江铃Ｂ：2019年半年度报告（英文版）

Jiangling Motors Corporation, Ltd.

2019Half-year Report

2019-043

Chapter I Important Notes, Contents and Abbreviations

Important NoteThe Board of Directors and its members, the Supervisory Board and itsmembers, and the senior executives are jointly and severally liable for thetruthfulness, accuracy and completeness of the information disclosed in thereport and confirm that the information disclosed herein does not contain anyfalse statement, misrepresentation or major omission.

Chairman Qiu Tiangao, CFO Li Weihua and Chief of Finance Department, XieWanzhao, confirm that the Financial Statements in this Half-year Report aretruthful, accurate and complete.

Director David Johnston did not attend this meeting, and he authorized ViceChairman Anning Chen to represent him at this meeting, and all the otherDirectors were present at the Board meeting in person.

Neither cash dividend nor stock dividend was distributed. The Board decidednot to convert capital reserve to share capital this time.

All financial data in this report are prepared under International FinancialReporting Standards (‘IFRS’) unless otherwise specified.

The Half-year Report is prepared in Chinese and English. In case ofdiscrepancy, the Chinese version will prevail.

Contents

Chapter I Important Notes, Contents and Abbreviations ...... 2

Chapter II Brief Introduction ...... 4

Chapter V Major Events ...... 13

Chapter VI Share Capital Changes & Shareholders ...... 19

Chapter VII Preferred Shares ...... 23

Chapter VIII Directors, Supervisors and Senior Management ...... 24

Chapter IX Company Bond ...... 25

Chapter X Financial Statements ...... 26

Chapter XI Catalogue on Documents for Reference ...... 91

Abbreviations:

JMC, or the Company Jiangling Motors Corporation, Ltd.JHC Jiangling Motor Holdings Co., Ltd.Ford Ford Motor CompanyCSRC China Securities Regulatory CommissionJMCG Jiangling Motors Company (Group)JMCH JMC Heavy Duty Vehicle Co., Ltd.EVP Executive Vice PresidentCFO Chief Financial OfficerVP Vice President

Chapter II Brief Introduction

1. Company’s information

Share’s name	Jiangling Motors, Jiangling B	Share’s Code	000550, 200550
Place of listing	Shenzhen Stock Exchange
Company’s Chinese name	江铃汽车股份有限公司
English name	Jiangling Motors Corporation, Ltd.
Abbreviation	JMC
Company legal representative	Qiu Tiangao

2. Contact person and method

	Board Secretary	Securities Affairs Representative
Name	Wan Hong	Quan Shi
Address	No. 509, Northern Yingbin Avenue, Nanchang City, Jiangxi Province, P.R.C	No. 509, Northern Yingbin Avenue, Nanchang City, Jiangxi Province, P.R.C
Tel	86-791-85266178	86-791-85266178
Fax	86-791-85232839	86-791-85232839
E-mail	[e-mail]	[e-mail]

3. Other

I. Contact methodsChanges of registered address, headquarter address, postal code, websiteand e-mail

□Applicable √Not Applicable

There is no change of registered address, headquarter address, postal code,website and e-mail. Please refer to 2018 Annual Report for details.

II. Newspapers for information disclosure, website for publication of JMC’shalf-year report and place for achieving half-year report

□Applicable √Not Applicable

There is no change of newspapers for information disclosure, websitedesignated by CSRC for publication of JMC’s Half-year Report and place forachieving Half-year Report. Please refer to 2018 Annual Report for details.

4. Main accounting data and financial ratios

Unit: RMB ‘000

	Reporting period (2019 first half)	Same period last year	Change (%)
Revenue	13,721,954	14,287,497	-3.96
Profit Attributable to the Equity Holders of the Company	58,862	318,951	-81.55
Net Cash Generated From Operating Activities	1,435,202	-906,818	258.27
Basic Earnings Per Share (RMB)	0.07	0.37	-81.55
Diluted Earnings Per Share (RMB)	0.07	0.37	-81.55
Weighted Average Return on Equity Ratio	0.57%	2.72%	Down 2.15 percentage points
	At the end of reporting period	At the end of the previous year	Change (%)
Total Assets	23,668,970	23,396,529	1.16
Shareholders’ Equity Attributable to the Equity Holders of the Company	10,408,831	10,384,498	0.23

5. Accounting data difference between domestic and foreign accountingstandards

I. Differences in net profit and net assets disclosed respectively per IFRS andPRC GAAP.

□Applicable √Not Applicable

There is no difference between IFRS and PRC GAAP in net profit and netassets.

II. Differences in net profit and net assets disclosed respectively per GAAPand PRC GAAP.

□Applicable √Not Applicable

There is no difference between GAAP and PRC GAAP in net profit and netassets.

Chapter III Operating Overview

1. Company’s Core Business during the Reporting Period

JMC’s core business is production and sales of commercial vehicles, SUVand related components. JMC’s major products include JMC series light truck,heavy truck, pickup and light bus; Yusheng SUV; Ford-brand light bus, MPVand SUV. The Company also produces and sells engines, castings and othercomponents for sales to domestic and overseas markets.

2. Major Change of Main Assets

I. Major Change of Main Assets

There’s no major change of main assets during the reporting period.

II. Main Overseas Assets

□Applicable □√Not Applicable

3. Core Competitiveness Analysis

JMC is a sino-foreign joint venture auto company with R&D, manufacturingand sales operations. With leading position and advanced technology ofcommercial vehicles, JMC is China auto industry pioneer providing excellentproducts and solutions to smart logistics, which is certificated as a nationalhigh-tech enterprise, national innovative pilot enterprise, national enterprisetechnology centre, national industrial design centre, national intellectualproperty demonstration enterprises, advanced quality management enterpriseand national automobile export base; and had been ranked among the top100 most valuable global brands for consecutive years.

JMC insists on the guide of strategy, focuses on strengthening the strategyimplementation: during the reporting period, the company developed “2025Strategy” which identified the new vision of JMC, committed to become theindustry leader of light commercial vehicle and provider of Ford products withexcellent cost performance. Commercial vehicle is positioned on city/main linelogistics products and suppliers of comprehensive service scheme. Achievebreakthrough and great development on small/middle passenger vehiclesegment.

Centered on innovation and service, promoting structural renovation: JMCadheres to the road of scientific/technological and management innovation.During the reporting period, the company continued vigorous implementationof product innovation to drive development, integrate resources, strengthentechnological innovation, promote market-oriented product innovation; deepentransformation and adjustment, adhere to business model innovation; developsystematic cost reduction strategies, focus on promoting the transformation oforganization and efficiency, and comprehensively enhance the corecompetitiveness of products.

Focusing on advantageous business and create product leadership: JMCfocuses on the core business, concentrates intensive cultivation on eachsegment, insists on customer-centered, improve the market awareness of thewhole value chain, so as to actively makes the company's products theleaders of each segment.

Collaborative integration of the industrial system, positive layout of “ASEC”:

aiming at the new trends in the development of the automotive industry, JMCpromotes the implementation of the "ASEC" development strategy of"autonomous driving, sharing, electrification, connectivity". The company hasdeveloped layout in the core areas such as new energy vehicles, smartconnectivity, and autonomous driving to accelerate the construction of afuture-oriented and globally competitive business ecosystem through theoverall collaboration and integration of “ASEC”.

Chapter IV Management Discussion and Analysis

1. Summary

In 2019, China's economy has maintained a trend of overall stable andprogressive development. The main macroeconomic indicators reflected theoperation in a reasonable range, and the economic structure is constantlybeing optimized and adjusted. Total sales volume was 12.32 million units,decreased 12.40% compared with last year.

During the reporting period, to cope with more severe competition, morestringent regulatory requirement and intensifying cost pressures, theCompany focused on quality improvement, new product development,operating cost control and production efficiency enhancement. Simultaneously,the Company introduced series of sales policy to respond the market risk. Inthe first half of 2019, JMC achieved sales volume of 136,643 units, decreased

7.27% compared with last year, achieved revenue of RMB 13.72 billion,decreased 3.96% compared with last year, achieved net profit of RMB 59million, decreased 81.55% compared with last year. It mainly reflects: I. thevolume decrease of passenger vehicle in the interim period and the change ofoverall sales structure; II. Marketing expense increased to compete in the verychallenging market. III. Continued spending on new product and technology.

2. Core Business Analysis

Year-over-Year Changes of Main Financial Data

Unit: RMB ’000

	2019 1H	2018 1H	YOY change（%）	Reason
Revenue	13,721,954	14,287,497	-3.96%
Cost of sales	11,683,969	12,277,724	-4.84%
Distribution costs	705,875	452,934	55.85%	Due to the marketing expense increase for Territory launch.
Administrative expenses	1,274,585	1,138,530	11.95%	Due to Territory trademark royalty and labour economic.
Finance Income-net	90,141	103,392	-12.82%
Income tax expense	-46,302	27,404	-268.96%	Due to operating loss.
Research and Development Expenditure	914,829	820,752	11.46%
Net cash generated from operating activities	1,435,202	-906,818	258.27%	Due to payment of the goods decrease.
Net cash used in investing activities	-684,405	-442,747	-54.58%	Due to cash payment increase for fixed assets purchase.
Net cash used in financing activities	-220	-2,000,548	99.99%	Due to the 2017 mid-term special dividend paid in 2018 Q1.

Net increase/(decrease) in cash and cash equivalents

750,577

-3,350,113

122.40%

Due to increase of net cash generated from operating activities and the 2017 mid-term special dividend paid in 2018 Q1.

Composition of Core Business

Unit: RMB ’000

	Turnover	Cost	Gross Margin	Y-O-Y turnover change (%)	Y-O-Y Cost Change (%)	Y-O-Y gross margin change (points)
By Industry
Automobile Industry	13,540,007	11,511,538	14.98%	-4.36%	-5.32%	0.86%
By Products
Vehicle	12,327,573	10,656,459	13.56%	-3.34%	-4.31%	0.88%
By Region
China	13,540,007	11,511,538	14.98%	-4.36%	-5.32%	0.86%

3. Non- core business analysis

□√Applicable □Not Applicable

Unit: RMB ’000

Item	Amount	Proportion	Explanation	Sustainability （Y/N）
Non-operating Revenue	158,387	1,261.10%	Government incentives to support the Company’s development	Y
Investment return	13,841	110.20%	financial investment such as structural deposits

4. Analysis of Assets and Liabilities

I. Major changes

Unit: RMB ’000

Asset item	June 30, 2019		December 31, 2018		YOY
					Proportion change
	Amount	Proportion	Amount	Proportion	(Points)
Property, plant and equipment	7,118,181	30.07%	6,941,292	29.67%	0.40
Inventories	2,173,276	9.18%	2,522,354	10.78%	-1.60
Trade, other receivables and prepayments	4,054,726	17.13%	4,678,284	20.00%	-2.87
Cash and cash equivalents	8,367,457	35.35%	7,616,880	32.56%	2.79
Trade and other payables	12,454,392	52.62%	12,195,966	52.13%	0.49

II. The fair value of the assets and liabilities (not applicable).

III. Restriction on Assets Rights as of the End of the Reporting PeriodThere was no major restriction on assets rights as of the end of the reportingperiod.

5. Investment

I. Summary

□Applicable □√Not Applicable

II. Obtained Major Equity Investment during the Reporting Period

□Applicable □√Not Applicable

III. Ongoing Major Non-Equity Investment during the Reporting Period

□√Applicable □Not Applicable

Project Name	Investment Method/ source	Fixed Assets (Y/N)	Spending in 2019 (RMB Mils)	Investment Committed (RMB Mils)	Progress	Index
Fushan Site	Self-funded	Y	338	710	34.60%	Announcement of this project (NO:2017-044) was published in the website http://www.cninfo.com.cn
Total			338	710	--	--	0.00

IV. Financial Assets Investment(a) Stock Investment

□Applicable □√Not Applicable

(b) Derivative Investment

□Applicable □√Not Applicable

6. Sales of Major Assets and Equity

I. Sale of Major Assets

□Applicable □√Not Applicable

II. Sales of Major Equity

□Applicable □√Not Applicable

7. Operating Results of Main Subsidiaries and Joint-Stock Companies whoseimpact on JMC’s net profit more than 10%

Unit: RMB ’000

Name of Companies	Type of Companies	Main Business	Registered Capital	Assets	Net Assets	Turnover	Operating Profit	Net Profit
Jiangling Motors Sales Co., Ltd.	Subsidiary	Sale of vehicles, service parts	50,000	3,114,101	61,660	12,496,605	-250,459	-187,934
JMC Heavy Duty Vehicle Co., Ltd.	Subsidiary	Production and sale of heavy commercial vehicles, engines, components, and related service	281,793	2,812,829	-821,670	145,829	-153,738	-145,814

Acquisition and disposal of the subsidiary

□Applicable □√Not Applicable

8. Structured Entities Controlled by JMC

□Applicable □√Not Applicable

9．Business performance prediction in 1-9, 2019

□ Applicable √ Not Applicable

10. Potential Challenges and Solutions

In 2019, the Company will continue to face fiercer competition, more stringentregulatory requirements, intensifying cost pressures and a slowdown inChina’s economic growth. To achieve steady growth, the Company willcontinue to focus on the following aspects in 2019:

(1) Insight customer demand and improve channel capability to realize thecustomer-centered business growth;

(2) Accelerating product platformization, redefine product portfolio, enrich line

up and net connectivity configuration to better satisfy customer demand;

(3) Optimizing company’s production system to improve efficiency andproduct quality ;

(4) Improve suppliers’ capability and parts quality; continue to reduce partspurchasing cost ;

(5) Sustaining the expense management and control to optimize the businessstructure;

(6) Establish highly capable and efficient organization through the current

process optimization team to flexibly respond to the market change;

(7) Strengthening corporate governance and application of appropriate risk

assessment and control mechanisms.

The Company will focus on light commercial vehicle with the support of SUV,maximize its own advantage and fully take advantage of shareholdersresource to realize sustainable profit. Strengthen channel coverage, improvefinancing service ability; promote new products development and R&D abilityimprovement, to accelerate the progress of launching new competitiveproducts to the market; develop more proactive cost reduction plan to improvethe company’s profit ability. Guided by the new strategy, the company willcontinuously implement all the specific initiatives to accelerate the strategictarget achievement.

Chapter V Major Events

1. Annual and special shareholders’ meeting

I. Shareholders’ meeting during the reporting period

Number	Name	Investors Attending Percentage (%)	Meeting Date	Announcement Date	Announcement Index
1	2019 First Special Shareholders’ Meeting	77.45%	Feb 20, 2019	Feb 21, 2019	Number 2019-007, published on the website www.cninfo.com.cn.
2	2018 Annual Shareholders’ Meeting	76.86%	June 28, 2019	June 29, 2019	Number 2019-032, published on the website www.cninfo.com.cn.

II. Share holders who hold vote right restored preferred shares apply to hold aspecial shareholders’ meeting

□Applicable √Not Applicable

2. Proposal on profit distribution and converting capital reserve to sharecapital for the reporting period

□Applicable √Not Applicable

The Company planned that neither cash dividend nor stock dividend wasdistributed, and not to convert capital reserve to share capital for the first halfof 2019.

3. Commitments of actual controlling parties, shareholders, related parties,acquirers and the Company finished in the reporting period or overdueunfinished by the end of the reporting period

□Applicable √Not Applicable

There is no commitments of actual controlling parties, shareholders, relatedparties, acquirers and the Company finished in the reporting period oroverdue unfinished by the end of the reporting period.

4. Appointment or dismissal of accounting firm

Whether the 2019 half-year report is audited?

□Yes √No

JMC 2019 half-year report is not audited.

5. Explanation of the board of directors, the supervisory board to abnormalopinions from accounting firm for the reporting period

□Applicable √Not Applicable

6. Explanation of the board of directors to abnormal opinions from accountingfirm in 2018

□Applicable √Not Applicable

7. Related matters regarding bankruptcy

□Applicable √Not Applicable

The Company did not go bankrupt during the reporting period.

8. Litigation or arbitration

Significant litigation or arbitration

□Applicable √Not Applicable

There is no significant litigation or arbitration in the reporting period.

Other litigation

□Applicable √Not Applicable

9. Punishment

□Applicable √Not Applicable

The Company have not been punished by regulatory authorities.

10. Honesty and credit of JMC and its controlling shareholder or actualcontrolling party

□Applicable √Not Applicable

11. Implementation of equity incentive plan, employee stock ownership planand other employee incentive method

□Applicable √Not Applicable

12. Major related transactions

I. Routine operation related party transactionsPlease refer to the note 31 “Related party Transactions” to the financialstatements for details.

II. Major related party transaction concerning transfer of assets or equity

□Applicable √Not Applicable

There was no major related party transaction concerning transfer of assets orequity during the reporting period.

III. Related party transaction concerning outside co-investment

□Applicable √Not Applicable

There was no outside co-investment during the reporting period.

IV. Related credit and debt

√Applicable □Not Applicable

Is there non-operating related credit and debt?

□Yes √No

The Company had no non-operating related credit and debt during thereporting period.

V. Other major related party transactions

□Applicable √Not Applicable

Please refer to the note 31 “Related party Transactions” to the financialstatements for details.

Index for the Announcement of Major related party transactions:

Announcement Title	Announcement Disclosure Date	Website for Disclosure
Jiangling Motors Corporation, Ltd. Public Announcement on Forecast of the Routine Related Party Transactions in 2019	March 28, 2019	http://www.cninfo.com.cn

13. Non-operating funding in the Company occupied by controllingshareholder and its affiliates

□Applicable √Not Applicable

There was no non-operating funding in the Company occupied by controllingshareholder and its affiliates during the reporting period.

14. Major contracts and execution

I. Entrustment, contract or leasea. Entrustment

□Applicable √Not Applicable

There was no entrustment during the reporting period.

b. Contract

□Applicable √Not Applicable

There was no contract during the reporting period.

c. Lease

√Applicable □Not Applicable

See the note 31(b) to financial statements for lease of related parties.

Project earns more than 10% of net profit.

□Applicable √Not Applicable

Project deficits more than 10% of net profit.

□Applicable √Not Applicable

II Major guarantee

□Applicable √Not Applicable

The Company had no outside guarantee during the reporting period.

III. Other important contracts

□Applicable √Not Applicable

There was no other important contract during the reporting period.

15. Corporation social responsibilities

I. Environmental protectionWhether the Company and affiliates is the key pollution discharge unitpublished by environmental protection administration?

√Yes □No

Main Pollutants	Emission Ways	Emission Outlet Number	Emission Outlet Distribution	Emission Concentration	Emission Standard	Emission Amount	Emission Standard Amount	Meet Standard or Not
Wastewater (COD, NH-N)	continuous discharge	6	3 in Mainsite, 1 in Xiaolan Site, 1 in Cast Plant and 1 in Axle Plant	"COD:128.8mg/L NH-N:12mg/L"	“Wastewater Discharge Standard”(GB 8978-1996)	COD: 47.862t, NH-N : 2.635t	COD≤841.2t, NH-N≤21.72t	Meet Standard
Exhaust gas (SO2, NOx, smoke, toluol, dimethylbenzene, NMHC）	continuous discharge	148	51 in Mainsite, 58 in Xiaolan Site, 33 in Cast Plant and 6 in Axle Plant	SO2: 44mg/m3, NOx : 187mg/m3, solid: 63.7mg/m3, toluol : 1.83mg/m3, dimethylbenzene: 3.22mg/m3 .	"The Emission Standard of Air Pollutants”,” Emission Standard of Air Pollutants for Boiler”（GB 13271-2014）	SO2: 9.856t, NOx : 15.307t	SO2≤93.01t, NOx≤60.91t	Meet Standard

The construction and operation of environmental protection facilitiesSince 2006, JMC has invested more than RMB 30 million to construct sevenwastewater treatment stations (including the wastewater treatment station inthe east plant area and Xiaolan wastewater treatment station), with thetreatment capacity as high as 9,000t/d. The treated wastewater reached thenational discharge standard. In 2019, the Company invested RMB 870thousand to upgrade the wastewater treatment process of the wastewatertreatment station in Axle Plant, and enhance the treatment capacity to ensure

the treated wastewater will reach the national discharge standard..For up-to-standard emission of waste gases, JMC has taken new controlmeasures over the years. In 2012, the Company invested RMB 10 million toreconstruct the cupola furnace in the casting plant. In 2013, Xiaolan Branchinvested RMB 14 million to install a TNV waste gas incinerator. In 2014, JMCinvested RMB 14.6 million to construct the boiler coal-gas-switch project in thesouth district. In 2017, the casting plant reconstructed the ventilation & dustremoval system for the smelting furnace in the large-size and middle & small-sized parts workshop, and installed efficient environmental-friendly dustremoval equipment, effectively reducing the environmental pollution by dust.From 2018 to 2019, the casting plant add electric furnace dust collectors inthe large-size part workshop, and reconstruct the sand shakeout & dustremoval system for KW moulding line, reducing the environmental pollution.

For noise reduction, JMC took different measures to reduce the environmentalimpact, such as increase of protective sound-proof doors & windows,establishment of noise enclosure for air blower, installation of muffler andtransformation of sound-proof doors & windows. All these measures canmake sure up-to-standard discharge of noise at the plant boundary.

In the process of waste management, JMC managed from the source, anddivided the generation of wastes. JMC established a temporary storage yardfor solid wastes. Warning graphic symbols have been posted at the temporarystorage site of hazardous wastes. Besides, signboards have been provided aswell, so as to remind the passer-by of probable hazards in the storage

process of hazardous wastes. In 2017, JMC invested RMB500 thousand toextend Xiaolan storage yard for solid wastes. In 2018 JMC has renovated theengine plant garbage station. In 2019, the Company plans to invest RMB600thousand to extend Xiaolan Dangerous Waste Station. At the same time,Qingyunpu plant actively adopt waste reduction measures and invested RMB110 thousand to purchase primer robot waste solvent recycling device in 2019.

EIA on construction project and other administrative permits forenvironmental protectionThe Company strictly implements the construction project environmentalimpact assessment system. With respect to new construction, expansion andreconstruction, JMC comprehensively planned environmental protection andevaluated the “Three Simultaneities”. From the source of design, JMC carriedout the philosophy of energy saving and low carbon all the time. TheCompany carries on the environmental monitoring every year according to therequirements, ensures the pollutant discharge meeting the requirements ofdischarge permit, formulates the stricter internal control target, and strives toreduce the impact of environmental pollution to the minimum. In 2019, theCompany obtained the environmental assessment approval of the vehicleproduction expansion project, the new collision simulation laboratory projectand the project of expanding the capacity of 300 thousand vehicle parts andcomponents per year (Phase II).

Emergency plan on emergency environmental incidentsIn order to dilute or prevent environmental risks, JMC established anemergency preparation and response procedure and specific environmentalemergency plans which were submitted to the Environmental ProtectionBureau for the record,so as to formulate corresponding control methods forpotential accidents and emergences occurred or that may probably occur.JMC organized emergency drills every year to ensure the efficiency ofemergency plan.

Environmental self-monitoring schemeIn 2019, JMC’s Qingyunpu Main Plant Area (the “Plant Area”) was listed as akey pollutant discharging organization of wastewater/hazardous wastes. ThePlant Area monitored by itself in strict accordance with the Method for Self-monitoring and Information Disclosure of State Key Monitoring Enterprises(Trial). Its self-monitoring schemes, monitoring results and annual monitoringreports on pollution sources were disclosed on the “pollution source self-monitoring reporting platform of Jiangxi Province”.

Other information related to environmental protectionJMC paid high attention to environmental protection and pollution sourcecontrol, taking resource saving and cost reduction as the primary task.Moreover, the Company also took full advantage of 6sigma, and controlledfrom the source, so as to achieve the effect of environmental improvement. Inthe new expansion and reconstruction projects, JMC laid emphasis onimproving the environmental performance, strictly implemented the system of“Three Simultaneities”, transacted the EIA procedure according to nationalstandards, stipulated the preventive and control measures for environmentalpollution, and reported to competent administrative departments onenvironmental protection for approval.

II. One-to-one poverty alleviationa. Plan on one-to-one poverty alleviationThe Company joined the one-to-one poverty alleviation, depending on JMCG,in Qianmo Village, Dai Jiapu Township, Suichuang County, Jiangxi Provinceand Xianting Village, Songhu Town, Xinjian District, Nanchang City inaccordance with the working arrangement of Jiangxi Provincial PartyCommittee and Provincial Government. The overall goal is: to help the poorvillage to achieve a well-off standard of living before 2020 by cooperating withthe local government.

b. Summary of one-to-one poverty alleviation in the first halfThe Company regards the realization of precision poverty relief as the basicstrategy of precision poverty alleviation. The Company continued toconsolidate efforts of one-to-one poverty alleviation in the first half of 2019.

c. Status of targeted measures in poverty alleviation

Item	Unit	Amount/Progress
I. Brief Introduction	——	——
including：1. Funding	RMB (‘000)	828.9
2. Sum converted from the materials	RMB (‘000)	19.6
II. Investments	——	——
1. Anti-poverty depending on industry development	——	——
2. Anti-poverty depending on employment transfer	——	——
3. Anti-poverty depending on relocation	——	——
4. Anti-poverty depending on education	——	——
including：4.1 Grants in aid to poor students	RMB (‘000)	806.9
5. Health Anti-poverty	——	——
6. Ecological protection anti-poverty	——	——
7. Miscellaneous provisions	——	——
including：7.1 Investments on stay-at-home children, women and elderly	RMB (’000)	41.6
8. Social anti-poverty	——	——
9. Other	——	——
III. Awards	——	——

16. Other major events

√Applicable □Not Applicable

JMC received government incentives about RMB 260 million appropriated byNanchang County Xiaolan Economic& Technological Development Zone,Nanchang City Wanli District and Shanxi Comprehensive ReformDemonstration Zone during the reporting period, which is to support JMC’sdevelopment.

17. Major event of JMC subsidiary

□Applicable √Not Applicable

Chapter VI Share Capital Changes & Shareholders

1. Changes of Shareholding Structure

I. Changes of shareholding structure

	Before the change		Change (+, -)					After the change
	Shares	Proportion of total shares (%)	New shares	Bonus Shares	Reserve- converted shares	Others	Subtotal	Shares	Proportion of total shares (%)
I. Limited tradable A shares	786,840	0.09%	-	-	-	100	100	786,940	0.09%
1. Other domestic shares	786,840	0.09%	-	-	-	100	100	786,940	0.09%
Including:
Domestic legal person shares	785,940	0.09%	-	-	-	-36,000	-36,000	749,940	0.09%
Domestic natural person shares	900	-	-	-	-	36,100	36,100	37,000	-
II. Unlimited tradable shares	862,427,160	99.91%	-	-	-	-100	-100	862,427,060	99.91%
1. A shares	518,307,145	60.06%	-	-	-	-100	-100	518,427,160	60.06%
2. B shares	344,000,000	39.85%	-	-	-	-	-	344,000,000	39.85%
III. Total	863,214,000	100.00%	-	-	-	-	-	863,214,000	100.00%

Causes of shareholding changes

√Applicable □Not Applicable

During the past three years as of June 30, 2019, the Company did not issueshares and derivative securities. JMC’s total number of shares remainedunchanged. The change in shareholding structure was caused by the limitedA shares of 36,000 shares held by Shenzhen Airport Terminal Building Co.,Ltd. were transferred to nature person shareholders in 2019.

Approval of changes of shareholding structure

□Applicable √Not Applicable

Shares transfer

□Applicable √Not Applicable

Impact on accounting data, such as the latest EPS, diluted EPS, shareholders’equity attributable to the equity holders of the Company, generated fromshares changes

□Applicable √Not Applicable

Others to be disclosed necessarily or per the requirements of securitiesregulator

□Applicable √Not Applicable

II. Changes of limited tradable shares

□Applicable √Not Applicable

2. Securities issuance and listing

□Applicable √Not Applicable

3. Shareholders and shareholding status

Total shareholders (as of June 30, 2018)	JMC had 20,943 shareholders, including 15,772 A-share holders, and 5,171 B-share holders.
Top ten shareholders
Shareholder Name	Shareholder Type	Shareholding Percentage (%)	Shares at the End of Year	Change (+,-)	Shares with Trading Restriction		Shares due to mortgage or frozen
Jiangling Motor Holdings Co., Ltd.	State-owned legal person	41.03	354,176,000	0	0		0
Ford Motor Company	Foreign legal person	32.00	276,228,394	0	0		0
China Securities Corporation Limited	Other	2.72	23,458,066	0	0		0
Shanghai Automotive Co., Ltd.	State-owned Legal person	1.51	13,019,610	0	0		0
Harvest Environmental Protection Low Carbon Stock Investment Fund	Other	0.98	8,465,988	277,005	0		0
Central Huijin Investment Ltd.	State-owned legal person	0.83	7,186,600	0	0		0
JPMBLSA RE FTIF TEMPLETON CHINA FUND GTI 5497	Foreign legal person	0.68	5,848,450	0	0		0
GAOLING FUND, L.P.	Foreign legal person	0.63	5,453,086	0	0		0
National Social Security Fund 504 Portfolio	Other	0.61	5,250,455	5,250,455	0		0
INVESCO FUNDS SICAV	Foreign legal person	0.58	5,035,746	0	0		0
Notes on association among above-mentioned shareholders			None.
Top ten shareholders holding unlimited tradable shares
Shareholder Name		Shares without Trading Restriction				Share Type
Jiangling Motor Holdings Co., Ltd.		354,176,000				A share
Ford Motor Company		276,228,394				B share
China Securities Corporation Limited		23,458,066				A share
Shanghai Automotive Co., Ltd.		13,019,610				A share
Harvest Environmental Protection Low Carbon Stock Investment Fund		8,465,988				A share
Central Huijin Investment Ltd.		7,186,600				A share
JPMBLSA RE FTIF TEMPLETON CHINA FUND GTI 5497		5,848,450				B share
GAOLING FUND, L.P.		5,453,086				B share
National Social Security Fund 504 Portfolio		5,250,455				A share
TEMPLETON DRAGON FUND, INC.		5,035,746				B share
Notes on association among above-mentioned shareholders		None.

Stock buy-back by top ten shareholders or top ten shareholders holdingunlimited tradable shares in the reporting period

□Yes √No

There is no stock buy-back by top ten shareholders or top ten shareholdersholding unlimited tradable shares in the reporting period.

4. Change of controlling shareholders or actual controlling partiesChange of controlling shareholders

□Applicable √Not Applicable

There was no change of controlling shareholders during the reporting period.

Change of actual controlling parties

□Applicable √Not Applicable

There was no change of actual controlling parties during the reporting period.

Subsequent eventsJiangling Motor Holdings Co., Ltd. (hereinafter referred to as “JHC”), acontrolling shareholder of Jiangling Motors Co., Ltd. (hereinafter referred to as“JMC” or “the Company”), has been divided and separated into the newcompany, Nanchang Jiangling Investment Co., Ltd. (hereinafter referred to as“JIC”) and Jiangling Motor Holdings Co., Ltd. (as an existing company). Afterthe separation, JHC intends to divide its hold 41.03% equity of JMC into thenew company, JIC, and therefore, the controlling shareholder of JMC will bechanged from JHC to JIC, but actual controllers of JMC remains unchanged.

As of July 26, 2019, the 354,176,000 JMC shares, accounting for about 41.03%of the total share capital of the Company, held by JHC, the former controllingshareholder of the Company, have been transferred to JIC, and JHC nolonger held the shares of the Company. JIC holds 354,176.000 shares of theCompany, accounting for about 41.03% of the total share capital of theCompany, and becomes a controlling shareholder of the Company.

Shareholding relationship with JMC and the shareholders of JHC before andafter the separation are shown as follows:

（1）Before the separation

Chongqing Changan Automobile Co., Ltd.

JMCG

50%

50%

JHC

41.03%

41.03%

JMC

（2）After the separation

Chongqing Changan Automobile Co., Ltd.

JMCG

50%

50%

Nanchang Jiangling Investment Co., Ltd.

41.03%

41.03%

JMC

Chapter VII Preferred Shares

□Applicable √Not Applicable

JMC have no preferred shares during the reporting period.

Chapter VIII Directors, Supervisors and Senior Management

1. Changes of shares held by directors, supervisors and senior management

□Applicable √Not Applicable

There was no change of shares held by Directors, Supervisors and seniormanagement in the reporting period. Please refer to 2018 annual report fordetails.

2. Changes of directors, supervisors and senior management

√Applicable □Not Applicable

Name	Position	Status	Date	Reason
Manto Wong	President	Appointed	March 1, 2019
Andy Ball	VP	Appointed	April 1, 2019
Luo Xiaofang	VP	Appointed	May 1, 2019
Manto Wong	Director	Elected	June 28, 2019
Jin Wenhui	Director	Elected	June 28, 2019
Milton Wong	VP	Appointed	July 1, 2019
Thomas Fann	President	Leave	March 1, 2019	Retirement.
Tim Slatter	VP	Leave	March 1, 2019	Work rotation.
Christian Chen	VP	Leave	May 1, 2019	Work rotation.
Andy Ball	VP	Leave	May 1, 2019	Resign from the vice president position for the personal reasons.

Chapter IX Company BondWhether the Company owns the corporate bond that is lists in the securitiesexchange and undue or is not paid in full although it’s due.

□Yes √No

Chapter X Financial Statements

JIANGLING MOTORS CORPORATION, LTD.

FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30JUNE 2019

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in thousands of RMB unless otherwise stated)

			Six Months Ended 30 June
	Notes		2019#		2018#
Revenue from contracts with customers	5		13,721,954		14,287,497
Taxes and surcharges			(368,975)		(368,792)
Cost of sales	6		(11,683,969)		(12,277,724)
Gross profit			1,669,010		1,640,981
Distribution costs	6		(705,875)		(452,934)
Administrative expenses	6		(1,274,585)		(1,138,530)
Net expected credit losses on financial assets	3.1(2)		1,056		(918)
Net impairment losses on property, plant and equipment			(3,126)		(3,607)
Other income	8		235,605		195,360
Operating (loss)/profit			(77,915)		240,352
Finance income	9		92,765		106,654
Finance costs	9		(2,624)		(3,262)
Finance income-net	9		90,141		103,392
Share of profit of investments accounted for using the equity method	16b		334		2,611
Profit before income tax			12,560		346,355
Income tax credit/(expense)	10		46,302		(27,404)
Profit for the period			58,862		318,951
Profit attributable to:
Shareholders of the Company			58,862		318,951
Total comprehensive income for the period			58,862		318,951

Total comprehensive income attributable to:
Shareholders of the Company			58,862		318,951
Earnings per share for profit attributable to the shareholders of the Company for the period (expressed in RMB per share)
- Basic and diluted	11		0.07		0.37

#Unaudited financial indexesThe notes on pages 32 to 90 are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in thousands of RMB unless otherwise stated)

			As at
	Notes		30 June 2019#		31 December 2018
ASSETS
Non-current assets
Property, plant and equipment	12		7,118,181		6,941,292
Lease prepayment	13		593,473		601,260
Intangible assets	14		288,412		246,026
Deferred income tax assets	17		789,091		743,096
Investments accounted for using the equity method	16b		40,446		40,112
Total non-current assets			8,829,603		8,571,786
Current assets
Inventories	18		2,173,276		2,522,354
Trade and other receivables and prepayments	19		4,054,726		4,678,284
Derivative financial instruments	3.3		-		979
Financial assets at fair value through other comprehensive income	3.3		223,907		6,246
Cash and cash equivalents	20		8,367,457		7,616,880
Restricted cash			20,001		-
Total current assets			14,839,367		14,824,743
Total assets			23,668,970		23,396,529

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)FOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in thousands of RMB unless otherwise stated)

			As at
	Notes		30 June 2019#		31 December 2018
EQUITY
Share capital	21		863,214		863,214
Share premium			816,609		816,609
Other reserves	22		447,472		447,472
Retained earnings			8,281,536		8,257,203
Total equity			10,408,831		10,384,498

LIABILITIES
Non-current liabilities
Contract liabilities	5		54,499		38,382
Borrowings	23		3,376		3,595
Deferred income tax liabilities	17		25,676		26,024
Retirement benefit obligations	24		60,777		63,425
Provisions for statutory warranty	25		166,251		151,492
Other non-current liabilities			93,301		60,160
Total non-current liabilities			403,880		343,078
Current liabilities
Trade and other payables	26		12,454,356		12,195,966
Contract liabilities	5		188,911		266,702
Current income tax liabilities			72		179
Borrowings	23		450		449
Derivative financial instruments			2,578		-
Retirement benefit obligations	24		4,595		4,595
Provisions for statutory warranty	25		205,297		201,062
Total current liabilities			12,856,259		12,668,953
Total liabilities			13,260,139		13,012,031
Total equity and liabilities			23,668,970		23,396,529
#Unaudited financial indexes The notes on pages 32 to 90 are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in thousands of RMB unless otherwise stated)

	Notes	Share capital	Share premium	Other reserves	Retained earnings	Total
Balance at 1 January 2018		863,214	816,609	450,914	10,441,665	12,572,402
Profit for the six months		-	-	-	318,951	318,951
Dividends relating to 2017		-	-	-	(2,276,295)	(2,276,295)
Balance at 30 June 2018		863,214	816,609	450,914	8,484,321	10,615,058
Balance at 1 January 2019		863,214	816,609	447,472	8,257,203	10,384,498
Profit for the six months		-	-	-	58,862	58,862
Dividends relating to 2018	27	-	-	-	(34,529)	(34,529)
Balance at 30 June 2019		863,214	816,609	447,472	8,281,536	10,408,831

#Unaudited financial indexesThe notes on pages 32 to 90 are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in thousands of RMB unless otherwise stated)

		Six Months Ended 30 June
	Notes	2019#		2018#
Cash flows from operating activities
Cash generated from operations	28	1,435,500		(791,761)
Interest paid		(150)		(151)
Income tax paid		(148)		(114,906)
Net cash inflow/(outflow) from operating activities		1,435,202		(906,818)
Cash flows from investing activities
Payment for property, plant and equipment (“PPE”)		(801,467)		(572,583)
Purchase of financial assets at fair value through profit or loss		(4,700,000)		(3,462,000)
Other cash paid relating to investing activities		(7,591)		(13,354)
Proceeds from disposal of PPE	28	2,990		2,569
Proceeds from disposal of financial assets at fair value through profit or loss		4,700,000		3,462,000
Investment income from financial assets at fair value through profit or loss		18,447		10,202
Interest received		100,566		129,686
Other cash received from investing activities		2,650		733
Net cash outflow from investing activities		(684,405)		(442,747)
Cash flows from financing activities
Repayments of borrowings		(220)		(207)
Dividends paid to shareholders of the Company		-		(1,999,237)
Other cash paid relating to financing activities		-		(1,104)
Net cash outflow from financing activities		(220)		(2,000,548)
Net increase/(decrease) in cash and cash equivalents		750,577		(3,350,113)
Cash and cash equivalents at beginning of year		7,616,880		11,137,723
Effects of exchange rate changes		-		-
Cash and cash equivalents at end of period	20	8,367,457		7,787,610

#Unaudited financial indexesThe notes on pages 32 to 90 are an integral part of these consolidated financial statements.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

1 General information

Jiangling Motors Corporation, Ltd. (the “Company”) was established in the People’s Republic of China (the “PRC”) under the Company Law of the PRC and according to the approval of Hongban (1992) No. 005 of Nangchang Revolution and Authorisation Group of Company’s Joint Stock as a joint stock limited company to hold certain operational assets and liabilities of the automotive manufacturing business of Jiangxi Motors Manufacturing Factory, which was owned by Jiangling Motors Group Co.,Ltd (“JMCG”). The legal representative’s operating license of the Company is No. 913600006124469438. The address of the Company’s registered office is No.509, Northern Yingbin Avenue, Nanchang, Jiangxi Province, the PRC. In December 1993, the Company issued 494,000,000 domestic ordinary shares (“A share”). In addition, the Company issued 25,214,000 A shares as bonus shares to the existing shareholders in 1994. The bonus shares were issued by utilisation of the Company’s retained earnings. In 1995, the Company issued 174,000,000 domestically listed foreign shares (“B share”) and the Company issued 170,000,000 additional B shares in 1998. As at 30 June 2019, the total number of issued shares of the Company is 863,214,000 shares, which are all listed on the Shenzhen Stock Exchange, the PRC. The Company and its subsidiaries (the “Group”) are principally engaged in the development, manufacturing and selling of automobiles, engines and automobile related parts, dies and tools. These consolidated financial statements were authorised for issue by the Board of Directors on 27 August 2019.

2 Summary of significant accounting policies

	This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the Group consisting the Company and its subsidiaries.
2.1	Basis of preparation
	The consolidated financial statements of the Group have been prepared in accordance with all applicable International Financial Reporting Standards (“IFRS”). The consolidated financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities (including derivative instruments, financial assets at FVOCI and financial liabilities at FVPL) are measured at fair value.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.1	Basis of preparation (continued)
	New and amended standards adopted by the Group
	The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the adoption of new and amended standards as set out below. The other standards did not have any impact on the Group’s accounting policies and did not require retrospective adjustments.
	? IFRS 16 Leases
	IFRS 16 has been effective from 1 January 2019. As permitted under the specific transitional provisions in the standard, the Group has adopted IFRS 16 retrospectively, but has not restated comparatives for the 2018 reporting period. There is no reclassifications and adjustments arising from the new leasing rules need to be recognised in the opening balance sheet on 1 January 2019 because the leases are short-term or for which the underlying asset is of low value.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)

2.2	Subsidiaries
	A subsidiary is an entity (including a structured entity) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
	The acquisition method of accounting is used to account for business combinations by the Group.
	Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

2.3	Associates
	An associate is an entity over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost.

The Group's share of post-acquisition profit or loss is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. Dividends received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

	The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to ‘share of profit of investments accounted for using equity method’ in profit or loss.
	Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the Group’s financial statements only to the extent of unrelated investor’s interests in the associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.
	Gains or losses on dilution of equity interest in associates are recognised in profit or loss.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.4	Separate financial statements
	Investments in subsidiaries are accounted for at cost less impairment. Cost includes direct attributable costs of investment. The results of subsidiaries are accounted for by the Company on the basis of dividend received and receivable. Impairment testing of the investments in subsidiaries is required upon receiving a dividend from these investments if the dividend exceeds the total comprehensive income of the subsidiary in the period the dividend is declared or if the carrying amount of the investment in the separate financial statements exceeds the carrying amount in the consolidated financial statements of the investee’s net assets including goodwill.
2.5	Segment Reporting
	Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive committee that makes strategic decisions.
2.6	Foreign currency translation
(1)	Functional and presentation currency
	Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in Renminbi (“RMB”), which is the Company’s functional and the Group’s presentation currency.
(2)	Transactions and balances
	Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.
	Foreign exchange gains and losses are presented in profit or loss within other income/(expense)-net.
	Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as equities classified as fair value through other comprehensive income are recognised in other comprehensive income.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.7	Property, plant and equipment

	Property, plant and equipment is stated at historical cost less accumulated depreciation and any impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition or construction of the items.
	Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

	Depreciation is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:
	Buildings	35-40 years
	Plant and machinery	10-15 years
	Motor automobiles	6-10 years
	Moulds	5 years
	Electronic and other equipment	5-7 years

	The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
	An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (Note 2.10).

	Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within other income/(expense) - net in profit or loss.
	Assets under construction represent buildings under construction and plant and equipment pending installation, and are stated at cost. Costs include construction and acquisition costs. No provision for depreciation is made on assets under construction until such time as the relevant assets are completed and ready for intended use. When the assets concerned are brought into use, the costs are transferred to property, plant and equipment and depreciated in accordance with the policy as stated above.

2.8	Lease prepayment
	Lease prepayment represents upfront prepayment made for the land use rights, and is expensed in profit or loss on a straight-line basis over the period of the lease or when there is impairment, the impairment is expensed in profit or loss.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.9	Intangible assets
(1)	Goodwill
	Goodwill arises on the acquisition of subsidiaries represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identified net assets acquired. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units (“CGUs”), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of the CGU containing the goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not subsequently reversed.

(2)	Research and development
	Research expenditure is recognised as an expense as incurred. Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as intangible assets when the following criteria are fulfilled: (a) it is technically feasible to complete the intangible asset so that it will be available for use or sale; (b) management intends to complete the intangible asset and use or sell it; (c) there is an ability to use or sell the intangible asset; (d) it can be demonstrated how the intangible asset will generate probable future economic benefits; (e) adequate technical, financial and other resources to complete the development and to use or sell the intangible asset are available; and (f) the expenditure attributable to the intangible asset during its development can be reliably measured.
	The development cost of an internally generated intangible asset is the sum of the expenditure incurred from the date the asset meets the recognition criteria above to the date when it is available for use. The development costs capitalised in connection with the intangible asset include costs of materials and services used or consumed and employee costs incurred in the creation of the asset. Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use on a straight-line basis over its useful life. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.9	Intangible assets (continued)
(3)	Computer software
	Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives of 5 years.
(4)	Non-patent technology
	Non-patent technology is capitalised from the development cost. These costs are amortised over their estimated useful lives of 5 years.

2.10	Impairment of non-financial assets
	Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

2.11	Non-current assets held-for-sale
	Non-current assets are classified as held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and investment property that are carried at fair value and contractual rights under insurance contracts, which are specifically exempt from this requirement.
	An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset is recognised at the date of derecognition.
	Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.
	Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the statement of financial position.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

2.12	Investments and other financial assets
(1)	Classification
	The Group classifies its financial assets in the following measurement categories:
	? those to be measured subsequently at fair value (either through OCI or through profit or loss), and ? those to be measured at amortised cost.
	The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.
	For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (“FVOCI”).
	The Group reclassifies debt investments when and only when its business model for managing those assets changes.
(2)	Recognition and derecognition
	Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
(3)	Measurement
	At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
	Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.
	Debt instruments
	Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Group classifies its debt instruments:
	? Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other income/(expense)-net together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.12	Investments and other financial assets (continued)
(3)	Measurement (continued)
	? FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other income/(expense)-net. Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other income/(expense)-net and impairment expenses are presented as separate line item in the statement of profit or loss.
	? FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within other income/(expense)-net in the period in which it arises.

	Equity instruments
	The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the Group’s right to receive payments is established.
	Changes in the fair value of financial assets at FVPL are recognised in other income/(expense)-net in the statement of profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.
(4)	Impairment
	The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables, see Note 3.1 for further details.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.13	Offsetting financial instruments
	Financial assets and liabilities are offset and the net amount reported in the statement of financial position where the Group currently has a legally enforceable right to offset the recognised amounts, and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The Group has also entered into arrangements that do not meet the criteria for offsetting but still allow for the related amounts to be set off in certain circumstances, such as bankruptcy or the termination of a contract.
2.14	Derivatives and hedging activities
	Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. No derivative is designated as a hedging instrument by the Group, changes in the fair value of derivatives are recognised immediately in profit or loss and included in other income/(expense)-net.
2.15	Inventories
	Inventories are stated at the lower of cost and net realisable value. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads, the latter being allocated on the basis of normal operating capacity. Cost excludes borrowing costs. Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.16	Trade and other receivables
	Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection of trade and other receivables is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.
	Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less allowance for impairment. See Note 3.1 for further information about the Group’s accounting for trade receivables and a description of the Group’s impairment policies.

2.17	Cash and cash equivalents
	In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.

2.18	Share capital
	Share capital consists of “A” and “B” shares.
	Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.
	Where any group company purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to owners of the Company until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s shareholders.
2.19	Trade and other payables
	These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
2.20	Borrowings
	Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.20	Borrowings (continued)
	Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income/(expense)-net or finance costs.
	Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

2.21	Borrowing costs
	General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
	Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
	All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
	Borrowing costs include interest expense, finance charges in respect of finance lease and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs. The exchange gains and losses that are an adjustment to interest costs include the interest rate differential between borrowing costs that would be incurred if the entity had borrowed funds in its functional currency, and the borrowing costs actually incurred on foreign currency borrowings. Such amounts are estimated based on interest rates on similar borrowings in the entity’s functional currency.
	When the construction of the qualifying assets takes more than one accounting period, the amount of foreign exchange differences eligible for capitalisation is determined for each annual period and are limited to the difference between the hypothetical interest amount for the functional currency borrowings and the actual interest incurred for foreign currency borrowings. Foreign exchange differences that did not meet the criteria for capitalisation in previous years should not be capitalised in subsequent years.

2.22	Current and deferred income tax
	The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
(1)	Current income tax
	The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company and its subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.22	Current and deferred income tax (continued)
(2)	Deferred income tax
	Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
	Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
	Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
	Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
2.23	Employee benefits
	Employee benefits refer to all forms of consideration or compensation given by the Group in exchange for service rendered by employees or for termination of employment relationship, which include short-term employee benefits, post-employment benefits, termination benefits and other long-term employee benefits.
(1)	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 and 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.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.23	Employee benefits (continued)
(2)	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, the premiums or contributions on basic pensions and unemployment insurance belong to defined contribution plans; the premiums or contributions on supplementary retirement benefits belong to defined benefit plans.
(i)	Defined contribution plans
	Basic pensions
	The Group’s employees participate in the basic pension plan set up and administered by local authorities of Ministry of Human Resource 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 provides employees with some supplementary retirement benefits belong to defined benefit plans in addition to the social security policy prescribed by the State. The liability recognised in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of national debt that are denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms of the related obligation.
	The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit or loss.
	Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the statement of financial position.
	Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service costs.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.23	Employee benefits (continued)
(3)	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.
(4)	Early retirement benefits
	The Group offers early retirement benefits to those employees who accept early retirement arrangements. The early retirement benefits refer to the salaries and social security contributions to be paid to and for the employees who accept voluntary retirement before the normal retirement date prescribed by the State, as approved by the management. The Group pays early retirement benefits to those early retired employees from the early retirement date until the normal retirement date. The Group accounts for the early retirement benefits in accordance with the treatment for termination benefits, in which the salaries and social security contributions to be paid to and for the early retired employees from the off-duty date to the normal retirement date are recognised as liabilities with a corresponding charge to the profit or loss for the current period. The differences arising from the changes in the respective actuarial assumptions of the early retirement benefits and the adjustments of benefit standards are recognised in profit or loss in the period in which they occur.
	The termination benefits expected to be settled within one year since the balance sheet date are classified as current liabilities.

2.24	Provisions
	Provisions, mainly warranty costs, are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.
	Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
	Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.25	Revenue recognition
	The Group manufactures and sells a range of automobiles and automobile parts to dealers and ending customers. Besides, the Group also provides automobile maintenance and additional warranty services. The Group recognises revenue when the customer obtains control of the goods and services. The revenue is recognised based on the consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to customers.
(1)	Sales of goods – Automobile and automobile parts
	The Group manufactures and sells a range of automobiles and automobile parts to dealers and ending customers. Sales are recognised when control of the products has transferred, being when the customer has the ability to direct the use of and obtain substantially all of the remaining benefits from the products. Control of automobiles is transferred when automobiles are delivered out of warehouse, being when customer has accepted the products. Control of automobile parts is transferred when the products out of warehouse or shipped to designated destination, being when customer has accepted the products.
	When the contracts include two performance obligations, selling automobiles and providing shipping services, the transaction price will be allocated to each performance obligation based on the stand-alone selling prices. Where these are not directly observable, they are estimated considering market information, expected cost plus margin.
	No element of financing is deemed present as the sales are made with a credit term within one year, which is consistent with market practice. The Group’s obligation to repair or replace faulty products under the statutory warranty terms prescribed by the industry law and regulations is recognised as a provision, see Note 2.24. For additional warranty, it is considered as a separate performance obligation under IFRS 15, see Note 2.25(2).
	Revenue from these sales is recognised based on the price specified in the contract, net of the estimated discounts. Accumulated experience is used to estimate and provide for the discounts, using the expected value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur.
(2)	Rendering of services
	The Group provides service of automobile maintenance and additional warranty. Revenue is recognised on the basis of inputs to the satisfaction of the performance obligation relative to the total expected inputs to the satisfaction of that performance obligation.
	Trade receivables are recognised when the Group recognised revenue according to the completion process and has an unconditional right to consideration. Contract assets are recognised when the Group satisfies a performance obligation but does not have an unconditional right to consideration. The provision of trade receivables and contract assets are subject to expected credit loss model. Contract liabilities are recognised when the consideration received before the Group satisfies the performance obligation. The contract assets and liabilities are presented on a net basis for the some contract.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.26	Earnings per share
(1)	Basic earnings per share
	Basic earnings per share is calculated by dividing: the profit attributable to owners of the company, excluding any costs of servicing equity other than ordinary shares by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares.
(2)	Diluted earnings per share
	Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account: ? the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and ? the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.
2.27	Leases
	Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.
2.28	Dividend distribution
	Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders, where appropriate.
2.29	Government grants
	Government grants refer to the monetary or non-monetary assets obtained by the Group from the government, including tax return, financial subsidy and etc.
	Government grants are recognised when the grants can be received and the Group can comply with all attached conditions. If a government grant is a monetary asset, it will be measured at the amount received or receivable. If a government grant is a non-monetary asset, it will be measured at its fair value. If it is unable to obtain its fair value reliably, it will be measured at its nominal amount.
	Government grants related to assets refer to government grants which are obtained by the Group for the purposes of purchase, construction or acquisition of the long-term assets. Government grants related to income refer to the government grants other than those related to assets.
	Government grants related to assets will be recorded as deferred income and recognised evenly in profit or loss over the useful lives of the related assets.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

2	Summary of significant accounting policies (continued)
2.29	Government grants (continued)
	Government grants related to income will be recorded as deferred income and recognised in profit or loss in the period in which the related expenses are recognised if the grants are intended to compensate for future expenses or losses, and otherwise recognised in profit or loss for the current period if the grants are used to compensate for expenses or losses that have been incurred.
2.30	Interest income
	Interest income from financial assets at FVPL is included in other income/(expense)-net, see Note 8 below.
	Interest income on financial assets at amortised cost and financial assets at FVOCI (2017 –loans and receivables) calculated using the effective interest method is recognised in the statement of profit or loss as part of finance income. Interest income is presented as finance income where it is earned from financial assets that are held for cash management purposes, see Note 9 below. Any other interest income is included in other income/(expense)-net.
	Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial assets the effective interest rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance).

3	Financial risk management
	The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.
	The Group’s risk management is predominantly controlled by Finance Department under policies approved by the Board of Directors. Group Finance Department identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk and credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
3.1	Financial risk factors
(1)	Market risk
(i)	Foreign exchange risk
	The Group operates domestically and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to other payables dominated in US dollar (“USD”) and Euro.
	Management has set up a policy to require the Group to manage their foreign exchange risk against their functional currency. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the Company’s functional currency.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

3	Financial risk management (continued)
3.1	Financial risk factors (continued)
(1)	Market risk (continued)
(i)	Foreign exchange risk (continued)
	Exposure
	The Group’s exposure to foreign currency risk at the end of the reporting period, expressed in RMB, was as follows:

		30 June 2019			31 December 2018
		USD RMB’000	EUR RMB’000	Other currency RMB’000	USD RMB’000	EUR RMB’000	Other currency RMB’000
	Derivative financial instruments
	Foreign exchange forwards	(2,578)	-	-	979	-	-
	Trade and other receivables	-	266	-	-	265	-
	Borrowings	(3,826)	-	-	(4,044)	-	-
	Trade and other payables	(202,250)	(106,365)	(4,171)	(164,599)	(100,450)	(4,045)
		(208,654)	(106,099)	(4,171)	(167,664)	(100,185)	(4,045)

	Sensitivity
	As shown in the table above, the Group is primarily exposed to changes in USD/RMB and Euro/RMB exchange rates.
	As at 30 June 2019, if RMB had strengthened/weakened by 10% against USD with all other variable held constant, the Group’s net profit for the year then ended would have been approximately RMB17,722,000 (2018: RMB14,187,000) higher/lower. As at 30 June 2019, if RMB had strengthened/weakened by 10% against Euro with all other variable held constant, the Group’s net profit for the year then ended would have been approximately RMB9,074,000 (2018: RMB8,626,000) higher/lower.

(ii)	Interest rate risk
	The Group’s income and operating cash flows are substantially independent of changes in market interest rates. As at 30 June 2019, a large portion of its bank deposits were at variable rates and all of its borrowings were at fixed rate. The Group has not used any interest rate swaps to hedge its exposure to interest rate risk.
	As at 30 June 2019, if the interest rate of the Group’s bank deposits had been increased/decreased by 10% and all other variables were held constant, the Group’s net profit for the year then ended would have been increased/decreased by approximately RMB7,313,000 (2018: RMB14,174,000).
	As at 30 June 2019, the difference between the fair value and book value of the Group’s borrowings with fixed rate is immaterial.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

3	Financial risk management (continued)
3.1	Financial risk factors (continued)
(2)	Credit risk
	Credit risk arises from cash and cash equivalents, contractual cash flows of other financial instruments at fair value through comprehensive income and at fair value through profit or loss, favourable derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables.
(i)	Risk management
	Credit risk is managed on a group basis. Risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. The compliance with credit limits by customers is regularly monitored by line management.
(ii)	Impairment of financial assets
	The Group has four types of financial assets that are subject to the expected credit loss model:
	trade receivables for sales of inventory and from the provision of services, and notes receivables carried at FVOCI other financial assets at amortised cost cash and cash equivalents.
	Trade receivables
	The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due.
	The expected loss rates are based on the payment profiles of sales over a period of 24 month before 31 December 2018 or 1 January 2018 respectively and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The Group has identified the GDP and the unemployment rate of China in which it sells its goods and services to be the most relevant factors, and accordingly adjusts the historical loss rates based on expected changes in these factors.
	On that basis, the loss allowance as at 30 June 2019 was determined as follows for trade receivables:

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

3	Financial risk management (continued)
3.1	Financial risk factors (continued)
(2)	Credit risk (continued)
(ii)	Impairment of financial assets (continued)
(a)	As at 30 June 2019, receivables with amounts are subject to separate assessment for impairment as below:
	30 June 2019	Current	1-30 days past due	More than 30 days past due	More than 60 days past due	More than 90 days past due	Total
	Expected loss rate	-	-	-	-	100%	—
	Gross carrying amount – trade receivables	-	-	-	-	8,633	8,633
	Loss allowance	-	-	-	-	(8,633)	(8,633)
	As the above debtors involved in several lawsuits, the Group cannot be able to collect the amount under the original terms, a full provision for bad debts of that receivable were made.

(b)	As at 30 June 2019, trade receivables have been grouped on the basis of shared credit risk characteristics and the days past due for the measurement of expected credit losses:
i)	Notes receivables group
	As at 30 June 2019, all the notes receivables are bank acceptance bills of RMB6,500,000, which will be accepted mainly by large state-owned banks or national commercial banks. The Group believes that there is no significant credit losses due to the bank default.

ii)	Automobiles sales group
	30 June 2019	Current	1-30 days past due	More than 30 days past due	More than 60 days past due	More than 90 days past due	Total
	Expected loss rate	0.31%	0.36%	0.93%	15.58%	15.97%	—
	Gross carrying amount – trade receivables	1,893,816	47,929	8,611	5,115	22,607	1,978,078
	Loss allowance	(5,916)	(173)	(80)	(797)	(3,610)	(10,576)

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

3	Financial risk management (continued)
3.1	Financial risk factors (continued)
(2)	Credit risk (continued)
(ii)	Impairment of financial assets (continued)
(b)	As at 30 June 2019, trade receivables have been grouped on the basis of shared credit risk characteristics and the days past due for the measurement of expected credit losses (continued):

iii)	New energy automobiles subsidies group
	30 June 2019	Current	1-30 days past due	More than 30 days past due	More than 60 days past due	More than 90 days past due	Total
	Expected loss rate	0.30%	-	-	-	-	—
	Gross carrying amount – trade receivables	253,162	-	-	-	-	253,162
	Loss allowance	(759)	-	-	-	-	(759)

iv)	Automobile parts group:
	30 June 2019	Current	1-30 days past due	More than 30 days past due	More than 60 days past due	More than 90 days past due	Total
	Expected loss rate	0.30%	0.30%	0.50%	0.60%	5.00%	—
	Gross carrying amount – trade receivables	321,294	24,382	3,050	218	2,457	351,401
	Loss allowance	(964)	(73)	(15)	(1)	(123)	(1,176)

	Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group, and a failure to make contractual payments.
	Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.
	Financial assets at fair value through other comprehensive income
	Notes receivables carried at FVOCI are considered to have low credit risk, and the loss allowance recognised during the period was therefore limited to 12 months expected losses. Management considers ‘low credit risk’ for the instruments that the issuer has a strong capacity to meet its contractual cash flow obligations in the near term. JMC Heavy Duty Vehicle Co., Ltd. (“JMCH”), the subsidiary of the Group, held notes receivables for endorsement and presented as FVOCI at the statement of financial position. All the notes receivables are bank acceptable bills and considered as low credit risk financial instruments without significant credit risk because the

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

banks have a strong capacity to meet its contractual cash flow obligations in the near term.

3	Financial risk management (continued)
3.1	Financial risk factors (continued)
(2)	Credit risk (continued)
(ii)	Impairment of financial assets (continued)
	Other financial assets at amortised cost
	Other financial assets at amortised cost include bank interest receivables and other receivables. The closing loss allowances for other financial assets as at 30 June 2019 reconcile to the opening loss allowances as follows:

		1-30 days past due: expected credit losses in the next 12 months RMB’000	More than 90 days past due: expected credit losses throughout lifetime RMB’000	Total RMB’000
	Opening loss allowance as at 1 January 2019	240	203	443
	Increase in the allowance recognised in profit or loss during the period	29	63	92
	Reverse of the allowance recognised in profit or loss during the period	(15)	-	(15)
	Closing loss allowance as at 30 June 2019	254	266	520

	All the bank interest receivables are considered as low credit risk financial instruments without significant credit risk because the banks have a strong capacity to meet its contractual cash flow obligations in the near term.
	Net impairment losses on financial assets recognised in profit or loss
	Cash and cash equivalents
	While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

3	Financial risk management (continued)
3.1	Financial risk factors (continued)
(3)	Liquidity risk
	Cash flow forecasting is performed in the operating entities of the Group and aggregated by Finance Department. Finance Department monitors rolling forecasts of the Group's liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities (Note 23) at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.
	The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

		Less than 1 year RMB’000	Between 1 and 2 years RMB’000	Between 2 and 5 years RMB’000	Over 5 years RMB’000
	At 30 June 2019
	Bank borrowings
	- Principals	450	450	1,350	1,576
	- Interests	56	49	106	47
	Trade and other payables (exclude payroll and welfare payables, other tax payables)	12,081,645	-	-	-
		12,082,151	499	1,456	1,623

	At 31 December 2018
	Bank borrowings
	- Principals	449	449	1,348	1,798
	- Interests	59	52	116	61
	Trade and other payables (exclude payroll and welfare payables, other tax payables)	11,658,259	-	-	-
		11,658,767	501	1,464	1,859

3.2	Capital risk management
	The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as borrowings divided by total capital. Total capital is calculated as equity, as shown in the consolidated statement of financial position, plus borrowings. The Group aims to maintain the gearing ratio at a reasonable level.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

	As at 30 June 2019	Level 1	Level 2	Level 3	Total
	Financial assets
	Financial assets at FVOCI
	Notes receivables	-	-	223,907	223,907
	Total financial assets	-	-	223,907	223,907
	Financial Liabilities Derivatives Foreign exchange forwards	-	2,578	-	2,578
	Total financial liabilities	-	2,578	-	2,578

	As at 31 December 2018	Level 1	Level 2	Level 3	Total
	Financial liabilities
	Derivatives
	Foreign exchange forwards	-	979	-	979
	Financial assets at FVOCI
	Notes receivables	-	-	6,246	6,246
	Total financial liabilities	-	979	6,246	7,225
	There were no transfers between levels 1 and 2 for recurring fair value measurements during the year.
	The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period. Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1. Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.

3	Financial risk management (continued)
3.2	Capital risk management (continued)

	The gearing ratios at 30 June 2019 and 31 December 2018 were as follows:
		30 June 2019		31 December 2018
	Total borrowings	3,826		4,044
	Total equity	10,408,831		10,384,498
	Total capital	10,412,657		10,388,542
	Gearing ratio	0.04%		0.04%

3.3	Fair value estimation
(1)	Fair value hierarchy
	This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value in the financial statements. The Group has classified its financial instruments into the three levels prescribed under the accounting standards:

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

3	Financial risk management (continued)
3.3	Fair value estimation (continued)
(2)	Valuation techniques used to determine fair values
	Specific valuation techniques used to value financial instruments include:
	for foreign currency forwards - present value of future cash flows based on forward exchange rates at the balance sheet date for other financial instruments - discounted cash flow analysis.
(3) Fair value measurements using significant unobservable inputs (level 3)	Fair value measurements using significant unobservable inputs (level 3)
	The following table presents the changes in level 3 items for the periods ended 30 June 2019 and 31 December 2018:

		Financial assets at FVPL- monetary fund and structural deposits	Financial assets at FVOCI- notes receivables	Total
	Opening balance 1 January 2018	-	—	-
	Acquisitions	10,353,000	102,802	10,455,802
	Disposals	(10,353,000)	(96,556)	(10,449,556)
	Closing balance 31 December 2018	-	6,246	6,246
	Opening balance 1 January 2019	-	6,246	6,246
	Acquisitions	4,700,000	975,559	5,675,559
	Disposals	(4,700,000)	(757,898)	(5,457,898)
	Closing balance 30 June 2019	-	223,907	223,907

	There is no unrealised gains or losses recognised in profit or loss attributable to balances held at the end of the reporting period. The gains or losses arising from the holding of the financial assets measured at fair value during the financial period are recognised in other income/(expense)-net.

4	Critical accounting estimates and judgements
	Estimates and judgements are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

4	Critical accounting estimates and judgements (continued)
4.1	Critical accounting estimates
(1)	Measurement of expected credit losses
	The Group calculates expected credit losses according to the default risk exposure and expected credit loss rate, and determines the expected credit loss rate based on default probability and default loss rate. In determining the expected credit loss rate, the Group uses data such as internal historical credit loss experience, etc., and adjusts historical data based on current conditions and forward-looking information. When considering forward-looking information, the indicators used by the Group include the risk of economic downturn, the expected increase in unemployment rate, the external market environment, the technological environment and changes in customer conditions. The Group regularly monitors and reviews assumptions related to the calculation of expected credit losses. In the six months ended 2019, there was no significant change in the above estimation techniques and key assumptions.

(2)	Impairment of long term assets

	The Group assesses whether there are indicators that the long term assets except for financial assets are impaired at each balance sheet date. When there are indicators that the carrying amounts of those long term assets are unrecoverable, an impairment test will be performed.
	When the carrying amount of the long term assets except for financial assets or the cash generating unit (“CGU”) is higher than its recoverable amount, which is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use, the impairment occurred.
	The Group determines the fair value less costs of disposal based on discounted future cash flow forecasts. The Group use the medium and long-term budgets of the business development plan approved by the management as a starting point when applying the present value technique, adjusting for market conditions.
	Key judgements are made on revenue growth rate, sales price growth rate, discount rate and long term growth rate when estimate the discounted future cash flow forecasts. The Group uses relevant accessible information, including the production and sales volumn, relevant market information which are based on the reasonable and supportable assumptions, to estimate the recoverable amount of those long term assets.

(3)	Taxation
	The Group is subject to various taxes in the PRC, including corporate income tax, value added tax and consumption tax. Significant judgment is required in determining the provision for these taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from amounts that were initial recorded, such differences will impact the tax provisions in the period of final tax outcome.
	Deferred income tax assets relating to certain temporary differences are recognised as management considers it is probable that future taxable profit will be available against which the temporary differences can be utilised. Where the expectation is different from the original estimate, such differences will impact the recognition of deferred tax assets and tax in the periods in which such estimate is changed.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

(4)	Provisions
	The Group provides statutory warranties on automobile and undertakes to repair or replace items that fail to perform satisfactorily based on certain pre-determined conditions. Management estimates the related warranty claims based on historical warranty claim information including level of repairs and returns as well as recent trends that might suggest that past cost information may differ from future claims. Factors that could impact the estimated claim information include the success of the Group’s productivity and quality controls, as well as parts and labour costs. Any increase or decrease in the provision would affect profit or loss in future years.
(5)	Write-down of inventory
	Inventories shall be measured at the lower of cost and the net realisable value. The net realisable value is estimated sales price less estimated cost to finish goods, estimated distribution expenses and related taxes in the daily operation.
	If management revises estimated sales price, estimated cost to finish goods, distribution expenses and related taxes, and revised sales price is lower than current sales price, or revised cost to finish goods, distribution expenses and related taxes are higher than those current estimation, the Group needs to consider increasing the write-down provision of the inventories.
	If the actual sales price, the cost to finish goods, distribution expenses and related taxes are higher or lower than the estimation of management, the Group will recognise the relevant influence in profit or loss in the relevant accounting period.

4.2	Critical accounting judgements
(1)	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 of the financial assets performance and reporting the financial assets 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.

4	Critical accounting estimates and judgements (continued)
4.1	Critical accounting estimates (continued)
(3)	Taxation (continued)
	As at 30 June 2019, the Group recorded deferred tax assets of approximately RMB789,091,000. To the extent that it is probable that taxable profit will be available against which the deductible temporary differences will be utilised, deferred tax assets are recognised mainly for temporary differences arising from accrued expenses and retirement benefit obligations.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

4	Critical accounting estimates and judgements (continued)
4.2	Critical accounting judgements (continued)
(1)	Classification of financial assets (continued)
	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 include time value of money, credit risks, other basic lending risks and considerations for costs and profits; whether the repayment in advance reflects the principal outstanding and corresponding interest and reasonable compensation paid for early termination of the contract.
(2)	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.
(3)	Capitalisation of development costs
	Development costs are capitalised when the criteria in Note 2.9(2) are fulfilled. The assessments on whether the criteria for capitalisation of development have been met involves the 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 costs and recorded the process in meeting minutes based on feasibility analysis and regular review on the development project phase etc.
(4)	Timing of revenue recognition
	The Group sells automobiles and automobile parts to distributors and ending customers. As prescribed in the contract, control of automobiles is transferred to the customers when the good are out of the warehouse, while control of automobile parts is transferred when the parts are out of the warehouse or shipped to the designate destination based on the contract terms. The distributors and ending customers sign the delivery documents after they accept the products. Thereafter, the distributors or ending customers control the products and have the right to set the price, bear the risks of any obsolescence and loss of the products. The distributors and ending customers have obtained the control of the products after accepting the products. Therefore, the Group recognises the sales revenue of the products at the time when the delivery documents have been signed.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

4	Critical accounting estimates and judgements (continued)
4.2	Critical accounting judgements (continued)
(5)	Sales with product warranties
	The Group provides statutory warranty for automobiles and automobile parts, and the period 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 for this purpose, thus this kind of warranty does not identified as a separate performance obligation. In addition, the Group also offers additional warranty other than the requirements of laws and regulations, which identified as a separate performance obligation. The Group recognises the revenue of the additional warranty over time during the period when services are rendered.

5	Revenue and segment information
	The Group principally derives its turnover from the manufacture, assembly and sale of automobiles, related spare parts and components, and sales are made principally in the PRC. Revenue represents the total invoiced value of goods supplied to customers, net of value-added tax, returns and allowances.
	Management has determined the operating segment based on the reports reviewed by the strategic executive committee that are used to make strategic decisions. The committee considers the business from the product perspective as all the Group’s sales are made in the PRC. Since the Group principally derives its turnover from the sale of automobiles, the committee considers the automobile business as a whole in allocating resources and assessing performance. Accordingly, no segment information is presented.
	The revenue by product of the whole business as follows:
		Six months ended 30 June 2019
		Automobiles	Automobile parts	Maintenance services	Materials and others	Total
	Main business income	12,327,573	1,168,533	43,900	-	13,540,006
	-Recognition at a point in time	12,327,573	1,168,533	-	-	13,496,106
	-Recognition over time	-	-	43,900	-	43,900
	Other business income	-	-	-	181,948	181,948
		12,327,573	1,168,533	43,900	181,948	13,721,954
		Six months ended 30 June 2018
		Automobiles	Automobile parts	Maintenance services	Materials and others	Total
	Main business income	12,753,388	1,370,722	33,762	-	14,157,872
	-Recognition at a point in time	12,753,388	1,370,722	-	-	14,124,110
	-Recognition over time	-	-	33,762	-	33,762
	Other business income	-	-	-	129,625	129,625
		12,753,388	1,370,722	33,762	129,625	14,287,497
	As at 30 June 2019, the expected revenue of unsatisfied performance obligations from signed contract is RMB103,676,000. The Group will recognise the revenue from 2019 to 2022.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

5	Revenue and segment information (continued)
	The Group has recognised the following assets and liabilities related to contracts with customers:

		30 June 2019	31 December 2018
	Contract liabilities
	Automobiles and automobile parts	139,734	212,246
	Maintenance services and additional warranty	103,676	92,838
	Total contract liabilities	243,410	305,084
	Less: non-current liabilities	(54,499)	(38,382)
	Total current contract liabilities	188,911	266,702

6	Expenses by nature
		Six months ended 30 June
		2019		2018
	Changes in inventories of finished goods and work in progress	101,187		(53,018)
	Raw materials and consumables used	10,151,019		10,805,572
	Employee benefit expense (Note 7)	1,246,623		1,118,958
	Depreciation of PPE (Note 12, 28)	475,243		463,097
	Repairs and maintenance expenditure on PPE	40,473		53,666
	Transportation expenses	332,654		320,658
	Amortisation of lease prepayment (Note 13, 28)	7,787		7,787
	Amortisation of intangible assets (Note 14, 28)	35,164		25,814
	Provision of statutory warranty (Note 25)	159,699		123,718
	Design fees	243,684		250,316
	Sales promotion expenses	106,691		94,463
	Advertising and new product planning expenses	228,204		89,635
	Provision for inventories write-down	5,310		5,195
	Others	530,691		563,327
	Total cost of sales, distribution expenses and administrative expenses	13,664,429		13,869,188

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

7	Employee benefit expense
		Six months ended 30 June
		2019		2018
	Wages and salaries	907,635		812,503
	Social security costs	119,810		109,307
	Pension costs ? defined contribution plans	139,569		138,023
	Others	79,609		59,125
		1,246,623		1,118,958

The employees of the Group participated in a retirement benefit plan organised by the municipal and provincial governments under which the Group was required to make defined contributions monthly to this plan.

In addition, the Group also paid certain pension subsidies to certain retired employees. In accordance with the Group’s early retirement programs, the Group was also committed to make periodic benefit payments to certain early-retired employees until they reach their legal retirement ages.

8	Other income
			Six months ended 30 June
			2019		2018
	Government grants (a)		230,279		159,254
	Net fair value gains/(losses) on derivative financial instruments		(3,557)		6,915
	Net loss on disposal of derivative financial instruments		(4,940)		(12,620)
	Others		13,823		41,811
			235,605		195,360
(a)	In the six months ended 2019, the Group received grants of approximately RMB230,279,000, mainly from Economic Development District Administrative Commission of Xiaolan and the Finance Bureau of Economic, Transformation and Comprehensive Reform Demonstration Zone Administrative Commission of Shanxi. Those grants were income related government grants to support the Group’s operation.

9	Finance income and expenses
			Six months ended 30 June
			2019		2018
	(a) Finance income
	Interest income on bank deposits		87,147		95,632
	Interest income on credit sales		5,618		11,022
			92,765		106,654
	(b) Finance expenses
	Interest expense on bank loans		(106)		(107)
	Bank charges and others		(2,518)		(3,155)
			(2,624)		(3,262)
	Net finance income		90,141		103,392

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

10	Taxation
(i)	Corporate income tax (“CIT”)
	As the Company is qualified as a high-tech enterprise and approved by the relevant tax authorities in 2018, the Company is entitled to a preferential CIT rate of 15% from 2018 to 2020 (2018: 15%). The CIT rates of JMCH, Jiangling Motor Sales Co., Ltd. (“JMCS”), Shenzhen Fujiang New Energy Automobile Sales Co., Ltd. (“SZFJ”), Guangzhou Fujiang New Energy Automobile Sales Co., Ltd. (“GZFJ”) and Xiamen Fujiang New Energy Automobile Sales Co., Ltd. (“XMFJ”), the subsidiaries of the Company, are 25%.
	The amounts of income tax expense charged to profit or loss represented:
			Six months ended 30 June
			2019		2018
	Current tax		41		7,428
	Deferred tax (Note 17)		(46,343)		19,976
			(46,302)		27,404

	The difference between the actual income tax charge in profit or loss and the amounts which result from applying the enacted tax rate to profit before income tax can be reconciled as follows:
			Six months ended 30 June
			2019		2018
	Profit before tax		12,560		346,355
	Tax calculated at tax rates applicable to profits in the respective companies		(38,028)		29,341
	Tax concessions		(9)		(69)
	Expenses not deductible for tax purposes		294		297
	R&D costs deduction		(64,124)		(47,715)
	Income not subject to tax		(882)		(391)
	Effect of different tax rates applied for the periods in which the temporary differences are expected to reverse		18,925		10,116
	Utilisation of previously temporary differences for which no deferred income tax asset was recognised		-		(1,764)
	Temporary differences for which no deferred income tax asset was recognised		4,195		-
	Tax losses for which no deferred income tax asset was recognised		33,327		37,589
	Tax charge		(46,302)		27,404

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

10	Taxation (continued)

(ii)	Value-added tax (“VAT”)
	Pursuant to the No.39, 2019 notice jointly issued from the Ministry of Finance, the State Administration of Taxation, the general administration of customs, the Group's taxable products sales income applicable VAT rate is 13% from 1 April 2019, while the VAT rate was 16% before then. The VAT rate applicable to the Group's transportation business is 9% from 1 April 2019, while the VAT rate was 10% before then.
(iii)	Consumption Tax (“CT”)
	The Group’s automobile sale is subject to CT at 3%, 5% or 9% on the selling price of goods.

11	Earnings per share
	Basic earnings per share is calculated by dividing the profit attributable to shareholders of the Company by the weighted average number of ordinary shares in issue during the year.
			Six months ended 30 June
			2019			2018
	Profit attributable to shareholders of the Company		58,862			318,951
	Weighted average number of ordinary shares in issue (‘000)		863,214			863,214
	Basic earnings per share (RMB)		0.07			0.37

Diluted earnings per share equals to basic earnings per share as there were no dilutive potential ordinary shares outstanding during the year ended 30 June 2019.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

12	Property, plant and equipment
		Buildings	Plant and Machinery	Motor Automobiles	Moulds	Electronic and other equipment	Assets under constructions	Total
	At 1 January 2018
	Cost	2,084,217	3,954,028	280,071	2,411,080	3,137,100	678,684	12,545,180
	Accumulated depreciation and impairment	(414,792)	(1,935,093)	(144,009)	(1,608,649)	(1,727,441)	(1,108)	(5,831,092)
	Net book amount	1,669,425	2,018,935	136,062	802,431	1,409,659	677,576	6,714,088
	Year ended 31 December 2018
	Opening net book amount	1,669,425	2,018,935	136,062	802,431	1,409,659	677,576	6,714,088
	Additions	-	-	-	-	-	1,214,241	1,214,241
	Transfers	101,202	97,601	21,936	176,549	199,671	(596,959)	-
	Disposals	(56)	(1,164)	(1,188)	(5,986)	(688)	(7)	(9,089)
	Reclassification	2,965	(143,415)	29,462	3,871	107,117	-	-
	Other deductions	-	(10,119)	-	-	(2,647)	(32,151)	(44,917)
	Impairment charge	-	(2,832)	(478)	-	(3,478)	(355)	(7,143)
	Depreciation charge	(51,781)	(246,570)	(37,514)	(252,144)	(337,879)	-	(925,888)
	Closing net book amount	1,721,755	1,712,436	148,280	724,721	1,371,755	1,262,345	6,941,292
	At 31 December 2018
	Cost	2,188,306	3,837,053	326,799	2,556,744	3,376,670	1,263,392	13,548,964
	Accumulated depreciation and impairment	(466,551)	(2,124,617)	(178,519)	(1,832,023)	(2,004,915)	(1,047)	(6,607,672)
	Net book amount	1,721,755	1,712,436	148,280	724,721	1,371,755	1,262,345	6,941,292
	Six months ended 30 June 2019
	Opening net book amount	1,721,755	1,712,436	148,280	724,721	1,371,755	1,262,345	6,941,292
	Additions	-	-	-	-	-	669,832	669,832
	Transfers	567	49,482	13,598	80,843	107,046	(251,536)	- -
	Disposals	-	(4,768)	(1,798)	-	(374)	(10)	(6,950)
	Other deductions	(1,986)	(5,481)	-	- -	(5)	(152)	(7,624)
	Impairment charge (Note 28)	- -	(2,662)	(91)	- -	(373)	-	(3,126)
	Depreciation charge (Note 6, 28)	(27,016)	(121,043)	(18,623)	(134,848)	(173,713)	- -	(475,243)
	Closing net book amount	1,693,320	1,627,964	141,366	670,716	1,304,336	1,680,479	7,118,181
	At 30 June 2019
	Cost	2,186,887	3,819,204	333,327	2,626,163	3,460,597	1,681,171	14,107,349
	Accumulated depreciation and impairment	(493,567)	(2,191,240)	(191,961)	(1,955,447)	(2,156,261)	(692)	(6,989,168)
	Net book amount	1,693,320	1,627,964	141,366	670,716	1,304,336	1,680,479	7,118,181

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

12	Property, plant and equipment (continued)
	For the six months ended 30 June 2019, depreciation expense of approximately RMB407,308,000 (the six months ended 30 June 2018: RMB404,610,000) has been charged in cost of sales, RMB1,639,000 (the six months ended 30 June 2018: RMB1,568,000) in distribution costs and RMB66,296,000 (the six months ended 30 June 2018: RMB56,919,000) in administrative expenses.
(i)	Temporarily idle property, plant and equipment
	As at 30 June 2019, property, plant and equipment with book value of approximately RMB 13,170,000 (cost of RMB132,424,000) (31 December 2018: book value of approximately RMB 2,497,000 and cost of RMB56,727,000) were temporarily idle due to product process adjustment and other reasons.The specific analysis is as follows:
			Cost		Accumulated depreciation		Impairment		Net book amount
	Plant and Machinery		110,939		(89,092)		(11,503)		10,344
	Motor Automobiles		2,418		(1,947)		(98)		373
	Electronic and other equipment		19,067		(15,564)		(1,050)		2,453
			132,424		(106,603)		(12,651)		13,170
(ii)	Property, plant and equipment not yet obtained proper certificate
			Net book amount				Reasons for not completing proper certificate
	Buildings		882,715				Procedure not yet completed
13	Lease prepayment
	Lease prepayment represents the Group’s interests in land which are held on leases of 50 years. The movement is as follows:

			30 June 2019		31 December 2018
	Opening net book amount		601,260		616,834
	Additions		-		-
	Amortisation charge (Note 6, 28)		(7,787)		(15,574)
	Closing net book amount		593,473		601,260
	Cost		751,626		751,626
	Accumulated amortisation		(158,153)		(150,366)
	Net book amount		593,473		601,260

Amortisation expense was charged in administrative expenses.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

14	Intangible assets
			Non-patent technology		Software		Goodwill		After-sale management model		Other		Total
	Year ended 31 December 2018
	Opening net book amount		146,556		47,842		3,462		-		-		197,860
	Addition		71,814		32,152		-		-		-		103,966
	Disposals		-		(63)		-		-		-		(63)
	Amortisation charge		(38,952)		(16,785)		-		-		-		(55,737)
	Closing net book amount		179,418		63,146		3,462		-		-		246,026
	At 31 December 2018
	Cost		254,412		152,014		89,028		36,978		1,649		534,081
	Accumulated amortisation and impairment		(74,994)		(88,868)		(85,566)		(36,978)		(1,649)		(288,055)
	Net book amount		179,418		63,146		3,462		-		-		246,026
	Six months ended 30 June 2019
	Opening net book amount		179,418		63,146		3,462		-		-		246,026
	Addition		77,398		152		-		-		-		77,550
	Disposals		-		-		-		-		-		-
	Amortisation charge (Note 6, 28)		(25,002)		(10,162)		-		-		-		(35,164)
	Closing net book amount		231,814		53,136		3,462		-		-		288,412
	At 30 June 2019
	Cost		331,809		152,165		89,028		36,978		1,649		611,629
	Accumulated amortisation and impairment		(99,995)		(99,029)		(85,566)		(36,978)		(1,649)		(323,217)
	Net book amount		231,814		53,136		3,462		-		-		288,412

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

14	Intangible assets (continued)

(i)	For six months ended 30 June 2019, amortisation expense of approximately RMB34,745,000 (the six months ended 30 June 2018: RMB25,356,000) was charged in administrative expenses, RMB249,000 (the six months ended 30 June 2018: RMB288,000) in cost of sales and RMB170,000 (the six months ended 30 June 2018: RMB170,000) in distribution costs.
(ii)	Development cost of approximately RMB77,398,000 (the six months ended 30 June 2018:RMB19,693,000) were capitalised by the Group during the six months ended 30 June 2019.
(iii)	Impairment test for goodwill

Goodwill arises on the acquisition of a subsidiary, and is monitored by the management at the cash generating unit level. The goodwill is allocated to the following cash generating unit (“CGU”):

		31 December 2018		Addition		Impairment		30 June 2019
	JMCH	3,462		-		-		3,462

The recoverable amount of the CGU is determined based on fair value less costs of disposal. These calculations use after-tax cash flow projections based on financial budgets approved by management covering a seven-year period according to the medium and long-term budgets for the business development plan approved by the management. Adjustments for market conditions are also considered for the forecast. Cash flows beyond the seven-year period are extrapolated using the estimated long term growth rate stated below. The long term growth rate does not exceed the average growth rate for the heavy duty automobile business in which the CGU operates.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

14	Intangible assets (continued)
(iii)	Impairment test for goodwill (continued)
	In the opinion of management, the recoverable amount of the CGU will not be lower than the carrying amount even if taking into account a reasonably possible change in the key assumptions on the calculation of recoverable amount of the CGU.
	The fair value measurement is categorised in level 3 of the fair value hierarchy.
15	Financial instruments by category
	The Group holds the following financial instruments:
	Financial assets		Notes	30 June 2019		31 December 2018
	Financial assets at amortised cost
	Trade receivables		19	2,570,128		2,674,650
	Notes receivables		19	6,500		626,509
	Other receivables		19	89,423		84,588
	Interest receivables		19	29,683		37,923
	Cash and cash equivalents		20	8,367,457		7,616,880
	Financial assets at fair value through other comprehensive income
	Notes receivables			223,907		6,246
	Derivative financial instruments			-		979
				11,287,098		11,047,775

	Financial liabilities	Notes	30 June 2019		31 December 2018
	Liabilities at amortised cost
	Trade and other payables(exclude payroll and welfare payables, other tax payables)	26	12,081,645		11,658,259
	Borrowings	23	3,826		4,044
	Derivative financial instruments		2,578		-
			12,088,049		11,662,303

The Group’s exposure to various risks associated with the financial instruments is discussed in Note 3. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned above.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

16a	Subsidiaries

	As at the date of this report, the Group has the following subsidiaries:
	Entity	Place and date of incorporation	Percentage of equity interest held			Principal activities
	JMCH	Taiyuan, PRC /8 January 2013	100%			Manufacture and sale of automobiles and spare parts
	JMCS	Nanchang, PRC /11 October 2013	100%			Sale of automobiles and spare parts
	SZFJ	Shenzhen, PRC /3 May 2018	100%			Sale of automobiles and spare parts
	GZFJ	Guangzhou, PRC /15 June 2018	100%			Sale of automobiles and spare parts
	XMFJ	Xiamen, PRC /20 June 2018	100%			Sale of automobiles and spare parts
16b	Investments accounted for using the equity method
(i)	Summarised financial information for immaterial associate
	The amount recognised in the consolidated statement of financial position was as follow:
					30 June 2019			31 December 2018
	Associate				40,446			40,112

	The amount recognised in the consolidated statement of comprehensive income was as follow:
			Six months ended 30 June
			2019		2018
	Share of profit		334		2,611

The Company holds 19.15% interest of Hanon Systems (Nanchang) Co., Ltd. (“Hanon Systems”) and the investment is accounted for using the equity method of accounting.

(ii)	Reconciliation of summarised financial information of the associate
			Six months ended 30 June
			2019		2018
	At beginning of the year		209,460		197,774
	Profit for the year		1,742		13,634
	Dividends distributed		-		-
	At end of the year		211,202		211,408
	Interest in associate		19.15%		19.15%
	Carrying value		40,446		40,485

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

17	Deferred income tax

			30 June 2019		31 December 2018
	Deferred tax assets		1,016,943		926,630
	Deferred tax liabilities-can be offset		(227,852)		(183,534)
	Deferred tax liabilities-cannot be offset		(25,676)		(26,024)
	Deferred tax assets-net		789,091		743,096
	Deferred tax liabilities-net		(25,676)		(26,024)

	The gross movement on the deferred income tax account is as follows:
			30 June 2019		31 December 2018
	At beginning of the year		717,072		663,517
	Credited to profit or loss (Note 10(i))		46,343		52,407
	Credited to other comprehensive income (Note 10(i))		-		1,148
	At end of the year		763,415		717,072

The movement in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:

	Deferred tax assets	Provision for impairment of assets	Retirement benefits obligation	Accrued expenses and provision for statutory warranty	Amortization of non-patented technology	Tax losses	Others	Total
	At 1 January 2018	12,149	13,543	723,387	4,505	-	4,293	757,877
	Credited/(charged) to profit or loss	4,549	1,405	(18,816)	4,869	178,791	(3,193)	167,605
	Credited to other comprehensive income	-	1,148	-	-	-	-	1,148
	At 31 December 2018	16,698	16,096	704,571	9,374	178,791	1,100	926,630
	(Charged) /credited to profit or loss	(2,528)	(397)	55,467	3,125	26,594	8,052	90,313
	Credited to other comprehensive income	-	-	-	-	-	-	-
	At 30 June 2019	14,170	15,699	760,038	12,499	205,385	9,152	1,016,943

	Deferred tax liabilities	Amortisation of intangible assets	PPE depreciation	Fair value gains	Forwards exchange contracts	Total
	At 1 January 2018	(3,545)	(64,079)	(26,736)	-	(94,360)
	(Charged)/credited to profit or loss	(841)	(114,922)	712	(147)	(115,198)
	At 31 December 2018	(4,386)	(179,001)	(26,024)	(147)	(209,558)
	(Charged)/credited to profit or loss	(1,309)	(43,156)	348	147	(43,970)
	At 30 June 2019	(5,695)	(222,157)	(25,676)	-	(253,528)

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

17	Deferred income tax (continued)

	The analysis of deferred tax assets and deferred tax liabilities is as follows:
			30 June 2019		31 December 2018
	Deferred tax assets:
	–Deferred tax asset to be recovered after more than 12 months		233,281		203,802
	–Deferred tax asset to be recovered within 12 months		783,661		722,828
			1,016,942		926,630

			30 June 2019		31 December 2018
	Deferred tax liabilities:
	–Deferred tax liabilities to be recovered after more than 12 months		(214,572)		(182,373)
	–Deferred tax liabilities to be recovered within 12 months		(38,956)		(27,185)
			(253,528)		(209,558)

Deductible temporary differences and tax losses which no deferred income tax assets were recognised were as follows:

			30 June 2019		31 December 2018
	Deductible temporary differences		251,214		234,433
	Tax losses		749,897		639,805
			1,001,111		874,238

The expiry years of the tax losses are as follows:

			30 June 2019		31 December 2018
	2019		36,772		36,772
	2020		72,470		72,470
	2021		115,820		115,820
	2022		150,713		150,713
	2023		240,815		264,030
	2024		133,307		-
			749,897		639,805

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

	Movement on the provision for inventories write-down is as follows:
				30 June 2019		31 December 2018
	At beginning of the year			(76,815)		(45,130)
	Provision for inventories write-down (Note 28)			(5,310)		(53,651)
	Inventories written off during the year as uncollectible			21,192		21,966
	At end of the year			(60,933)		(76,815)

19	Trade and other receivables and prepayments
		30 June 2019		31 December 2018
	Trade receivables	2,591,273		2,696,928
	Less: Provision for impairment of trade receivables	(21,145)		(22,278)
	Trade receivables – net	2,570,128		2,674,650
	Notes receivables	6,500		626,509
	Other receivables	89,943		85,031
	Less: Provision for impairment of other receivables	(520)		(443)
	Other receivables – net	89,423		84,588
	Prepayments	1,192,605		1,158,303
	-Material payment in advance	555,268		525,777
	-Advance payment of taxes and surcharges	637,337		632,048
	-Others	-		478
	Deductable VAT input tax	166,387		96,311
	Interest receivables	29,683		37,923
		4,054,726		4,678,284

Refer to Note 31 for details of receivables from related parties.

The carrying amounts of trade and other receivables approximate their fair values.

18	Inventories
			30 June 2019		31 December 2018
	Raw materials		1,305,690		1,553,135
	Work in progress		205,122		211,490
	Finished goods		662,464		757,729
			2,173,276		2,522,354
	For the six months ended 30 June 2019, the cost of inventories recognised as expenses and included in cost of sales amounted to approximately RMB10,252,206,000 (the six months ended 30 June 2018: RMB10,752,554,000).

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

19	Trade and other receivables and prepayments (continued)

	Movement on the provision for impairment of trade and other receivables is as follows:
			30 June 2019		31 December 2018
	At beginning of the year		(22,721)		(21,674)
	Provision for receivables impairment (Note 28)		1,056		(1,089)
	Receivables written off during the year as uncollectible		-		42
	At end of the year		(21,665)		(22,721)

The other classes within trade and other receivables do not contain impaired assets.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security.

20	Cash and cash equivalents
			30 June 2019		31 December 2018
	Cash at bank and in hand		6,655,457		2,016,859
	Short-term bank deposits (a)		1,712,000		5,600,021
			8,367,457		7,616,880
	As at 30 June 2019 and 31 December 2018, all bank deposits are in RMB. As at 30 June 2019, the Group had cash of approximately RMB577,916,000 (2018: RMB833,617,000) deposited in Jiangling Motor Group Finance Company (“JMCF”) (Note 31 (ix)). JMCF, a non-bank financial institution, is a subsidiary of JMCG.

(a)	Short-term bank deposits can be withdrawn at the discretion of the Group without any restriction.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

21	Share capital
		Number of shares (thousands)	Tradable shares			Total
			“A” shares		“B” shares
			Restricted	Non-restricted
	Year ended 31 December 2018
	Balance at 1 January 2018	863,214	907	518,307	344,000	863,214
	Transfer	-	(120)	120	-	-
	Balance at 31 December 2018	863,214	787	518,427	344,000	863,214
	Six months ended 30 June 2019
	Balance at 1 January 2019	863,214	787	518,427	344,000	863,214
	Transfer	-	-	-	-	-
	Balance at 30 June 2019	863,214	787	518,427	344,000	863,214

All the “A” and “B” shares are registered, issued and fully paid shares of RMB1 each. All the “A” and “B” shares rank pari passu in all respects.

After the implementation of the share reform scheme on 13 February 2006, 787,000 shares were still restricted as at 30 June 2019.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

22	Other reserves

		Statutory surplus reserve fund (a)	Reserve fund	Others	Total
	At 1 January 2018	431,607	18,627	680	450,914
	Other comprehensive income
	-Remeasurements of retirement benefit obligation, net of tax	-	-	(3,442)	(3,442)
	At 31 December 2018	431,607	18,627	(2,762)	447,472
	Other comprehensive income
	-Remeasurements of retirement benefit obligation, net of tax	-	-	-	-
	At 30 June 2019	431,607	18,627	(2,762)	447,472

(a)

In accordance with the relevant laws and regulations in the PRC and Articles of Association of the Company, it is required to appropriate 10% of its annual net profit, after offsetting any prior years’ losses as determined under the Accounting Standards for Business Enterprises in the PRC, to the statutory surplus reserve fund before distributing the net profit. When the balance of the statutory surplus reserve fund reaches 50% of the Company’s share capital, any further appropriation is at the discretion of shareholders. The statutory surplus reserve fund can be used to offset prior years’ losses, if any, and may be converted into share capital by issuing new shares to shareholders in proportion to their existing shareholding or by increasing the par value of the shares currently held by them. The fund is non-distributable except for liquidation.

As the balance of the statutory surplus reserve fund has reached 50% of the Company’s share capital, no further appropriations to the statutory surplus reserve fund were provided for the six months ended 30 June 2019.

(a)	Bank borrowings of USD557,000 (equivalent to approximately RMB3,826,000) (2018: USD589,000 equivalent to approximately RMB4,044,000) were guaranteed by JMCF (Note 31 (iii)).
	The interest rate of bank borrowings is 1.50% per annum (2018: 1.50%).
	The fair value of borrowings approximates their carrying values.

23	Borrowings
			30 June 2019		31 December 2018
	Current
	Bank borrowings - guaranteed (a)		450		449
	Non-current
	Bank borrowings - guaranteed (a)		3,376		3,595
	Total borrowings		3,826		4,044

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

	The maturity of non-current borrowings is as follows:
			30 June 2019		31 December 2018
	Between 1 and 2 years		450		449
	Between 2 and 5 years		1,350		1,348
	Over 5 years		1,576		1,798
			3,376		3,595
	The Group has the following undrawn borrowing facilities:
			30 June 2019		31 December 2018
	Fixed rate
	- Expiring within one year		1,973,097		2,270,784

23	Borrowings (continued)

24	Retirement benefits obligations
	The amount of early retirement and supplemental benefit obligations recognised in the consolidated statement of financial position is as follows:
			30 June 2019		31 December 2018
	Present value of defined benefits obligations		65,372		68,020
	The movement of early retirement and supplemental benefit obligations for the year ended 31 December 2018 is as follows:
			30 June 2019		31 December2018
	At beginning of the year		68,020		59,184
	For the year
	-Current service cost		-		1,315
	-Interest cost		-		2,410
	-Payment		(2,648)		(4,954)
	-Past service cost from the change of plan		-		2,386
	-Actuarial loss		-		7,679
	At end of the year		65,372		68,020
	Current		4,595		4,595
	Non-current		60,777		63,425
			65,372		68,020
	The material actuarial assumptions used in valuing these obligations are as follows:
							31 December 2018
							3.5%
							2%
							0% to 6%

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

25	Provisions for statutory warranty
	The movement on the statutory warranty provisions and other liabilities is as follows:
			30 June 2019		31 December 2018
	At beginning of the year		352,554		374,981
	Charged for the year (Note 6)		159,699		291,471
	Utilised during the year		(140,705)		(313,898)
	At end of the period		371,548		352,554

	Analysis of total provisions:
			30 June 2019		31 December 2018
	Non-current		166,251		151,492
	Current		205,297		201,062
			371,548		352,554

The above represents the statutory warranty protecting customer from faults that arise after the product has been transferred to the customer. The statutory warranty is estimated based on prior years’ experience on the occurrence of such cost.

24	Retirement benefits obligations (continued)

	Based on the assessment and IAS 19, the Group estimated that, at 30 June 2019, a provision of RMB65,372,000 is sufficient to cover all future retirement-related obligations.
	Obligation in respect of retirement benefits of RMB65,372,000 is the present value of the unfunded obligations, of which the current portion amounting to RMB4,595,000 (2018: RMB4,595,000) has been included under current liabilities.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

26	Trade and other payables
			30 June 2019		31 December 2018
	Trade payables		7,914,886		7,824,908
	Payroll and welfare payables		356,075		304,322
	Dividend payables		41,313		6,790
	Other tax payables		16,636		233,385
	Payables of sales rebates		1,748,027		1,714,485
	Payables of R&D expenses		930,737		828,807
	Others		1,446,682		1,283,269
			12,454,356		12,195,966

	Refer to Note 31 for details of amount due to related parties.
27	Dividends
	A final dividend for 2018 of RMB0.04 per share, amounting to a total dividend of approximately RMB34,529,000 was proposed at the Board of Directors’ Meeting on 26 March 2019, and such dividend is proposed at the Shareholders’ Meeting on 28 June 2019.

28

Cash generated from operations

		Six months ended 30 June
		2019		2018
	Profit before tax	12,560		346,355
	Depreciation of PPE (Note 6, 12)	475,243		463,097
	Amortisation of lease prepayment (Note 6, 13)	7,787		7,787
	Amortisation of intangible assets (Note 6, 14)	35,164		25,814
	Impairment charges of PPE (Note 12)	3,126		3,607
	Provision for receivables impairment (Note 19)	(1,056)		918
	Provision of inventories (Note 18)	5,310		5,195
	(Gain)/loss on disposals of PPE	4,412		(34,273)
	Finance expenses (Note 9)	2,170		2,879
	Finance income (Note 9)	(92,765)		(106,654)
	Net foreign exchange transaction loss/(gain)	451		3,219
	Share of profit from investment accounted for using equity method (Note 16b)	(334)		(2,611)
	Investment gain of finance asset investment	(18,447)		(10,202)
	Investment loss of forwards exchange contracts	4,940		12,620
	Changes on fair value of forwards exchange contracts	3,557		(6,915)
	Provisions for statutory warranty	18,994		(7,799)
	Changes in working capital:
	-Increase in restricted cash	(20,001)		-
	- Increase in inventories	333,470		(20,248)
	- Increase in trade and other receivables	368,709		(399,396)
	- (Decrease)/increase in trade and other payables	294,858		(1,072,349)
	- Increase/(decrease) in pensions and other retirement benefits	(2,648)		(2,805)
	Cash generated from operations	1,435,500		(791,761)

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

28	Cash generated from operations (continued)
	In the cash flow statement, proceeds from disposal of PPE, lease prepayment and intangible assets comprise:
		Six months ended 30 June
		2019		2018
	Net book amount	6,950		95,408
	(Loss) /gain on disposal of PPE	(4,412)		34,273
	(Decrease)/increase in trade and other payables	452		(127,112)
	Proceeds from disposal of PPE	2,990		2,569
29	Contingencies
	At 30 June 2019, the Group did not have any significant contingent liabilities.

30	Commitments
	Capital commitments
	Capital expenditure contracted for at the balance sheet date but not recognised in the financial statements are as follows:

			30 June 2019		31 December 2018
	Contracted but not provided for:
	Purchases of buildings, plant and machinery		946,316		1,095,333

31	Related party transactions
	Related parties are those parties that have the ability to control the other party or exercise significant influence in making financial and operating decisions. Parties are also considered to be related if they are subject to common control.
	Jiangling Motor Holdings Co. Ltd. (“JHC”) (a), which owns 41.03% of the Company’s shares, and Ford Motor Company (“Ford”), which owns 32% of the Company’s shares, are major shareholders of the Company as at 30 June 2019. The shareholders of JHC are Chongqing Changan Automobile Corporation Ltd. and JMCG, and both of them hold 50% equity interest of JHC, respectively.
	The following is a summary of the significant transactions carried out between the Group, its associates, JMCG and its subsidiaries, JHC and its subsidiaries and joint venture, Ford and its subsidiaries and joint venture in the ordinary course of business during the six months ended 30 June 2019. (a) As of July 26, 2019, JHC has transferred the total share capital of the Company to Nanchang Jiangling Investment Co., Ltd. (“JIC”). JHC no longer held the shares of the Company, the controlling shareholder of JMC will be changed from JHC to JIC.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands of RMB unless otherwise stated)

31	Related party transactions (continued)
	For the six months ended 30 June 2019, related parties, other than the subsidiary, and their relationship with the Group are as follows:
	Name of related party	Relationship
	JMCG	Shareholder of JHC
	Jiangxi Jiangling Special Purpose Vehicle Co., Ltd.	Subsidiary of JMCG
	Jiangling Material Co.	Subsidiary of JMCG
	Nanchang Gear Co., Ltd.	Subsidiary of JMCG
	Jiangxi JMCG Industry Co., Ltd.	Subsidiary of JMCG
	Jiangxi Lingrui Recycling Resources Development Corporation	Subsidiary of JMCG
	JMCG Jingma Motors Co., Ltd.	Subsidiary of JMCG
	JMCG Property Management Co.	Subsidiary of JMCG
	Nanchang Baojiang Steel Processing Distribution Co., Ltd.	Associate of JMCG
	Faurecia Emissions Control Technologies (Nanchang) Co., Ltd.	Associate of JMCG
	Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd	Associate of JMCG
	Jiangxi JMCG Specialty Vehicles Corporation, Ltd.	Associate of JMCG
	Jiangxi Jiangling Group Special Vehicle Co., Ltd.	Associate of JMCG
	Nanchang Hengou Industry Co., Ltd.	Associate of JMCG
	Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd.	Associate of JMCG
	Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.	Associate of JMCG
	GETRAG (Jiangxi) Transmission Company	Associate of JMCG
	Jiangxi jiangling overseas automobile sales and service Co., Ltd	Associate of JMCG
	Jiangxi JMCG Motorhome Co., Ltd.	Associate of JMCG
	Jiangxi Jiangling Chassis Co.,Ltd.	Subsidiary of JMCG
	Nanchang JMCG Shishun Logistics Co., Ltd.	Subsidiary of JMCG
	Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd.	Subsidiary of JMCG
	Nanchang JMCG Xinchen Auto Component Co., Ltd.	Subsidiary of JMCG
	JMCF	Subsidiary of JMCG
	Nanchang Jiangling Hua Xiang Auto Components Co., Ltd.	Joint venture of JMCG
	Jiangxi Jiangling Lear Interior System Co., Ltd.	Joint venture of JMCG
	Nanchang Unistar Electric & Electronics Co., Ltd.	Joint venture of JMCG
	Nanchang Yinlun Heat-exchanger Co., Ltd.	Joint venture of JMCG
	Jiangxi ISUZU Engine Co.,Ltd.	Joint venture of JMCG
	Nanchang JMCG Liancheng Auto Component Co., Ltd.	Subsidiary of JMCG
	Nanchang Lianda Machinery Co., Ltd.	Subsidiary of JMCG
	Jiangling Aowei Aotomobile Spare Part Co., Ltd.	Subsidiary of JMCG
	NC.Gear Forging Factory	Subsidiary of JMCG
	Jiangxi Biaohong Engine Tappet Co., Ltd.	Subsidiary of JMCG
	Jiangxi JMCG Shangrao Industrial Co., Ltd.	Subsidiary of JMCG
	JMCG Jiangxi Engineering Construction Co., Ltd.	Subsidiary of JMCG
	Jiangxi JMCG Yichehang Second-hand Motors Sales Co., Ltd.	Subsidiary of JMCG
	Jiang ling Motor Electricity Vehicle Sales Co., Ltd	Subsidiary of JMCG
	Ford Global Technologies, LLC	Subsidiary of Ford
	Ford Motor (China) Co., Ltd.	Subsidiary of Ford
	Ford Motor Research & Engineering (Nanjing) Co., Ltd.	Subsidiary of Ford
	Ford Otomotiv Sanayi A.S.	Subsidiary of Ford
	Auto Alliance (Thailand) Co., Ltd.	Subsidiary of Ford
	Ford Vietnam Limitied	Subsidiary of Ford
	Changan Ford Automobile Co., Ltd.	Joint venture of Ford
	Jiangxi JMCG boya brake system Co., Ltd	Subsidiary of JMCG

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

31	Related party transactions (continued)
(i)	Purchases and sales of goods, provision and purchases of services
		Six months ended 30 June
	Purchase of goods	2019			2018
	Jiangxi Jiangling Special Purpose Vehicle Co., Ltd.	360,407			397,028
	Nanchang Baojiang Steel Processing Distribution Co., Ltd.	356,064			464,830
	Jiangxi Jiangling Chassis Co., Ltd.	341,935			464,265
	Nanchang Jiangling Hua Xiang Auto Components Co., Ltd.	341,796			244,473
	GETRAG (Jiangxi) Transmission Company	316,959			395,455
	Jiangxi Jiangling Lear Interior System Co., Ltd.	255,709			234,271
	Ford	187,925			301,095
	Nanchang JMCG Liancheng Auto Component Co., Ltd.	170,539			211,971
	Nanchang Unistar Electric & Electronics Co.,Ltd.	105,848			158,560
	Faurecia Emissions Control Technologies (Nanchang) Co., Ltd.	95,764			89,486
	Hanon Systems	87,086			136,338
	Nanchang JMCG Shishun Logistics Co., Ltd.	86,296			1,406
	JMCG	53,907			58,674
	Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd	50,767			51,150
	Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd.	33,620			34,052
	Nanchang Yinlun Heat-exchanger Co., Ltd.	32,419			23,536
	Nanchang Lianda Machinery Co., Ltd.	30,231			31,963
	Jiangxi JMCG Specialty Vehicles Corporation, Ltd.	26,962			89,556
	JHC	20,879			-
	Jiangling Material Co.	13,022			15,044
	Jiangxi Jiangling Group Special Vehicle Co., Ltd.	12,366			13,928
	Ford Otomotiv Sanayi A.S.	12,312			88,410
	Auto Alliance (Thailand) Co., Ltd.	11,703			53,769
	Jiangling Aowei Aotomobile Spare Part Co., Ltd.	10,039			13,657
	Nanchang JMCG Xinchen Auto Component Co., Ltd.	8,683			9,717
	Jiangxi ISUZU Engine Co., Ltd.	7,416			33,131
	Nanchang Gear Co., Ltd.	5,921			7,220
	Jiangxi JMCG Industry Co., Ltd.	5,746			5,359
	NC.Gear Forging Factory	3,283			6,829
	Jiangxi Biaohong Engine Tappet Co., Ltd.	3,134			3,379
	Jiangxi Lingrui Recycling Resources Development Corporation	3,012			1,932
	Changan Ford Automobile Co., Ltd.	2,401			6,869
	Jiangxi JMCG boya brake system Co., Ltd	2,114			24
	Jiangxi JMCG Shangrao Industrial Co., Ltd.	1,459			2,248
	Nanchang JMCG Skyman Auto Component Co., Ltd. (a)	-			39,904
	Others	152			206
			3,057,876		3,689,735
	(a) In December 2018, JHC absorbed Nanchang JMCG Skyman Auto Component Co.,Ltd. The Group purchased goods from related parties classified as two types: import parts and home-made parts. ? Purchase import parts from Ford or Ford’s suppliers, based on agreed price; ? Purchase home-made parts from other related parts, based on quotation, cost accounting and negotiation.

FOR THE SIX MONTHS ENDED 30 JUNE 2019NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in thousands of RMB unless otherwise stated)

31	Related party transactions (continued)
(i)	Purchases and sales of goods, provision and purchases of services (continued)

				Six months ended 30 June
	Purchase of services	Natures of transaction		2019		2018
	Nanchang JMCG Shishun Logistics Co., Ltd.	Truckage/Transportation		141,954		126,082
	Ford Global Technologies, LLC	Royalty fee		110,123		94,135
	Ford	Engineering service and design		106,018		134,540
	Changan Ford Automobile Co., Ltd.	Service fee/Labor costs		58,387		4,959
	Ford Otomotiv Sanayi A.S.	Engineering service and design		25,937		21,604
	Ford	Secondments costs		17,446		19,647
	Jiangxi JMCG Industry Co., Ltd.	Working meal		12,669		20,196
	Nanchang Hengou Industry Co., Ltd.	Packing/Truckage		12,063		19,944
	Ford Otomotiv Sanayi A.S.	Royalty fee		7,508		9,877
	JHC	Labor costs /Secondments costs		6,979		687
	Ford Motor (China) Co., Ltd.	Regional personnel costs		4,461		3,784
	Ford Otomotiv Sanayi A.S.	Secondments costs		3,349		10,746
	Ford Motor Research & Engineering (Nanjing) Co., Ltd.	Regional personnel costs		3,279		1,561
	Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd.	Promotion fee		2,902		-
	Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.	Agent business of importation		2,439		2,167
	JMCG Property Management Co.	Property management		998		1,083
	JMCG Jiangxi Engineering Construction Co., Ltd.	Engineering construction and maintenance fee		969		4,012
	GETRAG (Jiangxi) Transmission Company	Design fee		460		3,280
	Jiangxi Jiangling Group Special Vehicle Co., Ltd.	Promotion fee		36		1,540
	Jiangxi Jiangling Special Purpose Vehicle Co., Ltd.	Promotion fee		-		1,959
	Faurecia Emissions Control Technologies (Nanchang) Co., Ltd.	Design fee		-		1,315
	Others			1,401		922
			519,378			484,040

The Group purchased the service from related parties based on agreement price.

31	Related party transactions (continued)
(i)	Purchases and sales of goods, provision and purchases of services (continued)
		Six months ended 30 June
	Sales of goods	2019		2018
	Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.	474,714		566,065
	Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd.	63,909		91,265
	Jiangxi Jiangling Group Special Vehicle Co., Ltd.	41,557		35,586
	Jiangxi Lingrui Recycling Resources Development Corporation	36,018		29,625
	Jiangxi Jiangling Chassis Co., Ltd.	23,932		44,476
	JMCG Jingma Motors Co., Ltd.	20,101		36,743
	Nanchang JMCG Liancheng Auto Component Co., Ltd.	17,109		23,602
	Jiangxi JMCG Specialty Vehicles Corporation, Ltd.	12,667		61,448
	Jiangxi Jiangling Special Purpose Vehicle Co., Ltd.	9,066		57,568
	Jiangxi JMCG Yichehang Second-hand Motors Sales Co., Ltd.	7,640		7,707
	Nanchang JMCG Shishun Logistics Co., Ltd.	4,499		-
	Jiangxi jiangling overseas automobile sales and service Co., Ltd	4,341		-
	Nanchang Hengou Industry Co., Ltd.	4,245		22,874
	Nanchang Jiangling Hua Xiang Auto Components Co., Ltd.	3,385		6,996
	Jiangxi JMCG Industry Co., Ltd.	2,303		3,050
	Jiangxi Jiangling Lear Interior System Co., Ltd.	1,723		2,902
	Nanchang Lianda Machinery Co., Ltd.	1,026		81
	JMCG Property Management Co.	204		3,191
	JHC	35		23,080
	JMCG Jiangxi Engineering Construction Co., Ltd.	-		1,919
	Others	1,374		881
		729,848		1,019,059

The Group sold goods to related parties, based on agreement price.

31	Related party transactions (continued)

(ii)	Rental
	Rental cost

	Lessor	Category	Rental cost of six months ended 30 June 2019		Rental cost of six months ended 30 June 2018
	JMCG	Building	2,651		1,725
	Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.	Building	2,141		2,136
	JMCG Property Management Co.	Building	190		211
			4,982		4,072

	Rental income
	Lessee	Category	Rental income of six months ended 30 June 2019		Rental income of six months ended 30 June 2018
	GETRAG (Jiangxi) Transmission Company	Building	7		-
	JHC	Building	3		3
			10		3

(iii)	Guarantee
	As at 30 June 2019, bank loans of USD557,000 (equivalent to approximately RMB 3,826,000) (2018:USD589,000, equivalent to approximately RMB4,044,000) were guaranteed by JMCF (Note 23).

(iv)	Sales of PPE

(v)	Purchase of PPE

		Six months ended 30 June
		2019		2018
	Nanchang Jiangling Hua Xiang Auto Components Co., Ltd.	6,337		-
	Jiangxi Jiangling Special Purpose Vehicle Co., Ltd.	-		5,671
	Nanchang JMCG Liancheng Auto Component Co., Ltd.	-		677
		6,337		6,348

		Six months ended 30 June
		2019		2018
	Nanchang JMCG Shishun Logistics Co., Ltd.	299		-

31	Related party transactions (continued)
(vi)	Provide technique sharing

		Six months ended 30 June
		2019		2018
	Ford	28,810		-
	Ford Vietnam Limited	2,874		-
		31,684		-

(vii)	Key management remuneration
	Key management includes directors (executive and non-executive), members of the Executive Committee, the Company Secretary and members of the Supervisory Board. During the six months ended 2019, the total remuneration of the key management was approximately RMB6,361,000 (the six months ended 30 June 2018: RMB7,212,000).
(viii)	Interest received from cash deposit in related parties

			Six months ended 30 June
			2019		2018
	JMCF		6,771		9,739

(ix)	Balances arising from sales/purchases of goods/services

	Trade receivables from related parties	30 June 2019		31 December 2018
	Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.	165,281		251,236
	Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd.	30,136		32,940
	Ford	17,610		-
	JMCG Jingma Motors Co., Ltd.	10,499		6,162
	Nanchang JMCG Liancheng Auto Component Co., Ltd.	8,456		-
	Jiangxi JMCG Specialty Vehicles Corporation, Ltd.	8,190		237
	Jiangxi Jiangling Group Special Vehicle Co., Ltd.	8,162		5,726
	Jiang ling Motor Electricity Vehicle Sales Co., Ltd	5,961		5,961
	Nanchang JMCG Shishun Logistics Co., Ltd.	4,736		-
	Ford Vietnam Limited	2,874		5,104
	Nanchang Jiangling Hua Xiang Auto Components Co., Ltd.	1,522		1,899
	Jiangxi Jiangling Chassis Co., Ltd.	-		9,803
	Others	1,607		122
		265,034		319,190

31	Related party transactions (continued)
(ix)	Balances arising from sales/purchases of goods/services (continued)
	Other receivables from related parties	30 June 2019		31 December 2018
	Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.	39,142		35,027
	Nanchang Unistar Electric & Electronics Co., Ltd.	28		-
	Hanon Systems	2		-
	Others	-		11
		39,172		35,038

	Prepayments for purchasing of goods	30 June 2019		31 December 2018
	Nanchang Baojiang Steel Processing Distribution Co., Ltd.	536,715		496,146
		536,715		496,146
	Notes receivables from related parties	30 June 2019		31 December 2018
	Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.	15,000		-
	JMCG Jingma Motors Co., Ltd.	-		41,418
		15,000		41,418

	Prepayments for construction in progress	30 June 2019		31 December 2018
	Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.	121		-
	Jiangxi JMCG Specialty Vehicles Corporation, Ltd.	-		500
		121		500

	Prepayments for mould lease	30 June 2019		31 December 2018
	Changan Ford Automobile Co., Ltd.	-		478

	Cash deposit in related parties	30 June 2019		31 December 2018
	JMCF	577,916		833,617

31	Related party transactions (continued)
(ix)	Balances arising from sales/purchases of goods/services (continued)
	Trade payables to related parties	30 June 2019		31 December 2018
	Nanchang Jiangling Hua Xiang Auto Components Co., Ltd.	415,736		316,174
	Jiangxi Jiangling Chassis Co., Ltd.	297,987		333,431
	Jiangxi Jiangling Special Purpose Vehicle Co., Ltd.	269,443		336,126
	Jiangxi Jiangling Lear Interior System Co., Ltd.	197,031		214,139
	GETRAG (Jiangxi) Transmission Company	167,497		275,275
	Jiangxi JMCG Specialty Vehicles Corporation, Ltd.	144,038		138,209
	Nanchang JMCG Liancheng Auto Component Co., Ltd.	122,978		148,483
	Hanon Systems	96,975		91,656
	Nanchang JMCG Shishun Logistics Co., Ltd.	85,910		10,113
	Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd	62,152		48,200
	Nanchang Unistar Electric & Electronics Co., Ltd.	61,872		96,905
	Ford	55,833		151,749
	Faurecia Emissions Control Technologies (Nanchang) Co., Ltd.	54,896		58,966
	JMCG	40,107		68,159
	JHC	23,044		26,349
	Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd.	22,044		19,850
	Nanchang Yinlun Heat-exchanger Co., Ltd.	20,437		24,756
	Nanchang Lianda Machinery Co., Ltd.	17,409		28,325
	Jiangxi Jiangling Group Special Vehicle Co., Ltd.	9,941		28,944
	Jiangling Aowei Aotomobile Spare Part Co., Ltd.	9,523		14,533
	Jiangxi ISUZU Engine Co., Ltd.	8,784		9,956
	Nanchang JMCG Xinchen Auto Component Co., Ltd.	6,314		6,355
	Nanchang Gear Co., Ltd.	6,017		6,179
	Jiangxi JMCG Industry Co., Ltd.	6,014		7,830
	Auto Alliance (Thailand) Co., Ltd.	2,645		2,151
	Jiangxi Lingrui Recycling Resources Development Corporation	2,607		1,736
	Jiangxi JMCG boya brake system Co., Ltd	2,322		-
	Jiangxi JMCG Shangrao Industrial Co., Ltd.	1,883		1,693
	Jiangxi Biaohong Engine Tappet Co., Ltd.	1,586		2,037
	NC.Gear Forging Factory	1,369		4,173
	Ford Otomotiv Sanayi A.S.	1,344		1,031
	Jiangling Material Co.	1,048		1,372
	Changan Ford Automobile Co., Ltd.	-		67,622
	Others	-		16
		2,216,786		2,542,493

31	Related party transactions (continued)
(ix)	I Balances arising from sales/purchases of goods/services (continued)

	Other payables to related parties	30 June 2019		31 December 2018
	Ford	131,973		92,310
	Ford Otomotiv Sanayi A.S.	101,544		115,254
	Ford Global Technologies, LLC	64,933		41,203
	Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd.	41,230		31,946
	Changan Ford Automobile Co., Ltd.	35,868		9,776
	JMCG Jiangxi Engineering Construction Co., Ltd.	25,771		30,166
	JHC	20,676		15,641
	GETRAG (Jiangxi) Transmission Company	12,190		14,216
	Nanchang JMCG Shishun Logistics Co., Ltd.	12,038		7,736
	Jiangxi Jiangling Group Special Vehicle Co., Ltd.	7,303		6,921
	Faurecia Emissions Control Technologies (Nanchang) Co., Ltd.	5,469		13,584
	JMCG	2,666		623
	Jiangxi JMCG Industry Co., Ltd.	2,486		3,504
	Ford Motor (China) Co., Ltd.	2,135		4,803
	Jiangxi Jiangling Lear Interior System Co., Ltd.	1,207		4,612
	JMCG Property Management Co.	1,189		748
	Ford Motor Research & Engineering (Nanjing) Co., Ltd.	1,004		607
	Nanchang Hengou Industry Co., Ltd.	413		10,211
	Jiangxi Jiangling Special Purpose Vehicle Co., Ltd.	250		1,403
	Nanchang Jiangling Hua Xiang Auto Components Co., Ltd.	-		7,222
	Jiangxi JMCG Motorhome Co., Ltd.	-		1,905
	Others	1,733		2,086
		472,078		416,477

	Capital commitments		30 June 2019		31 December 2018
	JMCG Jiangxi Engineering Construction Co., Ltd.		31,940		29,456

Chapter XI Catalogue on Documents for Reference

1. Originals of 2019 Half-year financial statements signed by Chairman, Chief

Financial Officer and Chief of Finance Department.

2. Originals of all the documents and public announcements disclosed in

newspapers designated by CSRC in the first half of 2019.

4. The Half-year Report in the China GAAP.

Board of DirectorsJiangling Motors Corporation, Ltd.August 29, 2019