 33 in Cast toluol :0.016mg/m3,                             NOx :13.71
 dimethylben discharge                                                             Standard of Air                     NOx≤60.91t Standard
                                           Plant and 5 in   dimethylbenzene:0.09                            t
 zene,                                                                             Pollutants for Boiler”
                                           Axle Plant       0mg/m3 , NMHC:
 NMHC)                                                                            (GB 13271-2014)
                                                            22.6mg/m3\"
                   III. Information regarding environment protection
                   The construction and operation of pollutant preventive and control
                   facilities
                   Since 2006, JMC has invested more than RMB 30 million to construct seven
                   wastewater treatment stations (including the wastewater treatment station in
                   the east plant area and Xiaolan wastewater treatment station), with the
                   treatment capacity as high as 9,000t/d. The treated wastewater reached the
                   national discharge standard.
                   For up-to-standard emission of waste gases, JMC has taken new control
                   measures over the years. In 2012, the Company invested RMB 10 million to
                   reconstruct the cupola furnace in the casting plant. In 2013, Xiaolan Branch
                   invested RMB 14 million to install a TNV waste gas incinerator. In 2014, JMC
                   invested RMB 14.6 million to construct the boiler coal-gas-switch project in the
                   south district. In 2017, the casting plant reconstructed the ventilation & dust
                   removal system for the smelting furnace in the large-size and middle & small-
                   sized parts workshop, and installed efficient environmental-friendly dust
                   removal equipment, effectively reducing the environmental pollution by dust.
                   For noise reduction, JMC took different measures to reduce the environmental
                   impact, such as increase of protective sound-proof doors & windows,
                   establishment of noise enclosure for air blower, installation of muffler and
                   transformation of sound-proof doors & windows. All these measures can
                   make sure up-to-standard discharge of noise at the plant boundary.
                   In the process of waste management, JMC managed from the source, and
                   divided the generation of wastes. JMC established a temporary storage yard
                   for solid wastes. Warning graphic symbols have been posted at the temporary
                   storage site of hazardous wastes. Besides, signboards have been provided as
well, so as to remind the passerby of probable hazards in the storage process
of hazardous wastes.
EIA on construction project and other administrative permits for
environmental protection
The company strictly implements the construction project environmental
impact assessment system. With respect to new construction, expansion and
reconstruction, JMC comprehensively planned environmental protection and
evaluated the “Three Simultaneities”. From the source of design, JMC carried
out the philosophy of energy saving and low carbon all the time. The
Company carries on the environmental monitoring every year according to the
requirements, ensures the pollutant discharge meeting the requirements of
discharge permit, formulates the stricter internal control target, and strives to
reduce the impact of environmental pollution to the minimum.
Emergency plan on emergency environmental incidents
In order to dilute or prevent environmental risks, JMC established an
emergency preparation and response procedure and specific environmental
emergency plans (such as emergency plan on environmental pollution
accidents, emergency plan on hazardous gases and emergency plan on paint
thinner), so as to formulate corresponding control methods for potential
accidents and emergences occurred or that may probably occur. JMC
organized emergency drills every year to ensure the efficiency of emergency
plan.
Environmental self-monitoring scheme
In 2017, JMC’s Qingyunpu Main Plant Area (the “Plant Area”) was listed as a
key pollutant discharging organization of wastewater/hazardous wastes. The
Plant Area monitored by itself in strict accordance with the Method for Self-
monitoring and Information Disclosure of State Key Monitoring Enterprises
(Trial). Its self-monitoring schemes, monitoring results and annual monitoring
reports on pollution sources were disclosed on the “pollution source self-
monitoring reporting platform of Jiangxi Province”. Xiaolan plant area and
other plant areas finished self-monitoring according to the EIA requirements.
Other information related to environmental protection
JMC paid high attention to environmental protection and pollution source
control, taking resource saving and cost reduction as the primary task.
Moreover, the Company also took full advantage of 6sigma, and controlled
from the source, so as to achieve the effect of environmental improvement. In
the new expansion and reconstruction projects, JMC laid emphasis on
improving the environmental performance, strictly implemented the system of
“Three Simultaneities”, transacted the EIA procedure according to national
standards, stipulated the preventive and control measures for environmental
pollution, and reported to competent administrative departments on
environmental protection for approval.
16. Other major events
√Applicable □Not Applicable
JMC received government incentives about RMB 200 million appropriated by
Nanchang City, Nanchang County Xiaolan Economic& Technological
Development Zone, Nanchang City Qingyunpu District and Taiyuan
Technological Development Zone during the reporting period, which is to
support JMC’s development.
17. Major event of JMC subsidiary
□Applicable √Not Applicable
               Chapter VI Share Capital Changes & Shareholders
               1. Changes of Shareholding Structure
               I. Changes of shareholding structure
                        Before the change                         Change (+, -)                          After the change
                                    Proportion    New             Reserve-                                          Proportion
                                                         Bonus
                        Shares       of total    share            converte    Others       Subtotal     Shares        of total
                                                         Shares
                                   shares (%)      s              d shares                                          shares (%)
I. Limited tradable
                        1,725,900       0.20%        -        -          -             -          -     1,725,900       0.20%
    A shares
1. State shares                 -            -       -        -          -             -          -             -            -
2. State-own legal
                                -            -       -        -          -             -          -             -            -
    person share
3. Other domestic
                        1,725,900       0.20%        -        -          -             -          -     1,725,900       0.20%
    shares
Including:
Domestic legal
                         835,140        0.10%        -        -          -   -44,400        -44,400      790,740        0.09%
    person shares
Domestic natural
                         890,760        0.10%        -        -          -    44,400        44,400       935,160        0.11%
    person shares
II. Unlimited
                      861,488,100      99.80%        -        -          -             -          -   861,488,100      99.80%
    tradable shares
1. A shares           517,488,100      59.95%        -        -          -             -          -   517,488,100     59.95%
2. B shares           344,000,000      39.85%        -        -          -             -          -   344,000,000     39.85%
III. Total            863,214,000     100.00%        -        -          -             -          -   863,214,000    100.00%
               Causes of shareholding changes
               √Applicable □Not Applicable
               44,400 limited tradable A shares hold by a domestic legal person shareholder
               were transferred to natural person shareholders in the first half of 2017.
               Approval of changes of shareholding structure
               □Applicable √Not Applicable
               Shares transfer
               □Applicable √Not Applicable
               Impact on accounting data, such as the latest EPS, diluted EPS, shareholders’
               equity attributable to the equity holders of the Company, generated from
               shares changes
               □Applicable √Not Applicable
               Others to be disclosed necessarily or per the requirements of securities
               regulator
               □Applicable √Not Applicable
               II. Changes of limited tradable shares
               □Applicable √Not Applicable
               2. Securities issuance and listing
               □Applicable √Not Applicable
            3. Shareholders and shareholding status
Total shareholders      JMC had 29,297 shareholders, including 23,921 A-share holders, and 5,376 B-share holders.
(as of June 30, 2017)
Top ten shareholders
                                                                                                           Shares
                                                              Shares at                     Shares with
                          Shareholder       Shareholding                      Change                       due to
 Shareholder Name                                             the End of                     Trading
                             Type          Percentage (%)                      (+,-)                      mortgage
                                                                 Year                       Restriction
                                                                                                          or frozen
Jiangling Motor         State-owned
                                                     41.03    354,176,000              0              0
Holding Co., Ltd.       legal person
Ford Motor Company      Foreign legal
                                                        32    276,228,394              0              0
                        person
China Securities
                        Other                          2.64    22,743,584          -2,200             0
Corporation Limited
Shanghai Automotive State-owned
                                                       1.51    13,019,610               0             0
Co., Ltd.               Legal person
Central Huijin          State-owned
                                                       0.83      7,186,600              0             0
Investment Ltd.         legal person
JPMBLSA RE FTIF
                        Foreign legal
TEMPLETON CHINA                                        0.75      5,848,450        -24,000             0
                        person
FUND GTI 5497
Xingye Securities
Corporation Jinqilin
No.5 Aggregate          Other                          0.67      5,782,597     5,782,597              0
Assets Management
Plan
GAOLING                 Foreign legal
                                                       0.63      5,439,086              0             0
FUND,L.P.               person
TEMPLETON
                        Foreign legal
DRAGON                                                 0.57      4,916,708              0             0
                        person
FUND,INC.
INVESCO                 Foreign legal
                                                       0.52      4,483,356        110,726             0
FUNDS SICAV             person
Notes on association among above-mentioned                    None.
shareholders
  Top ten shareholders holding unlimited tradable shares
           Shareholder Name                       Shares without Trading Restriction              Share Type
Jiangling Motor Holding Co., Ltd.                                           354,176,000                    A share
Ford Motor Company                                                          276,228,394                    B share
China Securities Corporation Limited                                          22,743,584                   A share
Shanghai Automotive Co., Ltd.                                                 13,019,610                   A share
Central Huijin Investment Ltd.                                                  7,186,600                  A share
JPMBLSA RE FTIF TEMPLETON
                                                                                5,848,450                   B share
CHINA FUND GTI 5497
Xingye Securities Corporation Jinqilin
No.5 Aggregate Assets Management                                                5,782,597                   A share
Plan
GAOLING FUND,L.P.                                                               5,439,086                   B share
TEMPLETON DRAGON FUND,INC.                                                      4,916,708                   B share
INVESCO FUNDS SICAV                                                             4,483,356                   B share
Notes on association among above-           None.
mentioned shareholders
            Stock buy-back by top ten shareholders or top ten shareholders holding
            unlimited tradable shares in the reporting period
            □Yes √No
There is no stock buy-back by top ten shareholders or top ten shareholders
holding unlimited tradable shares in the reporting period.
4. Change of controlling shareholders or actual controlling parties
Change of controlling shareholders
□Applicable √Not Applicable
There was no change of controlling shareholders during the reporting period.
Change of actual controlling parties
□Applicable √Not Applicable
There was no change of actual controlling parties during the reporting period.
Chapter VII     Preferred Shares
□Applicable √Not Applicable
JMC have no preferred shares during the reporting period.
Chapter VIII         Directors, Supervisors and Senior Management
1. Changes of shares held by directors, supervisors and senior management
□Applicable √Not Applicable
There was no change of shares held by Directors, Supervisors and senior
management in the reporting period. Please refer to 2016 annual report for
details.
2. Changes of directors, supervisors and senior management
    Name              Position       Status           Date                     Reason
Peter Fleet     Vice Chairman    Elected         June 29, 2017 Re-election of Board of Directors
David
                Director         Elected         June 29, 2017 Re-election of Board of Directors
Johnston
                                 Expiration of
David Schoch Vice Chairman       the Term of     June 29, 2017 Re-election of Board of Directors
                                 Office
                                 Expiration of
Mark Kosman Director             the Term of     June 29, 2017 Re-election of Board of Directors
                                 Office
                                 Expiration of
Arturo
                Vice President   the Term of     June 29, 2017
Mendoza
                                 Office
Mike Chang      Vice President   Appointed       June 29, 2017
                                 Expiration of
Liu Niansheng Supervisor         the Term of     June 27, 2017 Re-election of Supervisory Board
                                 Office
                                 Expiration of
Xu Lanfeng      Supervisor       the Term of     June 27, 2017 Re-election of Supervisory Board
                                 Office
Ding Zhaoyang   Supervisor       Elected         June 27, 2017 Re-election of Supervisory Board
Chen Guang      Supervisor       Elected         June 27, 2017 Re-election of Supervisory Board
Liao Zanping    Vice President   Leave           Feb. 1, 2017 Work rotation
Wu Xiaojun      Vice President   Appointed       Feb. 1, 2017
Chapter IX        Company Bond
Whether the Company owns the corporate bond that is lists in the securities
exchange and undue or is not paid in full although it’s due.
□Yes √No
Chapter X Financial Statements
JIANGLING MOTORS CORPORATION, LTD.
FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30
JUNE 2017
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2017
(All amounts in thousands of RMB unless otherwise stated)
                                                                     Six months ended 30 June
                                                            Note          2017#          2016#
Revenue                                                      5        15,666,476        10,810,736
Sales tax                                                               (544,622)          (328,255)
Cost of sales                                                6       (12,371,957)        (8,356,083)
Gross profit                                                           2,749,897          2,126,398
Distribution expenses                                        6        (1,270,477)          (757,567)
Administrative expenses                                      6        (1,193,666)          (937,398)
Impairment charge of non-current assets                                   (3,347)            (1,347)
Other income                                                 8           203,584            225,856
Operating profit                                                         485,991            655,942
Finance income                                               9           127,903           110,419
Finance expenses                                             9            (2,003)             (767)
Finance income-net                                           9           125,900           109,652
Share of profit of investments accounted for using the
  equity method                                             15b             3,447              5,026
Profit before income tax                                                 615,338           770,620
Income tax expense                                           10          (62,435)          (66,103)
Profit for the period                                                    552,903           704,517
Total comprehensive income for the period                                552,903           704,517
Profit attributable to:
Shareholders of the Company                                              552,903           704,517
Total comprehensive income attributable to:
Shareholders of the Company                                              552,903           704,517
Earnings per share for profit attributable to the
shareholders of the Company for the period
  (expressed in RMB per share)
- Basic and diluted                                          11              0.64               0.82
#Unaudited financial indexes
The notes on pages 28 to 79 are an integral part of these consolidated financial statements.
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
(All amounts in thousands of RMB unless otherwise stated)
                                                                                   As at
                                                                                           31 December
                                                            Note
                                                                   30 June 2017#
Assets
Non-current assets
Property, plant and equipment                               12             6,587,077           6,688,530
Lease prepayment                                            13               624,621             632,408
Intangible assets                                           14               148,093             158,160
Investments accounted for using the equity method           15b               43,340              39,893
Other non-current assets                                                      99,127              97,549
Deferred income tax assets                                  16               576,026             554,488
                                                                           8,078,284           8,171,028
Current assets
Financial assets at fair value through profit or loss                          5,949               8,539
Inventories                                                 17             1,960,649           1,934,092
Trade and other receivables and prepayments                 18             3,589,508           2,625,808
Cash and cash equivalents                                   19            10,477,947          11,666,222
Restricted cash                                                                    -
Assets classified as held for sale                          20                87,637              87,637
                                                                          16,121,690          16,322,761
Total assets                                                              24,199,974          24,493,789
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
AS AT 30 JUNE 2017
(All amounts in thousands of RMB unless otherwise stated)
                                                                                     As at
                                                            Note                               31 December
                                                                    30 June 2017#
Equity and liabilities
Equity attributable to shareholders of the
Company
Share capital                                               21             863,214                 863,214
Share premium                                                              816,609                 816,609
Other reserves                                              22             452,126                 452,126
Retained earnings                                                       10,303,630              10,277,287
Total equity                                                            12,435,579              12,409,236
Liabilities
Non-current liabilities
Borrowings                                                  23               4,214                   4,543
Deferred income tax liabilities                             16              26,980                  27,383
Retirement benefit obligations                              24              50,913                  53,627
Provisions for warranty and other liabilities               25             149,128                 130,987
Other non-current liabilities                                                  280
                                                                           231,515                 216,860
Current liabilities
Trade and other payables                                    26          11,329,443              11,605,178
Current income tax liabilities                                              31,121                  98,860
Borrowings                                                  23                 444
Retirement benefit obligations                              24               4,561                   4,561
Provisions for warranty and other liabilities               25             167,311                 153,640
Other current liabilities                                                        -                   5,000
                                                                        11,532,880              11,867,693
Total liabilities                                                       11,764,395              12,084,553
Total equity and liabilities                                            24,199,974              24,493,789
#Unaudited financial indexes
The notes on pages 28 to 79 are an integral part of these consolidated financial statements.
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2017
(All amounts in thousands of RMB unless otherwise stated)
                                          Attributable to shareholders of the Company
                                           Share        Share         Other     Retained         Total
                                 Note     capital    premium       reserves     earnings       equity#
Balance at 1 January 2016                863,214       816,609     452,938     9,848,381   11,981,142
Profit for the six months                                                        704,517      704,517
Dividends relating to 2015                                                     (889,110)     (889,110)
Balance at 30 June 2016                  863,214       816,609     452,938     9,663,788   11,796,549
Balance at 1 January 2017                863,214       816,609     452,126    10,277,287   12,409,236
Profit for the six months                      -             -           -       552,903    552,903
Dividends relating to 2016        27           -             -           -      (526,560)  (526,560)
Balance at 30 June 2017                  863,214       816,609     452,126    10,303,630 12,435,579
#Unaudited financial indexes
The notes on pages 28 to 79 are an integral part of these consolidated financial statements.
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2017
(All amounts in thousands of RMB unless otherwise stated)
                                                                       Six months ended 30 June
                                                            Note            2017#              2016#
Cash flows from operating activities
Cash generated from operations                              28           (733,272)             1,103,907
Interest paid                                                                 (158)                 (320)
Income tax paid                                                           (165,971)             (116,033)
Net cash generated from operating activities                             (899,401)               987,554
Cash flows from investing activities
Purchase of property, plant and equipment (PPE)                           (407,102)             (512,444)
Other cash paid relating to investing activities                            (3,886)                 (101)
Proceeds from disposal of PPE                               28               2,097                 2,611
Interest received                                                          120,666               145,919
Dividends received                                                                -                5,745
Other cash received from investing activities                                5,469
Net cash used in investing activities                                     (282,756)             (357,893)
Cash flows from financing activities
Repayments of borrowings                                                    (5,226)                 (212)
Dividends paid to shareholders of the Company                                 (892)               (7,571)
Net cash used in financing activities                                       (6,118)               (7,783)
Net (decrease)/increase in cash and cash equivalents                   (1,188,275)                621,878
Cash and cash equivalents at beginning of year                         11,666,222              8,848,040
Effects of exchange rate changes                                                 -                      -
Cash and cash equivalents at end of period                  19         10,477,947              9,469,918
#Unaudited financial indexes
The notes on pages 28 to 79 are an integral part of these consolidated financial statements.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
1     General information
      Jiangling Motors Corporation, Ltd. (the “Company”) was established in the People’s Republic
      of China (the “PRC”) under the Company Law of the PRC and according to the approval of
      Hongban (1992) No. 005 of Nangchang Revolution and Authorisation Group of Company’s
      Joint Stock as a joint stock limited company to hold certain operational assets and liabilities of
      the automotive manufacturing business of Jiangxi Motors Manufacturing Factory, which was
      owned by Jiangling Motors Corporation Group (“JMCG”). The legal representative’s operating
      license of the Company is No. 913600006124469438.
      The address of the Company’s registered office is No.509, Northern Yingbin Avenue,
      Nanchang, Jiangxi Province, the PRC.
      In December 1993, the Company issued 494,000,000 domestic ordinary shares (“A share”).
      In addition, the Company issued 25,214,000 A shares as bonus shares to the existing
      shareholders in 1994. The bonus shares were issued by utilisation of the Company’s retained
      earnings.
      In 1995, the Company issued 174,000,000 domestically listed foreign shares (“B share”) and
      the Company issued 170,000,000 additional B shares in 1998.
      As at 30 June 2017, the total number of issued shares of the Company is 863,214,000
      shares, which are all listed on the Shenzhen Stock Exchange, the PRC.
      The Company and its subsidiaries (the “Group”) are principally engaged in the development,
      manufacturing and selling of automobiles, engines and automobile related parts, dies and
      tools.
      These consolidated financial statements were authorised for issue by the Board of Directors
      on 29 August 2017.
2     Summary of significant accounting policies
      The principal accounting policies applied in the preparation of these consolidated financial
      statements are set out below. These policies have been consistently applied to all the years
      presented, unless otherwise stated.
2.1   Basis of preparation
      The consolidated financial statements of the Group have been prepared in accordance with all
      applicable International Financial Reporting Standards (“IFRS”). The consolidated financial
      statements have been prepared under the historical cost convention, as modified by the
      revaluation of financial assets and financial liabilities at fair value through profit or loss.
      The preparation of financial statements in conformity with IFRS requires the use of certain
      critical accounting estimates. It also requires management to exercise its judgement in the
      process of applying the Group’s accounting policies. The areas involving a higher degree of
      judgement or complexity, or areas where assumptions and estimations are significant to the
      consolidated financial statements are disclosed in Note 4.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
2     Summary of significant accounting policies (continued)
2.1   Basis of preparation (continued)
2.1.1 Changes in accounting policy and disclosures
(a)   New and amended standards adopted by the group
      Standards, amendments and interpretations which are effective for the financial year beginning
      on 1 January 2016 are not material to the Group.
(b)   New standards and interpretations not yet adopted
      A number of new standards and amendments to standards and interpretations are effective
      for annual periods beginning after 1 January 2016, and have not been applied in preparing
      these consolidated financial statements. None of these is expected to have a significant effect
      on the consolidated financial statements of the Group, except the following set out below:
           IFRS 9, ‘Financial instruments’, addresses the classification, measurement and
           recognition of financial assets and financial liabilities. The complete version of IFRS 9
           was issued in July 2014. It replaces the guidance in IAS 39 that relates to the
           classification and measurement of financial instruments. IFRS 9 retains but simplifies the
           mixed measurement model and establishes three primary measurement categories for
           financial assets: amortised cost, fair value through OCI and fair value through P&L. The
           basis of classification depends on the entity's business model and the contractual cash
           flow characteristics of the financial asset. Investments in equity instruments are required
           to be measured at fair value through profit or loss with the irrevocable option at inception
           to present changes in fair value in OCI not recycling. There is now a new expected credit
           losses model that replaces the incurred loss impairment model used in IAS 39. For
           financial liabilities there were no changes to classification and measurement except for
           the recognition of changes in own credit risk in other comprehensive income, for liabilities
           designated at fair value through profit or loss. IFRS 9 relaxes the requirements for hedge
           effectiveness by replacing the bright line hedge effectiveness tests. It requires an
           economic relationship between the hedged item and hedging instrument and for the
           ‘hedged ratio’ to be the same as the one management actually use for risk management
           purposes.
           Contemporaneous documentation is still required but is different to that currently
           prepared under IAS 39. The standard is effective for accounting periods beginning on or
           after 1 January 2018. Early adoption is permitted. The Group is yet to assess IFRS 9’s
           full impact.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
2     Summary of significant accounting policies (continued)
2.1   Basis of preparation (continued)
2.1.1 Changes in accounting policy and disclosures (continued)
(b)   New standards and interpretations not yet adopted (continued)
           IFRS 15, 'Revenue from contracts with customers' deals with revenue recognition and
           establishes principles for reporting useful information to users of financial statements
           about the nature, amount, timing and uncertainty of revenue and cash flows arising from
           an entity’s contracts with customers. Revenue is recognised when a customer obtains
           control of a good or service and thus has the ability to direct the use and obtain the
           benefits from the good or service. The standard replaces IAS 18 'Revenue' and IAS 11
           'Construction contracts' and related interpretations. The standard is effective for annual
           periods beginning on or after 1 January 2018 and earlier application is permitted. The
           Group is assessing the impact of IFRS 15.
           IFRS 16, 'Leases' will result in almost all leases being recognised on the balance sheet,
           as the distinction between operating and finance leases is removed. Under the new
           standard, an asset (the right to use the leased item) and a financial liability to pay rentals
           are recognised. The only exceptions are short-term and low-value leases. The
           accounting for lessors will not significantly change.
           The new standard is mandatory for financial years commencing on or after 1 January
           2019. At this stage, the Group does not intend to adopt the standard before its effective
           date.
      There are no other IFRSs or IFRIC interpretations that are not yet effective that would be
      expected to have a material impact on the Group.
2.2   Subsidiaries
      A subsidiary is an entity (including a structured entity) over which the Group has control. The
      Group controls an entity when the Group is exposed to, or has rights to, variable returns from
      its involvement with the entity and has the ability to affect those returns through its power over
      the entity. Subsidiaries are consolidated from the date on which control is transferred to the
      Group. They are deconsolidated from the date that control ceases.
      Investments in subsidiaries are accounted for at cost less impairment. Cost includes direct
      attributable costs of investment. The results of subsidiaries are accounted for by the Company
      on the basis of dividend received and receivable.
      Impairment testing of the investments in subsidiaries is required upon receiving a dividend
      from these investments if the dividend exceeds the total comprehensive income of the
      subsidiary in the period the dividend is declared or if the carrying amount of the investment in
      the separate financial statements exceeds the carrying amount in the consolidated financial
      statements of the investee’s net assets including goodwill.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
2     Summary of significant accounting policies (continued)
2.3   Associates
      An associate is an entity over which the Group has significant influence but not control,
      generally accompanying a shareholding of between 20% and 50% of the voting rights.
      Investments in associates are accounted for using the equity method of accounting. Under the
      equity method, the investment is initially recognised at cost, and the carrying amount is
      increased or decreased to recognise the investor’s share of the profit or loss of the investee
      after the date of acquisition.
      The Group's share of post-acquisition profit or loss is recognised in profit or loss, and its share
      of post-acquisition movements in other comprehensive income is recognised in other
      comprehensive income with a corresponding adjustment to the carrying amount of the
      investment. When the Group's share of losses in an associate equals or exceeds its interest in
      the associate, including any other unsecured receivables, the Group does not recognise
      further losses, unless it has incurred legal or constructive obligations or made payments on
      behalf of the associate.
      The Group determines at each reporting date whether there is any objective evidence that the
      investment in the associate is impaired. If this is the case, the Group calculates the amount of
      impairment as the difference between the recoverable amount of the associate and its
      carrying value and recognises the amount adjacent to ‘share of profit of investments
      accounted for using equity method’ in profit or loss.
      Profits and losses resulting from upstream and downstream transactions between the Group
      and its associate are recognised in the Group’s financial statements only to the extent of
      unrelated investor’s interests in the associates. Unrealised losses are eliminated unless the
      transaction provides evidence of an impairment of the asset transferred. Accounting policies of
      associates have been changed where necessary to ensure consistency with the policies
      adopted by the Group.
      Gains or losses on dilution of equity interest in associates are recognised in profit or loss.
2.4   Segment Reporting
      Operating segments are reported in a manner consistent with the internal reporting provided
      to the chief operating decision-maker. The chief operating decision-maker, who is responsible
      for allocating resources and assessing performance of the operating segments, has been
      identified as the executive committee that makes strategic decisions.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
2     Summary of significant accounting policies (continued)
2.5   Foreign currency translation
(1)   Functional and presentation currency
      Items included in the financial statements of each of the Group’s entities are measured using
      the currency of the primary economic environment in which the entity operates (the “functional
      currency”). The consolidated financial statements are presented in Renminbi (“RMB”), which is
      the Company’s functional and the Group’s presentation currency.
(2)   Transactions and balances
      Foreign currency transactions are translated into the functional currency using the exchange
      rates prevailing at the dates of the transactions or valuation where items are remeasured.
      Foreign exchange gains and losses resulting from the settlement of such transactions and
      from the translation at year-end exchange rates of monetary assets and liabilities
      denominated in foreign currencies are recognised in profit or loss, except when deferred in
      equity as qualifying cash flow hedges and qualifying net investment hedges.
      Foreign exchange gains and losses are presented in profit or loss within ‘other income/
      (expense)-net’.
      Changes in the fair value of monetary securities denominated in foreign currency classified as
      available-for-sale are analysed between translation differences resulting from changes in the
      amortised cost of the security and other changes in the carrying amount of the security.
      Translation differences related to changes in amortised cost are recognised in profit or loss,
      and other changes in carrying amount are recognised in other comprehensive income.
      Translation differences on non-monetary financial assets and liabilities such as equities held
      at fair value through profit or loss are recognised in profit or loss as part of the fair value gain
      or loss. Translation differences on non-monetary financial assets, such as equities classified
      as available-for-sale, are included in other comprehensive income.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
2     Summary of significant accounting policies (continued)
2.6   Property, plant and equipment
      Property, plant and equipment is stated at historical cost less accumulated depreciation and
      any impairment losses. Historical cost includes expenditure that is directly attributable to the
      acquisition or construction of the items.
      Subsequent costs are included in the asset’s carrying amount or recognised as a separate
      asset, as appropriate, only when it is probable that future economic benefits associated with
      the item will flow to the Group and the cost of the item can be measured reliably. The carrying
      amount of the replaced part is derecognised. All other repairs and maintenance are charged to
      profit or loss during the financial period in which they are incurred.
      Depreciation is calculated using the straight-line method to allocate their cost to their residual
      values over their estimated useful lives, as follows:
      Buildings                                                                            35-40 years
      Plant and machinery                                                                  10-15 years
      Motor vehicles                                                                        6-10 years
      Moulds                                                                                   5 years
      Electronic and other equipment                                                         5-7 years
      The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end
      of each reporting period.
      An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
      carrying amount is greater than its estimated recoverable amount (Note 2.9).
      Gains and losses on disposals are determined by comparing the proceeds with the carrying
      amount and are recognised within ‘other income/(expense) - net’ in profit or loss.
      Assets under construction represent buildings under construction and plant and equipment
      pending installation, and are stated at cost. Costs include construction and acquisition costs. No
      provision for depreciation is made on assets under construction until such time as the relevant
      assets are completed and ready for intended use. When the assets concerned are brought into
      use, the costs are transferred to property, plant and equipment and depreciated in accordance
      with the policy as stated above.
2.7   Lease prepayment
      Lease prepayment represents upfront prepayment made for the land use rights, and is
      expensed in profit or loss on a straight-line basis over the period of the lease or when there is
      impairment, the impairment is expensed in profit or loss.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
2     Summary of significant accounting policies (continued)
2.8   Intangible assets
(1)   Goodwill
      Goodwill arises on the acquisition of subsidiaries represents the excess of the consideration
      transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date
      fair value of any previous equity interest in the acquiree over the fair value of the identified net
      assets acquired.
      For the purpose of impairment testing, goodwill acquired in a business combination is allocated
      to each of the cash-generating units (“CGUs”), or groups of CGUs, that is expected to benefit
      from the synergies of the combination. Each unit or group of units to which the goodwill is
      allocated represents the lowest level within the entity at which the goodwill is monitored for
      internal management purposes. Goodwill is monitored at the operating segment level.
      Goodwill impairment reviews are undertaken annually or more frequently if events or changes in
      circumstances indicate a potential impairment. The carrying value of the CGU containing the
      goodwill is compared to the recoverable amount, which is the higher of value in use and the fair
      value less costs of disposal. Any impairment is recognised immediately as an expense and is
      not subsequently reversed.
(2)   Research and development
      Research expenditure is recognised as an expense as incurred. Costs incurred on development
      projects (relating to the design and testing of new or improved products) are recognised as
      intangible assets when the following criteria are fulfilled:
      (a) it is technically feasible to complete the intangible asset so that it will be available for use or
          sale;
      (b) management intends to complete the intangible asset and use or sell it;
      (c) there is an ability to use or sell the intangible asset;
      (d) it can be demonstrated how the intangible asset will generate probable future economic
          benefits;
      (e) adequate technical, financial and other resources to complete the development and to use
          or sell the intangible asset are available; and
      (f) the expenditure attributable to the intangible asset during its development can be reliably
          measured.
      The development cost of an internally generated intangible asset is the sum of the expenditure
      incurred from the date the asset meets the recognition criteria above to the date when it is
      available for use. The development costs capitalized in connection with the intangible asset
      include costs of materials and services used or consumed and employee costs incurred in the
      creation of the asset.
      Capitalised development costs are recorded as intangible assets and amortised from the point at
      which the asset is ready for use on a straight-line basis over its useful life.
      Other development expenditures that do not meet these criteria are recognised as an expense
      as incurred. Development costs previously recognised as an expense are not recognised as an
      asset in a subsequent period.
       JIANGLING MOTORS CORPORATION, LTD.
       FOR THE SIX MONTHS ENDED 30 JUNE 2017
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)
2      Summary of significant accounting policies (continued)
2.8    Intangible assets (continued)
(3)    Computer software
       Acquired computer software licences are capitalised on the basis of the costs incurred to acquire
       and bring to use the specific software. These costs are amortised over their estimated useful
       lives of 5 years.
(4)    Non-patent technology
       Non-patent technology is capitalised from the development cost. These costs are amortised over
       their estimated useful lives of 5 years.
2.9    Impairment of non-financial assets
       Intangible assets that have an indefinite useful life or intangible assets not ready to use are not
       subject to amortisation and are tested annually for impairment. Assets that are subject to
       amortisation are reviewed for impairment whenever events or changes in circumstances indicate
       that the carrying amount may not be recoverable. An impairment loss is recognised for the
       amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
       amount is the higher of an asset’s fair value less costs of disposal and value in use. For the
       purposes of assessing impairment, assets are grouped at the lowest levels for which there are
       separately identifiable cash flows (cash-generating units). Non-financial assets other than
       goodwill that suffered an impairment are reviewed for possible reversal of the impairment at
       each reporting date.
2.10   Non-current assets held-for-sale
       Non-current assets are classified as held for sale when their carrying amount is to be recovered
       principally through a sale transaction and a sale is considered highly probable. The non-current
       assets (except for certain assets as explained below), are stated at the lower of carrying amount
       and fair value less costs to sell. Deferred tax assets and financial assets (other than investments
       in subsidiaries and associates), which are classified as held for sale, would continue to be
       measured in accordance with the policies set out elsewhere in Note 2.
2.11   Financial assets
(1)    Classification
       The Group classifies its financial assets in the following categories: at fair value through profit
       or loss, loans and receivables, and available-for-sale. The classification depends on the
       purpose for which the financial assets were acquired. Management determines the
       classification of its financial assets at initial recognition.
(a)    Financial assets at fair value through profit or loss
       Financial assets at fair value through profit or loss are financial assets held for trading. A
       financial asset is classified in this category if acquired principally for the purpose of selling in
       the short term. Derivatives are also categorised as held for trading unless they are designated
       as hedges. Assets in this category are classified as current assets if expected to be settled
       within 12 months; otherwise, they are classified as non-current.
       JIANGLING MOTORS CORPORATION, LTD.
       FOR THE SIX MONTHS ENDED 30 JUNE 2017
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)
2      Summary of significant accounting policies (continued)
2.11   Financial assets (continued)
(1)    Classification (continued)
(b)    Loans and receivables
       Loans and receivables are non-derivative financial assets with fixed or determinable
       payments that are not quoted in an active market. They are included in current assets, except
       for the amounts that are settled or expected to be settled more than 12 months after the end
       of the reporting period. These are classified as non-current assets.
(c)    Available-for-sale financial assets
       Available-for-sale financial assets are non-derivatives that are either designated in this
       category or not classified in any of the other categories. They are included in non-current
       assets unless the investment matures or management intends to dispose of it within 12
       months of the end of the reporting period.
(2)    Recognition and measurement
       Regular way purchases and sales of financial assets are recognised on the trade-date-the
       date on which the Group commits to purchase or sell the asset. Investments are initially
       recognised at fair value plus transaction costs for all financial assets not carried at fair value
       through profit or loss. Financial assets carried at fair value through profit or loss are initially
       recognised at fair value, and transaction costs are expensed in profit or loss. Financial assets
       are derecognised when the rights to receive cash flows from the investments have expired or
       have been transferred and the Group has transferred substantially all risks and rewards of
       ownership. Available-for-sale financial assets and financial assets at fair value through profit
       or loss are subsequently carried at fair value. Loans and receivables are subsequently carried
       at amortised cost using the effective interest method.
       Gains or losses arising from changes in the fair value of the ‘financial assets at fair value
       through profit or loss’ category are presented in profit or loss within ‘other income/(expense)-
       net’ in the period in which they arise. Dividend income from financial assets at fair value
       through profit or loss is recognised in profit or loss as part of other income when the Group’s
       right to receive payments is established.
       Changes in the fair value of monetary and non-monetary securities classified as available-for-
       sale are recognised in other comprehensive income.
       When securities classified as available-for-sale are sold or impaired, the accumulated fair
       value adjustments recognised in equity are included in profit or loss as ‘gains and losses from
       investment securities’.
       Interest on available-for-sale securities calculated using the effective interest method is
       recognised in profit or loss as part of other income. Dividends on available-for-sale equity
       instruments are recognised in profit or loss as part of other income when the Group’s right to
       receive payments is established.
       JIANGLING MOTORS CORPORATION, LTD.
       FOR THE SIX MONTHS ENDED 30 JUNE 2017
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)
2      Summary of significant accounting policies (continued)
2.12   Financial liabilities at fair value through profit or loss and offsetting financial
       instruments
       Financial liabilities at fair value through profit or loss are financial liabilities held for trading. A
       financial liability is classified in this category if incurred principally for the purpose of selling in the
       short term. A financial liability initially recognised at fair value, and transaction costs are
       expensed in profit or loss. Subsequent measurements are measured at fair value. Liabilities in
       this category are classified as current liabilities if expected to be settled within 12 months;
       otherwise, they are classified as non-current. A financial liability is derecognised when it is
       extinguished.
       Financial assets and liabilities are offset and the net amount reported in the statement of
       financial position when there is a legally enforceable right to offset the recognised amounts
       and there is an intention to settle on a net basis or realise the asset and settle the liability
       simultaneously. The legally enforceable right must not be contingent on future events and
       must be enforceable in the normal course of business and in the event of default, insolvency
       or bankruptcy of the Company or the counterparty.
2.13   Impairment of financial assets
(1)    Assets carried at amortised cost
       The Group assesses at the end of each reporting period whether there is objective evidence
       that a financial asset or group of financial assets is impaired. A financial asset or a group of
       financial assets is impaired and impairment losses are incurred only if there is objective
       evidence of impairment as a result of one or more events that occurred after the initial
       recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the
       estimated future cash flows of the financial asset or group of financial assets that can be
       reliably estimated.
       Evidence of impairment may include indications that the debtors or a group of debtors is
       experiencing significant financial difficulty, default or delinquency in interest or principal
       payments, the probability that they will enter bankruptcy or other financial reorganisation, and
       where observable data indicate that there is a measurable decrease in the estimated future
       cash flows, such as changes in arrears or economic conditions that correlate with defaults.
       For loans and receivables category, the amount of the loss is measured as the difference
       between the asset’s carrying amount and the present value of estimated future cash flows
       (excluding future credit losses that have not been incurred) discounted at the financial asset’s
       original effective interest rate. The carrying amount of the asset is reduced and the amount of
       the loss is recognised in profit or loss. If a loan or held-to-maturity investment has a variable
       interest rate, the discount rate for measuring any impairment loss is the current effective
       interest rate determined under the contract. As a practical expedient, the Group may
       measure impairment on the basis of an instrument’s fair value using an observable market
       price.
       If, in a subsequent period, the amount of the impairment loss decreases and the decrease
       can be related objectively to an event occurring after the impairment was recognised (such as
       an improvement in the debtor’s credit rating), the reversal of the previously recognised
       impairment loss is recognised in profit or loss.
       JIANGLING MOTORS CORPORATION, LTD.
       FOR THE SIX MONTHS ENDED 30 JUNE 2017
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)
2      Summary of significant accounting policies (continued)
2.13   Impairment of financial assets (continued)
(2)    Assets classified as available-for-sale
       The Group assesses at the end of each reporting period whether there is objective evidence
       that a financial asset or a group of financial assets is impaired.
       For debt securities, if any such evidence exists the cumulative loss – measured as the
       difference between the acquisition cost and the current fair value, less any impairment loss
       on that financial asset previously recognised in profit or loss – is reclassified from equity and
       recognised in profit or loss. If, in a subsequent period, the fair value of a debt instrument
       classified as available-for-sale increases and the increase can be objectively related to an
       event occurring after the impairment loss was recognised in profit or loss, the impairment loss
       is reversed through profit or loss.
       For equity investments, a significant or prolonged decline in the fair value of the security
       below its cost is also evidence that the assets are impaired. If any such evidence exists the
       cumulative loss – measured as the difference between the acquisition cost and the current
       fair value, less any impairment loss on that financial asset previously recognised in profit or
       loss – is reclassified from equity and recognised in profit or loss. Impairment losses
       recognised in profit or loss on equity instruments are not reversed through profit or loss.
2.14 Inventories
       Inventories are stated at the lower of cost and net realisable value. Cost is determined using the
       weighted average cost method. The cost of finished goods and work in progress comprises raw
       materials, direct labour, other direct costs and related production overheads (based on normal
       operating capacity). It excludes borrowing costs. Net realisable value is the estimated selling
       prices in the ordinary course of business, less applicable variable distribution expenses.
2.15   Trade and other receivables
       Trade receivables are amounts due from customers for merchandise sold or services performed
       in the ordinary course of business. If collection of trade and other receivables is expected in one
       year or less (or in the normal operating cycle of the business if longer), they are classified as
       current assets. If not, they are presented as non-current assets.
       Trade and other receivables are recognised initially at fair value and subsequently measured
       at amortised cost using the effective interest method, less allowance for impairment. See Note
       2.11(2) for further information about the Group’s accounting for trade receivables and Note
       2.13 for a description of the Group’s impairment policies.
2.16 Cash and cash equivalents
    In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand,
    deposits held at call with banks and other short-term highly liquid investments with original
    maturities of three months or less.
       JIANGLING MOTORS CORPORATION, LTD.
       FOR THE SIX MONTHS ENDED 30 JUNE 2017
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)
2      Summary of significant accounting policies (continued)
2.17   Share capital
       Share capital consists of “A” and “B” shares.
       Incremental costs directly attributable to the issue of new shares are shown in equity as a
       deduction, net of tax, from the proceeds.
       Where any group company purchases the Company’s equity share capital (treasury shares), the
       consideration paid, including any directly attributable incremental costs (net of income taxes) is
       deducted from equity attributable to owners of the Company until the shares are cancelled or
       reissued. Where such shares are subsequently reissued, any consideration received, net of any
       directly attributable incremental transaction costs and the related income tax effects, is included
       in equity attributable to the Company’s shareholders.
2.18   Trade payables
       Trade payables are obligations to pay for goods or services that have been acquired in the
       ordinary course of business from suppliers. Accounts payable are classified as current liabilities
       if payment is due within one year or less (or in the normal operating cycle of the business if
       longer). If not, they are presented as non-current liabilities.
       Trade payables are recognised initially at fair value and subsequently measured at amortised
       cost using the effective interest method.
2.19   Borrowings
       Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
       subsequently carried at amortised cost; any difference between the proceeds (net of transaction
       costs) and the redemption value is recognised in profit or loss over the period of the borrowings
       using the effective interest method.
       Borrowings are removed from the balance sheet when the obligation specified in the contract is
       discharged, cancelled or expired. The difference between the carrying amount of a financial
       liability that has been extinguished or transferred to another party and the consideration paid,
       including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as
       other income or finance costs.
       Borrowings are classified as current liabilities unless the Group has an unconditional right to
       defer settlement of the liability for at least 12 months after the end of the reporting period.
2.20   Borrowing costs
       General and specific borrowing costs directly attributable to the acquisition, construction or
       production of qualifying assets, which are assets that necessarily take a substantial period of
       time to get ready for their intended use or sale, are added to the cost of those assets, until such
       time as the assets are substantially ready for their intended use or sale.
       Investment income earned on the temporary investment of specific borrowings pending their
       expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
       All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
       JIANGLING MOTORS CORPORATION, LTD.
       FOR THE SIX MONTHS ENDED 30 JUNE 2017
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)
2      Summary of significant accounting policies (continued)
2.20   Borrowing costs (continued)
       Borrowing costs include interest expense, finance charges in respect of finance lease and
       exchange differences arising from foreign currency borrowings to the extent that they are
       regarded as an adjustment to interest costs. The exchange gains and losses that are an
       adjustment to interest costs include the interest rate differential between borrowing costs that
       would be incurred if the entity had borrowed funds in its functional currency, and the borrowing
       costs actually incurred on foreign currency borrowings. Such amounts are estimated based on
       interest rates on similar borrowings in the entity’s functional currency.
       When the construction of the qualifying assets takes more than one accounting period, the
       amount of foreign exchange differences eligible for capitalisation is determined for each annual
       period and are limited to the difference between the hypothetical interest amount for the
       functional currency borrowings and the actual interest incurred for foreign currency borrowings.
       Foreign exchange differences that did not meet the criteria for capitalisation in previous years
       should not be capitalised in subsequent years.
       JIANGLING MOTORS CORPORATION, LTD.
       FOR THE SIX MONTHS ENDED 30 JUNE 2017
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)
2      Summary of significant accounting policies (continued)
2.21   Current and deferred income tax
       The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or
       loss, except to the extent that it relates to items recognised in other comprehensive income or
       directly in equity. In this case the tax is also recognised in other comprehensive income or
       directly in equity, respectively.
(1)    Current income tax
       The current income tax charge is calculated on the basis of the tax laws enacted or
       substantively enacted at the balance sheet date in the PRC. Management periodically evaluates
       positions taken in tax returns with respect to situations in which applicable tax regulation is
       subject to interpretation. It establishes provisions where appropriate on the basis of amounts
       expected to be paid to the tax authorities.
(2)    Deferred income tax
       Inside basis differences
       Deferred income tax is recognised, using the liability method, on temporary differences arising
       between the tax bases of assets and liabilities and their carrying amounts in the consolidated
       financial statements. However, deferred tax liabilities are not recognised if they arise from the
       initial recognition of goodwill, the deferred income tax is not accounted for if it arises from initial
       recognition of an asset or liability in a transaction other than a business combination that at the
       time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax
       is determined using tax rates (and laws) that have been enacted or substantively enacted by the
       balance sheet date and are expected to apply when the related deferred income tax asset is
       realised or the deferred income tax liability is settled.
       Deferred income tax assets are recognised only to the extent that it is probable that future
       taxable profit will be available against which the temporary differences can be utilised.
       Outside basis differences
       Deferred income tax liabilities are provided on taxable temporary differences arising from
       investments in subsidiaries, associates and joint arrangements, except for deferred income tax
       liability where the timing of the reversal of the temporary difference is controlled by the Group
       and it is probable that the temporary difference will not reverse in the foreseeable future.
       Generally the Group is unable to control the reversal of the temporary difference for associates.
       Only when there is an agreement in place that gives the Group the ability to control the reversal
       of the temporary difference in the foreseeable future, deferred tax liability in relation to taxable
       temporary differences arising from the associate’s undistributed profits is not recognised.
       Deferred income tax assets are recognised on deductible temporary differences arising from
       investments in subsidiaries and associate only to the extent that it is probable the temporary
       difference will reverse in the future and there is sufficient taxable profit available against which
       the temporary difference can be utilised.
       JIANGLING MOTORS CORPORATION, LTD.
       FOR THE SIX MONTHS ENDED 30 JUNE 2017
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)
2      Summary of significant accounting policies (continued)
2.21   Current and deferred income tax (continued)
(3)    Offsetting
       Deferred income tax assets and liabilities are offset when there is a legally enforceable right to
       offset current tax assets against current tax liabilities and when the deferred income taxes
       assets and liabilities relate to income taxes levied by the same taxation authority on either the
       taxable entity or different taxable entities where there is an intention to settle the balances on a
       net basis.
2.22   Employee benefits
(1)    Pension obligations
       The Group contributes on a monthly basis to a defined contribution retirement scheme managed
       by the PRC government. The contribution to the scheme is charged to profit or loss as and
       when incurred. The Group’s obligations are determined at a certain percentage of the salaries of
       the employees.
       In addition, the Group provides supplementary pension subsidies to certain qualified employees.
       Such supplementary pension subsidies are considered as under defined benefit plans. The
       liability recognised in the statement of financial position in respect of these defined benefit plans
       is the present value of the defined benefit obligation at the balance sheet date less the fair value
       of plan assets, together with adjustments for recognised actuarial gains or losses and past
       service cost. The defined benefit obligation is calculated annually by independent actuaries
       using the projected unit credit method. The present value of the defined benefit obligation is
       determined by discounting the estimated future cash outflows according to the terms of the
       related pension liability.
       The current service cost of the defined benefit plan, recognised in profit or loss in employee
       benefit expense, except where included in the cost of an asset, reflects the increase in the
       defined benefit obligation results from employee service in the current year, benefit changes,
       curtailments and settlements.
       Past-service costs are recognised immediately in profit or loss.
       The net interest cost is calculated by applying the discount rate to the net balance of the defined
       benefit obligation and the fair value of plan assets. This cost is included in employee benefit
       expense in profit or loss.
       Actuarial gains and losses arising from experience adjustments and changes in actuarial
       assumptions are charged or credited to equity in other comprehensive income in the period in
       which they arise.
(2)    Housing fund and other benefits
       The Group’s full-time employees are entitled to participate in a state-sponsored housing fund.
       The fund can be used by the employees for the purchase of apartment accommodation, or
       may be withdrawn upon their retirement. The Group is required to make annual contributions
       to the state-sponsored housing fund equivalent to a certain percentage of the employees’
       salaries.
       JIANGLING MOTORS CORPORATION, LTD.
       FOR THE SIX MONTHS ENDED 30 JUNE 2017
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)
2      Summary of significant accounting policies (continued)
2.22   Employee benefits (continued)
(3)    Bonus entitlement
       The expected cost of bonus payments is recognised as a liability when the Group has a
       present legal or constructive obligation as a result of services rendered by employees and a
       reliable estimate of the obligation can be made. Liabilities for bonus are expected to be settled
       within twelve months and are measured at the amounts expected to be paid when they are
       settled.
2.23   Provisions
       Provisions, mainly warranty costs, are recognised when: the Group has a present legal or
       constructive obligation as a result of past events; it is probable that an outflow of resources will
       be required to settle the obligation; and the amount has been reliably estimated. Provisions are
       not recognised for future operating losses.
       Where there are a number of similar obligations, the likelihood that an outflow will be required in
       settlement is determined by considering the class of obligations as a whole. A provision is
       recognised even if the likelihood of an outflow with respect to any one item included in the same
       class of obligations may be small.
       Provisions are measured at the present value of the expenditures expected to be required to
       settle the obligation using a pre-tax rate that reflects current market assessments of the time
       value of money and the risks specific to the obligation. The increase in the provision due to
       passage of time is recognised as interest expense.
2.24   Revenue recognition
       Revenue is measured at the fair value of the consideration received or receivable, and
       represents amounts receivable for goods supplied, stated net of discounts returns and value
       added taxes. The Group recognises revenue when the amount of revenue can be reliably
       measured; when it is probable that future economic benefits will flow to the entity; and when
       specific criteria have been met for each of the Group’s activities, as described below. The Group
       bases its estimates of return on historical results, taking into consideration the type of customer,
       the type of transaction and the specifics of each arrangement.
(1)    Sales of goods
       Revenue from the sale of goods is recognised when significant risks and rewards of ownership
       of the goods are transferred to the customer, the customer has accepted the products and
       collectability of the related receivables is reasonably assured.
(2)    Rental income
       Rental income is recognised on a straight-line basis over the period of the rental contracts.
       JIANGLING MOTORS CORPORATION, LTD.
       FOR THE SIX MONTHS ENDED 30 JUNE 2017
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)
2      Summary of significant accounting policies (continued)
2.25   Interest income
       Interest income is recognised using the effective interest method. When a loan and receivable is
       impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated
       future cash flow discounted at the original effective interest rate of the instrument, and continues
       unwinding the discount as interest income. Interest income on impaired loan and receivables
       are recognised using the original effective interest rate.
2.26   Leases
       Leases in which a significant portion of the risks and rewards of ownership are retained by the
       lessor are classified as operating leases. Payments made under operating leases (net of any
       incentives received from the lessor) are charged to profit or loss on a straight-line basis over the
       period of the lease.
2.27   Dividend distribution
       Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s
       financial statements in the period in which the dividends are approved by the Company’s
       shareholders, where appropriate.
2.28   Government grants
       Government grants refer to the monetary or non-monetary assets obtained by the Group from
       the government, including tax return, financial subsidy and 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 will be recorded as deferred income and recognised
       evenly in profit or loss over the useful lives of the related assets. However, the government
       grants measured at their nominal amounts will be directly recorded in profit and loss for the
       current period.
       Government grants related to income will be recorded as deferred income and recognised in
       profit or loss in the period in which the related expenses are recognised if the grants are
       intended to compensate for future expenses or losses, and otherwise recognised in profit or
       loss for the current period if the grants are used to compensate for expenses or losses that
       have been incurred.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
3     Financial risk management
3.1   Financial risk factors
      The Group’s activities expose it to a variety of financial risks: market risk (including foreign
      exchange risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk
      management programme focuses on the unpredictability of financial markets and seeks to
      minimise potential adverse effects on the Group’s financial performance.
      Risk management is carried out by Finance Department under policies approved by the Board
      of Directors.
(1)   Market risk
(a)   Foreign exchange risk
      The Group operates domestically and is exposed to foreign exchange risk arising from various
      currency exposures, primarily with respect to other payables dominated in US dollar (“USD”)
      and Euro.
      Management has set up a policy to require the Group to manage their foreign exchange risk
      against their functional currency. Foreign exchange risk arises when future commercial
      transactions or recognised assets or liabilities are denominated in a currency that is not the
      Company’s functional currency.
      As at 30 June 2017, if RMB had strengthened/weakened by 10% against USD with all other
      variable held constant, the Group’s net profit for the six months ended 30 June 2017 then
      ended would have been approximately RMB20,534,000 (2016: RMB35,091,000) higher/lower.
      As at 30 June 2017, if RMB had strengthened/weakened by 10% against Euro with all other
      variable held constant, the Group’s net profit for the six months ended 30 June 2017 then
      ended would have been approximately RMB2,731,000 (2016: RMB5,269,000) higher/lower.
(b)   Interest rate risk
      The Group’s income and operating cash flows are substantially independent of changes in
      market interest rates. As at 30 June 2017, a large portion of its bank deposits and all of its
      borrowings were at fixed rate. The Group has not used any interest rate swaps to hedge its
      exposure to interest rate risk.
      As at 30 June 2017, if the interest rate of the Group’s bank deposits had been
      increased/decreased by 10% and all other variables were held constant, the Group’s net profit
      for the six months ended 30 June 2017 then ended would have been increased/decreased by
      approximately RMB10,184,000.
(2)   Credit risk
      The Group’s maximum exposure to credit risk in relation to financial assets is the carrying
      amounts of cash and cash equivalents and trade and other receivables.
      As at 30 June 2017, the Group had cash of approximately RMB963,588,000 (2016:
      RMB874,990,000) deposited in Jiangling Motor Group Finance Company (“JMCF”), which is a
      non-bank financial institution and a subsidiary of JMCG (Note 19). The Group’s other bank
      deposits are mainly deposited in state-owned banks or other listed banks. Management
      believes all these financial institutions have high credit quality without significant credit risk.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
3     Financial risk management (continued)
3.1   Financial risk factors (continued)
(2)   Credit risk (continued)
      All the Group’s trade and other receivables have no collateral. However, the Group has
      policies in place to ensure that sales are made to customers with appropriate credit history
      and the Group performs periodic credit evaluations of its customers. The Group assesses the
      credit quality of each customer by taking into account its financial position, past experience
      and other factors. Credit limit and terms are reviewed on periodic basis, and the financial
      department is responsible for such monitoring procedures. In determining whether provision
      for impairment is required, the Group takes into consideration the aging status and the
      likelihood of collection. In this regards, the directors of the Company are satisfied that the risks
      is minimal as all customers are existing ones or related parties and have no default in the past
      and adequate provision for impairment, if any, has been made in the financial statements after
      assessing the collectability of individual debts. Further quantitative disclosures in respect of
      the impairment of trade and other receivables are set out in Note 18.
(3)   Liquidity risk
      Cash flow forecasting is performed in the operating entities of the Group in and aggregated by
      Finance Department. Finance Department monitors rolling forecasts of the Group's liquidity
      requirements to ensure it has sufficient cash to meet operational needs while maintaining
      sufficient headroom on its undrawn committed borrowing facilities (Note 23) at all times so that
      the Group does not breach borrowing limits or covenants (where applicable) on any of its
      borrowing facilities.
      The table below analyses the Group’s financial liabilities into relevant maturity groupings
      based on the remaining period at the balance sheet date to the contractual maturity date. The
      amounts disclosed in the table are the contractual undiscounted cash flows.
                                        Less than 1        Between 1         Between 2            Over 5
                                               year       and 2 years       and 5 years            years
      At 30 June 2017
      Bank borrowings
       - Principals                             444                444             1,330            2,440
       - Interests                               68                 62               145
      Trade and other payables           10,394,267                  -                 -                -
                                         10,394,779                506             1,475            2,550
      At 31 December 2016
      Bank borrowings
       - Principals                             454                454             1,363           2,726
       - Interests                               73                 66               158
      Trade and other payables           11,053,248                  -                 -               -
                                         11,053,775                520             1,521           2,859
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
3     Financial risk management (continued)
3.2   Capital risk management
      The Group’s objectives when managing capital are to safeguard the Group’s ability to continue
      as a going concern in order to provide returns for shareholders and benefits for other
      stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
      In order to maintain or adjust the capital structure, the Group may adjust the amount of
      dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets
      to reduce debt.
      Consistent with others in the industry, the Group monitors capital on the basis of the gearing
      ratio. This ratio is calculated as borrowings divided by total capital. Total capital is calculated
      as equity, as shown in the consolidated statement of financial position, plus borrowings. The
      Group aims to maintain the gearing ratio at a reasonable level.
      The gearing ratios at 30 June 2017 and 31 December 2016 were as follows:
                                                           30 June 2017              31 December 2016
      Total borrowings                                                 4,658                       4,997
      Total equity                                                12,435,579                  12,409,236
      Total capital                                               12,440,237                  12,414,233
      Gearing ratio                                                   0.04%                        0.04%
3.3   Fair value estimation
      The inputs to valuation techniques used to measure fair value are categorised into three levels
      within a fair value hierarchy as follows:
           Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
           Inputs other than quoted prices included within level 1 that are observable for the asset
           or liability, either directly (that is, as prices) or indirectly (that is, derived from prices)
           (level 2).
           Inputs for the asset or liability that are not based on observable market data (that is,
           unobservable inputs) (level 3).
      Financial assets at fair value through profit or loss are forward exchange contracts which are
      not traded in an active market. The fair value is determined by using valuation techniques
      which maximised the use of observable market data where it is available and rely as little as
      possible on entity specific estimates. Since all significant inputs required to value forward
      exchange contracts are observable, the forward exchange contracts are classified as level 2.
      The carrying amounts of the Group’s financial assets including cash and cash equivalents,
      trade and other receivables and financial liabilities including trade and other payables,
      borrowing, approximate their fair values due to their short maturities. The book values less any
      estimated credit adjustments for financial assets and liabilities with a maturity of less than one
      year are assumed to approximate their fair values.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
4     Critical accounting estimates and judgements
      Estimates and judgements are continually evaluated and are based on historical experience
      and other factors, including expectations of future events that are believed to be reasonable
      under the circumstances.
      The Group makes estimates and assumptions concerning the future. The resulting accounting
      estimates will, by definition, seldom equal the related actual results. The estimates and
      assumptions that have a significant risk of causing a material adjustment to the carrying
      amounts of assets and liabilities within the next financial year are addressed below.
(1)   Impairment of long term assets
      The Group assesses whether there are indicators that the long term assets except for financial
      assets are impaired at each balance sheet date. When there are indicators that the carrying
      amounts of those long term assets are unrecoverable, an impairment test will be performed.
      When the carrying amount of the long term assets except for financial assets or the cash
      generating unit (“CGU”) is higher than its recoverable amount, which is the higher of an
      asset’s or CGU’s fair value less costs of disposal and its value in use, the impairment
      occurred.
      To determine the fair value less costs of disposal, the Group take reference to the prices in
      sales agreements in relevant asset transactions or the observable market prices, and the
      incremental cost which could directly attributable to the assets disposal.
      Key judgements are made on the outputs, sales prices, relevant operation costs and discount
      rates when estimate the discounted future cash flow forecasts. The Group uses relevant
      accessible information, including the assets outputs, sales prices, relevant operation costs
      which are based on the reasonable and supportable assumptions, to estimate the recoverable
      amount of those long term assets.
(2)   Taxation
      The Group is subject to various taxes in the PRC, including corporate income tax, value added
      tax and consumption tax. Significant judgment is required in determining the provision for
      these taxes. There are many transactions and calculations for which the ultimate tax
      determination is uncertain during the ordinary course of business. The Group recognises
      liabilities for anticipated tax issues based on estimates of whether additional taxes will be due.
      Where the final tax outcome of these matters is different from amounts that were initial
      recorded, such differences will impact the tax provisions in the period such determination is
      made.
      Deferred income tax assets relating to certain temporary differences are recognised as
      management considers it is probable that future taxable profit will be available against which
      the temporary differences can be utilised. Where the expectation is different from the original
      estimate, such differences will impact the recognition of deferred tax assets and tax in the
      periods in which such estimate is changed.
      As at 30 June 2017, the Group recorded the deferred tax assets of approximately
      RMB576,026,000. To the extent that it is probable that taxable profit will be available against
      which the deductible temporary differences will be utilised, deferred tax assets are recognised
      mainly for temporary differences arising from accrued expenses and retirement benefit
      obligations.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
4      Critical accounting estimates and judgements(continued)
(3)    Provisions
       The Group provides warranties on automobile and undertakes to repair or replace items that
       fail to perform satisfactorily based on certain pre-determined conditions. Management
       estimates the related warranty claims based on historical warranty claim information including
       level of repairs and returns as well as recent trends that might suggest that past cost
       information may differ from future claims.
       Factors that could impact the estimated claim information include the success of the Group’s
       productivity and quality controls, as well as parts and labour costs. Any increase or decrease
       in the provision would affect profit or loss in future years.
(4)    Impairment of inventory
       Inventories shall be measured at the lower of cost and the net realisable value. The net
       realisable value is estimated sales price less estimated cost to finish goods, estimated
       distribution expenses and related taxes in the daily operation.
       If management revises estimated sales price, estimated cost       to finish goods, distribution
       expenses and related taxes, and revised sales price is lower      than current sales price, or
       revised cost to finish goods, distribution expenses and related   taxes are higher than those
       current estimation, the Group need to consider increasing the     impairment provision to the
       inventories.
       If the actual sales price, the cost to finish goods, distribution expenses and related taxes are
       higher or lower than the estimation of management, the Group will recognise the relevant
       influence in profit or loss relevant accounting period.
    JIANGLING MOTORS CORPORATION, LTD.
    FOR THE SIX MONTHS ENDED 30 JUNE 2017
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
    (All amounts in thousands of RMB unless otherwise stated)
5    Revenue and segment information
     The Group principally derives its turnover from the manufacture, assembly and sale of
     automobiles, related spare parts and components, and sales are made principally in the PRC.
     Revenue represents the total invoiced value of goods supplied to customers, net of value-added
     tax, returns and allowances.
     Management has determined the operating segment based on the reports reviewed by the
     strategic executive committee that are used to make strategic decisions. The committee
     considers the business from the product perspective as all the Group’s sales are made in the
     PRC. Since the Group principally derives its turnover from the sale of automobiles, the
     committee considers the automobile business as a whole in allocating resources and assessing
     performance. Accordingly, no segment information is presented.
6    Expenses by nature
                                                                  Six months ended 30 June
                                                                      2017
     Changes in inventories of finished goods and
       work in progress                                            162,825                  74,118
     Raw materials and consumables used                         11,127,866               7,390,290
     Employee benefit expense (Note 7)                           1,042,529                 872,355
     Depreciation of PPE (Note 12, 28)                             397,762                 323,276
     Repairs and maintenance expenditure on PPE                     43,305                  37,727
     Research and development expenditure                          852,674                 650,289
     Amortisation of lease prepayment (Note 13, 28)                  7,787                   7,904
     Amortisation of intangible assets (Note 14, 28)                 5,527                   4,743
     Provision of warranty                                         150,360                 108,763
     Others                                                      1,023,595                 562,749
     Total cost of sales, distribution expenses and
      administrative expenses                                   14,814,230             10,032,214
     For the six months ended 30 June 2017, depreciation of PPE of approximately RMB24,788,000
     (the six months ended 30 June 2016: RMB 21,797,000) and amortisation of intangible assets of
     approximately RMB12,642,000 (the six months ended 30 June 2016: RMB 888,000) were
     included in research and development expenditure.
     Impairment charge for trade and other receivables of approximately RMB2,207,000 (the six
     months ended 30 June 2016:RMB8,710,000) and impairment charge for inventories of
     approximately RMB19,663,000 (the six months ended 30 June 2016: RMB 10,124,000), which
     were included in administrative expenses, were not included in expenses by nature.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
7      Employee benefit expense
                                                                   Six months ended 30 June
                                                                         2017
       Wages and salaries                                             748,104                619,534
       Social security costs                                           98,055                 84,831
       Pension costs  defined contribution plans                      129,990                114,803
       Others                                                          66,380                 53,187
                                                                    1,042,529                872,355
       The employees of the Group participated in a retirement benefit plan organised by the
       municipal and provincial governments under which the Group was required to make defined
       contributions monthly to this plan.
       In addition, the Group also paid certain pension subsidies to certain retired employees. In
       accordance with the Group’s early retirement programs, the Group was also committed to
       making periodic benefit payments to certain early-retired employees until they reach their
       legal retirement ages.
8     Other income
                                                                  Six months ended 30 June
                                                                        2017
      Government grants (a)                                          205,468                 227,480
      Others                                                          (1,884)                 (1,624)
                                                                     203,584                 225,856
(a)   For the six months ended 30 June 2017, the Group received grants of approximately
      RMB205,468,000 mainly from Finance Bureau of Nanchang, Finance Bureau of Nanchang
      Qingyunpu District, Economic Development District Administrative Commission of Xiaolan
      and the Finance Bureau of Economic and Technological Development District Administrative
      Commission of Taiyuan. These government grants were income related to support the
      Group’s operation and were charged to profit or loss directly up received.
9      Finance income and expenses
                                                                   Six months ended 30 June
                                                                        2017
       (a) Finance income
       Interest income on bank deposits                              121,328             103,318
       Interest income on credit sales                                 6,575               7,101
                                                                     127,903             110,419
       (b) Finance expenses
       Interest expense on bank loans                                   (114)                   (59)
       Bank charges and others                                        (1,889)                  (708)
                                                                      (2,003)                  (767)
       Net finance income                                            125,900                 109,652
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
10    Taxation
(a)   Corporate income tax (“CIT”)
      As the Company is qualified as a high-tech enterprise and approved by the relevant tax
      authorities in 2015, the Company is entitled to a preferential CIT rate of 15% from 2015 to
      2017 (2016: 15%). The CIT rates of JMC Heavy Duty Vehicle Co., Ltd. (“JMCH”) and Jiangling
      Motor Sales Co, Ltd. (“JMCS”), the subsidiaries of the Company, are 25%.
      The amounts of income tax expense charged to profit or loss represented:
                                                                  Six months ended 30 June
                                                                        2017
      Current tax                                                      84,376               96,325
      Deferred tax (Note 16)                                          (21,941)             (30,222)
                                                                       62,435                66,103
      The tax on the Group’s profit before tax differs from the theoretical amount that would arise
      using the weighted average tax rate applicable to profits of the consolidated entities as
      follows:
                                                                   Six months ended 30 June
                                                                          2017
      Profit before tax                                              615,338               770,620
      Tax calculated at tax rates applicable to profits in
    the respective companies                                       70,822              100,020
      Tax concessions                                                    (28)                 (105)
      Expenses not deductible for tax purposes                            361
      Income not subject to tax                                       (40,650)             (36,587)
      Effect of different tax rates applied for the periods
    in which the temporary differences are
    expected to reverse                                            10,849                4,322
      Utilisation of previously temporary differences for
    which no deferred income tax asset was
    recognised                                                     (2,391)             (11,161)
      Tax losses for which no deferred income tax
    asset was recognised                                          23,472                 9,331
      Tax charge                                                      62,435                66,103
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
10    Taxation (continued)
(a)   Value-added tax (“VAT”)
      Output VAT is levied at a general rate of 17% on the selling price of goods. Pursuant to the
      “Circular on the Overall Promotion of Pilot Program of Levying VAT in place of Business Tax”
      (Cai Shui [2016] 36) jointly issued by the Ministry of Finance and the State Administration of
      Taxation, the rental income and interest income are subject to VAT from 1 May 2016, and the
      applicable tax rates are 11% and 6% respectively.
(b)   Consumption Tax (“CT”)
      The Group’s automobile sale is subject to CT at 3%, 5% or 9% on the selling price of goods.
11    Earnings per share
      Basic earnings per share is calculated by dividing the profit attributable to shareholders of the
      Company by the weighted average number of ordinary shares in issue during the year.
                                                                   Six months ended 30 June
                                                                         2017
      Profit attributable to shareholders of the
       Company                                                         552,903                704,517
      Weighted average number of ordinary shares in
    issue (‘000)                                                  863,214                863,214
      Basic earnings per share (RMB)                                      0.64                   0.82
      Diluted earnings per share equals to basic earnings per share as there were no dilutive
      potential ordinary shares outstanding during the six months ended 30 June 2017.
     JIANGLING MOTORS CORPORATION, LTD.
     FOR THE SIX MONTHS ENDED 30 JUNE 2017
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)
12   Property, plant and equipment
                                                                  Plant and       Motor                     Electronic and      Assets under
                                                   Buildings     Machinery      Vehicles      Moulds      other equipment      constructions          Total
     At 1 January 2016
     Cost                                          1,802,523      3,193,284      219,587     1,591,116           2,384,260         1,637,474     10,828,244
     Accumulated depreciation and impairment        (327,994)    (1,657,416)    (106,346)   (1,227,369)         (1,184,881)             (692)    (4,504,698)
     Net book amount                               1,474,529      1,535,868      113,241       363,747           1,199,379         1,636,782      6,323,546
     Year ended 31 December 2016
     Opening net book amount                       1,474,529      1,535,868     113,241       363,747           1,199,379          1,636,782      6,323,546
     Additions                                              -              -          -             -                    -         1,138,940      1,138,940
     Transfers                                        63,567        422,097      55,408       621,285             498,413         (1,660,770)             -
     Disposals                                          (100)          (774)     (3,182)         (736)                (178)                 -        (4,970)
     Other deductions                                       -       (18,969)          -             -               (2,712)           (14,784)      (36,465)
     Impairment charge                                      -        (1,717)        (50)            -               (1,027)                 -        (2,794)
     Depreciation charge                             (45,595)      (198,266)    (26,648)     (177,019)           (282,199)                  -      (729,727)
     Closing net book amount                       1,492,401      1,738,239     138,769       807,277           1,411,676          1,100,168      6,688,530
     At 31 December 2016
     Cost                                          1,865,850      3,526,187      262,667     2,206,895           2,862,436         1,100,860     11,824,895
     Accumulated depreciation and impairment        (373,449)    (1,787,948)    (123,898)   (1,399,618)         (1,450,760)             (692)    (5,136,365)
     Net book amount                               1,492,401      1,738,239      138,769       807,277           1,411,676         1,100,168      6,688,530
     Six months ended 30 June 2017
     Opening net book amount                       1,492,401      1,738,239     138,769       807,277           1,411,676          1,100,168      6,688,530
     Additions                                              -              -          -             -                    -           326,956        326,956
     Transfers                                        71,525        111,568       3,067        64,038             111,288           (361,486)             -
     Disposals                                               -          (68)     (1,817)            -                 (276)                -         (2,161)
     Other deductions                                       -               -         -             -                      -            (351)          (351)
     Impairment charge (Note 28)                            -          (615)       (128)            -               (2,188)             (416)        (3,347)
     Depreciation charge (Note 6, 28)                (24,511)      (110,408)    (15,166)     (114,781)           (157,684)                 -       (422,550)
     Closing net book amount                       1,539,415      1,738,716     124,725       756,534           1,362,816          1,064,871      6,587,077
     At 30 June 2017
     Cost                                          1,937,375      3,632,890      260,707     2,257,218           2,962,674         1,065,979     12,116,843
     Accumulated depreciation and impairment        (397,960)    (1,894,174)    (135,982)   (1,500,684)         (1,599,858)           (1,108)    (5,529,766)
     Net book amount                               1,539,415      1,738,716      124,725       756,534           1,362,816         1,064,871      6,587,077
     JIANGLING MOTORS CORPORATION, LTD.
     FOR THE SIX MONTHS ENDED 30 JUNE 2017
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)
12   Property, plant and equipment (continued)
     For the six months ended 30 June 2017, depreciation expense of approximately
     RMB367,960,000 (the six months ended 30 June 2016: RMB289,897,000) was charged in cost
     of sales, RMB1,349,000 (the six months ended 30 June 2016: RMB1,427,000) in distribution
     expenses and RMB53,241,000 (the six months ended 30 June 2016: RMB53,749,000) in
     administrative expenses.
     Lease rental expenses amounting to approximately RMB4,419,000 (the six months ended 30
     June 2016: RMB3,087,000) relating to the lease of property are included in profit or loss.
13   Lease prepayment
     Lease prepayment represents the Group’s interests in land which are held on leases of 50
     years. The movement is as follows:
                                                                 30 June 2017     31 December 2016
     Opening net book amount                                           632,408             645,608
     Additions                                                               -               2,394
     Amortisation charge (Note 6, 28)                                   (7,787)            (15,594)
     Closing net book amount                                           624,621             632,408
     Cost                                                              751,626             751,626
     Accumulated amortisation                                         (127,005)           (119,218)
     Net book amount                                                   624,621             632,408
     Amortisation expense was charged in administrative expenses.
     JIANGLING MOTORS CORPORATION, LTD.
     FOR THE SIX MONTHS ENDED 30 JUNE 2017
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)
14    Intangible assets
                                                          Non-patent                                        After-sale
                                                          technology        Software    Goodwill    management model     Other          Total
      Year ended 31 December 2016
      Opening net book amount                                          -      38,225       3,462                     -       18      41,705
      Addition                                                   124,587      12,390           -                     -        -    136,977
      Amortisation charge                                         (8,694)    (11,818)          -                     -      (10)   (20,522)
      Closing net book amount                                115,893          38,797       3,462                     -        8    158,160
      At 31 December 2016
      Cost                                                       124,587      98,017      89,028               36,978    1,649     350,259
      Accumulated amortisation and impairment                     (8,694)    (59,220)    (85,566)             (36,978)   (1,641)   (192,099)
      Net book amount                                            115,893      38,797       3,462                     -        8    158,160
      Six months ended 30 June 2017
      Opening net book amount                                115,893          38,797       3,462                     -        8    158,160
      Addition                                                     7,751        351            -                     -        -       8,102
      Amortisation charge (Note 6, 28)                           (11,745)     (6,420)          -                     -      (4)    (18,169)
      Closing net book amount                                    111,899      32,728       3,462                     -        4    148,093
      At 30 June 2017
      Cost                                                       132,338      98,368      89,028               36,978    1,649     358,361
      Accumulated amortisation and impairment                    (20,439)    (65,640)    (85,566)             (36,978)   (1,645)   (210,268)
      Net book amount                                            111,899      32,728       3,462                     -        4    148,093
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
14    Intangible assets (continued)
(a)   For six months ended 30 June 2017, amortisation expense of approximately RMB17,690,000
      (the six months ended 30 June 2016: RMB5,506,000) was charged in administrative expenses,
      approximately RMB309,000 (the six months ended 30 June 2016: RMB97,000) in cost of sales
      and approximately RMB170,000 (the six months ended 30 June 2016: RMB28,000) in
      distribution expenses.
(b)   Development costs of approximately RMB7,751,000 were capitalised as non-patent technology
      by the Group during the six months ended 30 June 2017 (the six months ended 30 June 2016:
      RMB60,053,000).
(c)   Impairment test for goodwill
      Goodwill arises on the acquisition of a subsidiary, and is monitored by the management at the
      cash generating unit level. The goodwill is allocated to the following CGU:
                  31 December 2016            Addition            Impairment              30 June 2017
      JMCH                       3,462                 -                   -                       3,462
      The recoverable amount of the CGU is determined based on value in use calculations. These
      calculations use after-tax cash flow projections based on financial budgets approved by
      management covering a nine-year period. Cash flows beyond the five-year period are
      extrapolated using the estimated growth rates stated below. The growth rate does not exceed
      the long-term average growth rate for the heavy duty vehicle business in which the CGU
      operates.
      The key assumptions used for value in use calculations in 2016 were as follows:
      Item                                                                                        JMCH
      Compound annual volume growth rate                                                           283%
      Long term growth rate                                                                          3%
      Discount rate                                                                              19.40%
      The long term growth rates used are consistent with the forecasts included in industry reports.
      The discount rates used are after-tax and reflect specific risks relating to the relevant operating
      subsidiary.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
15a   Subsidiaries
      As at the date of this report, the Group has the following subsidiaries:
                               Place and date           Percentage of
      Entity                  of incorporation     equity interest held              Principal activities
      JMCH                     Taiyuan, PRC /                       100%         Manufacture and sale of
                               8 January 2013                                automobiles and spare parts
      JMCS                    Nanchang, PRC /                       100%         Sale of automobiles and
                              11 October 2013                                                spare parts
15b   Investments accounted for using the equity method
(a)   Summarised financial information for immaterial associate
      The amount recognised in the consolidated statement of financial position was as follow:
                                                                  30 June 2017       31 December 2016
      Associate                                                          43,340                   39,893
      The amount recognised in the consolidated statement of comprehensive income was as follow:
                                                                      Six months ended 30 June
                                                                          2017
      Share of profit                                                      3,447                   5,026
      The Company holds 19.15% interest of Hanon Systems (Nanchang) Co., Ltd. (Hanon
      Systems) and the investment is accounted for using the equity method of accounting.
(b)   Reconciliation of summarised financial information for immaterial associates
                                                                      Six months ended 30 June
                                                                           2017
      At beginning of the year                                          208,317                 214,061
      Profit for the period                                              18,000                   26,245
      Dividends distributed                                                   -                 (30,000)
      At end of the period                                              226,317                 210,306
      Interest in associate                                              19.15%                  19.15%
      Carrying value                                                     43,340                   40,274
     JIANGLING MOTORS CORPORATION, LTD.
     FOR THE SIX MONTHS ENDED 30 JUNE 2017
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)
16   Deferred income tax
                                                                 30 June 2017                  31 December 2016
     Deferred tax assets                                                     640,190                        590,899
     Deferred tax liabilities-can be offset                                  (64,164)                       (36,411)
     Deferred tax liabilities-cannot be offset                               (26,980)                       (27,383)
     Deferred tax assets-net                                                 576,026                        554,488
     Deferred tax liabilities-net                                            (26,980)                       (27,383)
     The gross movement on the deferred income tax account is as follows:
                                                                     30 June 2017             31 December 2016
     At beginning of the year                                                 527,105                       445,541
     Credited to profit or loss (Note 10(a))                                   21,941                        81,293
     Credited to other comprehensive income
      (Note 10(a))                                                                  -
     At end of the period                                                     549,046                       527,105
     The movement in deferred income tax assets and liabilities during the year, without taking into
     consideration the offsetting of balances within the same tax jurisdiction, is as follows:
                                                                            Amortization
                                   Provision for Retirement                            of
                                  impairment of    benefits Accrued         nonpatented
     Deferred tax assets                 assets obligation expenses          technology         Others         Total
     At 1 January 2016                   6,207        13,339   460,044                  -         519        480,109
     Credited to profit or loss          1,379           484   107,442             1,087          127        110,519
     Credited to other
       comprehensive income                  -           271            -               -           -
     At 31 December 2016                 7,586        14,094   567,486             1,087          646       590,899
     Credited /(charged) to
     profit or loss                      3,331         (407)    44,665             1,468          234         49,291
     Credited to other
       comprehensive income                 -              -            -               -               -           -
     At 30 June 2017                    10,917        13,687   612,151             2,555          880       640,190
                                       Amortisation                                          Forward
                                       of intangible       PPE           Fair value         exchange
     Deferred tax liabilities                assets depreciation              gains         contracts          Total
     At 1 January 2016                      (2,760)        (3,404)          (28,392)             (12)       (34,568)
     (Charged)/credited to profit or
       loss                                 (1,936)      (27,030)             1,009           (1,269)       (29,226)
     At 31 December 2016                    (4,696)      (30,434)           (27,383)          (1,281)       (63,794)
     (Charged)/credited to profit or
       loss                                   (586)      (27,556)               403               389       (27,350)
     At 30 June 2017                        (5,282)      (57,990)           (26,980)            (892)       (91,144)
     JIANGLING MOTORS CORPORATION, LTD.
     FOR THE SIX MONTHS ENDED 30 JUNE 2017
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)
16   Deferred income tax (continued)
     The analysis of deferred tax assets and deferred tax liabilities is as follows:
                                                                 30 June 2017     31 December 2016
     Deferred tax assets:
     –Deferred tax asset to be recovered after
    more than 12 months                                            15,554                14,493
     –Deferred tax asset to be recovered
    within 12 months                                              624,636               576,406
                                                                      640,190               590,899
                                                                 30 June 2017      31 December 2016
     Deferred tax liabilities:
     –Deferred tax liabilities to be recovered
    after more than 12 months                                     (86,576)               (60,365)
     –Deferred tax liabilities to be recovered
    within 12 months                                               (4,568)                (3,429)
                                                                      (91,144)               (63,794)
     Deductible temporary differences and tax losses which no deferred income tax assets were
     recognised were as follows:
                                                                 30 June 2017      31 December 2016
     Deductible temporary differences                                  30,618                40,182
     Tax losses                                                       452,714               369,032
                                                                      483,332               409,214
     The expiry years of the tax losses are as follows:
                                                                 30 June 2017      31 December 2016
     2017                                                              89,447                89,447
     2018                                                              44,319                44,319
     2019                                                              36,772                36,772
     2020                                                              72,470                72,470
     2021                                                             115,819               126,024
     2022                                                              93,887                     -
                                                                      452,714               369,032
     JIANGLING MOTORS CORPORATION, LTD.
     FOR THE SIX MONTHS ENDED 30 JUNE 2017
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)
17   Inventories
                                                                 30 June 2017    31 December 2016
     Raw materials                                                  1,489,895           1,300,443
     Work in progress                                                 202,854             193,152
     Finished goods                                                   267,900             440,497
                                                                    1,960,649           1,934,092
     For the six months ended 30 June 2017, the cost of inventories recognised as expenses and
     included in cost of sales amounted to approximately RMB11,290,691,000 ( the six months
     ended 30 June 2016: RMB7,464,408,000).
     A provision of approximately RMB39,366,000(2016: RMB26,491,000) was made as at 30
     June 2017. The Group reversed approximately RMB1,062,000 of a previous inventory write-
     down during the six months ended 30 June 2017. During the six months ended 30 June 2017,
     the Group wrote-off inventories with provision of approximately RMB6,788,000 made in prior
     years. The provision and reversal of the inventory write-down have been included in
     administrative expenses in profit or loss.
     As at 30 June 2017, no inventory was pledged as security for liabilities.
18   Trade and other receivables and prepayments
                                                                 30 June 2017    31 December 2016
     Trade receivables                                              1,651,383           1,188,088
     Less: Provision for impairment of trade
              receivables                                             (18,056)            (15,940)
     Trade receivables – net                                       1,633,327           1,172,148
     Notes receivables                                                651,501             498,875
     Other receivables                                                104,667              86,581
     Less: Provision for impairment of other
              receivables                                                (524)               (433)
     Other receivables – net                                         104,143              86,148
     Prepayments                                                    1,120,071             796,833
     Interest receivables                                              80,466              71,804
                                                                    3,589,508           2,625,808
     Refer to Note 31 for details of receivables from related parties. The carrying amounts of the
     Group’s trade and other receivables are all denominated in RMB.
     The carrying amounts of trade and other receivables and prepayments approximate their fair
     values.
     JIANGLING MOTORS CORPORATION, LTD.
     FOR THE SIX MONTHS ENDED 30 JUNE 2017
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)
18   Trade and other receivables and prepayments (continued)
     Movement on the provision for impairment of trade and other receivables is as follows:
                                                           30 June 2017         31 December 2016
     At beginning of the year                                     (16,373)                     (7,611)
     Provision for receivables impairment
       (Note 28)                                                   (2,207)                     (8,952)
     Receivables written off during the year as
       uncollectible                                                    -
     At end of the period                                         (18,580)                    (16,373)
     The creation of provision for impaired receivables was included in ‘administrative expense’ in
     profit or loss.
     The other classes within trade and other receivables do not contain impaired assets.
     The maximum exposure to credit risk at the reporting date is the carrying value of each class of
     receivable mentioned above. The Group does not hold any collateral as security.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
19    Cash and cash equivalents
                                                                  30 June 2017   31 December 2016
      Cash at bank and in hand                                         642,947               790,373
      Short-term bank deposits (a)                                   9,835,000            10,875,849
                                                                    10,477,947            11,666,222
      As at 30 June 2017, the Group had cash of approximately RMB963,588,000 (2016:
      RMB874,990,000) deposited in JMCF (Note 31 (j)). The interest rates range from 1.495%-
      2.25% per annum (2016: 1.495% to 2.25%). JMCF, a non-bank financial institution, is a
      subsidiary of JMCG.
(a)   Short-term bank deposits can be withdrawn at the discretion of the Group without any
      restriction.
20    Assets classified as held for sale
                                                                  30 June 2017   31 December 2016
      Lease prepayment and buildings of
    Transit plant                                                   87,637                 87,637
      As at 26 March 2015, under the authorisation from the Board of Directors, the Company signed
      an agreement of “state-owned land reserves” with Nanchang Land Reserve Centre (the
      “agreement”). According to the agreement, the Company will sell its land use right and
      buildings of Transit plant, with a consideration of RMB135,000,000 to Nanchang Land Reserve
      Centre. The transaction is expected to be completed within the year of 2017.
      As those aforementioned assets met the criteria of assets classified as held for sale, they were
      reclassified as current assets and presented separately in the consolidated statement of
      financial position.
     JIANGLING MOTORS CORPORATION, LTD.
     FOR THE SIX MONTHS ENDED 30 JUNE 2017
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)
21   Share capital
                                    Number of                   Tradable shares                    Total
                                        shares            “A” shares            “B” shares
                                   (thousands)      Restricted Non-restricted
     Year ended 31 December 2016
     Balance at 1 January 2016          863,214          1,726         517,488       344,000     863,214
     Transfer                                 -              -               -             -            -
     Balance at 31 December 2016        863,214          1,726         517,488       344,000     863,214
     Six months ended 30 June
       2017
     Balance at 1 January 2017          863,214          1,726         517,488       344,000     863,214
     Transfer                                 -              -               -             -            -
     Balance at 30 June 2017            863,214          1,726         517,488       344,000     863,214
     All the “A” and “B” shares are registered, issued and fully paid shares of RMB1 each.
     All the “A” and “B” shares rank pari passu in all respects.
     After the implementation of the share reform scheme on 13 February 2006, 1,726,000 shares
     were still restricted as at 30 June 2017.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
22    Other reserves
                                                  Statutory
                                            surplus reserve
                                                    fund (a)      Reserve fund     Others          Total
      At 1 January 2016                             431,607            18,627       2,704       452,938
      Other comprehensive income
      -Remeasurements of retirement
    benefit obligation, net of tax                     -                 -       (812)         (812)
      At 31 December 2016                           431,607            18,627       1,892       452,126
      Other comprehensive income
      -Remeasurements of retirement
    benefit obligation, net of tax                     -                 -              -            -
      At 30 June 2017                               431,607            18,627       1,892       452,126
(a)   In accordance with the relevant laws and regulations in the PRC and Articles of Association of
      the Company, it is required to appropriate 10% of its annual net profit, after offsetting any prior
      years’ losses as determined under the Accounting Standards for Business Enterprises in the
      PRC, to the statutory surplus reserve fund before distributing the net profit. When the balance
      of the statutory surplus reserve fund reaches 50% of the Company’s share capital, any further
      appropriation is at the discretion of shareholders. The statutory surplus reserve fund can be
      used to offset prior years’ losses, if any, and may be converted into share capital by issuing
      new shares to shareholders in proportion to their existing shareholding or by increasing the par
      value of the shares currently held by them. The fund is non-distributable except for liquidation.
      As the balance of the statutory surplus reserve fund has reached 50% of the Company’s share
      capital, no further appropriations to the statutory surplus reserve fund were provided for the six
      months ended 30 June 2017.
23    Borrowings
                                                                  30 June 2017     31 December 2016
      Current
      Bank borrowings - guaranteed (a)                                     444
      Non-current
      Bank borrowings - guaranteed (a)                                    4,214                   4,543
      Total borrowings                                                    4,658                   4,997
(a)   Bank borrowings of USD 688,000 (equivalent to approximately RMB4,658,000) (2016:
      USD720,000 equivalent to approximately RMB4,997,000) were guaranteed by JMCF (Note 31
      (c)).
      The interest rate of bank borrowings is 1.50% per annum (2016: 1.50%).
      The fair value of borrowings approximates their carrying values.
     JIANGLING MOTORS CORPORATION, LTD.
     FOR THE SIX MONTHS ENDED 30 JUNE 2017
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)
23   Borrowings (continued)
     The maturity of non-current borrowings is as follows:
                                                                 30 June 2017     31 December 2016
     Between 1 and 2 years                                                444
     Between 2 and 5 years                                              1,330                   1,363
     Over 5 years                                                       2,440                   2,726
                                                                        4,214                   4,543
     The Group has the following undrawn borrowing facilities:
                                                                 30 June 2017     31 December 2016
     Fixed rate
     - Expiring within one year                                     1,392,537               1,390,868
24   Retirement benefits obligations
     The amount of early retirement and supplemental benefit obligations recognised in the statement
     of financial position is as follows:
                                                                 30 June 2017      31 December 2016
     Present value of defined benefits obligations                      55,474                 58,188
     The movement of early retirement and supplemental benefit obligations for the six months ended
     30 June 2017 is as follows:
                                                                 30 June 2017      31 December 2016
     At beginning of the year                                          58,188                  56,833
     For the year
     -Current service cost                                                  -                   1,325
     -Interest cost                                                         -                   1,633
     -Payment                                                          (2,714)                 (4,754)
     -Past service cost from the change of plan                             -                   1,486
      -Actuarial loss                                                       -                   1,665
     At end of the period                                              55,474                  58,188
     Current                                                            4,561                   4,561
     Non-current                                                       50,913                  53,627
                                                                       55,474                  58,188
     The material actuarial assumptions used in valuing these obligations are as follows:
                                                                 30 June 2017      31 December 2016
     Discount rate adopted                                               ——                  3.5%
     The salary and supplemental benefits inflation
     rate of retiree, early-retiree and employee at post                 ——               0% to 6%
     JIANGLING MOTORS CORPORATION, LTD.
     FOR THE SIX MONTHS ENDED 30 JUNE 2017
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)
24   Retirement benefits obligations (continued)
     As at 30 June 2017, the Group did not estimate the present value of defined benefit obligation.
     Based on the assessment and IAS 19, the Group estimated that, at 30 June 2017, a provision of
     RMB55,474,000 is sufficient to cover all future retirement-related obligations.
     Obligation in respect of retirement benefits of RMB55,474,000 is the present value of the
     unfunded obligations, of which the current portion amounting to RMB4,561,000 (2016:
     RMB4,561,000) has been included under current liabilities.
25   Provisions for warranty and other liabilities
     The movement on the warranty provisions and other liabilities is as follows:
                                                                 30 June 2017       31 December 2016
     At beginning of the year                                         284,627                 214,722
     Charged for the year (Note 6)                                    150,360                 261,430
     Utilised during the year                                        (118,548)              (191,525)
     At end of the period                                             316,439                 284,627
     Analysis of total provisions:
                                                                 30 June 2017       31 December 2016
     Non-current                                                      149,128                130,987
     Current                                                          167,311                153,640
                                                                      316,439                284,627
     The above represents the warranty costs for repairs and maintenance, which are estimated
     based on present after-sale service policies and prior years’ experience on the occurrence of
     such cost.
     JIANGLING MOTORS CORPORATION, LTD.
     FOR THE SIX MONTHS ENDED 30 JUNE 2017
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)
26   Trade and other payables
                                                                 30 June 2017           31 December 2016
     Trade payables                                                 7,173,967                  7,731,169
     Payroll and welfare payable                                      237,814                    289,283
     Dividend payables                                                531,512                      5,840
     Other payables                                                 3,386,150                  3,578,886
                                                                   11,329,443                 11,605,178
     For details of amount due to related parties, please refer to Note 31.
27   Dividends
     A final dividend for 2016 of RMB 0.61 per share, amounting to a total dividend of
     RMB526,560,000 is proposed at the Shareholders’ Meeting on 29 June 2017.
28   Cash generated from operations
                                                                       Six months ended 30 June
                                                                             2017
     Profit before tax                                                     615,338                770,620
     Depreciation of PPE (Note 6, 12)                                      422,550                345,073
     Amortisation of lease prepayment (Note 6, 13)                           7,787                  7,904
     Amortisation of intangible assets (Note 6, 14)                         18,169                  5,631
     Impairment charges of PPE (Note 12)                                     3,347                  1,347
     Provision for receivables impairment (Note 18)                          2,207                  8,710
     Provision of inventories                                               19,663                 10,124
     Loss on disposals of PPE                                                  246
     Finance expenses                                                         1,646
     Finance income (Note 9)                                              (127,903)              (110,419)
     Net foreign exchange transaction loss                                   5,383                  6,863
     Share of profit from investment accounted for using
    equity method (Note 15b)                                              (3,447)              (5,026)
     Investment gain of forward exchange contracts                            (1,583)               (276)
     Changes on fair value of forward exchange contracts                        2,590              (1,921)
     Changes in working capital:
      - Increase in inventories                                             (52,548)              (32,459)
      - (Increase) /decrease in trade and other receivables                (948,781)               460,103
      - Increase in provisions for warranty                                  31,812                 15,767
      - decrease in trade and other payables                              (727,034)             (376,818)
      -decrease in pensions and other retirement benefits                    (2,714)                (2,694)
     Cash generated from operations                                       (733,272)             1,103,907
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
28    Cash generated from operations (continued)
      In the cash flow statement, proceeds from disposal of PPE comprise:
                                                                    Six months ended 30 June
                                                                          2017
      Net book amount                                                     2,161                  3,289
      Loss on disposal of PPE                                             (246)                   (895)
      Offset with trade and other payables                                  182
      Proceeds from disposal of PPE                                       2,097                  2,611
29    Contingencies
      At 30 June 2017 the Group did not have any significant contingent liabilities.
30    Commitments
      Capital commitments
      Capital expenditure contracted for at the balance sheet date but not recognised in the financial
      statements are as follows:
                                                                  30 June 2017         31 December 2016
      Contracted but not provided for:
      Purchases of buildings, plant and machinery                      631,540                 572,773
31   Related party transactions
     Related parties are those parties that have the ability to control the other party or exercise
     significant influence in making financial and operating decisions. Parties are also considered to
     be related if they are subject to common control.
     Jiangling Motor Holdings Co. Ltd. (“JMH”), which owns 41.03% of the Company’s shares, and
     Ford Motor Company (“Ford”), which owns 32% of the Company’s shares, are major
     shareholders of the Company as at 30 June 2017. The shareholders of JMH are Chongqing
     Changan Automobile Corporation Ltd. and JMCG, and both of them hold 50% equity interest of
     JMH, respectively.
     The following is a summary of the significant transactions carried out between the Group, its
     associates, JMCG and its subsidiaries, JMH and its subsidiaries and joint venture, Ford and its
     subsidiaries and joint venture in the ordinary course of business during the six months ended 30
     June 2017.
     JIANGLING MOTORS CORPORATION, LTD.
     FOR THE SIX MONTHS ENDED 30 JUNE 2017
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
     (All amounts in thousands of RMB unless otherwise stated)
31   Related party transactions (continued)
     For the six months ended 30 June 2017, related parties, other than the subsidiary, and their
     relationship with the Group are as follows:
     Name of related party                                                          Relationship
     JMCG                                                                    Shareholder of JMH
     Nanchang JMCG Skyman Auto Component Co.,Ltd.                              Subsidiary of JMH
     Ford Motor (China) Co., Ltd.                                              Subsidiary of Ford
     Ford Motor Research & Engineering (Nanjing) Co., Ltd.                     Subsidiary of Ford
     Ford Global Technologies, LLC                                             Subsidiary of Ford
     Ford Otomotiv Sanayi A.S.                                                 Subsidiary of Ford
     Auto Alliance (Thailand) Co.,Ltd.                                         Subsidiary of Ford
     Ford Vietnam Limited                                                      Subsidiary of Ford
     Jiangxi JMCG Industry Co.,Ltd.                                          Subsidiary of JMCG
     JMCG Property Management Co.                                            Subsidiary of JMCG
     Nanchang Gear Co.,Ltd.                                                  Subsidiary of JMCG
     Jiangxi Jiangling Material Utilization Co.,Ltd.                         Subsidiary of JMCG
     Jiangling Material Co.                                                  Subsidiary of JMCG
     Nanchang Jiangling Hua Xiang Auto Components Co.,Ltd.                   Subsidiary of JMCG
     JMCF                                                                    Subsidiary of JMCG
     Jiangxi Lingge Non-ferrous Metal Die-casting Co.,Ltd.                   Subsidiary of JMCG
     Jiangxi Jiangling Chassis Co.,Ltd.                                      Subsidiary of JMCG
     Nanchang JMCG Liancheng Auto Component Co.,Ltd.                         Subsidiary of JMCG
     JMCG Jingma Motors Co., Ltd.                                            Subsidiary of JMCG
     Jiangxi Jiangling Lear Interior System Co.,Ltd.                       Joint venture of JMCG
     Jiangxi JMCG Shangrao Industrial Co.,Ltd.                               Subsidiary of JMCG
     JMCG Jiangxi Engineering Construction Co., Ltd.                         Subsidiary of JMCG
     Nanchang JMCG Xinchen Auto Component Co.,Ltd.                           Subsidiary of JMCG
     Nanchang JMCG Shishun Logistics Co., Ltd.                               Subsidiary of JMCG
     Nanchang Lianda Machinery Co.,Ltd.                                      Subsidiary of JMCG
     Jiangxi JMCG Yichehang Second-hand Motors Sales Co., Ltd.               Subsidiary of JMCG
     Jiangxi Biaohong Engine Tappet Co.,Ltd.                                 Subsidiary of JMCG
     Jiangxi Sinodef International Trade Co.,Ltd.                            Subsidiary of JMCG
     Nanchang Unistar Electric & Electronics Co.,Ltd.                        Subsidiary of JMCG
     Nanchang Hengou Industry Co., Ltd.                                       Associate of JMCG
     Jiangxi Jiangling Special Purpose Vehicle Co.,Ltd.                      Subsidiary of JMCG
     Jiangxi Jiangling Non-ferrous Metal Die-casting Co.,Ltd                 Subsidiary of JMCG
     Jiangxi ISUZU Co., Ltd.                                                 Subsidiary of JMCG
     Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.                           Associate of JMCG
     Nanchang Yinlun Heat-exchanger Co.,Ltd.                                  Associate of JMCG
     JMCG Hequn Costume Co.,Ltd.                                              Associate of JMCG
     Jiangling Aowei Aotomobile Spare Part Co.,Ltd.                           Associate of JMCG
     GETRAG (Jiangxi) Transmission Company                                    Associate of JMCG
     Nanchang Baojiang Steel Processing Distribution Co.,Ltd.                 Associate of JMCG
     Faurecia Emissions Control Technologies (Nanchang) Co.,Ltd.              Associate of JMCG
     Jiangxi Jiangling Group Special Vehicle Co.,Ltd.                         Associate of JMCG
     Jiangxi JMCG Specialty Vehicles Corporation, Ltd.                        Associate of JMCG
     Ford Motor Company of Australia Limited                                   Subsidiary of Ford
     Changan Ford Automobile Co.,Ltd.                                       Joint venture of Ford
          JIANGLING MOTORS CORPORATION, LTD.
          FOR THE SIX MONTHS ENDED 30 JUNE 2017
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          (All amounts in thousands of RMB unless otherwise stated)
31    Related party transactions (continued)
(a)    Purchases and sales of goods, provision and purchases of services
                                                                       Six months ended 30 June
       Purchase of goods                                                    2017
       Nanchang Baojiang Steel Processing Distribution Co.,Ltd.           457,760            254,213
       Ford                                                               452,439            184,544
       Jiangxi Jiangling Chassis Co.,Ltd.                                 421,636            384,153
       GETRAG (Jiangxi) Transmission Company                              391,606            311,994
       Jiangxi Jiangling Special Purpose Vehicle Co.,Ltd.                 326,851            298,479
       Jiangxi Jiangling Lear Interior System Co.,Ltd.                    282,853            227,342
       Nanchang Jiangling Hua Xiang Auto Components Co.,Ltd.              278,927            135,181
       Nanchang JMCG Liancheng Auto Component Co.,Ltd.                    234,711            138,623
       Nanchang Unistar Electric & Electronics Co.,Ltd.                   122,995            100,047
       Hanon Systems                                                      120,879            103,226
       Changan Ford Automobile Co.,Ltd.                                   115,331             10,719
       Faurecia Emissions Control Technologies (Nanchang) Co.,Ltd.         99,189             28,368
       Jiangxi JMCG Specialty Vehicles Corporation, Ltd.                   73,564             90,130
       Auto Alliance (Thailand) Co.,Ltd.                                   72,011                  -
       JMCG                                                                50,538             53,480
       Nanchang JMCG Skyman Auto Component Co.,Ltd.                        31,861             32,714
       Nanchang Lianda Machinery Co.,Ltd.                                  30,357             35,657
       Jiangxi Lingge Non-ferrous Metal Die-casting Co.,Ltd.               29,077             18,710
       Nanchang Yinlun Heat-exchanger Co.,Ltd.                             28,259             23,343
       Ford Otomotiv Sanayi A.S.                                           16,047              5,865
       Jiangling Material Co.                                              14,658             11,117
       Jiangling Aowei Aotomobile Spare Part Co.,Ltd.                      13,956             15,318
       Nanchang Gear Co.,Ltd.                                              12,040              8,976
       Nanchang JMCG Xinchen Auto Component Co.,Ltd.                       11,909             14,164
       Jiangxi Biaohong Engine Tappet Co.,Ltd.                              4,042              4,814
       Jiangxi JMCG Shangrao Industrial Co.,Ltd.                            3,062              3,709
       JMCG Hequn Costume Co.,Ltd.                                          2,543              1,504
       Jiangxi Jiangling Non-ferrous Metal Die-casting Co.,Ltd              1,961                  -
       Jiangxi JMCG Industry Co.,Ltd.                                       1,355
       Jiangxi Jiangling Material Utilization Co.,Ltd.                          -              1,327
       Others                                                                   3              4,952
                                                                        3,702,420          2,503,500
       The Group purchased goods from related parties classified as two types: import parts and home-
       made parts.
           Purchase import parts from Ford or Ford’s suppliers, based on agreed price;
           Purchase home-made parts from other related parts, based on quotation, cost accounting and
           negotiation.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
31    Related party transactions (continued)
(a)   Purchases and sales of goods, provision and purchases of services (continued)
                                                                                                              Six months ended 30 June
      Purchase of services                                                         Natures of transaction           2017
      Ford                                                                  Engineering service and design       148,586             46,590
      Ford Global Technologies, LLC                                                             Royalty fee      134,653             37,885
      Nanchang JMCG Shishun Logistics Co., Ltd.                                              Transportation      128,924             85,587
      Ford Otomotiv Sanayi A.S.                                             Engineering service and design        32,749            151,648
      Nanchang Hengou Industry Co., Ltd.                                                   Packing/truckage       29,705             30,836
      JMCG Jiangxi Engineering Construction Co., Ltd.             Engineering construction and maintenance        20,430
      Ford Otomotiv Sanayi A.S.                                                          Secondments costs        16,652             15,334
      Ford                                                                               Secondments costs        16,631             19,584
      Jiangxi JMCG Industry Co.,Ltd.                                                          Working meal        15,434             13,053
      JMH                                                                                       Royalty fee       10,000                  -
      Ford Otomotiv Sanayi A.S.                                                                 Royalty fee        9,582              6,736
      Ford Motor (China) Co., Ltd.                                             Software and consulting fees        3,327                  -
      Ford Motor (China) Co., Ltd.                                                Regional personnel costs         2,847              2,702
      Hanon Systems                                                       Experimental manufacturing costs         2,263              2,479
      Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.                          Agent business of importation        1,972              2,705
      Nanchang JMCG Liancheng Auto Component
      Co.,Ltd.                                                            Experimental manufacturing costs         1,145                 -
      JMH                                                                              Secondments costs             957
      Ford Motor Research & Engineering (Nanjing) Co.,
      Ltd.                                                                        Regional personnel costs          937               1,871
      Jiangxi JMCG Specialty Vehicles Corporation, Ltd.                                         Promotion           396               2,774
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
31    Related party transactions (continued)
(a)   Purchases and sales of goods, provision and purchases of services (continued)
                                                                                                       Six months ended 30 June
      Purchase of services                                                    Natures of transaction         2017
      Changan Ford Automobile Co.,Ltd.                                                    Design fee            -              1,650
      Others                                                                              Design fee        3,750
                                                                                                          580,940            423,100
      The Group purchased the service from related parties based on agreement price.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
31    Related party transactions (continued)
(a)   Purchases and sales of goods, provision and purchases of services (continued)
                                                                           Six months ended 30 June
      Sales of goods                                                            2017
      Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.                         452,175          550,617
      Jiangxi Jiangling Chassis Co.,Ltd.                                      47,632           26,293
      Nanchang Hengou Industry Co., Ltd.                                      44,199                -
      Jiangxi JMCG Specialty Vehicles Corporation, Ltd.                       42,953           84,586
      JMCG Jingma Motors Co., Ltd.                                            39,224           38,436
      Nanchang JMCG Liancheng Auto Component Co.,Ltd.                         30,036           22,918
      Jiangxi Jiangling Non-ferrous Metal Die-casting Co.,Ltd                 29,891                -
      Jiangxi Jiangling Special Purpose Vehicle Co.,Ltd.                      18,326           24,979
      Jiangxi JMCG Yichehang Second-hand Motors Sales Co., Ltd.               14,511           11,215
      Jiangxi Jiangling Group Special Vehicle Co.,Ltd.                        12,823            3,145
      Nanchang Jiangling Hua Xiang Auto Components Co.,Ltd.                    9,155            1,908
      Jiangxi Jiangling Lear Interior System Co.,Ltd.                          3,355            6,702
      JMCG Property Management Co.                                             3,343            3,353
      Jiangxi JMCG Industry Co.,Ltd.                                           3,060            5,214
      JMH                                                                      2,853            1,729
      Jiangxi ISUZU Co., Ltd.                                                  1,009
      Jiangxi Jiangling Material Utilization Co.,Ltd.                              -           15,849
      Jiangxi Sinodef International Trade Co.,Ltd.                                 -            4,831
      Others                                                                     766            1,135
                                                                             755,311          803,350
      The Group sold goods to related parties, based on agreement price.
                                                                           Six months ended 30 June
      Provision of services                                                     2017
      Ford Motor Company of Australia Limited                                         -           6,698
      The Group provided the services to related parties, based on agreement price.
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
31    Related party transactions (continued)
(b)   Rental
      Rental cost
      Lessor                                   Category       Rental cost of six         Rental cost of six
                                                              months ended 30            months ended 30
                                                                     June 2017                  June 2016
      Jiangxi Jiangling Motors Imp. &
      Exp. Co., Ltd.                            Building                  2,138                      2,981
      JMCG                                      Building                  2,070                          -
      JMCG Property Management Co.              Building                    211
                                                                          4,419                      3,087
      Rental income
      Lessee                                  Category Rental income of six          Rental income of six
                                                         months ended 30               months ended 30
                                                                 June 2017                     June 2016
      JMH                                       Building                      4
      GETRAG (Jiangxi) Transmission
      Company                                   Building                      3                           -
                                                                              7
(c)   Guarantee
      As at 30 June 2017, bank loans of USD688,000 (equivalent to approximately RMB4,658,000)
      (2016:USD720,000 equivalent to approximately RMB4,997,000) were guaranteed by JMCF
      (Note 23).
(d)   Sales of PPE
                                                                        Six months ended 30 June
                                                                              2017
      Jiangxi JMCG Industrial Co., Ltd.                                             2
(e)   Purchase of PPE
                                                                        Six months ended 30 June
                                                                              2017
      Jiangxi JMCG Specialty Vehicles Corporation, Ltd.                            150                    -
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
31    Related party transactions (continued)
(f)   Key management remuneration
      Key management includes directors (executive and non-executive), members of the Executive
      Committee, the Company Secretary and members of the Supervisory Board. During the six
      months ended 30 June 2017, the total remuneration of the key management was approximately
      RMB 9,256,000 (the six months ended 30 June 2016: RMB 8,077,000).
(g)   Interest received from cash deposit in related parties
                                                                   Six months ended 30 June
                                                                         2017
      JMCF                                                              10,098                  5,879
      During the six months ended 30 June 2017, the interest rates range from 1.495% to 2.25% per
      annum.
(h)   Balances arising from sales/purchases of goods/services
      Trade receivables from related parties                      30 June 2017   31 December 2016
      Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.                   131,831                230,848
      Nanchang Hengou Industry Co., Ltd.                                40,987                  1,694
      JMCG Jingma Motors Co., Ltd.                                      19,593                 10,530
      Jiangxi Jiangling Chassis Co.,Ltd.                                 7,149                      -
      JMH                                                                3,370                  1,664
      Jiangxi JMCG Industry Co.,Ltd.                                     1,633                  2,036
      Nanchang Jiangling Hua Xiang Auto Components
      Co.,Ltd.                                                               -                  3,304
      Jiangxi Jiangling Group Special Vehicle Co.,Ltd.                       -                  1,360
      Ford Vietnam Limited                                                   -                  1,149
      Others                                                               293
                                                                       204,856                252,720
      Other receivables from related parties                      30 June 2017   31 December 2016
      Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.                    43,710                 30,338
      Ford Otomotiv Sanayi A.S.                                          1,225                  1,225
      Others                                                               930
                                                                        45,865                 32,485
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
31    Related party transactions (continued)
(h)   Balances arising from sales/purchases of goods/services (continued)
      Prepayments for purchasing of goods                         30 June 2017   31 December 2016
      Nanchang Baojiang Steel Processing Distribution
      Co.,Ltd.                                                        586,520             410,220
      Ford Otomotiv Sanayi A.S.                                         1,930                   -
      Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.                      986                   -
                                                                      589,436             410,220
      Notes receivables from related parties                      30 June 2017   31 December 2016
      JMCG Jingma Motors Co., Ltd.                                      36,395             44,827
      Prepayments for construction in progress                    30 June 2017   31 December 2016
      JMCG Jiangxi Engineering Construction Co., Ltd.                   13,516              8,106
      Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.                    12,245
      Others                                                               150                  -
                                                                        25,911              8,379
      Prepayments for mould lease                                 30 June 2017   31 December 2016
      Changan Ford Automobile Co., Ltd.                                 22,259             32,528
      Cash deposit in related parties                             30 June 2017   31 December 2016
      JMCF (Note 19)                                                   963,588            874,990
      JIANGLING MOTORS CORPORATION, LTD.
      FOR THE SIX MONTHS ENDED 30 JUNE 2017
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (All amounts in thousands of RMB unless otherwise stated)
31    Related party transactions (continued)
(h)   Balances arising from sales/purchases of goods/services (continued)
      Trade payables to related parties                           30 June 2017   31 December 2016
      Jiangxi Jiangling Chassis Co.,Ltd.                               301,854            267,405
      Jiangxi Jiangling Lear Interior System Co.,Ltd.                  270,491            381,357
      Jiangxi JMCG Specialty Vehicles Corporation,
      Ltd.                                                             258,189            286,710
      Nanchang Jiangling Hua Xiang Auto
      Components Co.,Ltd.                                              194,953            210,407
      GETRAG (Jiangxi) Transmission Company                            185,437            180,956
      Jiangxi Jiangling Special Purpose Vehicle
      Co.,Ltd.                                                         167,843            255,916
      Nanchang JMCG Liancheng Auto Component
      Co.,Ltd.                                                         116,678            144,608
      Hanon Systems                                                     83,797             87,404
      Ford                                                              81,868            117,540
      Nanchang Unistar Electric & Electronics Co.,Ltd.                  68,648             50,575
      Faurecia Emissions Control Technologies
      (Nanchang) Co.,Ltd.                                               54,110             43,618
      JMCG                                                              51,201             73,518
      Nanchang JMCG Skyman Auto Component
      Co.,Ltd.                                                          34,032             23,538
      Jiangxi Lingge Non-ferrous Metal Die-casting
      Co.,Ltd.                                                          18,622             17,778
      Nanchang Yinlun Heat-exchanger Co.,Ltd.                           18,311             20,612
      Nanchang Lianda Machinery Co.,Ltd.                                17,716             23,570
      Nanchang JMCG Xinchen Auto Component
      Co.,Ltd.                                                           9,691             10,194
      Jiangling Aowei Aotomobile Spare Part Co.,Ltd.                     8,983             13,475
      Auto Alliance (Thailand) Co.,Ltd.                                  6,888             12,004
      Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.                     6,454              3,654
      Nanchang Gear Co.,Ltd.                                             5,836              5,777
      Jiangxi JMCG Shangrao Industrial Co.,Ltd.                          2,521              2,137
      Jiangxi Biaohong Engine Tappet Co.,Ltd.                            2,133              2,362
      Changan Ford Automobile Co.,Ltd.                                   2,036            113,485
      Ford Otomotiv Sanayi A.S.                                          2,015              2,687
      Jiangxi Jiangling Non-ferrous Metal Die-casting
      Co.,Ltd                                                            1,492
      Jiangxi JMCG Industry Co.,Ltd.                                     1,481
      Others                                                             1,190              3,790
                                                                     1,974,470          2,355,877
       JIANGLING MOTORS CORPORATION, LTD.
       FOR THE SIX MONTHS ENDED 30 JUNE 2017
       NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
       (All amounts in thousands of RMB unless otherwise stated)
31     Related party transactions (continued)
(h)   I Balances arising from sales/purchases of goods/services (continued)
       Other payables to related parties                           30 June 2017   31 December 2016
       Ford                                                             109,828            176,871
       Ford Otomotiv Sanayi A.S.                                         95,045            232,672
       Ford Global Technologies, LLC                                     59,147             58,517
       JMCG Jiangxi Engineering Construction Co., Ltd.                   18,145             12,511
       JMH                                                               10,696              1,303
       Jiangxi Jiangling Lear Interior System Co.,Ltd.                   10,556             16,154
       Nanchang Hengou Industry Co., Ltd.                                 9,423             11,378
       Nanchang JMCG Shishun Logistics Co., Ltd.                          6,580              3,944
       Nanchang Jiangling Hua Xiang Auto Components
       Co.,Ltd.                                                           5,979              6,157
       Nanchang JMCG Liancheng Auto Component
       Co.,Ltd.                                                           3,879              3,751
       Ford Motor (China) Co., Ltd.                                       3,689              1,199
       Hanon Systems                                                      2,520
       Jiangxi Jiangling Group Special Vehicle Co.,Ltd.                   1,090
       GETRAG (Jiangxi) Transmission Company                                665              1,550
       JMCG Hequn Costume Co.,Ltd.                                          861              1,410
       JMCG                                                                  53              1,041
       Others                                                             2,864              5,383
                                                                        341,020            535,049
       Advance from related parties                                30 June 2017   31 December 2016
       Jiangxi JMCG Specialty Vehicles Corporation,
       Ltd.                                                                176               4,294
       Others                                                              774
                                                                           950               4,636
(i)   I Related parties commitments
       Capital commitments                                         30 June 2017   31 December 2016
       JMCG Jiangxi Engineering Construction Co.,
    Ltd.                                                             49,019             40,334
Chapter XI         Catalogue on Documents for Reference
1. Originals of 2017 Half-year financial statements signed by legal representative
   and Chief Financial Officer.
2. Originals of all the documents and public announcements disclosed in
   newspapers designated by CSRC in the first half of 2017.
4. The Half-year Report in the China GAAP.
Board of Directors
Jiangling Motors Corporation, Ltd.
August 30, 2017

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