FINANCIAL STATEMENTS ANDFOR THE SIX MONTHS ENDED 30 JUNE 2021 JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY BALANCE SHEET AS AT 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated) Assets | Assets | Note | 30 June 2021 Consolidated* | 31 December 2020 Consolidated | 30 June 2021 Company* | 31 December 2020 Company | | Current assets | | | | | | | Cash and cash equivalents | 4(1) | 10,950,186,735 | 11,121,955,129 | 8,208,750,569 | 8,473,562,045 | | Financial assets held for trading | 4(2) | 553,211,507 | 803,892,985 | - | 502,797,917 | | Accounts receivable | 4(3)、14(1) | 3,401,921,804 | 2,999,883,212 | 3,108,512,087 | 3,330,880,651 | | Financing receivables | 4(4) | 428,573,213 | 815,583,669 | 529,914,581 | 29,412,448 | | Advances to suppliers | 4(5) | 579,396,268 | 452,714,683 | 579,292,941 | 451,832,917 | | Other receivables | 4(6)、14(2) | 216,179,929 | 128,989,573 | 241,702,042 | 1,359,907,223 | | Inventories | 4(7) | 2,178,815,436 | 2,086,605,692 | 2,108,932,110 | 2,020,079,494 | | Other current assets | 4(8) | 885,726,989 | 737,369,737 | 825,850,162 | 678,079,950 | | Total current assets | | 19,194,011,881 | 19,146,994,680 | 15,602,954,492 | 16,846,552,645 | | Non-current assets | | | | | | | Long-term equity investments | 4(9)、14(3) | 39,232,347 | 39,496,548 | 2,807,175,840 | 1,561,496,548 | | Fixed assets | 4(10) | 4,785,494,825 | 5,165,956,410 | 3,991,109,365 | 4,331,796,677 | | Construction in progress | 4(11) | 1,927,985,414 | 1,535,497,770 | 1,828,963,510 | 1,429,348,858 | | Right-of-use assets | 4(12) | 40,768,628 | 28,405,890 | 38,582,276 | 28,405,890 | | Intangible assets | 4(13) | 1,063,475,861 | 931,391,553 | 773,702,506 | 637,918,837 | | Development expenditures | 4(13) | 29,063,385 | 173,473,242 | 29,063,385 | 173,473,242 | | Deferred tax assets | 4(14) | 1,328,196,010 | 1,163,969,325 | 365,889,704 | 370,120,915 | | Total non-current assets | | 9,214,216,470 | 9,038,190,738 | 9,834,486,586 | 8,532,560,967 | | TOTAL ASSETS | | 28,408,228,351 | 28,185,185,418 | 25,437,441,078 | 25,379,113,612 |
JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY BALANCE SHEET AS AT 30 JUNE 2021(CONTINUED)(All amounts in RMB Yuan unless otherwise stated) Liabilities and owners' equity | Liabilities and owners' equity | Note | 30 June 2021 Consolidated* | 31 December 2020 Consolidated | 30 June 2021 Company* | 31 December 2020 Company | | Current liabilities | | | | | | | Short-term borrowings | 4(16) | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | | Derivative financial liabilities | 4(17) | 8,165,742 | 3,716,727 | 8,165,742 | 3,716,727 | | Notes payable | 4(18) | 1,565,665 | - | - | - | | Accounts payable | 4(19) | 9,408,546,403 | 10,026,215,877 | 9,401,623,759 | 10,022,399,964 | | Contract liabilities | 4(20) | 155,880,367 | 558,526,846 | 40,313,165 | 42,397,868 | | Employee benefits payable | 4(21) | 632,200,970 | 759,368,606 | 571,222,642 | 687,984,808 | | Taxes payable | 4(22) | 291,614,997 | 218,445,227 | 102,947,957 | 95,599,544 | | Other payables | 4(23) | 8,024,900,054 | 4,153,849,625 | 4,714,357,954 | 1,495,307,482 | | Current portion of non-current liabilities | 4(24) | 16,602,776 | 10,909,163 | 16,082,883 | 10,909,163 | | Other current liabilities | 4(25) | 382,857,533 | 410,899,328 | 33,417,221 | 39,220,370 | | Total current liabilities | | 19,422,334,507 | 16,641,931,399 | 15,388,131,323 | 12,897,535,926 | | Non-current liabilities | | | | | | | Long-term borrowings | 4(26) | 2,326,688 | 2,563,666 | 2,326,688 | 2,563,666 | | Lease liabilities | 4(27) | 27,854,023 | 18,998,952 | 25,883,102 | 18,998,952 | | Provisions | 4(28) | 206,997,083 | 195,896,139 | - | - | | Deferred income | 4(29) | 48,943,773 | 49,944,625 | 48,943,773 | 49,944,625 | | Long-term employee benefits payable | 4(30) | 60,786,693 | 62,855,000 | 60,492,693 | 62,561,000 | | Deferred tax liabilities | 4(14) | 142,239,570 | 126,995,164 | 117,891,524 | 102,300,000 | | Other non-current liabilities | 4(31) | 105,589,814 | 99,526,464 | 98,706,996 | 90,866,994 | | Total non-current liabilities | | 594,737,644 | 556,780,010 | 354,244,776 | 327,235,237 | | Total liabilities | | 20,017,072,151 | 17,198,711,409 | 15,742,376,099 | 13,224,771,163 | | Equity | | | | | | | Share capital | 4(32) | 863,214,000 | 863,214,000 | 863,214,000 | 863,214,000 | | Capital surplus | 4(33) | 839,442,490 | 839,442,490 | 839,442,490 | 839,442,490 | | Other comprehensive income | 4(34) | (11,759,250) | (11,759,250) | (12,021,750) | (12,021,750) | | Surplus reserve | 4(35) | 431,607,000 | 431,607,000 | 431,607,000 | 431,607,000 | | Retained earnings | 4(36) | 6,268,651,960 | 8,863,969,769 | 7,572,823,239 | 10,032,100,709 | | Total equity attributable to shareholders of the Company | | 8,391,156,200 | 10,986,474,009 | 9,695,064,979 | 12,154,342,449 | | Minority interests | | - | - | - | - | | Total equity | | 8,391,156,200 | 10,986,474,009 | 9,695,064,979 | 12,154,342,449 | | TOTAL LIABILITIES AND EQUITY | | 28,408,228,351 | 28,185,185,418 | 25,437,441,078 | 25,379,113,612 |
note：* Unaudited financial indexesLegal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY INCOME STATEMENTS FOR 2021 FIRST HALF-YEAR(All amounts in RMB Yuan unless otherwise stated) Item | Item | Note | 2021 First Half-year Consolidated* | 2020 First Half-year Consolidated* | 2021 First Half-year Company* | 2020 First Half-year Company* | | Revenue | 4(37)、14(4) | 17,675,621,088 | 14,073,417,878 | 16,423,558,481 | 13,100,109,933 | | Less: Cost of sales | 4(37)、4(43)、14(4) | (15,050,224,719) | (11,860,122,365) | (14,542,226,983) | (11,197,514,026) | | Taxes and surcharges | 4(38) | (479,241,514) | (386,579,142) | (457,195,578) | (374,566,719) | | Selling and distribution expenses | 4(39)、4(43) | (949,514,418) | (592,187,320) | (137,982,658) | (106,442,789) | | General and administrative expenses | 4(40)、4(43) | (529,817,540) | (459,127,446) | (446,001,303) | (358,155,678) | | Research and development expenses | 4(41)、4(43) | (726,466,190) | (696,582,452) | (718,611,661) | (694,302,769) | | Financial expenses | 4(42) | 145,442,287 | 66,731,813 | 116,227,293 | 67,945,339 | | Including: Interest expenses | | (12,133,084) | (19,061,965) | (12,101,916) | (16,322,688) | | Interest income | | 149,147,665 | 94,240,518 | 119,819,393 | 91,873,400 | | Add: Other income | 4(46) | 333,292,836 | 165,639,467 | 333,208,941 | 145,105,792 | | Investment income | 4(47)、14(5) | (10,863,242) | 28,278,000 | (4,619,007) | 28,278,000 | | Including: Share of profit of associates and joint ventures | 4(47) | (264,201) | (3,024,554) | (264,201) | (3,024,554) | | Gains on changes in fair value | 4(48) | (5,130,493) | 10,012,041 | (7,246,932) | 10,012,041 | | Credit impairment losses | 4(45) | 7,389,378 | (66,242,811) | 1,197,855 | (61,963,003) | | Asset impairment losses | 4(44) | - | (34,107,710) | - | (20,994,208) | | Gains on disposal of assets | 4(49) | 11,152,182 | (581,955) | 20,345,706 | (1,145,364) | | Operating profit | | 421,639,655 | 248,547,998 | 580,654,154 | 536,366,549 | | Add: Non-operating income | 4(50) | 2,510,277 | 3,599,193 | 1,052,244 | 3,052,524 | | Less: Non-operating expenses | 4(51) | (2,584,982) | (30,238,252) | (2,387,862) | (30,104,671) | | Total profit | | 421,564,950 | 221,908,939 | 579,318,536 | 509,314,402 | | Less: Income tax expenses | 4(52) | (16,350,895) | (14,137,157) | (38,064,142) | (21,565,844) | | Net profit | | 405,214,055 | 207,771,782 | 541,254,394 | 487,748,558 | | Classified by continuity of operations | | | | | | | Net profit from continuing operations | | 405,214,055 | 207,771,782 | 541,254,394 | 487,748,558 | | Net profit from discontinued operations | | - | - | - | - | | Classified by ownership of the equity | | | | | | | Minority interests | | - | - | - | - | | Attributable to shareholders of the Company | | 405,214,055 | 207,771,782 | 541,254,394 | 487,748,558 | | Other comprehensive income, net of tax | | - | - | - | - | | Attributable to shareholders of the Company | | | | | | | Other comprehensive income items which will not be reclassified to profit or loss | | | | | | | Changes arising from remeasurement of defined benefit plan | 4(34) | - | - | - | - | | Attributable to minority interests | | | | | | | Total comprehensive income | | 405,214,055 | 207,771,782 | 541,254,394 | 487,748,558 | | Attributable to shareholders of the Company | | 405,214,055 | 207,771,782 | 541,254,394 | 487,748,558 | | Attributable to minority interests | | - | - | - | - |
Earnings per share | Earnings per share | | | | | | | Basic earnings per share(RMB Yuan) | 4(53) | 0.47 | 0.24 | —— | —— | | Diluted earnings per share(RMB Yuan) | 4(53) | 0.47 | 0.24 | —— | —— |
note：* Unaudited financial indexesLegal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS FOR 2021 FIRST HALF-YEAR(All amounts in RMB Yuan unless otherwise stated) Item | Item | Note | 2021 First Half-year Consolidated* | 2020 First Half-year Consolidated* | 2021 First Half-year Company* | 2020 First Half-year Company* | | Cash flows from operating activities | | | | | | | Cash received from sales of goods or rendering of services | | 19,342,042,070 | 14,440,474,744 | 17,810,262,253 | 12,911,082,079 | | Cash received relating to other operating activities | 4(54) | 450,958,933 | 245,920,384 | 364,859,759 | 187,369,975 | | Sub-total of cash inflows | | 19,793,001,003 | 14,686,395,128 | 18,175,122,012 | 13,098,452,054 | | Cash paid for goods and services | | (15,712,429,064) | (10,617,165,843) | (15,292,180,904) | (10,193,382,381) | | Cash paid to and on behalf of employees | | (1,504,023,988) | (1,084,107,268) | (1,400,304,399) | (962,774,043) | | Payments of taxes and surcharges | | (1,271,259,251) | (1,021,043,215) | (1,022,744,168) | (838,116,455) | | Cash paid relating to other operating activities | 4(54) | (1,235,370,851) | (1,229,795,175) | (663,632,878) | (768,797,800) | | Sub-total of cash outflows | | (19,723,083,154) | (13,952,111,501) | (18,378,862,349) | (12,763,070,679) | | Net cash flows from operating activities | 4(55) | 69,917,849 | 734,283,627 | (203,740,337) | 335,381,375 | | Cash flows from investing activities | | | | | | | Cash received from disposal of investments | | 1,850,000,000 | 6,471,000,000 | 2,142,000,000 | 9,238,976,131 | | Cash received from returns on investments | | 10,204,593 | 32,619,541 | 3,894,456 | 32,619,541 | | Net cash received from disposal of fixed assets, intangible assets and other long-term assets | | 13,292,324 | 7,983,584 | 12,434,835 | 7,062,524 | | Net cash received from disposal of subsidiaries and other business units | | 108,000,000 | - | 108,000,000 | - | | Cash received relating to other investing activities | 4(54) | 122,821,020 | 96,772,432 | 101,929,208 | 164,343,358 | | Sub-total of cash inflows | | 2,104,317,937 | 6,608,375,557 | 2,368,258,499 | 9,443,001,554 | | Cash paid to acquire fixed assets, intangible assets and other long-term assets | | (722,025,976) | (493,537,475) | (715,324,702) | (480,691,940) | | Cash paid to acquire investments | | (1,600,000,000) | (9,189,000,000) | (1,688,461,068) | (12,088,976,131) | | Cash paid relating to other investing activities | | (7,829,410) | (1,928,931) | (7,829,408) | (1,928,931) | | Sub-total of cash outflows | | (2,329,855,386) | (9,684,466,406) | (2,411,615,178) | (12,571,597,002) | | Net cash flows from investing activities | | (225,537,449) | (3,076,090,849) | (43,356,679) | (3,128,595,448) | | Cash flows from financing activities | | | | | | | Cash received from borrowings | | 989,255,556 | 1,800,000,000 | 989,255,556 | 1,800,000,000 | | Sub-total of cash inflows | | 989,255,556 | 1,800,000,000 | 989,255,556 | 1,800,000,000 | | Cash repayments of borrowings | | (1,000,214,487) | (500,231,444) | (1,000,214,487) | (500,231,444) | | Cash payments for distribution of dividends, profits or interest expenses | | (2,346,105) | (18,544,156) | (2,346,105) | (15,845,917) | | Cash paid relating to other financing activities | 4(54) | (4,409,423) | (4,800,032) | (4,409,424) | (3,603,380) | | Sub-total of cash outflows | | (1,006,970,015) | (523,575,632) | (1,006,970,016) | (519,680,741) | | Net cash flows from financing activities | | (17,714,459) | 1,276,424,368 | (17,714,460) | 1,280,319,259 | | Effect of foreign exchange rate changes on cash and cash | | - | - | - | - |
equivalents | equivalents | | | | | | | Net decrease in cash and cash equivalents | 4(55) | (173,334,059) | (1,065,382,854) | (264,811,476) | (1,512,894,814) | | Add: Cash and cash equivalents at beginning of year | 4(55) | 11,121,955,129 | 8,937,936,658 | 8,473,562,045 | 8,677,928,946 | | Cash and cash equivalents at end of period | 4(55) | 10,948,621,070 | 7,872,553,804 | 8,208,750,569 | 7,165,034,132 |
note：* Unaudited financial indexesLegal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated) | Item | Note | Attributable to equity owners of the Company | Minority interests | Total equity | | Share capital | Capital surplus | Other comprehensive income | Surplus reserves | Retained earnings | | Balance at 1 January 2020 | | 863,214,000 | 839,442,490 | (11,395,500) | 431,607,000 | 8,373,695,791 | - | 10,496,563,781 | | Movements for the six months ended 30 June 2020* | | - | - | - | - | 147,346,802 | - | 147,346,802 | | Total comprehensive income | | | | | | | | | | Net profit | | | - | - | - | - | 207,771,782 | - | 207,771,782 | | Other comprehensive income | | - | - | - | - | - | - | - | | Total comprehensive income for the year | | - | - | - | - | 207,771,782 | - | 207,771,782 | | Profit distribution | | | | | | | | | | | Distribution to shareholders | 4(36) | - | - | - | - | (60,424,980) | - | (60,424,980) | | Balance at 30 June 2020* | | 863,214,000 | 839,442,490 | (11,395,500) | 431,607,000 | 8,521,042,593 | - | 10,643,910,583 | | Balance at 1 January 2021 | | 863,214,000 | 839,442,490 | (11,759,250) | 431,607,000 | 8,863,969,769 | - | 10,986,474,009 | | Movements for the six months ended 30 June 2021* | | - | - | - | - | (2,595,317,809) | - | (2,595,317,809) | | Total comprehensive income | | | | | | | | | | Net profit | | | - | - | - | - | 405,214,055 | - | 405,214,055 | | Other comprehensive income | | - | - | - | - | - | - | - | | Total comprehensive income for the year | | - | - | - | - | 405,214,055 | - | 405,214,055 | | Profit distribution | | | | | | | | | | | Distribution to shareholders | 4(36) | - | - | - | - | (3,000,531,864) | - | (3,000,531,864) | | Balance at 30 June 2021* | | 863,214,000 | 839,442,490 | (11,759,250) | 431,607,000 | 6,268,651,960 | - | 8,391,156,200 |
note：* Unaudited financial indexesLegal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni JIANGLING MOTORS CORPORATION, LTD.COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated) | Item | Note | Share capital | Capital surplus | Other comprehensive income | Surplus reserves | Retained earnings | Total equity | | Balance at 1 January 2020 | | | 863,214,000 | 839,442,490 | (11,616,750) | 431,607,000 | 9,484,175,533 | 11,606,822,273 | | Movements for the six months ended 30 June 2020* | | | - | - | - | - | 427,323,578 | 427,323,578 | | Total comprehensive income | | | | | | | | | | Net profit | | | - | - | - | - | 487,748,558 | 487,748,558 | | Other comprehensive income | | | - | - | - | - | - | - | | Total comprehensive income for the year | | | - | - | - | - | 487,748,558 | 487,748,558 | | Profit distribution | | | | | | | | | | Distribution to shareholders | | 4(36) | - | - | - | - | (60,424,980) | (60,424,980) | | Balance at 30 June 2020* | | | 863,214,000 | 839,442,490 | (11,616,750) | 431,607,000 | 9,911,499,111 | 12,034,145,851 | | Balance at 1 January 2021 | | | 863,214,000 | 839,442,490 | (12,021,750) | 431,607,000 | 10,032,100,709 | 12,154,342,449 | | Movements for the six months ended 30 June 2021* | | | - | - | - | - | (2,459,277,470) | (2,459,277,470) | | Total comprehensive income | | | | | | | | | | Net profit | | | - | - | - | - | 541,254,394 | 541,254,394 | | Other comprehensive income | | | - | - | - | - | - | - | | Total comprehensive income for the year | | | - | - | - | - | 541,254,394 | 541,254,394 | | Profit distribution | | | | | | | | | | Distribution to shareholders | | 4(36) | - | - | - | - | (3,000,531,864) | (3,000,531,864) | | Balance at 30 June 2021* | | | 863,214,000 | 839,442,490 | (12,021,750) | 431,607,000 | 7,572,823,239 | 9,695,064,979 |
note：* Unaudited financial indexesLegal representative：Qiu Tiangao CFO：Li Weihua Finance Department：Ding Ni NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 1 | General information | | | | Jiangling Motors Corporation, Ltd. (hereinafter “the Company”) is a Sino-foreign joint stock enterprise established under the approval of Hongban (1992) No. 005 of Nanchang Revolution and Authorisation Group of Company’s Joint Stock on the basis of Jiangxi Motors Manufacturing Factory on 16 June 1992. The registration number of the enterprise business license is No. 913600006124469438. The registered address of the Company and the address of its headquarters are both Nanchang City, Jiangxi Province of the People’s Republic of China (“the PRC”). | | | | On 23 July 1993, with the approval of the China Securities Regulatory Commission (hereinafter “CSRC”) (Zheng Jian Fa Shen Zi [1993] No. 22) and (Zheng Jian Han Zi [1993] No. 86), the Company was listed on the Stock Exchange of Shenzhen on 1 December 1993, issuing 494,000,000 shares in total. On 8 April 1994, a total of 25,214,000 shares were distributed for the 1993 dividend distribution programme with the approval of the shareholders’ meeting and Jiangxi Securities Management Leading Group (Gan Securities [1994] No. 02). In 1995, with the approval of CSRC (Zheng Jian Fa Zi [1995] No. 144) and the Shenzhen Securities Management Office (Shenzhen Office Fu [1995] No. 92), the Company issued 174,000,000 ordinary shares (“B shares”). In 1998, with the approval of CSRC (Zheng Jian Fa Zi [1998] No. 19), the Company issued additional 170,000,000 B shares. | | | | According to the resolution of the shareholders’ meeting regarding the split share structure reform on 11 January 2006, the Company implemented the Scheme on Split Share Structure Reform on 13 February 2006. After the implementation, the Company’s total paid-in capital remains the same. Related details are disclosed in Note 4(33). | | | | As at 30 June 2021, the Company’s paid-in capital totalled RMB863,214,000, with par value of RMB1 per share. | | | | The business scope of the Company and its subsidiaries (hereinafter “the Group”) includes production and sales of automobile assemblies such as automobiles, special (modified) vehicles, engines and chassis and other automobile parts, and provision of related after-sales services; retail and wholesale of imported E series automobiles of Ford Motor (China) Co., Ltd. (“FORD”) as the dealer; import and export of automobiles and parts; dealership of used cars; provision enterprise management and consulting services related to production and sales of automobiles. | | | | Subsidiaries included in the consolidation scope for the current period are detailed in Note 5. | | | | These financial statements were authorised for issue by the Company's Board of Directors on 26 August 2021. | | | | 2 | Summary of significant accounting policies and accounting estimates | | | | The Group determines specific accounting policies and estimates based on the features of its production and operation, which mainly comprise the measurement of expected credit losses (“ECL”) on receivables (Note 2(8)), valuation of inventories (Note 2(9)), depreciation of fixed assets and amortisation of intangible assets and right-of-use assets (Note 2(11), (14), (22)), criteria for capitalisation of development expenditures (Note 2(14)), recognition and measurement of revenue (Note 2(19)), etc. Key judgements and critical accounting estimates and key assumptions applied by the Group on the determination of significant accounting policies are set out in Note 2(24). |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (1) | Basis of preparation | | | | The financial statements are prepared in accordance with the Accounting Standards for Business Enterprises - Basic Standard, specific accounting standards and relevant regulations issued by the Ministry of Finance on 15 February 2006 and in subsequent periods (hereinafter collectively referred to as “the Accounting Standards for Business Enterprises” or “CASs”) and the disclosure requirements in the Preparation Convention of Information Disclosure by Companies Offering Securities to the Public No.15 - General Rules on Financial Reporting issued by CSRC. The financial statements are prepared on a going concern basis. | | | | (2) | Statement of compliance with the Accounting Standards for Business Enterprises | | | | The financial statements of the Company for the Six Months Ended 30 June 2021 are in compliance with the Accounting Standards for Business Enterprises, and truly and completely present the consolidated and company’s financial position of the Company as at 30 June 2021 and their financial performance, cash flows and other information for the year then ended. | | | | (3) | Fiscal year | | | | The Company’s fiscal year starts on 1 January and ends on 30 June. | | | | (4) | Recording currency | | | | The recording currency is Renminbi (“RMB”). The financial statements are presented in RMB. | | | | (5) | Preparation of consolidated financial statements | | | | The consolidated financial statements comprise the financial statements of the Company and all of its subsidiaries. | | | | Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidated from the date that such control ceases. For a subsidiary that is acquired in a business combination involving enterprises under common control, it is included in the consolidated financial statements from the date when it, together with the Company, comes under common control of the ultimate controlling party. The portion of the net profits realised before the combination date is presented separately in the consolidated income statement. | | | | In preparing the consolidated financial statements, where the accounting policies or the accounting periods of the Company and subsidiaries are inconsistent, the financial statements of the subsidiaries are adjusted in accordance with the accounting policies and the accounting period of the Company. For subsidiaries acquired from business combinations not involving enterprises under common control, the individual financial statements of the subsidiaries are adjusted based on the fair value of the identifiable net assets at the acquisition date. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (5) | Preparation of consolidated financial statements (Cont'd) | | | | All significant intra-group balances, transactions and unrealised profits are eliminated in the consolidated financial statements. The portion of subsidiaries’ shareholders' equity and the portion of subsidiaries’ net profits and losses and comprehensive income for the period not attributable to the Company are recognised as minority interests, net profit attributed to minority interests and total comprehensive income attributed to minority interests, and presented separately in the consolidated financial statements under shareholders' equity, net profits and total comprehensive income respectively. If the subsidiaries’ loss for the current period attributed to the minority shareholders exceeds their share in the opening shareholder’s equity, the excess will be deducted against the minority interests. Unrealised profits and losses resulting from the sale of assets by the Company to its subsidiaries are fully eliminated against net profit attributable to owners of the parent. Unrealised profits and losses resulting from the sale of assets by a subsidiary to the Company are eliminated and allocated between net profit attributable to owners of the parent and net profit attributed to minority interests in accordance with the allocation proportion of the parent in the subsidiary. Unrealised profits and losses resulting from the sale of assets by one subsidiary to another are eliminated and allocated between net profit attributable to owners of the parent and net profit attributed to minority interests in accordance with the allocation proportion of the parent in the subsidiary. If the accounting treatment of a transaction is inconsistent in the financial statements at the Group level and at the Company or its subsidiary level, adjustment will be made from the perspective of the Group. | | | | (6) | Cash and cash equivalents | | | | Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand, and short-term and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. | | | | (7) | Foreign currency translation | | | | Foreign currency transactions | | | | Foreign currency transactions are translated into recording currency using the exchange rates prevailing at the dates of the transactions. | | | | At the balance sheet date, monetary items denominated in foreign currencies are translated into recording currency using the spot exchange rates on the balance sheet date. Exchange differences arising from these translations are recognised in profit or loss for the current period, except for those attributable to foreign currency borrowings that have been taken out specifically for acquisition or construction of qualifying assets, which are capitalised as part of the cost of those assets. Non-monetary items denominated in foreign currencies that are measured at historical costs are translated at the balance sheet date using the spot exchange rates at the date of the transactions. The effect of exchange rate changes on cash is presented separately in the cash flow statement. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (8) | Financial instruments | | | | A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. A financial asset or a financial liability is recognised when the Group becomes a party to the contractual provisions of the instrument. | | | | (a) | Financial assets | | | | (i) | Classification and measurement | | | | Based on the business model for managing the financial assets and the contractual cash flow characteristics of the financial assets, financial assets are classified as: (1) financial assets at amortised cost; (2) financial assets at fair value through other comprehensive income; (3) financial assets at fair value through profit or loss. | | | | The financial assets are measured at fair value at initial recognition. Related transaction costs that are attributable to the acquisition of the financial assets are included in the initially recognised amounts, except for the financial assets at fair value through profit or loss, the related transaction costs of which are recognised directly in profit or loss for the current period. Accounts receivable or notes receivable arising from sales of products or rendering of services (excluding or without regard to significant financing components) are initially recognised at the consideration that is entitled to be charged by the Group as expected. | | | Debt instruments | | | | The debt instruments held by the Group refer to the instruments that meet the definition of financial liabilities from the perspective of the issuer, and are measured in the following three ways: | | | | Measured at amortised cost: | | | | The objective of the Group’s business model is to hold the financial assets to collect the contractual cash flows, and the contractual cash flow characteristics are consistent with a basic lending arrangement, which gives rise on specified dates to the contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. The interest income of such financial assets is recognised using the effective interest method. Such financial assets mainly include cash at bank and on hand, notes receivable, accounts receivable and other receivables, etc. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (8) | Financial instruments (Cont'd) | | | | (a) | Financial assets (Cont’d) | | | | (i) | Classification and measurement (Cont’d) | | | | Measured at fair value through other comprehensive income: | | | | The objective of the Group’s business model is to hold the financial assets to both collect the contractual cash flows and sell such financial assets, and the contractual cash flow characteristics are consistent with a basic lending arrangement. Such financial assets are measured at fair value through other comprehensive income, except for the impairment gains or losses, foreign exchange gains and losses, and interest income calculated using the effective interest method which are recognised in profit or loss for the current period. Such financial assets mainly include financing receivables, etc. | | | | Measured at fair value through profit or loss: | | | | Debt instruments held by the Group that are not divided into those at amortised cost, or those measured at fair value through other comprehensive income, are measured at fair value through profit or loss. At initial recognition, the Group does not designate a portion of financial assets as at fair value through profit or loss to eliminate or significantly reduce an accounting mismatch. Financial assets that are due in more than one year as from the balance sheet date and are expected to be held for over one year are included in other non-current financial assets, and the others are included in financial assets held for trading. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (8) | Financial instruments (Cont'd) | | | | (a) | Financial assets (Cont’d) | | | | (ii) | Impairment | | | | Loss provision for financial assets at amortised cost and investments in debt instruments at fair value through other comprehensive income is recognised on the basis of ECL. | | | | Giving consideration to reasonable and supportable information on past events, current conditions and forecasts of future economic conditions, as well as the default risk weight, the Group recognises the ECL as the probability-weighted amount of the present value of the difference between the cash flows receivable from the contract and the cash flows expected to collect. | | | | As at each balance sheet date, the ECL of financial instruments at different stages are measured respectively. 12-month ECL provision is recognised for financial instruments in Stage 1 that have not had a significant increase in credit risk since initial recognition; lifetime ECL provision is recognised for financial instruments in Stage 2 that have had a significant increase in credit risk yet without credit impairment since initial recognition; and lifetime ECL provision is recognised for financial instruments in Stage 3 that have had credit impairment since initial recognition. | | | | For the financial instruments with low credit risk on the balance sheet date, the Group assumes there is no significant increase in credit risk since initial recognition and recognises the 12-month ECL provision. | | | | For the financial instruments in Stage 1, Stage 2 and with low credit risk, the Group calculates the interest income by applying the effective interest rate to the gross carrying amount (before deduction of the impairment provision). For the financial instrument in Stage 3, the interest income is calculated by applying the effective interest rate to the amortised cost (after deduction of the impairment provision from the gross carrying amount). | | | | For notes receivable, accounts receivable and financing receivables arising from sales of goods and rendering of services in the ordinary course of operating activities, the Group measures the lifetime ECL provision regardless of whether there is a significant financing component. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (8) | Financial instruments (Cont'd) | | | | (a) | Financial assets (Cont’d) | | | | (ii) | Impairment (Cont’d) | | | | In case the ECL of an individually assessed financial asset can be evaluated with reasonable cost, the Group determines the ECL based on impairment assessment of an individual financial asset. In case the ECL of an individually assessed financial asset cannot be evaluated with reasonable cost, the Group divides the receivables into certain groupings based on credit risk characteristics, and calculates the ECL for the groupings. Basis for determining groupings and related provision method are as follows: | | | | Grouping - Bank acceptance notes | State-owned banks and joint stock banks | | Grouping - Sales of general automobiles | Customers of general automobiles | | Grouping - Sales of new energy automobiles | Customers of new energy automobiles | | Grouping - Sales of other automobiles | Customers of other automobiles | | Grouping - Sales of automobile parts | Customers of automobile parts | | Grouping - Interest from cash at bank | Accrued interest on cash at bank | | Grouping - Operating advances and guarantees | Operating advances and guarantees | | | | For accounts receivable that are classified into groupings and notes receivable and financing receivables arising from sales of goods and rendering of services in the ordinary course of operating activities, the Group calculates the ECL with reference to historical credit losses experience, current conditions and forecasts of future economic conditions, and based on the exposure at default and the lifetime ECL rate. For other notes receivable, financing receivables and other receivables classified into groupings, the Group calculates the ECL with reference to the historical credit loss experience, current conditions and forecasts of future economic conditions, and based on the exposure at default and the 12-month or lifetime ECL rate. | | | | The Group recognises the loss provision made or reversed into profit or loss for the current period. For debt instruments held at fair value through other comprehensive income, the Group adjusts other comprehensive income while the impairment loss or gain is recognised in profit or loss for the current period. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (8) | Financial instruments (Cont'd) | | | | (a) | Financial assets (Cont’d) | | | | (iii) | Derecognition | | | | A financial asset is derecognised when: (i) the contractual rights to the cash flows from the financial asset expire, (ii) the financial asset has been transferred and the Group transfers substantially all the risks and rewards of ownership of the financial asset to the transferee, or (iii) the financial asset has been transferred and the Group has not retained control of the financial asset, although the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset. When a financial asset is derecognised, the difference between the carrying amount and the sum of the consideration received and the cumulative changes in fair value that are previously recognised directly in other comprehensive income is recognised in profit or loss for the current period. | | | | (b) | Financial liabilities | | | | Financial liabilities are classified as financial liabilities at amortised cost and financial liabilities at fair value through profit or loss at initial recognition. Financial liabilities of the Group mainly comprise financial liabilities at amortised cost, including notes payable, accounts payable, other payables, borrowings, etc. Such financial liabilities are initially recognised at fair value, net of transaction costs incurred, and subsequently measured using the effective interest method. Financial liabilities that are due within one year (inclusive) are classified as current liabilities; those with maturities over one year but are due within one year (inclusive) as from the balance sheet date are classified as current portion of non-current liabilities. Others are classified as non-current liabilities. | | | | A financial liability is derecognised or partly derecognised when the underlying present obligation is discharged or partly discharged. The difference between the carrying amount of the derecognised part of the financial liability and the consideration paid is recognised in profit or loss for the current period. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (8) | Financial instruments (Cont'd) | | | | (c) | Determination of fair value of financial instruments | | | | The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the active market. The fair value of a financial instrument that is not traded in an active market is determined by using a valuation technique. In valuation, the Group adopts valuation techniques applicable in the current situation and supported by adequate available data and other information, selects inputs with the same characteristics as those of assets or liabilities considered in relevant transactions of assets or liabilities by market participants, and gives priority to the use of relevant observable inputs. When relevant observable inputs are not available or feasible, unobservable inputs are adopted. |
| (9) | Inventories | | | | (a) | Classification | | | | Inventories include raw materials, work in progress products, finished goods, materials in transit, low value consumables, materials consigned for processing, etc., and are measured at the lower of cost and net realisable value. | | | | (b) | Costing of inventories | | | | Cost is determined using the weighted average method. The cost of finished goods and work in progress comprise raw materials, direct labour and systematically allocated production overhead based on the normal production capacity. | | | | (c) | Basis for determining net realisable value of inventories and method for making provision for inventories | | | | Provision for inventories is determined at the excess amount of the carrying amounts of the inventories over their net realisable value. Net realisable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sale and related taxes. | | | | (d) | The Group adopts the perpetual inventory system. | | | | (e) | Amortisation methods of low value consumables | | | | Low value consumables are amortised into expenses in full when issued for use. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (10) | Long-term equity investments | | | | Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries and the Group’s long-term equity investments in its associates. | | | | Subsidiaries are the investees over which the Company is able to exercise control. Associates are the investees that the Group has a significant influence on their financial and operating decisions. | | | | Investments in subsidiaries are presented using the cost method in the Company’s financial statements, and adjusted to the equity method when preparing the consolidated financial statements. Investments in associates are accounted for using the equity method. | | | | (a) | Determination of investment cost | | | | For long-term equity investments acquired through a business combination involving enterprises under common control, the investment cost shall be the absorbing party’s share of the carrying amount of owners’ equity of the party being absorbed in the consolidated financial statements of the ultimate controlling party at the combination date; for long-term equity investments acquired through a business combination not involving enterprises under common control, the investment cost shall be the combination cost. For long-term equity investments acquired not through a business combination, such as long-term equity investments acquired by payment in cash, the initial investment cost shall be the purchase price actually paid; for long-term equity investments acquired by issuing equity securities, the initial investment cost shall be the fair value of the equity securities issued. | | | | (b) | Subsequent measurement and recognition of profit or loss | | | | Long-term equity investments accounted for using the cost method are measured at the initial investment cost. Cash dividend or profit distribution declared by an investee is recognised as investment income into profit or loss for the current period. | | | | Where the initial investment cost exceeds the Group’s share of the fair value of the investee’s identifiable net assets at the time of acquisition, the investment is initially measured at that cost. Where the initial investment cost is less than the Group’s share of the fair value of the investee’s identifiable net assets at the time of acquisition, the difference is included in profit or loss for the current period and the cost of the long-term equity investment is adjusted upwards accordingly. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (10) | Long-term equity investments (Cont’d) | | | | (b) | Subsequent measurement and recognition of profit or loss (Cont’d) | | | | For long-term equity investments accounted for using the equity method, the Group recognises the investment income or losses according to its share of net profit or loss of the investee. The Group does not recognise further losses when the carrying amounts of the long-term equity investments together with any long-term interests that, in substance, form part of the Group’s net investment in investees are reduced to zero. However, if the Group has obligations for additional losses and the criteria with respect to recognition of provisions are satisfied, the Group continues recognising the investment losses and the provisions at the amount it expects to undertake. The Group’s share of the changes in investee’s owner's equity other than those arising from the net profit or loss, other comprehensive income and profit distribution is recognised in capital surplus with a corresponding adjustment to the carrying amounts of the long-term equity investment. The carrying amount of the investment is reduced by the Group’s share of the profit distribution or cash dividends declared by the investees. Unrealised gains or losses on transactions between the Group and its investees are eliminated to the extent of the Group’s equity interest in the investees, based on which the investment income or losses are recognised. Any losses resulting from transactions between the Group and its investees, which are attributable to asset impairment losses are not eliminated. | | | | (c) | Basis for determining existence of control and significant influence over investees | | | | Control is the power over investees that can bring variable returns through involvement in related activities of investees and the ability to influence the returns by using such power over investees. | | | | Significant influence is the power to participate in making decisions on financial and operating policies of investees, but is not control or joint control over making those policies. | | | | (d) | Impairment of long-term equity investments | | | | The carrying amounts of long-term equity investments in subsidiaries and associates is reduced to the recoverable amounts when the recoverable amounts are below their carrying amount (Note 2(15)). | | | | (11) | Fixed assets | | | | (a) | Recognition and initial measurement of fixed assets | | | | Fixed assets comprise buildings, machinery and equipment, motor vehicles, moulds, and electronic and other equipment. | | | | Fixed assets are recognised when it is probable that the related economic benefits will flow to the Group and the costs can be reliably measured. Fixed assets purchased or constructed by the Group are initially measured at cost at the time of acquisition. The fixed assets contributed by the state-owned shareholders upon the restructuring of the Company are recorded at the valued amount determined by the state-owned asset administration department. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (11) | Fixed assets (Cont’d) | | | | (a) | Recognition and initial measurement of fixed assets (Cont’d) | | | | Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable that the associated economic benefits will flow to the Group and the related cost can be reliably measured. The carrying amount of the replaced part is derecognised. All the other subsequent expenditures are recognised in profit or loss for the period in which they are incurred. | | | | (b) | Depreciation methods of fixed assets | | | | Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their estimated net residual values over their estimated useful lives. For the fixed assets that have been provided for impairment loss, the related depreciation charge is prospectively determined based upon the adjusted carrying amounts over their remaining useful lives. | | | | The estimated useful lives, the estimated net residual values expressed as a percentage of cost and the annual depreciation rates of fixed assets are as follows: | | | | | Estimated useful lives | Estimated net residual values | Annual depreciation rates | | | | | | | Buildings | 35 to 40 years | 4% | 2.4% to 2.7% | | Machinery and equipment | 10 to 15 years | 4% | 6.4% to 9.6% | | Motor vehicles | 5 to 10 years | 4% | 9.6% to 19.2% | | Moulds | 5 years | - | 20% | | Electronic and other equipment | 5 to 7 years | 4% | 13.7% to 19.2% | | | | The estimated useful life and the estimated net residual value of a fixed asset and the depreciation method applied to the asset are reviewed, and adjusted as appropriate at each year-end. | | | | (c) | The carrying amount of a fixed asset is reduced to the recoverable amount when the recoverable amount is below the carrying amount (Note 2(15)). | | | | (d) | Disposal of fixed assets | | | | A fixed asset is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The amount of proceeds from disposals on sale, transfer, retirement or damage of a fixed asset net of its carrying amount and related taxes and expenses is recognised in profit or loss for the current period. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (12) | Construction in progress | | | | Construction in progress is measured at actual cost. Actual cost comprises construction costs, installation costs, borrowing costs that are eligible for capitalisation and other costs necessary to bring the fixed assets ready for their intended use. Construction in progress is transferred to fixed assets when the assets are ready for their intended use, and depreciation is charged starting from the next month. The carrying amount of construction in progress is reduced to the recoverable amount when the recoverable amount is below the carrying amount (Note 2(15)). | | | | (13) | Borrowing costs | | | | The borrowing costs that are directly attributable to acquisition and construction of an asset that needs a substantially long period of time for its intended use commence to be capitalised and recorded as part of the cost of the asset when expenditures for the asset and borrowing costs have been incurred, and the activities relating to the acquisition and construction that are necessary to prepare the asset for its intended use have commenced. The capitalisation of borrowing costs ceases when the asset under acquisition or construction becomes ready for its intended use and the borrowing costs incurred thereafter are recognised in profit or loss for the current period. Capitalisation of borrowing costs is suspended during periods in which the acquisition or construction of an asset is interrupted abnormally, and the interruption lasts for more than 3 months, until the acquisition or construction is resumed. | | | | The capitalised amount of specific borrowings intended to be used for the acquisition or construction of qualifying assets is determined by the interest expenses incurred in the period less interest income of the unused borrowings deposited at bank or investment income from temporary investments. | | | | The capitalised amount of general borrowings intended to be used for the acquisition or construction of qualifying assets is determined by the weighted average of the excess of accumulated capital expenditure over capital expenditure of the special borrowings multiplied by the weighted average effective interest rate of the utilised general borrowings. The effective interest rate is the rate at which the future cash flows of the borrowings over the expected lifetime or a shorter applicable period are discounted into the initial recognised amount of the borrowings. | | | | (14) | Intangible assets | | | | Intangible assets include land use rights, software use fees, non-patent technologies and after-sales service management mode, and are measured at cost. | | | | (a) | Land use rights | | | | Land use rights are amortised on the straight-line basis over their approved use period of 50 years. If the acquisition costs of the land use rights and the buildings located thereon cannot be reasonably allocated between the land use rights and the buildings, all of the acquisition costs are recognised as fixed assets. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (14) | Intangible assets (Cont’d) | | | | (b) | Software use fees | | | | Software use fees are amortised on a straight-line basis over the estimated useful life of 5 years. | | | | (c) | Non-patent technologies | | | | Non-patent technologies are amortised on the straight-line basis over the useful life of 5 years. | | | | (d) | Periodical review of useful life and amortisation method | | | | For an intangible asset with a finite useful life, review of its useful life and amortisation method is performed at each year-end, with adjustment made appropriately. | | | | (e) | Research and development | | | | The expenditure on an internal research and development project is classified into expenditure on the research phase and expenditure on the development phase based on its nature and whether there is material uncertainty that the research and development activities can form an intangible asset at the end of the project. | | | | Expenditure on the research phase related to planned survey, evaluation and selection for research on manufacturing technique of automobile products is recognised in profit or loss in the period in which it is incurred. Prior to mass production, expenditure on the development phase related to the design and testing phase in regards to the final application of manufacturing technique of automobile products is capitalised only if all of the following conditions are satisfied: ? the development of manufacturing technique of automobile products has been fully demonstrated by technical team; ? management intends to complete the development of manufacturing technique of automobile products, and use or sell it; ? the research and analysis of preliminary market survey indicate that products manufactured with manufacturing technique of automobile products are marketable; ? adequate technical and financial supports are available for development of manufacturing techniques of automobile products and subsequent mass production; and, ? expenditure on development of manufacturing techniques of automobile products can be reliably collected. | | | | Other expenditures on the development phase that do not meet the conditions above are recognised in profit or loss in the period in which they are incurred. Development expenditures previously recognised as profit or loss are not recognised as an asset in a subsequent period. Capitalised expenditure on the development phase is presented as development expenditures in the balance sheet and transferred to intangible assets at the date when the asset is ready for its intended use. | | | | (f) | Impairment of intangible assets | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | The carrying amounts of intangible assets are reduced to the recoverable amounts when the recoverable amounts are below their carrying amounts (Note 2(15)). |
| | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (15) | Impairment of long-term assets | | | | Fixed assets, construction in progress, right-of-use assets, intangible assets with finite useful lives and long-term equity investments in subsidiaries and associates are tested for impairment if there is any indication that the assets may be impaired at the balance sheet date; intangible assets that are not yet available for their intended use are tested for impairment at least once a year, irrespective of whether there is any indication of impairment. If the result of the impairment test indicates that the recoverable amount of an asset is less than its carrying amount, a provision for impairment and an asset impairment loss are recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less disposal costs and the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognised on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows. | | | | Goodwill that is separately presented in the financial statements is tested at least once a year for impairment, irrespective of whether there is any indication that it may be impaired. In conducting the test, the carrying amount of goodwill is allocated to the related asset group or groups of asset groups which are expected to benefit from the synergies of the business combination. If the result of the test indicates that the recoverable amount of an asset group or a group of asset groups, including the allocated goodwill, is lower than its carrying amount, the corresponding impairment loss is recognised. The impairment loss is first deducted from the carrying amount of goodwill that is allocated to the asset group or group of asset groups, and then deducted from the carrying amounts of other assets within the asset group or group of asset groups in proportion to the carrying amounts of assets other than goodwill. | | | | Once the above asset impairment loss is recognised, it will not be reversed for the value recovered in the subsequent periods. | | | | (16) | Employee benefits | | | | Employee benefits refer to all forms of consideration or compensation given by the Group in exchange for service rendered by employees or for termination of employment relationship, which include short-term employee benefits, post-employment benefits and termination benefits. | | | | (a) | Short-term employee benefits | | | | Short-term employee benefits include wages or salaries, bonus, allowances and subsidies, staff welfare, premiums or contributions on medical insurance, work injury insurance and maternity insurance, housing funds, union running costs and employee education costs, short-term paid absences, etc. The short-term employee benefits actually occurred are recognised as a liability in the accounting period in which the service is rendered by the employees, with a corresponding charge to the profit or loss for the current period or the cost of relevant assets. Non-monetary benefits are measured at fair value. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (16) | Employee benefits (Cont'd) | | | | (b) | Post-employment benefits | | | | The Group classifies post-employment benefit plans as either defined contribution plans or defined benefit plans. Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into a separate fund and will have no obligation to pay further contributions; and defined benefit plans are post-employment benefit plans other than defined contribution plans. During the reporting period, premiums or contributions on basic pensions and unemployment insurance paid for employees belong to defined contribution plans; supplementary retirement benefits for employees are defined benefit plans. | | | | (i) | Defined contribution plans | | | | Basic pensions | | | | The Group’s employees participate in the basic pension plan set up and administered by local authorities of the Ministry of Human Resources and Social Security. Monthly payments of premiums on the basic pensions are calculated according to the bases and percentage prescribed by the relevant local authorities. When employees retire, the relevant local authorities are obliged to pay the basic pensions to them. The amounts based on the above calculations are recognised as liabilities in the accounting period in which the service has been rendered by the employees, with a corresponding charge to the profit or loss for the current period or the cost of relevant assets. | | | | (ii) | Defined benefit plans | | | | The Group also provides employees with supplementary retirement benefits in addition to the insurance system prescribed by the State. Such supplementary retirement benefits belong to defined benefit plans. The defined benefit liabilities recognised on the balance sheet represent the present value of defined benefit obligations less the fair value of the plan assets. The defined benefit obligations are calculated annually by an independent actuary using projected unit credit method at the interest rate of national debt with similar obligation term and currency. Service costs related to supplementary retirement benefits (including current service costs, historical service costs and settled gains or losses) and net interest are recognised in profit or loss for the current period or the cost of related assets, and changes arising from remeasurement of net liabilities or net assets of defined benefit plans are recognised in other comprehensive income. | | | | (c) | Termination benefits | | | | The Group provides compensation for terminating the employment relationship with employees before the end of the employment contracts or as an offer to encourage employees to accept voluntary redundancy before the end of the employment contracts. The Group recognises a liability arising from compensation for termination of the employment relationship with employees, with a corresponding charge to profit or loss for the current period at the earlier of the following dates: 1) when the Group cannot unilaterally withdraw an employment termination plan or a curtailment proposal; 2) when the Group recognises costs or expenses for a restructuring that involves the payment of termination benefits. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (16) | Employee benefits (Cont'd) | | | | (c) | Termination benefits (Cont’d) | | | | Early retirement benefits | | | | The Group offers early retirement benefits to those employees who accept early retirement arrangements. The early retirement benefits refer to the salaries and social security contributions to be paid to and for the employees who accept voluntary retirement before the normal retirement date prescribed by the State, as approved by the management. The Group pays early retirement benefits to those early retired employees from the early retirement date until the normal retirement date. The Group accounts for the early retirement benefits in accordance with the treatment for termination benefits, in which the salaries and social security contributions to be paid to and for the early retired employees from the off-duty date to the normal retirement date are recognised as liabilities with a corresponding charge to the profit or loss for the current period. The differences arising from the changes in the respective actuarial assumptions of the early retirement benefits and the adjustments of benefit standards are recognised in profit or loss in the period in which they occur. | | | | The termination benefits expected to be paid within one year since the balance sheet date are classified as employee benefits payable. | | | | (17) | Dividend distribution | | | | Cash dividends are recognised as liabilities in the period in which the dividends are approved at the shareholders’ meeting. | | | | (18) | Provisions | | | | Provisions for product warranties, compensation to suppliers, etc. are recognised when the Group has a present obligation, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be measured reliably. | | | | A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factors on a contingency, such as the risks, uncertainties and the time value of money, are taken into account as a whole in reaching the best estimate of a provision. Where the effect of the time value of money is material, the best estimate is determined by discounting the related future cash outflows. The increase in the discounted amount of the provision arising from passage of time is recognised as interest expense. | | | | The carrying amount of provisions is reviewed at each balance sheet date and adjusted to reflect the current best estimate. | | | | The provisions expected to be settled within one year since the balance sheet date are classified as current liabilities. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (19) | Revenue | | | | The Group manufactures automobiles and automobile parts and sells them to distributors and end customers. In addition, the Group also provides customers with auto maintenance and additional quality warranty services. The Group recognises revenue at the amount of the consideration that is entitled to be charged by the Group as expected when the customer obtains control over relevant goods or services. | | | | (a) | Selling automobiles and automobile parts to distributors and end customers | | | | The Group manufactures automobiles and automobile parts and sells such products to distributors and end customers. The Group recognises revenue from sales of automobiles after they are delivered as prescribed in the contract, customers have accepted the products and the delivery documents have been signed by both parties. The Group recognises revenue from sales of parts after they are delivered to the designated location as prescribed in the contract, customers have accepted the products and the delivery documents have been signed by both parties. Where two or more obligations are included in a contract between the Group and the customers, at the beginning date of the contract, the Group allocates the transaction price to individual obligation in the relative proportion to the individual selling prices of products or services committed in each individual obligation. When the individual selling price is unobservable, the Group makes reasonable estimates on the individual selling price with comprehensive consideration to all available information, and by using market adjustment method, cost plus method, etc. The credit periods granted by the Group to distributors and end customers are generally within one year and no more than two years, which is consistent with the industry practice, and there is no significant financing component. The Group provides product warranties for automobiles and automobile parts as required by laws and regulations, and recognises the corresponding provisions (Note 2(18)). The Group provides distributors and end customers with sales discounts based on sales volume, and related revenue is recognised at contract consideration net of the discount amount estimated based on historical experience and using the expected value method. | | | | (b) | Rendering of services | | | | The Group provides customers with car maintenance and additional quality assurance services, and recognizes revenue within a period of time based on the progress of the performance of the services provided. According to the nature of the service provided, the performance progress is determined in accordance with the value of the labour provided to the customer to the customer or the cost of the provided labour to the total labour cost. | | | | When the Group recognises revenue based on the stage of completion, the amount with unconditional collection right obtained by the Group is recognised as accounts receivable, and the rest is recognised as contract assets. Meanwhile, loss provision for accounts receivable and contract assets are recognised on the basis of ECL (Note 2(8)). If the contract price received or receivable exceeds the amount for the completed service, the excess portion will be recognised as contract liabilities. Contract assets and contract liabilities under the same contract are presented on a net basis. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | | | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (20) | Government grants | | | | Government grants refer to the monetary or non-monetary assets obtained by the Group from the government, including support funds for enterprise development, financial subsidies, etc. | | | | Government grants are recognised when the grants can be received and the Group can comply with all attached conditions. If a government grant is a monetary asset, it will be measured at the amount received or receivable. If a government grant is a non-monetary asset, it will be measured at its fair value. If it is unable to obtain its fair value reliably, it will be measured at its nominal amount. | | | | Government grants related to assets refer to government grants which are obtained by the Group for the purposes of purchase, construction or acquisition of the long-term assets. Government grants related to income refer to the government grants other than those related to assets. | | | | Government grants related to assets are recorded as deferred income and recognised in profit or loss on a reasonable and systemic basis over the useful lives of the assets. Government grants related to income that compensate future costs, expenses or losses are recorded as deferred income and recognised in profit or loss; government grants related to income that compensate incurred costs, expenses or losses are recognised in profit or loss directly for the current period. | | | | The Group adopts the same presentation method for similar government grants. | | | | Government grants related to ordinary activities are included in operating profit. Otherwise, they are recorded in non-operating income. | | | | Financial discounts directly received by the Group are deducted against related borrowing costs. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (21) | Deferred tax assets and deferred tax liabilities | | | | Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differences arising between the tax bases of assets and liabilities and their carrying amounts (temporary differences). Deferred tax asset is recognised for the deductible losses that can be carried forward to subsequent years for deduction of the taxable profit in accordance with the tax laws. No deferred tax liability is recognised for a temporary difference arising from the initial recognition of goodwill. No deferred tax asset or deferred tax liability is recognised for the temporary differences resulting from the initial recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or deductible losses). At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. | | | | Deferred tax assets are only recognised for deductible temporary differences, deductible losses and tax credits to the extent that it is probable that taxable profit will be available in the future against which the deductible temporary differences, deductible losses and tax credits can be utilised. | | | | Deferred tax liabilities are recognised for taxable temporary differences arising from investments in subsidiaries and associates, except where the Group is able to control the timing of reversal of such temporary differences, and it is probable that the temporary differences will not reverse in the foreseeable future. When it is probable that the deductible temporary differences arising from investments in subsidiaries and associates will be reversed in the foreseeable future and that the taxable profit will be available in the future against which the deductible temporary differences can be utilised, the corresponding deferred tax assets are recognised. | | | | Deferred tax assets and deferred tax liabilities are offset when: ? the deferred tax assets and deferred tax liabilities are related to the same tax payer within the Group and the same taxation authority; and, ? that tax payer within the Group has a legally enforceable right to offset current tax assets against current tax liabilities. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (22) | Leases | | | | A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. | | | | The Group as the lessee | | | | At the commencement date, the Group shall recognise the right-of-use asset and measure the lease liabilities at the present value of the lease payments that are not paid at that date. Lease payments include fixed payments, the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and payments of penalties for terminating the lease if the lessee exercises an option to terminate the lease. Variable lease payments in proportion to sales are excluded from lease payments and recognised in profit or loss as incurred. Lease liabilities that are due within one year (inclusive) as from the balance sheet date are included in the current portion of non-current liabilities. | | | | The Group's right-of-use assets represent leased buildings. Right-of-use assets are measured initially at cost which comprises the amount of the initial measurement of lease liabilities, any lease payments made at or before the commencement date and any initially direct costs, less any lease incentives received. If it is reasonably probable that the Group will obtain ownership of the underlying asset by the end of the lease term, the asset is depreciated over its remaining useful life; otherwise the asset is depreciated over the shorter of the lease term and its remaining useful life. The carrying amounts of the right-of-use assets are reduced to the recoverable amounts when the recoverable amounts are below their carrying amounts (Note 2(15)). | | | | For short-term leases with a term of 12 months or less and leases of an individual asset (when new) of low value, the Group may, instead of recognising right-of-use assets and lease liabilities, recognise the lease payments in the cost of the underlying assets or in profit or loss for the current period on a straight-line basis over the lease term. | | | | The Group shall account for a lease modification as a separate lease if both: (1) the modification extends the scope of the lease by adding the right to use one or more underlying assets; (2) the increased consideration is equivalent to the amount of the individual price of the expanded part of the lease scope adjusted according to the contract conditions. | | | | For a lease modification that is not accounted for as a separate lease, the Group shall redetermine the lease term at the effective date of the lease modification, and remeasure the lease liability by discounting the revised lease payments using a revised discount rate, except for the simplified method for contract changes directly caused by COVID-19. For a lease modification which narrows the scope of the lease or shortens the lease term, the Group decreases the carrying amount of the right-of-use asset, and recognises in profit or loss any gain or loss relating to the partial or full termination of the lease. For other changes which lead to the remeasurement of lease liabilities, the Group correspondingly adjusts the carrying amount of the right-of-use asset. | | | | For the rental waivers due to COVID-19 and for the period ended before 30 June 2021 only, the Group applies the simplified method, records the undiscounted waivers in profit or loss and adjusts lease liability when the agreement is reached to dismiss the original payment obligation. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (22) | Leases (Cont’d) | | | | The Group as the lessor | | | | A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. An operating lease is a lease other than a finance lease. | | | | As a lessor, the Group has no financing liabilities. When the Group leases free buildings, the rental income from operating leases is recognized on a straight-line basis during the lease term. | | | | (23) | Segment information | | | | The Group identifies operating segments based on the internal organisation structure, management requirements and internal reporting system, and discloses segment information of reportable segments on the basis of operating segments. | | | | An operating segment is a component of the Group that satisfies all of the following conditions: (1) the component is able to earn revenues and incur expenses from its ordinary activities; (2) whose operating results are regularly reviewed by the Group’s management to make decisions about resources to be allocated to the segment and to assess its performance, and (3) for which the information on financial position, operating results and cash flows is available to the Group. Two or more operating segments that have similar economic characteristics and satisfy certain conditions can be aggregated into one single operating segment. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) |
| (24) | Critical accounting estimates and judgements | | | | The Group continually evaluates the critical accounting estimates and key judgements applied based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. | | | | (a) | Critical judgements on applying the accounting policies | | | | (i) | Classification of financial assets | | | | Significant judgements made by the Group in the classification of financial assets include business model and analysis on contractual cash flow characteristics. | | | | The Group determines the business model for financial assets management on the group basis, and factors to be considered include the methods for evaluating the financial assets performance and reporting such performance to key management personnel, the risks relating to the financial assets performance and corresponding management methods, the ways in which related business management personnel are remunerated, etc. | | | | When assessing whether contractual cash flow characteristics of financial assets are consistent with basic lending arrangement, key judgements made by the Group include: the possibility of changes in time schedule or amount of the principal during the lifetime due to reasons such as repayment in advance; whether interest only includes time value of money, credit risk, other basic lending risks and considerations for costs and profits. For example, whether the repayment in advance only reflects the principal outstanding and corresponding interest and reasonable compensation paid for early termination of the contract. | | | | (ii) | Judgement on significant increase in credit risk | | | | Judgement made by the Group for significant increase in credit risk is mainly based on whether the overdue days exceed 30 days, or whether one or more of the following indicators change significantly: business environment of the debtor, internal and external credit rating, significant changes in actual or expected operating results, significant decrease in value of collateral or credit rate of guarantor, etc. | | | | Judgement made by the Group for the occurrence of credit impairment is mainly based on whether the overdue days exceed 90 days (i.e., a default has occurred), or whether one or more of the following conditions is/are satisfied: the debtor is suffering significant financial difficulties, the debtor is undergoing other debt restructuring, or the debtor probably goes bankrupt, etc. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (24) | Critical accounting estimates and judgements (Cont’d) | | | | (a) | Critical judgements in applying the accounting policies (Cont’d) | | | | (iii) | Judgement on capitalisation of development expenditures | | | | Development expenditures are capitalised when the criteria in Note 2(14)(e) are fulfilled. The assessments on whether the criteria for capitalisation of development expenditures have been met involve judgements of the Group, including the technical feasibility of the project, the likelihood of the project generating sufficient future economic benefits and the timing to start capitalisation particularly. The Group makes the judgements on the capitalisation of development expenditures and records the process in meeting minutes based on feasibility analysis, regular review on the development project phase, etc. | | | | (iv) | Timing of revenue recognition | | | | The Group sells automobiles and automobile parts to distributors or end customers. The Group recognises revenue from sales of automobiles after they are delivered as prescribed in the contract, distributors or end customers have accepted the products and the delivery documents have been signed by both parties. The Group recognises revenue from sales of parts after they are delivered to the designated location as prescribed in the contract, distributors or end customers have accepted the products and the delivery documents are signed by both parties. Thereafter, the distributors or end customers own the products, have the right to set prices independently, and bear the risks from price fluctuation or damage of the products. The distributors or end customers have obtained the control of the products after accepting the products. Therefore, the Group recognises the sales revenue of the products at the time when the delivery documents have been signed. | | | | (v) | Sales with product warranties | | | | The Group provides statutory warranty for automobiles and automobile parts, and the periods and terms of such warranty comply with the requirements of laws and regulations related to the products. The Group does not provide any significant additional service or additional warranty for this purpose, thus this kind of warranty cannot be identified as a separate performance obligation. In addition, the Group also offers additional warranty other than the requirements of laws and regulations, which is identified as a separate performance obligation. The Group recognises the revenue of the additional warranty over time during the period when services are rendered. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (24) | Critical accounting estimates and judgements (Cont’d) | | | | (b) | Critical accounting estimates and key assumptions | | | | The critical accounting estimates and key assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year are outlined below: | | | | (i) | | |
| | Scenarios | | | Base | Bad | Good | | | | | | | Gross domestic product | 14.25% | 14.15% | 14.34% | | Money supply | 9.20% | 7.72% | 10.68% |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (24) | Critical accounting estimates and judgements (Cont’d) | | | | (b) | Critical accounting estimates and key assumptions (Cont’d) |
| (ii) | Impairment of long-term assets | | | | The Group assesses whether there is any indication that non-current assets other than financial assets may be impaired at the balance sheet date. When there are indications showing the carrying amounts of such assets cannot be recovered, an impairment test will be performed. | | | | When the carrying amount of non-current assets or asset groups other than financial assets is higher than the recoverable amount, which is the higher of an asset’s fair value less disposal costs and the present value of the future cash flows expected to be derived from the asset, it shows non-current assets or asset groups are impaired. | | | | The amount of an asset’s fair value less disposal costs was determined by the price of a sale agreement in a fair trade, less the costs that are directly attributable to the disposal of the asset. Where there is no sales agreement but there is an active market of assets, the amount is determined by the market price less the costs that are directly attributable to the disposal of the asset. The market price of assets is determined by the considerations provided by the buyer. Where there is no sales agreement or active market of assets, the amount of an asset’s fair value less disposal costs was determined based on the best information available, with reference to the latest transaction price or results of similar assets of the same industry. | | | | Disposal costs include legal cost, taxes and handling fee related to asset disposal, and direct costs incurred to bring the assets to a saleable state.. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (24) | Critical accounting estimates and judgements (Cont’d) | | | | (b) | Critical accounting estimates and key assumptions (Cont’d) | | | | (iii) | Income tax and deferred income tax | | | | The Group is subject to enterprise income tax in multiple regions. There are some transactions and events for which the ultimate tax treatment is uncertain during the ordinary course of business. Significant judgement is required from the Group in determining the provision for income taxes in each of these regions. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. | | | | As stated in Note 3(2), the Company is a high-tech enterprise. The “High-Tech Enterprise Certificate” is effective for three years. Upon expiration, application for high-tech enterprise assessment should be submitted again to the relevant government authorities. Based on the past experience of reassessment for high-tech enterprise upon expiration and its actual conditions, the Company considers that it is able to obtain the qualification for high-tech enterprises in the next 3 years, and therefore a preferential tax rate of 15% is used to calculate the corresponding deferred income tax. If the Company cannot obtain the qualification for high-tech enterprise upon expiration, the Company is subject to a statutory tax rate of 25% for the calculation of income tax, which further influences the recognised deferred tax assets, deferred tax liabilities and income tax expenses. | | | | Deferred tax assets are recognised for the deductible tax losses that can be carried forward to subsequent years to the extent that it is probable that taxable profit will be available in the future against which the deductible tax losses can be utilised. Taxable profit that will be available in the future includes the taxable profit that will be realised through ordinary course of business and the taxable profit that will be increased upon the reversal of taxable temporary differences incurred in prior periods. Judgements and estimates are required to determine the time and amounts of taxable profit in the future. Any difference between the reality and the estimate may result in adjustment to the carrying amount of deferred tax assets. | | | | (iv) | Provisions | | | | The Group undertakes after-sales repair or replacement obligations for automobiles sold based on the after-sales service agreement. Management estimates related provisions based on historical after-sales service data, including the repair and replacement provided as well as current trends. Factors that may impact the estimation of warranty costs include improvement of the Group’s productivity and production quality, as well as changes in related parts and labour costs. Any increase or decrease in provisions will have impact on profit or loss of the Group in the future. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 2 | Summary of significant accounting policies and accounting estimates (Cont’d) | | | | (24) | Critical accounting estimates and judgements (Cont’d) | | | | (b) | Critical accounting estimates and key assumptions (Cont’d) |
| (v) | Provision for inventories | | | | The Group's inventories are stated at the lower of cost and net realisable value. Net realisable value of inventories is the amount of the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sales and related taxes. | | | | If the management revises the estimated selling price of the inventory, the estimated costs to be incurred by the time of completion, and the estimated selling expenses and related taxes, the revised estimated selling price is lower than the currently adopted estimated selling price, or the revised until The estimated costs, estimated sales expenses, and related taxes and fees at the completion of the project are higher than the currently adopted estimates, the Group needs to make provision for inventory. | | | | If the actual selling prices, costs to completion, selling and distribution expenses and related taxes are higher or lower than management’s estimates, the Group shall recognise the relevant differences in the consolidated income statement during the corresponding accounting period. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 3 | Taxation | | | | (1) | The main categories and rates of taxes applicable to the Group are set out below: | | | | Category | Taxation basis | Tax rate | | | | | | Corporate income tax (a) | Taxable income | 15% and 25% | | VAT (b) | Taxable value-added amount (Tax payable is calculated by multiplying the taxable sales amount by the applicable tax rate less deductible input VAT of the current period) | 13%, 9% and 6% | | Consumption tax (c) | Taxable sales amount | 3%, 5% and 9% | | City maintenance and construction tax (d) | The payment amount of VAT and consumption tax | 5% and 7% |
| (a) | Pursuant to the Circular on Enterprise Income Tax Policy Concerning Deductions for Equipment and Appliances (Cai Shui [2018] No. 54) and An announcement on extending the period of implementation of some preferential tax policies (Cai Shui [2021] No. 06) relevant regulations issued by the State Taxation Administration, during the period from 1 January 2018 to 30 June 2021, the cost of newly purchased equipment with the original cost less than RMB5 million can be fully deducted against taxable profit in the next month after the asset is put into use, instead of being depreciated annually for tax filing. Pursuant to the Circular on further Increasing the Pre-tax Deduction for Research and Development Expenses (Cai Shui [2021] No. 13) issued by the Ministry of Finance, the State Taxation Administration and the Ministry of Science and Technology and relevant regulations, during the period from 1 January 2021 to 30 June 2021, the Groups’ actual research and development expenses that are not recognised as intangible assets but included in profit or loss are allowed to 100% pre-tax additional deduction; those expenses recognised as intangible assets can be amortised before tax at 200% of the costs of intangible assets. | | | | (b) | Pursuant to the Announcement on Relevant Policies for Deepening Value-Added Tax Reform (Announcement [2019] No. 39) and relevant regulations jointly issued by the Ministry of Finance, the State Taxation Administration and the General Administration of Customs, the Group’s taxable products sales revenue is subject to the VAT at the rate of 13%. The Group's real estate leasing business is subject to the VAT at the rate of 9%. The interest income from its wholly-owned subsidiaries is subject to VAT at the rate of 6%. | | | | (c) | Pursuant to the Interim Regulations of the People's Republic of China on Consumption Tax promulgated by the State Council (Order No. 539 of the State Council of the People's Republic of China) and the Notice of Ministry of Finance and State Taxation Administration on Adjusting Consumption Tax Policies for Passenger Cars (Cai Shui [2008] No. 105), the consumption tax rates of the Group's taxable products are 3%, 5% and 9%. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 3 | Taxation (Cont’d) | | | | (1) | The main categories and rates of taxes applicable to the Group are set out below(Cont’d): | | | | (d) | Pursuant to the Circular of the State Council on Unifying the Collection of City Construction and Maintenance Tax and Educational Surcharge on Domestic and Foreign-Owned Enterprises and Individuals (Guo Fa [2010] No. 35) issued by the State Council, the Group is subject to city construction and maintenance tax at the rates of 5% and 7%. | | | | (2) | Tax preference | | | | Pursuant to the Circular of Jiangxi High-Tech Enterprise Certification Leading Group on the Announcement of the First Batch of High-Tech Enterprises of Jiangxi Province for the year 2018 (Gan Gao Qi Ren Fa [2018] No. 3), the Company is certified as a high-tech enterprise, and the valid term is three years. During the period from 1 January 2018 to 31 December 2020, the Company was subject to enterprise income tax at the rate of 15%. At present, the company is re-identified as a high-tech enterprise. | | | | In 2021, except for the Company, the Company’s wholly-owned companies, including JMC Heavy Duty Vehicle Co., Ltd. (“JMCH”), Taiyuan Jiangling Motive Power Co., Ltd. (“JMPC”), Jiangling Motor Sales Co., Ltd. (“JMCS”), Shenzhen Fujiang New Energy Automobile Sales Co., Ltd. (“SZFJ”), and Guangzhou Fujiang New Energy Automobile Sales Co., Ltd. (“GZFJ”),were subject to the enterprise income tax at the rate of 25%. | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements | | | | (1) | Cash and cash equivalents | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Bank balances (a) | 10,948,621,070 | | 11,121,955,129 | | Other cash and cash equivalents (b) | 1,565,665 | | - | | | 10,950,186,735 | | 11,121,955,129 | | | | | | | (a) | As at 30 June 2021, cash at bank of the Group deposited with Jiangling Motor Group Finance Company (“JMCF”) was RMB771,587,928 (31 December 2020: RMB1,231,825,734) (Note 7(6)), and interest was calculated at 1.725% to 2.25% (2020: 0.455% to 3.30%) per annum, which was the interest rate applied to deposits with the same term. | | | | JMCF, a holding subsidiary of Jiangling Motors Group Co., Ltd (“JMCG”), is a non-banking financial institution. JMCG holds 50% equity capital of Nanchang Jiangling Investment Co., Ltd. (“JIC”), a main shareholder of the Company. | | (b) | As at 30 June 2021, Other cash and cash equivalents of RMB 1,565,665 (December 31, 2020: none) are margin deposits deposited for the Group to apply to the bank for the issuance of bank acceptance drafts. | | (2) | Financial assets held for trading | | | | | 30 June 2021 | | 31 December 2020 | | | | | | Structured Deposits | 553,211,507 | | 803,892,985 |
| (3) | Accounts receivable | | | | 30 June 2021 | | 31 December 2020 | | | | | | Accounts receivable | 3,628,257,248 | | 3,233,785,212 | | Less: Provision for bad debts | (226,335,444) | | (233,902,000) | | 3,401,921,804 | | 2,999,883,212 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (3) | Accounts receivable (Cont’d) | | | | (a) | The ageing of accounts receivable is analysed as follows: | | | | | 30 June 2021 | | 31 December 2020 | | | | | | Within 1 year | 3,030,225,204 | | 2,729,338,870 | | 1 to 2 years | 148,995,102 | | 18,746,837 | | 2 to 3 years | 404,147,862 | | 477,066,625 | | Over 3 years | 44,889,080 | | 8,632,880 | | | 3,628,257,248 | | 3,233,785,212 |
| (b) | As at 30 June 2021, the five largest accounts receivable aggregated by debtor were analysed as follows: | | | | | Balance | | Amount of provision for bad debts | | % of total balance | | | | | | | | | Company 1 | 869,532,495 | | (528,716) | | 23.97% | | Company 2 | 151,108,994 | | (844,088) | | 4.16% | | Company 3 | 143,474,765 | | (63,138) | | 3.95% | | Company 4 | 141,613,288 | | (76,656) | | 3.90% | | Company 5 | 90,840,644 | | (39,304) | | 2.50% | | | 1,396,570,186 | | (1,551,902) | | 38.48% |
| | | (c) | Provision for bad debts | | | | For accounts receivable, the Group measures the loss provision based on the lifetime ECL regardless of whether there is a significant financing component. | | | | (i) | Accounts receivable for which provision for bad debts is made on the individual basis are analysed as follows: |
| | 30 June 2021 | | Book balance | | Provision for bad debts | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | New energy subsidies receivable i) | 103,180,418 | | 100% | | (103,180,418) | | Receivables for automobiles ii) | 81,112,880 | | 100% | | (81,112,880) | | | 184,293,298 | | | | (184,293,298) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (3) | Accounts receivable (Cont’d) | | | | (c) | Provision for bad debts (Cont’d) | | | | (i) | Accounts receivable for which provision for bad debts is made on the individual basis are analysed as follows (Cont’d): |
| | 31 December 2020 | | | | | | | | Book balance | | Provision for bad debts | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | New energy subsidies receivable i) | 103,180,418 | | 100% | | (103,180,418) | | Receivables for automobiles ii) | 83,112,880 | | 100% | | (83,112,880) | | | 186,293,298 | | | | (186,293,298) |
| i) As at 30 June 2021, government subsidies receivable for new energy automobiles amounted to RMB103,180,418 (31 December 2020: RMB103,180,418). As the corresponding new energy vehicles may not meet the corresponding subsidy policy standards, the Group considered the receivables cannot be collected, therefore, full provision was made for those receivables. | | | | ii) As at 30 June 2021 and 31 December 2020, since aforesaid companies in debts had difficulties in operation and were involved in several legal proceedings, the Group considered the receivables cannot be collected, therefore, full provision was made for those receivables. |
| (ii) | Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows: | | | | Grouping - Sales of general automobiles: |
| | 30 June 2021 | | | | | | | | Book balance | | Provision for bad debts | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | Not overdue | 2,634,165,630 | | 0.04% | | (1,151,080) | | Overdue for 1 to 30 days | 179,467,156 | | 0.04% | | (79,794) | | Overdue for 31 to 60 days | 3,750,054 | | 1.60% | | (59,944) | | Overdue for 61 to 90 days | 2,932,562 | | 2.52% | | (73,907) | | Overdue over 90 days | 10,095,272 | | 8.83% | | (891,821) | | | 2,830,410,674 | | | | (2,256,546) | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) |
| (3) | Accounts receivable (Cont’d) | | | | (c) | Provision for bad debts (Cont’d) | | | | (ii) | Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows (Cont’d): |
| Grouping - Sales of general automobiles (Cont’d): |
| | 31 December 2020 | | | | | | | | Book balance | | Provision for bad debts | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | Not overdue | 2,092,329,084 | | 0.21% | | (4,395,983) | | Overdue for 1 to 30 days | 262,730,035 | | 0.21% | | (551,996) | | Overdue for 31 to 60 days | 345,798 | | 6.35% | | (21,961) | | Overdue for 61 to 90 days | 1,936,800 | | 10.74% | | (208,085) | | Overdue over 90 days | 17,757,747 | | 17.59% | | (3,123,783) | | | 2,375,099,464 | | | | (8,301,808) |
| Grouping - Sales of new energy automobiles: |
| | 30 June 2021 | | Book balance | | Provision for bad debts | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | Not overdue | 122,873,663 | | 5.01% | | (6,160,075) | | Overdue for 1 to 30 days | - | | — | | - | | Overdue for 31 to 60 days | - | | — | | - | | Overdue for 61 to 90 days | - | | — | | - | | Overdue over 90 days | 155,710,138 | | 21.05% | | (32,783,514) | | | 278,583,801 | | | | (38,943,589) |
| | 31 December 2020 | | Book balance | | Provision for bad debts | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | Not overdue | 149,343,763 | | 6.28% | | (9,378,788) | | Overdue for 1 to 30 days | - | | — | | - | | Overdue for 31 to 60 days | 194,083,088 | | 14.52% | | (28,173,753) | | Overdue for 61 to 90 days | - | | — | | - | | Overdue over 90 days | 3,993,700 | | 16.25% | | (649,037) | | | 347,420,551 | | | | (38,201,578) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (3) | Accounts receivable (Cont’d) | | | | (c) | Provision for bad debts (Cont’d) | | | | (ii) | Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows (Cont’d): |
| Grouping - Spare parts: | | | | | 30 June 2021 | | Book balance | | Provision for bad debts | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | Not overdue | 334,969,475 | | 0.25% | | (842,011) |
| | 31 December 2020 | | Book balance | | Provision for bad debts | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | Not overdue | 288,024,625 | | 0.30% | | (864,074) | | Overdue for 1 to 30 days | 21,425,030 | | 0.30% | | (64,275) | | Overdue for 31 to 60 days | 11,544,651 | | 0.50% | | (57,723) | | Overdue for 61 to 90 days | 1,809,917 | | 0.60% | | (10,860) | | Overdue over 90 days | 2,167,676 | | 5.00% | | (108,384) | | | 324,971,899 | | | | (1,105,316) | | |
| (iii) | For the six months ended 30 June 2021, The provision for bad debts amounted to RMB7,566,557 was reversed. The significant amounts collected or reversed were as follows: | | | | | Reasons for reversal/recovery | Basis and justification for determining the provision for bad debts | Amount of reversal/ recovery | Recovery method | | | | | | | | Accounts receivable 1 | The actual receipt of account receivables relating to the provision for bad debts made in the prior period. | The aforesaid companies in debts had difficulties in operation and were involved in several legal proceedings, the Group considered the receivables cannot be collected, therefore, full provision was made for those receivables. | 2,000,000 | Received | | (d) | ? For the six months ended 30 June 2021, The group has no actual write-off accounts receivable. | | | | e) | As at 30 June 2021 and 31 December 2020, there were no accounts receivable pledged. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) |
| (4) | Financing receivables | | | | 30 June 2021 | | 31 December 2020 | | | | | | Financing receivables | 428,573,213 | | 815,583,669 |
| | | The Group endorses the notes receivable as required by daily fund management, which also met the criteria for derecognition, and therefore classified those notes receivable as financial assets at fair value through other comprehensive income. | | | | The Group had no notes receivable for which the provision for impairment was made on the individual basis, and measured provision for bad debts based on the lifetime ECL. As at 30 June 2021 and 31 December 2020, the acceptors of the Groups’ notes receivable were mainly four major state-owned banks or national joint-stock banks. Therefore, the Group expected there was no significant loss on related bank acceptance notes arising from non-performance by these banks. | | | | As at 30 June 2021, the Group had no bank acceptance notes receivable that have been endorsed or discounted but not yet matured presented in financing receivables. | | | | As at 30 June 2021, the notes receivables were endorsed or discounted by the Group but not matured as follows: | | | | | | | | Derecognised | | Not derecognised | | | | | | Bank acceptance notes | 821,924,876 | | - |
| (5) | Advances to suppliers | | | | (a) | The ageing of advances to suppliers is analysed below: | | | | | 30 June 2021 | | 31 December 2020 | | | Amount | | % of total balance | | Amount | | % of total balance | | | | | | | | | | | Within 1 year | 579,396,268 | | 100% | | 452,714,683 | | 100% | | | | (b) | As at 30 June 2021, the five largest advances to suppliers aggregated by debtor were analysed as follows: | | | | | Amount | | % of total balance | | | | | | | Company 1 | 489,145,695 | | 84.42% | | Company 2 | 57,098,374 | | 9.85% | | Company 3 | 13,333,848 | | 2.30% | | Company 4 | 8,432,977 | | 1.46% | | Company 5 | 3,343,681 | | 0.58% | | | 571,354,575 | | 98.61% |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (6) | Other receivables | | | | | 30 June 2021 | | 31 December 2020 | | | | | | Interest receivable from cash at bank | 85,462,590 | | 60,283,645 | | Import working capital advances | 25,000,000 | | 35,000,000 | | Advances for gas fee | 14,376,238 | | 7,367,141 | | Deposits receivable | 8,977,131 | | 7,152,745 | | Advances for research and development projects | 5,160,914 | | 4,559,669 | | Cash advance | 796,203 | | 761,613 | | Others | 76,801,941 | | 14,082,669 | | | 216,575,017 | | 129,207,482 | | | | | | | Less: Provision for bad debts | (395,088) | | (217,909) | | | 216,179,929 | | 128,989,573 |
| (a) | The ageing of other receivables is analysed as follows: | | | | | 30 June 2021 | | 31 December 2020 | | | | | | Within 1 year | 211,315,522 | | 128,336,086 | | Over 1 year | 5,259,495 | | 871,396 | | | 216,575,017 | | 129,207,482 |
| (b) | Provision for losses and changes in book balance statements: | | | | | | | Stage 1 | | Stage 3 | | | | | 12-month ECL (grouping) | | Lifetime ECL (credit-impaired) | | Total | | | | Book balance | Provision for bad debts | | Book balance | Provision for bad debts | | Provision for bad debts | | | | | | | | | | | | 31 December 2020 | 129,207,482 | (217,909) | | - | - | | (217,909) | | | Balance increase in the current period | 87,367,535 | - | | - | - | | - | | | Including: Write-off in the current period | - | - | | - | - | | - | | | Provision for bad debts in the current period | | (177,179) | | - | - | | (177,179) | | | - | | 30 June 2021 | 216,575,017 | (395,088) | | - | - | | (395,088) | | | | | | The Group had no other receivables transferred from Stage 1 to Stage 3, and no other receivables reversed from Stage 3 to Stage 1. | | | As at June 30, 2021, the Group has no other receivables in stage 2 and Stage 3. | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (6) | Other receivables (Cont’d) | | | | (b) | Provision for losses and changes in book balance statements (Cont’d): | | The analysis of other receivables at Stage 1 and Stage 3 is stated below: |
| (i) | As at 30 June 2021 and 31 December 2020, the Group had no other receivables with provision for bad debts on the individual basis. | | | | (ii) | As at 30 June 2021 and 31 December 2020, the Group’s other receivables with provision for bad debts on the grouping basis were analysed below: | | | | Other receivables with provision on the grouping basis at Stage 1: |
| | 30 June 2021 | | 31 December 2020 | | | Book balance | | Provision for losses | | Book balance | | Provision for losses | | | Amount | | Provision ratio | Amount | | Amount | | Provision ratio | Amount | | | | | | | | | | | | Portfolios of interest from cash at bank i): | | | | | | | | | | | Within 1 year | 85,462,590 | | - | - | | 60,283,645 | | - | - | | Grouping - Operating advances and deposits: | | | | | | | | | | | Within 1 year | 125,852,932 | | 0.30% | (379,239) | | 68,052,441 | | 0.32% | (215,154) | | Over 1 year | 5,259,495 | | 0.30% | (15,849) | | 871,396 | | 0.32% | (2,755) | | 216,575,017 | | | (395,088) | | 129,207,482 | | | (217,909) |
| i) As at 30 June 2021 and 31 December 2020, the Group’s interest receivable from cash at bank mainly came from four major state-owned banks or national joint-stock banks. Therefore, the Group expected that there was no material credit risk associated with related interest receivable and thus there was no significant losses on related interest receivable from non-performance by these banks. |
| (c) | ? For the six months ended 30 June 2021, The amount of bad debt provision was RMB 177,179. |
| (d) | ? For the six months ended 30 June 2021, The group has no actual write-off of other receivables. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (6) | Other receivables (Cont’d) |
| (e) | As at 30 June 2021, the five largest other receivables aggregated by debtor were analysed as follows: | | | | | Nature | | Balance | | Ageing | | % of total balance | | Provision for bad debts | | | | | | | | | | | | Company 1 | Assets receivables | | 32,555,714 | | Within 1 year | | 15.03% | | (97,667) | | Company 2 | Advances classified as expenses | | 25,190,512 | | Within 1 year | | 11.63% | | (75,572) | | Company 3 | Advances Assets receivables | | 18,513,359 | | Within 1 year | | 8.55% | | (55,540) | | Company 4 | Assets receivables | | 11,955,220 | | Within 1 year | | 5.52% | | (35,866) | | Company 5 | Advances classified as expenses | | 9,486,001 | | Within 1 year | | 4.38% | | (28,458) | | | | 97,700,806 | | | | 45.11% | | (293,103) |
| (7) | Inventories | | | | (a) | Inventories are summarised by categories as follows: | | | | | | | | 30 June 2021 | | 31 December 2020 |
| | Book balance | | Provision for inventories | | Carrying amount | | Book balance | | Provision for inventories | | Carrying amount | | Materials in transit | 135,266,570 | | - | | 135,266,570 | | 98,887,111 | | - | | 98,887,111 | | Raw materials | 1,099,742,966 | | (88,186,867) | | 1,011,556,099 | | 816,201,410 | | (109,312,198) | | 706,889,212 | | Work in progress | 278,794,412 | | (175,387) | | 278,619,025 | | 268,716,191 | | (175,387) | | 268,540,804 | | Finished goods | 603,112,024 | | - | | 603,112,024 | | 815,055,053 | | - | | 815,055,053 | | Low cost consumables | 148,219,701 | | (32,479,143) | | 115,740,558 | | 160,969,525 | | (32,479,143) | | 128,490,382 | | Materials processed on commission | 34,521,160 | | - | | 34,521,160 | | 68,743,130 | | - | | 68,743,130 | | | 2,299,656,833 | | (120,841,397) | | 2,178,815,436 | | 2,228,572,420 | | (141,966,728) | | 2,086,605,692 |
| (b) | Provision for inventories is analysed as follows: | | | | | | | | | | | | 31 December | | Increase in the current period | | Decrease in the current period | | 30 June |
| | 2020 | | Provision | | Reversal | | Write-off | | 2021 | | | | | | | | | | | | | Raw materials | (109,312,198) | | - | | - | | 21,125,331 | | (88,186,867) | | Work in progress | (175,387) | | - | | - | | - | | (175,387) | | Low cost consumables | (32,479,143) | | - | | - | | - | | (32,479,143) | | | (141,966,728) | | - | | - | | 21,125,331 | | (120,841,397) | | | | | | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (7) | Inventories (Cont'd) |
| (c) | Provision for inventories is as follows: | | | | | | Specific basis for determining net realisable value | | Reason for current period write-off of provision for inventories | | | | Raw materials/Work in progress/Low value consumables | | Based on the estimated selling price, less the estimated costs to completion, estimated selling and distribution expenses and related taxes | | The net realizable value of inventories with provision sales have been achieved |
| (8) | Other current assets | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Taxes Prepaid, Input VAT to be deducted and to be verified | 885,615,580 | | 736,953,815 | | Others | 111,409 | | 415,922 | | | 885,726,989 | | 737,369,737 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (9) | Long-term equity investments | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Associate | | | | | - Hanon Systems (Nanchang) Co., Ltd. (“Hanon Systems”) | 39,232,347 | | 39,496,548 | | | | | | | Less: Provision for impairment of long-term equity investments | - | | - | | | 39,232,347 | | 39,496,548 |
| | | Associate | | | | | | | Movements for the current period | | | | 31 December 2020 | | Increase or decrease in investment | | Share of net profit/(loss) under equity method | | Cash dividends declared by joint ventures | | Provision for impairment | | 30 June 2021 | | Shareholding (%) | | Voting rights (%) | | Ending balance of provision for impairment | | | | | | | | | | | | | | | | | | | | Hanon Systems | 39,496,548 | | - | | (264,201) | | - | | - | | 39,232,347 | | 19.15% | | 33.33% | | - |
Related information of equity in associates is set forth in Note 5(2). NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (10) | Fixed assets | | | | | 30 June 2021 | | 31 December 2020 | | | | | | Fixed assets (a) | 4,782,132,367 | | 5,164,260,516 | | Fixed assets pending for disposal (b) | 3,362,458 | | 1,695,894 | | 4,785,494,825 | | 5,165,956,410 | | | | (a) | Fixed assets |
| . | | Buildings | Machinery and equipment | Motor vehicles | Moulds | Electronic and other equipment | Total | | | | | | | | | | Cost | | | | | | | | 31 December 2020 | 2,300,951,630 | 4,011,283,000 | 353,517,996 | 3,154,261,304 | 4,004,241,347 | 13,824,255,277 | | Increase in the current period | | | | | | | | Transfer from construction in progress | - | 5,283,649 | 4,740,766 | 85,010,394 | 34,570,398 | 129,605,207 | | Other increases | - | - | 7,682,876 | - | 43,215,116 | 50,897,992 | | Decrease in the current period | | | | | | | | Disposal or retirement | (12,050,420) | (163,422,780) | (4,035,565) | (12,990,539) | (32,833,161) | (225,332,465) | | Other decreases | - | (50,897,992) | - | - | - | (50,897,992) | | 30 June 2021 | 2,288,901,210 | 3,802,245,877 | 361,906,073 | 3,226,281,159 | 4,049,193,700 | 13,728,528,019 | | | | | | | | | | Accumulated depreciation | | | | | | | | 31 December 2020 | (573,584,513) | (2,390,076,662) | (232,596,897) | (2,372,671,702) | (2,596,189,492) | (8,165,119,266) | | Increase in the current period | | | | | | | | Provision | (28,448,696) | (110,821,592) | (16,414,567) | (110,466,772) | (167,244,078) | (433,395,705) | | Decrease in the current period | | | | | | | | Disposal or retirement | 4,630,260 | 104,174,319 | 1,549,385 | 12,140,680 | 23,736,787 | 146,231,431 | | 30 June 2021 | (597,402,949) | (2,396,723,935) | (247,462,079) | (2,470,997,794) | (2,739,696,783) | (8,452,283,540) | | | | | | | | | | Provision for impairment | | | | | | | | 31 December 2020 | - | (94,376,123) | (6,070,058) | (343,015,623) | (51,413,691) | (494,875,495) | | Increase in the current period | | | | | | | | Provision | - | - | - | - | - | - | | Decrease in the current period | | | | | | | | Disposal or retirement | - | - | 32,466 | 676,494 | 54,423 | 763,383 | | 30 June 2021 | - | (94,376,123) | (6,037,592) | (342,339,129) | (51,359,268) | (494,112,112) | | | | | | | | | | Carrying amount | | | | | | | | 30 June 2021 | 1,691,498,261 | 1,311,145,819 | 108,406,402 | 412,944,236 | 1,258,137,649 | 4,782,132,367 | | 31 December 2020 | 1,727,367,117 | 1,526,830,215 | 114,851,041 | 438,573,979 | 1,356,638,164 | 5,164,260,516 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (10) | Fixed assets (Cont'd) | | | | (a) | Fixed assets (Cont'd) | | | | For the six months ended 30 June 2021, depreciation charged to fixed assets amounted to RMB433,395,705 (the six months ended 30 June 2020: RMB517,638,550), of which the depreciation expenses charged in the cost of sales, selling and distribution expenses, general and administrative expenses and research and development expenses were RMB336,443,335, RMB1,008,818, RMB63,916,100 and RMB32,027,452 (the six months ended 30 June 2020: RMB398,894,781, RMB1,516,970, RMB81,887,718 and RMB35,339,081), respectively. | | | | The cost of fixed assets transferred from construction in progress amounted to RMB129,605,207 (the six months ended 30 June 2020: RMB80,025,139) (Note 4(11)). |
| (i) | Temporarily idle fixed assets | | | | ? As at 30 June 2021, the fixed assets with a carrying amount of approximately RMB59,246,836 (a cost of RMB1,012,789,184) (31 December 2020: a carrying amount of approximately RMB16,532,578 and a cost of RMB483,214,712) were temporarily idle due to factory relocation, the change of business development, product strategies and product process etc. The analysis is as follows: | | | | | Cost | | Accumulated depreciation | | Provision for impairment | | Carrying amount | | | | | | | | | | | Machinery and equipment | 300,907,156 | | (246,471,314) | | (37,209,692) | | 17,226,150 | | Motor vehicles | 13,706,317 | | (9,122,213) | | (2,498,046) | | 2,086,058 | | Moulds | 479,556,654 | | (151,571,099) | | (327,887,822) | | 97,733 | | Electronic and other equipment | 218,619,057 | | (166,750,609) | | (12,031,553) | | 39,836,895 | | | 1,012,789,184 | | (573,915,235) | | (379,627,113) | | 59,246,836 |
| | | (ii) | Fixed assets with pending certificates of ownership: | | | | | | Carrying amount | | Reasons for not obtaining certificates of ownership | | | | | | | | Buildings | | 275,429,305 | | Pending procedures | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (10) | Fixed assets (Cont’d) | | | | (b) | Fixed assets pending for disposal | | | | | 30 June 2021 | | 31 December 2020 | | | | | | Electronic and other equipment | 2,611,218 | | 1,639,777 | | Machinery and equipment | 662,952 | | 56,117 | | Motor vehicles | 88,288 | | - | | 3,362,458 | | 1,695,894 |
| (11) | Construction in progress |
| | 30 June 2021 | 31 December 2020 | | | Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | | | | | | | | | | Fushan new plant investment project | 642,211,422 | - | 642,211,422 | 522,070,550 | - | 522,070,550 | | Capacity optimization project | 701,633,914 | - | 701,633,914 | 504,378,481 | - | 504,378,481 | | Construction of Xiaolan 600 mu Phase 3 plan | 128,932,841 | - | 128,932,841 | 105,196,107 | - | 105,196,107 | | Engine construction project | 99,021,903 | - | 99,021,903 | 106,148,911 | - | 106,148,911 | | CX756 project | 61,099,732 | - | 61,099,732 | 89,516,432 | - | 89,516,432 | | N822 project | 74,884,781 | - | 74,884,781 | 31,176,961 | - | 31,176,961 | | Collision Simulation Laboratory | 44,998,123 | - | 44,998,123 | 45,422,684 | - | 45,422,684 | | CX743 conversion project | 41,946,927 | - | 41,946,927 | 26,409,132 | - | 26,409,132 | | N356 project | 13,789,890 | - | 13,789,890 | 13,789,890 | - | 13,789,890 | | V348 conversion project | 9,518,173 | - | 9,518,173 | 23,183,603 | - | 23,183,603 | | JF8/CX743 project | 9,173,450 | - | 9,173,450 | 7,347,943 | - | 7,347,943 | | Independently developed gasoline engine project | 1,041,249 | - | 1,041,249 | 1,041,249 | - | 1,041,249 | | N806 Project | 622,136 | - | 622,136 | 622,136 | - | 622,136 | | Stamping/frame Capacity improvement project | 137,377 | - | 137,377 | 137,377 | - | 137,377 | | Other miscellaneous and pending installation projects | 99,665,142 | (691,646) | 98,973,496 | 59,747,960 | (691,646) | 59,056,314 | | | 1,928,677,060 | (691,646) | 1,927,985,414 | 1,536,189,416 | (691,646) | 1,535,497,770 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (11) | Construction in progress (Cont’d) | | | | (a) | Movement of significant projects of construction in progress | | | | Project name | Budget (in RMB 0’000) | | 31 December 2020 | | Increase in the current period | | Transfer to fixed assets in the current period | | Decrease in the current period | | 30 June 2021 | % of project investment in budget | Progress of project | Accumulative capitalised borrowing costs | Including: Borrowing costs capitalised in the current period | Source of fund | | | | | | | | | | | | | | | | | | | | Fushan new plant investment project | 205,200 | | 522,070,550 | | 130,765,582 | | (10,624,710) | | - | | 642,211,422 | 55% | 55% | - | - | Self-owned funds | | Capacity optimization project | 179,462 | | 504,378,481 | | 199,370,623 | | (2,115,190) | | - | | 701,633,914 | 39% | 39% | - | - | Self-owned funds | | Construction of Xiaolan 600 mu Phase 3 plan | 20,977 | | 105,196,107 | | 24,083,522 | | (346,788) | | - | | 128,932,841 | 63% | 63% | - | - | Self-owned funds | | Engine construction project | 67,000 | | 106,148,911 | | 4,002,290 | | (11,129,298) | | - | | 99,021,903 | 69% | 69% | - | - | Self-owned funds | | CX756 project | 19,000 | | 89,516,432 | | 31,100,951 | | (59,517,651) | | - | | 61,099,732 | 69% | 69% | - | - | Self-owned funds | | N822 project | 20,700 | | 31,176,961 | | 43,853,838 | | (146,018) | | - | | 74,884,781 | 36% | 36% | - | - | Self-owned funds | | Collision Simulation Laboratory | 9,651 | | 45,422,684 | | 2,507,361 | | (2,931,922) | | - | | 44,998,123 | 76% | 76% | - | - | Self-owned funds | | CX743 conversion project | 11,006 | | 26,409,132 | | 16,038,805 | | (501,010) | | - | | 41,946,927 | 39% | 39% | - | - | Self-owned funds | | N356 project | 13,600 | | 13,789,890 | | 360,450 | | (360,450) | | - | | 13,789,890 | 80% | 80% | - | - | Self-owned funds | | V348 conversion project | 4,390 | | 23,183,603 | | 5,288,213 | | (18,953,643) | | - | | 9,518,173 | 72% | 72% | - | - | Self-owned funds | | JF8/CX743 project | 13,690 | | 7,347,943 | | 3,281,804 | | (1,456,297) | | - | | 9,173,450 | 95% | 95% | - | - | Self-owned funds | | Independently developed gasoline engine project | 43,200 | | 1,041,249 | | - | | - | | - | | 1,041,249 | 92% | 92% | - | - | Self-owned funds | | N806 Project | 2,860 | | 622,136 | | - | | - | | - | | 622,136 | 70% | 70% | - | - | Self-owned funds | | Stamping/frame Capacity improvement project | 56,778 | | 137,377 | | - | | - | | - | | 137,377 | 81% | 81% | - | - | Self-owned funds | | Other miscellaneous and pending installation projects | | | 59,747,960 | | 76,063,127 | | (21,522,230) | | (14,623,715) | | 99,665,142 | | | 292,897 | - | Self-owned funds and loans | | | | | 1,536,189,416 | | 536,716,566 | | (129,605,207) | | (14,623,715) | | 1,928,677,060 | | | 292,897 | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | Notes to the consolidated financial statements (Cont’d) | | | | (11) | Construction in progress (Cont’d) | | |
| (b) | Provision for impairment of construction in progress | | | | | 31 December 2020 | | Increase in the current period | | Decrease in the current period | | 30 June 2021 | | Reason for provision | | | | | | | | | | | | | Other miscellaneous and pending installation projects | (691,646) | | - | | - | | (691,646) | | The recoverable amount is lower than the book value |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) |
| | | Buildings | | | | | Cost | | | | 31 December 2020 | | 42,736,398 | | Increase in the current period | | | | New lease contracts | | 19,716,958 | | 30 June 2021 | | 62,453,356 | | | | | | Accumulated depreciation | | | | 31 December 2020 | | (14,330,508) | | Increase in the current period | | | | Provision | | (7,354,220) | | 30 June 2021 | | (21,684,728) | | | | | | Provision for impairment | | | | 31 December 2020 | | - | | Increase in the current period | | - | | Decrease in the current period | | - | | 30 June 2021 | | - | | | | | | Carrying amount | | | | 30 June 2021 | | 40,768,628 | | 31 December 2020 | | 28,405,890 |
| For the six months ended 30 June 2021, depreciation of right-of-use assets amounted to RMB7,354,220, of which RMB3,554,214, RMB1,685,693, RMB1,599,215 and RMB515,098 were included in cost of sales and selling distribution expenses, general and administrative expenses and research and development expenses(the six months ended 30 June 2020: RMB5,775,094, RMB1,450,734, RMB 0 and RMB 0), respectively. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (13) | Intangible assets | | | | | Land use rights | Software use fees | Non-patent technologies | After-sales services management model | Others | Total | | Cost | | | | | | | | 31 December 2020 | 751,625,667 | 206,965,791 | 540,153,070 | 36,979,184 | 1,599,516 | 1,537,323,228 | | Increase in the current period | | | | | | | | Transfer from construction in progress | - | 14,623,715 | - | - | - | 14,623,715 | | Internal research and development | - | - | 194,823,495 | - | - | 194,823,495 | | Decrease in the current period | | | | | | | | Disposal | - | - | - | - | - | - | | 30 June 2021 | 751,625,667 | 221,589,506 | 734,976,565 | 36,979,184 | 1,599,516 | 1,746,770,438 | | | | | | | | | | Accumulated amortisation | | | | | | | 31 December 2020 | (181,512,922) | (130,785,042) | (216,248,050) | (36,979,184) | (1,599,516) | (567,124,714) | | Increase in the current period | | | | | | | | Provision | (7,786,924) | (12,666,156) | (56,909,822) | - | - | (77,362,902) | | Decrease in the current period | | | | | | | | Disposal | - | - | - | - | - | - | | 30 June 2021 | (189,299,846) | (143,451,198) | (273,157,872) | (36,979,184) | (1,599,516) | (644,487,616) | | | | | | | | | | Provision for impairment | | | | | | | 31 December 2020 | - | - | (38,806,961) | - | - | (38,806,961) | | Increase in the current period | | | | | | | | Provision | - | - | - | - | - | - | | 30 June 2021 | - | - | (38,806,961) | - | - | (38,806,961) | | | | | | | | | | Carrying amount | | | | | | | | 30 June 2021 | 562,325,821 | 78,138,308 | 423,011,732 | - | - | 1,063,475,861 | | 31 December 2020 | 570,112,745 | 76,180,749 | 285,098,059 | - | - | 931,391,553 |
| For the six months ended 30 June 2021, amortisation charged to intangible assets amounted to RMB77,362,902 (the six months ended 30 June 2020: RMB58,225,513), of which the amounts charged to cost of sales, selling and distribution expenses, general and administrative expenses, and research and development expenses were RMB273,069, RMB223,108, RMB19,015,855 and RMB57,850,870 respectively. (the six months ended 30 June 2020: RMB 273,069,RMB 179,314,RMB 18,893,016 and RMB 38,880,114). | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (13) | Intangible assets (Cont’d) | | | | The Group's development expenditures are set out below: | | | | | 31 December 2020 | | Increase in the current period | | Decrease in the current period | | 30 June 2021 | | Recognised as intangible assets | | Write off | | | | | | | | | | | | | | Automobile products development project | 173,473,242 | | 50,413,638 | | (194,823,495) | | - | | 29,063,385 |
| Expenditures on research and development of the Group incurred in the six months ended 30 June 2021 amounted to RMB776,879,828 (the six months ended 30 June 2020: RMB823,946,960) in total, of which RMB726,466,190 (the six months ended 30 June 2020: RMB696,582,452) was recognised in profit or loss for the current period, RMB21,350,253 (the six months ended 30 June 2020: RMB86,341,229) was recognised as intangible assets for the current period and RMB29,063,385 (the six months ended 30 June 2020: RMB41,023,279) was included in the ending balance of development expenditures. As at 30 June 2021, the intangible assets developed by the Group accounted for 40% (31 December 2020: 31%) of the carrying amount of intangible assets. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) |
| (14) | Deferred tax assets and deferred tax liabilities | | | | (a) | Deferred tax assets before offsetting | | | | | 30 June 2021 | | 31 December 2020 | | | Deductible temporary differences and deductible tax losses | | Deferred tax assets | | Deductible temporary differences and deductible losses | | Deferred tax assets | | | | | | | | | | | Accrued expenses and provisions | 4,818,974,406 | | 1,097,011,961 | | 3,918,637,644 | | 896,970,479 | | Recoverable losses | 1,995,262,058 | | 304,346,957 | | 2,032,780,205 | | 307,105,716 | | Provision for asset impairment | 859,642,508 | | 134,539,799 | | 897,520,189 | | 140,838,024 | | Non-patent technology | 132,289,550 | | 28,462,021 | | 108,124,026 | | 23,281,348 | | Retirement benefits plan | 65,518,693 | | 15,186,804 | | 67,587,000 | | 15,497,050 | | Deferred income | 48,943,773 | | 7,341,566 | | 49,944,625 | | 7,491,694 | | Employee education funds unpaid | 59,205,852 | | 9,272,799 | | 42,695,014 | | 6,607,339 | | Others | 76,045,095 | | 11,456,912 | | 54,068,775 | | 8,189,817 | | | 8,055,881,935 | | 1,607,618,819 | | 7,171,357,478 | | 1,405,981,467 |
| | | Including: | | Expected to be recovered within one year (inclusive) | | | 1,275,807,710 | | | | 1,065,699,235 | | Expected to be recovered after one year | | | 331,811,109 | | | | 340,282,232 | | | | | 1,607,618,819 | | | | 1,405,981,467 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (14) | Deferred tax assets and deferred tax liabilities (Cont’d) |
| (b) | Deferred tax liabilities before offsetting | | | | | 30 June 2021 | | 31 December 2020 | | | Taxable temporary differences | | Deferred tax liabilities | | Taxable temporary differences | | Deferred tax liabilities | | | | | | | | | | | Depreciation of fixed assets | 1,386,782,904 | | 272,291,672 | | 1,247,553,627 | | 235,959,055 | | Net losses related to debt exemption and equity transactions between parent and subsidiary | 785,943,493 | | 117,891,524 | | 682,000,000 | | 102,300,000 | | Amortisation of intangible assets | 40,945,579 | | 6,328,260 | | 38,367,939 | | 5,779,320 | | Differences between the fair value of the identifiable net assets and carrying amount arising from business combinations not under common control | 97,392,184 | | 24,348,046 | | 98,780,656 | | 24,695,164 | | Others | 3,211,507 | | 802,877 | | 1,095,069 | | 273,767 | | | 2,314,275,667 | | 421,662,379 | | 2,067,797,291 | | 369,007,306 | | | | Including: | | Expected to be recovered within one year (inclusive) | | | 171,737,530 | | | | 147,540,386 | | Expected to be recovered after one year | | | 249,924,849 | | | | 221,466,920 | | | | | 421,662,379 | | | | 369,007,306 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (14) | Deferred tax assets and deferred tax liabilities (Cont’d) | | | | (c) | Deductible temporary differences and deductible losses that are not recognised as deferred tax assets are analysed as follows: | | | | | | | | 30 June 2021 | | 31 December 2020 | | | | | | Deductible losses | 117,022,793 | | 171,901,892 | | Deductible temporary differences | 467,558 | | 3,119,574 | | | 117,490,351 | | 175,021,466 |
| | | (d) | Deductible losses that are not recognised as deferred tax assets will be expired in following years: | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | | | | | | 2024 | 117,022,793 | | 171,901,892 | | | | (e) | The net balances of deferred tax assets and liabilities after offsetting are as follows: | | | | | 30 June 2021 | | 31 December 2020 | | | Offsetting amount | Balance after offsetting | | Offsetting amount | Balance after offsetting | | | | | | | | | Deferred tax assets | (279,422,809) | 1,328,196,010 | | (242,012,142) | 1,163,969,325 | | Deferred tax liabilities | (279,422,809) | 142,239,570 | | (242,012,142) | 126,995,164 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (15) | Provision for asset impairment and losses |
| | 31 December 2020 | | Increase in the current period | | Decrease in the current period | | 30 June 2021 | | | | | Reversal | | Write-off | | | | | | | | | | | | | | Provision for bad debts of accounts receivable | 233,902,000 | | - | | (7,566,556) | | - | | 226,335,444 | | Including: Provision for bad debts on the individual basis | 186,293,298 | | - | | (2,000,000) | | - | | 184,293,298 | | Provision for bad debts on the grouping basis | 47,608,702 | | - | | (5,566,556) | | - | | 42,042,146 | | Provision for bad debts of other receivables | 217,909 | | 177,179 | | - | | - | | 395,088 | | Sub-total | 234,119,909 | | 177,179 | | (7,566,556) | | - | | 226,730,532 | | | | | | | | | | | | | Provision for inventories | 141,966,728 | | - | | - | | (21,125,331) | | 120,841,397 | | Provision for impairment of fixed assets | 494,875,495 | | - | | - | | (763,383) | | 494,112,112 | | Provision for impairment of construction in progress | 691,646 | | - | | - | | - | | 691,646 | | Provision for impairment of goodwill | 89,028,412 | | - | | - | | - | | 89,028,412 | | Provision for impairment of intangible assets | 38,806,961 | | - | | - | | - | | 38,806,961 | | Sub-total | 765,369,242 | | - | | - | | (21,888,714) | | 743,480,528 | | | 999,489,151 | | 177,179 | | (7,566,556) | | (21,888,714) | | 970,211,060 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) |
| (16) | Short-term borrowings | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Credit loan | 500,000,000 | | 500,000,000 |
| | | As at June 31 2021, the interest rate for the short-term loan is 2.85% (December 31, 2020: 2.05% to 3.15%). |
| (17) | Derivative financial liabilities | | | | | 30 June 2021 | | 31 December 2020 | | | | | | Derivative financial liabilities - | | | | | Forward exchange contracts | 8,165,742 | | 3,716,727 |
| As at 30 June 2021 and 31 December 2020, derivative financial liabilities mainly represented forward exchange contracts. |
| (18) | Notes payable | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Bank acceptance notes | 1,565,665 | | - |
| (19) | Accounts payable | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Payable for spare parts | 9,207,129,657 | | 9,672,652,729 | | Payable for raw and auxiliary materials | 201,416,746 | | 353,563,148 | | | 9,408,546,403 | | 10,026,215,877 |
| | | As at 30 June 2021, accounts payable with ageing over 1 year amounted to RMB406,639,200 (31 December 2020: RMB431,202,897), which mainly represented materials payable for which settlement price has not yet been determined, and such payables had not been finally settled yet. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (20) | Contract liabilities | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Advances for automobiles and automobile parts | 113,014,269 | | 521,367,837 | | Advances for maintenance and warranty services | 148,455,912 | | 136,685,473 | | | 261,470,181 | | 658,053,310 | | Less: Contract liabilities expected to be included in revenue after one year (Note 4(31)) | (105,589,814) | | (99,526,464) | | | 155,880,367 | | 558,526,846 |
| (21) | Employee benefits payable | | | | | 30 June 2021 | | 31 December 2020 | | | | | | Short-term employee benefits payable (a) | 490,146,268 | | 617,598,452 | | Defined contribution plans payable (b) | 135,984,526 | | 135,699,978 | | Defined benefit plans payable (c) | 3,415,000 | | 3,415,000 | | Termination benefits payable (d) | 2,655,176 | | 2,655,176 | | 632,200,970 | | 759,368,606 |
| (a) | Short-term employee benefits | | | | | | | | | | | | 31 December 2020 | | Increase in the current period | | Decrease in the current period | | 30 June 2021 | | | | | | | | | | Wages and salaries, bonus, allowances and subsidies | 539,376,881 | | 1,009,880,252 | | (1,158,816,011) | | 390,441,122 | | Staff welfare | 26,872,505 | | 54,777,228 | | (47,177,698) | | 34,472,035 | | Social security contributions | 3,877,466 | | 53,558,925 | | (53,401,795) | | 4,034,596 | | Including: Medical insurance | - | | 45,145,334 | | (44,992,082) | | 153,252 | | Work injury insurance | 3,877,466 | | 3,166,398 | | (3,162,671) | | 3,881,193 | | Maternity insurance | - | | 5,247,193 | | (5,247,042) | | 151 | | Housing funds | - | | 73,446,013 | | (73,276,315) | | 169,698 | | Labour union funds and employee education funds | 47,471,600 | | 39,788,461 | | (26,231,244) | | 61,028,817 | | Other short-term employee benefits | - | | 4,848,118 | | (4,848,118) | | - | | | 617,598,452 | | 1,236,298,997 | | (1,363,751,181) | | 490,146,268 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (21) | Employee benefits payable (Cont’d) | | | | (b) | Defined contribution plans | | | | | 31 December 2020 | | Increase in the current period | | Decrease in the current period | | 30 June 2021 | | | | | | | | | | Basic pensions | 131,620,467 | | 107,073,450 | | (106,814,225) | | 131,879,692 | | Supplementary pensions | - | | 10,400,000 | | (10,400,000) | | - | | Unemployment insurance | 4,079,511 | | 3,399,495 | | (3,374,172) | | 4,104,834 | | 135,699,978 | | 120,872,945 | | (120,588,397) | | 135,984,526 |
| (c) | Defined benefit plans | | | | | 31 December 2020 | | Increase in the current period | | Decrease in the current period | | 30 June 2021 | | | | | | | | | | Post-retirement benefits payable (Note 4(30)) | 3,415,000 | | 1,282,213 | | (1,282,213) | | 3,415,000 |
| | | (d) | Termination benefits payable | | | | | 30 June 2021 | | 31 December 2020 | | | | | | Early retirement benefits payable (Note 4(30)) | 1,317,000 | | 1,317,000 | | Other termination benefits (i) | 1,338,176 | | 1,338,176 | | 2,655,176 | | 2,655,176 | | | (i) For the six months ended 30 June 2021, other termination benefits paid by the Group for termination of the employment relationship were RMB13,174,883. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (22) | Taxes payable | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Enterprise income tax payable | 164,607,336 | | 88,142,260 | | Consumption tax payable | 65,438,708 | | 78,952,885 | | Unpaid VAT | 36,066,495 | | 26,439,025 | | Land use tax payable | 4,819,354 | | 5,746,521 | | City maintenance and construction tax payable | 2,558,480 | | 2,005,985 | | Educational surcharge payable | 1,827,486 | | 1,432,847 | | Others | 16,297,138 | | 15,725,704 | | | 291,614,997 | | 218,445,227 |
| (23) | Other payables | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Ordinary share dividends payable | 3,006,966,959 | | 6,463,836 | | Construction expenses | 2,694,444,804 | | 2,213,691,765 | | Research and development project expenses | 712,135,448 | | 673,089,112 | | Advertising and new product planning fees | 192,331,108 | | 161,524,470 | | Construction expenses | 181,182,323 | | 290,525,592 | | Goods transportation expenses | 163,702,631 | | 148,274,852 | | Deposit payable | 146,416,930 | | 97,973,078 | | Technological transformation project expenses | 46,511,283 | | 21,530,592 | | Trademark management fees | 13,153,276 | | 2,485,538 | | Consulting expenses | 11,514,272 | | 10,298,545 | | Others | 856,541,020 | | 527,992,245 | | | 8,024,900,054 | | 4,153,849,625 | | As at 30 June 2021, other payables with ageing over 1 year of RMB1,075,939,516 (31December 2020: RMB819,824,836) mainly comprised deposits collected from logistics companies, distributors and repair stations, payables for projects and payables for research and development expenses. Such payables had not been finally settled yet in view of the continuing business transactions with distributors and service providers, and engineering projects and research and development projects that have not yet been accepted and completed. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (24) | Current portion of non-current liabilities | | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | | Current portion of lease liabilities (Note 4(27)) | | 16,179,742 | | 10,481,886 | | Current portion of long-term borrowings (Note 4(26)) | | 423,034 | | 427,277 | | | | 16,602,776 | | 10,909,163 |
| (25) | Other current liabilities | | | | | 30 June 2021 | | 31 December 2020 | | | | | | Provisions expected to be settled within one year (Note 4(28)) | 368,170,576 | | 343,121,509 | | Others | 14,686,957 | | 67,777,819 | | | 382,857,533 | | 410,899,328 |
| | | (26) | Long-term borrowings | | | | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Secured borrowings | 2,749,722 | | 2,990,943 | | Less: Current portion of long-term borrowings (Note 4(24)) | (423,034) | | (427,277) | | | 2,326,688 | | 2,563,666 |
| The above secured borrowings were long-term borrowings amounting to USD 425,647 secured by JMCF, borrowed from Industrial and Commercial Bank of China (“ICBC”), Nanchang Ganjiang Sub-branch with interest payable every half year and the principal was paid in instalments between 10 December 2007 and 27 October 2027. For the six months ended 30 June 2021, the interest rate of long-term borrowings was 1.5% (For the Six Months Ended 30 June 2020: 1.5%). |
| | Starting date | Maturity date | Currency | Interest rate (%) | 30 June 2021 | | 31 December 2020 | | Amount in foreign currency | | RMB equivalent | | Amount in foreign currency | | RMB equivalent | | | | | | | | | | | | | | ICBC Nanchang Ganjiang Sub-branch | 27 February 1998 | 27 October 2027 | USD | 1.5% | 425,647 | | 2,749,722 | | 458,389 | | 2,990,943 |
| (27) | Lease liabilities | | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | | Lease liabilities | | 44,033,765 | | 29,480,838 | | Less: Current portion of non-current liabilities (Note 4(24)) | | (16,179,742) | | (10,481,886) | | | | 27,854,023 | | 18,998,952 |
| (a) | As at the six months ended 30 June 2021, the lease payment related to the lease contract that the Group has signed but has not yet begun to execute is RMB361,843,200((Note 11 (3))(December 31, 2020: RMB361,843,200). |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (28) | Provisions | | | | | 31 December 2020 | | Increase in the current period | | Decrease in the current period | | 30 June 2021 | | | | | | | | | | | Product warranties i) | 511,619,012 | | 238,355,518 | | (197,813,393) | | 552,161,137 | | provision for contracts | 27,398,636 | | - | | (4,392,114) | | 23,006,522 | | | 539,017,648 | | 238,355,518 | | (202,205,507) | | 575,167,659 | | Less: Provisions expected to be settled within one year (Note 4(25)) | (343,121,509) | | | | | | (368,170,576) | | | 195,896,139 | | | | | | 206,997,083 |
| i) | Product warranties are expenses expected to be incurred during the warranty period from free after-sales services, product warranty and other services for vehicles sold. |
| (29) | Deferred income | | | | | 31 December 2020 | | Increase in the current period | | Decrease in the current period | | 30 June 2021 | | Reason | | | | | | | | | | | | | Government grants (a) | 49,944,625 | | 960,000 | | (1,960,852) | | 48,943,773 | | Subsidy for projects | | | | | | | | | | | | | (a) | Government grants |
| | 31 December 2020 | | Increase in the current period | Decrease in the current period | | 30 June 2021 | | Asset related/ Income related | | Recognised in other income | | Offset financial expenses | | | | | | | | | | | | | | | | Research and development-related subsidies | 47,519,981 | | 960,000 | | (200,727) | | - | | 48,279,254 | | Income related | | Government interest subsidies | 1,760,125 | | - | | - | | (1,760,125) | | - | | Income related | | Others | 664,519 | | - | | - | | - | | 664,519 | | Income related | | | 49,944,625 | | 960,000 | | (200,727) | | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) |
| (30) | Long-term employee benefits payable | | | | | 30 June 2021 | | 31 December 2020 | | | | | | Supplementary retirement benefits and early-retirement benefits eligible for recognition of provisions | 65,518,693 | | 67,587,000 | | Less: Payable within one year | (4,732,000) | | (4,732,000) | | | 60,786,693 | | 62,855,000 | | | | The retirement and early-retirement benefits payable within one year are included in employee benefits payable(Note 4(21)(c), (d)). | | | | For retired and early-retired employees, the Group provides them with certain amount of supplementary benefits during their retirement or early-retirement period. The amount of benefits depends on the employee's position, length of service and salary at the time of retirement or early-retirement, and is adjusted in accordance with inflation rate and other factors. The Group's obligations for supplementary retirement and early-retirement benefits as at the balance sheet date are calculated using projected unit credit method and are reviewed by an external independent actuary. |
| (a) | Movements of retirement and early-retirement benefits of the Group are as follows: | | | | | | Present value of the obligations of the defined benefit plan | | | | 30 June 2021 | | 31 December 2020 | | | | | | | | Opening balance | | 67,587,000 | | 68,441,000 | | | | | | | | Cost of defined benefit plan recognised in profit or loss for the current period | | | | | | - Current service cost | | - | | 1,242,000 | | - Past service cost | | - | | - | | - Actuarial (gains)/losses recognised immediately | | - | | (843,000) | | - Net interest | | - | | 2,324,000 | | | | | | | | Remeasurement of net liabilities for defined benefit plan | | | | | | - Actuarial losses | | - | | 485,000 | | | | | | | | Other movements | | | | | | - Benefits paid | | (2,068,307) | | (4,062,000) | | | | | | | | Ending balance | | 65,518,693 | | 67,587,000 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) |
| (30) | Long-term employee benefits payable (Cont'd) |
| (b) | The actuarial assumptions used to determine the present value of defined benefit plan obligations | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Discount rates | —— | | 3.75% | | Inflation rate | —— | | 2.0% | | Salaries and benefits growth rates | —— | | 0%-6% | | | | | | | Future mortality assumptions were determined based on the China Life Insurance Mortality Table (2010-2013), which is publicly available statistical information for the Chinese region. |
| | | (31) | Other non-current liabilities | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Contract liabilities expected to be included in revenue after one year (Note 4(20)) | 105,589,814 | | 99,526,464 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (32) | Share capital | | | | | 31 December 2020 | | Movements for the current period | | 30 June 2021 | | | | Shares newly issued | | Bonus share | | Transfer from capital surplus | | Others | | Sub-total | | | | | | | | | | | | | | | | | | Shares subject to trading restriction - | | | | | | | | | | | | | | | Other domestic shares | | | | | | | | | | | | | | | Including: Shares held by domestic non-state-owned legal persons | 745,140 | | - | | - | | - | | - | | - | | 745,140 | | Shares held by domestic natural persons | 5,700 | | - | | - | | - | | - | | - | | 5,700 | | | 750,840 | | - | | - | | - | | - | | - | | 750,840 | | | | | | | | | | | | | | | | | Shares not subject to trading restriction - | | | | | | | | | | | | | | | Ordinary shares denominated in RMB | 518,463,160 | | - | | - | | - | | - | | - | | 518,463,160 | | Domestically listed foreign shares | 344,000,000 | | - | | - | | - | | - | | - | | 344,000,000 | | | 862,463,160 | | - | | - | | - | | - | | - | | 862,463,160 | | | 863,214,000 | | - | | - | | - | | - | | - | | 863,214,000 | | | | Since the implementation of the Company's Scheme on Share Split Reform on 13 February 2006, as at 30 June 2021, there were 750,840 shares currently unavailable for trading. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (32) | Share capital (Cont’d) | | | | | 31 December 2019 | | Movements for the current year | | 31 December 2020 | | | | Shares newly issued | | Bonus share | | Transfer from capital surplus | | Others | | Sub-total | | | | | | | | | | | | | | | | | | Shares subject to trading restriction - | | | | | | | | | | | | | | | Other domestic shares | | | | | | | | | | | | | | | Including: Shares held by domestic non-state-owned legal persons | 749,940 | | - | | - | | - | | (4,800) | | (4,800) | | 745,140 | | Shares held by domestic natural persons | 975 | | - | | - | | - | | 4,725 | | 4,725 | | 5700 | | | 750,915 | | - | | - | | - | | (75) | | (75) | | 750,840 | | | | | | | | | | | | | | | | | Shares not subject to trading restriction - | | | | | | | | | | | | | | | Ordinary shares denominated in RMB | 518,463,085 | | - | | - | | - | | 75 | | 75 | | 518,463,160 | | Domestically listed foreign shares | 344,000,000 | | - | | - | | - | | - | | - | | 344,000,000 | | | 862,463,085 | | - | | - | | - | | 75 | | 75 | | 862,463,160 | | | 863,214,000 | | - | | - | | - | | - | | - | | 863,214,000 | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (33) | Capital surplus | | | | | 31 December 2020 | | Increase in the current period | | Decrease in the current period | | 30 June 2021 | | | | | | | | | | | Share premium | 816,609,422 | | - | | - | | 816,609,422 | | Other capital surplus | 22,833,068 | | - | | - | | 22,833,068 | | | 839,442,490 | | - | | - | | 839,442,490 |
| | 31 December 2019 | | Increase in the current year | | Decrease in the current year | | 31 December 2020 | | | | | | | | | | | Share premium | 816,609,422 | | - | | - | | 816,609,422 | | Other capital surplus | 22,833,068 | | - | | - | | 22,833,068 | | | 839,442,490 | | - | | - | | 839,442,490 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (34) | Other comprehensive income |
| | Other comprehensive income in the balance sheet | | Other comprehensive income in the income statement for the Six Months Ended 30 June 2021 | | | 31 December 2020 | Attributable to the parent company after tax | 30 June 2021 | | Amount incurred before income tax for the current period | Less: Transfer-out of previous other comprehensive income in the current period | Less: Income tax expenses | Attributable to the parent company after tax | | | | | | | | | | | Other comprehensive income items which will not be reclassified to profit or loss | | | | | | | | | | Actuarial gains on defined benefit plans | (11,759,250) | - | (11,759,250) | | - | - | - | - |
| | Other comprehensive income in the balance sheet | | Other comprehensive income in the income statement for the year ended 31 December 2020 | | | 31 December 2019 | Attributable to the parent company after tax | 31 December 2020 | | Amount incurred before income tax for the current year | Less: Transfer-out of previous other comprehensive income in the current year | Less: Income tax expenses | Attributable to the parent company after tax | | | | | | | | | | | Other comprehensive income items which will not be reclassified to profit or loss | | | | | | | | | | Actuarial gains on defined benefit plans | (11,395,500) | (363,750) | (11,759,250) | | (485,000) | - | 121,250 | (363,750) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (35) | Surplus reserve | | | | | 31 December 2020 | | Increase in the current period | | Decrease in the current period | | 30 June 2021 | | | | | | | | | | | Statutory surplus reserve | 431,607,000 | | - | | - | | 431,607,000 |
| | 31 December 2019 | | Increase in the current year | | Decrease in the current year | | 31 December 2020 | | | | | | | | | | | Statutory surplus reserve | 431,607,000 | | - | | - | | 431,607,000 |
| In accordance with the Company Law of the People's Republic of China, the Company’s Articles of Association and the resolution of the Board of Directors, the Company should appropriate 10% of net profit for the year to the statutory surplus reserve, and the Company can cease appropriation when the statutory surplus reserve accumulated to more than 50% of the registered capital. The statutory surplus reserve can be used to make up for the loss or increase the share capital upon approval from the appropriate authorities. As the accumulated appropriation to the statuary surplus reserve exceeded 50% of the registered capital, no appropriation was made in the current period(2020: Nil). | | | | The Company appropriates for the discretionary surplus reserve after the shareholders’ meeting approves the proposal from the Board of Directors. The discretionary surplus reserve can be used to compensate for the losses incurred in prior years or increase the share capital upon approval from appropriate authorities. |
| (36) | Retained earnings | | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Retained earnings at the beginning of the year | 8,863,969,769 | | 8,373,695,791 | | | Add: Net profit attributable to shareholders of the parent company for the current period | 405,214,055 | | 207,771,782 | | | Less: Ordinary share dividends payable (a) | (3,000,531,864) | | (60,424,980) | | | Retained earnings at the end of the period | 6,268,651,960 | | 8,521,042,593 | |
| (a) | ? According to the resolution of the board of directors on March 26th, 2021, the board of directors proposed that the Company distribute cash dividends of RMB3.476 per share to all shareholders. Based on the issued shares of 863,214,000, the proposed cash dividends total RMB3,000,531,864, and the proposal was approved by the shareholders' meeting on June 25, 2021 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | | | (37) | Revenue and cost of sales | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Revenue from main business | 17,360,624,109 | | 13,877,590,851 | | | Revenue from other business | 314,996,979 | | 195,827,027 | | | | 17,675,621,088 | | 14,073,417,878 | |
| | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Cost of sales from main business | 14,756,422,659 | | 11,670,570,165 | | | Cost of sales from other business | 293,802,060 | | 189,552,200 | | | | 15,050,224,719 | | 11,860,122,365 | |
| (a) | Revenue and cost of sales from main business | | | | | | | | | | | Six months ended 30 June | | | | 2021 | | 2020 | | | | | Revenue from main business | | Cost of sales from main business | | Revenue from main business | | Cost of sales from main business | | | | | | | | | | | | | | | Sales of automobiles | 16,283,174,183 | | 13,950,596,206 | | 13,030,304,986 | | 11,046,531,024 | | | | Sales of automobile parts | 1,023,854,381 | | 747,849,973 | | 809,320,498 | | 582,437,916 | | | | Automobile maintenance services | 53,595,545 | | 57,976,480 | | 37,965,367 | | 41,601,225 | | | | | 17,360,624,109 | | 14,756,422,659 | | 13,877,590,851 | | 11,670,570,165 | |
| (b) | Revenue and cost of sales from other business | | | | | | | | Six months ended 30 June |
| | 2021 | | 2020 | | | Revenue from other business | | Cost of sales from other business | | Revenue from other business | | Cost of sales from other business | | | | | | | | | | | Sales of materials | 257,593,313 | | 238,590,185 | | 162,807,656 | | 155,071,014 | | Others | 57,403,666 | | 55,211,875 | | 33,019,371 | | 34,481,186 | | | 314,996,979 | | 293,802,060 | | 195,827,027 | | 189,552,200 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (37) | Revenue and cost of sales (Cont’d) | | | | (c) | The Group's revenue in 2021 was broken down as follows: | | | | | | Six months ended 30 June 2021 | | | Automobiles | Automobile parts | Automobile maintenance services | Materials and others | Total | | | | | | | | Revenue from main business | 16,283,174,183 | 1,023,854,381 | 53,595,545 | - | 17,360,624,109 | | Including: Recognised at a time point | 16,283,174,183 | 1,023,854,381 | - | - | 17,307,028,564 | | Recognised within a certain period | - | - | 53,595,545 | - | 53,595,545 | | Revenue from other business | - | - | - | 314,996,979 | 314,996,979 | | | 16,283,174,183 | 1,023,854,381 | 53,595,545 | 314,996,979 | 17,675,621,088 |
| (i) | As at 30 June 2021, the amount of revenue corresponding to the performance obligation of the Group that has been contracted but not yet performed or not fulfilled was RMB148,455,912, which was expected to be recognised between 2021 and 2026. |
| (38) | Taxes and surcharges | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Consumption tax | 366,921,695 | | 271,679,866 | | | City maintenance and construction tax | 46,652,034 | | 50,598,211 | | | Educational surcharge | 42,987,981 | | 43,310,138 | | | Land use tax | 9,534,267 | | 9,774,064 | | | Real estate tax | 8,736,554 | | 8,220,537 | | | Stamp tax | 4,155,789 | | 2,779,740 | | | Others | 253,194 | | 216,586 | | | | 479,241,514 | | 386,579,142 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | | | (39) | Selling and distribution expenses | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Promotion expenses | 241,079,452 | | 91,894,222 | | | Warranties | 238,355,518 | | 155,588,778 | | | Advertising and new product planning fees | 139,947,287 | | 138,350,765 | | | Sales network construction expenses | 122,520,260 | | 41,733,973 | | | Salaries and benefits | 96,986,506 | | 70,754,094 | | | Storage expenses | 30,124,253 | | 17,822,522 | | | Packaging material expenses | 18,318,542 | | 14,586,046 | | | Depreciation and amortisation expenses | 2,917,619 | | 3,147,018 | | | Others | 59,264,981 | | 58,309,902 | | | | 949,514,418 | | 592,187,320 | |
| (40) | General and administrative expenses | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Salaries and benefits | 303,656,754 | | 264,648,937 | | | Depreciation and amortisation expenses | 84,531,170 | | 100,780,734 | | | Trademark management fees | 22,232,060 | | 20,627,894 | | | General office expenses | 10,744,528 | | 7,103,298 | | | Repair expenses | 6,143,557 | | 7,181,637 | | | Travelling expenses | 3,114,916 | | 2,092,846 | | | Others | 99,394,555 | | 56,692,100 | | | | 529,817,540 | | 459,127,446 | |
| (41) | Research and development expenses | | | | | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Salaries and benefits | 273,546,646 | | 277,417,893 | | | Research and development expenses | 123,421,584 | | 102,381,915 | | | Design fee | 93,888,283 | | 145,947,582 | | | Depreciation and amortisation expenses | 90,393,420 | | 74,219,195 | | | Materials expenses | 72,889,999 | | 27,797,465 | | | Others | 72,326,258 | | 68,818,402 | | | | 726,466,190 | | 696,582,452 | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | | | (42) | Financial expenses | | | | | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Interest costs | 13,014,765 | | 18,259,820 | | | Add: Interest expenses on lease liabilities | 878,444 | | 802,145 | | | Less: Government subsidies (Note 4(29)) | (1,760,125) | | - | | | Interest expenses | 12,133,084 | | 19,061,965 | | | Less: Interest income from bank deposits | (142,004,807) | | (89,499,630) | | | Fund occupation fee (a) | (7,142,858) | | (4,740,888) | | | Interest income | (149,147,665) | | (94,240,518) | | | Exchange gains or losses | (8,772,108) | | 7,561,075 | | | Others | 344,402 | | 885,665 | | | | (145,442,287) | | (66,731,813) | | | | | | (a) | The fund occupation fee is the fee paid to the Group at the rate agreed by both parties when the distributors delay payment or settle with a bill of exchange. | |
| (43) | Expenses by nature | | | | | | The cost of sales, selling and distribution expenses, general and administrative expenses and research and development expenses in the income statement are listed as follows by nature: | | | | | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Changes in inventories of finished goods and work in progress | 201,864,808 | | 280,051,275 | | | Consumed raw materials, low value consumables, etc. | 13,230,742,782 | | 10,272,137,288 | | | Employee benefits | 1,370,346,825 | | 1,196,965,144 | | | Depreciation of fixed assets | 433,395,705 | | 517,638,550 | | | Amortisation of intangible assets | 77,362,902 | | 58,225,513 | | | Depreciation of right-of-use assets | 7,354,220 | | 7,225,828 | | | Transportation expenses | 424,338,871 | | 255,909,419 | | | Warranties | 238,355,518 | | 155,588,778 | | | Promotion expenses | 241,079,452 | | 91,894,222 | | | Advertising and new product planning fees | 139,947,287 | | 138,350,765 | | | Design fee | 93,888,283 | | 145,947,582 | | | Research and development expenses | 123,421,584 | | 102,381,915 | | | Fixed asset repair and maintenance expenses | 63,661,306 | | 41,966,653 | | | Others | 610,263,324 | | 343,736,651 | | | | 17,256,022,867 | | 13,608,019,583 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | | | (44) | Asset impairment losses | | | | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Provision for inventories | - | | 23,856,596 | | | Impairment of fixed assets | - | | 10,251,114 | | | | - | | 34,107,710 | |
| (45) | Credit impairment losses | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Losses on bad debts of accounts receivable | (7,566,557) | | 66,317,513 | | | Losses on bad debts of other receivables | 177,179 | | (74,702) | | | (7,389,378) | | 66,242,811 | |
| (46) | Other income | | | | | | | | | | Six months ended 30 June | | | | | 2021 | | 2020 | | Asset related/ Income related | | | | | | | | Subsidy for operating activities | 324,065,109 | | 138,966,751 | | Income related | | Research and development activities related subsidies | 9,227,727 | | 26,672,716 | | Income related | | | 333,292,836 | | 165,639,467 | | |
| (47) | Investment income | | | | | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Investment income from financial assets held for trading | 10,204,592 | | 32,619,541 | | | Investment losses from long-term equity investment under equity method | (264,201) | | (3,024,554) | | | Losses on discount of financing receivables | (13,053,249) | | - | | | Investment loss from forward exchange settlement | (7,750,384) | | (1,316,987) | | | | (10,863,242) | | 28,278,000 | |
| | | There is no significant restriction on the remittance of investment income to the Group. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | | | (48) | Gains on changes in fair value | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | Financial assets at fair value through profit or loss — | | | | | | Structural deposits | (681,478) | | 7,990,657 | | | Derivative financial assets and derivative financial liabilities - | | | | | | (Losses)/Income on forward exchange contracts | (4,449,015) | | 2,021,384 | | | | (5,130,493) | | 10,012,041 | |
| (49) | Gains on disposal of assets | | | | | | | | | | Six months ended 30 June | | | | | 2021 | | 2020 | | Amount recognised in non-recurring profit or loss in six months ended 30 June 2021 | | | | | | | | | Income/(losses) on disposal of assets | 11,152,182 | | (581,955) | | 11,152,182 | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (50) | Non-operating income | | | | | | | | | | Six months ended 30 June | | | | | 2021 | | 2020 | | Amount recognised in non-recurring profit or loss in six months ended 30 June 2021 | | | | | | | | | Compensation and penalty income | 1,520,395 | | 1,434,743 | | 1,520,395 | | Government grants (a) | - | | 40,000 | | - | | Others | 989,882 | | 2,124,450 | | 989,882 | | | 2,510,277 | | 3,599,193 | | 2,510,277 |
| | | (a) | Details of government grants | | | | | | | | | | Six months ended 30 June | | | | | 2021 | | 2020 | | Asset related/ Income related | | | | | | | | Others | - | | 40,000 | | Income related | | | | | | | | | (51) | Non-operating expenses | | | | | | | | | | Six months ended 30 June | | | | | 2021 | | 2020 | | Amount recognised in non-recurring profit or loss in six months ended 30 June 2021 | | | | | | | | Losses on scrapping of assets | 143,574 | | 25,278,620 | | 143,574 | | Donations | 1,995,000 | | 4,936,682 | | 1,995,000 | | Others | 446,408 | | 22,950 | | 446,408 | | | 2,584,982 | | 30,238,252 | | 2,584,982 | | | | | | | |
| (52) | Income tax expenses | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Current income tax calculated based on tax law and related regulations | 165,333,174 | | 12,440,650 | | | Deferred income tax | (148,982,279) | | 1,696,507 | | | | 16,350,895 | | 14,137,157 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (52) | Income tax expenses (Cont’d) |
| The reconciliation from income tax calculated based on the applicable tax rates and total profit presented in the consolidated income statement to the income tax expenses is listed below: | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Total profit | 421,564,950 | | 221,908,939 | | | Income tax calculated at applicable tax rates | 49,035,811 | | 4,273,820 | | | Effect of change in the tax rates | 14,052,432 | | 16,397,340 | | | Tax credit | - | | (68,983) | | | Super deduction | (73,910,521) | | (74,643,356) | | | Non-taxable income | 39,630 | | 453,683 | | | Equity transactions and debt exemption between parent and subsidiary | 25,985,873 | | - | | | Costs, expenses and losses not deductible for tax purposes | 15,530,448 | | 143,379 | | | Utilisation of previously unrecognised deductible temporary differences | (663,003) | | (16,441,318) | | | Deductible losses for which no deferred tax asset was recognised | - | | 84,022,592 | | | Utilisation of the deductible loss of the unrecognized deferred tax asset in the previous period | (13,719,775) | | - | | | Income tax expenses | 16,350,895 | | 14,137,157 | | | | | | (53) | Earnings per share | | | | | | (a) | Basic earnings per share | | | | | | Basic earnings per share are calculated by dividing consolidated net profit attributable to ordinary shareholders of the parent company by the weighted average number of outstanding ordinary shares of the parent company: | | | | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Consolidated net profit attributable to ordinary shareholders of the parent company | 405,214,055 | | 207,771,782 | | | Weighted average number of ordinary shares outstanding issued by the Company | 863,214,000 | | 863,214,000 | | | Basic earnings per share | 0.47 | | 0.24 | | | | | | | | | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | | | (53) | Earnings per share (Cont’d) | | | | | | (b) | Diluted earnings per share | | | | | | Diluted earnings per share are calculated by dividing consolidated net profit attributable to ordinary shareholders of the parent company adjusted based on the dilutive potential ordinary shares by the adjusted weighted average number of outstanding ordinary shares of the Company. As there were no dilutive potential ordinary shares in six months ended 30 June 2021 (six months ended 30 June 2020: Nil), diluted earnings per share equalled to basic earnings per share. | | | | | | (54) | Notes to the cash flow statement | | | | | | (a) | Cash received relating to other operating activities | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Government grants | 334,382,070 | | 164,857,450 | | | Deposits from distributors | 78,002,972 | | 22,539,331 | | | Deposits for bidding | 22,377,000 | | 28,090,361 | | | Quality claims | 277,752 | | 530,263 | | | Input VAT refund | - | | 23,559,902 | | | Others | 15,919,139 | | 6,343,077 | | | | 450,958,933 | | 245,920,384 | |
| (b) | Cash paid relating to other operating activities | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Research and development expenses | 271,562,707 | | 515,676,803 | | | Warranties | 216,744,709 | | 136,325,584 | | | Advertising expenses | 113,004,161 | | 122,999,651 | | | Promotion expenses | 185,146,657 | | 147,975,736 | | | Guarantees | 49,908,699 | | 17,904,238 | | | Maintenance expenses | 44,654,150 | | 20,729,104 | | | Travel expenses | 17,919,914 | | 12,873,171 | | | Others | 336,429,854 | | 255,310,888 | | | | 1,235,370,851 | | 1,229,795,175 | | | | | | (c) | Cash received relating to other investing activities | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Interest from cash at bank | 116,825,862 | | 89,946,934 | | | Interest from acceptance notes | 4,895,325 | | 4,229,944 | | | Interest from credit sales | 1,020,809 | | 1,983,609 | | | Investment income from forward exchange settlement | 79,024 | | 611,945 | | | | 122,821,020 | | 96,772,432 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (54) | Notes to the cash flow statement (Cont’d) | | | | (d) | Cash paid relating to other financing activities |
| | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Repayments of lease liabilities | 4,409,423 | | 4,800,032 | |
| | | | (55) | Supplementary information to the cash flow statement | | | | | | (a) | Supplementary information to the cash flow statement | | | | | | Reconciliation from net profit to cash flows from operating activities | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Net profit | 405,214,055 | | 207,771,782 | | | Add: Asset impairment losses (Note 4(44)) | - | | 34,107,710 | | | Credit impairment losses (Note 4(45)) | (7,389,378) | | 66,242,811 | | | Depreciation of fixed assets (Note 4(10)) | 433,395,705 | | 517,638,550 | | | Amortisation of intangible assets (Note 4(13)) | 77,362,902 | | 58,225,513 | | | Depreciation of right-of-use assets (Note 4(12)) | 7,354,220 | | 7,225,828 | | | Increase in provisions | 36,150,011 | | 32,984,461 | | | (Income)/Losses on disposal of long-term assets | (11,008,608) | | 25,860,575 | | | Financial expenses | (145,788,789) | | (67,128,763) | | | Investment losses/( income) (Note 4(47)) | 10,863,242 | | (28,278,000) | | | (Gains)/losses on changes in fair value (Note 4(48)) | 5,130,493 | | (10,012,041) | | | (Increase)/decrease in deferred tax assets | (164,226,685) | | 2,013,602 | | | Increase/(Decrease) in deferred tax liabilities | 15,244,406 | | (317,095) | | | (Increase)/Decrease in inventories | (139,999,996) | | 216,420,338 | | | Increase in other cash and cash equivalents | (1,565,665) | | (49,718,600) | | | Increase in operating receivables | (279,516,996) | | (728,501,730) | | | Decrease/(increase) in operating payables | (171,301,068) | | 449,748,686 | | | Net cash flows from operating activities | 69,917,849 | | 734,283,627 | | | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 4 | Notes to the consolidated financial statements (Cont’d) | | | | (55) | Supplementary information to the cash flow statement (Cont’d) |
| (b) | Net increase in cash | | | | | | | | | | | | | | Six months ended 30 June | | | 2021 | | 2020 | | | | | | | | | Cash at the end of the period | 10,948,621,070 | | 7,872,553,804 | | | Less: Cash at the beginning of the year | (11,121,955,129) | | (8,937,936,658) | | | Net increase in cash | (173,334,059) | | (1,065,382,854) | |
| (c) | Cash and cash equivalents | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Bank deposit available for payment at any time | 10,948,621,070 | | 11,121,955,129 |
| (56) | Monetary items denominated in foreign currency | | | | | 30 June 2021 | | | Amounts denominated in foreign currencies | | Translation exchange rate | | Amounts in RMB | | | | | | | | | Long-term borrowings - | | | | | | | USD | 425,647 | | 6.4601 | | 2,749,722 | | | | | | | | | Other payables - | | | | | | | USD | 18,322,398 | | 6.4601 | | 118,364,523 | | EUR | 33,288 | | 7.6862 | | 255,858 | | | | | | | 118,620,381 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 5 | Interests in other entities | | | | (1) | Interests in subsidiaries | | | | Structure of the enterprise group | | | | Subsidiaries | Place of major business | Place of registration | Nature of business | Shareholding (%) | Method of acquisition | | | | | | Direct | Indirect | | | | | | | | | | JMCS | Nanchang, Jiangxi | Nanchang, Jiangxi | Retail, wholesale and lease of automobiles | 100% | — | Set up by investment | | JMCH | Taiyuan, Shanxi | Taiyuan, Shanxi | Manufacture and sales of automobiles | 100% | — | Business combinations not involving enterprises under common control | | | | | | | | | | SZFJ | Shenzhen, Guangdong | Shenzhen, Guangdong | Retail, wholesale and lease of automobiles | 100% | — | Set up by investment | | GZFJ | Guangzhou, Guangdong | Guangzhou, Guangdong | Retail, wholesale and lease of automobiles | 100% | — | Set up by investment | | JMPC (i) | Taiyuan, Shanxi | Taiyuan, Shanxi | Manufacture and sales of engines | 100% | — | Establishment through split-off by JMCH | | | | (i) according to the resolution of the Board of Directors’ meeting on June 19, 2020, JMPC was established by split-off of JMCH. The Company directly holds 100% equity of JMPC and JMCH respectively after the split. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 5 | Interests in other entities (Cont’d) | | | | | (2) | Interests in associates | | | | | | Summarised information of insignificant associates | | | | | | | | | Six months ended 30 June | | | | 2021 | | 2020 | | | | | | | | | Aggregated carrying amount of investments | 39,232,347 | | 37,910,003 |
| | | | | | Aggregate of the following items in proportion | | | | | Net profit (i) | (264,201) | | (3,024,554) | | Other comprehensive income (i) | - | | - | | Total comprehensive income | (264,201) | | (3,024,554) |
| (i) The net profit and other comprehensive income have taken into account the impacts of both the fair value of the identifiable assets and liabilities upon the acquisition of investment in joint ventures and associates and the unification of accounting policies adopted by the joint ventures and the associates to those adopted by the Group. | | | | 6 | Segment information | | | | Revenue and profits of the Company mainly arise from production and domestic sales of automobiles, and the primary assets of the Group are all located in China. Management of the Group assesses the operating performance of the Group as a whole. Therefore, no segment report is prepared for the current period. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions | | | | (1) | Information of major shareholders | | | | (a) | General information of major shareholders | | | | | Type of enterprise | Place of registration | Legal representative | Nature of business | Code of organisation | | | | | | | | JIC | State-owned enterprise | Nanchang, China | Qiu Tiangao | Investment and asset management | 91360125MA38LUR91F | | Ford Motor Company (“Ford”) | Foreign enterprise | United States | William Clay Ford, Jr. | Manufacture and sales of automobiles | N/A |
| (b) | Registered capital and changes in major shareholders |
| | 31 December 2020 | Increase in the current period | Decrease in the current period | 30 June 2021 | | | | | | | | JIC | 1,000,000,000 | - | - | 1,000,000,000 | | Ford | USD 41,000,000 | - | - | USD 41,000,000 |
| (c) | The percentages of shareholding and voting rights in the Company held by major shareholders | | | | | 30 June 2021 | | 31 December 2020 |
| | Shareholding (%) | Voting rights (%) | | Shareholding (%) | Voting rights (%) | | | | | | | | | JIC | 41.03% | 41.03% | | 41.03% | 41.03% | | Ford | 32% | 32% | | 32% | 32% |
| (2) | Information of subsidiaries | | | | The general information and other related information of subsidiaries are set out in Note 5(1). | | | | (3) | Information of associates | | | | The information of associates that have related party transactions with the Group is set out in Note 5(2). |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (4) | Information of other related parties | | | | Related parties | Relationship with the Group | | | | | JMCG | Shareholder of JIC | | Chongqing Changan Automobile Co., Ltd. | Shareholder of JIC | | JMCG Jingma Motors Co., Ltd. | Wholly-owned subsidiary of JMCG | | Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | Wholly-owned subsidiary of JMCG | | Jiangxi Lingrui Recycling Resources Development Corporation | Wholly-owned subsidiary of JMCG | | Nanchang Gear Co., Ltd. | Wholly-owned subsidiary of JMCG | | Jiangling Material Co., Ltd. | Wholly-owned subsidiary of JMCG | | Jiangxi JMCG Industry Co., Ltd. | Wholly-owned subsidiary of JMCG | | Jiangxi Jiangling Chassis Co., Ltd. | Wholly-owned subsidiary of JMCG | | Nanchang JMCG Shishun Logistics Co., Ltd. | Wholly-owned subsidiary of JMCG | | JMCF | Wholly-owned subsidiary of JMCG | | Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd. | Wholly-owned subsidiary of JMCG | | Nanchang JMCG Xinchen Auto Component Co., Ltd. | Wholly-owned subsidiary of JMCG | | Jingdezhen Shishun Logistics Co., Ltd. | Wholly-owned subsidiary of JMCG | | Ford Global Technologies,LLC | Wholly-owned subsidiary of Ford | | Ford Motor (China) Co., Ltd. | Wholly-owned subsidiary of Ford | | Ford Motor Research & Engineering (Nanjing) Co., Ltd. | Wholly-owned subsidiary of Ford | | Ford Motor Co. Thailand Ltd. | Wholly-owned subsidiary of Ford | | Ford Otomotiv Sanayi A.S. | Holding subsidiary of Ford | | Auto Alliance (Thailand) Co., Ltd. | Holding subsidiary of Ford | | Ford Vietnam Limited | Holding subsidiary of Ford | | Ford Trading Company, LLC | Holding subsidiary of Ford | | Changan Ford Automobile Co., Ltd. | Joint venture of Ford | | Nanchang JMCG Frame Co., Ltd | Subsidiary under indirect control of JMCG | | Nanchang JMCG Liancheng Auto Component Co., Ltd. | Subsidiary under indirect control of JMCG |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (4) | Information of other related parties (Cont’d) | | | | Related parties | Relationship with the Group | | | | | Nanchang Lianda Machinery Co., Ltd. | Subsidiary under indirect control of JMCG | | Jiangling Aowei Automobile Spare Part Co., Ltd. | Subsidiary under indirect control of JMCG | | Jiangxi JMCG Boya brake system Co., Ltd | Subsidiary under indirect control of JMCG | | Jiangxi JMCG Shangrao Industrial Co., Ltd. | Subsidiary under indirect control of JMCG | | NC.Gear Forging Factory | Subsidiary under indirect control of JMCG | | JMCG Jiangxi Engineering Construction Co., Ltd. | Subsidiary under indirect control of JMCG | | Jiangxi Yizhi Zhixing Automobile Operation Service Co., Ltd. | Subsidiary under indirect control of JMCG | | Guizhou Wanfu Vehicle Sales & Service Co., Ltd. | Group subsidiary of JIC’s shareholder | | Chongqing Anfu Vehicle Marketing Co., Ltd. | Group subsidiary of JIC’s shareholder | | Chengdu Wanxing Vehicle Sales & Service Co., Ltd. | Group subsidiary of JIC’s shareholder | | Chongqing Anbo Vehicle Sales Co., Ltd. | Group subsidiary of JIC’s shareholder | | Yunan Wanfu Vehicle Sales & Service Co., Ltd. | Group subsidiary of JIC’s shareholder | | Dali Wanfu Vehicle Sales & Service Co., Ltd. | Group subsidiary of JIC’s shareholder | | Beijing Beifang Changfu Vehicle Sales & Service Co., Ltd. | Group subsidiary of JIC’s shareholder | | China Changan Group Hefei Investing Co., Ltd. | Group subsidiary of JIC’s shareholder | | Beijing Baiwang Changfu Vehicle Sales & Service Co., Ltd. | Group subsidiary of JIC’s shareholder | | Honghe Wanfu Vehicle Sales & Service Co., Ltd. | Group subsidiary of JIC’s shareholder | | China Changan Group Tianjin Sales Co., Ltd. | Group subsidiary of JIC’s shareholder | | Anhui Wanyou Vehicle Sales & Service Co., Ltd. | Group subsidiary of JIC’s shareholder | | Guizhou Wanjia Vehicle Sales & Service Co., Ltd. | Group subsidiary of JIC’s shareholder | | Jiangxi Jiangling Lear Interior System Co., Ltd. | Joint venture of JMCG | | Jiangxi ISUZU Co., Ltd. | Joint venture of JMCG | | Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | Joint venture of JMCG |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (4) | Information of other related parties (Cont’d) | | | | Related parties | Relationship with the Group | | | | | Nanchang Unistar Electric & Electronics Co., Ltd. | Joint venture of JMCG | | Nanchang Yinlun Heat-exchanger Co., Ltd. | Joint venture of JMCG | | Jiangxi ISUZU Engine Co., Ltd. | Joint venture of JMCG | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | Associate of JMCG | | Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. | Associate of JMCG | | Jiangxi JMCG Specialty Vehicles Co., Ltd. | Associate of JMCG | | Jiangxi Jiangling Group Special Vehicle Co., Ltd. | Associate of JMCG | | Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd. | Associate of JMCG | | Nanchang Baojiang Steel Processing Distribution Co., Ltd. | Associate of JMCG | | Magna PT Powertrain (Jiangxi) Co., Ltd. (i) | Associate of JMCG | | Faurecia Emissions Control Technologies (Nanchang) Co., Ltd. | Associate of JMCG | | Jiangling Motor Holdings Co., Ltd. | Associate of JMCG | | Jiangxi Lingyun Automobile Industry Technology Co.,Ltd | Associate of JMCG | | Nanchang Hengou Industry Co., Ltd. | Associate of JMCG | | Jiujiang Fuwantong Vehicle Co., Ltd. | Associate of JMCG | | Jiangxi Fuxiang Vehicle Co., Ltd. | Associate of JMCG | | Ji'an Qingyuan District Yongfuda Vehicle Co., Ltd. | Associate of JMCG | | Yichun Xinfu Vehicle Co., Ltd. | Associate of JMCG | | Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | Associate of JMCG | | Jiangling Motor Electricity Vehicle Co., Ltd. | Associate of JMCG | | Jiangxi Jiangling Group Health Science and Technology Co., Ltd. | Associate of JMCG | | | | | (i)In December 2020, the GETRAG (Jiangxi) Transmission Company has been renamed to Magna PT Powertrain (Jiangxi) Co., Ltd. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | | (5) | Related party transactions | | | | | (a) | Purchase and sales of goods, provision and receipt of services | | | | | | Purchase of goods: | | | | Six months ended 30 June | | | | | | Related parties | Nature of related party transactions | 2021 | | 2020 | | | | | | | | | | Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | Purchase of spare parts | 559,640,678 | | 383,892,896 | | | Nanchang Baojiang Steel Processing Distribution Co., Ltd. | Purchase of raw materials | 487,650,466 | | 405,185,757 | | | Jiangxi Jiangling Chassis Co., Ltd. | Purchase of spare parts | 454,821,789 | | 355,113,008 | | | Magna PT Powertrain (Jiangxi) Co., Ltd. | Purchase of spare parts | 416,304,253 | | 336,800,228 | | | Ford | Purchase of spare parts | 406,714,749 | | 331,917,143 | | | Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | Purchase of spare parts | 386,207,282 | | 272,438,364 | | | Jiangxi Jiangling Lear Interior System Co., Ltd. | Purchase of spare parts | 253,713,165 | | 203,467,840 | | | Faurecia Emissions Control Technologies (Nanchang) Co., Ltd. | Purchase of spare parts | 204,996,379 | | 211,129,621 | | | Nanchang JMCG Liancheng Auto Component Co., Ltd. | Purchase of spare parts | 192,440,537 | | 178,564,686 | | | Nanchang JMCG Shishun Logistics Co., Ltd. | Purchase of spare parts | 186,331,354 | | 180,731,669 | | | Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | Purchase of spare parts | 179,718,350 | | - | | | Nanchang Unistar Electric & Electronics Co., Ltd. | Purchase of spare parts | 157,062,782 | | 130,765,035 | | | Hanon Systems | Purchase of spare parts | 113,038,226 | | 86,204,275 | | | JMCG | Purchase of spare parts | 95,172,791 | | 71,583,876 | | | Nanchang Yinlun Heat-exchanger Co., Ltd. | Purchase of spare parts | 57,322,498 | | 30,324,257 | | | Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd. | Purchase of spare parts | 51,246,461 | | 45,571,842 | | | Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd. | Purchase of spare parts | 40,864,845 | | 32,436,589 | | | Nanchang Lianda Machinery Co., Ltd. | Purchase of spare parts | 39,419,200 | | 32,528,800 | | | Jiangxi JMCG Specialty Vehicles Co., Ltd. | Purchase of spare parts | 24,377,547 | | 20,244,154 | | | Changan Ford Automobile Co., Ltd. | Purchase of spare parts | 22,322,571 | | 16,159,043 | | | Auto Alliance (Thailand) Co., Ltd. | Purchase of spare parts | 22,108,469 | | 45,263,124 | | | Jiangling Motor Holdings Co., Ltd. | Purchase of spare parts | 20,348,183 | | 19,423,653 | | | Jiangxi JMCG Boya brake system Co., Ltd | Purchase of spare parts | 17,753,794 | | 6,169,098 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | | (5) | Related party transactions (Cont’d) | | | | | (a) | Purchase and sales of goods, provision and receipt of services (Cont'd) | | | | | | Purchase of goods (Cont'd): | | | | Six months ended 30 June | | | | | | Related parties | Nature of related party transactions | 2021 | | 2020 | | | | | | | | | | Jiangxi Lingyun Automobile Industry Technology Co.,Ltd | Purchase of spare parts | 16,903,992 | | 5,462,414 | | | Ford Otomotiv Sanayi A.S. | Purchase of spare parts | 14,985,072 | | 25,895,662 | | | Jiangxi Jiangling Group Special Vehicle Co., Ltd. | Purchase of spare parts | 14,710,069 | | 18,057,702 | | | Jiangling Material Co., Ltd. | Purchase of raw materials | 14,381,157 | | 10,789,819 | | | Jiangling Aowei Automobile Spare Part Co., Ltd. | Purchase of spare parts | 12,432,709 | | 9,133,485 | | | Nanchang JMCG Xinchen Auto Component Co., Ltd. | Purchase of spare parts | 8,531,947 | | 6,833,446 | | | Jiangxi JMCG Industry Co., Ltd. | Purchase of spare parts | 5,555,782 | | 270,582 | | | Jiangxi ISUZU Engine Co., Ltd. | Purchase of spare parts | 5,385,785 | | 11,670,041 | | | NC.Gear Forging Factory | Purchase of spare parts | 4,600,012 | | 3,436,975 | | | Jiangxi Lingrui Recycling Resources Development Corporation | Purchase of spare parts | 3,603,406 | | 4,876,295 | | | Ford Motor Co. Thailand Ltd. | Purchase of spare parts | 1,761,533 | | 3,620,884 | | | Jiangxi JMCG Shangrao Industrial Co., Ltd. | Purchase of spare parts | 1,532,713 | | 1,383,417 | | | Jiangxi Jiangling Group Health Science and Technology Co., Ltd. | Purchase of epidemic prevention materials | 75,752 | | 2,214,000 | | | Nanchang Gear Co., Ltd. | Purchase of spare parts | - | | 3,700,664 | | | Other related parties | Purchase of spare parts | 378,277 | | 3,655,968 | | | | | 4,494,414,575 | | 3,506,916,312 |
| The products purchased by the Group from related parties are divided into two categories: purchase of imported parts and purchase of domestic parts. ? The pricing on imported parts purchased from Ford or its suppliers is based on the agreed price by both parties. ? The pricing on domestic accessories purchased from other related parties is determined through quotation, cost accounting, and negotiation between the two parties, and is adjusted regularly. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (5) | Related party transactions (Cont’d) | | | | (a) | Purchase and sales of goods, provision and receipt of services (Cont'd) |
| | Receipt of services: | | | | | | | | Six months ended 30 June | | | | | | | | | | Related parties | Nature of related party transactions | 2021 | | 2020 | | | | | | | | | | Nanchang JMCG Shishun Logistics Co., Ltd. | Transportation/Truckage | 183,101,437 | | 145,365,321 | | | Ford Global Technologies,LLC | Trademark management fees/Technical development | 137,193,141 | | 111,064,126 | | | JMCG Jiangxi Engineering Construction Co., Ltd. | Engineering construction/Maintenance fee | 91,462,137 | | 126,634,929 | | | Ford | Engineering service/Personnel costs | 45,133,925 | | 128,825,062 | | | Changan Ford Automobile Co., Ltd. | Service fee/Labor costs, etc. | 16,626,550 | | 26,903,713 | | | Jiangxi JMCG Industry Co., Ltd. | Dinning fee | 10,818,912 | | 10,620,614 | | | Ford Otomotiv Sanayi A.S. | Technical service/Technical development/ Personnel costs | 9,025,906 | | 13,953,012 | | | Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | Transportation/Rental fee, etc. | 7,759,524 | | 2,143,309 | | | Ford Motor (China) Co., Ltd. | Personnel costs | 6,622,070 | | 5,607,007 | | | Jiangling Motor Holdings Co., Ltd. | Personnel costs/Labor costs | 5,041,950 | | 100,700 | | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | Agent fee, etc. | 4,734,392 | | 3,720,284 | | | Ford Motor Research & Engineering (Nanjing) Co., Ltd. | Personnel costs | 3,698,207 | | 5,380,878 | | | Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | Design fee/Experimental costs | 2,175,305 | | - | | | Jiangxi JMCG Specialty Vehicles Co., Ltd. | Promotion | 1,139,648 | | 4,099,057 | | | Chongqing Changan Automobile Co., Ltd. | Personnel costs | 840,139 | | 638,559 | | | Magna PT Powertrain (Jiangxi) Co., Ltd. | Design fee | 44,000 | | 4,551,480 | | | Other related parties | | 3,706,823 | | 3,543,314 | | | | | 529,124,066 | | 593,151,365 | | | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | | (5) | Related party transactions (Cont’d) | | | | | (a) | Purchase and sales of goods, provision and receipt of services (Cont'd) | | | | | | Sales of goods | | | | Six months ended 30 June | | | | | | Related parties | Nature of related party transactions | 2021 | | 2020 | | | | | | | | | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | Sales of automobiles and accessories | 1,448,104,620 | | 515,648,431 | | | Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. | Sales of automobiles | 116,350,946 | | 247,784,771 | | | Jiangxi Lingrui Recycling Resources Development Corporation | Scrapping materials and utilities | 46,091,112 | | 37,417,132 | | | Jiangxi Jiangling Chassis Co., Ltd. | Sales of accessories | 35,912,126 | | 25,066,364 | | | Jiangxi JMCG Specialty Vehicles Co., Ltd. | Sales of automobiles and accessories | 29,087,061 | | 116,257,012 | | | JMCG Jingma Motors Co., Ltd. | Sales of automobiles and accessories | 28,334,162 | | 21,175,865 | | | Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | Sales of accessories | 24,575,547 | | - | | | Jiangxi Jiangling Group Special Vehicle Co., Ltd. | Sales of automobiles | 22,609,914 | | 19,430,202 | | | Dali Wanfu Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 21,352,956 | | 22,654,665 | | | Chengdu Wanxing Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 20,425,695 | | 3,839,113 | | | Chongqing Anfu Vehicle Marketing Co., Ltd. | Sales of automobiles and accessories | 19,801,630 | | 5,983,015 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | | (5) | Related party transactions (Cont’d) | | | | | (a) | Purchase and sales of goods, provision and receipt of services (Cont'd) | | | | | | Sales of goods (Cont'd): | | | | Six months ended 30 June | | | | | | Related parties | Nature of related party transactions | 2021 | | 2020 | | | | | | | | | | Chongqing Anbo Vehicle Sales Co., Ltd. | Sales of automobiles and accessories | 18,291,943 | | 5,520,116 | | | Nanchang JMCG Shishun Logistics Co., Ltd. | Sales of automobiles and accessories | 12,279,634 | | 11,258,826 | | | Guizhou Wanfu Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 7,888,813 | | 11,046,682 | | | Jiujiang Fuwantong Vehicle Co., Ltd. | Sales of automobiles and accessories | 6,759,745 | | 8,476,498 | | | China Changan Group Tianjin Sales Co., Ltd. | Sales of automobiles and accessories | 5,932,997 | | 217,533 | | | Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd. | Sales of accessories | 4,950,891 | | - | | | Nanchang JMCG Liancheng Auto Component Co., Ltd. | Sales of accessories | 4,850,081 | | 20,393,560 | | | Nanchang Hengou Industry Co., Ltd. | Sales of accessories | 4,575,689 | | 3,794,800 | | | Guizhou Wanjia Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 3,745,325 | | - | | | Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | Sales of automobiles and accessories, utilities | 3,429,676 | | 99,880,081 | | | Beijing Beifang Changfu Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 3,394,918 | | 8,291,761 | | | Jiangxi ISUZU Co., Ltd. | Sales of accessories | 2,382,506 | | 151,096 | | | Jiangxi Jiangling Lear Interior System Co., Ltd. | Sales of accessories | 2,376,736 | | 2,349,992 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | | (5) | Related party transactions (Cont’d) | | | | | (a) | Purchase and sales of goods, provision and receipt of services (Cont'd) | | | | | | Sales of goods (Cont'd): | | | | Six months ended 30 June | | | | | | Related parties | Nature of related party transactions | 2021 | | 2020 | | | | | | | | | | Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | Sales of accessories | 1,620,115 | | 3,933,437 | | | Anhui Wanyou Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 1,425,731 | | - | | | Jiangxi Yizhi Zhixing Automobile Operation Service Co., Ltd. | Sales of automobiles | 1,302,655 | | - | | | Jiangxi JMCG Industry Co., Ltd. | Sales of accessories,scrapping materials and utilities | 1,265,886 | | 1,532,473 | | | Nanchang Lianda Machinery Co., Ltd. | Sales of accessories | 1,236,605 | | 273,615 | | | Yunan Wanfu Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 567,472 | | 3,000,142 | | | Beijing Baiwang Changfu Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 381,676 | | 1,312,986 | | | China Changan Group Hefei Investing Co., Ltd. | Sales of automobiles and accessories | 134,176 | | 8,700,430 | | | Jiangxi Fuxiang Vehicle Co., Ltd. | Sales of automobiles and accessories, utilities | 78,516 | | 1,962,208 | | | Yichun Xinfu Vehicle Co., Ltd. | Sales of automobiles and accessories | 70,796 | | 1,178,868 | | | Ji'an Qingyuan District Yongfuda Vehicle Co., Ltd. | Sales of automobiles and accessories | 50,582 | | 1,404,914 | | | Honghe Wanfu Vehicle Sales & Service Co., Ltd. | Sales of automobiles and accessories | 47,190 | | 1,553,651 | | | Jingdezhen Shishun Logistics Co., Ltd. | Sales of automobiles | - | | 2,389,380 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | | (5) | Related party transactions (Cont’d) | | | | | (a) | Purchase and sales of goods, provision and receipt of services (Cont'd) | | | | | | Sales of goods (Cont'd): | | | | Six months ended 30 June | | | | | | Related parties | Nature of related party transactions | 2021 | | 2020 | | | | | | | | | | Other related parties | | 1,769,547 | | 3,450,991 | | | | | 1,903,455,670 | | 1,217,330,610 |
| | | The Group’s pricing on goods sold to related parties is based on the agreed price by both parties. | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (5) | Related party transactions (Cont’d) | | | | (b) | Leases |
| (i) | The lease income recognised in the current period with the Group as the lessor: | | | | | | Six months ended 30 June | | Name of the lessee | Type of the leased asset | 2021 | | 2020 | | | | | | | | Jiangling Material Co., Ltd. | Buildings | 60,550 | | - | | Jiangxi ISUZU Co., Ltd. | Buildings | 31,371 | | 53,411 | | | | 91,921 | | 53,411 |
| (ii) | Increase of right-of-use assets in the current period with the Group as the lessee | | | | Six months ended 30 June | | | Name of the lessor | Type of the leased asset | 2021 | | 2020 | | | | | | | | | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | Buildings | 16,852,582 | | - | | | JMCG | Buildings | 182,766 | | - | | | | | 17,035,348 | | - |
| (iii) | Interest expenses on lease liabilities in the current period of the Group as the lessee: | | | | | | | Six months ended 30 June | | | | | 2021 | | 2020 | | | | | | | | | | JMCG | | 221,943 | | 305,570 | | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | | 213,557 | | 41,038 | | | | | 435,500 | | 346,608 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (5) | Related party transactions (Cont’d) | | | | (c) | Guarantee received | | | | Guarantor | Guaranteed amount | Starting date | Ending date | Fully performed or not | | | | | | | JMCF | 2,749,722 | 5 March 2001 | 30 October 2029 | Not fully performed |
| | 2021 first half-year, JMCF provided guarantees for some bank borrowings of the Group, with a maximum guarantee limit of USD2,282,123. As at 30 June 2021, JMCF provided borrowing guarantee to the bank borrowing of USD425,647, equivalent to RMB2,749,722 (31 December 2020: USD458,389, equivalent to RMB2,990,943) for the Group. | | | | | (d) | Transfer of assets | | | | Six months ended 30 June | | | Related parties | Nature of related party transactions | 2021 | | 2020 | | | | | | | | | | Jiangxi JMCG Industry Co., Ltd. | Sales of fixed assets | - | | 1,447 | | | | | - | | 1,447 | | | | | | | | | | The pricing on transfer of assets between the Group and related parties is based on the agreed price by both parties. | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | | (5) | Related party transactions (Cont’d) | | | | | (e) | Purchase of assets | | | | Six months ended 30 June | | | Related parties | Nature of related party transactions | 2021 | | 2020 | | | | | | | | | | Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | Purchase of fixed assets | 4,946,744 | | 1,370,067 | | | Magna PT Powertrain (Jiangxi) Co., Ltd. | Purchase of fixed assets | 2,480,000 | | 3,480,000 | | | Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | Purchase of fixed assets | 444,600 | | - | | | Jiangling Motor Holdings Co., Ltd. | Purchase of fixed assets | - | | 337,660 | | | | | 7,871,344 | | 5,187,727 | | | | | | | | | | The pricing on purchase of assets between the Group and related parties is based on the agreed price by both parties. | | | | | (f) | Provision of technology sharing | | | | Six months ended 30 June | | | Related parties | Nature of related party transactions | 2021 | | 2020 | | | | | | | | | | Ford Motor Research & Engineering (Nanjing) Co., Ltd. | Technical service | 24,740,000 | | 8,290,000 | | | Ford Vietnam Limited | Technical service | 12,780,000 | | 11,123,000 | | | Jiangxi ISUZU Co., Ltd. | Technical service | 4,615,000 | | - | | | Ford | Technical service | 3,230,000 | | 6,974,000 | | | Ford Trading Company, LLC | Technical service | 2,350,000 | | - | | | Ford Otomotiv Sanayi A.S. | Technical service | 340,000 | | - | | | | | 48,055,000 | | 26,387,000 |
| | | | | | | The Group’s pricing on technology sharing provided to related parties is based on the agreed price by both parties. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | | (5) | Related party transactions (Cont’d) | | | | | | | | | (g) | Purchase of fuel consumption integral acquisition | | | | | | | | | Six months ended 30 June | | | Related party | 2021 | | 2020 | | | | | | | | | Jiangling Motor Holdings Co., Ltd. | 177,528,259 | | - | | | Jiangling Motor Electricity Vehicle Co., Ltd. | 11,186,318 | | 23,315,612 | | | | 188,714,577 | | 23,315,612 | | | | - | | | | | The Group’s pricing on fuel consumption integral purchased from related parties is based on the agreed price by both parties. | | | | | (h) | Remuneration of key management | | | | | | Six months ended 30 June | | | | 2021 | | 2020 | | | | | | | | | Remuneration of key management | 11,096,700 | | 6,783,165 |
| | | | (i) | Interest income | | | | | | Six months ended 30 June |
| | 2021 | | 2020 | | | | | | | JMCF | 9,065,202 | | 8,942,382 | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (6) | Receivables from and payables to related parties | | | | Receivables from related parties: | | | | | 30 June 2021 | | 31 December 2020 | | | Amount | | Provision for bad debts | | Amount | | Provision for bad debts | | | | | | | | | | | Accounts receivable | | | | | | | | | | | | | | | | | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 869,532,495 | | (528,716) | | 1,081,916,003 | | (2,368,381) | | Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. | 53,564,546 | | (23,176) | | 22,613,476 | | (47,488) | | Jiangxi JMCG Specialty Vehicles Co., Ltd. | 31,701,175 | | (14,811) | | 9,705,710 | | (20,997) | | JMCG Jingma Motors Co., Ltd. | 19,608,976 | | (48,948) | | 4,953,579 | | (14,861) | | Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | 14,043,419 | | (35,055) | | - | | - | | Nanchang JMCG Frame Co., Ltd | 6,941,722 | | (17,328) | | 11,499,163 | | (34,497) | | Ford Vietnam Limited | 6,390,000 | | (15,951) | | 19,500,000 | | (97,500) | | Jiangxi Jiangling Group Special Vehicle Co., Ltd. | 3,287,145 | | (1,422) | | 3,340,025 | | (7,014) | | Ford | 3,230,000 | | (8,063) | | 6,304,000 | | (31,520) | | Jiangxi ISUZU Co., Ltd. | 2,988,138 | | (7,459) | | 1,103,086 | | (3,309) | | Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd. | 2,443,304 | | (6,099) | | 943,109 | | (2,829) | | Ford Trading Company, LLC | 2,350,000 | | (5,866) | | - | | - | | Nanchang JMCG Liancheng Auto Component Co., Ltd. | 1,650,455 | | (4,120) | | 8,906,500 | | (26,720) | | Ford Motor Research & Engineering (Nanjing) Co., Ltd. | 1,367,400 | | (3,413) | | 890,400 | | (4,452) | | Nanchang Hengou Industry Co., Ltd. | 1,220,975 | | (3,048) | | 394,513 | | (1,184) | | Jiangxi Jiangling Chassis Co., Ltd. | - | | - | | 4,786,897 | | (14,361) | | Nanchang JMCG Shishun Logistics Co., Ltd. | - | | - | | 4,267,697 | | (12,803) | | Jiangxi Jiangling Lear Interior System Co., Ltd. | 926,020 | | (2,312) | | 1,192,642 | | (3,578) | | Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | 591,682 | | (1,477) | | 1,539,411 | | (4,618) | | Other related parties | 2,595,941 | | (5,376) | | 2,016,965 | | (6,044) | | | 1,024,433,393 | | (732,640) | | 1,185,873,176 | | (2,702,156) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (6) | Receivables from and payables to related parties (Cont’d) | | | | Receivables from related parties (Cont'd): | | | | | 30 June 2021 | | 31 December 2020 | | | Amount | | Provision for bad debts | | Amount | | Provision for bad debts | | | | | | | | | | | Other receivables | | | | | | | | | | | | | | | | | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 25,190,512 | | (75,572) | | 35,201,661 | | (105,605) | | Other related parties | 145,870 | | (445) | | 6,644 | | (20) | | | 25,336,382 | | (76,017) | | 35,208,305 | | (105,625) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (6) | Receivables from and payables to related parties (Cont’d) | | | | Receivables from related parties (Cont'd): | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Advances to suppliers | Nanchang Baojiang Steel Processing Distribution Co., Ltd. | 489,145,695 | | 355,529,951 |
| Financing receivables | JMCG Jingma Motors Co., Ltd. | 7,387,290 | | 5,172,364 |
| | | | | | | Prepayment for projects | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 177,160 | | 1,239,661 | | | | | | | | Bank balances | JMCF | 771,587,928 | | 1,231,825,734 |
| Payables to related parties: | | | | | 30 June 2021 | | 31 December 2020 |
| Accounts payable | Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | 473,583,419 | | 600,620,464 | | | Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | 423,742,898 | | 450,355,413 | | | Jiangxi Jiangling Chassis Co., Ltd. | 336,602,865 | | 381,961,882 | | | Jiangxi Jiangling Lear Interior System Co., Ltd. | 229,848,248 | | 244,023,570 | | | Ford | 210,415,771 | | 165,212,418 | | | Magna PT Powertrain (Jiangxi) Co., Ltd. | 210,393,489 | | 257,203,673 | | | Jiangxi Zhonglian Intelligent Logistics Co., Ltd. | 163,864,546 | | 343,739 | | | Nanchang JMCG Liancheng Auto Component Co., Ltd. | 153,999,210 | | 177,586,249 | | | Faurecia Emissions Control Technologies (Nanchang) Co., Ltd. | 140,062,610 | | 140,584,875 | | | Hanon Systems | 104,228,065 | | 119,546,495 | | | JMCG | 95,458,246 | | 108,139,686 | | | Nanchang Unistar Electric & Electronics Co., Ltd. | 89,113,683 | | 107,067,804 | | | Nanchang JMCG Shishun Logistics Co., Ltd. | 87,796,370 | | 112,968,126 | | | Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd. | 48,372,146 | | 84,273,999 | | | Nanchang Yinlun Heat-exchanger Co., Ltd. | 34,995,662 | | 39,863,083 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (6) | Receivables from and payables to related parties (Cont’d) | | | | Payables to related parties (Cont'd): | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Accounts payable | Jiangxi JMCG Specialty Vehicles Co., Ltd. | 27,215,029 | | 44,095,229 | | | Jiangxi Jiangling Group Special Vehicle Co., Ltd. | 26,854,645 | | 17,656,588 | | | Changan Ford Automobile Co., Ltd. | 25,640,001 | | 7,408,214 | | | Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd. | 22,833,969 | | 33,997,041 | | | Nanchang Lianda Machinery Co., Ltd. | 21,647,671 | | 31,713,777 | | | Auto Alliance (Thailand) Co., Ltd. | 12,868,698 | | 4,294,750 | | | Jiangling Aowei Automobile Spare Part Co., Ltd. | 11,392,207 | | 11,243,037 | | | Jiangxi Lingyun Automobile Industry Technology Co.,Ltd | 11,158,275 | | 5,184,778 | | | Jiangxi JMCG Boya brake system Co., Ltd | 10,694,371 | | 8,797,919 | | | Jiangling Motor Holdings Co., Ltd. | 9,740,676 | | 11,635,750 | | | Nanchang JMCG Xinchen Auto Component Co., Ltd. | 8,753,995 | | 5,721,038 | | | Jiangxi ISUZU Engine Co., Ltd. | 5,456,011 | | 441,696 | | | Jiangxi Lingrui Recycling Resources Development Corporation | 3,531,531 | | 4,814,171 | | | Jiangxi JMCG Industry Co., Ltd. | 2,870,093 | | 1,044,850 | | | Ford Otomotiv Sanayi A.S. | 2,838,737 | | 4,727,288 | | | NC.Gear Forging Factory | 2,524,035 | | 921,767 | | | Jiangling Material Co., Ltd. | 1,190,978 | | 1,955,537 | | | Jiangxi JMCG Shangrao Industrial Co., Ltd. | 845,624 | | 1,144,320 | | | Nanchang Gear Co., Ltd. | 90,024 | | 3,414,942 | | | Other related parties | 731,945 | | 666,052 | | | | 3,011,355,743 | | 3,190,630,220 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (6) | Receivables from and payables to related parties (Cont’d) |
| Payables to related parties (Cont'd): | | | | | | | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | | Other payables | Jiangling Motor Holdings Co., Ltd. | 177,758,640 | | 1,480,192 | | | Ford Global Technologies,LLC | 65,202,298 | | 18,050,765 | | | Ford | 49,365,740 | | 48,814,942 | | | Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd. | 27,247,587 | | 23,287,853 | | | Nanchang JMCG Shishun Logistics Co., Ltd. | 11,516,681 | | 8,370,326 | | | Magna PT Powertrain (Jiangxi) Co., Ltd. | 11,246,731 | | 13,139,275 | | | Jiangling Motor Electricity Vehicle Co., Ltd. | 11,186,318 | | - | | | Jiangxi Jiangling Group Special Vehicle Co., Ltd. | 10,905,475 | | 10,269,987 | | | Jiangxi Jiangling Special Purpose Vehicle Co., Ltd. | 6,194,319 | | 1,588,791 | | | JMCG Jiangxi Engineering Construction Co., Ltd. | 5,834,085 | | 7,117,653 | | | Jiangxi JMCG Specialty Vehicles Co., Ltd. | 4,243,509 | | 3,682,741 | | | Ford Otomotiv Sanayi A.S. | 3,789,649 | | 5,265,976 | | | Faurecia Emissions Control Technologies (Nanchang) Co., Ltd. | 3,042,455 | | 3,285,350 | | | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 2,838,809 | | 1,456,956 | | | Nanchang Baojiang Steel Processing Distribution Co., Ltd. | 2,722,060 | | 1,944,877 | | | Chongqing Changan Automobile Co., Ltd. | 2,621,234 | | 1,781,095 | | | Ford Motor (China) Co., Ltd. | 2,134,987 | | 2,570,952 | | | Jiangxi JMCG Industry Co., Ltd. | 1,903,507 | | 3,726,567 | | | Changan Ford Automobile Co., Ltd. | 1,491,634 | | 18,503,441 | | | Hanon Systems | 1,475,000 | | 1,475,000 | | | Ford Motor Research & Engineering (Nanjing) Co., Ltd. | 1,284,159 | | 1,345,255 | | | Jiangxi Jiangling Lear Interior System Co., Ltd. | 1,207,000 | | 1,207,000 | | | Nanchang Jiangling HuaXiang Auto Components Co., Ltd. | 951,859 | | 2,481,859 | | | JMCG | - | | 2,313,728 | | | Other related parties | 4,232,871 | | 5,600,327 | | | . | 410,396,607 | | 188,760,908 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 7 | Related parties and related party transactions (Cont'd) | | | | (6) | Receivables from and payables to related parties (Cont’d) |
| Payables to related parties (Cont'd): | | | | | | | | | | | 30 June 2021 | | 31 December 2020 |
| Contract liabilities | Other related parties | 1,402,307 | | 2,191,137 | | | | | | | | Lease liabilities | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 17,066,139 | | - | | | JMCG | 8,135,282 | | 9,033,918 | | | | 25,201,421 | | 9,033,918 |
| (7) | Commitments in relation to related parties | | | | Capital commitments | 30 June 2021 | | 31 December 2020 | | | | | | | JMCG Jiangxi Engineering Construction Co., Ltd. | 195,204,618 | | 377,223,784 | | | | Guarantee of commitments in relation to related parties is set out in Note 7(5)(c). |
| 8 | Contingencies | | | | As at 30 June 2021, the Group had no contingencies that needed to be accounted for in the notes to the financial statements. | | | | 9 | Commitments | | | | Capital expenditure commitments | | | | Capital expenditures contracted by the Group but are not yet necessary to be presented on the balance sheet as at the balance sheet date are as follows: | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Buildings, machinery and equipment | 823,830,000 | | 1,127,750,000 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 10 | Events after the balance sheet date | | | | (1) | Disposal of equity in subsidiary | | | | The Company and Yunnan Yunnei Power Group Co., Ltd. signed the relevant equity transaction contract in accordance with the relevant trading rules of Shanghai United Property Rights Exchange. As of the disclosure date of this report, the relevant equity trading is still in process. | | | | By consensus, the company has signed the corresponding equity transfer agreement for the sale of 100% equity of JMCH to Volvo Lastvagnar Aktiebolag. As of the disclosure date of this report, the relevant equity trading is still in process. | | | | 11 | Financial instrument and risk | | | | The Group's activities expose it to a variety of financial risks, which mainly comprise market risk (primarily including foreign exchange risk and interest rate risk), credit risk and liquidity risk. The above financial risks and the Group's risk management policies to mitigate the risks are as follows: The Board of Directors is responsible for planning and establishing the Group's risk management framework, formulating the Group's risk management policies, and supervising the implementation of risk management measures. The Group has established risk management policies to identify and analyse the risks faced by the Group. These risk management policies specify the risks such as market risk, credit risk and liquidity risk management. The Group regularly evaluates the market environment and changes in the Group's operating activities to determine whether to update the risk management policies or not. The Group's risk management is carried out under policies approved by the Board of Directors. The business departments of the Group work closely to identify and evaluate related risks, and determine countermeasures with management to avoid or reduce the adverse impact of the related risks on the Company. The internal audit department of the Group conducts periodical audit to the controls and procedures for risk management and reports the audit results to the Risk Management Committee of the Group. |
| (1) | Market risk | | | | (a) | Foreign exchange risk | | | | The Group’s major operational activities are carried out in Mainland China and a majority of the transactions are denominated in RMB. The Group is exposed to foreign exchange risk arising from the recognised assets and liabilities, and future transactions denominated in foreign currencies, primarily with respect to USD. The Group monitors the amount of assets and liabilities, and transactions denominated in foreign currencies to minimise the foreign exchange risk. Therefore, the Group signed forward exchange contracts to mitigate the foreign exchange risk (Note 4(17)). | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 11 (1) (a) | Financial instrument and risk (Cont’d) Market risk (Cont’d) Foreign exchange risk (Cont’d) The financial assets and the financial liabilities denominated in foreign currencies, which are held by the Company and the subsidiaries of the Group, whose recording currencies were RMB, were expressed in RMB as at 30 June 2021 and 31 December 2020 as follows: | | | 30 June 2021 | | | USD | | EUR | | Total | | | | | | | | Financial liabilities denominated in foreign currency - | | | | | | Derivative financial liabilities | 8,165,742 | | - | 8,165,742 | | Current portion of long-term borrowings | 423,034 | | - | 423,034 | | Long-term borrowings | 2,326,688 | | - | 2,326,688 | | Other payables | 118,364,523 | | 255,858 | 118,620,381 | | | 129,279,987 | | 255,858 | 129,535,845 |
| | USD | | EUR | | Total | | Financial liabilities denominated in foreign currency - | | | | | | | Derivative financial liabilities | 3,716,727 | | - | | 3,716,727 | | Current portion of long-term borrowings | 427,277 | | - | | 427,277 | | Long-term borrowings | 2,563,666 | | - | | 2,563,666 | | Other payables | 70,936,756 | | 1,469,682 | | 72,406,438 | | | 77,644,426 | | 1,469,682 | | 79,114,108 |
| As at 30 June 2021, if the RMB had strengthened/weakened by 10% against the USD while all other variables had been held constant, the Group’s net profit would have been approximately RMB10,988,799 (31 December 2020: approximately RMB6,599,776) higher/lower for the financial assets and liabilities dominated in foreign currencies whose recording currency is RMB; if the RMB had strengthened/weakened by 10% against the EUR while all other variables had been held constant, the Group’s net profit would have been approximately RMB21,748 higher/lower (31 December 2020: approximately RMB142,961). |
| (b) | Interest rate risk | | | | The Group's interest rate risk mainly arises from interest-bearing debts such as short-term loans and long-term bank loans. The financial liabilities of floating interest rate expose the Group to cash flow interest rate risk, and the financial liabilities of fixed interest rate expose the Group to fair value interest rate risk. The Group determines the relative proportions of fixed-rate and floating-rate contracts based on the prevailing market environment. As of June 30, 2021, the Group’s short-term borrowings of RMB500,000,000 (December 31, 2020: RMB500,000,000) are fixed-rate borrowings, and long-term borrowings of USD 425,647 (December 31, 2020: USD 458,389) are fixed-rate borrowings, therefor no significant cash flow interest rate risk. | | | | As at 30 June 2021 and 31 December 2020, no significant difference between the fair value and the carrying amount of the Group’s borrowings with fixed-rate. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 11 | Financial instrument and risk (Cont’d) | | | | (2) | Credit risk | | | | The Group’s credit risk mainly arises from cash and cash equivalent, notes receivable, accounts receivable, financial assets held for trading, other receivables and derivative financial assets at fair value through profit or loss that are not included in the impairment assessment scope. The carrying amount of the Group’s financial assets reflects its maximum credit exposure on the balance sheet date. | | | | The Group expects that there is no significant credit risk associated with cash at bank and on hand since they are deposited at state-owned banks and other medium or large size listed banks with good reputation and high credit rating. The Group does not expect that there will be significant losses from non-performance by these banks. |
| In addition, the Group has policies to limit the credit exposure on notes receivable, accounts receivable, financing receivables and other receivables. The Group assesses the credit quality of and sets credit limits on its customers by taking into account their financial position, the availability of guarantee from third parties, their credit history and other factors such as current market conditions. The credit history of the customers is regularly monitored by the Group. In respect of customers with a poor credit history, the Group will use written payment reminders, or shorten or cancel credit periods, to ensure the overall credit risk of the Group is limited to a controllable extent. | | | | As at 30 June 2021, the Group had no significant collateral or other credit enhancements held as a result of the debtor’s mortgage (31 December 2020: Nil). |
| (3) | Liquidity risk | | | | Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the Group. The Group monitors rolling forecasts of its short-term and long-term liquidity requirements to ensure it has sufficient cash and securities that are readily convertible to cash to meet operational needs, while maintaining sufficient headroom on its undrawn committed borrowing facilities from major financial institutions so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities to meet the short-term and long-term liquidity requirements. | | | | On the balance sheet date, the undiscounted contractual cash flows of various financial liabilities of the Group are listed as follows based on the maturity date: | | | | | 30 June 2021 | | | Within 1 year | | 1 to 2 years | | 2 to 5 years | | Over 5 years | | Total | | | | | | | | | | | | | short-term borrowing | | | | | | | | | | | —principal | 500,000,000 | | - | | - | | - | | 500,000,000 | | —interest | - | | - | | - | | - | | - | | Derivative financial liabilities | 8,165,742 | | - | | - | | - | | 8,165,742 | | Accounts payable | 9,408,546,403 | | - | | - | | - | | 9,408,546,403 | | Other payables | 8,024,900,054 | | - | | - | | - | | 8,024,900,054 | | Lease liabilities | 17,841,592 | | 18,735,104 | | 10,272,078 | | - | | 46,848,774 | | Long-term borrowings | | | | | | | | | - | | - Principal | 423,034 | | 423,034 | | 1,269,102 | | 634,552 | | 2,749,722 | | - Interest | 39,659 | | 33,314 | | 61,869 | | 9,518 | | 144,360 | | | 17,959,916,484 | | 19,191,452 | | 11,603,049 | | 644,070 | | 17,991,355,055 | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 11 | Financial instrument and risk (Cont’d) | | | | (3) | Liquidity risk (Cont’d) | | | | | 31 December 2020 |
| | Within 1 year | | 1 to 2 years | | 2 to 5 years | | Over 5 years | | Total | | | | | | | | | | | | | short-term borrowing | 500,000,000 | | - | | - | | - | | 500,000,000 | | —principal | 2,173,333 | | - | | - | | - | | 2,173,333 | | —interest | 3,716,727 | | - | | - | | - | | 3,716,727 | | Derivative financial liabilities | 10,026,215,877 | | - | | - | | - | | 10,026,215,877 | | Accounts payable | 4,153,849,625 | | - | | - | | - | | 4,153,849,625 | | Other payables | 11,683,625 | | 11,419,366 | | 8,646,930 | | - | | 31,749,921 | | Lease liabilities | | | | | | | | | | | Long-term borrowings | 427,277 | | 427,277 | | 1,281,833 | | 854,556 | | 2,990,943 | | - Principal | 43,262 | | 36,853 | | 72,103 | | 16,023 | | 168,241 | | | 14,698,109,726 | | 11,883,496 | | 10,000,866 | | 870,579 | | 14,720,864,667 |
| (i) | As at June 30, 2021, the lease payment related to the lease contract that the Group has signed but has not yet begun to execute as follows(Note 4(27)(a))(December 31, 2020:RMB 361,843,200): |
| | | 30 June 2021 | | | | Within 1 year | | 1 to 2 years | | 2 to 5 years | | | | Total | | | | | | | | | | | | | | Future contractual cash flows not included in lease liabilities | | 72,368,640 | | 72,368,640 | | 217,105,920 | | | | 361,843,200 |
| 12 | Fair value estimates | | | | The level in which fair value measurement is categorised is determined by the level of the fair value hierarchy of the lowest level input that is significant to the entire fair value measurement: | | | | Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. | | | | Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. | | | | Level 3: Unobservable inputs for the asset or liability. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 12 | Fair value estimates (Cont’d) | | | | (1) | Assets and liabilities measured at fair value on a recurring basis | | | | As at 30 June 2021, the assets measured at fair value on a recurring basis by the above three levels were analysed below: | | | | | Level 1 | | Level 2 | | Level 3 | | Total | | | | | | | | | | | Financial assets - | | | | | | | | | Financial assets held for trading- | | | | | | | | | Structured deposits | - | | - | | 553,211,507 | | 553,211,507 | | Financing receivables- | | | | | | | | | Notes receivables | - | | - | | 428,573,213 | | 428,573,213 | | | - | | - | | 981,784,720 | | 981,784,720 |
| | | As at 30 June 2021, the liabilities measured at fair value on a recurring basis by the above three levels were analysed below: | | | | | Level 1 | | Level 2 | | Level 3 | | Total | | | | | | | | | | | Financial liabilities - | | | | | | | | | Derivative financial liabilities- | | | | | | | | | Forward foreign exchange contract | - | | 8,165,742 | | - | | 8,165,742 |
| As at 31 December 2020, the assets measured at fair value on a recurring basis by the above three levels were analysed below: | | | | | Level 1 | | Level 2 | | Level 3 | | Total | | Structured deposits | - | | | | 803,892,985 | | 803,892,985 | | Financial assets - | | | | | | | | | Financing receivables | | | | | | | | | Notes receivables | - | | - | | 815,583,669 | | 815,583,669 | | | - | | - | | 1,619,476,654 | | 1,619,476,654 | | | | As at 31 December 2020, the liabilities measured at fair value on a recurring basis by the above three levels were analysed below: | | | | | Level 1 | | Level 2 | | Level 3 | | Total | | | | | | | | | | | Financial liabilities - | | | | | | | | | Derivative financial liabilities | | | | | | | | | Forward foreign exchange contract | - | | 3,716,727 | | - | | 3,716,727 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 12 | Fair value estimates (Cont’d) | | | | (1) | Assets and liabilities measured at fair value on a recurring basis (Cont’d) |
| The Group takes the date on which events causing the transfers between the levels take place as the timing specific for recognising the transfers. There is no transfer between Level 1 and Level 2 for the current period. | | | | The fair value of financial instruments traded in an active market is determined at the quoted market price; and the fair value of those not traded in an active market is determined by the Group using valuation technique. The valuation models used mainly comprise discounted cash flow model and market comparable corporate model. The inputs of valuation technique mainly include risk-free interest rate, benchmark rate, exchange rate, etc. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 12 | Fair value estimates (Cont’d) | | | | (1) | Assets and liabilities measured at fair value on a recurring basis (Cont'd) | | | | The changes in Level 3 financial assets are analysed below: |
| | 31 December 2020 | | Increase | | Decrease | | 30 June 2021 | | Gains recognised in profit or loss (a) | | Changes in unrealised gains or losses included in profit or loss in 2021 with respect to assets still held as at 30 June 2021 - gains or losses on changes in fair value | | | | | | | | | | | | | | Financial assets | | | | | | | | | | | | | Financial assets held for trading - | | | | | | | | | | | | | Monetary fund | - | | 500,000,000 | | (500,000,000) | | - | | 198,622 | | - | | Structural deposits | 803,892,985 | | 1,099,318,522 | | (1,350,000,000) | | 553,211,507 | | 10,005,970 | | (681,478) | | Financing receivables - | | | | | | | | | | | | | Notes receivable | 815,583,669 | | 1,581,300,701 | | (1,968,311,157) | | 428,573,213 | | - | | - | | | | | | | | | | | | | | Total assets | 1,619,476,654 | | 3,180,619,223 | | (3,818,311,157) | | 981,784,720 | | 10,204,592 | | (681,478) |
| (a) | Gains recognised in profit or loss is recognised in investment income in the income statement. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 12 | Fair value estimates (Cont’d) | | | | (1) | Assets and liabilities measured at fair value on a recurring basis (Cont'd) | | | | The changes in Level 3 financial assets are analysed below (Cont'd): |
| | 31 December 2019 | | Increase | | Decrease | | 31 December 2020 | | Gains recognised in profit or loss (a) | | Changes in unrealised gains or losses included in profit or loss in 2020 with respect to assets still held as at 31 December 2020 - gains or losses on changes in fair value | | | | | | | | | | | | | | Financial assets | | | | | | | | | | | | | Financial assets held for trading - | | | | | | | | | | | | | Monetary fund | - | | 500,000,000 | | (500,000,000) | | - | | 244,059 | | - | | Structural deposits | - | | 15,610,892,985 | | (14,807,000,000) | | 803,892,985 | | 77,605,603 | | 3,892,985 | | Financing receivables - | | | | | | | | | | | | | Notes receivable | 289,044,373 | | 2,325,165,208 | | (1,798,625,912) | | 815,583,669 | | - | | - | | | | | | | | | | | | | | Total assets | 289,044,373 | | 18,436,058,193 | | (17,105,625,912) | | 1,619,476,654 | | 77,849,662 | | 3,892,985 |
| (a) | Gains recognised in profit or loss is recognised in investment income in the income statement. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 12 | Fair value estimates (Cont’d) | | | | (2) | Assets measured at fair value on a non-recurring basis | | | | As at 30 June 2021 and 31 December 2020, the Group did not have assets measured at fair value on a non-recurring basis. | | | | (3) | Assets and liabilities not measured at fair value but for which the fair value is disclosed | | | | The Group’s financial assets and liabilities measured at amortised cost mainly comprise notes receivable, accounts receivable, other receivables, short-term borrowing, account payables, long-term borrowings, etc. | | | | The carrying amount of the Group's financial assets and liabilities not measured at fair value is a reasonable approximation of their fair value. | | | | The fair value of long-term borrowings is the present value of the contractually determined stream of future cash flows discounted at the rate of interest applied at that time by the market to instruments of comparable credit status and providing substantially the same cash flows on the same terms, and categorised within Level 3 of the fair value hierarchy. |
| 13 | Capital management | | | | The Group’s capital management policies aim to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital. | | | | |
| | | The Group's total capital is calculated as “shareholders equity” as shown in the consolidated balance sheet. The Group is not subject to external mandatory capital requirements, and monitors capital on the basis of equity ratio. | | | | As at 30 June 2021 and 31 December 2020, the Group's equity ratio was as follows: | | | | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Total borrowings | 502,749,722 | | 502,990,943 | | Total equities | 8,391,156,200 | | 10,986,474,009 | | | | | | | Equity ratio | 5.99% | | 4.58% |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 14 | Notes to the Company’s financial statements |
| (1) | Accounts receivable | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Accounts receivable | 3,278,994,400 | | 3,502,761,954 | | Less: Provision for bad debts | (170,482,313) | | (171,881,303) | | | 3,108,512,087 | | 3,330,880,651 |
| (a) | The ageing of accounts receivable is analysed as follows: | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Within 1 year | 2,841,807,874 | | 3,043,074,741 | | 1 to 2 years | 5,027,969 | | 5,223,812 | | 2 to 3 years | 400,079,957 | | 454,463,401 | | Overdue over 3 years | 32,078,600 | | - | | | 3,278,994,400 | | 3,502,761,954 |
| (b) | As at 30 June 2021, the five largest accounts receivable aggregated by debtor were analysed as follows: | | | | | Balance | | Amount of provision for bad debts | | % of total balance | | | | | | | | | Company 1 | 1,714,945,725 | | - | | 52.30% | | Company 2 | 860,205,437 | | (499,576) | | 26.23% | | Company 3 | 147,567,312 | | - | | 4.50% | | Company 4 | 72,480,000 | | (72,480,000) | | 2.21% | | Company 5 | 53,938,618 | | (134,642) | | 1.64% | | | 2,849,137,092 | | (73,114,218) | | 86.88% |
| (c) | Provision for bad debts | | | | For accounts receivable, irrespective of whether a significant financing component exists, the Company measures the loss provision according to the lifetime expected credit losses. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 14 | Notes to the Company’s financial statements (Cont’d) | | | | (1) | Accounts receivable (Cont’d) | | | | (c) | Provision for bad debts (Cont’d) |
| (i) | Accounts receivable for which provision for bad debts is made on the individual basis are analysed as follows: |
| | 30 June 2021 | | | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Provision for bad debts | | | | | | | | Receivables from related parties within the Group i) | 1,862,632,705 | | - | | - | | New energy subsidies receivable ii) | 84,903,126 | | 100% | | (84,903,126) | | Accounts receivable for automobiles iii) | 72,480,000 | | 100% | | (72,480,000) | | | 2,020,015,831 | | | | (157,383,126) |
| | Book balance | | Provision for bad debts | | | Amount | | Lifetime ECL (%) | | Provision for bad debts | | | | | | | | Receivables from related parties within the Group i) | 1,775,196,875 | | - | | - | | New energy subsidies receivable ii) | 84,903,126 | | 100% | | (84,903,126) | | Accounts receivable for automobiles iii) | 74,480,000 | | 100% | | (74,480,000) | | | 1,934,580,001 | | | | (159,383,126) |
| i) As at 30 June 2021, the Company's accounts receivable due from subsidiaries JMCS, SZFJ and JMPC were RMB1,714,945,725, RMB147,567,312 and RMB119,668 respectively, totalling to RMB1,862,632,705. The Company carried out individual assessment on receivables from subsidiaries. Based on the judgement of credit risk, there is no significant credit risk on receivables from subsidiaries, and there is no overdue or impairment. As at 31 December 2020, the Company's accounts receivable from subsidiaries JMCS, JMCH and GZFJ were RMB1,605,066,624, RMB167,353,472 and RMB2,776,779 respectively, totalling to RMB1,775,196,875. The Company carried out individual assessment on receivables from subsidiaries. Based on the judgement of credit risk, there is no significant credit risk on receivables from subsidiaries, and there is no overdue or impairment. | | | | ii) As at 30 June 2021, state subsidies for new energy automobiles receivable amounted to RMB84,903,126 (31 December 2020: RMB84,903,126). As the corresponding new energy vehicles may not meet the corresponding subsidy policy standards, the Company considered the receivables cannot be collected, therefore, full provision was made for those receivables. | | | | iii) As at 30 June 2021 and 31 December 2020, since these companies in debts were involved in several legal proceedings, the Company considered that it was difficult to recover such receivables, therefore, full provision was made for those receivables. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 14 | Notes to the Company’s financial statements (Cont’d) | | | | (1) | Accounts receivable (Cont’d) | | | | (c) | Provision for bad debts (Cont’d) | | | | (ii) | Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows: |
| Grouping - Sales of general automobiles: | | | | | 30 June 2021 | | | Book balance | | Provision for bad debts | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | Not overdue | 838,332,166 | | 0.04% | | (374,072) | | Overdue for 1 to 30 days | 7,584,372 | | 0.07% | | (5,426) | | Overdue for 31 to 60 days | 119,425 | | 2.59% | | (3,092) | | | 846,035,963 | | | | (382,590) |
| Grouping - Sales of general automobiles: | | | | | 31 December 2020 | | | Book balance | | Provision for bad debts | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | Not overdue | 1,096,348,057 | | 0.21% | | (2,303,427) | | Overdue for 1 to 30 days | 70,701,614 | | 0.21% | | (148,544) | | Overdue for 31 to 60 days | 345,798 | | 6.35% | | (21,961) | | | 1,167,395,469 | | | | (2,473,932) |
| Grouping - Sales of new energy automobiles: | | | | | 30 June 2021 | | | Book balance | | Provision for bad debts | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | Not overdue | 122,873,663 | | 5.01% | | (6,160,075) | | Overdue for 1 to 30 days | - | | - | | - | | Overdue for 31 to 60 days | - | | - | | - | | Overdue for 61 to 90 days | - | | - | | - | | Overdue over 90 days | 23,243,550 | | 25.34% | | (5,890,472) | | | 146,117,213 | | | | (12,050,547) |
| | 31 December 2020 | | | Book balance | | Provision for bad debts | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | | | | | | | | Not overdue | 138,042,462 | | 4.94% | | (6,826,200) | | Overdue for 1 to 30 days | - | | — | | - | | Overdue for 31 to 60 days | 23,243,550 | | 10.25% | | (2,381,426) | | | 161,286,012 | | | | (9,207,626) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 14 | Notes to the Company’s financial statements (Cont’d) | | | | (1) | Accounts receivable (Cont’d) | | | | (c) | Provision for bad debts (Cont’d) | | | | (ii) | Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows (Cont’d): | | | | Grouping - spare parts: |
| | 30 June 2021 | | Book balance | | Provision for bad debts | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | Not overdue | 266,825,393 | | 0.25% | | (666,050) |
| | 31 December 2020 | | Book balance | | Provision for bad debts | | Amount | | Lifetime ECL (%) | | Amount | | | | | | | | Not overdue | 206,087,099 | | 0.30% | | (618,261) | | Overdue for 1 to 30 days | 19,968,933 | | 0.30% | | (59,907) | | Overdue for 31 to 60 days | 10,595,310 | | 0.50% | | (52,977) | | Overdue for 61 to 90 days | 1,295,045 | | 0.60% | | (7,770) | | Overdue over 90 days | 1,554,085 | | 5.00% | | (77,704) | | | 239,500,472 | | | | (816,619) |
| (iii) | The provision for bad debts in the current period amounted to RMB601,010, and RMB2,000,000 was reversed. The significant amounts reversed were as follows: | | | | | Reasons for reversal/recovery | Basis and justification for determining the provision for bad debts | Amount of reversal | Reasons for reversal/ recovery | | | | | | | | Accounts receivable 1 | The actual receipt of account receivables relating to the provision for bad debts made in the prior period. | The aforesaid companies in debts had difficulties in operation and were involved in several legal proceedings, so the Group considered that it was difficult to recover such receivables, so related provision for bad debts was made in full amount. | 2,000,000 | Received |
| (d) | In the six months ended 30 June 2021, no accounts receivable had been written off. | | | | (e) | As at 30 June 2021 and 31 December 2020, the Company did not have accounts receivable that were pledged. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 14 | Notes to the Company’s financial statements (Cont’d) | | | | (2) | Other receivables |
| | 30 June 2021 | | 31 December 2020 | | | | | | | Interest receivable from cash at bank | 67,457,831 | | 49,458,968 | | Receivables from JMCH | 44,679,410 | | 1,247,724,942 | | Import working capital advances | 25,000,000 | | 35,000,000 | | Deposits receivable | 8,897,131 | | 7,072,745 | | Advances for research and development projects | 5,160,914 | | 4,559,669 | | Cash advance | 696,898 | | 680,403 | | Others | 90,199,732 | | 15,599,236 | | | 242,091,916 | | 1,360,095,963 | | | | | | | Less: Provision for bad debts | (389,874) | | (188,740) | | | 241,702,042 | | 1,359,907,223 |
| (a) | The ageing of other receivables is analysed as follows: | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Within 1 year | 236,912,421 | | 1,359,304,567 | | Over 1 year | 5,179,495 | | 791,396 | | | 242,091,916 | | 1,360,095,963 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 14 | Notes to the Company’s financial statements (Cont’d) | | | | (2) | Other receivables (Cont'd) | | | | (b) | Provision for losses and changes in book balance statements | | | | | | | | | | Stage 1 | | Stage 3 | | Total | | | 12-month ECL (grouping) | | 12-month ECL (individual) | | Sub-total | | Lifetime ECL (credit impaired) | | | | Book balance | Provision for bad debts | | Book balance | Provision for bad debts | | Provision for bad debts | | Book balance | Provision for bad debts | | Provision for bad debts | | | | | | | | | | | | | | | 31 December 2020 | 112,371,021 | (188,740) | | 1,247,724,942 | - | | (188,740) | | - | - | | (188,740) | | Balance increase/(decrease) in the current period | 85,041,485 | - | | (1,203,045,532) | - | | - | | - | - | | - | | Provision for bad debts in the current period | - | (201,134) | | - | - | | (201,134) | | - | - | | (201,134) | | 30 June 2021 | 197,412,506 | (389,874) | | 44,679,410 | - | | (389,874) | | - | - | | (389,874) |
| As at 30 June 2021, the Group had no other receivables transferred from Stage 1 to Stage 3, and no other receivables reversed from Stage 3 to Stage 1. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 14 | Notes to the Company’s financial statements (Cont’d) | | | | (2) | Other receivables (Cont’d) | | | | (b) | Provision for losses and changes in book balance statements (Cont’d) | | | | As at 30 June 2021 and 31 December 2020, the Company did not have any other receivables at Stage 2. Other receivables at Stage 1 and Stage 3 were analysed below: | | | | (i) | As at 30 June 2021 and 31 December 2020, provision for bad debts of other receivables on the individual basis was analysed as follows: | | | | | 30 June 2021 | | Stage 1 | Book balance | | 12-month ECL (%) | | Provision for bad debts | Reason | | | | | | | | | Receivables from JMCH | 44,679,410 | | - | | - | i) |
| | 31 December 2020 | | Stage 1 | Book balance | | 12-month ECL (%) | | Provision for bad debts | Reason | | | | | | | | | Receivables from JMCH | 1,247,724,942 | | - | | - | i) |
| i) As at 30 June 2021, the Company’s other receivables from subsidiary JMCH were RMB44,679,410 (31 December 2020: RMB1,247,724,942). The Company carried out individual assessment on receivables from subsidiaries. Based on the judgement of credit risk, there is no significant credit risk on receivables from subsidiaries, and there is no overdue or impairment. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 14 | Notes to the Company’s financial statements (Cont’d) | | | | (2) | Other receivables (Cont'd) | | | | (b) | Provision for losses and changes in book balance statements (Cont’d) | | | | (ii) | As at 30 June 2021 and 31 December 2020, the Company’s other receivables with provision for bad debts on the grouping basis were analysed below: | | | | Other receivables with provision on the grouping basis at Stage 1: |
| | 30 June 2021 | | 31 December 2020 | | | Book balance | | Provision for losses | | Book balance | | Provision for losses | | | Amount | | Provision ratio | Amount | | Amount | | Provision ratio | Amount | | | | | | | | | | | | Grouping of interest receivable from cash at bank i): | | | | | | | | | | | Within 1 year | 67,457,831 | | - | - | | 49,458,968 | | - | - | | Grouping of operating advances and guarantees: | | | | | | | | | | | Within 1 year | 124,775,180 | | 0.30% | (374,326) | | 62,120,657 | | 0.30% | (186,365) | | Over 1 year | 5,179,495 | | 0.30% | (15,548) | | 791,396 | | 0.30% | (2,375) | | 197,412,506 | | | (389,874) | | 112,371,021 | | | (188,740) |
| As at 30 June 2021 and 31 December 2020, the Company’s interest receivable from cash at bank mainly came from four major state-owned banks or national joint-stock banks. Therefore, the Company expected there was no significant loss on related interest receivable from non-performance by these banks. | | | | As at June 30, 2021, the Company has no other receivables in the second and third stage. |
| (c) | In the six months ended 30 June 2021, the amount of bad debt provision was RMB 201,134. | | (d) | In the six months ended 30 June 2021, no other receivables had been written off. |
| (e) | As at 30 June 2021, the five largest other receivables aggregated by debtor were analysed as follows: | | | | | Nature | | Balance | | Ageing | | % of total balance | | Provision for bad debts | | | | | | | | | | | | Company 1 | Subsidiary trading | | 44,679,410 | | Within 1 year | | 18.46% | | - | | Company 2 | Assets receivables | | 32,555,714 | | Within 1 year | | 13.45% | | (97,667) | | Company 3 | Expenses advances | | 25,190,512 | | Within 1 year | | 10.41% | | (75,572) | | Company 4 | Assets receivables | | 18,513,359 | | Within 1 year | | 7.65% | | (55,540) | | Company 5 | Assets receivables | | 11,955,220 | | Within 1 year | | 4.94% | | (35,866) | | | | 132,894,215 | | | | 54.91% | | (264,645) |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 14 | Notes to the Company’s financial statements (Cont’d) | | | | (3) | Long-term equity investments | | | | | | | | 30 June 2021 | | 31 December 2020 | | | | | | | Subsidiaries (a) | 3,293,943,493 | | 2,048,000,000 | | Associates (b) | 39,232,347 | | 39,496,548 | | | 3,333,175,840 | | 2,087,496,548 | | Less: Provision for impairment of long-term equity investments | (526,000,000) | | (526,000,000) | | | 2,807,175,840 | | 1,561,496,548 |
| (a) | Subsidiaries | | | | | | | | | Changes in the current period | | | | | | | | | | | 31 December 2020 | | Split-off | | Debt exemption | | | Provision for impairment | | 30 June 2021 | | Balance of provision for impairment In 30 June 2021 | | Cash dividends declared this period | | | | | | | | | | | | | | | | | | | | | | | | | JMCH | | | 852,000,000 | | 1,142,000,000 | | 103,943,493 | | | - | | 2,097,943,493 | | (526,000,000) | | - | | | | | JMCS | | | 50,000,000 | | - | | - | | | - | | 50,000,000 | | - | | - | | | | | SZFJ | | | 10,000,000 | | - | | - | | | - | | 10,000,000 | | - | | - | | | | | GZFJ | | | 10,000,000 | | - | | - | | | - | | 10,000,000 | | - | | - | | | | | JMPC | | | 600,000,000 | | - | | - | | | - | | 600,000,000 | | - | | - | | | | | | | | 1,522,000,000 | | 1,142,000,000 | | 103,943,493 | | | - | | 2,767,943,493 | | (526,000,000) | | - | | | | | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 14 | Notes to the Company’s financial statements (Cont’d) | | | | (3) | Long-term equity investments (Cont’d) | | | | (a) | Subsidiaries (Cont’d) | | | | (i) | In January 2021, the Company increased the share capital of JMCH by RMB 1,142 million in cash. | | | | (ii) | In January 2021, greed by the Company and JMCH, the Company exempted the debt of RMB103,943,493 from JMCH. | | | | (b) | Associates | | | | Refer to Note 4(9). |
SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 14 | Notes to the Company’s financial statements (Cont’d) | | | | | | | (4) | Revenue and cost of sales | | | | | | | | Six months ended 30 June | | | | 2021 | | 2020 | | | | | | | | | | | Revenue from main business | 16,109,269,826 | | 12,901,713,333 | | | | Revenue from other business | 314,288,655 | | 198,396,600 | | | | | 16,423,558,481 | | 13,100,109,933 | |
| | Six months ended 30 June | | | | 2021 | | 2020 | | | | | | | | | | | Cost of sales from main business | 14,248,936,203 | | 11,010,954,908 | | | | Cost of sales from other business | 293,290,780 | | 186,559,118 | | | | | 14,542,226,983 | | 11,197,514,026 | |
| (a) | Revenue and cost of sales from main business | | | | | | | | | | | Six months ended 30 June | | | | 2021 | | 2020 | | | | | Revenue from main business | | Cost of sales from main business | | Revenue from main business | | Cost of sales from main business | | | | | | | | | | | | | | | Sales of automobiles | 15,039,210,401 | | 13,448,227,943 | | 12,091,989,040 | | 10,397,191,187 | | | | Sales of spare parts | 983,532,314 | | 742,735,696 | | 771,758,926 | | 572,162,496 | | | | Automobile maintenance services | 86,527,111 | | 57,972,564 | | 37,965,367 | | 41,601,225 | | | | | 16,109,269,826 | | 14,248,936,203 | | 12,901,713,333 | | 11,010,954,908 | |
| (b) | Revenue and cost of sales from other business | | | | | | | | Six months ended 30 June | | | | 2021 | | 2020 | | | | | Revenue from other business | | Cost of sales from other business | | Revenue from other business | | Cost of sales from other business | | | | | | | | | | | | | | | Sales of materials | 257,777,393 | | 238,667,848 | | 157,745,817 | | 149,930,871 | | | | Others | 56,511,262 | | 54,622,932 | | 40,650,783 | | 36,628,247 | | | | | 314,288,655 | | 293,290,780 | | 198,396,600 | | 186,559,118 | |
SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 14 | Notes to the Company’s financial statements (Cont’d) | | | | (4) | Revenue and cost of sales (Cont’d) | | | | (c) | The breakdown of revenue earned in 2021 was as follows: | | | | | | Six months ended 30 June 2021 | | Automobiles | Spare parts | Automobile maintenance services | Materials and others | Total | | | | | | | | Revenue from main business | 15,039,210,401 | 983,532,314 | 86,527,111 | - | 16,109,269,826 | | Including: Recognised at a time point | 15,039,210,401 | 983,532,314 | - | - | 16,022,742,715 | | Recognised within a certain period | - | - | 86,527,111 | - | 86,527,111 | | Revenue from other business | - | - | - | 314,288,655 | 314,288,655 | | | 15,039,210,401 | 983,532,314 | 86,527,111 | 314,288,655 | 16,423,558,481 |
| (i) | As at 30 June 2021, the amount of revenue corresponding to the performance obligation of the Company that had been contracted but not yet performed or not fulfilled was RMB137,930,962, which was expected to be recognised between 2021 and 2026. |
| (5) | Investment income | | | | | | | | Six months ended 30 June | | | | 2021 | | 2020 | | | | | | | | | | | Investment income from financial assets held for trading | 3,894,457 | | 32,619,541 | | | | Investment loss from forward exchange settlement | (7,750,384) | | (1,316,987) | | | | Investment income from long-term equity investment under equity method | (264,201) | | (3,024,554) | | | | Losses on discounts for financing receivables | (498,879) | | - | | | | | (4,619,007) | | 28,278,000 | | | | | | | | There is no significant restriction on the remittance of investment income to the Company. | |
SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021 (All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 1 | Statement of non-recurring profit or loss | | | | | | | | Six months ended 30 June | | | | 2021 | | 2020 | | | | | | | | | | | Profit or loss on disposal of non-current assets | 11,008,608 | | (25,860,575) | | | | Government grants recognised in profit or loss for the current period | 335,052,961 | | 165,679,468 | | | | Gains and losses arising from changes in fair value of financial assets and liabilities held at fair value through profit or loss, and investment gains and losses from disposal of related financial assets and liabilities | (2,676,284) | | 41,314,596 | | | | Fund occupation fee received from non-financial institutions | 7,142,859 | | 4,740,888 | | | | Reversal of provision for impairment of receivables tested individually | 2,000,000 | | - | | | | Net amount of other non-operating income and expenses | 68,869 | | (1,400,440) | | | | Other profit and loss items that meet the definition of non-recurring profit and loss | (5,423,293) | | - | | | | | 347,173,720 | | 184,473,937 | | | | Effect of income tax | (55,801,540) | | (26,053,489) | | | | Effect of gains and losses on minority interests (net of tax) | - | | - | | | | | 291,372,180 | | 158,420,448 | |
| | | Basis for preparation of statement of non-recurring profit or loss | | | | Under the requirements in the Explanatory Announcement No. 1 on Information Disclosure by Companies Offering Securities to the Public - Non-recurring Profit or Loss [2008] from CSRC, non-recurring profit or loss refers to that arises from transactions and events that are not directly relevant to ordinary activities, or that are relevant to ordinary activities, but are extraordinary and not expected to recur frequently that would have an influence on users of financial statements making economic decisions on the financial performance and profitability of an enterprise. |
SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only] | 2 | Return on net assets and earnings per share | | | | | Weighted average return on net assets (%) | | Earnings per share | | | | Basic earnings per share | | Diluted earnings per share | | | Six months ended 30 June | | | 2021 | 2020 | | 2021 | 2020 | | 2021 | 2020 | | | | | | | | | | | Net profit attributable to ordinary shareholders of the Company | 3.62% | 1.96% | | 0.47 | 0.24 | | 0.47 | 0.24 | | Net profit attributable to ordinary shareholders of the Company, net of non-recurring profit or loss | 1.02% | 0.47% | | 0.13 | 0.06 | | 0.13 | 0.06 | | | | | | | | | | |
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