Jiangling Motors Corporation, Ltd.
2016 Annual Report
Chapter I Important Notes, Contents and Abbreviations
Important Note
The Board of Directors and its members, the Supervisory Board and its members,
and the senior executives are jointly and severally liable for the truthfulness, accuracy
and completeness of the information disclosed in the report and confirm that the
information disclosed herein does not contain any false statement, misrepresentation
or major omission.
Chairman Qiu Tiangao, CFO Gong Yuanyuan and Chief of Finance Department, Ding
Ni, confirm that the Financial Statements in this Annual Report are truthful and
complete.
All Directors were present at the Board meeting to review this Annual Report.
The prospective description regarding future business plan and development strategy
in this report does not constitute virtual commitment. The investors shall pay attention
to the risk.
All financial data in this report are prepared under International Financial Reporting
Standards (‘IFRS’) unless otherwise specified.
The Annual Report is prepared in Chinese and English. In case of discrepancy, the
Chinese version will prevail.
The year 2016 profit distribution proposal approved by the Board of Directors is as
follows:
A cash dividend of RMB 6.1 (including tax) will be distributed for every 10 shares held
based on the total share capital of 863,214,000 shares, and there is no stock dividend.
The Board decided not to convert capital reserve to share capital this time.
Contents
Chapter I Important Notes, Contents and Abbreviations ............................... 1
Chapter II Brief Introduction and Operating Highlight .................................... 3
Chapter III Operating Overview ...................................................................... 5
Chapter IV Management Discussion and Analysis .......................................... 6
Chapter V Major Events ............................................................................... 14
Chapter VI Share Capital Changes & Shareholders ...................................... 25
Chapter VII Preferred Shares.......................................................................... 29
Chapter VIII Directors, Supervisors, Senior Management and Employees ...... 29
Chapter IX Corporate Governance Structure ................................................. 39
Chapter X Corporate Bond............................................................................ 46
Chapter XI Financial Statements ................................................................... 46
Chapter XII Catalog on Documents for Reference ............................................... 110
Abbreviations:
JMC, or the Company Jiangling Motors Corporation, Ltd.
JMH Jiangling Motor Holding Co., Ltd.
Ford Ford Motor Company
CSRC China Securities Regulatory Commission
JMCG Jiangling Motors Company (Group)
JMCH JMC Heavy Duty Vehicle Co., Ltd.
EVP Executive Vice President
CFO Chief Financial Officer
VP Vice President
Chapter II Brief Introduction and Operating Highlight
1. Company’s Information
Share’s name Jiangling Motors, Jiangling B Share’s Code 000550, 200550
Place of listing Shenzhen Stock Exchange
Company’s Chinese
江铃汽车股份有限公司
name
English name Jiangling Motors Corporation, Ltd.
Abbreviation JMC
Company legal
Qiu Tiangao
representative
No. 509, Northern Yingbin Avenue, Nanchang City, Jiangxi
Registered Address
Province, P.R.C
Postal Code of
Registered Address
Headquarters No. 509, Northern Yingbin Avenue, Nanchang City, Jiangxi
Address Province, P.R.C
Postal Code of
Headquarters 330001
Address
Website http://www.jmc.com.cn
E-mail relations@jmc.com.cn
2. Contact Person and Method
Securities Affairs
Board Secretary
Representative
Name Wan Hong Quan Shi
No. 509, Northern Yingbin No. 509, Northern Yingbin
Address Avenue, Nanchang City, Avenue, Nanchang City,
Jiangxi Province, P.R.C Jiangxi Province, P.R.C
Tel 86-791-85266178 86-791-85266178
Fax 86-791-85232839 86-791-85232839
E-mail relations@jmc.com.cn relations@jmc.com.cn
3. Information Disclosure and Place for Achieving Annual Report
Newspapers for information China Securities, Securities Times, Hong Kong
disclosure Commercial Daily
Website designated by CSRC for
http://www.cninfo.com.cn
publication of JMC’s Annual Report
Securities Department, Jiangling Motors
Place for Achieving Annual Report
Corporation, Ltd.
4. Changes of Registration
Organization Code
Changes of Controlling On December 1, 1993, JMC A shares were listed on
Shareholders Shenzhen Stock Exchange, while JMCG, the founder-
member, was the controlling shareholder of the Company.
On September 29, 1995 and November 12, 1998, JMC
issued additional 344 million B shares totally, while, after
the additional B share issuance, JMCG and Ford were the
controlling shareholders of the Company. On December 8,
2005, the 354.176 million JMC shares held by JMCG, the
former controlling shareholder, were transferred to JMH.
Presently, JMH and Ford are the controlling shareholders
of the Company.
5. Other Information
Accounting Firm Appointed by JMC for Audit
PricewaterhouseCoopers Zhong Tian CPAs LLP
Name
(‘PwC Zhong Tian’)
11th Floor, PricewaterhouseCoopers Center, 202 Hu Bin Road,
Headquarters address
Shanghai City, P.R.C.
Names of Signed
Ye Jun, Xiong Huanwei
Accountants
6. Main accounting data and financial ratios
Unit: RMB ‘000
2016 2015 Change (%)
Revenue 26,633,949 24,527,893 8.59 25,537,290
Profit Attributable to the
Equity Holders of the 1,318,016 2,222,061 -40.68 2,107,852
Company
Net Cash Generated
4,593,000 1,924,474 138.66 4,189,649
From Operating Activities
Basic Earnings Per Share
1.53 2.57 -40.68 2.44
(RMB)
Diluted Earnings Per
1.53 2.57 -40.68 2.44
Share (RMB)
Weighted Average Return Down 8.82
10.74% 19.56% 21.20%
on Equity Ratio percentage point
End of Year End of Year End of Year
Change (%)
2016 2015
Total Assets 24,493,789 21,050,726 16.36 19,496,528
Shareholders’ Equity
Attributable to the Equity 12,409,236 11,981,142 3.57 10,598,429
Holders of the Company
7. Accounting data difference between China GAAP and IFRS
Impact of IFRS adjustments on the net profit and shareholders’ equity
□Applicable □√Not Applicable
8. Main accounting data quarterly
Unit: RMB’000
Q1 Q2 Q3 Q4
Revenue 5,341,490 5,469,246 6,418,622 9,404,591
Profit Attributable to the
Equity Holders of the 413,564 290,953 389,036 224,463
Company
Net Cash Generated
From Operating -142,756 1,130,310 1,086,184 2,519,262
Activities
Chapter III Operating Overview
1. Company’s Core Business during the Reporting Period
JMC’s core business is production and sales of commercial vehicles, SUV and
related components. JMC’s major products include JMC series light truck, pickup,
Yusheng SUV, Ford-brand SUV, Ford-brand commercial vehicles, and heavy duty
trucks. The Company also produces and sells engines, castings and other
components for sales to domestic and overseas markets.
2. Major Change of Main Assets
I. Major Change of Main Assets
There’s no major change of main assets during the reporting period.
II. Main Overseas Assets
□Applicable □√Not Applicable
3. Core Competitiveness Analysis
JMC is a sino-foreign joint venture auto company with R&D, manufacturing and sales
operations. As a mainstream of domestic light commercial vehicle industry, JMC had
been ranked among the top hundred Chinese listed corporations with comprehensive
strength for consecutive years; and certificated as a national enterprise technology
center, high-tech enterprise and national automobile export base which improve the
company’s core business competence.
With the support from Ford's advanced technology and management experience,
JMC's influence over auto industry is improving steadily, making considerable
progress both in new product development and technical equipment. Series of Ford
new products such as Ford brand SUV EVEREST, Ford brand MPV Tourneo and
Ford new Transit launched further improved JMC’s competence on R&D and
manufacturing. JMC self- developed new Yusheng SUV S330 launched in the second
half of 2016, further enhanced JMC’s capability of R&D, manufacturing and market
competitiveness in SUV field. In 2016, JMC KaiRui N800 program won the First Prize
of China Automotive Industry Awards for Science and Technology, fully showed
JMC’s leading technology in light commercial vehicle field. High standard Xiaolan
manufacturing site continues to expand modern plants of vehicle, engine and frame. It
will further ensure JMC's product production and quality improvement. Xiaolan
national R&D centre’s research and development capability will also be further
improved.
Chapter IV Management Discussion and Analysis
1. Summary
In 2016, benefited from sustained rapid growth of SUV market, China's automotive
market continues to keep growth. Total sales volume was 28.03 million units,
increased 13.65% compared with last year. Commercial vehicle sales volume was
3.65 million units, increased 5.80% compared with 2015.
During the reporting period, to cope with more severe competition, more stringent
regulatory requirement and intensifying cost pressures, the Company focused on
quality improvement, new product development, operating cost control and production
efficiency enhancement. Simultaneously, the Company introduced series of sales
policy to respond the market risk. In 2016, JMC achieved sales volume of 281,019
units, increased 6.95% compared with last year, achieved revenue of RMB 26.63
billion, increased 8.59% compared with last year, achieved net profit of RMB 1.32
billion, decreased 40.68% compared with last year. It mainly reflected the product
pricing reduction and market expense increase because of severe automotive market
competition.
2. Core Business Analysis
I. Summary
In 2016, JMC sales volume achieved 281,019 units, increased 6.95% compared with
last year, including 102,379 units truck, 60,892 units pickup, 44,753 units SUV and
72,995 units Transit CV.
2016 total production volume was 281,463 units, increased 8.20% compared with last
year, including 101,651 units truck, 61,186 units pickup, 46,590 units SUV and 72,036
units Transit CV.
JMC total sales revenue in 2016 was RMB 26.63 billion, increased 8.59% compared
with last year.
II. Revenue and Cost
(a) Composition of Sales Revenue
Unit: RMB
2016 FY 2015 FY
YOY
Proportion Proportion change
Amount Amount (%)
(%) (%)
Revenue 26,633,948,551 100% 24,527,892,839 100% 8.59%
By Industry
Automobile 26,633,948,551 100.00% 24,527,892,839 100.00% 8.59%
Industry
By Products
Vehicle 23,876,058,142 89.64% 22,115,996,697 90.17% 7.96%
Components 2,369,645,586 8.90% 2,176,421,920 8.87% 8.88%
Material
388,244,823 1.46% 235,474,222 0.96% 64.88%
& Others
By region
China 26,633,948,551 100.00% 24,527,892,839 100.00% 8.59%
(b) Reach to 10% of Revenue or Profit by Industry, Product or Region
□√Applicable □Not Applicable
Unit: RMB
Y-O-Y
Y-O-Y
Y-O-Y Cost gross
Gross turnover
Turnover Cost Change margin
Margin change
(%) change
(%)
(points)
By Industry
Automobile 26,633,948,551 20,612,722,940 22.61% 8.59% 13.69% -3.47%
Industry
By Products
Vehicle 23,876,058,142 18,626,319,979 21.99% 7.96% 14.16% -4.23%
By Region
China 26,633,948,551 20,612,722,940 22.61% 8.59% 13.69% -3.47%
If the company’s core business scope is adjusted during the reporting period, the
company’s core business data of last year need to be adjusted per the scope in this
year
□Applicable □√Not Applicable
(c) Whether Company’s Goods Revenue Higher Than Service Revenue
□√Yes □No
Industry Item Unit 2016 2015 Change (%)
Automobile Sales volume unit 281,019 262,756 6.95%
Explanation on YOY change of over 30%
□Applicable □√Not Applicable
(d) Execution of Company’s Signed Major Sales Contract
□Applicable □√Not Applicable
(e) Composition of Operating Cost
Unit: RMB
2016 FY 2015 FY
YOY
Product Proportion Proportion change
Cost Cost （%）
(%) (%)
Vehicle 18,626,319,979 90.36% 16,316,619,585 89.99% 14.16%
Components 1,718,540,492 8.34% 1,587,708,668 8.76% 8.24%
Material
267,862,469 1.30% 226,806,699 1.25% 18.10%
& Others
(f) Whether Consolidated Scope was Changed During the Reporting Period
□Yes □√No
(g) Major Change or Adjustment on Business, Products or Services During the
Reporting Period
□Applicable □√Not Applicable
(h) Main Customers and Suppliers
Top 5 Customers:
Total sales value to top 5 customers（RMB） 3,307,592,709
Accounted for the proportion of JMC’s total
12.42%
annual turnover
Included related party transaction accounted for
4.45%
the proportion of JMC’s total annual turnover
Percentage of
Sales Value
No. Name of the Customer JMC’s Total
(RMB)
Turnover (%)
1 JMCG Import & Export Co., Ltd. 1,184,309,674 4.45%
Zhejiang Jiangling Motors Sales
2 959,394,766 3.60%
Company
Shanghai Keda Zhoupu Auto
3 405,751,604 1.52%
Sales Company
Henan Jiangling Motors Sales
4 401,849,815 1.51%
Company
Hunan Transit Jiangling Motors
5 356,286,850 1.34%
Sales Company
Total 3,307,592,709 12.42%
Other introduction to main customers
□√Applicable □Not Applicable
JMIE is a related party of the Company. Both Chief Supervisor Zhu Yi and VP Li Qing
of JMC hold the position of director of JMIE.
Top 5 Suppliers:
Total purchase value from top 5 suppliers（RMB） 3,588,838,197
Accounted for the proportion of JMC’s total annual
18.97%
purchase amount
Included related party transaction accounted for the
15.08%
proportion of JMC’s total annual purchase amount
Percentage of
Purchase Value JMC’s Total
No. Name of the Supplier
(RMB) Annual Purchase
Amount (%)
Jiangxi Jiangling Chassis
1 805,642,254 4.26%
Company
Bosch Auto Diesel System
2 736,195,285 3.89%
Company
Jiangxi Jiangling Special Purpose
3 700,308,641 3.70%
Vehicle Company
Nanchang Bao-jiang Steel
4 690,097,399 3.65%
Processing & Distribution Co., Ltd.
GETRAG (Jiangxi) Transmission
5 656,594,618 3.47%
Company
Total 3,588,838,197 18.97%
Other introduction to main suppliers
□√Applicable □Not Applicable
Except Bosch Auto Diesel System Company, the other four suppliers are related
parties of the Company.
III. Expense Analysis
There’s no major change of expense during the reporting period.
IV. Research & Development
In 2016, JMC continued to focus on development of new product programs. Product
related spending centered at future product development and compliance with
regulatory requirements, including new model, increased payloads, new styling, and
improved power, etc., ensuring the Company is compliant with stringent
environmental and safety regulations. The competitive R&D will ensure the
company’s volume and profit growth. Development expenditure in 2016 was 1,937
million, representing 15.61% of net assets, or 7.27% of revenue.
R&D
2016 2015 Change (%)
R&D Staff (person) 2,225 2,110 5.45%
R&D Staff as % of total employees 13.19% 13.44% -0.25%
R&D Investment (RMB) 1,937,312,797 1,830,992,839 5.81%
R&D Investment as % of revenue 7.27% 7.46% -0.19%
Capitalization of R&D investment 124,586,552 0.00 -
Capitalization of R&D investment as %
6.43% 0.00% 6.43%
of R&D Investment
Major change of R&D Investment as % of revenue
□Applicable □√Not Applicable
Major change of capitalization of R&D investment
□√Applicable □Not Applicable
See the note 14 (b) to major change of capitalization of R&D investment.
V. Cash Flow Analysis
RMB’000
Item 2016 2015 Y-O-Y Change
Net cash generated from
4,593,000 1,924,474 138.66%
operating activities
Net cash used in
-875,148 -1,197,152 26.90%
investing activities
Net cash used in
-899,670 -842,750 -6.75%
financing activities
Net (decrease)/increase
cash and cash 2,818,182 -115,428 2,541.50%
equivalents
Explanation on the major factors regarding major change of related data
□√Applicable □Not Applicable
Net cash generated from operating activities increased by RMB 2,669 million, up
138.66% vs. 2015, mainly reflecting the increase of cash generated from selling
goods due to higher sales volume.
Explanation on significant difference between net cash generated from operating
activities and net profit during the reporting period
□Applicable □√Not Applicable
3. Non-core business analysis
□Applicable □√Not Applicable
4. Analysis of Assets and Liabilities
I. Major changes
Unit: RMB’000
YOY
December 31, 2016 December 31, 2015 Major Changes
Asset item Proportion
change Explanation
Amount Proportion Amount Proportion (Points)
Property, plant and
6,688,530 27.31% 6,323,546 30.04% -2.73
equipment
Inventories 1,934,092 7.90% 1,730,930 8.22% -0.32
Trade, other receivables
2,625,808 10.72% 2,793,770 13.27% -2.55
and prepayments
Due to the increase of
Cash and cash equivalents 11,666,222 47.63% 8,848,040 42.03% 5.60 cash generated from
operating activities
Due to the increase of
material purchasing
Trade and other payables 11,605,178 47.38% 8,708,829 41.37% 6.01 according to the
increase of Q4 sales
volume
II. The fair value of the assets and liabilities (not applicable).
III. Restriction on Assets Rights as of the End of the Reporting Period
There was no major restriction on assets rights as of the end of the reporting period.
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
Investment Fixed
Spending Investment
Method/ Assets
Project in 2016 Committed
source (Y/N) Progress Index
Name
(RMB
(RMB Mils)
Mils)
Announcement of this
project (No:2013-035)
J08 Self-
Y 50 856 Launched was published in the
Program funded
website
http://www.cninfo.com.cn
Announcement of this
project (No:2014-013)
J09 Self-
Y 303 1,908 Launched was published in the
Program funded
website
http://www.cninfo.com.cn
Announcement of this
Capacity
project (No:2010-017)
Investment Self-
Y 54 1,919 90% was published in the
in Xiaolan funded
website
Site
http://www.cninfo.com.cn
Announcement of this
project (No:2015-005)
N330 Self-
Y 332 991 Launched was published in the
Program funded
website
http://www.cninfo.com.cn
IV. Financial Assets Investment
(a) Stock Investment
□Applicable □√Not Applicable
(b) Derivative Investment
□Applicable □√Not Applicable
V. Usage of Raised Fund
□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 whose impact
on JMC’s net profit more than 10%
Unit: RMB
Name of Type of Registered Operating
Main Business Assets Net Assets Turnover Net Profit
Companies Companies Capital Profit
Jiangling
Motors Sales Sales vehicle,
Subsidiary 50,000,000 2,667,369,265 231,233,192 23,177,566,943 14,407,672 10,551,204
Corporation, service parts
Ltd
Product heavy
JMC Heavy commercial
Duty Vehicle Subsidiary vehicle , engine, 281,793,174 1,301,652,005. -107,534,370 104,774,811 -173,413,993 -54,663,175
Co., Ltd component, and
related service
Acquisition and disposal of the subsidiary
□Applicable □√Not Applicable
8. Structured Entities Controlled by JMC
□Applicable □√Not Applicable
9. Outlook
I. Industry Competition and Development Trend
At present China is still in the stage of accelerated industrial and urbanization
development. With the One Belt One Road strategy and urbanization progress,
China’s infrastructure construction and logistics industry will also continue the
development as well as opportunity for the development of China’s commercial
vehicle market. Meanwhile, China's Car Parc per capita is still lower than world’s
average level indicating a strong auto market potential in the future. Currently, urban
traffic congestion, environment pollution and purchase tax incentive reduction affect
automobile industry development. However, as the economic progressing steadily,
the consumption level and purchasing power improved, domestic automobile sales
volume is expected to achieve higher level. In 2017, sales volume is expected to
continue to grow slightly.
II. Corporation Strategy
Company’s mission is to produce and sell world class products with the best
customer satisfaction in auto industry. JMC will continue to introduce new light truck,
pickup, light bus and SUV programs in the future to further strengthen the market
share performance. At the same time, JMC will further continue to improve SUV sales
performance and penetrate into heavy truck segment.
III. 2017 Business Plan
The Company is targeting 2017 sales volume level at 365 thousand units and
revenue level at RMB 35.2 billion, increases of 30% and 32% vs. 2016 respectively.
To enhance profitability, the company is committed to the following plans in 2017:
(1) Achieve volume and market share targets by enhancing the sales network and
sales/marketing activities, especially pushing the third – fifth class city dealer
network construction;
(2) Well prepared the new products launch plan for Tourneo AT, JMC own brand light
bus, JMC heavy truck;
(3) Continue to improve product quality, pursue cost reduction opportunities, improve
manufacturing and operating efficiency to achieve profit and cost targets;
(4) Continue to promote the new fuel economy and emission compliance program to
satisfy regulatory requirements;.
(5) Work with technical partners to execute future product development and R&D
ability improvement; and
(6) Expand finished vehicle exports and OEM components sales business.
IV. Potential Challenges and Solutions
In 2017, the Company will continue to face fiercer competition, more stringent
regulatory requirements, intensifying cost pressures and a slowdown in China’s
economic growth. To achieve steady growth, the Company will continue to focus on
the following aspects in 2017:
(1) Optimizing company’s production system to improve efficiency and product quality;
(2) Optimizing dealer network and marketing spending to improve market share;
(3) Improve suppliers’ capability and parts quality; continue to reduce parts
purchasing cost;
(4) Strengthening corporate governance and application of appropriate risk
assessment and control mechanisms;
(5) Sustaining the expense management and control to optimize the business
structure; and
(6) Optimize and execute company’s growth strategies to pursue sustainable long-
term growth.
The Company will continue to optimize cost structure, improve production efficiency,
mitigate management cost as well as focus on new product development to deliver
the launch quality and cost target. With the support from technical partner, the
Company continues to promote new products development and R&D ability
improvement, to accelerate the progress of launching new competitive and profitable
products to the market. Meanwhile, the Company will strive to ensure the timely
delivery of high quality heavy truck, and devote to strengthening dealer network,
expanding overseas market and parts business.
10. External research and media interview to the Company
I. Table of external research, communication and media interviews with the
Company in the reporting period
Date Communication Type of Information Discussed and
Method Object Materials offered
January 14, On-the-spot Institution JMC Operating highlights
2016 research
January 26, On-the-spot Institution JMC Operating highlights
2016 research
March 3, On-the-spot Institution JMC Operating highlights
2016 research
March 10, On-the-spot Institution JMC Operating highlights
2016 research
June 15, On-the-spot Institution JMC Operating highlights
2016 research
August 12, On-the-spot Institution JMC Operating highlights
2016 research
September On-the-spot Institution JMC Operating highlights
8, 2016 research
November On-the-spot Institution JMC Operating highlights
11, 2016 research
Reception times
Visiting institution number
Visiting person number
Other objects
Whether to disclose, reveal or divulge the No
undisclosed material information
Chapter V Major Events
1. Profit distribution and capital reserve conversion regarding common stock
Establishment, implementation or adjustment of profit distribution policy, esp. cash
dividend distribution policy, regarding common stock during the reporting period
□√Applicable □Not Applicable
The Company’s standards and proportion on profit distribution is clear and on the
process, Independent Directors fulfilled their duties. The reasonable appeals from the
middle and small shareholders were thought over and their legal rights and interests
were protected when the plan was drafted and executed.
JMC had distributed cash dividends to all the shareholders in the consecutive
fourteen years since 2003. Accumulated cash dividends for the fourteen years
totalled RMB 6,421 million. During the reporting period, the Proposal on Profit
Distribution for Year 2015 was reviewed and approved by the Board of Directors, and
was approved by 2015 Annual Shareholders’ Meeting. On July 2016, the Company
completed the profit distribution for Year 2015. Both the formulation of JMC Profit
Distribution Plan and implementation complies with the relevant requirements of the
Articles of Association and other profit distribution policy, and the procedures are valid
and legal, which protect the interests of all shareholders.
Special Explanation on Cash Dividend Policy
Whether to comply with the requirements of the
Articles of Association of JMC or resolution of the Y
Shareholders’ Meeting (Y/N)
Whether the standards and proportion of dividends
Y
on profit distribution are clear (Y/N)
Whether the procedures are valid and legal (Y/N) Y
Whether the Independent Director fulfil their duties
Y
(Y/N)
Whether middle and small shareholders have
opportunities to claim their appeals and their legal Y
rights and interests are completely protected (Y/N)
Whether the condition and procedure are
reasonable and transparent when the cash Y
dividend policy is being changed (Y/N)
Profit Distribution Plan or Proposal from 2014 to 2016
(1) Proposal on 2016 Year Profit Distribution Plan
Details on the profit available for appropriation of the Company in 2016 prepared in
accordance with the China GAAP and International Financial Reporting Standard
(‘IFRS’) are as follows:
Unit: RMB’000
China GAAP IFRS
Retained earnings at Dec. 31, 2015 9,851,590 9,848,381
2016 net profit 1,318,016 1,318,016
Allocation of dividend for 2015 -889,110 -889,110
Retained earnings at Dec. 31, 2016 10,280,496 10,277,287
The upper limit of profit available for distribution was based on the lower of the un-
appropriated profit calculated in accordance with the China GAAP and that calculated
in accordance with IFRS. Therefore, the Company’s retained earnings available for
distribution as of December 31, 2016 were RMB 10,277,287 thousand.
The Board approved to submit to the 2016 Annual Shareholders’ Meeting the
following proposal on year 2016 profit distribution:
(1). to appropriate for the dividend distribution from the profit available for distribution,
which shall be equal to RMB 0.61 per share and shall apply to the Company’s
total share capital; and
(2). to carry forward the un-appropriated portion to the following fiscal year.
Profit distribution proposal: a cash dividend of RMB 6.1 (including tax) will be
distributed for every 10 shares held. Based on the total share capital of 863,214,000
shares as of December 31, 2016, the total cash dividend distribution amounts shall be
RMB 526,560,540.
B share dividend shall be paid in Hong Kong Dollars and converted based on the
HKD-to-RMB standard exchange rate published by the People’s Bank of China on the
first working day following the approval on the profit distribution proposal by the
Shareholders’ Meeting of the Company.
The Board decided not to convert capital reserve to share capital this time.
(2) 2015 Year Profit Distribution Plan
Profit distribution proposal: a cash dividend of RMB 10.3 (including tax) was
distributed for every 10 shares held. Based on the total share capital of 863,214,000
shares as of December 31, 2015, the total cash dividend distribution amounts were
RMB 889,110,420.
B share dividend was paid in Hong Kong Dollars and converted based on the HKD-to-
RMB standard exchange rate published by the People’s Bank of China on the first
working day following the approval on the profit distribution proposal by the
Shareholders’ Meeting of the Company.
The Board decided not to convert capital reserve to share capital this time.
(3) 2014 Year Profit Distribution Plan
Profit distribution proposal: a cash dividend of RMB 9.7 (including tax) was distributed
for every 10 shares held. Based on the total share capital of 863,214,000 shares as of
December 31, 2014, the total cash dividend distribution amounts were RMB
837,317,580.
B share dividend was paid in Hong Kong Dollars and converted based on the HKD-to-
RMB standard exchange rate published by the People’s Bank of China on the first
working day following the approval on the profit distribution proposal by the
Shareholders’ Meeting of the Company.
The Board decided not to convert capital reserve to share capital this time.
Table of cash dividend in the recent three years
Unit: RMB’000
Profit attributable to Cash dividend as % of
Cash dividend the equity holders of profit attributable to the
(Including tax) the Company in that equity holders of the
year Company
2016* 526,561 1,318,016 39.95%
2015 889,110 2,222,061 40.01%
2014 837,318 2,107,852 39.72%
*The proposal on 2016 year profit distribution is subject to approval of the
Shareholders’ Meeting of the Company.
2. Proposal on 2016 Year Profit Distribution Plan or Capital Reserve Conversion
□√Applicable □Not Applicable
Please refer to Article 1, Chapter V of this Report.
3. Commitments
3.1 Commitments of the Company, the shareholder, the actual controlling party, the
acquirer, the Director, the Supervisor, the senior executive or other related party of
the Company
□√Applicable □Not Applicable
Promisor Content of Time Term of Implementation of
Item
Commitments Commitments commitments
Share reform None None None N/A
Acquisition report or
Statement of changes in None None None N/A
equity
Asset restructuring None None None N/A
Initial Public Offering or
None None None N/A
re-funding
JMH exercised its
within 6 months
July 11, commitments sincerely and
Other commitments JMH * since July 9,
2015 did not breach the promise as
of January 9, 2016.
Implementation in time Yes
or not
* i. JMH will not reduce JMC shares by secondary market within six months since July
9, 2015; ii. JMH will exercise its duties as a major shareholder, concentrate on the
quality of the listed company, push to establish a sound invest-return long-term
mechanism and continue to improve the return level.
3.2 Earnings forecast of the assets or project and the explanations
□Applicable □√Not Applicable
4. Non-operating funding in the Company occupied by controlling shareholder and its
affiliates
□Applicable □√Not Applicable
There was no non-operating funding in the Company occupied by controlling
shareholder and its affiliates.
5. Explanation of the Board of Directors, Supervisory Committee and Independent
Directors to abnormal opinions from accounting firm
□Applicable □√Not Applicable
6. Explanation on the changes of accounting policy, accounting estimates, estimation
method compared with that of last year
□Applicable □√Not Applicable
There was no change of accounting policy, accounting estimates, estimation method
during the reporting period.
7. Explanation on major accounting errors that shall be restated during the reporting
period
□Applicable □√Not Applicable
There was no major accounting error that shall be restated during the reporting period.
8. Explanation on consolidated scope change compared with that of last year
□Applicable □√Not Applicable
There was no change on consolidated scope in the reporting period.
9. Appointment or Dismissal of Accounting Firm
Current accounting firm
Name PricewaterhouseCoopers Zhong Tian CPAs LLP
Compensation (RMB’000) 1,900
Consecutive years offering audit
services
Names of signed accountants Ye Jun, Xiong Huanwei
Dismissal of accounting firm
□Applicable □√Not Applicable
Appointment of C-SOX auditor, financial consultant or sponsor
Upon the approval of 2014 Annual Shareholders’ Meeting, JMC agreed to appoint
PwC Zhong Tian as JMC’s 2016 to 2018 C-SOX auditor. In 2016, JMC paid RMB 550
thousand to PwC Zhong Tian for the C-SOX audit.
10. Suspension and Termination of Listing after Annual Report Disclosed
□Applicable □√Not Applicable
11. Related Matters regarding Bankruptcy
□Applicable □√Not Applicable
There was no matter involving bankruptcy during the reporting period.
12. Major Litigation or Arbitration
□Applicable □√Not Applicable
There was no major litigation or arbitration during the reporting period.
13. Punishment
□Applicable □√Not Applicable
Neither JMC nor its Directors or senior management were punished by regulatory
authorities in 2016.
14. Honesty and credit of JMC and its controlling shareholder or actual controlling
party
□Applicable □√Not Applicable
15. Implementation of Equity Incentive Plan, Employee Stock Ownership Plan and
Other Employee Incentive Method
□Applicable □√Not Applicable
There was neither equity incentive plan or ESOP, nor other employee incentive
method in 2016.
16. Major Related Transactions
i. Routine related party transactions
□√Applicable □Not Applicable
As % of
Pricing Settlement Amount Total
Transaction Parties Content Relationship
Principle Method (RMB’000) Purchases/
Revenue
Parts and Subsidiary of 60 days after
Jiangxi Jiangling Contracted
components JMCG delivery and 805,640 4.26
Chassis Company price
purchase invoicing
Jiangxi Jiangling Parts and Wholly-owned 30 days after
Contracted
Special-Purpose components subsidiary of delivery and 700,310 3.70
price
Vehicle Co, Ltd. purchase JMCG invoicing
Nanchang Bao-jiang Raw Associate of
Contracted
Steel Processing & materials JMCG Prepayment 690,100 3.65
price
Distribution Co., Ltd. purchase
GETRAG (Jiangxi) Parts and Associate of 60 days after
Contracted
Transmission components JMCG delivery and 656,600 3.47
price
Company purchase invoicing
Parts and Joint venture of 60 days after
Jiangling-Lear Contracted
components JMCG delivery and 569,820 3.01
Interior Trim Factory price
purchase invoicing
Parts and Controlling
Contracted
Ford components shareholder of D/P & T/T 523,860 2.77
price
purchase JMC
Sales 40% of
prepayment
JMCG Import and Associate of Contracted and the
1,184,310 4.45
Export Co., Ltd. JMCG price remains paid
during 30 days
after delivery
ii. Major related party transaction concerning transfer of assets or equity
□Applicable □√Not Applicable
There was no major related party transaction concerning transfer of assets or equity
in 2016.
iii. Related party transaction concerning outside co-investment
□Applicable □√Not Applicable
There was no outside co-investment in 2016.
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 in the reporting period.
v. Other major related party transactions
□√Applicable □Not Applicable
The balance amount of bank deposit of the Company in JMCG Finance Company as
of the end of the year 2016 was RMB 874,990 thousand. The Board of Directors
reviewed and approved JMCG Finance Company Continious Risk Assessment
Report. Please refer to the website www.cninfo.com.cn for the original of the report
which was published on March 25, 2017.
17. Major Contracts and Execution
i. Entrustment, contract or lease
a. Entrustment
□Applicable □√Not Applicable
There was no entrustment in 2016.
b. Contract
□Applicable □√Not Applicable
There was no contract in 2016.
c. Lease
□√Applicable □Not Applicable
See the note 31 (b) to financial statements for lease of related parties.
Project with more than 10% of net profit
□Applicable □√Not Applicable
There was no lease project with more than 10% of net profit in the reporting period.
ii Major guarantee
□Applicable □√Not Applicable
The Company had no outside guarantee in 2016.
iii. Entrustment on cash asset management
a. Trust investment
□Applicable □√Not Applicable
There was no trust investment in 2016.
b. Entrusted loan
□Applicable □√Not Applicable
There was no entrusted loan in 2016.
iv. Other major contract
□Applicable □√Not Applicable
18. Corporation Social Responsibilities
i. Targeted measures in poverty alleviation
□√Applicable □Not Applicable
a. Summary of targeted measures in poverty alleviation in 2016
The Company joined the one-to-one poverty alleviation, depending on JMCG, in
Qianmo Village, Dai Jiapu Township, Suichuang County, Jiangxi Province and
Xianting Village, Songhu Town, Xinjian District, Nanchang City in accordance with the
working arrangement of Jiangxi Provincial Party Committee and Provincial
Government.
In 2016, the Company made 29 families or 86 persons in Qianmo Village who were
recorded into poverty alleviation files get rid of poverty; and made 11 persons get rid
of poverty in Xianting Village.
b. Status of Year 2016 targeted measures in poverty alleviation for the listed
company
Item Unit Amount/Progress
I. Brief Introduction —— ——
including：1. Funding RMB (‘000)
2. Sum converted from the materials RMB (‘000) 47.7
3. Persons get rid of poverty Persons
II. Investments —— ——
1. Anti-poverty depending on industry development —— ——
including：1.1 Type ——
1.2 Projects Number
1.3 Investment amount RMB (‘000)
1.4 Persons get rid of poverty Persons
2. Anti-poverty depending on employment transfer —— ——
including：2.1 Investments on vocational skills RMB (‘000)
2.2 Training persons regarding vocational skills Persons
2.3 Employment Persons Persons
3. Anti-poverty depending on relocation —— ——
including：3.1 Employment persons among relocated
Persons
persons
4. Anti-poverty depending on education —— ——
including：4.1 Grants in aid to poor students RMB (‘000) 11.1
4.2 Poor students in aid Persons
4.3 Investments on the improvement of
RMB (‘000)
educational source in poverty-stricken area
5. Health Anti-poverty —— ——
Including: 5.1 Investments on medical and health services
RMB (‘000)
in poverty-stricken area
6. Ecological protection anti-poverty —— ——
including：6.1 Project type ——
6.2 Investment amount RMB (‘000)
7. Miscellaneous provisions —— ——
including：7.1 Investments on stay-at-home children, RMB (‘000)
women and elderly
7.2 Number of stay-at-home children, women
Persons
and elderly in aid
7.3 Investments on poor & disable people RMB (‘000)
7.4 Number of poor & disable people in aid Persons
8. Social anti-poverty —— ——
including：8.1 Investments on cooperation between West
RMB (‘000)
China and East China
8.2 Investments on one-to-one anti-poverty RMB (‘000)
8.3 Investments from anti-poverty charity fund RMB (‘000)
9. Other —— ——
including：9.1.Project Number
9.2.Investment amount RMB (‘000)
9.3. Persons getting rid of poverty Persons
III. Awards —— ——
c. On-going plan regarding targeted measures in poverty alleviation
In 2017, depending on JMCG, the Company will make 23 families or 48 persons in
Qianmo Village get rid of poverty and make the Village remove poverty village hat.
And, the Company will make the other 2 persons in Xianting Village get rid of poverty.
ii. Other information regarding corporation social responsibilities
√Applicable □Not Applicable
JMC 2016 Corporation Social Responsibilities Report can be downloaded from JMC
official website: www.jmc.com.cn or the website: www.cninfo.com.cn.
iii. Information regarding environment protection
Whether the Company and affiliates is the key pollution discharge unit published by
environmental protection administration?
√Yes □No
Name of
Applicable Total
principal Number of
Mode of Distribution of Discharge standard for Total amount amount of Excessive
pollutant and discharge
discharge discharge outlet concentration pollutant of discharge discharge discharge
specific outlet
discharge audited
pollutant
3 in Mainsite, 1
“Wastewater
Wastewater continuous in Xiaolan Site, \"COD:183mg/L COD: COD≤721.
Discharge Meet
(COD, NH-N) discharge 6 1 in Cast Plant NH-
Standard”(GB
219.73t; NH- 82t; NH-
Standard
and 1 in Axle N:19.78mg/L\" N: 5.35t N≤17.038t
8978-1996)
Plant
SO2: 22mg/m3;
NOx: 70mg/m3;
\"The Emission
Exhaust gas smoke:
53 in Mainsite, Standard of Air
(SO2,NOx,sm 45.1mg/m3;
34 in Xiaolan Pollutants”, ”Em SO2≤87.8t;
oke,toluol, continuous toluol: SO2: 0.41t; Meet
125 Site, 33 in Cast ission Standard NOx≤35.53
dimethylbenz discharge 0.001mg/m3; NOx : 24.22t Standard
Plant and 5 in of Air Pollutants t
ene, dimethylbenzene:
Axle Plant for Boiler”（GB
NMHC） 0.001mg/m3;
13271-2014）
NMHC:
0.2mg/m3\"
The construction and operation of pollutant preventive and control facilities
Since 2006, JMC has invested more than RMB 30 million to construct seven
wastewater treatment stations (including the wastewater treatment station in the east
plant area and Xiaolan wastewater treatment station), with the treatment capacity as
high as 9,000t/d. The treated wastewater reached the national discharge standard.
For up-to-standard emission of waste gases, JMC has taken new control measures
over the years. In 2012, the Company invested RMB 10 million to reconstruct the
cupola furnace in the casting plant. In 2013, Xiaolan Branch invested RMB 14 million
to install a TNV waste gas incinerator. In 2014, JMC invested RMB 14.6 million to
construct the boiler coal-gas-switch project in the south district, effectively reducing
the environmental pollution by dust.
For noise reduction, JMC took different measures to reduce the environmental impact,
such as increase of protective sound-proof doors & windows, establishment of noise
enclosure for air blower, installation of muffler and transformation of sound-proof
doors & windows. All these measures can make sure up-to-standard discharge of
noise at the plant boundary.
In the process of waste management, JMC managed from the source, and divided
the generation of wastes. JMC established a temporary storage yard for solid wastes.
Warning graphic symbols have been posted at the temporary storage site of
hazardous wastes. Besides, signboards have been provided as well, so as to remind
the passerby of probable hazards in the storage process of hazardous wastes.
EIA on construction project and other administrative permits for environmental
protection
The company strictly implements the construction project environmental impact
assessment system. With respect to new construction, expansion and reconstruction,
JMC comprehensively planned environmental protection and evaluated the “Three
Simultaneities”. From the source of design, JMC carried out the philosophy of energy
saving and low carbon all the time. The Company carries on the environmental
monitoring every year according to the requirements, ensures the pollutant discharge
meeting the requirements of discharge permit, formulates the stricter internal control
target, and strives to reduce the impact of environmental pollution to the minimum.
Emergency plan on emergency environmental incidents
In order to dilute or prevent environmental risks, JMC established an emergency
preparation and response procedure and specific environmental emergency plans
(such as emergency plan on environmental pollution accidents, emergency plan on
hazardous gases and emergency plan on paint thinner), so as to formulate
corresponding control methods for potential accidents and emergences occurred or
that may probably occur. JMC organized emergency drills every year to ensure the
efficiency of emergency plan.
Environmental self-monitoring scheme
In 2016, JMC’s Qingyunpu Main Plant Area (the “Plant Area”) was listed as a key
pollutant discharging organization of wastewater/hazardous wastes. The Plant Area
monitored by itself in strict accordance with the Method for Self-monitoring and
Information Disclosure of State Key Monitoring Enterprises (Trial). Its self-monitoring
schemes, monitoring results and annual monitoring reports on pollution sources were
disclosed on the “pollution source self-monitoring reporting platform of Jiangxi
Province”. Xiaolan plant area and other plant areas finished self-monitoring according
to the EIA requirements.
Other information related to environmental protection
JMC paid high attention to environmental protection and pollution source control,
taking resource saving and cost reduction as the primary task. Moreover, the
Company also took full advantage of 6sigma, and controlled from the source, so as to
achieve the effect of environmental improvement. In the new expansion and
reconstruction projects, JMC laid emphasis on improving the environmental
performance, strictly implemented the system of “Three Simultaneities”, transacted
the EIA procedure according to national standards, stipulated the preventive and
control measures for environmental pollution, and reported to competent
administrative departments on environmental protection for approval.
19. Other Major Events
JMC received government incentives of approximate RMB 510 million appropriated
by Nanchang City, Nanchang County Xiaolan Economy Development Zone,
Nanchang City Qingyupu District, and Taiyuan Economic & Technological
Development Zone in 2016, which is to support JMC’s development.
20. Major event of JMC subsidiary
□Applicable □√Not Applicable
Chapter VI Share Capital Changes & Shareholders
1. Changes of shareholding structure
I. Table of the changes of shareholding structure
Before the change Change (+, -) After the change
Proportion New Reserve- Proportion
Bonus
Shares of total share converte Others Subtotal Shares of total
Shares
shares (%) s d shares shares (%)
I. Limited tradable
1,725,900 0.20% - - - - - 1,725,900 0.20%
A shares
3. Other domestic
1,725,900 0.20% - - - - - 1,725,900 0.20%
shares
Including:
Domestic legal
1,713,000 0.20% - - - -877,860 -877,860 835,140 0.10%
person shares
Domestic natural
12,900 - - - - 877,860 877,860 890,760 0.10%
person shares
II. Unlimited
861,488,100 99.80% - - - - - 861,488,100 99.80%
tradable shares
1. A shares 517,488,100 59.95% - - - - - 517,488,100 59.95%
2. B shares 344,000,000 39.85% - - - - - 344,000,000 39.85%
III. Total 863,214,000 100.00% - - - - - 863,214,000 100.00%
Causes of shareholding changes
□√Applicable □Not Applicable
JMC did not issue shares or derivative securities during the past three years as of
December 31, 2016. JMC’s total shares remained the same in 2016, and the change
in shareholding structure was caused by
a. limited A shares of 757,860 shares, formerly held by Shenzhen Airport Terminal
Building Co., Ltd., were transferred to 197 nature person shareholders;
b. limited A shares of 120,000 shares, formerly held by Luoyang Machinery &
Electric Company, were transferred to one nature person shareholder by the way
of judicial decision.
Approval of changes of shareholding structure
□Applicable □√Not Applicable
Shares Transfer
□Applicable □√Not Applicable
Impact on accounting data, such as the latest EPS, diluted EPS, shareholders’ equity
attributable to the equity holders of the Company, generated from shares transfer
□Applicable □√Not Applicable
Others to be disclosed necessarily or per the requirements of securities regulator
□Applicable □√Not Applicable
II. Changes of limited A shares
□Applicable □√Not Applicable
2. Securities Issuance and Listing
I. Securities issuance (not including preferred shares) in 2016
□Applicable □√Not Applicable
II. Explanation on changes of shares, shareholding structure, assets and liabilities
structure
□Applicable □√Not Applicable
III. Current staff shares
□Applicable □√Not Applicable
3. Shareholders and actual controlling parties
I. Total shareholders, top ten shareholders, and top ten shareholders holding
unlimited tradable shares
Total shareholders JMC had 19,407 shareholders, including 14,409 A-share holders, and 4,998 B-share holders,
(as of December 31, as of December 31, 2016.
2016)
Total shareholders JMC had 20,535 shareholders, including 15,445 A-share holders, and 5,090 B-share
(as of February 28, holders, as of February 28, 2017.
2017)
Top ten shareholders
Shares due
Shareholding Shares at Shares with
Shareholder Change to
Shareholder Name Percentage the End of Trading
Type (+,-) mortgage
(%) Year Restriction
or frozen
Jiangling Motor State-owned
41.03 354,176,000 0 0
Holding Co., Ltd. legal person
Ford Motor Company Foreign legal
32 276,228,394 0 0
person
China Securities
Other 2.64 22,745,784 0 0
Corporation Limited
Shanghai Automotive State-owned
1.51 13,019,610 0 0
Co., Ltd. Legal person
Central Huijin State-owned
0.83 7,186,600 0 0
Investment Ltd. legal person
British Columbia Foreign legal
0.75 6,438,041 1,137,969 0
Invest Company person
BILL & MELINDA
GATES Foreign legal
0.73 6,338,080 92,500 0
FOUNDATION person
TRUST
JPMBLSA RE FTIF
Foreign legal
TEMPLETON CHINA 0.68 5,872,450 0 0
person
FUND GTI 5497
GAOLING Foreign legal
0.63 5,439,086 0 0
FUND,L.P. person
Foreign legal
Norges Bank 0.59 5,082,713 1,337,195 0
person
Top ten shareholders holding unlimited tradable shares
Shareholder Name Shares without Trading Restriction Share Type
Jiangling Motor Holding Co., Ltd. 354,176,000 A share
Ford Motor Company 276,228,394 B share
China Securities Corporation Limited 22,745,784 A share
Shanghai Automotive Co., Ltd. 13,019,610 A share
Central Huijin Investment Ltd. 7,186,600 A share
British Columbia Invest Company 6,438,041 A share
BILL & MELINDA GATES FOUNDATION
6,338,080 A share
TRUST
JPMBLSA RE FTIF TEMPLETON
5,872,450 B share
CHINA FUND GTI 5497
GAOLING FUND,L.P. 5,439,086 B share
Norges Bank 5,082,713 A share
Notes on association among above- None.
mentioned shareholders
Stock buy-back by top ten shareholders or top ten shareholders holding unlimited
tradable shares in the reporting period
□Applicable □√Not Applicable
II. Controlling Shareholders
Nature of controlling shareholders: Central/Local government holdings, foreign
holdings
Type: Legal person
Legal Main scope of
Name Established Date Organization code
representative business
manufacturing of
automobiles, engines,
chassis, and
automotive
components and
parts, sales of self-
produced products, as
well as related after-
sales services;
industrial investment;
management & agent
Jiangling Motor Holding 9136010076703230 for merchandise and
Mr. Zhang Baolin November 1. 2004
Co., Ltd. 79 technology export &
import; property
management; sales of
household articles,
mechanical &
electronic equipment,
artistic handicrafts,
agricultural by-
products and steel;
consulting business in
enterprise
management.
Design,
manufacturing,
assembly and sales of
cars, trucks, parts and
William Clay
Ford Motor Company 1903 components,
Ford
financing, leasing of
vehicles and
equipment, and
insurance business.
Change of controlling shareholders
□Applicable □√Not Applicable
There was no change of controlling shareholders in the reporting period.
III. Actual Controlling Parties
Nature of controlling shareholders: Central/Local State-owned Assets Supervision
and Administration
Type: Legal person
Legal
Name Established Date Organization code Main scope of business
representative
manufacturing of
automobiles, engines,
chassis, specialty vehicle,
transmission, other products,
automotive quality testing,
sales of self-produced
products and raw materials,
equipment, electronic
JMCG Qiu Tiangao July 27, 1991 91360000158263759R products, parts and others,
as well as related after-sales
services and maintenance
services; development of
products derived from JMC
brand light vehicle; oversea
auto project-contracting,
export equipment, material
and related labor services.
development, manufacturing,
sales, import & export
Chongqing business of auto (including
Changan December 31, sedan), engine, automotive
Xu Liuping 9150000020286320X6
Automobile 1996 components, die, tools,
Co., Ltd. installation of machinery,
technological consultant
services.
Equity of listed company in domestic and aboard market held by the entity
None
controlled by the actual controlling party during the reporting period
Change of actual controlling parties
□Applicable □√Not Applicable
There was no change of actual controlling parties in the reporting period.
Ownership and control relations between the Company and the actual controlling
parties are shown as follows:
SASAC
Nanchang State-owned Assets
Supervision and Administration
Committee
41.82% 100%
Chongqing Changan Automobile Co., JMCG
Ltd. 50% 50%
JMH Ford
41.03% 32%
JMC
Actual controlling parties control the Company by the way of trust or other assets
management
□Applicable □√Not Applicable
IV. Other legal person shareholder holding more than 10% of total equity of the
Company
□Applicable □√Not Applicable
V. Shareholding reducing restriction to controlling shareholders, actual controlling
parties, restructuring parties and other commitment-making entities
□√Applicable □Not Applicable
JMH commits not to reduce JMC shares by secondary market within six months since
July 9, 2015.
Chapter VII Preferred Shares
□Applicable □√Not Applicable
JMC had no preferred shares in the reporting period.
Chapter VIII Directors, Supervisors, Senior Management and
Employees
1. Changes of Shares held by Directors, Supervisors and Senior Management
Position Name Gender Age Term of Office Shares Shares Share Cause
as of as of Change in of
Dec. 31, Dec. 31, Year 2016 Share
2015 2016 Change
Directors：
2014.6.27-
Chairman Qiu Tiangao Male 51 0 0
2017.6.27
2016.8.12-
Vice Chairman David Schoch Male 66 0 0
2017.6.27
2016.4.28-
Director Mark Kosman Male 52 0 0
2017.6.27
2016.4.28-
Director & President Thomas Fann Male 55 0 0
2017.6.27
2016.4.28-
Director & EVP Xiong Chunying Female 53 1,200 1,200
2017.6.27
2015.12.9-
Director Yuan Mingxue Male 50 0 0
2017.6.27
2014.6.27-
Independent Director Lu Song Male 60 0 0
2017.6.27
2014.6.27-
Independent Director Wang Kun Female 41 0 0
2017.6.27
2015.12.9-
Independent Director Li Xianjun Male 49 0 0
2017.6.27
2014.6.27-
Ex-Chairman Wang Xigao Male 67 0 0
2016.4.28
2014.6.27-
Ex-Vice Chairman John Lawler Male 51 0 0
2016.8.12
2014.6.27-
Ex-Director Manto Wong Male 55 0 0
2016.4.28
Ex- Director & 2014.6.27-
Yuan-Ching Chen Male 65 0 0
President 2016.4.28
Supervisors：
2014.6.27-
Chief supervisor Zhu Yi Male 47 0 0
2017.6.27
2014.6.27-
Supervisor Alvin Qing Liu Male 60 0 0
2017.6.27
2014.6.27-
Supervisor Zhang Jian Male 48 40 40
2017.6.27
2014.6.27-
Supervisor Liu Niansheng Male 50 0 0
2017.6.27
2014.6.27-
Supervisor Xu Lanfeng Female 48 0 0
2017.6.27
Senior
Management:
2015.1.1-
EVP Jin Wenhui Male 50 0 0
2017.6.27
2016.4.7-
CFO Gong Yuanyuan Female 44 0 0
2017.6.27
2014.6.27-
VP & Board Secretary Wan Hong Male 56 0 0
2017.6.27
2014.6.27-
VP Li Qing Male 52 0 0
2017.6.27
2015.4.1-
VP Tim Slatter Male 43 0 0
2017.6.27
2014.6.27-
VP Zhu Shuixing Male 52 100 100
2017.6.27
2014.6.27-
VP Liu Shuying Female 54 0 0
2017.6.27
2015.7.1-
VP Arturo Mendoza Male 62 0 0 0
2017.6.27
2015.7.1-
VP Li Xiaojun Male 41 0 0 0
2017.6.27
2015.9.1-
VP Christian Chen Male 44 0 0 0
2017.6.27
2014.6.27-
Ex-CFO Dennis Leu Male 53 0 0 0
2016.4.7
2014.6.27-
Ex-VP Liao Zanping Male 54 0 0 0
2017.2.1
2017.2.1-
VP Wu Xiaojun Male 43 0 0 0
2017.6.27
2. Changes of Directors, Supervisors and Senior Management
Name Position Status Date Reason
Wang Xigao Chairman Leave April 28, 2016 Retirement
John Lawler Vice Chairman Leave August 12, 2016 Work rotation
Manto Wong Director Leave April 28, 2016 Work rotation
Yuan-Ching
Director Leave April 28, 2016 Work rotation
Chen
Yuan-Ching
President Dismissal April 7, 2016 Work rotation
Chen
Dennis Leu CFO Dismissal April 7, 2016 Work rotation
Liao Zanping VP Dismissal February 1, 2017 Work rotation
3. Particulars about working experience of directors, supervisors and senior
management in the past five years
Directors:
Mr. Qiu Tiangao, born in 1966, holds a Bachelor’s Degree in Mechanical
Manufacturing and a Master’s Degree in Industrial Engineering from Huazhong
University of Science and Technology. In the past five years, Mr. Qiu Tiangao held
various positions including Chairman of JMCG Jingma Motors Co., Ltd., Chairman of
Jiangxi Isuzu Motors Co., Ltd., Vice Chairman of JMH, Director, General
Manager,Chairman of JMCG, Mr. Qiu Tiangao was appointed as Chairman of JMC in
April 2016.
Mr. David Schoch, born in 1951, holds a Bachelor’s Degree in Business
Administration from Lycoming College, U.S.A. and his MBA in Finance from Temple
University. In the past five years, Mr. David Schoch held various positions including
Ford Motor Company Group Vice President and President, Asia Pacific, Chairman
and CEO of Ford China. Mr. David Schoch was appointed as Vice Chairman of JMC
in August 2016.
Mr. Mark Kosman, born in 1965, holds a Bachelor Degree in Accounting from Bowling
Green State University, U.S.A. and a MBA from Wayne State University, U.S.A. In the
past five years, Mr. Mark Kosman held various positions including Global Product
Development Controller of Ford, Ford Asia Pacific & Africa CFO. Mr. Mark Kosman
was appointed as Director of JMC in April 2016.
Mr. Thomas Fann, born in 1962, holds a Bachelor Degree in Mechanical Engineering
from National Cheng Kung University, China Taiwai, a Master Degree in Mechanical
Engineering from National Tsing Hua University, China Taiwan, and a Doctor Degree
in Mechanical Engineering from University of Michigan, U.S.A. In the past five years,
Mr. Thomas Fann held various positions including Finance Director, President of Ford
Lio Ho, President of JMC. Mr. Thomas Fann was appointed as Director of JMC in
April 2016.
Ms. Xiong Chunying, born in 1964, senior engineer, holds a Bachelor’s Degree in
Automobile Engineering from Jiangsu Engineering College, a Master’s Degree in
Industrial Economics from Jiangxi University of Finance and Economics and an
EMBA Degree in China Europe International Business School. In the past five years,
Ms. Xiong Chunying has held the positions of Executive Vice President of JMC,
Director of JMCG. Ms. Xiong Chunying was appointed as Director of JMC in April
2016.
Mr. Yuan Mingxue, born in 1968, senior engineer, holds a Bachelor’s Degree in Auto
Engineering from Beijing Institute of Technology and an EMBA from China Europe
International Business School. In the past five years, Mr. Yuan Mingxue held various
positions including Assistant to Assistant to the President, Chief of Strategy Planning
Department and Director of Capital Management Division of Chongqing Changan
Automobile Company Limited (“Changan Automobile”), Assistant to the President and
General Manager of Overseas Business Development Department of Changan
Automobile, Vice President of Changan Automobile, and Director of JMH. Mr. Yuan
Mingxue was appointed as Director of JMC in October 2015.
Mr. Lu Song, born in 1957, professor and lawyer, holds a Bachelor’s Degree in Law
from Peking University and a Master’s Degree in Law from China Foreign Affairs
University (“CFAU”) and Free University of Brussels respectively. In the past five
years, Mr. Lu Song held various positions including teaching and administrative staff
of CFAU, Vice President of the Chinese Society of Private International Law,
Executive Member of the Council of the Chinese Society of International Law,
Executive Member of the Council the Chinese Arbitration Law, and the arbitrator of
international arbitral institutions. Mr. Lu Song was appointed as Independent Director
of JMC in June 2014.
Ms. Wang Kun, born in 1976, associate professor, holds a Bachelor’s Degree in
Administration from Nankai University and a Doctor’s Degree in Accounting from
Hong Kong University of Science and Technology. In the past five years, Ms. Wang
Kun held various positions including lecturer in Tsinghua University School of
Economics and Management, Assistant to Dean of Tsinghua University School of
Economics and Management and Deputy Director of Tsinghua University Corporate
Governance Centre. Ms. Wang Kun was appointed as Independent Director of JMC
in June 2014.
Mr. Li Xianjun, born in 1967, holds a Bachelor’s Degree in Industrial Management
from Jilin University of Technology and a MBA, a Doctor’s Degree in Political
Economy from Jilin University. In the past five years, Mr. Li Xianjun held various
positions including Head and Academic Director of School of Automotive Engineering
of Tsinghua University, Independent Director of Tianjin FAW Xiali Automobile Co., Ltd.
Ms. Li Xianjun was appointed as Independent Director of JMC in December 2015.
Supervisors:
Mr. Zhu Yi, born in 1970, is a senior accountant, and holds a Bachelor’s Degree in
Business Administration from Jiangxi Institute of Economic Administrators and a MBA
from New York Institute of Technology. In the past five years, Mr. Zhu Yi used to be
Vice General Manager, Director of JMCG, and Director of JMH. Mr. Zhu Yi has been
a Chief Supervisor of JMC since June 2011.
Mr. Alvin Qing Liu, born in 1957, has a Jurisprudence Doctor Degree and a Master
Degree in International Economics from Marquette University, U.S.A. and is a
member of American Bar Association and was admitted to practice in the U.S.
Federal Court for the Eastern District of Wisconsin. In the past five years, Mr. Alvin
Qing Liu has held the positions including Vice Chairman of Changan Ford Mazda
Engine Co., Ltd., Director of Changan Ford Automobile Co., Ltd., Vice President and
General Counsel of Ford Asia Pacific, Director & Vice Chairman of Ford Motor (China)
Ltd. Mr. Alvin Qing Liu has been a Supervisor of JMC since June 2002.
Mr. Zhang Jian, born in 1969, holds a College Degree in Secretarial Professional from
North China University of Technology. In the past five years, Mr. Zhang Jian held
various positions including Chief of JMCG Publicity Department and Chairman of
JMCG Labor Union. Mr. Zhang Jian held the post of Supervisor of JMC in June 2011.
Mr. Liu Niansheng, born in 1967, is a senior engineer, and holds a Bachelor’s Degree
in Forging Technology and Equipment from Jiangxi University of Technology and a
Master’s Degree in National Economic Management from Renmin University of China.
In the past five years, Mr. Liu Niansheng held various positions including Plant
Manager of JMC Transit Plant and Assistant to the President of JMC. Mr. Liu
Niansheng held the post of Supervisor of JMC in December 2011.
Ms. Xu Lanfeng, born in 1969, senior engineer, holds a Bachelor’s Degree in Forging
Technology and Equipment from Nanchang University and a MBA from University of
International Business and Economics. In the past five years, Ms. Xu Lanfeng held
various positions including Chief of Manufacturing Department and Assistant to the
President of JMC. Ms. Xu Lanfeng has been a Supervisor of JMC in June 2008.
Senior management:
Mr. Jin Wenhui, born in 1967, is a senior engineer and holds a Bachelor’s Degree in
Mechanical Manufacturing and a Master’s Degree in Mechanical Engineering from
Huazhong University of Science and Technology, and an EMBA Degree in China
Europe International Business School. In the past five years, Mr. Jin Wenhui held
various positions including Assistant to the President for JMC and Vice General
Manager of Jianging-Isuzu Motors Company Limited, Director, General Manager of
JMCG Jingma Motors Co., Ltd., Executive Vice General Manager of Jiangxi-Isuzu
Motors Co., Ltd., Executive Vice President of JMC.
Ms. Gong Yuanyuan, born in 1973, holds a Bachelor Degree in Finance from
Shanghai Jiaotong University and a MBA from City University, United Kingdom. In the
past five yeats, Ms. Gong Yuanyuan has held various positions including Controller of
MFG and MP&L of Ford China, and PD Controller of Lincoln and Mustang of Ford
U.S., CFO of JMC.
Mr. Wan Hong, born in 1961, is an engineer, and holds a Master of Business
Administration Degree from Jiangxi University of Finance & Economics. In the past
five years, Mr. Wan Hong has held the positions of Vice President and Board
Secretary of JMC, Independent Director of Jiangxi Hongdu Aviation Industry Co., Ltd.
Mr. Li Qing, born in 1965, holds a Bachelor’s Degree in Marketing from Wuhan
University of Technology and a MBA from University of South Australia and Jiangxi
University of Finance & Economics. In the past five years, Mr. Li Qing has held the
positions of Vice President of JMC, Director of JMCG and Executive Director of
Jiangling Motors Sales Co., Ltd.
Mr. Tim Slatter, born in 1974, holds a Bachelor’s Degree in Automotive Engineering
and Design from Coventry University, U.K. In the past five years, Mr. Tim Slatter held
various positions including Global Exhaust Engineering Manager of Ford Europe,
Powertrain Programs and Integration Chief Engineer of Ford AP.
Mr. Zhu Shuixing, born in 1965, is a senior engineer and holds a Master’s Degree in
Pressure Processing from Northwestern Polytechnical University and a MBA from
Jinan University. In the past five years, Mr. Zhu Shuixing has held the position of Vice
President of JMC.
Ms. Liu Shuying, born in 1962, is a senior engineer and holds a Bachelor’s Degree in
Mechanical Manufacturing from Jiangxi University of Technology. In the past five
years, Ms. Liu Shuying has held the position of Vice President of JMC.
Mr. Arturo Mendoza, born in 1955, holds an Engineering Bachelor’s Degree in
Mechanical Engineering from Instituto Tecnologico de Chihuahua, Mexico. In the past
five years, Mr. Arturo Mendoza held various positions including LMEA Manager of
Changan Ford Mazda Engine Corporation and Vice President of JMC.
Mr. Li Xiaojun, born in 1975, is a senior engineer and holds a Bachelor’s Degree in
Mechanical Design & Manufacturing from Jiangxi University of Science and
Technology and a Master’s Degree in Industrial Engineering from Huazhong
University of Science and Technology. In the past five years, Mr. Li Xiaojun held
various positions including Plant Manager of Assembly Plant, Assistant to the
President for JMC and Vice President of JMC.
Mr. Christian Chen, born in 1972, is a semi-senior engineer and holds a Bachelor’s
Degree in Automotive Engineering from Wuhan University of Technology and a MBA
from Wuhan University. In the past five years, Mr. Christian Chen held various
positions including Purchasing Manager and Senior Purchasing Manager of Ford
Motor Company, and Vice President of JMC.
Mr. Wu Xiaojun, born in 1974, holds a Bachelor’s Degree from Wuhan University of
Technology and a MBA from Jiangxi University of Finance and Economics. In the
past five years, Mr. Wu Xiaojun held various positions including Chief of Quality
Department, Assistant to the President for JMC, Executive Deputy General Manager,
General Manager of JMC Heavy Duty Vehicle Co., Ltd. Mr. Wu Xiaojun was
appointed as VP of JMC in February 2017.
Positions at the shareholder entities
□√Applicable □Not Applicable
Name Shareholder Title Term of Compensation
Entity Office Paid by
Shareholder
Entity (Y/N)
Qiu Tiangao JMH Vice Chairman 2016.3— N
David Schoch Ford Group Vice President 2012.12— Y
and President, Asia
Pacific
Yuan Mingxue JMH Director 2015.7— N
Zhu Yi JMH Director 2004.11— N
Alvin Qing Liu Ford Asia Pacific Vice 2009.1— Y
President and
General Counsel
Particulars about positions and concurrent positions in other entities other than
shareholder entities
□√Applicable □Not Applicable
Name Entity Title
JMC Heavy Duty
Executive Director
Vehicle Co., Ltd.
JMCG Chairman
Qiu Tiangao JMCG Jingma Motors
Chairman
Co., Ltd.
Jiangxi-Isuzu Motors
Chairman
Co., Ltd.
Ford Motor (China)
Chairman and CEO
Ltd.
Ford Motor Research
David Schoch & Engineering Chairman and CEO
(Nanjing) Co., Ltd.
Changan Ford
Vice Chairman
Automobile Co., Ltd.
Ford Motor (China)
Director
Ltd.
Mark Kosman
Changan Ford
Director
Automobile Co., Ltd.
Chongqing Changan
Yuan Mingxue Vice President
Automobile Co., Ltd.
Lu Song CAFU Professor
Assistant to Dean of
Tsinghua University
School of Economics
and Management
Wang Kun Tsinghua University
and Deputy Director
of Tsinghua
University Corporate
Governance Center
Head and Academic
Director of School of
Li Xianjun Tsinghua University
Automotive
Engineering
Director & Vice
Zhu Yi JMCG
General Manager
Changan Ford Mazda
Vice Chairman
Engine Co., Ltd.
Ford Motor (China) Director & Vice
Alvin Qing Liu
Ltd. Chairman
Changan Ford
Director
Automobile Co., Ltd.
Xiong Chunying JMCG Director
Jin Wenhui JMCG Director
JMC Heavy Duty
Supervisor
Vehicle Co., Ltd.
Gong Yuanyuan
Jiangling Motors
Supervisor
Sales Co., Ltd.
Jiangxi Hongdu
Wan Hong Aviation Industry Co., Independent Director
Ltd.
JMCG Director
Li Qing Jiangling Motors
Executive Director
Sales Co., Ltd.
JMC Heavy Duty
Wu Xiaojun General Manager
Vehicle Co., Ltd.
Penalties from securities regulator to the present and resigned Directors, Supervisors
and senior executives in the recently three years
□Applicable □√Not Applicable
4. Annual Compensation
Decision-making procedure, basis, and payment regarding the annual compensation
of the Directors, the Supervisors and senior executives
Directors and Supervisors who did not concurrently hold other management positions
in JMC were not paid by JMC. Director Qiu Tiangao, Supervisors Zhu Yi and Zhang
Jian were paid by JMCG. Directors David Schoch, Mark Kosman and Supervisor
Alvin Qing Liu were paid by Ford. Director Yuan Mingxue was paid by Chongqing
Changan Automobile Co., Ltd.
(1) In accordance with the Senior Executive Compensation & Incentive Plan of JMC
approved by the Board of Directors and the Senior Executive Base Salary Plan of
JMC agreed by the Compensation Committee, the compensation for the Chinese-side
senior management consists of base salary, short-term incentive and long-term
incentive, and the long-term incentive would be paid equally in a deferred period of
three years. In 2016, the Company paid annual compensation before tax of
approximately RMB 1,660 thousand to EVP Xiong Chunying, paid approximately
RMB 1,330 thousand EVP Jin Wenhui, paid approximately RMB 1,200 thousand per
person to VP & Board Secretary Wan Hong, VP Li Qing, VP Zhu Shuixing VP Liu
Shuying, paid VP Liao Zanping approximately RMB 1,300 thousand, and paid VP Li
Xiaojun approximately RMB 1,070 thousand. Two employee-representative
supervisors, Mr. Liu Niansheng and Ms Xu Lanfeng, were paid annual compensation
before tax of about RMB 840 thousand and RMB 460 thousand respectively. The total
compensation before tax paid by JMC for the aforesaid persons was about RMB
11.49 million in the reporting period, including the long-term incentive of RMB 1.19
million deferred from the previous years.
(2) JMC pays annual compensation for Ford-seconded senior management personnel
to Ford in accordance with the revised Personnel Secondment Agreement signed
between JMC and Ford and Ford Affiliates. In 2016, JMC should pay US$ 281,250
per person to Ford for Director & President Thomas Fann, pay US$ 375 thousand per
person to VP Arturo Mendoza and VP Tim Slatter, pay RMB 562.5 thousand to CFO
Gong Yuanyuan, pay RMB 750 thousand to VP Christian Chen, pay US$ 93,750 per
person to ex- Director & President Yuan-Ching Chen and ex-CFO Dennis Leu. These
payments made by JMC to Ford do not reflect the actual salaries earned by Ford-
seconded senior management.
(3) Pursuant to the resolutions of JMC 2011 Annual Shareholder’s Meeting, the
annual compensation for the JMC Independent Directors is adjusted as RMB 100
thousand per person, and JMC bears their travel-related expenses associated with
JMC’s business.
Table on Annual Compensation
Unit: RMB’000
Compensation
Compensation
Paid by
Name Position Gender Age Present (Y/N) Before Tax
Related Party
Paid by JMC
(Y/N)
Qiu Tiangao Chairman Male 51 Y 0 Y
David Schoch Vice Chairman Male 66 Y 0 Y
Mark Kosman Director Male 52 Y 0 Y
Director & Y N
Thomas Fann Male 55 *
President
Xiong Chunying Director & EVP Female 53 Y 1,660 N
Yuan Mingxue Director Male 50 Y 0 Y
Independent Y
Lu Song Male 60 100 N
Director
Independent Y
Wang Kun Female 41 100 N
Director
Independent Y
Li Xianjun Male 49 100 N
Director
Wang Xigao Ex-Chairman Male 67 N 0 Y
Ex-Vice N
John Lawler Male 51 0 Y
Chairman
Manto Wong Ex-Director Male 55 N 0 Y
Yuan-Ching Ex- Director &
Male 65 N * N
Chen President
Zhu Yi Chief supervisor Male 47 Y 0 Y
Alvin Qing Liu Supervisor Male 60 Y 0 Y
Zhang Jian Supervisor Male 48 Y 0 Y
Liu Niansheng Supervisor Male 50 Y 840 N
Xu Lanfeng Supervisor Female 48 Y 460 N
Jin Wenhui EVP Male 50 Y 1,330 N
Gong Yuanyuan CFO Female 44 Y * N
VP & Board Y
Wan Hong Male 56 1,200 N
Secretary
Li Qing VP Male 52 Y 1,200 N
Tim Slatter VP Male 43 Y * N
Zhu Shuixing VP Male 52 Y 1,200 N
Liu Shuying VP Female 54 Y 1,200 N
Arturo Mendoza VP Male 62 Y * N
Li Xiaojun VP Male 41 Y 1,070 N
Christian Chen VP Male 44 Y * N
Dennis Leu Ex-CFO Male 53 N * N
Liao Zanping Ex-VP Male 54 N 1,300 N
* Please refer to the Article 4 (2) of the Chapter.
Granted equity incentive to the Directors, Supervisors and senior executives in 2016
□Applicable □√Not Applicable
5. Employees
i. Employees, Professional Structure and Educational Level
Employees in parent company (persons) 15,473
Employees in subsidiaries (persons) 1,392
Total employees (persons) 16,865
Total employees paid compensation (persons) 17,776
Retired employees bore retirement benefits in parent
company and its subsidiaries
Professional Structure
Type Employees (Persons)
Production Worker 11,465
Sales Personnel
Technical Personnel 3,592
Finance Personnel
Administrative Staff
Total 16,865
Educational Level
Type Employees (Persons)
Master degree and higher
Bachelor degree 3,814
Polytechnic school degree 2,290
Below polytechnic school degree 9,836
Total 16,865
ii. Compensation Policy
Comparing with market compensation system and income level and considering the
Company’s actual situation, JMC regarded Position, Person, Performance
Compensation Concept as guideline and offered competitive compensation, which
could ensure the inner fairness and competitive ability against the outside, to attract,
reserve and give incentive to the excellent talents,.
iii. Training
In 2016, JMC’s training expense was RMB 22,195 thousand, and training person-time
were 95,851 with training stratification of 96.70%. Please refer to the Chapter IV of
2016 JMC Corporation Social Responsibility Report for more details on 2016 training
plan implementation.
iv. Labour outsourcing
□Applicable □√Not Applicable
Chapter IX Corporate Governance Structure
1. Status of the Corporate Governance in JMC
Difference between actual situation of corporate governance in JMC and that of
requirements of listed company corporate governance promulgated by CSRC
□Applicable □√Not Applicable
There was no major difference between actual situation of corporate governance in
JMC and that of requirements of listed company corporate governance promulgated by
CSRC. During the reporting period, the Company continued to improve its corporate
governance in compliance with the Company law, the Code of Corporate Governance
for Listed Companies in China, the Rules Governing Listing of Stock on Shenzhen
Stock Exchange, as well as relevant laws and regulations. JMC fulfilled its social
responsibilities positively and made a report on 2016 Corporate Social Responsibilities.
2. Separation between JMC and the Controlling Shareholders in respect of Personnel,
Assets and Finance, and Independence concerning Organization and Business:
(1) With respect to personnel matters, the positions of chairman and president are
held by different individuals; JMC’s senior management do not hold positions other
than director positions with its controlling shareholders; JMC senior management
personnel are paid by JMC; labor, personnel matters and compensation management
of JMC are completely independent.
(2) With respect to assets, JMC assets are complete. The assets utilized by JMC,
including production system, supporting production system and peripheral facilities,
and non-patent technology, are owned and/or controlled by JMC.
(3) With respect to finance, JMC has an independent finance department and
independent accounting system, and has a uniform and independent accounting
system and financial control system for its branches and subsidiaries. JMC has its
own bank accounts, and there are no bank accounts jointly owned by JMC and its
controlling shareholders. JMC pays taxes independently in accordance with relevant
laws.
(4) With respect to organization, JMC’s organization is independent, complete and
scientifically established with a sound and efficient operating mechanism. The
establishment and the operation of JMC’s corporate governance are strictly carried
out per the Articles of Association of JMC. Production and administrative
management are independent from the controlling shareholders. JMC has
established an organization structure that meets the need for ongoing development.
(5) With respect to business, JMC has independent purchasing, production and sales
systems. The purchasing, production and sales of main materials and products are
carried out through its own purchasing, production & sales functions. JMC is
independent from the controlling shareholders in respect to its business, and has
independent and complete business and self-sufficient operating capability.
3. Horizontal Competition
□Applicable □√Not Applicable
4. Introduction to the Shareholders’ Meeting
I. Index to the Shareholders’ Meeting in 2016
Meeting Meeting Type Convening Date Disclosure Date Index
Announcement of this
2016 First Special Special Special Shareholders’
Shareholders’ Shareholders’ April 28, 2016 April 29, 2016 Meeting (No: 2016-017) was
Meeting Meeting published in the website
http://www.cninfo.com.cn.
Announcement of this Annual
2015 Annual Annual Shareholders’ Meeting (No:
Shareholders’ Shareholders’ June 30, 2016 July 1, 2016 2016-026) was published in
Meeting Meeting the website
http://www.cninfo.com.cn.
Announcement of this
2016 Second Special Special Special Shareholders’
Shareholders’ Shareholders’ August 12, 2016 August 13, 2016 Meeting (No: 2016-037) was
Meeting Meeting published in the website
http://www.cninfo.com.cn.
II. Special Shareholders’ Meeting convened by preferred shareholders whose voting
rights were restored
□Applicable □√Not Applicable
5. Independent Directors’ Performance of Duty
I. Particulars about the directors’ attendance to the Board meeting and the
Shareholders’ Meeting
Not to present Presence at
Presence
Required in person in the
Presence in Form of Presence
Name Board Absence two Shareholders’
in Person Paper by Proxy
Attendance consecutive Meeting
Meeting
meetings (Y/N)
Lu Song 16 3 12 1 0 N
Wang Kun 16 4 12 0 0 N
Li Xianjun 16 3 12 1 0 N
II. Dissent from Independent Directors
□Yes □√No
The Independent Directors of the Company had no dissent to the relevant proposal of
the Company in the reporting period.
III. Other introduction to Independent Directors’ Performance of Duty
□√Yes □No
JMC has appointed three Independent Directors so far. The Independent Directors
exercised their fiduciary duties on routine work and major decision-making of the Board
of Directors. They studied every proposal reviewed by the Board of Directors
thoroughly and raised their opinions, inquired about major events which required
opinions from the Independent Directors and issued their written opinions, and actively
engaged in the affairs of the Compensation Committee and the Audit Committee in the
reporting period, to protect the interests of the Company and all the shareholders.
6. 2016 Diligence Report of the Committees under the Board of Directors
I. Audit Committee’s Works
A. Work Summary Report of the Audit Committee
According to Audit Committee Working Rules, the Audit Committee diligently
executed its duties and delivered guiding opinions. The primary tasks during the
reporting period were as follows:
i. The Audit Committee reviewed the Company’s internal control work plan and
internal control implementation results regularly;.
ii. The Audit Committee reviewed the Eight Accounting Provisions and Write-off
proposal and submitted it to the Board for approval;
iii. The Audit Committee reviewed the Credit Risk Control Proposal and Credit Risk
Control Status Report;
iv. The Audit Committee reviewed the independent auditor’s audit plan, letter of
engagement and risks and controls;
v. The Audit Committee has coordinated with the independent auditor to allow the
audit and associated financial report can be submitted within the appointed period.
vi. The Audit Committee reviewed the financial statements before the certified
auditor’s on-site audit, after receiving the certified auditor’s initial and final audit
opinions. The Committee communicated with auditors face to face over important
events and major accounting estimations, audit adjustment items and important
accounting policies which potentially affect the financial statements, and believes
that the financial statements are truthful, accurate and fully reflect the Company’s
actual status;
vii. The Audit Committee has submitted the 2016 Independent Auditor Summary
Report to Board for review; and
viii. The Audit Committee reviewed the Internal Control Self-assessment Report and
agreed to submit this to the Board for approval.
B. Written opinions on JMC financial statements
The Audit Committee reviewed the unaudited financial statements prepared by the
Company and issued its written opinions on January 16, 2017 as follows:
The Audit Committee reviewed the Financial Statements compiled by JMC and
believes that the Financial Statements have in all material respects reflected the
actual company status. The Audit Committee will continue to keep in close contact
with auditor. After receiving the auditor’s initial audit comments, Audit Committee will
review Company Financial Statements a second time.
The Audit Committee reviewed the financial statements prepared by JMC after the
external auditor issued its initial audit opinions, and issued its written opinions on
February 16, 2017 as follows:
i. Financial statements have been prepared according to China New GAAP and the
company’s financial policies; and
ii. The financial status reported for December 31, 2016 including Balance Sheet,
Income Statement and Cash Flow is accurate and truthful.
The Audit Committee made resolutions on the audited 2016 financial statements on
March 2, 2017 as follows:
The Audit Committee has reviewed the financial statements after the certified auditor
issued its final audit opinions. The Audit Committee believes that the financial status
reported for December 31, 2016 including Balance Sheet, Income Statement and
Cash Flow is accurate and truthful. The Audit Committee supports submitting to the
Board approval.
C. 2016 External Auditor Work Summary Report
The Audit Committee has reviewed the 2016 Audit Work Plan submitted by the
independent auditing firm PwC via communications with the PwC leading auditor.
Agreement was achieved regarding timing and content and both parties believe that
the plan ensures a comprehensive completion of the 2016 audit tasks.
The independent auditor thoroughly communicated with the management and the
Audit Committee Members regarding: accounting policies implementation, revenue
recognition, significant accounting estimates related to accrued expenses, accounting
treatment for 8 Provisions, impairment of long-term assets and R & D expenses,
related party transaction recognition and fairness and information disclosure. They
have also discussed about issues identified and the corrective actions. As a result, all
parties have a more in-depth understanding of the business status, financial status
and internal control. Therefore, a solid foundation was laid for a fair audit conclusion
issued by the independent auditor.
The Audit Committee believes that the external certified auditor has executed the
audit work consistently with the requirements of China Certified Auditor Independent
Audit Principles. The audit period is adequate and the allocation of personnel
resources is sufficient to deliver an audit report which accurately reflects the
Company’s financial position as at December 31, 2016, and the financial performance
and cash flows for the year then ended. The audit conclusion fairly reflects the
Company’s actual status.
II. 2016 Diligence Report of the Compensation Committee
In the reporting period, the Compensation Committee exercised its duties as follows:
i. reviewed and approved the Proposal on 2015 Year-end Bonus for Senior
Executives;
ii. reviewed and approved 2014 Diligence Report of the Compensation Committee;
and
iii. proposed and reviewed JMC Executive Compensation Scheme, and submit it to
the Board of Directors for approval.
The Compensation Committee’s opinions on the annual compensation of the
directors, supervisors and senior management disclosed in this Report are as follows:
The 2016 annual compensation for the Chinese-side senior management was paid
upon the principles promulgated in the JMC Executive Compensation Scheme. The
2016 annual compensation for Ford-seconded senior management personnel was
paid in accordance with revised Personnel Secondment Agreement signed between
JMC and Ford and Ford Affiliates. The annual compensation for the director and
supervisor that the Company paid abided by JMC salary management system.
In the reporting period, the annual compensation of the directors, supervisors and
senior executives disclosed in this Report was complied with JMC salary
management system, and there was neither breach nor inconsistency of this system.
7. Works of Supervisory Board
Risks found by the Supervisory Board in 2016
□Yes □√No
The Supervisory Board had no dissent on inspection items in the reporting period.
8. Compensation & Incentive Mechanism for Senior Management in the Reporting
Period
In accordance with the JMC Executive Compensation Scheme approved by the Board
of Directors in September 2016, the compensation for senior management consists of
base salary and floating bonus. The base salary level is determined according the
grade of the senior executives, and the floating bones shall be paid according to the
operating performance. 70% of the bonus will be distributed in this year, and the rest 30%
will be distributed in the next three years. The annual total income target of the senior
executives will be adjusted through using the historical market salary increase. The
Compensation Committee approved the 2016 year-end bonus of senior executives on
March 2, 2017 based on the performance of the KPIs for the senior executives, and
approved to adjust the Year 2017 total income target of the senior executives. These
plans are applicable only to the Chinese-side senior management.
9. Internal Control
I. Major defect of internal control in the reporting period
□Yes □√No
II. Internal Control Self-assessment Report
Issuance date March 25, 2017
Index www.cninfo.com.cn
Total value of assets of the entities
in scope counts as % of that
100.00%
disclosed in the consolidated
financial statements
Total value of operating revenue of
the entities in scope counts as % of
100.00%
that disclosed in the consolidated
financial statements
Deficiency Determination Criteria
Type Financial Report Non-financial Report
Material Weakness: An error that
changes the trend of results,
Material Weakness: Unscientific
changes profit to loss or loss to
decision making process such
profit Ineffective anti-fraud
as incorrect decisions that
process or any fraud involving
result in unsuccessful mergers
senior management Ineffective
and acquisitions; Major
control over accounting policies
regulatory compliance issues;
Ineffective oversight by the Audit
Frequent media reports harmful
Committee Significant Deficiency;
to the Company’s reputation; A
Errors in management reporting
lack of control within key
systems or Corporate accounting
business processes or
records that could lead to
systematic breakdown of
incorrect management decisions;
control policies
Actions inconsistent with
Material weakness identified in
Qualitative Criteria Company values, policies and
the self-assessment without any
other Corporate guidelines that
action plan implemented
are likely to significantly impact
Significant Deficiency; control
cost, quality, customer
deficiency, or combination of
satisfaction, reputation, or
control deficiencies, that does
competitive advantage; Control
not meet the criteria for material
issues in IT infrastructure or
weakness but deserves the
applications that may lead to
concerns of the Audit
impairment of Company
Committee and the Board of
operations. Any actions indicating
Directors. Minor Deficiency Any
fraud or theft that is significant in
control deficiencies that do not
value Minor Deficiency; Any
meet the criteria for material or
control deficiencies that do not
significant.
meet the criteria for material or
significant.
Material Weakness Misstatement in
the Income Statement is more than
5% of the annual profit before
taxation; Misclassification in the
Income Statement is more than
0.4% of the annual sales revenue Please refer to internal control
deficiency over financial reporting
Quantitative Criteria Adjustment of net assets in the
for the criteria for non-financial
Balance Sheet is more than 1% of reporting internal control.
the shareholders' equity Adjustment
of asset or liability in the Balance
Sheet is more than 0.6% of the total
assets; Adjustment in the Cash Flow
Statement is more than 3% of the
total net cash flow in the operating
activities. Significant Deficiency
Misstatement in the Income
Statement is more than 2.5% of the
annual profit before taxation;
Misclassification in the Income
Statement is more than 0.2% of the
annual sales revenue; Adjustment of
net assets in the Balance Sheet is
more than 0.5% of the
Shareholders’ equity; Adjustment
of asset or liability in the Balance
Sheet is more than 0.3% of the Total
assets; Adjustment in the Cash Flow
Statement is more than 1.5% of the
total net cash flow from the
operating activities. Minor Deficiency
All the deficiencies that do not meet
the quantitative criteria for
significant.
Number of Material Weakness in
financial report
Number of Material Weakness in
non-financial report
Number of Significant Deficiency in
financial report
Number of Significant Deficiency in
non-financial report
10. Internal Control Audit Report
□√Applicable □Not Applicable
Opinions in the Internal Control Audit Report
The opinions in the Internal Control Audit Report issued by Pwc Zhong Tian are as follows:
As of December 31, 2016, JMC maintained adequate control over financial statements in all the material
aspects according to the Basic Standard for Enterprise Internal Control and other relevant rules.
Internal Control Audit Report
Disclosed
Disclosed or not
Issuance date March 25, 2017
Index http://www.cninfo.com.cn
Type of Opinion Standard and unqualified opinions
Major Defect regarding non-
No
financial report or no
Abnormal opinion issued by the accounting firm
□Yes □√No
Opinion issued by the accounting firm keeps the same with that of self-assessment
report made by the Board
□√Yes □No
Chapter X Corporate Bond
Whether the Company owns the corporate bond that it lists in the securities exchange
and is undue or is not paid in full although it’s due
No.
Chapter XI Financial Statements
Type of Audit Report Standard and Unqualified Opinion
Signature date March 23, 2017
Name of Auditor PricewaterhouseCoopers Zhong Tian
CPAs LLP
Document No. of Audit Report 2017/SH-082
Independent Auditor’s Report
2017/SH-082
(Page 1 of 5)
To the Shareholders of Jiangling Motors Corporation, Ltd.
Opinion
What we have audited
The consolidated financial statements of Jiangling Motors Corporation, Ltd. (the “Company”)
and its subsidiaries (the “Group”) set out on pages 50 to 107, which comprise:
the consolidated statement of financial position as at 31 December 2016;
the consolidated statement of comprehensive income for the year then ended;
the consolidated statement of changes in equity for the year then ended;
the consolidated statement of cash flows for the year then ended; and
notes to the consolidated financial statements, which include a summary of significant
accounting policies.
Our opinion
In our opinion, the consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as at 31 December 2016, and of its
consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with International Financial Reporting Standards (“IFRSs”).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (“ISAs”).
Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Consolidated Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Independence
We are independent of the Group in accordance with the Code of Ethics for Professional
Accountants of the Chinese Institute of Certified Public Accountants (“CICPA Code”), and we
have fulfilled our other ethical responsibilities in accordance with the CICPA Code.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the consolidated financial statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Key audit matters identified in our audit are summarised as follows:
Research and development expenditures
Impairment of long term assets
2017/SH-082
(Page 2 of 5)
Key Audit Matter How our audit addressed the
Key Audit Matter
Research and development We obtained a breakdown, by value, of all individual
expenditures research and development projects and reconciled this
to the amounts of research and development expenses
Refer to note 14 to the and capitalised research and development projects,
consolidated financial which were recorded in the general ledger, identifying
statements. no reconciling differences.
We focussed on this area due to We tested the projects where research and
the incurred amount of research development expenses were in excess of
and development expenditures RMB20,000,000, together with a sample of randomly
(RMB1,937,313,000 in 2016), the selected immaterial projects from the remaining
amount of the development costs population, as follows:
capitalised (RMB124,587,000 in We obtained the lists of expenses by nature on
2016), and the fact that there is selected projects and inspected contracts and
management’s judgement underlying invoices which were directly related to
involved in assessing whether the those projects. We also checked the reasonableness
criteria set out in the accounting of the indirect expenses attributable to relevant
policies (note 2.8(2)) required for projects, including employment costs and
capitalisation of such depreciation expenses, by understanding the
allocating method and inspecting the supporting
development costs had been met,
for the assembling and allocating process of those
particularly:
indirect expenses.
The technical feasibility of the We also checked the recorded research and
project. development costs of those projects with budgeted
The likelihood of the project amounts and discuss with project manager
generating sufficient future regarding to the status of selected projects.
economic benefits.
We found no material issues arising from the above
We had particular regard to the procedures.
fact that the Group has continued
to invest in the technical We obtained the lists of capitalised projects and tested
improvements for its automobile those projects with the capitalised amounts over
products, and therefore we RMB25,000,000. We obtained explanations from
focussed on the accuracy and management of why those projects were considered to
completeness of recorded be capital in nature, in terms of how the specific
research and development requirements of the relevant accounting standards,
expenditures and whether the most notably of IAS 38 were met. We also conducted
economic benefits of the projects interviews with individual project managers
under development supported responsible for those projects selected to corroborate
the amounts capitalised. these explanations, which enabled us to independently
assess whether the projects met all the criteria for
As part of our work we also capitalisation set out in accounting standards. In
focused on management’s addition, we reviewed the selected projects’ inspection
judgements regarding whether reports at different phases including the reports which
capitalised costs were of a indicated that the subject projects entered into
development stage rather than developmental stage and related management and
research stage (which would result board meeting minutes. We found the information we
in the costs being expensed rather gathered from those documents to be consistent with
than capitalised), and whether explanations obtained from individual project
costs, including employment managers and to be in line with management’s
(payroll) costs, were directly assessment that the costs met the relevant
attributable to relevant projects. capitalisation criteria. We considered management’s
judgments on whether those selected projects should
be capitalised were appropriate.
2017/SH-082
(Page 3 of 5)
Key Audit Matter How our audit addressed the
Key Audit Matter
Impairment of long term We evaluated management’s impairment calculations
assets assessing the future cash flow forecasts used in the
models, and the process by which they were drawn up,
Refer to note 12 to the including comparing them to the latest Board
consolidated financial approved budgets, and testing the underlying
statements. calculations. We found that management had followed
their clearly documented process for drawing up future
We focused on this area because cash flow forecasts, which was subject to timely
JMC Heavy Duty Vehicle Co., oversight and challenge by the directors and which was
Ltd. (“JMCH”), the subsidiary consistent with the Board’s approved budgets.
of the Group has incurred
accumulated losses of We challenged:
RMB622,424,000 as at 31 the key assumptions for long-term growth rates in
December 2016, which the forecasts by comparing them to historical
indicates there may be results, and economic and industry forecasts;
impairment on its long term the discount rate by assessing the cost of capital for
assets, mainly including the CGU and comparable organisations.
property, plant and equipment
with the amount of We discussed the action plans in place and evaluated
RMB861,591,000 The the reasonableness of those plans, by comparing those
determination of whether or not action plans with JMC’s performance in prior years,
an impairment charge for long automobile industry developing trends and existing
term assets for JMCH is market player’s performance. We considered those
necessary to involve significant action plans were reasonably set in place.
judgements of management
about the future results of the We also tested whether the required CGU profitability
business and assessment of improvement had ever been attained by the relevant
future plans of the JMCH’s CGU historically. We compared the current year actual
operations. results with the figures included in the prior year
forecast to consider whether any forecasts included
Management considers JMCH assumptions that, with hindsight, had been optimistic.
to be a cash generating unit We found the actual results and forecasted figures
(“CGU”) and has calculated the were consistent.
recoverable amount of this CGU
as the higher of an asset’s or We challenged management on the adequacy of their
cash-generating unit’s fair value sensitivity calculations over the CGU. We determined
less costs of disposal and its that the calculations were most sensitive to
value in use. The value in use is assumptions for revenue growth rates and discount
based on discounted future cash rates. We calculated the degree to which these
flow forecasts over which the assumptions would need to move before an
management make judgements impairment conclusion was triggered. We discussed
on certain key inputs including, the likelihood of such a movement with management
for example, discount rates and and agreed with their conclusion that it was unlikely.
long term growth rates.
2017/SH-082
(Page 4 of 5)
Other Information
Management is responsible for the other information. The other information comprises all of
the information included in the annual report other than the consolidated financial
statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to
read the other information and, in doing so, consider whether the other information is
materially inconsistent with the consolidated financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of Management and Audit Committee for the
Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated
financial statements in accordance with IFRSs, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless management either
intends to liquidate the Group or to cease operations, or have no realistic alternative but to do
so.
The Audit Committee is responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
2017/SH-082
(Page 5 of 5)
Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s
ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related
disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial
statements represent the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of
the entities or business activities within the Group to express an opinion on the
consolidated financial statements. We are responsible for the direction, supervision
and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with Audit Committee regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide Audit Committee with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with Audit Committee, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Ye Jun.
PricewaterhouseCoopers Zhong Tian LLP
Shanghai, the People’s Republic of China
23 March 2017
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2016
(All amounts in thousands of RMB unless otherwise stated)
Year ended 31 December
Note 2016
Revenue 5 26,633,949 24,527,893
Sales tax (823,494) (788,236)
Cost of sales 6 (20,612,723) (18,131,135)
Gross profit 5,197,732 5,608,522
Distribution expenses 6 (1,961,535) (1,591,235)
Administrative expenses 6 (2,498,485) (2,470,489)
Impairment charge of non-current assets (2,795) (3,016)
Other income 8 514,415 683,136
Operating profit 1,249,332 2,226,918
Finance income 9 223,517 270,985
Finance expenses 9 (3,882) (2,344)
Finance income-net 9 219,635 268,641
Share of profit of investments accounted for using the
equity method 15b 12,624 14,045
Profit before income tax 1,481,591 2,509,604
Income tax expense 10 (163,575) (287,543)
Profit for the year 1,318,016 2,222,061
Other comprehensive income:
Item that will not be reclassified subsequently to profit or
loss
- Remeasurements of retirement benefits obligations (1,083) (2,707)
- Income tax relating to remeasurements of retirement
benefit obligations 271
Other comprehensive income for the year, net of tax (812) (2,030)
Total comprehensive income for the year 1,317,204 2,220,031
Profit attributable to:
Shareholders of the Company 1,318,016 2,222,061
Total comprehensive income attributable to:
Shareholders of the Company 1,317,204 2,220,031
Earnings per share for profit attributable to the
shareholders of the Company for the year
(expressed in RMB per share)
- Basic and diluted 11 1.53 2.57
The notes on pages 55 to 107 are an integral part of these consolidated financial statements.
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
(All amounts in thousands of RMB unless otherwise stated)
As at 31 December
Note 2016
Assets
Non-current assets
Property, plant and equipment 12 6,688,530 6,323,546
Lease prepayment 13 632,408 645,608
Intangible assets 14 158,160 41,705
Investments accounted for using the equity method 15b 39,893 40,993
Other non-current assets 97,549 64,487
Deferred income tax assets 16 554,488 473,933
8,171,028 7,590,272
Current assets
Financial assets at fair value through profit or loss 8,539
Inventories 17 1,934,092 1,730,930
Trade and other receivables and prepayments 18 2,625,808 2,793,770
Cash and cash equivalents 19 11,666,222 8,848,040
Restricted cash 463 -
Assets classified as held for sale 20 87,637 87,637
16,322,761 13,460,454
Total assets 24,493,789 21,050,726
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
AS AT 31 DECEMBER 2016
(All amounts in thousands of RMB unless otherwise stated)
As at 31 December
Note 2016
Equity and liabilities
Equity attributable to shareholders of the
Company
Share capital 21 863,214 863,214
Share premium 816,609 816,609
Other reserves 22 452,126 452,938
Retained earnings 10,277,287 9,848,381
Total equity 12,409,236 11,981,142
Liabilities
Non-current liabilities
Borrowings 23 4,543 4,678
Deferred income tax liabilities 16 27,383 28,392
Retirement benefit obligations 24 53,627 52,273
Provisions for warranty and other liabilities 25 130,987 104,557
Other non-current liabilities 320
216,860 190,300
Current liabilities
Trade and other payables 26 11,605,178 8,708,829
Current income tax liabilities 98,860 50,305
Borrowings 23 454
Retirement benefit obligations 24 4,561 4,560
Provisions for warranty and other liabilities 25 153,640 110,165
Other current liabilities 5,000 5,000
11,867,693 8,879,284
Total liabilities 12,084,553 9,069,584
Total equity and liabilities 24,493,789 21,050,726
The notes on pages 55 to 107 are an integral part of these consolidated financial statements.
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2016
(All amounts in thousands of RMB unless otherwise stated)
Attributable to shareholders of the Company
Share Share Other Retained Total
Note capital premium reserves earnings equity
Balance at 1 January 2015 863,214 816,609 454,968 8,463,638 10,598,429
Profit for the year - - - 2,222,061 2,222,061
Other comprehensive income
- Remeasurements of retirement
benefit obligations, net of tax - - (2,030) - (2,030)
Dividends relating to 2014 - - - (837,318) (837,318)
Balance at 31 December 2015 863,214 816,609 452,938 9,848,381 11,981,142
Balance at 1 January 2016 863,214 816,609 452,938 9,848,381 11,981,142
Profit for the year - - - 1,318,016 1,318,016
Other comprehensive income
- Remeasurements of retirement
benefit obligations, net of tax - - (812) - (812)
Dividends relating to 2015 27 - - - (889,110) (889,110)
Balance at 31 December 2016 863,214 816,609 452,126 10,277,287 12,409,236
The notes on pages 55 to 107 are an integral part of these consolidated financial statements.
JIANGLING MOTORS CORPORATION, LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016
(All amounts in thousands of RMB unless otherwise stated)
Year ended 31 December
Note 2016
Cash flows from operating activities
Cash generated from operations 28 4,789,706 2,349,083
Interest paid (393) (340)
Income tax paid (196,313) (424,269)
Net cash generated from operating activities 4,593,000 1,924,474
Cash flows from investing activities
Purchase of property, plant and equipment (PPE) (1,144,340) (1,542,900)
Other cash paid relating to investing activities (1,138) (6,561)
Proceeds from disposal of PPE 28 2,765 43,669
Interest received 248,605 291,744
Dividends received 13,724 15,657
Other cash received from investing activities 5,236 1,239
Net cash used in investing activities (875,148) (1,197,152)
Cash flows from financing activities
Repayments of borrowings (433) (411)
Dividends paid to shareholders of the Company (897,770) (840,961)
Other cash paid relating to financing activities (1,467) (1,378)
Net cash used in financing activities (899,670) (842,750)
Net increase/(decrease) in cash and cash equivalents 2,818,182 (115,428)
Cash and cash equivalents at beginning of year 8,848,040 8,963,468
Effects of exchange rate changes - -
Cash and cash equivalents at end of year 19 11,666,222 8,848,040
The notes on pages 55 to 107 are an integral part of these consolidated financial statements.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
1 General information
Jiangling Motors Corporation, Ltd. (the “Company”) was established in the People’s Republic
of China (the “PRC”) under the Company Law of the PRC and according to the approval of
Hongban (1992) No. 005 of Nangchang Revolution and Authorisation Group of Company’s
Joint Stock as a joint stock limited company to hold certain operational assets and liabilities of
the automotive manufacturing business of Jiangxi Motors Manufacturing Factory, which was
owned by Jiangling Motors Corporation Group (“JMCG”). The legal representative’s operating
license of the Company is No. 913600006124469438.
The address of the Company’s registered office is No.509, Northern Yingbin Avenue,
Nanchang, Jiangxi Province, the PRC.
In December 1993, the Company issued 494,000,000 domestic ordinary shares (“A share”).
In addition, the Company issued 25,214,000 A shares as bonus shares to the existing
shareholders in 1994. The bonus shares were issued by utilisation of the Company’s retained
earnings.
In 1995, the Company issued 174,000,000 domestically listed foreign shares (“B share”) and
the Company issued 170,000,000 additional B shares in 1998.
As at 31 December 2016, 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 23 March 2017.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial
statements are set out below. These policies have been consistently applied to all the years
presented, unless otherwise stated.
2.1 Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with all
applicable International Financial Reporting Standards (“IFRS”). The consolidated financial
statements have been prepared under the historical cost convention, as modified by the
revaluation of financial assets and financial liabilities at fair value through profit or loss.
The preparation of financial statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the
process of applying the Group’s accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimations are significant to the
consolidated financial statements are disclosed in Note 4.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.1 Basis of preparation (continued)
2.1.1 Changes in accounting policy and disclosures
(a) New and amended standards adopted by the group
Standards, amendments and interpretations which are effective for the financial year beginning
on 1 January 2016 are not material to the Group.
(b) New standards and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are effective
for annual periods beginning after 1 January 2016, and have not been applied in preparing
these consolidated financial statements. None of these is expected to have a significant effect
on the consolidated financial statements of the Group, except the following set out below:
IFRS 9, ‘Financial instruments’, addresses the classification, measurement and
recognition of financial assets and financial liabilities. The complete version of IFRS 9
was issued in July 2014. It replaces the guidance in IAS 39 that relates to the
classification and measurement of financial instruments. IFRS 9 retains but simplifies the
mixed measurement model and establishes three primary measurement categories for
financial assets: amortised cost, fair value through OCI and fair value through P&L. The
basis of classification depends on the entity's business model and the contractual cash
flow characteristics of the financial asset. Investments in equity instruments are required
to be measured at fair value through profit or loss with the irrevocable option at inception
to present changes in fair value in OCI not recycling. There is now a new expected credit
losses model that replaces the incurred loss impairment model used in IAS 39. For
financial liabilities there were no changes to classification and measurement except for
the recognition of changes in own credit risk in other comprehensive income, for liabilities
designated at fair value through profit or loss. IFRS 9 relaxes the requirements for hedge
effectiveness by replacing the bright line hedge effectiveness tests. It requires an
economic relationship between the hedged item and hedging instrument and for the
‘hedged ratio’ to be the same as the one management actually use for risk management
purposes.
Contemporaneous documentation is still required but is different to that currently
prepared under IAS 39. The standard is effective for accounting periods beginning on or
after 1 January 2018. Early adoption is permitted. The Group is yet to assess IFRS 9’s
full impact.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.1 Basis of preparation (continued)
2.1.1 Changes in accounting policy and disclosures (continued)
(b) New standards and interpretations not yet adopted (continued)
IFRS 15, 'Revenue from contracts with customers' deals with revenue recognition and
establishes principles for reporting useful information to users of financial statements
about the nature, amount, timing and uncertainty of revenue and cash flows arising from
an entity’s contracts with customers. Revenue is recognised when a customer obtains
control of a good or service and thus has the ability to direct the use and obtain the
benefits from the good or service. The standard replaces IAS 18 'Revenue' and IAS 11
'Construction contracts' and related interpretations. The standard is effective for annual
periods beginning on or after 1 January 2018 and earlier application is permitted. The
Group is assessing the impact of IFRS 15.
IFRS 16, 'Leases' will result in almost all leases being recognised on the balance sheet,
as the distinction between operating and finance leases is removed. Under the new
standard, an asset (the right to use the leased item) and a financial liability to pay rentals
are recognised. The only exceptions are short-term and low-value leases. The
accounting for lessors will not significantly change.
The new standard is mandatory for financial years commencing on or after 1 January
2019. At this stage, the Group does not intend to adopt the standard before its effective
date.
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be
expected to have a material impact on the Group.
2.2 Subsidiaries
A subsidiary is an entity (including a structured entity) over which the Group has control. The
Group controls an entity when the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those returns through its power over
the entity. Subsidiaries are consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control ceases.
Investments in subsidiaries are accounted for at cost less impairment. Cost includes direct
attributable costs of investment. The results of subsidiaries are accounted for by the Company
on the basis of dividend received and receivable.
Impairment testing of the investments in subsidiaries is required upon receiving a dividend
from these investments if the dividend exceeds the total comprehensive income of the
subsidiary in the period the dividend is declared or if the carrying amount of the investment in
the separate financial statements exceeds the carrying amount in the consolidated financial
statements of the investee’s net assets including goodwill.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.3 Associates
An associate is an entity over which the Group has significant influence but not control,
generally accompanying a shareholding of between 20% and 50% of the voting rights.
Investments in associates are accounted for using the equity method of accounting. Under the
equity method, the investment is initially recognised at cost, and the carrying amount is
increased or decreased to recognise the investor’s share of the profit or loss of the investee
after the date of acquisition.
The Group's share of post-acquisition profit or loss is recognised in profit or loss, and its share
of post-acquisition movements in other comprehensive income is recognised in other
comprehensive income with a corresponding adjustment to the carrying amount of the
investment. When the Group's share of losses in an associate equals or exceeds its interest in
the associate, including any other unsecured receivables, the Group does not recognise
further losses, unless it has incurred legal or constructive obligations or made payments on
behalf of the associate.
The Group determines at each reporting date whether there is any objective evidence that the
investment in the associate is impaired. If this is the case, the Group calculates the amount of
impairment as the difference between the recoverable amount of the associate and its
carrying value and recognises the amount adjacent to ‘share of profit of investments
accounted for using equity method’ in profit or loss.
Profits and losses resulting from upstream and downstream transactions between the Group
and its associate are recognised in the Group’s financial statements only to the extent of
unrelated investor’s interests in the associates. Unrealised losses are eliminated unless the
transaction provides evidence of an impairment of the asset transferred. Accounting policies of
associates have been changed where necessary to ensure consistency with the policies
adopted by the Group.
Gains or losses on dilution of equity interest in associates are recognised in profit or loss.
2.4 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided
to the chief operating decision-maker. The chief operating decision-maker, who is responsible
for allocating resources and assessing performance of the operating segments, has been
identified as the executive committee that makes strategic decisions.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.5 Foreign currency translation
(1) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using
the currency of the primary economic environment in which the entity operates (the “functional
currency”). The consolidated financial statements are presented in Renminbi (“RMB”), which is
the Company’s functional and the Group’s presentation currency.
(2) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions or valuation where items are remeasured.
Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss, except when deferred in
equity as qualifying cash flow hedges and qualifying net investment hedges.
Foreign exchange gains and losses are presented in profit or loss within ‘other income/
(expense)-net’.
Changes in the fair value of monetary securities denominated in foreign currency classified as
available-for-sale are analysed between translation differences resulting from changes in the
amortised cost of the security and other changes in the carrying amount of the security.
Translation differences related to changes in amortised cost are recognised in profit or loss,
and other changes in carrying amount are recognised in other comprehensive income.
Translation differences on non-monetary financial assets and liabilities such as equities held
at fair value through profit or loss are recognised in profit or loss as part of the fair value gain
or loss. Translation differences on non-monetary financial assets, such as equities classified
as available-for-sale, are included in other comprehensive income.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.6 Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and
any impairment losses. Historical cost includes expenditure that is directly attributable to the
acquisition or construction of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be measured reliably. The carrying
amount of the replaced part is derecognised. All other repairs and maintenance are charged to
profit or loss during the financial period in which they are incurred.
Depreciation is calculated using the straight-line method to allocate their cost to their residual
values over their estimated useful lives, as follows:
Buildings 35-40 years
Plant and machinery 10-15 years
Motor vehicles 6-10 years
Moulds 5 years
Electronic and other equipment 5-7 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end
of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount (Note 2.9).
Gains and losses on disposals are determined by comparing the proceeds with the carrying
amount and are recognised within ‘other income/(expense) - net’ in profit or loss.
Assets under construction represent buildings under construction and plant and equipment
pending installation, and are stated at cost. Costs include construction and acquisition costs. No
provision for depreciation is made on assets under construction until such time as the relevant
assets are completed and ready for intended use. When the assets concerned are brought into
use, the costs are transferred to property, plant and equipment and depreciated in accordance
with the policy as stated above.
2.7 Lease prepayment
Lease prepayment represents upfront prepayment made for the land use rights, and is
expensed in profit or loss on a straight-line basis over the period of the lease or when there is
impairment, the impairment is expensed in profit or loss.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.8 Intangible assets
(1) Goodwill
Goodwill arises on the acquisition of subsidiaries represents the excess of the consideration
transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date
fair value of any previous equity interest in the acquiree over the fair value of the identified net
assets acquired.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated
to each of the cash-generating units (“CGUs”), or groups of CGUs, that is expected to benefit
from the synergies of the combination. Each unit or group of units to which the goodwill is
allocated represents the lowest level within the entity at which the goodwill is monitored for
internal management purposes. Goodwill is monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in
circumstances indicate a potential impairment. The carrying value of the CGU containing the
goodwill is compared to the recoverable amount, which is the higher of value in use and the fair
value less costs of disposal. Any impairment is recognised immediately as an expense and is
not subsequently reversed.
(2) Research and development
Research expenditure is recognised as an expense as incurred. Costs incurred on development
projects (relating to the design and testing of new or improved products) are recognised as
intangible assets when the following criteria are fulfilled:
(a) it is technically feasible to complete the intangible asset so that it will be available for use or
sale;
(b) management intends to complete the intangible asset and use or sell it;
(c) there is an ability to use or sell the intangible asset;
(d) it can be demonstrated how the intangible asset will generate probable future economic
benefits;
(e) adequate technical, financial and other resources to complete the development and to use
or sell the intangible asset are available; and
(f) the expenditure attributable to the intangible asset during its development can be reliably
measured.
The development cost of an internally generated intangible asset is the sum of the expenditure
incurred from the date the asset meets the recognition criteria above to the date when it is
available for use. The development costs capitalized in connection with the intangible asset
include costs of materials and services used or consumed and employee costs incurred in the
creation of the asset.
Capitalised development costs are recorded as intangible assets and amortised from the point at
which the asset is ready for use on a straight-line basis over its useful life.
Other development expenditures that do not meet these criteria are recognised as an expense
as incurred. Development costs previously recognised as an expense are not recognised as an
asset in a subsequent period.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.8 Intangible assets (continued)
(3) Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire
and bring to use the specific software. These costs are amortised over their estimated useful
lives of 5 years.
(4) Non-patent technology
Non-patent technology is capitalised from the development cost. These costs are amortised over
their estimated useful lives of 5 years.
2.9 Impairment of non-financial assets
Intangible assets that have an indefinite useful life or intangible assets not ready to use are not
subject to amortisation and are tested annually for impairment. Assets that are subject to
amortisation are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the
amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs of disposal and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units). Non-financial assets other than
goodwill that suffered an impairment are reviewed for possible reversal of the impairment at
each reporting date.
2.10 Non-current assets held-for-sale
Non-current assets are classified as held for sale when their carrying amount is to be recovered
principally through a sale transaction and a sale is considered highly probable. The non-current
assets (except for certain assets as explained below), are stated at the lower of carrying amount
and fair value less costs to sell. Deferred tax assets and financial assets (other than investments
in subsidiaries and associates), which are classified as held for sale, would continue to be
measured in accordance with the policies set out elsewhere in Note 2.
2.11 Financial assets
(1) Classification
The Group classifies its financial assets in the following categories: at fair value through profit
or loss, loans and receivables, and available-for-sale. The classification depends on the
purpose for which the financial assets were acquired. Management determines the
classification of its financial assets at initial recognition.
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A
financial asset is classified in this category if acquired principally for the purpose of selling in
the short term. Derivatives are also categorised as held for trading unless they are designated
as hedges. Assets in this category are classified as current assets if expected to be settled
within 12 months; otherwise, they are classified as non-current.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.11 Financial assets (continued)
(1) Classification (continued)
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They are included in current assets, except
for the amounts that are settled or expected to be settled more than 12 months after the end
of the reporting period. These are classified as non-current assets.
(c) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this
category or not classified in any of the other categories. They are included in non-current
assets unless the investment matures or management intends to dispose of it within 12
months of the end of the reporting period.
(2) Recognition and measurement
Regular way purchases and sales of financial assets are recognised on the trade-date-the
date on which the Group commits to purchase or sell the asset. Investments are initially
recognised at fair value plus transaction costs for all financial assets not carried at fair value
through profit or loss. Financial assets carried at fair value through profit or loss are initially
recognised at fair value, and transaction costs are expensed in profit or loss. Financial assets
are derecognised when the rights to receive cash flows from the investments have expired or
have been transferred and the Group has transferred substantially all risks and rewards of
ownership. Available-for-sale financial assets and financial assets at fair value through profit
or loss are subsequently carried at fair value. Loans and receivables are subsequently carried
at amortised cost using the effective interest method.
Gains or losses arising from changes in the fair value of the ‘financial assets at fair value
through profit or loss’ category are presented in profit or loss within ‘other income/(expense)-
net’ in the period in which they arise. Dividend income from financial assets at fair value
through profit or loss is recognised in profit or loss as part of other income when the Group’s
right to receive payments is established.
Changes in the fair value of monetary and non-monetary securities classified as available-for-
sale are recognised in other comprehensive income.
When securities classified as available-for-sale are sold or impaired, the accumulated fair
value adjustments recognised in equity are included in profit or loss as ‘gains and losses from
investment securities’.
Interest on available-for-sale securities calculated using the effective interest method is
recognised in profit or loss as part of other income. Dividends on available-for-sale equity
instruments are recognised in profit or loss as part of other income when the Group’s right to
receive payments is established.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.12 Financial liabilities at fair value through profit or loss and offsetting financial
instruments
Financial liabilities at fair value through profit or loss are financial liabilities held for trading. A
financial liability is classified in this category if incurred principally for the purpose of selling in the
short term. A financial liability initially recognised at fair value, and transaction costs are
expensed in profit or loss. Subsequent measurements are measured at fair value. Liabilities in
this category are classified as current liabilities if expected to be settled within 12 months;
otherwise, they are classified as non-current. A financial liability is derecognised when it is
extinguished.
Financial assets and liabilities are offset and the net amount reported in the statement of
financial position when there is a legally enforceable right to offset the recognised amounts
and there is an intention to settle on a net basis or realise the asset and settle the liability
simultaneously. The legally enforceable right must not be contingent on future events and
must be enforceable in the normal course of business and in the event of default, insolvency
or bankruptcy of the Company or the counterparty.
2.13 Impairment of financial assets
(1) Assets carried at amortised cost
The Group assesses at the end of each reporting period whether there is objective evidence
that a financial asset or group of financial assets is impaired. A financial asset or a group of
financial assets is impaired and impairment losses are incurred only if there is objective
evidence of impairment as a result of one or more events that occurred after the initial
recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the
estimated future cash flows of the financial asset or group of financial assets that can be
reliably estimated.
Evidence of impairment may include indications that the debtors or a group of debtors is
experiencing significant financial difficulty, default or delinquency in interest or principal
payments, the probability that they will enter bankruptcy or other financial reorganisation, and
where observable data indicate that there is a measurable decrease in the estimated future
cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For loans and receivables category, the amount of the loss is measured as the difference
between the asset’s carrying amount and the present value of estimated future cash flows
(excluding future credit losses that have not been incurred) discounted at the financial asset’s
original effective interest rate. The carrying amount of the asset is reduced and the amount of
the loss is recognised in profit or loss. If a loan or held-to-maturity investment has a variable
interest rate, the discount rate for measuring any impairment loss is the current effective
interest rate determined under the contract. As a practical expedient, the Group may
measure impairment on the basis of an instrument’s fair value using an observable market
price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease
can be related objectively to an event occurring after the impairment was recognised (such as
an improvement in the debtor’s credit rating), the reversal of the previously recognised
impairment loss is recognised in profit or loss.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.13 Impairment of financial assets (continued)
(2) Assets classified as available-for-sale
The Group assesses at the end of each reporting period whether there is objective evidence
that a financial asset or a group of financial assets is impaired.
For debt securities, if any such evidence exists the cumulative loss – measured as the
difference between the acquisition cost and the current fair value, less any impairment loss
on that financial asset previously recognised in profit or loss – is reclassified from equity and
recognised in profit or loss. If, in a subsequent period, the fair value of a debt instrument
classified as available-for-sale increases and the increase can be objectively related to an
event occurring after the impairment loss was recognised in profit or loss, the impairment loss
is reversed through profit or loss.
For equity investments, a significant or prolonged decline in the fair value of the security
below its cost is also evidence that the assets are impaired. If any such evidence exists the
cumulative loss – measured as the difference between the acquisition cost and the current
fair value, less any impairment loss on that financial asset previously recognised in profit or
loss – is reclassified from equity and recognised in profit or loss. Impairment losses
recognised in profit or loss on equity instruments are not reversed through profit or loss.
2.14 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the
weighted average cost method. The cost of finished goods and work in progress comprises raw
materials, direct labour, other direct costs and related production overheads (based on normal
operating capacity). It excludes borrowing costs. Net realisable value is the estimated selling
prices in the ordinary course of business, less applicable variable distribution expenses.
2.15 Trade and other receivables
Trade receivables are amounts due from customers for merchandise sold or services performed
in the ordinary course of business. If collection of trade and other receivables is expected in one
year or less (or in the normal operating cycle of the business if longer), they are classified as
current assets. If not, they are presented as non-current assets.
Trade and other receivables are recognised initially at fair value and subsequently measured
at amortised cost using the effective interest method, less allowance for impairment. See Note
2.11(2) for further information about the Group’s accounting for trade receivables and Note
2.13 for a description of the Group’s impairment policies.
2.16 Cash and cash equivalents
In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand,
deposits held at call with banks and other short-term highly liquid investments with original
maturities of three months or less.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.17 Share capital
Share capital consists of “A” and “B” shares.
Incremental costs directly attributable to the issue of new shares are shown in equity as a
deduction, net of tax, from the proceeds.
Where any group company purchases the Company’s equity share capital (treasury shares), the
consideration paid, including any directly attributable incremental costs (net of income taxes) is
deducted from equity attributable to owners of the Company until the shares are cancelled or
reissued. Where such shares are subsequently reissued, any consideration received, net of any
directly attributable incremental transaction costs and the related income tax effects, is included
in equity attributable to the Company’s shareholders.
2.18 Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the
ordinary course of business from suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less (or in the normal operating cycle of the business if
longer). If not, they are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised
cost using the effective interest method.
2.19 Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
subsequently carried at amortised cost; any difference between the proceeds (net of transaction
costs) and the redemption value is recognised in profit or loss over the period of the borrowings
using the effective interest method.
Borrowings are removed from the balance sheet when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount of a financial
liability that has been extinguished or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as
other income or finance costs.
Borrowings are classified as current liabilities unless the Group has an unconditional right to
defer settlement of the liability for at least 12 months after the end of the reporting period.
2.20 Borrowing costs
General and specific borrowing costs directly attributable to the acquisition, construction or
production of qualifying assets, which are assets that necessarily take a substantial period of
time to get ready for their intended use or sale, are added to the cost of those assets, until such
time as the assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.20 Borrowing costs (continued)
Borrowing costs include interest expense, finance charges in respect of finance lease and
exchange differences arising from foreign currency borrowings to the extent that they are
regarded as an adjustment to interest costs. The exchange gains and losses that are an
adjustment to interest costs include the interest rate differential between borrowing costs that
would be incurred if the entity had borrowed funds in its functional currency, and the borrowing
costs actually incurred on foreign currency borrowings. Such amounts are estimated based on
interest rates on similar borrowings in the entity’s functional currency.
When the construction of the qualifying assets takes more than one accounting period, the
amount of foreign exchange differences eligible for capitalisation is determined for each annual
period and are limited to the difference between the hypothetical interest amount for the
functional currency borrowings and the actual interest incurred for foreign currency borrowings.
Foreign exchange differences that did not meet the criteria for capitalisation in previous years
should not be capitalised in subsequent years.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.21 Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or
loss, except to the extent that it relates to items recognised in other comprehensive income or
directly in equity. In this case the tax is also recognised in other comprehensive income or
directly in equity, respectively.
(1) Current income tax
The current income tax charge is calculated on the basis of the tax laws enacted or
substantively enacted at the balance sheet date in the PRC. Management periodically evaluates
positions taken in tax returns with respect to situations in which applicable tax regulation is
subject to interpretation. It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
(2) Deferred income tax
Inside basis differences
Deferred income tax is recognised, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated
financial statements. However, deferred tax liabilities are not recognised if they arise from the
initial recognition of goodwill, the deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the
time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax
is determined using tax rates (and laws) that have been enacted or substantively enacted by the
balance sheet date and are expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future
taxable profit will be available against which the temporary differences can be utilised.
Outside basis differences
Deferred income tax liabilities are provided on taxable temporary differences arising from
investments in subsidiaries, associates and joint arrangements, except for deferred income tax
liability where the timing of the reversal of the temporary difference is controlled by the Group
and it is probable that the temporary difference will not reverse in the foreseeable future.
Generally the Group is unable to control the reversal of the temporary difference for associates.
Only when there is an agreement in place that gives the Group the ability to control the reversal
of the temporary difference in the foreseeable future, deferred tax liability in relation to taxable
temporary differences arising from the associate’s undistributed profits is not recognised.
Deferred income tax assets are recognised on deductible temporary differences arising from
investments in subsidiaries and associate only to the extent that it is probable the temporary
difference will reverse in the future and there is sufficient taxable profit available against which
the temporary difference can be utilised.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.21 Current and deferred income tax (continued)
(3) Offsetting
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to
offset current tax assets against current tax liabilities and when the deferred income taxes
assets and liabilities relate to income taxes levied by the same taxation authority on either the
taxable entity or different taxable entities where there is an intention to settle the balances on a
net basis.
2.22 Employee benefits
(1) Pension obligations
The Group contributes on a monthly basis to a defined contribution retirement scheme managed
by the PRC government. The contribution to the scheme is charged to profit or loss as and
when incurred. The Group’s obligations are determined at a certain percentage of the salaries of
the employees.
In addition, the Group provides supplementary pension subsidies to certain qualified employees.
Such supplementary pension subsidies are considered as under defined benefit plans. The
liability recognised in the statement of financial position in respect of these defined benefit plans
is the present value of the defined benefit obligation at the balance sheet date less the fair value
of plan assets, together with adjustments for recognised actuarial gains or losses and past
service cost. The defined benefit obligation is calculated annually by independent actuaries
using the projected unit credit method. The present value of the defined benefit obligation is
determined by discounting the estimated future cash outflows according to the terms of the
related pension liability.
The current service cost of the defined benefit plan, recognised in profit or loss in employee
benefit expense, except where included in the cost of an asset, reflects the increase in the
defined benefit obligation results from employee service in the current year, benefit changes,
curtailments and settlements.
Past-service costs are recognised immediately in profit or loss.
The net interest cost is calculated by applying the discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets. This cost is included in employee benefit
expense in profit or loss.
Actuarial gains and losses arising from experience adjustments and changes in actuarial
assumptions are charged or credited to equity in other comprehensive income in the period in
which they arise.
(2) Housing fund and other benefits
The Group’s full-time employees are entitled to participate in a state-sponsored housing fund.
The fund can be used by the employees for the purchase of apartment accommodation, or
may be withdrawn upon their retirement. The Group is required to make annual contributions
to the state-sponsored housing fund equivalent to a certain percentage of the employees’
salaries.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.22 Employee benefits (continued)
(3) Bonus entitlement
The expected cost of bonus payments is recognised as a liability when the Group has a
present legal or constructive obligation as a result of services rendered by employees and a
reliable estimate of the obligation can be made. Liabilities for bonus are expected to be settled
within twelve months and are measured at the amounts expected to be paid when they are
settled.
2.23 Provisions
Provisions, mainly warranty costs, are recognised when: the Group has a present legal or
constructive obligation as a result of past events; it is probable that an outflow of resources will
be required to settle the obligation; and the amount has been reliably estimated. Provisions are
not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect to any one item included in the same
class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to
settle the obligation using a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the obligation. The increase in the provision due to
passage of time is recognised as interest expense.
2.24 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable, and
represents amounts receivable for goods supplied, stated net of discounts returns and value
added taxes. The Group recognises revenue when the amount of revenue can be reliably
measured; when it is probable that future economic benefits will flow to the entity; and when
specific criteria have been met for each of the Group’s activities, as described below. The Group
bases its estimates of return on historical results, taking into consideration the type of customer,
the type of transaction and the specifics of each arrangement.
(1) Sales of goods
Revenue from the sale of goods is recognised when significant risks and rewards of ownership
of the goods are transferred to the customer, the customer has accepted the products and
collectability of the related receivables is reasonably assured.
(2) Rental income
Rental income is recognised on a straight-line basis over the period of the rental contracts.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
2 Summary of significant accounting policies (continued)
2.25 Interest income
Interest income is recognised using the effective interest method. When a loan and receivable is
impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated
future cash flow discounted at the original effective interest rate of the instrument, and continues
unwinding the discount as interest income. Interest income on impaired loan and receivables
are recognised using the original effective interest rate.
2.26 Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases. Payments made under operating leases (net of any
incentives received from the lessor) are charged to profit or loss on a straight-line basis over the
period of the lease.
2.27 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s
financial statements in the period in which the dividends are approved by the Company’s
shareholders, where appropriate.
2.28 Government grants
Government grants refer to the monetary or non-monetary assets obtained by the Group from
the government, including tax return, financial subsidy and etc.
Government grants are recognised when the grants can be received and the Group can
comply with all attached conditions. If a government grant is a monetary asset, it will be
measured at the amount received or receivable. If a government grant is a non-monetary
asset, it will be measured at its fair value. If it is unable to obtain its fair value reliably, it will be
measured at its nominal amount.
Government grants related to assets refer to government grants which are obtained by the
Group for the purposes of purchase, construction or acquisition of the long-term assets.
Government grants related to income refer to the government grants other than those related
to assets.
Government grants related to assets will be recorded as deferred income and recognised
evenly in profit or loss over the useful lives of the related assets. However, the government
grants measured at their nominal amounts will be directly recorded in profit and loss for the
current period.
Government grants related to income will be recorded as deferred income and recognised in
profit or loss in the period in which the related expenses are recognised if the grants are
intended to compensate for future expenses or losses, and otherwise recognised in profit or
loss for the current period if the grants are used to compensate for expenses or losses that
have been incurred.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
3 Financial risk management
3.1 Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including foreign
exchange risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk
management programme focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the Group’s financial performance.
Risk management is carried out by Finance Department under policies approved by the Board
of Directors.
(1) Market risk
(a) Foreign exchange risk
The Group operates domestically and is exposed to foreign exchange risk arising from various
currency exposures, primarily with respect to other payables dominated in US dollar (“USD”)
and Euro.
Management has set up a policy to require the Group to manage their foreign exchange risk
against their functional currency. Foreign exchange risk arises when future commercial
transactions or recognised assets or liabilities are denominated in a currency that is not the
Company’s functional currency.
As at 31 December 2016, 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 RMB35,091,000 (2015: RMB23,276,000) higher/lower.
As at 31 December 2016, 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 RMB5,269,000 (2015: RMB1,412,000) higher/lower.
(b) Interest rate risk
The Group’s income and operating cash flows are substantially independent of changes in
market interest rates. As at 31 December 2016, a large portion of its bank deposits and all of
its borrowings were at fixed rate. The Group has not used any interest rate swaps to hedge its
exposure to interest rate risk.
As at 31 December 2016, 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
RMB17,570,000 (2015: RMB20,259,000).
(2) Credit risk
The Group’s maximum exposure to credit risk in relation to financial assets is the carrying
amounts of cash and cash equivalents and trade and other receivables.
As at 31 December 2016, the Group had cash of approximately RMB874,990,000 (2015:
RMB372,320,000) deposited in Jiangling Motor Group Finance Company (“JMCF”), which is a
non-bank financial institution and a subsidiary of JMCG (Note 19). The Group’s other bank
deposits are mainly deposited in state-owned banks or other listed banks. Management
believes all these financial institutions have high credit quality without significant credit risk.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
3 Financial risk management (continued)
3.1 Financial risk factors (continued)
(2) Credit risk (continued)
All the Group’s trade and other receivables have no collateral. However, the Group has
policies in place to ensure that sales are made to customers with appropriate credit history
and the Group performs periodic credit evaluations of its customers. The Group assesses the
credit quality of each customer by taking into account its financial position, past experience
and other factors. Credit limit and terms are reviewed on periodic basis, and the financial
department is responsible for such monitoring procedures. In determining whether provision
for impairment is required, the Group takes into consideration the aging status and the
likelihood of collection. In this regards, the directors of the Company are satisfied that the risks
is minimal as all customers are existing ones or related parties and have no default in the past
and adequate provision for impairment, if any, has been made in the financial statements after
assessing the collectability of individual debts. Further quantitative disclosures in respect of
the impairment of trade and other receivables are set out in Note 18.
(3) Liquidity risk
Cash flow forecasting is performed in the operating entities of the Group in and aggregated by
Finance Department. Finance Department monitors rolling forecasts of the Group's liquidity
requirements to ensure it has sufficient cash to meet operational needs while maintaining
sufficient headroom on its undrawn committed borrowing facilities (Note 23) at all times so that
the Group does not breach borrowing limits or covenants (where applicable) on any of its
borrowing facilities.
The table below analyses the Group’s financial liabilities into relevant maturity groupings
based on the remaining period at the balance sheet date to the contractual maturity date. The
amounts disclosed in the table are the contractual undiscounted cash flows.
Less than 1 Between 1 Between 2 Over 5
year and 2 years and 5 years years
At 31 December 2016
Bank borrowings
- Principals 454 454 1,363 2,726
- Interests 73 66 158
Trade and other payables 11,053,248 - - -
11,053,775 520 1,521 2,859
At 31 December 2015
Bank borrowings
- Principals 425 425 1,276 2,977
- Interests 75 69 167
Trade and other payables 8,206,159 - - -
8,206,659 494 1,443 3,144
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
3 Financial risk management (continued)
3.2 Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue
as a going concern in order to provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets
to reduce debt.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing
ratio. This ratio is calculated as borrowings divided by total capital. Total capital is calculated
as equity, as shown in the consolidated statement of financial position, plus borrowings. The
Group aims to maintain the gearing ratio at a reasonable level.
The gearing ratios at 31 December 2016 and 2015 were as follows:
31 December 2016 31 December 2015
Total borrowings 4,997 5,103
Total equity 12,409,236 11,981,142
Total capital 12,414,233 11,986,245
Gearing ratio 0.04% 0.04%
3.3 Fair value estimation
The inputs to valuation techniques used to measure fair value are categorised into three levels
within a fair value hierarchy as follows:
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
Inputs other than quoted prices included within level 1 that are observable for the asset
or liability, either directly (that is, as prices) or indirectly (that is, derived from prices)
(level 2).
Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs) (level 3).
Financial assets at fair value through profit or loss are forward exchange contracts which are
not traded in an active market. The fair value is determined by using valuation techniques
which maximised the use of observable market data where it is available and rely as little as
possible on entity specific estimates. Since all significant inputs required to value forward
exchange contracts are observable, the forward exchange contracts are classified as level 2.
The carrying amounts of the Group’s financial assets including cash and cash equivalents,
trade and other receivables and financial liabilities including trade and other payables,
borrowing, approximate their fair values due to their short maturities. The book values less any
estimated credit adjustments for financial assets and liabilities with a maturity of less than one
year are assumed to approximate their fair values.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
4 Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience
and other factors, including expectations of future events that are believed to be reasonable
under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting
estimates will, by definition, seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are addressed below.
(1) Impairment of long term assets
The Group assesses whether there are indicators that the long term assets except for financial
assets are impaired at each balance sheet date. When there are indicators that the carrying
amounts of those long term assets are unrecoverable, an impairment test will be performed.
When the carrying amount of the long term assets except for financial assets or the cash
generating unit (“CGU”) is higher than its recoverable amount, which is the higher of an
asset’s or CGU’s fair value less costs of disposal and its value in use, the impairment
occurred.
To determine the fair value less costs of disposal, the Group take reference to the prices in
sales agreements in relevant asset transactions or the observable market prices, and the
incremental cost which could directly attributable to the assets disposal.
Key judgements are made on the outputs, sales prices, relevant operation costs and discount
rates when estimate the discounted future cash flow forecasts. The Group uses relevant
accessible information, including the assets outputs, sales prices, relevant operation costs
which are based on the reasonable and supportable assumptions, to estimate the recoverable
amount of those long term assets.
(2) Taxation
The Group is subject to various taxes in the PRC, including corporate income tax, value added
tax and consumption tax. Significant judgment is required in determining the provision for
these taxes. There are many transactions and calculations for which the ultimate tax
determination is uncertain during the ordinary course of business. The Group recognises
liabilities for anticipated tax issues based on estimates of whether additional taxes will be due.
Where the final tax outcome of these matters is different from amounts that were initial
recorded, such differences will impact the tax provisions in the period such determination is
made.
Deferred income tax assets relating to certain temporary differences are recognised as
management considers it is probable that future taxable profit will be available against which
the temporary differences can be utilised. Where the expectation is different from the original
estimate, such differences will impact the recognition of deferred tax assets and tax in the
periods in which such estimate is changed.
As at 31 December 2016, the Group recorded the deferred tax assets of approximately
RMB554,488,000. To the extent that it is probable that taxable profit will be available against
which the deductible temporary differences will be utilised, deferred tax assets are recognised
mainly for temporary differences arising from accrued expenses and retirement benefit
obligations.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
4 Critical accounting estimates and judgements(continued)
(3) Provisions
The Group provides warranties on automobile and undertakes to repair or replace items that
fail to perform satisfactorily based on certain pre-determined conditions. Management
estimates the related warranty claims based on historical warranty claim information including
level of repairs and returns as well as recent trends that might suggest that past cost
information may differ from future claims.
Factors that could impact the estimated claim information include the success of the Group’s
productivity and quality controls, as well as parts and labour costs. Any increase or decrease
in the provision would affect profit or loss in future years.
(4) Impairment of inventory
Inventories shall be measured at the lower of cost and the net realisable value. The net
realisable value is estimated sales price less estimated cost to finish goods, estimated
distribution expenses and related taxes in the daily operation.
If management revises estimated sales price, estimated cost to finish goods, distribution
expenses and related taxes, and revised sales price is lower than current sales price, or
revised cost to finish goods, distribution expenses and related taxes are higher than those
current estimation, the Group need to consider increasing the impairment provision to the
inventories.
If the actual sales price, the cost to finish goods, distribution expenses and related taxes are
higher or lower than the estimation of management, the Group will recognise the relevant
influence in profit or loss relevant accounting period.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
5 Revenue and segment information
The Group principally derives its turnover from the manufacture, assembly and sale of
automobiles, related spare parts and components, and sales are made principally in the PRC.
Revenue represents the total invoiced value of goods supplied to customers, net of value-added
tax, returns and allowances.
Management has determined the operating segment based on the reports reviewed by the
strategic executive committee that are used to make strategic decisions. The committee
considers the business from the product perspective as all the Group’s sales are made in the
PRC. Since the Group principally derives its turnover from the sale of automobiles, the
committee considers the automobile business as a whole in allocating resources and assessing
performance. Accordingly, no segment information is presented.
6 Expenses by nature
2016
Changes in inventories of finished goods and
work in progress (73,156) 169,844
Raw materials and consumables used 18,390,006 16,116,227
Employee benefit expense (Note 7) 1,874,861 1,678,080
Depreciation of PPE (Note 12, 28) 684,383 554,197
Repairs and maintenance expenditure on PPE 153,193 147,528
Research and development expenditure 1,812,726 1,830,993
Amortisation of lease prepayment (Note 13, 28) 15,594 15,733
Amortisation of intangible assets (Note 14, 28) 10,057 7,301
Provision of warranty 261,430 168,141
Others 1,907,004 1,478,741
Total cost of sales, distribution expenses and
administrative expenses 25,036,098 22,166,785
For the year ended 31 December 2016, depreciation of PPE of approximately RMB45,344,000
(2015: RMB36,374,000) and amortisation of intangible assets of approximately RMB10,465,000
(2015: RMB2,586,000) were included in research and development expenditure.
Impairment charge for trade and other receivables of approximately RMB8,952,000 (2015:
RMB3,882,000) and impairment charge for inventories of approximately RMB27,693,000 (2015:
RMB22,192,000), which were included in administrative expenses, were not included in
expenses by nature.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
7 Employee benefit expense
2016
Wages and salaries 1,330,140 1,182,279
Social security costs 175,862 167,711
Pension costs defined contribution plans 220,736 209,339
Pension costs defined benefit plans (Note 24) 5,026 3,616
Others 143,097 115,135
1,874,861 1,678,080
The employees of the Group participated in a retirement benefit plan organised by the
municipal and provincial governments under which the Group was required to make defined
contributions monthly to this plan.
In addition, the Group also paid certain pension subsidies to certain retired employees. In
accordance with the Group’s early retirement programs, the Group was also committed to
making periodic benefit payments to certain early-retired employees until they reach their
legal retirement ages.
8 Other income
2016
Government grants (a) 517,797 709,071
Others (3,382) (25,935)
514,415 683,136
(a) In 2016, the Group received grants of approximately RMB517,797,000, mainly from Finance
Bureau of Nanchang, Finance Bureau of Nanchang Qingyunpu District, Economic
Development District Administrative Commission of Xiaolan and the Finance Bureau of
Economic and Technological Development District Administrative Commission of Taiyuan.
These government grants were income related to support the Group’s operation and were
charged to profit or loss directly up received.
9 Finance income and expenses
2016
(a) Finance income
Interest income on bank deposits 209,023 239,965
Interest income on credit sales 14,494 31,020
223,517 270,985
(b) Finance expenses
Interest expense on bank loans (175) (417)
Bank charges and others (3,707) (1,927)
(3,882) (2,344)
Net finance income 219,635 268,641
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
10 Taxation
(a) Corporate income tax (“CIT”)
As the Company is qualified as a high-tech enterprise and approved by the relevant tax
authorities in 2015, the Company is entitled to a preferential CIT rate of 15% from 2015 to
2017 (2015: 15%). The CIT rates of JMC Heavy Duty Vehicle Co., Ltd. (“JMCH”) and Jiangling
Motor Sales Co, Ltd. (“JMCS”), the subsidiaries of the Company, are 25%.
The amounts of income tax expense charged to profit or loss represented:
2016
Current tax 244,868 321,135
Deferred tax (Note 16) (81,293) (33,592)
163,575 287,543
The tax on the Group’s profit before tax differs from the theoretical amount that would arise
using the weighted average tax rate applicable to profits of the consolidated entities as
follows:
2016
Profit before tax 1,481,591 2,509,604
Tax calculated at tax rates applicable to profits in
the respective companies 220,400 376,423
Tax concessions (105) (160)
Expenses not deductible for tax purposes 665
Income not subject to tax (85,519) (112,651)
Effect of different tax rates applied for the periods
in which the temporary differences are
expected to reverse 11,242
Utilisation of previously temporary differences for
which no deferred income tax asset was
recognised (14,614) -
Temporary differences for which no deferred
income tax asset was recognised - 3,960
Tax losses for which no deferred income tax
asset was recognised 31,506 18,244
Tax charge 163,575 287,543
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
10 Taxation (continued)
(a) Corporate income tax (continued)
The tax credit relating to other comprehensive income is as follows:
2016
Before Tax After Before Tax After
tax credit tax tax credit tax
Actuarial loss on retirement
benefit obligations (1,083) 271 (812) (2,707) 677 (2,030)
Other comprehensive income (1,083) 271 (812) (2,707) 677 (2,030)
Current tax - -
Deferred tax (Note 16) 271
271
(b) Value-added tax (“VAT”)
Output VAT is levied at a general rate of 17% on the selling price of goods. Pursuant to the
“Circular on the Overall Promotion of Pilot Program of Levying VAT in place of Business Tax”
(Cai Shui [2016] 36) jointly issued by the Ministry of Finance and the State Administration of
Taxation, the rental income and interest income are subject to VAT from 1 May 2016, and the
applicable tax rates are 11% and 6% respectively, while the business taxes were 5% before
then.
(c) 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.
2016
Profit attributable to shareholders of the
Company 1,318,016 2,222,061
Weighted average number of ordinary shares in
issue (‘000) 863,214 863,214
Basic earnings per share (RMB) 1.53 2.57
Diluted earnings per share equals to basic earnings per share as there were no dilutive
potential ordinary shares outstanding during the year ended 31 December 2016.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
12 Property, plant and equipment
Plant and Motor Electronic and Assets under
Buildings Machinery Vehicles Moulds other equipment constructions Total
At 1 January 2015
Cost 1,819,897 3,138,887 190,888 1,421,197 2,030,067 1,282,854 9,883,790
Accumulated depreciation and impairment (330,391) (1,595,216) (85,728) (1,144,046) (991,309) (692) (4,147,382)
Net book amount 1,489,506 1,543,671 105,160 277,151 1,038,758 1,282,162 5,736,408
Year ended 31 December 2015
Opening net book amount 1,489,506 1,543,671 105,160 277,151 1,038,758 1,282,162 5,736,408
Additions - - - - - 1,457,199 1,457,199
Transfers 114,352 261,449 34,729 193,583 399,568 (1,003,681) -
Disposals (4,255) (1,612) (1,216) - (2,150) - (9,233)
Classified as held for sale (78,870) - - - - - (78,870)
Other deductions - (86,845) - - (2,628) (98,898) (188,371)
Impairment charge (Note 28) - (1,719) (316) - (981) - (3,016)
Depreciation charge (Note 6, 28) (46,204) (179,076) (25,116) (106,987) (233,188) - (590,571)
Closing net book amount 1,474,529 1,535,868 113,241 363,747 1,199,379 1,636,782 6,323,546
At 31 December 2015
Cost 1,802,523 3,193,284 219,587 1,591,116 2,384,260 1,637,474 10,828,244
Accumulated depreciation and impairment (327,994) (1,657,416) (106,346) (1,227,369) (1,184,881) (692) (4,504,698)
Net book amount 1,474,529 1,535,868 113,241 363,747 1,199,379 1,636,782 6,323,546
Year ended 31 December 2016
Opening net book amount 1,474,529 1,535,868 113,241 363,747 1,199,379 1,636,782 6,323,546
Additions - - - - - 1,138,940 1,138,940
Transfers 63,567 422,097 55,408 621,285 498,413 (1,660,770) -
Disposals (100) (774) (3,182) (736) (178) - (4,970)
Other deductions - (18,969) - - (2,712) (14,784) (36,465)
Impairment charge (Note 28) - (1,717) (50) - (1,027) - (2,794)
Depreciation charge (Note 6, 28) (45,595) (198,266) (26,648) (177,019) (282,199) - (729,727)
Closing net book amount 1,492,401 1,738,239 138,769 807,277 1,411,676 1,100,168 6,688,530
At 31 December 2016
Cost 1,865,850 3,526,187 262,667 2,206,895 2,862,436 1,100,860 11,824,895
Accumulated depreciation and impairment (373,449) (1,787,948) (123,898) (1,399,618) (1,450,760) (692) (5,136,365)
Net book amount 1,492,401 1,738,239 138,769 807,277 1,411,676 1,100,168 6,688,530
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
12 Property, plant and equipment (continued)
For the year ended 31 December 2016, depreciation expense of approximately
RMB620,518,000 (2015: RMB506,108,000) was charged in cost of sales, RMB2,865,000 (2015:
RMB2,284,000) in distribution expenses and RMB106,344,000 (2015: RMB82,179,000) in
administrative expenses.
Lease rental expenses amounting to approximately RMB8,892,000 (2015: RMB8,809,000)
relating to the lease of property are included in profit or loss.
13 Lease prepayment
Lease prepayment represents the Group’s interests in land which are held on leases of 50
years. The movement is as follows:
31 December 2016 31 December 2015
Opening net book amount 645,608 590,629
Additions 2,394 79,479
Classified as held for sale - (8,767)
Amortisation charge (Note 6, 28) (15,594) (15,733)
Closing net book amount 632,408 645,608
Cost 751,626 749,232
Accumulated amortisation (119,218) (103,624)
Net book amount 632,408 645,608
Amortisation expense was charged in administrative expenses.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
14 Intangible assets
Non-patent After-sale
technology Software Goodwill management model Other Total
Year ended 31 December 2015
Opening net book amount - 28,682 3,462 - 29 32,173
Addition - 19,419 - - - 19,419
Amortisation charge (Note 6, 28) - (9,876) - - (11) (9,887)
Closing net book amount - 38,225 3,462 - 18 41,705
At 31 December 2015
Cost - 85,627 89,028 36,978 1,649 213,282
Accumulated amortisation and impairment - (47,402) (85,566) (36,978) (1,631) (171,577)
Net book amount - 38,225 3,462 - 18 41,705
Year ended 31 December 2016
Opening net book amount - 38,225 3,462 - 18 41,705
Addition 124,587 12,390 - - - 136,977
Amortisation charge (Note 6, 28) (8,694) (11,818) - - (10) (20,522)
Closing net book amount 115,893 38,797 3,462 - 8 158,160
At 31 December 2016
Cost 124,587 98,017 89,028 36,978 1,649 350,259
Accumulated amortisation and impairment (8,694) (59,220) (85,566) (36,978) (1,641) (192,099)
Net book amount 115,893 38,797 3,462 - 8 158,160
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
14 Intangible assets (continued)
(a) For the year ended 31 December 2016, amortisation expense of approximately
RMB20,027,000 (2015: RMB9,685,000) was charged in administrative expenses,
approximately RMB297,000 (2015: RMB194,000) in cost of sales and approximately
RMB198,000 (2015: RMB8,000) in distribution expenses.
(b) Development costs of approximately RMB124,587,000 were capitalised as non-patent
technology by the Group in 2016 (2015: Nil).
(c) Impairment test for goodwill
Goodwill arises on the acquisition of a subsidiary, and is monitored by the management at the
cash generating unit level. The goodwill is allocated to the following CGU:
31 December 2015 Addition Impairment 31 December 2016
JMCH 3,462 - - 3,462
The recoverable amount of the CGU is determined based on value in use calculations. These
calculations use after-tax cash flow projections based on financial budgets approved by
management covering a nine-year period. Cash flows beyond the five-year period are
extrapolated using the estimated growth rates stated below. The growth rate does not exceed
the long-term average growth rate for the heavy duty vehicle business in which the CGU
operates.
The key assumptions used for value in use calculations in 2016 were as follows:
Item JMCH
Compound annual volume growth rate 283%
Long term growth rate 3%
Discount rate 19.40%
The key assumptions used for value in use calculations in 2015 were as follows:
Item JMCH
Compound annual volume growth rate 404%
Long term growth rate 3%
Discount rate 19.40%
The long term growth rates used are consistent with the forecasts included in industry reports.
The discount rates used are after-tax and reflect specific risks relating to the relevant operating
subsidiary.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
15a Subsidiaries
As at the date of this report, the Group has the following subsidiaries:
Place and date Percentage of
Entity of incorporation equity interest held Principal activities
JMCH Taiyuan, PRC / 100% Manufacture and sale of
8 January 2013 automobiles and spare parts
JMCS Nanchang, PRC / 100% Sale of automobiles and
11 October 2013 spare parts
15b Investments accounted for using the equity method
(a) Summarised financial information for immaterial associate
The amount recognised in the consolidated statement of financial position was as follow:
31 December 2016 31 December 2015
Associate 39,893 40,993
The amount recognised in the consolidated statement of comprehensive income was as follow:
2016
Share of profit 12,624 14,045
The Company holds 19.15% interest of Hanon Systems (Nanchang) Co., Ltd. (Hanon
Systems) and the investment is accounted for using the equity method of accounting.
(b) Reconciliation of summarised financial information for immaterial associates
2016
At beginning of the year 214,061 140,719
Profit for the year 65,920 73,342
Dividends distributed (71,664) -
At end of the year 208,317 214,061
Interest in associate 19.15% 19.15%
Carrying value 39,893 40,993
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
16 Deferred income tax
31 December 2016 31 December 2015
Deferred tax assets 590,899 480,109
Deferred tax liabilities-can be offset (36,411) (6,176)
Deferred tax liabilities-cannot be offset (27,383) (28,392)
Deferred tax assets-net 554,488 473,933
Deferred tax liabilities-net (27,383) (28,392)
The gross movement on the deferred income tax account is as follows:
31 December 2016 31 December 2015
At beginning of the year 445,541 411,272
Credited to profit or loss (Note 10(a)) 81,293 33,592
Credited to other comprehensive income
(Note 10(a)) 271
At end of the year 527,105 445,541
The movement in deferred income tax assets and liabilities during the year, without taking into
consideration the offsetting of balances within the same tax jurisdiction, is as follows:
Amortization
Provision for Retirement of
impairment of benefits Accrued nonpatented
Deferred tax assets assets obligation expenses technology Others Total
At 1 January 2015 5,329 12,442 381,437 - 43,200 442,408
Credited/(charged) to
profit or loss 878 220 78,607 - (42,681) 37,024
Credited to other
comprehensive income - 677 - - -
At 31 December 2015 6,207 13,339 460,044 - 519 480,109
Credited to profit or loss 1,379 484 107,442 1,087 127 110,519
Credited to other
comprehensive income - 271 - - -
At 31 December 2016 7,586 14,094 567,486 1,087 646 590,899
Amortisation Forward
of intangible PPE Fair value exchange
Deferred tax liabilities assets depreciation gains contracts Total
At 1 January 2015 (1,678) - (29,458) - (31,136)
(Charged)/credited to profit or
loss (1,082) (3,404) 1,066 (12) (3,432)
At 31 December 2015 (2,760) (3,404) (28,392) (12) (34,568)
(Charged)/credited to profit or
loss (1,936) (27,030) 1,009 (1,269) (29,226)
At 31 December 2016 (4,696) (30,434) (27,383) (1,281) (63,794)
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
16 Deferred income tax (continued)
The analysis of deferred tax assets and deferred tax liabilities is as follows:
31 December 2016 31 December 2015
Deferred tax assets:
–Deferred tax asset to be recovered after
more than 12 months 14,493 12,653
–Deferred tax asset to be recovered
within 12 months 576,406 467,456
590,899 480,109
31 December 2016 31 December 2015
Deferred tax liabilities:
–Deferred tax liabilities to be recovered
after more than 12 months (60,365) (32,787)
–Deferred tax liabilities to be recovered
within 12 months (3,429) (1,781)
(63,794) (34,568)
Deductible temporary differences and tax losses which no deferred income tax assets were
recognised were as follows:
31 December 2016 31 December 2015
Deductible temporary differences 40,182 98,638
Tax losses 369,032 243,515
409,214 342,153
The expiry years of the tax losses are as follows:
31 December 2016 31 December 2015
2017 89,447 89,447
2018 44,319 44,319
2019 36,772 36,773
2020 72,470 72,976
2021 126,024 -
369,032 243,515
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
17 Inventories
31 December 2016 31 December 2015
Raw materials 1,300,443 1,170,043
Work in progress 193,152 144,654
Finished goods 440,497 416,233
1,934,092 1,730,930
For the year ended 31 December 2016, the cost of inventories recognised as expenses and
included in cost of sales amounted to approximately RMB18,316,850,000 (2015:
RMB16,286,071,000).
A provision of approximately RMB26,491,000 (2015: RMB47,637,000) was made as at 31
December 2016. The Group reversed approximately RMB5,369,000 of a previous inventory
write-down in 2016. In 2016, the Group wrote-off inventories with provision of approximately
RMB48,839,000 made in prior years. The provision and reversal of the inventory write-down
have been included in administrative expenses in profit or loss.
As at 31 December 2016, no inventory was pledged as security for liabilities.
18 Trade and other receivables and prepayments
31 December 2016 31 December 2015
Trade receivables 1,188,088 1,463,736
Less: Provision for impairment of trade
receivables (15,940) (7,319)
Trade receivables – net 1,172,148 1,456,417
Notes receivables 498,875 709,630
Other receivables 86,581 58,427
Less: Provision for impairment of other
receivables (433) (292)
Other receivables – net 86,148 58,135
Prepayments 796,833 476,952
Interest receivables 71,804 92,636
2,625,808 2,793,770
Refer to Note 31 for details of receivables from related parties. The carrying amounts of the
Group’s trade and other receivables are all denominated in RMB.
The carrying amounts of trade and other receivables and prepayments approximate their fair
values.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
18 Trade and other receivables and prepayments (continued)
Movement on the provision for impairment of trade and other receivables is as follows:
31 December 2016 31 December 2015
At beginning of the year (7,611) (7,638)
Provision for receivables impairment
(Note 28) (8,952) (3,882)
Receivables written off during the year as
uncollectible 190 3,909
At end of the year (16,373) (7,611)
The creation of provision for impaired receivables was included in ‘administrative expense’ in
profit or loss.
As at 31 December 2016, trade receivables of approximately RMB71,342,000 (2015:
RMB59,095,000) were past due but not impaired. These balances related to a number of
independent customers for whom there was no recent history of default. The ageing analysis of
these trade receivables based on past due date is as below:
31 December 2016 31 December 2015
Up to 3 months 2,976 34,327
3 months to 6 months 25,787 7,404
Over 6 months 42,579 17,364
71,342 59,095
The other classes within trade and other receivables do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of
receivable mentioned above. The Group does not hold any collateral as security.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
19 Cash and cash equivalents
31 December 2016 31 December 2015
Cash at bank and in hand 790,373 606,040
Short-term bank deposits (a) 10,875,849 8,242,000
11,666,222 8,848,040
As at 31 December 2016, the Group had cash of approximately RMB874,990,000 (2015:
RMB372,320,000) deposited in JMCF (Note 31 (j)). The interest rates range from 1.495%-
2.25% per annum (2015: 0.455% to 3%). JMCF, a non-bank financial institution, is a subsidiary
of JMCG.
(a) Short-term bank deposits can be withdrawn at the discretion of the Group without any
restriction.
20 Assets classified as held for sale
31 December 2016 31 December 2015
Lease prepayment and buildings of
Transit plant 87,637 87,637
As at 26 March 2015, under the authorisation from the Board of Directors, the Company signed
an agreement of “state-owned land reserves” with Nanchang Land Reserve Centre (the
“agreement”). According to the agreement, the Company will sell its land use right and
buildings of Transit plant, with a consideration of RMB135,000,000 to Nanchang Land Reserve
Centre. The transaction is expected to be completed within the year of 2017.
As those aforementioned assets met the criteria of assets classified as held for sale, they were
reclassified as current assets and presented separately in the consolidated statement of
financial position.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
21 Share capital
Number of Tradable shares Total
shares “A” shares “B” shares
(thousands) Restricted Non-restricted
Year ended 31 December 2015
Balance at 1 January 2015 863,214 1,822 517,392 344,000 863,214
Transfer - (96) 96 - -
Balance at 31 December 2015 863,214 1,726 517,488 344,000 863,214
Year ended 31 December 2016
Balance at 1 January 2016 863,214 1,726 517,488 344,000 863,214
Transfer - - - - -
Balance at 31 December 2016 863,214 1,726 517,488 344,000 863,214
All the “A” and “B” shares are registered, issued and fully paid shares of RMB1 each.
All the “A” and “B” shares rank pari passu in all respects.
After the implementation of the share reform scheme on 13 February 2006, 1,726,000 shares
were still restricted as at 31 December 2016.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
22 Other reserves
Statutory
surplus reserve
fund (a) Reserve fund Others Total
At 1 January 2015 431,607 18,627 4,734 454,968
Other comprehensive income
-Remeasurements of retirement
benefit obligation, net of tax - - (2,030) (2,030)
At 31 December 2015 431,607 18,627 2,704 452,938
Other comprehensive income
-Remeasurements of retirement
benefit obligation, net of tax - - (812) (812)
At 31 December 2016 431,607 18,627 1,892 452,126
(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
years ended 31 December 2015 and 2016.
23 Borrowings
31 December 2016 31 December 2015
Current
Bank borrowings - guaranteed (a) 454
Non-current
Bank borrowings - guaranteed (a) 4,543 4,678
Total borrowings 4,997 5,103
(a) Bank borrowings of USD720,000 (equivalent to approximately RMB4,997,000) (2015:
USD786,000 equivalent to approximately RMB5,103,000) were guaranteed by JMCF (Note 31
(c)).
The interest rate of bank borrowings is 1.50% per annum (2015: 1.50%).
The fair value of borrowings approximates their carrying values.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
23 Borrowings (continued)
The maturity of non-current borrowings is as follows:
31 December 2016 31 December 2015
Between 1 and 2 years 454
Between 2 and 5 years 1,363 1,276
Over 5 years 2,726 2,977
4,543 4,678
The Group has the following undrawn borrowing facilities:
31 December 2016 31 December 2015
Fixed rate
- Expiring within one year 1,390,868 2,214,032
24 Retirement benefits obligations
The amount of early retirement and supplemental benefit obligations recognised in the statement
of financial position is as follows:
31 December 2016 31 December 2015
Present value of defined benefits obligations 58,188 56,833
The movement of early retirement and supplemental benefit obligations for the year ended 31
December 2016 is as follows:
31 December2016 31 December2015
At beginning of the year 56,833 55,726
For the year
-Current service cost 1,325 1,625
-Interest cost 1,633 1,991
-Payment (4,754) (5,216)
-Past service cost from the change of plan 1,486 -
-Actuarial loss 1,665 2,707
At end of the year 58,188 56,833
Current 4,561 4,560
Non-current 53,627 52,273
58,188 56,833
The material actuarial assumptions used in valuing these obligations are as follows:
(1) Discount rate adopted: 3.50% (2015: 3.00%)
(2) The salary and supplemental benefits inflation rate of retiree, early-retiree and employee at
post: 0% to 6% (2015: 0% to 5% )
(3) Mortality: average life expectancy of residents in the PRC
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
24 Retirement benefits obligations (continued)
Based on the assessment and IAS 19, the Group estimated that, at 31 December 2016, a
provision of approximately RMB58,188,000 is sufficient to cover all future retirement-related
obligations.
Obligation in respect of retirement benefits of approximately RMB58,188,000 is the present
value of the unfunded obligations, of which the current portion amounting to approximately
RMB4,561,000 (2015: RMB4,560,000) has been included under current liabilities.
The sensitivity of the overall pension liability to changes in the weighted principal assumptions is:
Change in assumption Impact on overall liability
Discount rate Increase/decrease by 0.5% Decrease/increase by 5.2%/5.8%
Inflation rate Increase/decrease by 0.5% Increase/decrease by 2.0%/1.7%
Rate of mortality Increase/decrease by 1 year Decrease/increase by 0.1%/0.4%
For the year ended 31 December 2016, approximately RMB5,026,000 (2015: RMB3,616,000)
were charged in ‘administrative expenses’ and approximately RMB1,083,000 (2015:
RMB2,707,000) were charged in other comprehensive income.
25 Provisions for warranty and other liabilities
The movement on the warranty provisions and other liabilities is as follows:
31 December 2016 31 December 2015
At beginning of the year 214,722 226,503
Charged for the year (Note 6) 261,430 168,141
Utilised during the year (191,525) (179,922)
At end of the year 284,627 214,722
Analysis of total provisions:
31 December 2016 31 December 2015
Non-current 130,987 104,557
Current 153,640 110,165
284,627 214,722
The above represents the warranty costs for repairs and maintenance, which are estimated
based on present after-sale service policies and prior years’ experience on the occurrence of
such cost.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
26 Trade and other payables
31 December 2016 31 December 2015
Trade payables 7,731,169 5,600,317
Payroll and welfare payable 289,283 278,396
Dividend payables 5,840 11,646
Other payables 3,578,886 2,818,470
11,605,178 8,708,829
For details of amount due to related parties, please refer to Note 31.
27 Dividends
A final dividend for 2015 of RMB889,110,000 (RMB1.03 per share) was paid in 2016.
A final dividend for 2016 of RMB 0.61 per share, amounting to a total dividend of approximately
RMB526,560,000 was proposed at the Board of Directors’ Meeting on 23 March 2017, and such
dividend is to be approved by the shareholders at the Annual General Meeting. These financial
statements do not reflect this dividend payable.
28 Cash generated from operations
2016
Profit before tax 1,481,591 2,509,604
Depreciation of PPE (Note 6, 12) 729,727 590,571
Amortisation of lease prepayment (Note 6, 13) 15,594 15,733
Amortisation of intangible assets (Note 6, 14) 20,522 9,887
Impairment charges of PPE (Note 12) 2,794 3,016
Provision for receivables impairment (Note 18) 8,952 3,882
Provision of inventories (Note 17) 27,693 22,192
Loss on disposals of PPE 2,550 6,268
Finance expenses (Note 9) 3,325 1,795
Finance income (Note 9) (223,517) (270,985)
Net foreign exchange transaction loss 24,707 21,326
Share of profit from investment accounted for using
equity method (Note 15b) (12,624) (14,045)
Investment (gain)/loss of forward exchange contracts (4,098) 5,322
Changes on fair value of forward exchange contracts (8,462) (2,088)
Changes in working capital:
- Decrease in restricted cash - 6,810
- Increase in inventories (260,023) (133,843)
- Decrease/(increase) in trade and other receivables 90,460 (855,314)
- Increase/(decrease) in provisions for warranty 69,905 (11,781)
- Increase in trade and other payables 2,820,338 442,333
- Increase/(decrease) in pensions and other
retirement benefits 272 (1,600)
Cash generated from operations 4,789,706 2,349,083
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
28 Cash generated from operations (continued)
In the cash flow statement, proceeds from disposal of PPE comprise:
Year ended 31 December
2016
Net book amount 4,970 9,233
Loss on disposal of PPE (2,550) (6,268)
Offset with trade and other payables 345 40,704
Proceeds from disposal of PPE 2,765 43,669
29 Contingencies
At 31 December 2016, 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:
31 December 2016 31 December 2015
Contracted but not provided for:
Purchases of buildings, plant and machinery 572,773 1,033,458
31 Related party transactions
Related parties are those parties that have the ability to control the other party or exercise
significant influence in making financial and operating decisions. Parties are also considered to
be related if they are subject to common control.
Jiangling Motor Holdings Co. Ltd. (“JMH”), which owns 41.03% of the Company’s shares, and
Ford Motor Company (“Ford”), which owns 32% of the Company’s shares, are major
shareholders of the Company as at 31 December 2016. The shareholders of JMH are
Chongqing Changan Automobile Corporation Ltd. and JMCG, and both of them hold 50% equity
interest of JMH, respectively.
The following is a summary of the significant transactions carried out between the Group, its
associates, JMCG and its subsidiaries, JMH and its subsidiaries and joint venture, Ford and its
subsidiaries and joint venture in the ordinary course of business during the year ended 31
December 2016.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
31 Related party transactions (continued)
For the year ended 31 December 2016, related parties, other than the subsidiary, and their
relationship with the Group are as follows:
Name of related party Relationship
JMCG Shareholder of JMH
Nanchang JMCG Skyman Auto Component Co.,Ltd. Subsidiary of JMH
Ford Motor (China) Co., Ltd. Subsidiary of Ford
Ford Motor Research & Engineering (Nanjing) Co., Ltd. Subsidiary of Ford
Ford Global Technologies, LLC Subsidiary of Ford
Ford Otomotiv Sanayi A.S. Subsidiary of Ford
Auto Alliance (Thailand) Co.,Ltd. Subsidiary of Ford
Ford Vietnam Limited Subsidiary of Ford
JMCG Interior Trim Factory Subsidiary of JMCG
Jiangxi JMCG Industry Co.,Ltd. Subsidiary of JMCG
JMCG Property Management Co. Subsidiary of JMCG
Nanchang Gear Co.,Ltd. Subsidiary of JMCG
Jiangxi Jiangling Material Utilization Co.,Ltd. Subsidiary of JMCG
Jiangling Material Co. Subsidiary of JMCG
Nanchang Jiangling Hua Xiang Auto Components Co.,Ltd. Subsidiary of JMCG
JMCF Subsidiary of JMCG
Jiangxi ISUZU Engine Co.,Ltd. Subsidiary of JMCG
Jiangxi Lingge Non-ferrous Metal Die-casting Co.,Ltd. Subsidiary of JMCG
Jiangxi Jiangling Chassis Co.,Ltd. Subsidiary of JMCG
Nanchang JMCG Liancheng Auto Component Co.,Ltd. Subsidiary of JMCG
JMCG Jingma Motors Co., Ltd. Subsidiary of JMCG
Jiangxi Jiangling Lear Interior System Co.,Ltd. Joint venture of JMCG
Jiangxi JMCG Shangrao Industrial Co.,Ltd. Subsidiary of JMCG
JMCG Jiangxi Engineering Construction Co., Ltd. Subsidiary of JMCG
Nanchang JMCG Xinchen Auto Component Co.,Ltd. Subsidiary of JMCG
Nanchang JMCG Shishun Logistics Co., Ltd. Subsidiary of JMCG
Nanchang Lianda Machinery Co.,Ltd. Subsidiary of JMCG
Jiangxi JMCG Yichehang Second-hand Motors Sales Co., Ltd. Subsidiary of JMCG
Jiangxi Biaohong Engine Tappet Co.,Ltd. Subsidiary of JMCG
Nanchang Jiangling Huasheng Cleaner Co.,Ltd. Subsidiary of JMCG
Jiangxi Sinodef International Trade Co.,Ltd. Subsidiary of JMCG
Nanchang Unistar Electric & Electronics Co.,Ltd. Subsidiary of JMCG
Nanchang Hengou Industry Co., Ltd. Associate of JMCG
Nanchang JMCG Car Frame Co., Ltd. Subsidiary of JMCG
Jiangxi Jiangling Special Purpose Vehicle Co.,Ltd. Subsidiary of JMCG
Jiangxi Jiangling Non-ferrous Metal Die-casting Co.,Ltd Subsidiary of JMCG
Jiangxi Jiangling Real Estate Co., Ltd. Subsidiary of JMCG
Jiangxi ISUZU Co., Ltd. Subsidiary of JMCG
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. Associate of JMCG
Nanchang Yinlun Heat-exchanger Co.,Ltd. Associate of JMCG
JMCG Hequn Costume Co.,Ltd. Associate of JMCG
Jiangling Aowei Aotomobile Spare Part Co.,Ltd. Associate of JMCG
Nanchang JMCG Printing Plant Co.,Ltd. Associate of JMCG
GETRAG (Jiangxi) Transmission Company Associate of JMCG
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
31 Related party transactions (continued)
Name of related party Relationship
Nanchang Baojiang Steel Processing Distribution Co.,Ltd. Associate of JMCG
Faurecia Emissions Control Technologies (Nanchang) Co.,Ltd. Associate of JMCG
Jiangxi Jiangling Group Special Vehicle Co.,Ltd. Associate of JMCG
Jiangxi Specialty Vehicles Jiangling Motors Group Co.,Ltd. Associate of JMCG
Ford Motor Company of Australia Limited Subsidiary of Ford
Changan Ford Automobile Co.,Ltd. Joint venture of Ford
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
31 Related party transactions (continued)
(a) Purchases and sales of goods, provision and purchases of services
Purchase of goods 2016
Jiangxi Jiangling Chassis Co.,Ltd. 805,642 753,418
Jiangxi Jiangling Special Purpose Vehicle Co.,Ltd. 700,309 478,819
Nanchang Baojiang Steel Processing Distribution Co.,Ltd. 690,097 601,711
GETRAG (Jiangxi) Transmission Company 656,595 643,244
Jiangxi Jiangling Lear Interior System Co.,Ltd. 569,823 470,855
Ford 523,858 728,225
Nanchang Jiangling Hua Xiang Auto Components Co.,Ltd. 390,959 282,451
Nanchang JMCG Liancheng Auto Component Co.,Ltd. 329,198 298,493
Hanon Systems 233,974 248,735
Nanchang Unistar Electric & Electronics Co.,Ltd. 216,295 213,572
Changan Ford Automobile Co.,Ltd. 208,819 9,795
Jiangxi Specialty Vehicles Jiangling Motors Group Co.,Ltd. 186,315 232,562
Faurecia Emissions Control Technologies (Nanchang)
Co.,Ltd. 95,192 19,060
JMCG 87,317 127,389
Auto Alliance (Thailand) Co., Ltd. 86,082 -
Nanchang Lianda Machinery Co.,Ltd. 69,312 76,417
Nanchang JMCG Skyman Auto Component Co.,Ltd. 69,143 71,495
Nanchang Yinlun Heat-exchanger Co.,Ltd. 52,415 50,170
Jiangxi Lingge Non-ferrous Metal Die-casting Co.,Ltd. 45,933 37,086
Jiangling Aowei Aotomobile Spare Part Co.,Ltd. 33,051 34,912
Nanchang JMCG Xinchen Auto Component Co.,Ltd. 30,756 26,273
Jiangling Material Co. 25,503 25,493
Nanchang Gear Co.,Ltd. 19,394 19,024
Ford Otomotiv Sanayi A.S. 15,676 5,047
Jiangxi Biaohong Engine Tappet Co.,Ltd. 8,847 10,989
Nanchang JMCG Printing Plant Co.,Ltd. 8,548 6,879
Jiangxi JMCG Shangrao Industrial Co.,Ltd. 6,994 8,532
JMCG Hequn Costume Co.,Ltd. 6,016 4,894
Jiangxi Jiangling Material Utilization Co.,Ltd. 1,769 4,142
Jiangxi JMCG Industry Co.,Ltd. 1,612 7,610
Jiangxi Jiangling Non-ferrous Metal Die-casting Co.,Ltd. 1,160 -
Jiangxi ISUZU Engine Co.,Ltd. 1,039 11,347
JMCG Interior Trim Factory - 190,609
Nanchang Jiangling Huasheng Cleaner Co.,Ltd. - 9,220
6,177,643 5,708,468
The Group purchased goods from related parties classified as two types: import parts and home-
made parts.
Purchase import parts from Ford or Ford’s suppliers, based on agreed price;
Purchase home-made parts from other related parts, based on quotation, cost accounting and
negotiation.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
31 Related party transactions (continued)
(a) Purchases and sales of goods, provision and purchases of services (continued)
Purchase of services Natures of transaction 2016 2015
Ford Engineering service and design 287,301 318,484
Ford Otomotiv Sanayi A.S. Engineering service and design 252,248 231,703
Nanchang JMCG Shishun Logistics Co., Ltd. Transportation 179,326 166,329
Ford Global Technologies, LLC Royalty fee 143,109 87,387
Nanchang Hengou Industry Co., Ltd. Packing/truckage 61,692 43,433
Ford Secondments costs 37,716 56,339
Ford Otomotiv Sanayi A.S. Secondments costs 31,996 22,261
Jiangxi JMCG Industry Co.,Ltd. Working meal 30,568 31,826
JMCG Jiangxi Engineering Construction Co., Ltd. Engineering construction and maintenance 21,636 27,476
Ford Otomotiv Sanayi A.S. Royalty fee 16,347 49,818
Jiangxi Jiangling Lear Interior System Co.,Ltd. Evaluation and design 12,665 6,332
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. Agent business of importation 4,842 5,323
Ford Motor (China) Co., Ltd. Regional personnel costs 4,321 6,087
Ford Motor Research & Engineering (Nanjing) Co.,
Ltd. Regional personnel costs 2,908 2,461
Hanon Systems Experimental manufacturing costs 2,479 -
JMCG Property Management Co. Property management 2,384 2,302
Nanchang Jiangling Hua Xiang Auto Components
Co.,Ltd. Experimental manufacturing costs 2,158 597
Jiangxi Specialty Vehicles Jiangling Motors Group
Co.,Ltd. Promotion 2,022 7,882
Changan Ford Automobile Co.,Ltd. Design fee 1,650 -
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
31 Related party transactions (continued)
(a) Purchases and sales of goods, provision and purchases of services (continued)
Purchase of services Natures of transaction 2016 2015
Jiangxi Jiangling Group Special Vehicle Co.,Ltd. Promotion/Repairment 1,619 -
Nanchang JMCG Liancheng Auto Component
Co.,Ltd. Experimental manufacturing costs 1,309 729
JMH Secondments costs 1,282 1,465
JMCG Public relations costs 1,119 1,134
Ford Motor Research & Engineering (Nanjing) Co.,
Ltd. Software fee - 2,953
GETRAG (Jiangxi) Transmission Company Design fee - 2,831
Ford Royalty fee - 2,416
Ford Motor (China) Co., Ltd. Software fee - 1,229
Others 1,075 -
1,103,772 1,078,797
The Group purchased the service from related parties based on agreement price.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
31 Related party transactions (continued)
(a) Purchases and sales of goods, provision and purchases of services (continued)
Sales of goods 2016
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 1,184,310 1,066,146
Jiangxi Specialty Vehicles Jiangling Motors Group Co.,Ltd. 152,519 189,793
JMCG Jingma Motors Co., Ltd. 80,192 60,741
Jiangxi Jiangling Chassis Co.,Ltd. 79,391 55,627
Nanchang JMCG Liancheng Auto Component Co.,Ltd. 53,764 48,032
Jiangxi Jiangling Special Purpose Vehicle Co.,Ltd. 48,545 36,271
Jiangxi Jiangling Material Utilization Co.,Ltd. 30,047 47,818
Jiangxi JMCG Yichehang Second-hand Motors Sales Co., Ltd. 18,868 529
Jiangxi Jiangling Lear Interior System Co.,Ltd. 13,567 16,526
Jiangxi Jiangling Non-ferrous Metal Die-casting Co.,Ltd. 8,757 -
Jiangxi JMCG Industry Co.,Ltd. 8,557 9,606
Jiangxi Sinodef International Trade Co.,Ltd.(i) 7,873 16,949
Nanchang Jiangling Hua Xiang Auto Components Co.,Ltd. 7,453 6,939
JMCG Property Management Co. 7,228 7,043
Jiangxi Jiangling Group Special Vehicle Co.,Ltd. 6,942
Nanchang Hengou Industry Co., Ltd.(i) 4,272 -
JMH 3,428 972
Jiangxi ISUZU Co., Ltd. 1,885 1,952
JMCG Interior Trim Factory - 16,989
Jiangxi ISUZU Engine Co.,Ltd. - 3,928
Nanchang JMCG Car Frame Co., Ltd. - 3,669
Others 2,173 1,775
1,719,771 1,591,400
The Group sold goods to related parties, based on agreement price.
(i) In November 2016, Nanchang Hengou Industry Co.,Ltd. absorbed Jiangxi Sinodef International
Trade Co.,Ltd.
Provision of services 2016
Ford Motor Company of Australia Limited 6,706 -
The Group provided the services to related parties, based on agreement price.
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
31 Related party transactions (continued)
(b) Rental
Rental cost
Lessor Category Rental cost of 2016 Rental cost of 2015
Jiangxi Jiangling Motors Imp. &
Exp. Co., Ltd. Building 4,400 4,471
JMCG Building 4,069 4,074
JMCG Property Management Co. Building 423
Jiangxi Jiangling Real Estate Co.,
Ltd. Building -
8,892 8,809
Rental income
Lessee Category Rental income of Rental income of
2016
Jiangling Material Co., Ltd. Building 132
JMH Building 107
GETRAG (Jiangxi) Transmission
Company Building 70 -
Jiangxi ISUZU Co., Ltd. Building -
309
(c) Guarantee
As at 31 December 2016, bank loans of USD720,000 (equivalent to approximately
RMB4,997,000) (2015:USD786,000 equivalent to approximately RMB5,103,000) were
guaranteed by JMCF (Note 23).
(d) Sales of PPE
2016
Jiangxi JMCG Industrial Co., Ltd. 15
(e) Purchase of PPE
2016
Nanchang Jiangling HuaXiang Auto Components
Co.,Ltd. 8,262 -
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
31 Related party transactions (continued)
(f) Provide technique sharing
2016
JMCG 92,453 -
Ford Vietnam Limited 1,149 -
93,602 -
(g) 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 year
ended 31 December 2016, the total remuneration of the key management was approximately
RMB11,786,000 (2015: RMB11,262,000).
(h) Interest received from cash deposit in related parties
31 December 2016 31 December 2015
JMCF 10,037 7,828
In 2016, the interest rates range from 1.495% to 2.25% per annum (2015: 0.455% to 3%).
(i) Balances arising from sales/purchases of goods/services
Trade receivables from related parties 31 December 2016 31 December 2015
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 230,848 230,762
JMCG Jingma Motors Co., Ltd. 10,530 8,337
Nanchang Jiangling Hua Xiang Auto Components
Co.,Ltd. 3,304 -
Jiangxi JMCG Industry Co.,Ltd. 2,036 3,384
Nanchang Hengou Industry Co., Ltd. 1,694 -
JMH 1,664 -
Jiangxi Jiangling Group Special Vehicle Co.,Ltd. 1,360
Ford Vietnam Limited 1,149 -
Jiangxi Specialty Vehicles Jiangling Motors
Group Co.,Ltd. - 24,097
Nanchang JMCG Car Frame Co., Ltd. - 2,453
Others 135
252,720 269,271
Other receivables from related parties 31 December 2016 31 December 2015
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 30,338 6,941
Ford Otomotiv Sanayi A.S. 1,225 1,225
Others 922 -
32,485 8,166
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
31 Related party transactions (continued)
(j) Balances arising from sales/purchases of goods/services (continued)
Prepayments for purchasing of goods 31 December 2016 31 December 2015
Nanchang Baojiang Steel Processing Distribution
Co.,Ltd. 410,220 211,530
Notes receivables from related parties 31 December 2016 31 December 2015
JMCG Jingma Motors Co., Ltd. 44,827 27,080
Jiangxi Jiangling Chassis Co., Ltd. - 4,217
44,827 31,297
Prepayments for construction in progress 31 December 2016 31 December 2015
JMCG Jiangxi Engineering Construction Co., Ltd. 8,106 1,755
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 273 20,166
8,379 21,921
Prepayments for mould lease 31 December 2016 31 December 2015
Changan Ford Automobile Co., Ltd. 32,528 18,517
Cash deposit in related parties 31 December 2016 31 December 2015
JMCF (Note 19) 874,990 372,320
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
31 Related party transactions (continued)
(j) Balances arising from sales/purchases of goods/services (continued)
Trade payables to related parties 31 December 2016 31 December 2015
Jiangxi Jiangling Lear Interior System Co.,Ltd. 381,357 195,310
Jiangxi Specialty Vehicles Jiangling Motors Group
Co.,Ltd. 286,710 330,939
Jiangxi Jiangling Chassis Co.,Ltd. 267,405 210,110
Jiangxi Jiangling Special Purpose Vehicle
Co.,Ltd. 255,916 199,259
Nanchang Jiangling Hua Xiang Auto
Components Co.,Ltd. 210,407 112,597
GETRAG (Jiangxi) Transmission Company 180,956 181,415
Nanchang JMCG Liancheng Auto Component
Co.,Ltd. 144,608 105,596
Ford 117,540 127,701
Changan Ford Automobile Co.,Ltd. 113,485 5,829
Hanon Systems 87,404 96,058
JMCG 73,518 136,953
Nanchang Unistar Electric & Electronics Co.,Ltd. 50,575 71,433
Faurecia Emissions Control Technologies
(Nanchang) Co.,Ltd. 43,618 17,574
Nanchang Lianda Machinery Co.,Ltd. 23,570 22,373
Nanchang JMCG Skyman Auto Component
Co.,Ltd. 23,538 22,024
Nanchang Yinlun Heat-exchanger Co.,Ltd. 20,612 15,247
Jiangxi Lingge Non-ferrous Metal Die-casting
Co.,Ltd. 17,778 10,737
Jiangling Aowei Aotomobile Spare Part Co.,Ltd. 13,475 13,860
Auto Alliance (Thailand) Co.,Ltd. 12,004 -
Nanchang JMCG Xinchen Auto Component
Co.,Ltd. 10,194 7,049
Nanchang Gear Co.,Ltd. 5,777 6,680
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 3,654 -
Ford Otomotiv Sanayi A.S. 2,687 -
Nanchang JMCG Printing Plant Co.,Ltd. 2,507 1,474
Jiangxi Biaohong Engine Tappet Co.,Ltd. 2,362 3,156
Jiangxi JMCG Shangrao Industrial Co.,Ltd. 2,137 3,872
Jiangling Material Co. 933 1,501
Jiangxi Jiangling Material Utilization Co.,Ltd. 612 1,192
Nanchang Jiangling Huasheng Cleaner Co.,Ltd. - 5,274
Others 538 1,202
2,355,877 1,906,415
JIANGLING MOTORS CORPORATION, LTD.
FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands of RMB unless otherwise stated)
31 Related party transactions (continued)
(j) I Balances arising from sales/purchases of goods/services (continued)
Other payables to related parties 31 December 2016 31 December 2015
Ford Otomotiv Sanayi A.S. 232,672 122,899
Ford 176,871 110,278
Ford Global Technologies, LLC 58,517 48,500
Jiangxi Jiangling Lear Interior System Co.,Ltd. 16,154 5,178
JMCG Jiangxi Engineering Construction Co., Ltd. 12,511 8,333
Nanchang Hengou Industry Co., Ltd. 11,378 11,815
Nanchang Jiangling Hua Xiang Auto
Components Co.,Ltd. 6,157 5,590
Nanchang JMCG Shishun Logistics Co., Ltd. 3,944 2,773
Nanchang JMCG Liancheng Auto Component
Co.,Ltd. 3,751 1,745
GETRAG (Jiangxi) Transmission Company 1,550 6,650
JMCG Hequn Costume Co.,Ltd. 1,410 1,189
JMH 1,303
Ford Motor (China) Co., Ltd. 1,199 4,340
Nanchang JMCG Printing Plant Co.,Ltd. 1,168
JMCG 1,041
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. 616 3,668
Ford Motor Research & Engineering (Nanjing)
Co., Ltd. 466 1,126
Jiangxi Specialty Vehicles Jiangling Motors
Group Co.,Ltd. 167 13,554
Others 4,174 2,106
535,049 351,560
Advance from related parties 31 December 2016 31 December 2015
Jiangxi Specialty Vehicles Jiangling Motors
Group Co.,Ltd. 4,294
Jiangxi Sinodef International Trade Co.,Ltd. -
Others 342
4,636 1,213
(k) I Related parties commitments
Capital commitments 31 December 2016 31 December 2015
JMCG Jiangxi Engineering Construction Co.,
Ltd. 40,334 29,304
Chapter XII Catalog on Documents for Reference
1. Originals of 2016 financial statements signed by legal representative and Chief
Financial Officer.
2. Originals of the Independent Auditor’s Reports signed by Independent
accountants and stamped by the accounting firm.
3. Originals of all the documents and public announcements disclosed in
newspapers designated by CSRC in 2016.
4. The Annual Report in the China GAAP.
Board of Directors
Jiangling Motors Corporation, Ltd.
March 23, 2017
