读取中,请稍候

00-00 00:00:00
--.--
0.00 (0.000%)
昨收盘:0.000今开盘:0.000最高价:0.000最低价:0.000
成交额:0成交量:0买入价:0.000卖出价:0.000
市盈率:0.000收益率:0.00052周最高:0.00052周最低:0.000
江铃B:2021年半年度报告(英文版) 下载公告
公告日期:2021-08-28

Jiangling Motors Corporation, Ltd.

2021Half-year Report

2021-08

Chapter I Important Notes, Contents and Abbreviations

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

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

Except Director Thomas Hilditch authorized Vice Chairman Manto Wong toexercise voting rights on his behalf, all the other Directors were present at theBoard meeting to review this Half-year Report.

Future plans, development strategies and other forward-looking statements inthis report do not constitute a substantial commitment of the Company toinvestors. Investors are advised to pay attention to investment risks.

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

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

Contents

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

Chapter II Brief Introduction ...... 5

Chapter III Management Discussion and Analysis ...... 7

Chapter IV Corporate governance Structure ...... 16

Chapter V Environment and Social responsibility ...... 17

Chapter VI Major Events ...... 20

Chapter VII Share Capital Changes & Shareholders ...... 25

Chapter VIII Preferred Shares ...... 28

Chapter IX Company Bond ...... 29

Chapter X Financial Statements ...... 30

Abbreviations:

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

Catalogue on Documents for Reference

1. Originals of 2021 Half-year financial statements signed by Chairman, Chief

Financial Officer and Chief of Finance Department.

2. Originals of all the documents and public announcements disclosed innewspapers designated by CSRC in the first half of 2021.

3. Chinese version of the Half-year Report prepared per the China GAAP.

Chapter II Brief Introduction

1. Company’s information

Share’s name

Share’s nameJiangling Motors, Jiangling BShare’s Code000550,200550
Place of listingShenzhen Stock Exchange
Company’s Chinese name江铃汽车股份有限公司
English nameJiangling Motors Corporation, Ltd.
AbbreviationJMC
Company legal representativeQiu Tiangao

2. Contact person and method

Board SecretarySecurities Affairs Representative
NameXu LanfengQuan Shi
AddressNo. 2111, Yingbin Middle Avenue, Nanchang City, Jiangxi Province, P.R.CNo. 2111, Yingbin Middle Avenue, Nanchang City, Jiangxi Province, P.R.C
Tel86-791-8526617886-791-85266178
Fax86-791-8523283986-791-85232839
E-mailrelations@jmc.com.cnrelations@jmc.com.cn

3. Other

I. Contact methodsChanges of registered address, headquarter address, postal code, websiteand e-mail in the reporting period

√Applicable □Not Applicable

Registered addressNo. 509, Northern Yingbin Avenue, Nanchang City, Jiangxi Province, P.R.C.
Postal code of registered address330001
Headquarter addressNo. 2111, Yingbin Middle Avenue, Nanchang City, Jiangxi Province, P.R.C.
Postal code of headquarter address330200
Websitehttp://www.jmc.com.cn
E-mailrelations@jmc.com.cn

II. Changes of newspapers for information disclosure, website for publicationof JMC’s half-year report and place for achieving half-year report in thereporting period

□Applicable √Not Applicable

There is no change of newspapers for information disclosure, websitedesignated by CSRC for publication of JMC’s Half-year Report and placefor achieving Half-year Report. Please refer to 2020 Annual Report for details.

4. Main accounting data and financial ratios

Unit: RMB

Reporting period (2021 first half)Same period last yearChange (%)
Revenue17,675,621,088.0014,073,417,878.0025.6
Profit Attributable to the Equity Holders of the Company405,214,055.00207,771,782.0095.03
Net Profit Attributable to Shareholders of Listed Company After Deducting Non-Recurring Profit or Loss113,841,875.0049,351,334.00130.68
Net Cash Generated From Operating Activities69,917,849.00734,283,627.00-90.48
Basic Earnings Per Share (RMB)0.470.2495.03
Diluted Earnings Per Share (RMB)0.470.2495.03
Weighted Average Return on Equity Ratio3.62%1.96%up 1.66 percentage points
At the end of the reporting periodAt the end of the previous yearChange (%)
Total Assets28,408,228,351.0028,185,185,418.000.79
Shareholders’ Equity Attributable to the Equity Holders of the Company8,391,156,200.0010,986,474,009.00-23.62

5. Accounting data difference between domestic and foreign accountingstandards

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

□Applicable √Not Applicable

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

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

□Applicable √Not Applicable

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

Chapter III Management Discussion and Analysis

1. Company’s Core Business during the Reporting Period

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

During the reporting period, to cope with more severe competition, morestringent regulatory requirement, intensifying cost pressures and rising rawmaterial prices, the Company further strengthened the concept of customer-centered, implemented customer direct connection, channel empowermentand other marketing measures to improve customer experience and promotesales growth. At the same time, the Company focused on quality improvement,new product development, operating cost control and production efficiencyenhancement. In the first half of 2021, JMC achieved sales volume of 177,128units, increased 25.45% compared with the same period last year. JMC lightbuses ranked No.1 in the segment market share. JMC Pickup ranked No.2 inthe segment market share. JMC light trucks ranked No.4 in the segmentmarket share. And JMC achieved revenue of RMB 17.68 billion, increased

25.6% compared with the same period last year, achieved net profit of RMB

4.05 million, increased 95.03% compared with the same period last year. Itmainly reflects sales volume increase and continuous promotion of costreduction and efficiency enhancement and strict control of expenses.

Looking back at the first 2021 half-year, benefiting from the policy incentiveand continuous optimization of the economic structure, China’s GDP in thefirst two quarters witnessed YOY growth of 18.3% and 7.9% respectively. Thegrowth rate is gradually recovering to the potential rate. With that, China’sauto industry is also transferring from medium-high speed growing to high-quality development. Generally speaking, in the first half, the accumulatedauto sales volume in China reached 12,891,000 units, with YOY growth of

25.6%, thanks to the controlled epidemic. Specifically speaking, first, the salesvolume of CV achieved 2.884 million, with YOY growth of 31.9% (amongwhich LCV volume was 1.817 million, YOY growth was 25.2%), driven bysuch factors as Stage VI switch, overload governance, infrastructureconstruction kick-off, etc. Second, PV segment was recovering, with salesvolume reaching 10.007 million units and YOY growth of 27.0% (among whichSUV grew the fastest with the rate of 28.6%). Third, the sale volume of newenergy vehicles was 1.206 million, with YOY growth exceeding 200%. Themarket driving power is further strengthened, which accelerates the structuraladjustment between ICE and BEV. Fourth, some start-ups, including Neolixand Uisee, have run pilot operation at certain scenario, such as campus,mining area, ports and airports. Autonomous driving at certain scenarios is

developing from early stage to mid stage. The auto OEMs now focus more onthe possibility of mass production, some L3 functions are being realized formass production. With the requirement of high-quality development, newenergy and intelligent connectivity have officially become the importantbreakthroughs for the transform and upgrade of auto industry in China.

Looking into the second half, the economy growth rate shall gradually slowdown. The whole year fluctuation will be in an inversed tick shape. The wholeyear GDP growth rate will be around 7-9%, the demand for bulk commoditylike vehicles are recovering. However, in the first half, the raw material priceincreased, PPI kicked the new high, while CIP runs at a low level, so thedomestic demand will not rebound a lot. We need to pay great attention to thechip shortage, raw material price increase and other disadvantages. In thelong run, the potential market demand is the fundamental power for the long-term benefit of auto industry. With the gradual economic stability, fading policyinfluence, adjusted supply and new demands activated by technologyempowerment, the auto industry will enter a new round of high qualitydevelopment. The sales volume peak was estimated to be around 40 millionunits in the future.

In the CV segment that JMC is involved, influenced by dual circulation, E-commerce, refined tourism and customized transportation development, thelight bus sales volume get further improved. With gradually loosenedrestriction on urban access, together with people’s pursuit for better life andthe development of modern agriculture, the demands for Pickup shall befurther released. With the new urbanization and the construction of city circles,there will be more demands on short and medium-distance transportation,which shall be an incentive to the light truck market. With the continuouslyimproving income of people, SUV market shall gradually resume growth. Thesegments that JMC are involved shall enjoy further development with moreincremental volume.

2. Core Competitiveness Analysis

JMC is committed to becoming the leader in LCV segment. In the first half ofthis year, JMC launched the competitive model of Shunda small trucktargeting at retail market, with improved channel capability. All these shallbringer high market share of JMC light trucks in retail market. At the sametime, JMC actively explored customer demands and responded to the nationalnew energy strategy, with cost-effective Shunda BEV launched to enrich thenew energy light truck product portfolio and to enhance the whole life cyclecompetitiveness of new energy products.

As the top light bus brand in China, JMC always takes customers as thecenter and makes deep insight into the operation scenarios of light buses,with European-style light bus products covering all scenarios including cargotransportation, people moving and refitting. During the period when COVID-19broke out, Transit ambulance was honoured as Vehicle No.1 for Epidemic

Fighting with such advantages as swift rescue, quick after-sales response andhigh market share, etc. The recently launched new-generation Transit Proprovides more convenient and interesting driving experience with 2.2T dieselengine, AMT transmission, 13 intelligent driving assistance features andiFlyTek smart connectivity system. Uptime 100% solution can satisfy 24 hourdemand and service requirements of customers, and meanwhile, leads thenew era of digitalized light bus.

JMC Pickup products always center at customer demands and cover variousscenarios. The American-style premium Pickup Vigus 9 was recognized bycustomers with its leading comfortable luxury. Commercial and lifestyle dual-use Vigus 7 was favored by customers with its leading Powertrain system,and the practical new Baodian was attractive to customers with its leadingload capacity and low fuel consumption. In the first half of 2021, JMC Pickupachieved 35.77% growth in terms of sales volume, ranking among the top inthe industry.

For Ford SUV products, customer experience shall get improved through theinsight into the auto consumption market change and family structuredevelopment. The latest Ford showroom design and innovative customerexperience were adopted with brand-new Family Space Ford experienceshowroom. With the philosophy of treating customers as family and the threekey innovative characteristics, including relieving customers with faith,entertaining customers with courtesy and caring customers with love, Ford’s“Best of Ford, Best of China” commitment shall get further fulfilled.

3. Core Business Analysis

SummaryRefer to the relevant content of "1. Company’s Core Business during theReporting Period".

Year-over-Year Changes of Main Financial Data

Unit: RMB

2021 1H2020 1HYOY change(%)Reason
Revenue17,675,621,08814,073,417,87825.60%
Cost of sales15,050,224,71911,860,122,36526.90%
Distribution costs949,514,418592,187,32060.34%Due to the sales growth and the cost of bringing new models to market.
Administrative expenses529,817,540459,127,44615.40%
Finance expense-145,442,287-66,731,813-117.95%Due to the interest income from bank deposits increased.

Income tax expense

Income tax expense16,350,89514,137,15715.66%
Research and Development Expenditure776,879,828823,946,960-5.71%
Net cash generated from operating activities69,917,849734,283,627-90.48%Due to the increase of supplier payments.
Net cash used in investing activities-225,537,449-3,076,090,84992.67%Due to the decrease of current investments.
Net cash used in financing activities-17,714,4591,276,424,368-101.39%Due to the decrease of loan.
Net increase/(decrease) in cash and cash equivalents-173,334,059-1,065,382,85483.73%Due to the decrease of current investments.

Significant changes in the composition or source of profits during the reportingperiod

□Applicable √Not Applicable

There was no significant change in the composition or source of profits.

Composition of Core Business

Unit: RMB

2021 1H2020 1HYOY change (%)
AmountProportion (%)AmountProportion (%)
Revenue17,675,621,088100%14,073,417,878100%25.60%
By Industry
Automobile Industry17,675,621,088100%14,073,417,878100%25.60%
By Products
Vehicle16,283,174,18392.13%13,030,304,98692.59%24.96%
Components1,023,854,3815.79%809,320,4985.75%26.51%
Automobile Maintenance services53,595,5450.30%37,965,3670.27%41.17%
Material & Others314,996,9791.78%195,827,0271.39%60.85%
By region
China17,675,621,088100%14,073,417,878100%25.60%

Reach to 10% of Revenue or Profit by Industry, Product or Region

√Applicable □Not Applicable

Unit: RMB

TurnoverCostGross MarginY-O-Y turnover change (%)Y-O-Y Cost Change (%)Y-O-Y gross margin change (points)
By Industry
Automobile Industry17,675,621,08815,050,224,71914.85%25.60%26.90%-0.88%
By Products
Vehicle16,283,174,18313,950,596,20614.33%24.96%26.29%-0.89%
By Region
China17,675,621,08815,050,224,71914.85%25.60%26.90%-0.88%

Explanation on the above 30% year-on-year change of related data

□Applicable √Not Applicable

4. Non- core business analysis

□Applicable √Not Applicable

5. Analysis of Assets and Liabilities

I. Major changes

Unit: RMB

Asset itemJune 30, 2021December 31, 2020YOY
Proportion change
AmountProportionAmountProportion(Points)
Cash and cash equivalents10,950,186,73538.55%11,121,955,12939.46%-0.91%
Accounts receivables3,401,921,80411.98%2,999,883,21210.64%1.34%
Inventories2,178,815,4367.67%2,086,605,6927.40%0.27%
Long-term equity investments39,232,3470.14%39,496,5480.14%0.00%
Fixed assets4,785,494,82516.85%5,165,956,41018.33%-1.48%
Construction in progress1,927,985,4146.79%1,535,497,7705.45%1.34%
Right-of-use asset40,768,6280.14%28,405,8900.10%0.04%
Short-term borrowings500,000,0001.76%500,000,0001.77%-0.01%
Contract liabilities155,880,3670.55%558,526,8461.98%-1.43%
Long-term borrowings2,326,6880.01%2,563,6660.01%0.00%
Lease liabilities27,854,0230.10%18,998,9520.07%0.03%

II. Main Overseas Assets

□Applicable √Not Applicable

III. The fair value of the assets and liabilities.

√Applicable □Not Applicable

Unit: RMB

Item

ItemBeginning of the periodLoss/profit in faire value in the periodCumulative changes in fair value recorded into equityImpairment in the periodPurchase in the periodSell in the periodOther changesEnd of the period
financial assets
1.Trading financial assets (excluding derivative financial assets)803,892,985-681,478001,600,000,0001,850,000,0000553,211,507
2. Receivables financing815,583,6690001,581,300,7011,968,311,1570428,573,213
Subtotal1,619,476,654-681,478003,181,300,7013,818,311,1570981,784,720
Financial liabilities3,716,7274,449,015000008,165,742

Whether there is a significant change in the measurement attributes of theCompany's main assets during the reporting period

□Applicable √Not Applicable

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

6. 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

Unit: RMB

Project NameFushan Site
Investment Method/ sourceSelf-funded
Fixed Assets (Y/N)Y
Spending in 2021(RMB Mils)159,743,826
Investment Committed (RMB Mils)1,202,953,697
Progress55%
Date of disclosureNovember 15, 2017
IndexAnnouncement of this project (No. 2017-044) was published in the website http://www.cninfo.com.cn.

VI. Financial Assets Investment(a) Stock Investment

□Applicable √Not Applicable

(b) Derivative Investment

□Applicable √Not Applicable

7. Sales of Major Assets and Equity

I. Sale of Major Assets

□Applicable √Not Applicable

II. Sales of Major Equity

√Applicable □Not Applicable

Counterparty

CounterpartyYunnan Yunnei Power Group Co., Ltd.
Sold equity60% equity of Taiyuan Jiangling Power Co., Ltd., a wholly-owned subsidiary of the Company.
Date of saleYunnan Yunnei Power Group Co., Ltd. delisted the Equity on January 6, 2021 and the transfer is still in progress.
Transaction price (RMB mils)360
Net profit contributed by the equity to the listed company from the beginning of the current period to the selling dateRMB -23.06 million in the first half of 2021.
Impact of the sale on the CompanyThe purpose of this transaction is to sell the Transaction Equity to external strategic partner to develop heavy engine business.
Proportion of net profit contributed by equity sale to the total net profit of the listed companyNot applicable.
Equity sale pricing principlePublic bidding process.
Whether it is a related transactionNo.
Association with the counterpartyNo relationship.
Whether all the equity involved has been transferredNo.
Whether the plan is implemented as scheduled, if not, the reason and the measures taken by the companyYes.
Date of disclosureOctober 13, 2020 and January 7, 2021.
IndexThe announcements (No. 2020-040 and No. 2021-002) were published on the website: www.cninfo.com.cn.

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

Unit: RMB’000

Name ofCompanies

Name of CompaniesType of CompaniesMain BusinessRegistered CapitalAssetsNet AssetsTurnoverOperating ProfitNet Profit
Jiangling Motors Sales Co., Ltd.SubsidiarySale of vehicles, service parts50,0006,636,315186,52115,549,130-59,572-43,660
JMC Heavy Duty Vehicle Co., Ltd.SubsidiaryProduction and sale of vehicles, engines, components, and related service1,323,793858,139784,672143-65,471-65,318
Taiyuan Jiangling Power Co., Ltd.SubsidiaryDesign, assemble and sell engines and their spare parts600,000573,601562,8965,937-30,734-23,058

Acquisition and disposal of the subsidiary

□Applicable √Not Applicable

9. Structured Entities Controlled by JMC

□Applicable √Not Applicable

10. Potential Challenges and Solutions

Amid regional outbreaks of global COVID-19 in 2021, there is still uncertaintyin the recovery and growth of the world economy. China is actively promotingthe construction of the new dual circulation development pattern. Stimulatingconsumption will be a long-term policy orientation, and both supply anddemand will usher in dual upgrading. The rise of start-ups, stricter legalrequirements, rising raw material price, tight chip supply and intensifiedindustry competition all bring big challenges to the Company’s operation. Tomaintain robust growth, JMC will continue to focus on the following areas:

(1) Continue to make efforts in the prevention and control of the epidemic, andsteadily promote the Company's production and sales;

(2) Be customer-centered, show an in-depth insight into customer needs andchanges in the market environment, find new business growth points, andgain market in disruptive industry changes;

(3) Vigorously develop intelligent and digital products, transform from productprovider to full ecological provider, improve customer experience and open upnew sources of profits;

(4) Focus continuously on national regulations and policies, and energyconservation and environmental protection requirements, keep up with thepace of policies, and actively promote the upgrading of product technology;

(5) Improve supplier capabilities and component quality, and continue toreduce component procurement cost;

(6) Strengthen corporate governance, strictly follow national laws andregulations, and improve risk assessment and control mechanism;

(7) Continue expense management and control to optimize business structure;

(8) Create a lean and efficient organization to respond flexibly to marketchanges through the established process optimization team.

JMC will focus on light commercial vehicles with the support of SUV, continueto consolidate the core business, and lay a solid foundation. At the same time,JMC focuses on marketing and service, drives the digital transformation ofeach business module, and improves customer experience. JMC alsoexpands new businesses and profit models to build an ecological platform forsustainable development in the future. By strengthening sales channelconstruction, market awareness and consumer satisfaction are enhanced.Furthermore, the Company will promote new products design anddevelopment, achieve the quality and cost targets for new products toaccelerate the progress of launching new competitive products to the market,with market share expanded and higher profit. Stable cash flow should beensured to support the sustainable and high-quality development of theCompany.

Chapter IV Corporate Governance Structure

1. Annual and special shareholders’ meeting

I Index to the Shareholders’ Meeting in the reporting period

Meeting

MeetingMeeting TypeInvestor Participation RatioConvening DateDisclosure DateIndex
2021 First Special Shareholders’ MeetingSpecial Shareholders’ Meeting75.92%January 25, 2021January 26, 2021The announcement (No. 2021-009) was published in the website www.cninfo.com.cn.
2021 Second Special Shareholders’ MeetingSpecial Shareholders’ Meeting75.44%May 25, 2021May 26, 2021The announcement (No. 2021-033) was published in the website www.cninfo.com.cn.
2020 Annual Shareholders’ MeetingAnnual Shareholders’ Meeting75.92%June 25, 2021June 26, 2021The announcement (No. 2021-040) was published in the website www.cninfo.com.cn.

II Special Shareholders’ Meeting convened by preferred shareholders whosevoting rights were restored

□Applicable □√Not Applicable

2. Changes of directors, supervisors and senior management

√Applicable □Not Applicable

NamePositionStatusDateReason
Milton WongVPLeaveJanuary 31, 2021Work rotation
Eric HermannVPAppointedFebruary 1, 2021
Wan HongVPLeaveMarch 31, 2021Retired
Xu LanfengVPAppointedApril 1, 2021
Liu RangpoVPAppointedApril 1, 2021
Xiong YiVPAppointedApril 1, 2021
Anning ChenVice ChairmanLeaveJune 25, 2021Work arrangement
Manto WongVice ChairmanElectedJune 25, 2021
Xiong ChunyingDirectorElectedJune 25, 2021

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

□Applicable √Not Applicable

The Company planned that neither cash dividend nor stock dividend wasdistributed, and not to convert capital reserve to share capital for the first halfof 2021.

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

□Applicable √Not Applicable

Chapter V Environmental and social responsibility

1. Environmental protection

Whether the Company and affiliates is the key pollution discharge unitpublished by environmental protection administration?

√Yes □No

Name of companyor subsidiary

Name of company or subsidiaryJMCJMC
Name of principal pollutant and specific pollutantWastewater (COD, NH-N)Exhaust gas (SO2, NOx, smoke, toluol, xylene)
Mode of dischargeContinuous dischargeContinuous discharge
Number of discharge outlet6180
Distribution of discharge outlet3 in Mainsite, 2 in Xiaolan Site, 1 in Fushan Site, 1 in Cast Plant and 1 in Axle Plant51 in Mainsite, 58 in Xiaolan Site, 32 in Fushan Site, 33 in Cast Plant and 6 in Axle Plant
Discharge concentration"COD:32mg/L NH-N:0.904mg/LSO2: 3mg/m3; NOx: 70mg/m3; smoke: 20mg/m3; toluol: 0.252mg/m3; dimethylbenzene: 1.3mg/m3;
Applicable standard for pollutant discharge“Wastewater Discharge Standard”(GB 8978-1996)"The Emission Standard of Air Pollutants”; "Emission Standard of Air Pollutants for Boiler”(GB 13271-2014)
Total amount of dischargeCOD: 54.49t; NH-N: 1.06NOx: 5.86t
Total amount of discharge auditedCOD≤841.68t; NH-N≤83.1414tNOx≤37.69t
Excessive dischargeMeet StandardMeet Standard

The construction and operation of pollutant preventive and controlfacilitiesIn order to achieve the environmental protection construction requirements ofthe new base and ensure that various environmental protection indicatorsmeet the emission standards, the Company has continuously adopted variousgovernance measures. In 2020, the Company has controlled the casting odorin the plant to ensure the exhaust gas pollutants up to the standard. In 2021,JMC start the VOCs control project of the Xiaolan Plant to consistent withregulatory compliance standards. Since 2006, the Company has successivelybuilt seven Wastewater Treatment Stations. In 2021, the Company built a600-mu(equivalent to 98.842 acres)wastewater treatment station for theFushan Plant and Xiaolan Frame Plant to reach the requirements forwastewater discharge standards. In the waste management process, JMCstarts from the source, stores waste by classification, establishes a temporary

storage place for solid waste, posts warning graphic symbols, sets up signs,and strictly standardizes waste storage management. The company builds aSolid Waste Storage Station at Fushan Plant to store general solid waste andhazardous waste in strict accordance with requirements.

EIA on construction project and other administrative permits forenvironmental protectionThe Company strictly implements the construction project environmentalimpact assessment system. With respect to new construction, expansion andreconstruction, JMC comprehensively planned environmental protection andevaluated the “Three Simultaneities”. From the source of design, JMC carriedout the philosophy of energy saving and low carbon all the time. TheCompany carries on the environmental monitoring every year according to therequirements, ensures the pollutant discharge meeting the requirements ofdischarge permit, formulates the stricter internal control target, and strives toreduce the impact of environmental pollution to the minimum. In 2021, theproject of Xiaolan Simulation Collision Laboratory has been completed, andthe approval of the environmental impact report form of VOC treatment projectin painting workshop of Xiaolan Factory has be obtained.

Emergency plan on emergency environmental incidentsIn order to dilute or prevent environmental risks, JMC established anemergency preparation and response procedure and specific environmentalemergency plans, so as to formulate corresponding control methods forpotential accidents and emergences occurred or that may probably occur, andhas been filed with the environmental protection bureau. JMC organizevarious emergency drills to the effectiveness of the plan.

Environmental self-monitoring schemeJMC’s Qingyunpu Main Plant Area and Xiaolan Plant Area were listed as keypollutant discharging organizations of wastewater/hazardous wastes, andmonitored by themselves in strict accordance with the Method for Self-monitoring and Information Disclosure of State Key Monitoring Enterprises(Trial). Their self-monitoring schemes, monitoring results and annualmonitoring reports on pollution sources were disclosed on the “JiangxiProvince pollution source enterprise portal system”.

Administrative penalties imposed for environmental problems duringthe reporting periodNone.

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

standards, stipulated the preventive and control measures for environmentalpollution, and reported to competent administrative departments onenvironmental protection for approval.

Other environmental related informationNone.

2. Social responsibility

The first half of 2021 was a transitional period of transferring from povertyalleviation to rural revitalization. According to the work arrangement of JiangxiProvincial Party Committee and Provincial Government, and with the supportof JMCG, JMC got involved in poverty alleviation achievement consolidationof Xianting Village, and also its rural revitalization.

In terms of consolidating the achievements in poverty alleviation, the teamstationed in the village did a good job in monitoring the prevention of povertyreturn, and continued to provide assistance to registered poverty-strickenhouseholds to ensure that none of them returned to poverty. All grass-rootsParty branches of JMC continue to carry out visits and solicitation activities,nearly 100 visits were carried out in the first half of this year.

In the promotion of rural revitalization, the team stationed in the villageactively cooperated with the superior departments to carry out the orderlytransition of Xianting village branch and village committee. Village cadreshave been organized to learn from many agricultural industry characteristicbases in Nanchang city for many times to expand their ideas of ruraldevelopment.

In the second half of 2021, the team stationed in the village will not onlycontinue to consolidate the achievements of poverty alleviation, but also makemore contribution to rural revitalization.

Chapter VI Major Events

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

□Applicable √Not Applicable

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

2. Non-operating funding in the Company occupied by controlling shareholderand its affiliates

□Applicable √Not Applicable

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

3. Illegal outside guarantee

□Applicable √Not Applicable

The Company had no illegal outside guarantee during the reporting period.

4. Appointment or dismissal of accounting firm

Whether the 2021 half-year report is audited?

□Yes √No

JMC 2021 half-year report is not audited.

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

□Applicable √Not Applicable

6. Explanation of the board of directors to abnormal opinions from accountingfirm in 2021 half-year report

□Applicable √Not Applicable

7. Related matters regarding bankruptcy

□Applicable √Not Applicable

The Company did not go bankrupt during the reporting period.

8. Litigation or arbitration

Significant litigation or arbitration

□Applicable √Not Applicable

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

Other litigation

□Applicable √Not Applicable

9. Punishment

□Applicable √Not Applicable

The Company have not been punished by regulatory authorities.

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

□Applicable √Not Applicable

11. Major related transactions

I. Routine operation related party transactions

√Applicable □Not Applicable

Please refer to the note 7 “Related party Transactions” to the financialstatements for details.

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

□Applicable √Not Applicable

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

III. Related party transaction concerning outside co-investment

□Applicable √Not Applicable

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

IV. Related credit and debt

√Applicable □Not Applicable

Is there non-operating related credit and debt?

□Yes √No

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

V. Transaction with related financial companies or financial companies thatthe company holds

√Applicable □Not Applicable

Deposits

Unit: RMB ‘000

Related Party

Related PartyJMCG Finance Company
The related relationshipA subsidiary of JMCG
Maximum daily deposit limit*
Deposit rate1.725%-2.25%
Balance at the beginning of the period1,231,830
Amount incurred10,438,350
Balance at the end of the period771,590

* Note: JMC applies the consolidated deposit limit in JMCG Finance Companyat the end of each month to the lower of the following: 1) 25% of JMCGFinance Company absorbing deposit in prior year end; or 2) 12% of JMC’sconsolidated total cash reserve.

Loan

□Applicable √Not Applicable

Credit granting or other financial business

□Applicable √Not Applicable

VI. Other major related party transactions

√Applicable □Not Applicable

Please refer to the note 7 “Related party Transactions” to the financialstatements for details.Index for the Announcement of Major related party transactions:

Announcement Title

Announcement TitleAnnouncement Disclosure DateWebsite for Disclosure
Jiangling Motors Corporation, Ltd. Public Announcement on Related Party TransactionsFebruary 6, 2021http://www.cninfo.com.cn
Jiangling Motors Corporation, Ltd. Public Announcement on Related Party TransactionsMay 29, 2021http://www.cninfo.com.cn

12. Major contracts and execution

I. Entrustment, contract or leasea. Entrustment

□Applicable √Not Applicable

There was no entrustment during the reporting period.

b. Contract

□Applicable √Not Applicable

There was no contract during the reporting period.

c. Lease

√Applicable □Not Applicable

See the note 7 (5) (b) to financial statements for lease of related parties.

Project earns more than 10% of net profit.

□Applicable √Not Applicable

II Major Guarantee

□Applicable √Not Applicable

The Company had no major guarantee during the reporting period.

III. Entrusted financial management

□Applicable √Not Applicable

There was no entrusted financial management in the reporting period.

IV. Major contract of daily operation

□Applicable √Not Applicable

V. Other Major Contracts

□Applicable √Not Applicable

There was no other major contract in the reporting period.

13. Other major events

□Applicable √Not Applicable

There was no other major event in the reporting period.

14. Major event of JMC subsidiary

√Applicable □Not Applicable

JMC Heavy Duty Vehicle Co., Ltd., a whole-owned subsidiary of JMC, wasseparated per vehicle and engine business into the surviving company “JMCHeavy Duty Vehicle Co., Ltd.” and the derived new company “TaiyuanJiangling Power Co., Ltd.” in August 2020.

In October 2020, the Board of Directors approved to sell 60% of the equity ofTaiyuan Jiangling Power Co., Ltd. through the public bidding process atShanghai United Assets and Equity Exchange at a price of no less than RMB359,975,079. At the expiration of the bidding announcement period, the abovesubject matter is solicited to an intended transferee, Yunnan Yunnei PowerGroup Co., Ltd. (hereinafter referred to as “Yunnei Group”), with a delistingprice of RMB 360 million. In January 2021, the Company and Yunnei Groupsigned by consensus the corresponding assets and equity transactioncontract in accordance with the relevant trading rules of Shanghai UnitedAssets and Equity Exchange. As of the date of disclosure of the report, therelevant transaction between the Company and Yunnei Group is still inprogress.

In January 2021, the Shareholders’ Meeting of JMC approved to increase thecapital by RMB 1.142 billion in cash to JMC Heavy Duty Vehicle Co., Ltd.Upon completion of the capital increase, the registered capital of JMC HeavyDuty Vehicle Co., Ltd. was increased from RMB 181,793,174 to RMB1,323,793,174.

In May 2021, the Shareholders’ Meeting of JMC approved to sell 100% of theequity of JMC Heavy Duty Vehicle Co., Ltd. through the public biddingprocess at Shanxi Property Rights Exchange at a price of no less than RMB764,069,207. At the expiration of the bidding announcement period, the abovesubject matter is solicited to an intended transferee, Volvo LastvagnarAktiebolag. After the expiration of the bidding announcement period, VolvoLastvagnar Aktiebolag paid the deposit in accordance with the relevanttrading rules of Shanxi Property Rights Exchange. On August 23, 2021, byconsensus, the Company signed the Equity Interest Transfer AgreementRelating to 100% of the Equity Interests in JMC Heavy Duty Vehicle Co., Ltd.with Volvo Lastvagnar Aktiebolag. According to this agreement, the base price

paid by Volvo Lastvagnar Aktiebolag for the relevant equity interests is RMB781,400,000. As of the date of disclosure of the report, the relevanttransaction between the Company and Volvo Lastvagnar Aktiebolag is still inprogress.

Chapter VII Share Capital Changes & Shareholders

1. Changes of shareholding structure

I. Table of the changes of shareholding structure

Before the changeChange (+, -)After the change
SharesProportion of total shares (%)New sharesBonus SharesReserve- converted sharesOthersSubtotalSharesProportion of total shares (%)
I. Limited tradable A shares750,8400.09%00000750,8400.09%
1. Other domestic shares750,8400.09%00000750,8400.09%
Including:
Domestic legal person shares745,1400.09%00000745,1400.09%
Domestic natural person shares5,700000005,700
II. Unlimited tradable shares862,463,16099.91%00000862,463,16099.91%
1. A shares518,463,16060.06%00000518,463,16060.06%
2. B shares344,000,00039.85%00000344,000,00039.85%
III. Total863,214,000100.00%00000863,214,000100.00%

Causes of shareholding changes

□Applicable √Not Applicable

Approval of changes of shareholding structure

□Applicable □√Not Applicable

Shares Transfer

□Applicable □√Not Applicable

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

□Applicable □√Not Applicable

Others to be disclosed necessarily or per the requirements of securitiesregulator

□Applicable □√Not Applicable

II. Changes of limited A shares

□Applicable √Not Applicable

2. Securities issuance and listing

□Applicable √Not Applicable

3. Shareholders and shareholding status

Total shareholders (as ofJune 30, 2021)

Total shareholders (as of June 30, 2021)JMC had 48843 shareholders, including 43,086 A-share holders, and 5,757 B-share holders.
Top ten shareholders
Shareholder NameShareholder TypeShareholding Percentage (%)Shares at the End of YearChange (+,-)Shares with Trading RestrictionShares due to Mortgage or Frozen
Nanchang Jiangling Investment Co., Ltd.State-owned legal person41.03%354,176,000000
Ford Motor CompanyForeign legal person32.00%276,228,394000
Shanghai Automotive Co., Ltd.State-owned Legal person1.51%13,019,610000
Hong Kong Securities Clearing Company Ltd. (HKSCC)Foreign legal person0.81%6,960,267789,69100
GAOLING FUND, L.P.Foreign legal person0.63%5,453,086000
INVESCO FUNDS SICAVForeign legal person0.56%4,841,889000
National Social Security Fund - One One Eight CombinationsState-owned legal person0.54%4,643,5014,643,501
Jin XingDomestic natural person0.42%3,640,2001,043,80000
China Securities Finance Corporation LimitedState-owned legal person0.27%2,364,360-17,742,539
LSV EMERGING MARKETS EQUITY FUND, L.P.Foreign legal person0.26%2,301,600-404,60000
Notes on association among above-mentioned shareholdersNone.
Top ten shareholders holding unlimited tradable shares
Shareholder NameShares without Trading RestrictionShare Type
Nanchang Jiangling Investment Co., Ltd.354,176,000A share
Ford Motor Company276,228,394B share
Shanghai Automotive Co., Ltd.13,019,610A share
Hong Kong Securities Clearing Company Ltd. (HKSCC)6,960,267A share
GAOLING FUND, L.P.5,453,086B share
INVESCO FUNDS SICAV4,841,889B share
National Social Security Fund - One One Eight Combinations4,643,501A share
Jin Xing3,640,200B share
China Securities Finance Corporation Limited2,364,360A share
LSV EMERGING MARKETS EQUITY FUND, L.P.2,301,600B share
Notes on association among above-mentioned shareholdersNone.

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

□Yes √No

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

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

□Applicable √Not Applicable

There was no change of shares held by Directors, Supervisors and seniormanagement in the reporting period. Please refer to 2020 annual report fordetails.

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

□Applicable √Not Applicable

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

Change of actual controlling parties

□Applicable √Not Applicable

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

Chapter VIII Preferred Shares

□Applicable √Not Applicable

JMC have no Preferred Shares during the reporting period.

Chapter IX Company Bond

□Applicable √Not Applicable

Chapter X Financial Statements

JIANGLING MOTORS CORPORATION, LTD.

FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30JUNE 2021

JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY BALANCE SHEET AS AT 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)

Assets

AssetsNote30 June 2021 Consolidated*31 December 2020 Consolidated30 June 2021 Company*31 December 2020 Company
Current assets
Cash and cash equivalents4(1)10,950,186,73511,121,955,1298,208,750,5698,473,562,045
Financial assets held for trading4(2)553,211,507803,892,985-502,797,917
Accounts receivable4(3)、14(1)3,401,921,8042,999,883,2123,108,512,0873,330,880,651
Financing receivables4(4)428,573,213815,583,669529,914,58129,412,448
Advances to suppliers4(5)579,396,268452,714,683579,292,941451,832,917
Other receivables4(6)、14(2)216,179,929128,989,573241,702,0421,359,907,223
Inventories4(7)2,178,815,4362,086,605,6922,108,932,1102,020,079,494
Other current assets4(8)885,726,989737,369,737825,850,162678,079,950
Total current assets19,194,011,88119,146,994,68015,602,954,49216,846,552,645
Non-current assets
Long-term equity investments4(9)、14(3)39,232,34739,496,5482,807,175,8401,561,496,548
Fixed assets4(10)4,785,494,8255,165,956,4103,991,109,3654,331,796,677
Construction in progress4(11)1,927,985,4141,535,497,7701,828,963,5101,429,348,858
Right-of-use assets4(12)40,768,62828,405,89038,582,27628,405,890
Intangible assets4(13)1,063,475,861931,391,553773,702,506637,918,837
Development expenditures4(13)29,063,385173,473,24229,063,385173,473,242
Deferred tax assets4(14)1,328,196,0101,163,969,325365,889,704370,120,915
Total non-current assets9,214,216,4709,038,190,7389,834,486,5868,532,560,967
TOTAL ASSETS28,408,228,35128,185,185,41825,437,441,07825,379,113,612

JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY BALANCE SHEET AS AT 30 JUNE 2021(CONTINUED)(All amounts in RMB Yuan unless otherwise stated)

Liabilities and owners' equity

Liabilities and owners' equityNote30 June 2021 Consolidated*31 December 2020 Consolidated30 June 2021 Company*31 December 2020 Company
Current liabilities
Short-term borrowings4(16)500,000,000500,000,000500,000,000500,000,000
Derivative financial liabilities4(17)8,165,7423,716,7278,165,7423,716,727
Notes payable4(18)1,565,665---
Accounts payable4(19)9,408,546,40310,026,215,8779,401,623,75910,022,399,964
Contract liabilities4(20)155,880,367558,526,84640,313,16542,397,868
Employee benefits payable4(21)632,200,970759,368,606571,222,642687,984,808
Taxes payable4(22)291,614,997218,445,227102,947,95795,599,544
Other payables4(23)8,024,900,0544,153,849,6254,714,357,9541,495,307,482
Current portion of non-current liabilities4(24)16,602,77610,909,16316,082,88310,909,163
Other current liabilities4(25)382,857,533410,899,32833,417,22139,220,370
Total current liabilities19,422,334,50716,641,931,39915,388,131,32312,897,535,926
Non-current liabilities
Long-term borrowings4(26)2,326,6882,563,6662,326,6882,563,666
Lease liabilities4(27)27,854,02318,998,95225,883,10218,998,952
Provisions4(28)206,997,083195,896,139--
Deferred income4(29)48,943,77349,944,62548,943,77349,944,625
Long-term employee benefits payable4(30)60,786,69362,855,00060,492,69362,561,000
Deferred tax liabilities4(14)142,239,570126,995,164117,891,524102,300,000
Other non-current liabilities4(31)105,589,81499,526,46498,706,99690,866,994
Total non-current liabilities594,737,644556,780,010354,244,776327,235,237
Total liabilities20,017,072,15117,198,711,40915,742,376,09913,224,771,163
Equity
Share capital4(32)863,214,000863,214,000863,214,000863,214,000
Capital surplus4(33)839,442,490839,442,490839,442,490839,442,490
Other comprehensive income4(34)(11,759,250)(11,759,250)(12,021,750)(12,021,750)
Surplus reserve4(35)431,607,000431,607,000431,607,000431,607,000
Retained earnings4(36)6,268,651,9608,863,969,7697,572,823,23910,032,100,709
Total equity attributable to shareholders of the Company8,391,156,20010,986,474,0099,695,064,97912,154,342,449
Minority interests----
Total equity8,391,156,20010,986,474,0099,695,064,97912,154,342,449
TOTAL LIABILITIES AND EQUITY28,408,228,35128,185,185,41825,437,441,07825,379,113,612

note:* Unaudited financial indexesLegal representative:Qiu Tiangao CFO:Li Weihua Finance Department:Ding Ni

JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY INCOME STATEMENTS FOR 2021 FIRST HALF-YEAR(All amounts in RMB Yuan unless otherwise stated)

Item

ItemNote2021 First Half-year Consolidated*2020 First Half-year Consolidated*2021 First Half-year Company*2020 First Half-year Company*
Revenue4(37)、14(4)17,675,621,08814,073,417,87816,423,558,48113,100,109,933
Less: Cost of sales4(37)、4(43)、14(4)(15,050,224,719)(11,860,122,365)(14,542,226,983)(11,197,514,026)
Taxes and surcharges4(38)(479,241,514)(386,579,142)(457,195,578)(374,566,719)
Selling and distribution expenses4(39)、4(43)(949,514,418)(592,187,320)(137,982,658)(106,442,789)
General and administrative expenses4(40)、4(43)(529,817,540)(459,127,446)(446,001,303)(358,155,678)
Research and development expenses4(41)、4(43)(726,466,190)(696,582,452)(718,611,661)(694,302,769)
Financial expenses4(42)145,442,28766,731,813116,227,29367,945,339
Including: Interest expenses(12,133,084)(19,061,965)(12,101,916)(16,322,688)
Interest income149,147,66594,240,518119,819,39391,873,400
Add: Other income4(46)333,292,836165,639,467333,208,941145,105,792
Investment income4(47)、14(5)(10,863,242)28,278,000(4,619,007)28,278,000
Including: Share of profit of associates and joint ventures4(47)(264,201)(3,024,554)(264,201)(3,024,554)
Gains on changes in fair value4(48)(5,130,493)10,012,041(7,246,932)10,012,041
Credit impairment losses4(45)7,389,378(66,242,811)1,197,855(61,963,003)
Asset impairment losses4(44)-(34,107,710)-(20,994,208)
Gains on disposal of assets4(49)11,152,182(581,955)20,345,706(1,145,364)
Operating profit421,639,655248,547,998580,654,154536,366,549
Add: Non-operating income4(50)2,510,2773,599,1931,052,2443,052,524
Less: Non-operating expenses4(51)(2,584,982)(30,238,252)(2,387,862)(30,104,671)
Total profit421,564,950221,908,939579,318,536509,314,402
Less: Income tax expenses4(52)(16,350,895)(14,137,157)(38,064,142)(21,565,844)
Net profit405,214,055207,771,782541,254,394487,748,558
Classified by continuity of operations
Net profit from continuing operations405,214,055207,771,782541,254,394487,748,558
Net profit from discontinued operations----
Classified by ownership of the equity
Minority interests----
Attributable to shareholders of the Company405,214,055207,771,782541,254,394487,748,558
Other comprehensive income, net of tax----
Attributable to shareholders of the Company
Other comprehensive income items which will not be reclassified to profit or loss
Changes arising from remeasurement of defined benefit plan4(34)----
Attributable to minority interests
Total comprehensive income405,214,055207,771,782541,254,394487,748,558
Attributable to shareholders of the Company405,214,055207,771,782541,254,394487,748,558
Attributable to minority interests----

Earnings per share

Earnings per share
Basic earnings per share(RMB Yuan)4(53)0.470.24————
Diluted earnings per share(RMB Yuan)4(53)0.470.24————

note:* Unaudited financial indexesLegal representative:Qiu Tiangao CFO:Li Weihua Finance Department:Ding Ni

JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS FOR 2021 FIRST HALF-YEAR(All amounts in RMB Yuan unless otherwise stated)

Item

ItemNote2021 First Half-year Consolidated*2020 First Half-year Consolidated*2021 First Half-year Company*2020 First Half-year Company*
Cash flows from operating activities
Cash received from sales of goods or rendering of services19,342,042,07014,440,474,74417,810,262,25312,911,082,079
Cash received relating to other operating activities4(54)450,958,933245,920,384364,859,759187,369,975
Sub-total of cash inflows19,793,001,00314,686,395,12818,175,122,01213,098,452,054
Cash paid for goods and services(15,712,429,064)(10,617,165,843)(15,292,180,904)(10,193,382,381)
Cash paid to and on behalf of employees(1,504,023,988)(1,084,107,268)(1,400,304,399)(962,774,043)
Payments of taxes and surcharges(1,271,259,251)(1,021,043,215)(1,022,744,168)(838,116,455)
Cash paid relating to other operating activities4(54)(1,235,370,851)(1,229,795,175)(663,632,878)(768,797,800)
Sub-total of cash outflows(19,723,083,154)(13,952,111,501)(18,378,862,349)(12,763,070,679)
Net cash flows from operating activities4(55)69,917,849734,283,627(203,740,337)335,381,375
Cash flows from investing activities
Cash received from disposal of investments1,850,000,0006,471,000,0002,142,000,0009,238,976,131
Cash received from returns on investments10,204,59332,619,5413,894,45632,619,541
Net cash received from disposal of fixed assets, intangible assets and other long-term assets13,292,3247,983,58412,434,8357,062,524
Net cash received from disposal of subsidiaries and other business units108,000,000-108,000,000-
Cash received relating to other investing activities4(54)122,821,02096,772,432101,929,208164,343,358
Sub-total of cash inflows2,104,317,9376,608,375,5572,368,258,4999,443,001,554
Cash paid to acquire fixed assets, intangible assets and other long-term assets(722,025,976)(493,537,475)(715,324,702)(480,691,940)
Cash paid to acquire investments(1,600,000,000)(9,189,000,000)(1,688,461,068)(12,088,976,131)
Cash paid relating to other investing activities(7,829,410)(1,928,931)(7,829,408)(1,928,931)
Sub-total of cash outflows(2,329,855,386)(9,684,466,406)(2,411,615,178)(12,571,597,002)
Net cash flows from investing activities(225,537,449)(3,076,090,849)(43,356,679)(3,128,595,448)
Cash flows from financing activities
Cash received from borrowings989,255,5561,800,000,000989,255,5561,800,000,000
Sub-total of cash inflows989,255,5561,800,000,000989,255,5561,800,000,000
Cash repayments of borrowings(1,000,214,487)(500,231,444)(1,000,214,487)(500,231,444)
Cash payments for distribution of dividends, profits or interest expenses(2,346,105)(18,544,156)(2,346,105)(15,845,917)
Cash paid relating to other financing activities4(54)(4,409,423)(4,800,032)(4,409,424)(3,603,380)
Sub-total of cash outflows(1,006,970,015)(523,575,632)(1,006,970,016)(519,680,741)
Net cash flows from financing activities(17,714,459)1,276,424,368(17,714,460)1,280,319,259
Effect of foreign exchange rate changes on cash and cash----

equivalents

equivalents
Net decrease in cash and cash equivalents4(55)(173,334,059)(1,065,382,854)(264,811,476)(1,512,894,814)
Add: Cash and cash equivalents at beginning of year4(55)11,121,955,1298,937,936,6588,473,562,0458,677,928,946
Cash and cash equivalents at end of period4(55)10,948,621,0707,872,553,8048,208,750,5697,165,034,132

note:* Unaudited financial indexesLegal representative:Qiu Tiangao CFO:Li Weihua Finance Department:Ding Ni

JIANGLING MOTORS CORPORATION, LTD.CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)

ItemNoteAttributable to equity owners of the CompanyMinority interestsTotal equity
Share capitalCapital surplusOther comprehensive incomeSurplus reservesRetained earnings
Balance at 1 January 2020863,214,000839,442,490(11,395,500)431,607,0008,373,695,791-10,496,563,781
Movements for the six months ended 30 June 2020*----147,346,802-147,346,802
Total comprehensive income
Net profit----207,771,782-207,771,782
Other comprehensive income-------
Total comprehensive income for the year----207,771,782-207,771,782
Profit distribution
Distribution to shareholders4(36)----(60,424,980)-(60,424,980)
Balance at 30 June 2020*863,214,000839,442,490(11,395,500)431,607,0008,521,042,593-10,643,910,583
Balance at 1 January 2021863,214,000839,442,490(11,759,250)431,607,0008,863,969,769-10,986,474,009
Movements for the six months ended 30 June 2021*----(2,595,317,809)-(2,595,317,809)
Total comprehensive income
Net profit----405,214,055-405,214,055
Other comprehensive income-------
Total comprehensive income for the year----405,214,055-405,214,055
Profit distribution
Distribution to shareholders4(36)----(3,000,531,864)-(3,000,531,864)
Balance at 30 June 2021*863,214,000839,442,490(11,759,250)431,607,0006,268,651,960-8,391,156,200

note:* Unaudited financial indexesLegal representative:Qiu Tiangao CFO:Li Weihua Finance Department:Ding Ni

JIANGLING MOTORS CORPORATION, LTD.COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)

ItemNoteShare capitalCapital surplusOther comprehensive incomeSurplus reservesRetained earningsTotal equity
Balance at 1 January 2020863,214,000839,442,490(11,616,750)431,607,0009,484,175,53311,606,822,273
Movements for the six months ended 30 June 2020*----427,323,578427,323,578
Total comprehensive income
Net profit----487,748,558487,748,558
Other comprehensive income------
Total comprehensive income for the year----487,748,558487,748,558
Profit distribution
Distribution to shareholders4(36)----(60,424,980)(60,424,980)
Balance at 30 June 2020*863,214,000839,442,490(11,616,750)431,607,0009,911,499,11112,034,145,851
Balance at 1 January 2021863,214,000839,442,490(12,021,750)431,607,00010,032,100,70912,154,342,449
Movements for the six months ended 30 June 2021*----(2,459,277,470)(2,459,277,470)
Total comprehensive income
Net profit----541,254,394541,254,394
Other comprehensive income------
Total comprehensive income for the year----541,254,394541,254,394
Profit distribution
Distribution to shareholders4(36)----(3,000,531,864)(3,000,531,864)
Balance at 30 June 2021*863,214,000839,442,490(12,021,750)431,607,0007,572,823,2399,695,064,979

note:* Unaudited financial indexesLegal representative:Qiu Tiangao CFO:Li Weihua Finance Department:Ding Ni

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

1General information
Jiangling Motors Corporation, Ltd. (hereinafter “the Company”) is a Sino-foreign joint stock enterprise established under the approval of Hongban (1992) No. 005 of Nanchang Revolution and Authorisation Group of Company’s Joint Stock on the basis of Jiangxi Motors Manufacturing Factory on 16 June 1992. The registration number of the enterprise business license is No. 913600006124469438. The registered address of the Company and the address of its headquarters are both Nanchang City, Jiangxi Province of the People’s Republic of China (“the PRC”).
On 23 July 1993, with the approval of the China Securities Regulatory Commission (hereinafter “CSRC”) (Zheng Jian Fa Shen Zi [1993] No. 22) and (Zheng Jian Han Zi [1993] No. 86), the Company was listed on the Stock Exchange of Shenzhen on 1 December 1993, issuing 494,000,000 shares in total. On 8 April 1994, a total of 25,214,000 shares were distributed for the 1993 dividend distribution programme with the approval of the shareholders’ meeting and Jiangxi Securities Management Leading Group (Gan Securities [1994] No. 02). In 1995, with the approval of CSRC (Zheng Jian Fa Zi [1995] No. 144) and the Shenzhen Securities Management Office (Shenzhen Office Fu [1995] No. 92), the Company issued 174,000,000 ordinary shares (“B shares”). In 1998, with the approval of CSRC (Zheng Jian Fa Zi [1998] No. 19), the Company issued additional 170,000,000 B shares.
According to the resolution of the shareholders’ meeting regarding the split share structure reform on 11 January 2006, the Company implemented the Scheme on Split Share Structure Reform on 13 February 2006. After the implementation, the Company’s total paid-in capital remains the same. Related details are disclosed in Note 4(33).
As at 30 June 2021, the Company’s paid-in capital totalled RMB863,214,000, with par value of RMB1 per share.
The business scope of the Company and its subsidiaries (hereinafter “the Group”) includes production and sales of automobile assemblies such as automobiles, special (modified) vehicles, engines and chassis and other automobile parts, and provision of related after-sales services; retail and wholesale of imported E series automobiles of Ford Motor (China) Co., Ltd. (“FORD”) as the dealer; import and export of automobiles and parts; dealership of used cars; provision enterprise management and consulting services related to production and sales of automobiles.
Subsidiaries included in the consolidation scope for the current period are detailed in Note 5.
These financial statements were authorised for issue by the Company's Board of Directors on 26 August 2021.
2Summary of significant accounting policies and accounting estimates
The Group determines specific accounting policies and estimates based on the features of its production and operation, which mainly comprise the measurement of expected credit losses (“ECL”) on receivables (Note 2(8)), valuation of inventories (Note 2(9)), depreciation of fixed assets and amortisation of intangible assets and right-of-use assets (Note 2(11), (14), (22)), criteria for capitalisation of development expenditures (Note 2(14)), recognition and measurement of revenue (Note 2(19)), etc. Key judgements and critical accounting estimates and key assumptions applied by the Group on the determination of significant accounting policies are set out in Note 2(24).

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(1)Basis of preparation
The financial statements are prepared in accordance with the Accounting Standards for Business Enterprises - Basic Standard, specific accounting standards and relevant regulations issued by the Ministry of Finance on 15 February 2006 and in subsequent periods (hereinafter collectively referred to as “the Accounting Standards for Business Enterprises” or “CASs”) and the disclosure requirements in the Preparation Convention of Information Disclosure by Companies Offering Securities to the Public No.15 - General Rules on Financial Reporting issued by CSRC. The financial statements are prepared on a going concern basis.
(2)Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the Six Months Ended 30 June 2021 are in compliance with the Accounting Standards for Business Enterprises, and truly and completely present the consolidated and company’s financial position of the Company as at 30 June 2021 and their financial performance, cash flows and other information for the year then ended.
(3)Fiscal year
The Company’s fiscal year starts on 1 January and ends on 30 June.
(4)Recording currency
The recording currency is Renminbi (“RMB”). The financial statements are presented in RMB.
(5)Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company and all of its subsidiaries.
Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidated from the date that such control ceases. For a subsidiary that is acquired in a business combination involving enterprises under common control, it is included in the consolidated financial statements from the date when it, together with the Company, comes under common control of the ultimate controlling party. The portion of the net profits realised before the combination date is presented separately in the consolidated income statement.
In preparing the consolidated financial statements, where the accounting policies or the accounting periods of the Company and subsidiaries are inconsistent, the financial statements of the subsidiaries are adjusted in accordance with the accounting policies and the accounting period of the Company. For subsidiaries acquired from business combinations not involving enterprises under common control, the individual financial statements of the subsidiaries are adjusted based on the fair value of the identifiable net assets at the acquisition date.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(5)Preparation of consolidated financial statements (Cont'd)
All significant intra-group balances, transactions and unrealised profits are eliminated in the consolidated financial statements. The portion of subsidiaries’ shareholders' equity and the portion of subsidiaries’ net profits and losses and comprehensive income for the period not attributable to the Company are recognised as minority interests, net profit attributed to minority interests and total comprehensive income attributed to minority interests, and presented separately in the consolidated financial statements under shareholders' equity, net profits and total comprehensive income respectively. If the subsidiaries’ loss for the current period attributed to the minority shareholders exceeds their share in the opening shareholder’s equity, the excess will be deducted against the minority interests. Unrealised profits and losses resulting from the sale of assets by the Company to its subsidiaries are fully eliminated against net profit attributable to owners of the parent. Unrealised profits and losses resulting from the sale of assets by a subsidiary to the Company are eliminated and allocated between net profit attributable to owners of the parent and net profit attributed to minority interests in accordance with the allocation proportion of the parent in the subsidiary. Unrealised profits and losses resulting from the sale of assets by one subsidiary to another are eliminated and allocated between net profit attributable to owners of the parent and net profit attributed to minority interests in accordance with the allocation proportion of the parent in the subsidiary. If the accounting treatment of a transaction is inconsistent in the financial statements at the Group level and at the Company or its subsidiary level, adjustment will be made from the perspective of the Group.
(6)Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand, and short-term and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(7)Foreign currency translation
Foreign currency transactions
Foreign currency transactions are translated into recording currency using the exchange rates prevailing at the dates of the transactions.
At the balance sheet date, monetary items denominated in foreign currencies are translated into recording currency using the spot exchange rates on the balance sheet date. Exchange differences arising from these translations are recognised in profit or loss for the current period, except for those attributable to foreign currency borrowings that have been taken out specifically for acquisition or construction of qualifying assets, which are capitalised as part of the cost of those assets. Non-monetary items denominated in foreign currencies that are measured at historical costs are translated at the balance sheet date using the spot exchange rates at the date of the transactions. The effect of exchange rate changes on cash is presented separately in the cash flow statement.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(8)Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. A financial asset or a financial liability is recognised when the Group becomes a party to the contractual provisions of the instrument.
(a)Financial assets
(i)Classification and measurement
Based on the business model for managing the financial assets and the contractual cash flow characteristics of the financial assets, financial assets are classified as: (1) financial assets at amortised cost; (2) financial assets at fair value through other comprehensive income; (3) financial assets at fair value through profit or loss.
The financial assets are measured at fair value at initial recognition. Related transaction costs that are attributable to the acquisition of the financial assets are included in the initially recognised amounts, except for the financial assets at fair value through profit or loss, the related transaction costs of which are recognised directly in profit or loss for the current period. Accounts receivable or notes receivable arising from sales of products or rendering of services (excluding or without regard to significant financing components) are initially recognised at the consideration that is entitled to be charged by the Group as expected.
Debt instruments
The debt instruments held by the Group refer to the instruments that meet the definition of financial liabilities from the perspective of the issuer, and are measured in the following three ways:
Measured at amortised cost:
The objective of the Group’s business model is to hold the financial assets to collect the contractual cash flows, and the contractual cash flow characteristics are consistent with a basic lending arrangement, which gives rise on specified dates to the contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. The interest income of such financial assets is recognised using the effective interest method. Such financial assets mainly include cash at bank and on hand, notes receivable, accounts receivable and other receivables, etc.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(8)Financial instruments (Cont'd)
(a)Financial assets (Cont’d)
(i)Classification and measurement (Cont’d)
Measured at fair value through other comprehensive income:
The objective of the Group’s business model is to hold the financial assets to both collect the contractual cash flows and sell such financial assets, and the contractual cash flow characteristics are consistent with a basic lending arrangement. Such financial assets are measured at fair value through other comprehensive income, except for the impairment gains or losses, foreign exchange gains and losses, and interest income calculated using the effective interest method which are recognised in profit or loss for the current period. Such financial assets mainly include financing receivables, etc.
Measured at fair value through profit or loss:
Debt instruments held by the Group that are not divided into those at amortised cost, or those measured at fair value through other comprehensive income, are measured at fair value through profit or loss. At initial recognition, the Group does not designate a portion of financial assets as at fair value through profit or loss to eliminate or significantly reduce an accounting mismatch. Financial assets that are due in more than one year as from the balance sheet date and are expected to be held for over one year are included in other non-current financial assets, and the others are included in financial assets held for trading.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(8)Financial instruments (Cont'd)
(a)Financial assets (Cont’d)
(ii)Impairment
Loss provision for financial assets at amortised cost and investments in debt instruments at fair value through other comprehensive income is recognised on the basis of ECL.
Giving consideration to reasonable and supportable information on past events, current conditions and forecasts of future economic conditions, as well as the default risk weight, the Group recognises the ECL as the probability-weighted amount of the present value of the difference between the cash flows receivable from the contract and the cash flows expected to collect.
As at each balance sheet date, the ECL of financial instruments at different stages are measured respectively. 12-month ECL provision is recognised for financial instruments in Stage 1 that have not had a significant increase in credit risk since initial recognition; lifetime ECL provision is recognised for financial instruments in Stage 2 that have had a significant increase in credit risk yet without credit impairment since initial recognition; and lifetime ECL provision is recognised for financial instruments in Stage 3 that have had credit impairment since initial recognition.
For the financial instruments with low credit risk on the balance sheet date, the Group assumes there is no significant increase in credit risk since initial recognition and recognises the 12-month ECL provision.
For the financial instruments in Stage 1, Stage 2 and with low credit risk, the Group calculates the interest income by applying the effective interest rate to the gross carrying amount (before deduction of the impairment provision). For the financial instrument in Stage 3, the interest income is calculated by applying the effective interest rate to the amortised cost (after deduction of the impairment provision from the gross carrying amount).
For notes receivable, accounts receivable and financing receivables arising from sales of goods and rendering of services in the ordinary course of operating activities, the Group measures the lifetime ECL provision regardless of whether there is a significant financing component.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(8)Financial instruments (Cont'd)
(a)Financial assets (Cont’d)
(ii)Impairment (Cont’d)
In case the ECL of an individually assessed financial asset can be evaluated with reasonable cost, the Group determines the ECL based on impairment assessment of an individual financial asset. In case the ECL of an individually assessed financial asset cannot be evaluated with reasonable cost, the Group divides the receivables into certain groupings based on credit risk characteristics, and calculates the ECL for the groupings. Basis for determining groupings and related provision method are as follows:
Grouping - Bank acceptance notesState-owned banks and joint stock banks
Grouping - Sales of general automobilesCustomers of general automobiles
Grouping - Sales of new energy automobilesCustomers of new energy automobiles
Grouping - Sales of other automobilesCustomers of other automobiles
Grouping - Sales of automobile partsCustomers of automobile parts
Grouping - Interest from cash at bankAccrued interest on cash at bank
Grouping - Operating advances and guaranteesOperating advances and guarantees
For accounts receivable that are classified into groupings and notes receivable and financing receivables arising from sales of goods and rendering of services in the ordinary course of operating activities, the Group calculates the ECL with reference to historical credit losses experience, current conditions and forecasts of future economic conditions, and based on the exposure at default and the lifetime ECL rate. For other notes receivable, financing receivables and other receivables classified into groupings, the Group calculates the ECL with reference to the historical credit loss experience, current conditions and forecasts of future economic conditions, and based on the exposure at default and the 12-month or lifetime ECL rate.
The Group recognises the loss provision made or reversed into profit or loss for the current period. For debt instruments held at fair value through other comprehensive income, the Group adjusts other comprehensive income while the impairment loss or gain is recognised in profit or loss for the current period.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(8)Financial instruments (Cont'd)
(a)Financial assets (Cont’d)
(iii)Derecognition
A financial asset is derecognised when: (i) the contractual rights to the cash flows from the financial asset expire, (ii) the financial asset has been transferred and the Group transfers substantially all the risks and rewards of ownership of the financial asset to the transferee, or (iii) the financial asset has been transferred and the Group has not retained control of the financial asset, although the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset. When a financial asset is derecognised, the difference between the carrying amount and the sum of the consideration received and the cumulative changes in fair value that are previously recognised directly in other comprehensive income is recognised in profit or loss for the current period.
(b)Financial liabilities
Financial liabilities are classified as financial liabilities at amortised cost and financial liabilities at fair value through profit or loss at initial recognition. Financial liabilities of the Group mainly comprise financial liabilities at amortised cost, including notes payable, accounts payable, other payables, borrowings, etc. Such financial liabilities are initially recognised at fair value, net of transaction costs incurred, and subsequently measured using the effective interest method. Financial liabilities that are due within one year (inclusive) are classified as current liabilities; those with maturities over one year but are due within one year (inclusive) as from the balance sheet date are classified as current portion of non-current liabilities. Others are classified as non-current liabilities.
A financial liability is derecognised or partly derecognised when the underlying present obligation is discharged or partly discharged. The difference between the carrying amount of the derecognised part of the financial liability and the consideration paid is recognised in profit or loss for the current period.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(8)Financial instruments (Cont'd)
(c)Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the active market. The fair value of a financial instrument that is not traded in an active market is determined by using a valuation technique. In valuation, the Group adopts valuation techniques applicable in the current situation and supported by adequate available data and other information, selects inputs with the same characteristics as those of assets or liabilities considered in relevant transactions of assets or liabilities by market participants, and gives priority to the use of relevant observable inputs. When relevant observable inputs are not available or feasible, unobservable inputs are adopted.
(9)Inventories
(a)Classification
Inventories include raw materials, work in progress products, finished goods, materials in transit, low value consumables, materials consigned for processing, etc., and are measured at the lower of cost and net realisable value.
(b)Costing of inventories
Cost is determined using the weighted average method. The cost of finished goods and work in progress comprise raw materials, direct labour and systematically allocated production overhead based on the normal production capacity.
(c)Basis for determining net realisable value of inventories and method for making provision for inventories
Provision for inventories is determined at the excess amount of the carrying amounts of the inventories over their net realisable value. Net realisable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sale and related taxes.
(d)The Group adopts the perpetual inventory system.
(e)Amortisation methods of low value consumables
Low value consumables are amortised into expenses in full when issued for use.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(10)Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries and the Group’s long-term equity investments in its associates.
Subsidiaries are the investees over which the Company is able to exercise control. Associates are the investees that the Group has a significant influence on their financial and operating decisions.
Investments in subsidiaries are presented using the cost method in the Company’s financial statements, and adjusted to the equity method when preparing the consolidated financial statements. Investments in associates are accounted for using the equity method.
(a)Determination of investment cost
For long-term equity investments acquired through a business combination involving enterprises under common control, the investment cost shall be the absorbing party’s share of the carrying amount of owners’ equity of the party being absorbed in the consolidated financial statements of the ultimate controlling party at the combination date; for long-term equity investments acquired through a business combination not involving enterprises under common control, the investment cost shall be the combination cost. For long-term equity investments acquired not through a business combination, such as long-term equity investments acquired by payment in cash, the initial investment cost shall be the purchase price actually paid; for long-term equity investments acquired by issuing equity securities, the initial investment cost shall be the fair value of the equity securities issued.
(b)Subsequent measurement and recognition of profit or loss
Long-term equity investments accounted for using the cost method are measured at the initial investment cost. Cash dividend or profit distribution declared by an investee is recognised as investment income into profit or loss for the current period.
Where the initial investment cost exceeds the Group’s share of the fair value of the investee’s identifiable net assets at the time of acquisition, the investment is initially measured at that cost. Where the initial investment cost is less than the Group’s share of the fair value of the investee’s identifiable net assets at the time of acquisition, the difference is included in profit or loss for the current period and the cost of the long-term equity investment is adjusted upwards accordingly.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(10)Long-term equity investments (Cont’d)
(b)Subsequent measurement and recognition of profit or loss (Cont’d)
For long-term equity investments accounted for using the equity method, the Group recognises the investment income or losses according to its share of net profit or loss of the investee. The Group does not recognise further losses when the carrying amounts of the long-term equity investments together with any long-term interests that, in substance, form part of the Group’s net investment in investees are reduced to zero. However, if the Group has obligations for additional losses and the criteria with respect to recognition of provisions are satisfied, the Group continues recognising the investment losses and the provisions at the amount it expects to undertake. The Group’s share of the changes in investee’s owner's equity other than those arising from the net profit or loss, other comprehensive income and profit distribution is recognised in capital surplus with a corresponding adjustment to the carrying amounts of the long-term equity investment. The carrying amount of the investment is reduced by the Group’s share of the profit distribution or cash dividends declared by the investees. Unrealised gains or losses on transactions between the Group and its investees are eliminated to the extent of the Group’s equity interest in the investees, based on which the investment income or losses are recognised. Any losses resulting from transactions between the Group and its investees, which are attributable to asset impairment losses are not eliminated.
(c)Basis for determining existence of control and significant influence over investees
Control is the power over investees that can bring variable returns through involvement in related activities of investees and the ability to influence the returns by using such power over investees.
Significant influence is the power to participate in making decisions on financial and operating policies of investees, but is not control or joint control over making those policies.
(d)Impairment of long-term equity investments
The carrying amounts of long-term equity investments in subsidiaries and associates is reduced to the recoverable amounts when the recoverable amounts are below their carrying amount (Note 2(15)).
(11)Fixed assets
(a)Recognition and initial measurement of fixed assets
Fixed assets comprise buildings, machinery and equipment, motor vehicles, moulds, and electronic and other equipment.
Fixed assets are recognised when it is probable that the related economic benefits will flow to the Group and the costs can be reliably measured. Fixed assets purchased or constructed by the Group are initially measured at cost at the time of acquisition. The fixed assets contributed by the state-owned shareholders upon the restructuring of the Company are recorded at the valued amount determined by the state-owned asset administration department.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(11)Fixed assets (Cont’d)
(a)Recognition and initial measurement of fixed assets (Cont’d)
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable that the associated economic benefits will flow to the Group and the related cost can be reliably measured. The carrying amount of the replaced part is derecognised. All the other subsequent expenditures are recognised in profit or loss for the period in which they are incurred.
(b)Depreciation methods of fixed assets
Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their estimated net residual values over their estimated useful lives. For the fixed assets that have been provided for impairment loss, the related depreciation charge is prospectively determined based upon the adjusted carrying amounts over their remaining useful lives.
The estimated useful lives, the estimated net residual values expressed as a percentage of cost and the annual depreciation rates of fixed assets are as follows:
Estimated useful livesEstimated net residual valuesAnnual depreciation rates
Buildings35 to 40 years4%2.4% to 2.7%
Machinery and equipment10 to 15 years4%6.4% to 9.6%
Motor vehicles5 to 10 years4%9.6% to 19.2%
Moulds5 years-20%
Electronic and other equipment5 to 7 years4%13.7% to 19.2%
The estimated useful life and the estimated net residual value of a fixed asset and the depreciation method applied to the asset are reviewed, and adjusted as appropriate at each year-end.
(c)The carrying amount of a fixed asset is reduced to the recoverable amount when the recoverable amount is below the carrying amount (Note 2(15)).
(d)Disposal of fixed assets
A fixed asset is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The amount of proceeds from disposals on sale, transfer, retirement or damage of a fixed asset net of its carrying amount and related taxes and expenses is recognised in profit or loss for the current period.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(12)Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction costs, installation costs, borrowing costs that are eligible for capitalisation and other costs necessary to bring the fixed assets ready for their intended use. Construction in progress is transferred to fixed assets when the assets are ready for their intended use, and depreciation is charged starting from the next month. The carrying amount of construction in progress is reduced to the recoverable amount when the recoverable amount is below the carrying amount (Note 2(15)).
(13)Borrowing costs
The borrowing costs that are directly attributable to acquisition and construction of an asset that needs a substantially long period of time for its intended use commence to be capitalised and recorded as part of the cost of the asset when expenditures for the asset and borrowing costs have been incurred, and the activities relating to the acquisition and construction that are necessary to prepare the asset for its intended use have commenced. The capitalisation of borrowing costs ceases when the asset under acquisition or construction becomes ready for its intended use and the borrowing costs incurred thereafter are recognised in profit or loss for the current period. Capitalisation of borrowing costs is suspended during periods in which the acquisition or construction of an asset is interrupted abnormally, and the interruption lasts for more than 3 months, until the acquisition or construction is resumed.
The capitalised amount of specific borrowings intended to be used for the acquisition or construction of qualifying assets is determined by the interest expenses incurred in the period less interest income of the unused borrowings deposited at bank or investment income from temporary investments.
The capitalised amount of general borrowings intended to be used for the acquisition or construction of qualifying assets is determined by the weighted average of the excess of accumulated capital expenditure over capital expenditure of the special borrowings multiplied by the weighted average effective interest rate of the utilised general borrowings. The effective interest rate is the rate at which the future cash flows of the borrowings over the expected lifetime or a shorter applicable period are discounted into the initial recognised amount of the borrowings.
(14)Intangible assets
Intangible assets include land use rights, software use fees, non-patent technologies and after-sales service management mode, and are measured at cost.
(a)Land use rights
Land use rights are amortised on the straight-line basis over their approved use period of 50 years. If the acquisition costs of the land use rights and the buildings located thereon cannot be reasonably allocated between the land use rights and the buildings, all of the acquisition costs are recognised as fixed assets.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(14)Intangible assets (Cont’d)
(b)Software use fees
Software use fees are amortised on a straight-line basis over the estimated useful life of 5 years.
(c)Non-patent technologies
Non-patent technologies are amortised on the straight-line basis over the useful life of 5 years.
(d)Periodical review of useful life and amortisation method
For an intangible asset with a finite useful life, review of its useful life and amortisation method is performed at each year-end, with adjustment made appropriately.
(e)Research and development
The expenditure on an internal research and development project is classified into expenditure on the research phase and expenditure on the development phase based on its nature and whether there is material uncertainty that the research and development activities can form an intangible asset at the end of the project.
Expenditure on the research phase related to planned survey, evaluation and selection for research on manufacturing technique of automobile products is recognised in profit or loss in the period in which it is incurred. Prior to mass production, expenditure on the development phase related to the design and testing phase in regards to the final application of manufacturing technique of automobile products is capitalised only if all of the following conditions are satisfied: ? the development of manufacturing technique of automobile products has been fully demonstrated by technical team; ? management intends to complete the development of manufacturing technique of automobile products, and use or sell it; ? the research and analysis of preliminary market survey indicate that products manufactured with manufacturing technique of automobile products are marketable; ? adequate technical and financial supports are available for development of manufacturing techniques of automobile products and subsequent mass production; and, ? expenditure on development of manufacturing techniques of automobile products can be reliably collected.
Other expenditures on the development phase that do not meet the conditions above are recognised in profit or loss in the period in which they are incurred. Development expenditures previously recognised as profit or loss are not recognised as an asset in a subsequent period. Capitalised expenditure on the development phase is presented as development expenditures in the balance sheet and transferred to intangible assets at the date when the asset is ready for its intended use.
(f)Impairment of intangible assets

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

The carrying amounts of intangible assets are reduced to the recoverable amounts when the recoverable amounts are below their carrying amounts (Note 2(15)).
2Summary of significant accounting policies and accounting estimates (Cont’d)
(15)Impairment of long-term assets
Fixed assets, construction in progress, right-of-use assets, intangible assets with finite useful lives and long-term equity investments in subsidiaries and associates are tested for impairment if there is any indication that the assets may be impaired at the balance sheet date; intangible assets that are not yet available for their intended use are tested for impairment at least once a year, irrespective of whether there is any indication of impairment. If the result of the impairment test indicates that the recoverable amount of an asset is less than its carrying amount, a provision for impairment and an asset impairment loss are recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less disposal costs and the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognised on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows.
Goodwill that is separately presented in the financial statements is tested at least once a year for impairment, irrespective of whether there is any indication that it may be impaired. In conducting the test, the carrying amount of goodwill is allocated to the related asset group or groups of asset groups which are expected to benefit from the synergies of the business combination. If the result of the test indicates that the recoverable amount of an asset group or a group of asset groups, including the allocated goodwill, is lower than its carrying amount, the corresponding impairment loss is recognised. The impairment loss is first deducted from the carrying amount of goodwill that is allocated to the asset group or group of asset groups, and then deducted from the carrying amounts of other assets within the asset group or group of asset groups in proportion to the carrying amounts of assets other than goodwill.
Once the above asset impairment loss is recognised, it will not be reversed for the value recovered in the subsequent periods.
(16)Employee benefits
Employee benefits refer to all forms of consideration or compensation given by the Group in exchange for service rendered by employees or for termination of employment relationship, which include short-term employee benefits, post-employment benefits and termination benefits.
(a)Short-term employee benefits
Short-term employee benefits include wages or salaries, bonus, allowances and subsidies, staff welfare, premiums or contributions on medical insurance, work injury insurance and maternity insurance, housing funds, union running costs and employee education costs, short-term paid absences, etc. The short-term employee benefits actually occurred are recognised as a liability in the accounting period in which the service is rendered by the employees, with a corresponding charge to the profit or loss for the current period or the cost of relevant assets. Non-monetary benefits are measured at fair value.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(16)Employee benefits (Cont'd)
(b)Post-employment benefits
The Group classifies post-employment benefit plans as either defined contribution plans or defined benefit plans. Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into a separate fund and will have no obligation to pay further contributions; and defined benefit plans are post-employment benefit plans other than defined contribution plans. During the reporting period, premiums or contributions on basic pensions and unemployment insurance paid for employees belong to defined contribution plans; supplementary retirement benefits for employees are defined benefit plans.
(i)Defined contribution plans
Basic pensions
The Group’s employees participate in the basic pension plan set up and administered by local authorities of the Ministry of Human Resources and Social Security. Monthly payments of premiums on the basic pensions are calculated according to the bases and percentage prescribed by the relevant local authorities. When employees retire, the relevant local authorities are obliged to pay the basic pensions to them. The amounts based on the above calculations are recognised as liabilities in the accounting period in which the service has been rendered by the employees, with a corresponding charge to the profit or loss for the current period or the cost of relevant assets.
(ii)Defined benefit plans
The Group also provides employees with supplementary retirement benefits in addition to the insurance system prescribed by the State. Such supplementary retirement benefits belong to defined benefit plans. The defined benefit liabilities recognised on the balance sheet represent the present value of defined benefit obligations less the fair value of the plan assets. The defined benefit obligations are calculated annually by an independent actuary using projected unit credit method at the interest rate of national debt with similar obligation term and currency. Service costs related to supplementary retirement benefits (including current service costs, historical service costs and settled gains or losses) and net interest are recognised in profit or loss for the current period or the cost of related assets, and changes arising from remeasurement of net liabilities or net assets of defined benefit plans are recognised in other comprehensive income.
(c)Termination benefits
The Group provides compensation for terminating the employment relationship with employees before the end of the employment contracts or as an offer to encourage employees to accept voluntary redundancy before the end of the employment contracts. The Group recognises a liability arising from compensation for termination of the employment relationship with employees, with a corresponding charge to profit or loss for the current period at the earlier of the following dates: 1) when the Group cannot unilaterally withdraw an employment termination plan or a curtailment proposal; 2) when the Group recognises costs or expenses for a restructuring that involves the payment of termination benefits.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(16)Employee benefits (Cont'd)
(c)Termination benefits (Cont’d)
Early retirement benefits
The Group offers early retirement benefits to those employees who accept early retirement arrangements. The early retirement benefits refer to the salaries and social security contributions to be paid to and for the employees who accept voluntary retirement before the normal retirement date prescribed by the State, as approved by the management. The Group pays early retirement benefits to those early retired employees from the early retirement date until the normal retirement date. The Group accounts for the early retirement benefits in accordance with the treatment for termination benefits, in which the salaries and social security contributions to be paid to and for the early retired employees from the off-duty date to the normal retirement date are recognised as liabilities with a corresponding charge to the profit or loss for the current period. The differences arising from the changes in the respective actuarial assumptions of the early retirement benefits and the adjustments of benefit standards are recognised in profit or loss in the period in which they occur.
The termination benefits expected to be paid within one year since the balance sheet date are classified as employee benefits payable.
(17)Dividend distribution
Cash dividends are recognised as liabilities in the period in which the dividends are approved at the shareholders’ meeting.
(18)Provisions
Provisions for product warranties, compensation to suppliers, etc. are recognised when the Group has a present obligation, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factors on a contingency, such as the risks, uncertainties and the time value of money, are taken into account as a whole in reaching the best estimate of a provision. Where the effect of the time value of money is material, the best estimate is determined by discounting the related future cash outflows. The increase in the discounted amount of the provision arising from passage of time is recognised as interest expense.
The carrying amount of provisions is reviewed at each balance sheet date and adjusted to reflect the current best estimate.
The provisions expected to be settled within one year since the balance sheet date are classified as current liabilities.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(19)Revenue
The Group manufactures automobiles and automobile parts and sells them to distributors and end customers. In addition, the Group also provides customers with auto maintenance and additional quality warranty services. The Group recognises revenue at the amount of the consideration that is entitled to be charged by the Group as expected when the customer obtains control over relevant goods or services.
(a)Selling automobiles and automobile parts to distributors and end customers
The Group manufactures automobiles and automobile parts and sells such products to distributors and end customers. The Group recognises revenue from sales of automobiles after they are delivered as prescribed in the contract, customers have accepted the products and the delivery documents have been signed by both parties. The Group recognises revenue from sales of parts after they are delivered to the designated location as prescribed in the contract, customers have accepted the products and the delivery documents have been signed by both parties. Where two or more obligations are included in a contract between the Group and the customers, at the beginning date of the contract, the Group allocates the transaction price to individual obligation in the relative proportion to the individual selling prices of products or services committed in each individual obligation. When the individual selling price is unobservable, the Group makes reasonable estimates on the individual selling price with comprehensive consideration to all available information, and by using market adjustment method, cost plus method, etc. The credit periods granted by the Group to distributors and end customers are generally within one year and no more than two years, which is consistent with the industry practice, and there is no significant financing component. The Group provides product warranties for automobiles and automobile parts as required by laws and regulations, and recognises the corresponding provisions (Note 2(18)). The Group provides distributors and end customers with sales discounts based on sales volume, and related revenue is recognised at contract consideration net of the discount amount estimated based on historical experience and using the expected value method.
(b)Rendering of services
The Group provides customers with car maintenance and additional quality assurance services, and recognizes revenue within a period of time based on the progress of the performance of the services provided. According to the nature of the service provided, the performance progress is determined in accordance with the value of the labour provided to the customer to the customer or the cost of the provided labour to the total labour cost.
When the Group recognises revenue based on the stage of completion, the amount with unconditional collection right obtained by the Group is recognised as accounts receivable, and the rest is recognised as contract assets. Meanwhile, loss provision for accounts receivable and contract assets are recognised on the basis of ECL (Note 2(8)). If the contract price received or receivable exceeds the amount for the completed service, the excess portion will be recognised as contract liabilities. Contract assets and contract liabilities under the same contract are presented on a net basis.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(20)Government grants
Government grants refer to the monetary or non-monetary assets obtained by the Group from the government, including support funds for enterprise development, financial subsidies, etc.
Government grants are recognised when the grants can be received and the Group can comply with all attached conditions. If a government grant is a monetary asset, it will be measured at the amount received or receivable. If a government grant is a non-monetary asset, it will be measured at its fair value. If it is unable to obtain its fair value reliably, it will be measured at its nominal amount.
Government grants related to assets refer to government grants which are obtained by the Group for the purposes of purchase, construction or acquisition of the long-term assets. Government grants related to income refer to the government grants other than those related to assets.
Government grants related to assets are recorded as deferred income and recognised in profit or loss on a reasonable and systemic basis over the useful lives of the assets. Government grants related to income that compensate future costs, expenses or losses are recorded as deferred income and recognised in profit or loss; government grants related to income that compensate incurred costs, expenses or losses are recognised in profit or loss directly for the current period.
The Group adopts the same presentation method for similar government grants.
Government grants related to ordinary activities are included in operating profit. Otherwise, they are recorded in non-operating income.
Financial discounts directly received by the Group are deducted against related borrowing costs.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(21)Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differences arising between the tax bases of assets and liabilities and their carrying amounts (temporary differences). Deferred tax asset is recognised for the deductible losses that can be carried forward to subsequent years for deduction of the taxable profit in accordance with the tax laws. No deferred tax liability is recognised for a temporary difference arising from the initial recognition of goodwill. No deferred tax asset or deferred tax liability is recognised for the temporary differences resulting from the initial recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or deductible losses). At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled.
Deferred tax assets are only recognised for deductible temporary differences, deductible losses and tax credits to the extent that it is probable that taxable profit will be available in the future against which the deductible temporary differences, deductible losses and tax credits can be utilised.
Deferred tax liabilities are recognised for taxable temporary differences arising from investments in subsidiaries and associates, except where the Group is able to control the timing of reversal of such temporary differences, and it is probable that the temporary differences will not reverse in the foreseeable future. When it is probable that the deductible temporary differences arising from investments in subsidiaries and associates will be reversed in the foreseeable future and that the taxable profit will be available in the future against which the deductible temporary differences can be utilised, the corresponding deferred tax assets are recognised.
Deferred tax assets and deferred tax liabilities are offset when: ? the deferred tax assets and deferred tax liabilities are related to the same tax payer within the Group and the same taxation authority; and, ? that tax payer within the Group has a legally enforceable right to offset current tax assets against current tax liabilities.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(22)Leases
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Group as the lessee
At the commencement date, the Group shall recognise the right-of-use asset and measure the lease liabilities at the present value of the lease payments that are not paid at that date. Lease payments include fixed payments, the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and payments of penalties for terminating the lease if the lessee exercises an option to terminate the lease. Variable lease payments in proportion to sales are excluded from lease payments and recognised in profit or loss as incurred. Lease liabilities that are due within one year (inclusive) as from the balance sheet date are included in the current portion of non-current liabilities.
The Group's right-of-use assets represent leased buildings. Right-of-use assets are measured initially at cost which comprises the amount of the initial measurement of lease liabilities, any lease payments made at or before the commencement date and any initially direct costs, less any lease incentives received. If it is reasonably probable that the Group will obtain ownership of the underlying asset by the end of the lease term, the asset is depreciated over its remaining useful life; otherwise the asset is depreciated over the shorter of the lease term and its remaining useful life. The carrying amounts of the right-of-use assets are reduced to the recoverable amounts when the recoverable amounts are below their carrying amounts (Note 2(15)).
For short-term leases with a term of 12 months or less and leases of an individual asset (when new) of low value, the Group may, instead of recognising right-of-use assets and lease liabilities, recognise the lease payments in the cost of the underlying assets or in profit or loss for the current period on a straight-line basis over the lease term.
The Group shall account for a lease modification as a separate lease if both: (1) the modification extends the scope of the lease by adding the right to use one or more underlying assets; (2) the increased consideration is equivalent to the amount of the individual price of the expanded part of the lease scope adjusted according to the contract conditions.
For a lease modification that is not accounted for as a separate lease, the Group shall redetermine the lease term at the effective date of the lease modification, and remeasure the lease liability by discounting the revised lease payments using a revised discount rate, except for the simplified method for contract changes directly caused by COVID-19. For a lease modification which narrows the scope of the lease or shortens the lease term, the Group decreases the carrying amount of the right-of-use asset, and recognises in profit or loss any gain or loss relating to the partial or full termination of the lease. For other changes which lead to the remeasurement of lease liabilities, the Group correspondingly adjusts the carrying amount of the right-of-use asset.
For the rental waivers due to COVID-19 and for the period ended before 30 June 2021 only, the Group applies the simplified method, records the undiscounted waivers in profit or loss and adjusts lease liability when the agreement is reached to dismiss the original payment obligation.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(22)Leases (Cont’d)
The Group as the lessor
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. An operating lease is a lease other than a finance lease.
As a lessor, the Group has no financing liabilities. When the Group leases free buildings, the rental income from operating leases is recognized on a straight-line basis during the lease term.
(23)Segment information
The Group identifies operating segments based on the internal organisation structure, management requirements and internal reporting system, and discloses segment information of reportable segments on the basis of operating segments.
An operating segment is a component of the Group that satisfies all of the following conditions: (1) the component is able to earn revenues and incur expenses from its ordinary activities; (2) whose operating results are regularly reviewed by the Group’s management to make decisions about resources to be allocated to the segment and to assess its performance, and (3) for which the information on financial position, operating results and cash flows is available to the Group. Two or more operating segments that have similar economic characteristics and satisfy certain conditions can be aggregated into one single operating segment.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(24)Critical accounting estimates and judgements
The Group continually evaluates the critical accounting estimates and key judgements applied based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
(a)Critical judgements on applying the accounting policies
(i)Classification of financial assets
Significant judgements made by the Group in the classification of financial assets include business model and analysis on contractual cash flow characteristics.
The Group determines the business model for financial assets management on the group basis, and factors to be considered include the methods for evaluating the financial assets performance and reporting such performance to key management personnel, the risks relating to the financial assets performance and corresponding management methods, the ways in which related business management personnel are remunerated, etc.
When assessing whether contractual cash flow characteristics of financial assets are consistent with basic lending arrangement, key judgements made by the Group include: the possibility of changes in time schedule or amount of the principal during the lifetime due to reasons such as repayment in advance; whether interest only includes time value of money, credit risk, other basic lending risks and considerations for costs and profits. For example, whether the repayment in advance only reflects the principal outstanding and corresponding interest and reasonable compensation paid for early termination of the contract.
(ii)Judgement on significant increase in credit risk
Judgement made by the Group for significant increase in credit risk is mainly based on whether the overdue days exceed 30 days, or whether one or more of the following indicators change significantly: business environment of the debtor, internal and external credit rating, significant changes in actual or expected operating results, significant decrease in value of collateral or credit rate of guarantor, etc.
Judgement made by the Group for the occurrence of credit impairment is mainly based on whether the overdue days exceed 90 days (i.e., a default has occurred), or whether one or more of the following conditions is/are satisfied: the debtor is suffering significant financial difficulties, the debtor is undergoing other debt restructuring, or the debtor probably goes bankrupt, etc.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(24)Critical accounting estimates and judgements (Cont’d)
(a)Critical judgements in applying the accounting policies (Cont’d)
(iii)Judgement on capitalisation of development expenditures
Development expenditures are capitalised when the criteria in Note 2(14)(e) are fulfilled. The assessments on whether the criteria for capitalisation of development expenditures have been met involve judgements of the Group, including the technical feasibility of the project, the likelihood of the project generating sufficient future economic benefits and the timing to start capitalisation particularly. The Group makes the judgements on the capitalisation of development expenditures and records the process in meeting minutes based on feasibility analysis, regular review on the development project phase, etc.
(iv)Timing of revenue recognition
The Group sells automobiles and automobile parts to distributors or end customers. The Group recognises revenue from sales of automobiles after they are delivered as prescribed in the contract, distributors or end customers have accepted the products and the delivery documents have been signed by both parties. The Group recognises revenue from sales of parts after they are delivered to the designated location as prescribed in the contract, distributors or end customers have accepted the products and the delivery documents are signed by both parties. Thereafter, the distributors or end customers own the products, have the right to set prices independently, and bear the risks from price fluctuation or damage of the products. The distributors or end customers have obtained the control of the products after accepting the products. Therefore, the Group recognises the sales revenue of the products at the time when the delivery documents have been signed.
(v)Sales with product warranties
The Group provides statutory warranty for automobiles and automobile parts, and the periods and terms of such warranty comply with the requirements of laws and regulations related to the products. The Group does not provide any significant additional service or additional warranty for this purpose, thus this kind of warranty cannot be identified as a separate performance obligation. In addition, the Group also offers additional warranty other than the requirements of laws and regulations, which is identified as a separate performance obligation. The Group recognises the revenue of the additional warranty over time during the period when services are rendered.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(24)Critical accounting estimates and judgements (Cont’d)
(b)Critical accounting estimates and key assumptions
The critical accounting estimates and key assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year are outlined below:
(i)
Scenarios
BaseBadGood
Gross domestic product14.25%14.15%14.34%
Money supply9.20%7.72%10.68%

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(24)Critical accounting estimates and judgements (Cont’d)
(b)Critical accounting estimates and key assumptions (Cont’d)
(ii)Impairment of long-term assets
The Group assesses whether there is any indication that non-current assets other than financial assets may be impaired at the balance sheet date. When there are indications showing the carrying amounts of such assets cannot be recovered, an impairment test will be performed.
When the carrying amount of non-current assets or asset groups other than financial assets is higher than the recoverable amount, which is the higher of an asset’s fair value less disposal costs and the present value of the future cash flows expected to be derived from the asset, it shows non-current assets or asset groups are impaired.
The amount of an asset’s fair value less disposal costs was determined by the price of a sale agreement in a fair trade, less the costs that are directly attributable to the disposal of the asset. Where there is no sales agreement but there is an active market of assets, the amount is determined by the market price less the costs that are directly attributable to the disposal of the asset. The market price of assets is determined by the considerations provided by the buyer. Where there is no sales agreement or active market of assets, the amount of an asset’s fair value less disposal costs was determined based on the best information available, with reference to the latest transaction price or results of similar assets of the same industry.
Disposal costs include legal cost, taxes and handling fee related to asset disposal, and direct costs incurred to bring the assets to a saleable state..

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(24)Critical accounting estimates and judgements (Cont’d)
(b)Critical accounting estimates and key assumptions (Cont’d)
(iii)Income tax and deferred income tax
The Group is subject to enterprise income tax in multiple regions. There are some transactions and events for which the ultimate tax treatment is uncertain during the ordinary course of business. Significant judgement is required from the Group in determining the provision for income taxes in each of these regions. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
As stated in Note 3(2), the Company is a high-tech enterprise. The “High-Tech Enterprise Certificate” is effective for three years. Upon expiration, application for high-tech enterprise assessment should be submitted again to the relevant government authorities. Based on the past experience of reassessment for high-tech enterprise upon expiration and its actual conditions, the Company considers that it is able to obtain the qualification for high-tech enterprises in the next 3 years, and therefore a preferential tax rate of 15% is used to calculate the corresponding deferred income tax. If the Company cannot obtain the qualification for high-tech enterprise upon expiration, the Company is subject to a statutory tax rate of 25% for the calculation of income tax, which further influences the recognised deferred tax assets, deferred tax liabilities and income tax expenses.
Deferred tax assets are recognised for the deductible tax losses that can be carried forward to subsequent years to the extent that it is probable that taxable profit will be available in the future against which the deductible tax losses can be utilised. Taxable profit that will be available in the future includes the taxable profit that will be realised through ordinary course of business and the taxable profit that will be increased upon the reversal of taxable temporary differences incurred in prior periods. Judgements and estimates are required to determine the time and amounts of taxable profit in the future. Any difference between the reality and the estimate may result in adjustment to the carrying amount of deferred tax assets.
(iv)Provisions
The Group undertakes after-sales repair or replacement obligations for automobiles sold based on the after-sales service agreement. Management estimates related provisions based on historical after-sales service data, including the repair and replacement provided as well as current trends. Factors that may impact the estimation of warranty costs include improvement of the Group’s productivity and production quality, as well as changes in related parts and labour costs. Any increase or decrease in provisions will have impact on profit or loss of the Group in the future.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Summary of significant accounting policies and accounting estimates (Cont’d)
(24)Critical accounting estimates and judgements (Cont’d)
(b)Critical accounting estimates and key assumptions (Cont’d)
(v)Provision for inventories
The Group's inventories are stated at the lower of cost and net realisable value. Net realisable value of inventories is the amount of the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sales and related taxes.
If the management revises the estimated selling price of the inventory, the estimated costs to be incurred by the time of completion, and the estimated selling expenses and related taxes, the revised estimated selling price is lower than the currently adopted estimated selling price, or the revised until The estimated costs, estimated sales expenses, and related taxes and fees at the completion of the project are higher than the currently adopted estimates, the Group needs to make provision for inventory.
If the actual selling prices, costs to completion, selling and distribution expenses and related taxes are higher or lower than management’s estimates, the Group shall recognise the relevant differences in the consolidated income statement during the corresponding accounting period.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

3Taxation
(1)The main categories and rates of taxes applicable to the Group are set out below:
CategoryTaxation basisTax rate
Corporate income tax (a)Taxable income15% and 25%
VAT (b)Taxable value-added amount (Tax payable is calculated by multiplying the taxable sales amount by the applicable tax rate less deductible input VAT of the current period)13%, 9% and 6%
Consumption tax (c)Taxable sales amount3%, 5% and 9%
City maintenance and construction tax (d)The payment amount of VAT and consumption tax5% and 7%
(a)Pursuant to the Circular on Enterprise Income Tax Policy Concerning Deductions for Equipment and Appliances (Cai Shui [2018] No. 54) and An announcement on extending the period of implementation of some preferential tax policies (Cai Shui [2021] No. 06) relevant regulations issued by the State Taxation Administration, during the period from 1 January 2018 to 30 June 2021, the cost of newly purchased equipment with the original cost less than RMB5 million can be fully deducted against taxable profit in the next month after the asset is put into use, instead of being depreciated annually for tax filing. Pursuant to the Circular on further Increasing the Pre-tax Deduction for Research and Development Expenses (Cai Shui [2021] No. 13) issued by the Ministry of Finance, the State Taxation Administration and the Ministry of Science and Technology and relevant regulations, during the period from 1 January 2021 to 30 June 2021, the Groups’ actual research and development expenses that are not recognised as intangible assets but included in profit or loss are allowed to 100% pre-tax additional deduction; those expenses recognised as intangible assets can be amortised before tax at 200% of the costs of intangible assets.
(b)Pursuant to the Announcement on Relevant Policies for Deepening Value-Added Tax Reform (Announcement [2019] No. 39) and relevant regulations jointly issued by the Ministry of Finance, the State Taxation Administration and the General Administration of Customs, the Group’s taxable products sales revenue is subject to the VAT at the rate of 13%. The Group's real estate leasing business is subject to the VAT at the rate of 9%. The interest income from its wholly-owned subsidiaries is subject to VAT at the rate of 6%.
(c)Pursuant to the Interim Regulations of the People's Republic of China on Consumption Tax promulgated by the State Council (Order No. 539 of the State Council of the People's Republic of China) and the Notice of Ministry of Finance and State Taxation Administration on Adjusting Consumption Tax Policies for Passenger Cars (Cai Shui [2008] No. 105), the consumption tax rates of the Group's taxable products are 3%, 5% and 9%.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

3Taxation (Cont’d)
(1)The main categories and rates of taxes applicable to the Group are set out below(Cont’d):
(d)Pursuant to the Circular of the State Council on Unifying the Collection of City Construction and Maintenance Tax and Educational Surcharge on Domestic and Foreign-Owned Enterprises and Individuals (Guo Fa [2010] No. 35) issued by the State Council, the Group is subject to city construction and maintenance tax at the rates of 5% and 7%.
(2)Tax preference
Pursuant to the Circular of Jiangxi High-Tech Enterprise Certification Leading Group on the Announcement of the First Batch of High-Tech Enterprises of Jiangxi Province for the year 2018 (Gan Gao Qi Ren Fa [2018] No. 3), the Company is certified as a high-tech enterprise, and the valid term is three years. During the period from 1 January 2018 to 31 December 2020, the Company was subject to enterprise income tax at the rate of 15%. At present, the company is re-identified as a high-tech enterprise.
In 2021, except for the Company, the Company’s wholly-owned companies, including JMC Heavy Duty Vehicle Co., Ltd. (“JMCH”), Taiyuan Jiangling Motive Power Co., Ltd. (“JMPC”), Jiangling Motor Sales Co., Ltd. (“JMCS”), Shenzhen Fujiang New Energy Automobile Sales Co., Ltd. (“SZFJ”), and Guangzhou Fujiang New Energy Automobile Sales Co., Ltd. (“GZFJ”),were subject to the enterprise income tax at the rate of 25%.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements
(1)Cash and cash equivalents
30 June 202131 December 2020
Bank balances (a)10,948,621,07011,121,955,129
Other cash and cash equivalents (b)1,565,665-
10,950,186,73511,121,955,129
(a)As at 30 June 2021, cash at bank of the Group deposited with Jiangling Motor Group Finance Company (“JMCF”) was RMB771,587,928 (31 December 2020: RMB1,231,825,734) (Note 7(6)), and interest was calculated at 1.725% to 2.25% (2020: 0.455% to 3.30%) per annum, which was the interest rate applied to deposits with the same term.
JMCF, a holding subsidiary of Jiangling Motors Group Co., Ltd (“JMCG”), is a non-banking financial institution. JMCG holds 50% equity capital of Nanchang Jiangling Investment Co., Ltd. (“JIC”), a main shareholder of the Company.
(b)As at 30 June 2021, Other cash and cash equivalents of RMB 1,565,665 (December 31, 2020: none) are margin deposits deposited for the Group to apply to the bank for the issuance of bank acceptance drafts.
(2)Financial assets held for trading
30 June 202131 December 2020
Structured Deposits553,211,507803,892,985
(3)Accounts receivable
30 June 202131 December 2020
Accounts receivable3,628,257,2483,233,785,212
Less: Provision for bad debts(226,335,444)(233,902,000)
3,401,921,8042,999,883,212

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(3)Accounts receivable (Cont’d)
(a)The ageing of accounts receivable is analysed as follows:
30 June 202131 December 2020
Within 1 year3,030,225,2042,729,338,870
1 to 2 years148,995,10218,746,837
2 to 3 years404,147,862477,066,625
Over 3 years44,889,0808,632,880
3,628,257,2483,233,785,212
(b)As at 30 June 2021, the five largest accounts receivable aggregated by debtor were analysed as follows:
BalanceAmount of provision for bad debts% of total balance
Company 1869,532,495(528,716)23.97%
Company 2151,108,994(844,088)4.16%
Company 3143,474,765(63,138)3.95%
Company 4141,613,288(76,656)3.90%
Company 590,840,644(39,304)2.50%
1,396,570,186(1,551,902)38.48%
(c)Provision for bad debts
For accounts receivable, the Group measures the loss provision based on the lifetime ECL regardless of whether there is a significant financing component.
(i)Accounts receivable for which provision for bad debts is made on the individual basis are analysed as follows:
30 June 2021
Book balanceProvision for bad debts
AmountLifetime ECL (%)Amount
New energy subsidies receivable i)103,180,418100%(103,180,418)
Receivables for automobiles ii)81,112,880100%(81,112,880)
184,293,298(184,293,298)

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(3)Accounts receivable (Cont’d)
(c)Provision for bad debts (Cont’d)
(i)Accounts receivable for which provision for bad debts is made on the individual basis are analysed as follows (Cont’d):
31 December 2020
Book balanceProvision for bad debts
AmountLifetime ECL (%)Amount
New energy subsidies receivable i)103,180,418100%(103,180,418)
Receivables for automobiles ii)83,112,880100%(83,112,880)
186,293,298(186,293,298)
i) As at 30 June 2021, government subsidies receivable for new energy automobiles amounted to RMB103,180,418 (31 December 2020: RMB103,180,418). As the corresponding new energy vehicles may not meet the corresponding subsidy policy standards, the Group considered the receivables cannot be collected, therefore, full provision was made for those receivables.
ii) As at 30 June 2021 and 31 December 2020, since aforesaid companies in debts had difficulties in operation and were involved in several legal proceedings, the Group considered the receivables cannot be collected, therefore, full provision was made for those receivables.
(ii)Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows:
Grouping - Sales of general automobiles:
30 June 2021
Book balanceProvision for bad debts
AmountLifetime ECL (%)Amount
Not overdue2,634,165,6300.04%(1,151,080)
Overdue for 1 to 30 days179,467,1560.04%(79,794)
Overdue for 31 to 60 days3,750,0541.60%(59,944)
Overdue for 61 to 90 days2,932,5622.52%(73,907)
Overdue over 90 days10,095,2728.83%(891,821)
2,830,410,674(2,256,546)

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(3)Accounts receivable (Cont’d)
(c)Provision for bad debts (Cont’d)
(ii)Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows (Cont’d):
Grouping - Sales of general automobiles (Cont’d):
31 December 2020
Book balanceProvision for bad debts
AmountLifetime ECL (%)Amount
Not overdue2,092,329,0840.21%(4,395,983)
Overdue for 1 to 30 days262,730,0350.21%(551,996)
Overdue for 31 to 60 days345,7986.35%(21,961)
Overdue for 61 to 90 days1,936,80010.74%(208,085)
Overdue over 90 days17,757,74717.59%(3,123,783)
2,375,099,464(8,301,808)
Grouping - Sales of new energy automobiles:
30 June 2021
Book balanceProvision for bad debts
AmountLifetime ECL (%)Amount
Not overdue122,873,6635.01%(6,160,075)
Overdue for 1 to 30 days--
Overdue for 31 to 60 days--
Overdue for 61 to 90 days--
Overdue over 90 days155,710,13821.05%(32,783,514)
278,583,801(38,943,589)
31 December 2020
Book balanceProvision for bad debts
AmountLifetime ECL (%)Amount
Not overdue149,343,7636.28%(9,378,788)
Overdue for 1 to 30 days--
Overdue for 31 to 60 days194,083,08814.52%(28,173,753)
Overdue for 61 to 90 days--
Overdue over 90 days3,993,70016.25%(649,037)
347,420,551(38,201,578)

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(3)Accounts receivable (Cont’d)
(c)Provision for bad debts (Cont’d)
(ii)Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows (Cont’d):
Grouping - Spare parts:
30 June 2021
Book balanceProvision for bad debts
AmountLifetime ECL (%)Amount
Not overdue334,969,4750.25%(842,011)
31 December 2020
Book balanceProvision for bad debts
AmountLifetime ECL (%)Amount
Not overdue288,024,6250.30%(864,074)
Overdue for 1 to 30 days21,425,0300.30%(64,275)
Overdue for 31 to 60 days11,544,6510.50%(57,723)
Overdue for 61 to 90 days1,809,9170.60%(10,860)
Overdue over 90 days2,167,6765.00%(108,384)
324,971,899(1,105,316)
(iii)For the six months ended 30 June 2021, The provision for bad debts amounted to RMB7,566,557 was reversed. The significant amounts collected or reversed were as follows:
Reasons for reversal/recoveryBasis and justification for determining the provision for bad debtsAmount of reversal/ recoveryRecovery method
Accounts receivable 1The actual receipt of account receivables relating to the provision for bad debts made in the prior period.The aforesaid companies in debts had difficulties in operation and were involved in several legal proceedings, the Group considered the receivables cannot be collected, therefore, full provision was made for those receivables.2,000,000Received
(d)? For the six months ended 30 June 2021, The group has no actual write-off accounts receivable.
e)As at 30 June 2021 and 31 December 2020, there were no accounts receivable pledged.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(4)Financing receivables
30 June 202131 December 2020
Financing receivables428,573,213815,583,669
The Group endorses the notes receivable as required by daily fund management, which also met the criteria for derecognition, and therefore classified those notes receivable as financial assets at fair value through other comprehensive income.
The Group had no notes receivable for which the provision for impairment was made on the individual basis, and measured provision for bad debts based on the lifetime ECL. As at 30 June 2021 and 31 December 2020, the acceptors of the Groups’ notes receivable were mainly four major state-owned banks or national joint-stock banks. Therefore, the Group expected there was no significant loss on related bank acceptance notes arising from non-performance by these banks.
As at 30 June 2021, the Group had no bank acceptance notes receivable that have been endorsed or discounted but not yet matured presented in financing receivables.
As at 30 June 2021, the notes receivables were endorsed or discounted by the Group but not matured as follows:
DerecognisedNot derecognised
Bank acceptance notes821,924,876-
(5)Advances to suppliers
(a)The ageing of advances to suppliers is analysed below:
30 June 202131 December 2020
Amount% of total balanceAmount% of total balance
Within 1 year579,396,268100%452,714,683100%
(b)As at 30 June 2021, the five largest advances to suppliers aggregated by debtor were analysed as follows:
Amount% of total balance
Company 1489,145,69584.42%
Company 257,098,3749.85%
Company 313,333,8482.30%
Company 48,432,9771.46%
Company 53,343,6810.58%
571,354,57598.61%

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(6)Other receivables
30 June 202131 December 2020
Interest receivable from cash at bank85,462,59060,283,645
Import working capital advances25,000,00035,000,000
Advances for gas fee14,376,2387,367,141
Deposits receivable8,977,1317,152,745
Advances for research and development projects5,160,9144,559,669
Cash advance796,203761,613
Others76,801,94114,082,669
216,575,017129,207,482
Less: Provision for bad debts(395,088)(217,909)
216,179,929128,989,573
(a)The ageing of other receivables is analysed as follows:
30 June 202131 December 2020
Within 1 year211,315,522128,336,086
Over 1 year5,259,495871,396
216,575,017129,207,482
(b)Provision for losses and changes in book balance statements:
Stage 1Stage 3
12-month ECL (grouping)Lifetime ECL (credit-impaired)Total
Book balanceProvision for bad debtsBook balanceProvision for bad debtsProvision for bad debts
31 December 2020129,207,482(217,909)--(217,909)
Balance increase in the current period87,367,535----
Including: Write-off in the current period-----
Provision for bad debts in the current period(177,179)--(177,179)
-
30 June 2021216,575,017(395,088)--(395,088)
The Group had no other receivables transferred from Stage 1 to Stage 3, and no other receivables reversed from Stage 3 to Stage 1.
As at June 30, 2021, the Group has no other receivables in stage 2 and Stage 3.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(6)Other receivables (Cont’d)
(b)Provision for losses and changes in book balance statements (Cont’d):
The analysis of other receivables at Stage 1 and Stage 3 is stated below:
(i)As at 30 June 2021 and 31 December 2020, the Group had no other receivables with provision for bad debts on the individual basis.
(ii)As at 30 June 2021 and 31 December 2020, the Group’s other receivables with provision for bad debts on the grouping basis were analysed below:
Other receivables with provision on the grouping basis at Stage 1:
30 June 202131 December 2020
Book balanceProvision for lossesBook balanceProvision for losses
AmountProvision ratioAmountAmountProvision ratioAmount
Portfolios of interest from cash at bank i):
Within 1 year85,462,590--60,283,645--
Grouping - Operating advances and deposits:
Within 1 year125,852,9320.30%(379,239)68,052,4410.32%(215,154)
Over 1 year5,259,4950.30%(15,849)871,3960.32%(2,755)
216,575,017(395,088)129,207,482(217,909)
i) As at 30 June 2021 and 31 December 2020, the Group’s interest receivable from cash at bank mainly came from four major state-owned banks or national joint-stock banks. Therefore, the Group expected that there was no material credit risk associated with related interest receivable and thus there was no significant losses on related interest receivable from non-performance by these banks.
(c)? For the six months ended 30 June 2021, The amount of bad debt provision was RMB 177,179.
(d)? For the six months ended 30 June 2021, The group has no actual write-off of other receivables.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(6)Other receivables (Cont’d)
(e)As at 30 June 2021, the five largest other receivables aggregated by debtor were analysed as follows:
NatureBalanceAgeing% of total balanceProvision for bad debts
Company 1Assets receivables32,555,714Within 1 year15.03%(97,667)
Company 2Advances classified as expenses25,190,512Within 1 year11.63%(75,572)
Company 3Advances Assets receivables18,513,359Within 1 year8.55%(55,540)
Company 4Assets receivables11,955,220Within 1 year5.52%(35,866)
Company 5Advances classified as expenses9,486,001Within 1 year4.38%(28,458)
97,700,80645.11%(293,103)
(7)Inventories
(a)Inventories are summarised by categories as follows:
30 June 202131 December 2020
Book balanceProvision for inventoriesCarrying amountBook balanceProvision for inventoriesCarrying amount
Materials in transit135,266,570-135,266,57098,887,111-98,887,111
Raw materials1,099,742,966(88,186,867)1,011,556,099816,201,410(109,312,198)706,889,212
Work in progress278,794,412(175,387)278,619,025268,716,191(175,387)268,540,804
Finished goods603,112,024-603,112,024815,055,053-815,055,053
Low cost consumables148,219,701(32,479,143)115,740,558160,969,525(32,479,143)128,490,382
Materials processed on commission34,521,160-34,521,16068,743,130-68,743,130
2,299,656,833(120,841,397)2,178,815,4362,228,572,420(141,966,728)2,086,605,692
(b)Provision for inventories is analysed as follows:
31 DecemberIncrease in the current periodDecrease in the current period30 June
2020ProvisionReversalWrite-off2021
Raw materials(109,312,198)--21,125,331(88,186,867)
Work in progress(175,387)---(175,387)
Low cost consumables(32,479,143)---(32,479,143)
(141,966,728)--21,125,331(120,841,397)

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR EDNED 30 June 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(7)Inventories (Cont'd)
(c)Provision for inventories is as follows:
Specific basis for determining net realisable valueReason for current period write-off of provision for inventories
Raw materials/Work in progress/Low value consumablesBased on the estimated selling price, less the estimated costs to completion, estimated selling and distribution expenses and related taxesThe net realizable value of inventories with provision sales have been achieved
(8)Other current assets
30 June 202131 December 2020
Taxes Prepaid, Input VAT to be deducted and to be verified885,615,580736,953,815
Others111,409415,922
885,726,989737,369,737

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(9)Long-term equity investments
30 June 202131 December 2020
Associate
- Hanon Systems (Nanchang) Co., Ltd. (“Hanon Systems”)39,232,34739,496,548
Less: Provision for impairment of long-term equity investments--
39,232,34739,496,548
Associate
Movements for the current period
31 December 2020Increase or decrease in investmentShare of net profit/(loss) under equity methodCash dividends declared by joint venturesProvision for impairment30 June 2021Shareholding (%)Voting rights (%)Ending balance of provision for impairment
Hanon Systems39,496,548-(264,201)--39,232,34719.15%33.33%-

Related information of equity in associates is set forth in Note 5(2).

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(10)Fixed assets
30 June 202131 December 2020
Fixed assets (a)4,782,132,3675,164,260,516
Fixed assets pending for disposal (b)3,362,4581,695,894
4,785,494,8255,165,956,410
(a)Fixed assets
.BuildingsMachinery and equipmentMotor vehiclesMouldsElectronic and other equipmentTotal
Cost
31 December 20202,300,951,6304,011,283,000353,517,9963,154,261,3044,004,241,34713,824,255,277
Increase in the current period
Transfer from construction in progress-5,283,6494,740,76685,010,39434,570,398129,605,207
Other increases--7,682,876-43,215,11650,897,992
Decrease in the current period
Disposal or retirement(12,050,420)(163,422,780)(4,035,565)(12,990,539)(32,833,161)(225,332,465)
Other decreases-(50,897,992)---(50,897,992)
30 June 20212,288,901,2103,802,245,877361,906,0733,226,281,1594,049,193,70013,728,528,019
Accumulated depreciation
31 December 2020(573,584,513)(2,390,076,662)(232,596,897)(2,372,671,702)(2,596,189,492)(8,165,119,266)
Increase in the current period
Provision(28,448,696)(110,821,592)(16,414,567)(110,466,772)(167,244,078)(433,395,705)
Decrease in the current period
Disposal or retirement4,630,260104,174,3191,549,38512,140,68023,736,787146,231,431
30 June 2021(597,402,949)(2,396,723,935)(247,462,079)(2,470,997,794)(2,739,696,783)(8,452,283,540)
Provision for impairment
31 December 2020-(94,376,123)(6,070,058)(343,015,623)(51,413,691)(494,875,495)
Increase in the current period
Provision------
Decrease in the current period
Disposal or retirement--32,466676,49454,423763,383
30 June 2021-(94,376,123)(6,037,592)(342,339,129)(51,359,268)(494,112,112)
Carrying amount
30 June 20211,691,498,2611,311,145,819108,406,402412,944,2361,258,137,6494,782,132,367
31 December 20201,727,367,1171,526,830,215114,851,041438,573,9791,356,638,1645,164,260,516

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(10)Fixed assets (Cont'd)
(a)Fixed assets (Cont'd)
For the six months ended 30 June 2021, depreciation charged to fixed assets amounted to RMB433,395,705 (the six months ended 30 June 2020: RMB517,638,550), of which the depreciation expenses charged in the cost of sales, selling and distribution expenses, general and administrative expenses and research and development expenses were RMB336,443,335, RMB1,008,818, RMB63,916,100 and RMB32,027,452 (the six months ended 30 June 2020: RMB398,894,781, RMB1,516,970, RMB81,887,718 and RMB35,339,081), respectively.
The cost of fixed assets transferred from construction in progress amounted to RMB129,605,207 (the six months ended 30 June 2020: RMB80,025,139) (Note 4(11)).
(i)Temporarily idle fixed assets
? As at 30 June 2021, the fixed assets with a carrying amount of approximately RMB59,246,836 (a cost of RMB1,012,789,184) (31 December 2020: a carrying amount of approximately RMB16,532,578 and a cost of RMB483,214,712) were temporarily idle due to factory relocation, the change of business development, product strategies and product process etc. The analysis is as follows:
CostAccumulated depreciationProvision for impairmentCarrying amount
Machinery and equipment300,907,156(246,471,314)(37,209,692)17,226,150
Motor vehicles13,706,317(9,122,213)(2,498,046)2,086,058
Moulds479,556,654(151,571,099)(327,887,822)97,733
Electronic and other equipment218,619,057(166,750,609)(12,031,553)39,836,895
1,012,789,184(573,915,235)(379,627,113)59,246,836
(ii)Fixed assets with pending certificates of ownership:
Carrying amountReasons for not obtaining certificates of ownership
Buildings275,429,305Pending procedures

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(10)Fixed assets (Cont’d)
(b)Fixed assets pending for disposal
30 June 202131 December 2020
Electronic and other equipment2,611,2181,639,777
Machinery and equipment662,95256,117
Motor vehicles88,288-
3,362,4581,695,894
(11)Construction in progress
30 June 202131 December 2020
Book balanceProvision for impairmentCarrying amountBook balanceProvision for impairmentCarrying amount
Fushan new plant investment project642,211,422-642,211,422522,070,550-522,070,550
Capacity optimization project701,633,914-701,633,914504,378,481-504,378,481
Construction of Xiaolan 600 mu Phase 3 plan128,932,841-128,932,841105,196,107-105,196,107
Engine construction project99,021,903-99,021,903106,148,911-106,148,911
CX756 project61,099,732-61,099,73289,516,432-89,516,432
N822 project74,884,781-74,884,78131,176,961-31,176,961
Collision Simulation Laboratory44,998,123-44,998,12345,422,684-45,422,684
CX743 conversion project41,946,927-41,946,92726,409,132-26,409,132
N356 project13,789,890-13,789,89013,789,890-13,789,890
V348 conversion project9,518,173-9,518,17323,183,603-23,183,603
JF8/CX743 project9,173,450-9,173,4507,347,943-7,347,943
Independently developed gasoline engine project1,041,249-1,041,2491,041,249-1,041,249
N806 Project622,136-622,136622,136-622,136
Stamping/frame Capacity improvement project137,377-137,377137,377-137,377
Other miscellaneous and pending installation projects99,665,142(691,646)98,973,49659,747,960(691,646)59,056,314
1,928,677,060(691,646)1,927,985,4141,536,189,416(691,646)1,535,497,770

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(11)Construction in progress (Cont’d)
(a)Movement of significant projects of construction in progress
Project nameBudget (in RMB 0’000)31 December 2020Increase in the current periodTransfer to fixed assets in the current periodDecrease in the current period30 June 2021% of project investment in budgetProgress of projectAccumulative capitalised borrowing costsIncluding: Borrowing costs capitalised in the current periodSource of fund
Fushan new plant investment project205,200522,070,550130,765,582(10,624,710)-642,211,42255%55%--Self-owned funds
Capacity optimization project179,462504,378,481199,370,623(2,115,190)-701,633,91439%39%--Self-owned funds
Construction of Xiaolan 600 mu Phase 3 plan20,977105,196,10724,083,522(346,788)-128,932,84163%63%--Self-owned funds
Engine construction project67,000106,148,9114,002,290(11,129,298)-99,021,90369%69%--Self-owned funds
CX756 project19,00089,516,43231,100,951(59,517,651)-61,099,73269%69%--Self-owned funds
N822 project20,70031,176,96143,853,838(146,018)-74,884,78136%36%--Self-owned funds
Collision Simulation Laboratory9,65145,422,6842,507,361(2,931,922)-44,998,12376%76%--Self-owned funds
CX743 conversion project11,00626,409,13216,038,805(501,010)-41,946,92739%39%--Self-owned funds
N356 project13,60013,789,890360,450(360,450)-13,789,89080%80%--Self-owned funds
V348 conversion project4,39023,183,6035,288,213(18,953,643)-9,518,17372%72%--Self-owned funds
JF8/CX743 project13,6907,347,9433,281,804(1,456,297)-9,173,45095%95%--Self-owned funds
Independently developed gasoline engine project43,2001,041,249---1,041,24992%92%--Self-owned funds
N806 Project2,860622,136---622,13670%70%--Self-owned funds
Stamping/frame Capacity improvement project56,778137,377---137,37781%81%--Self-owned funds
Other miscellaneous and pending installation projects59,747,96076,063,127(21,522,230)(14,623,715)99,665,142292,897-Self-owned funds and loans
1,536,189,416536,716,566(129,605,207)(14,623,715)1,928,677,060292,897

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

Notes to the consolidated financial statements (Cont’d)
(11)Construction in progress (Cont’d)
(b)Provision for impairment of construction in progress
31 December 2020Increase in the current periodDecrease in the current period30 June 2021Reason for provision
Other miscellaneous and pending installation projects(691,646)--(691,646)The recoverable amount is lower than the book value

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(12)Right-of-use assets
Buildings
Cost
31 December 202042,736,398
Increase in the current period
New lease contracts19,716,958
30 June 202162,453,356
Accumulated depreciation
31 December 2020(14,330,508)
Increase in the current period
Provision(7,354,220)
30 June 2021(21,684,728)
Provision for impairment
31 December 2020-
Increase in the current period-
Decrease in the current period-
30 June 2021-
Carrying amount
30 June 202140,768,628
31 December 202028,405,890
For the six months ended 30 June 2021, depreciation of right-of-use assets amounted to RMB7,354,220, of which RMB3,554,214, RMB1,685,693, RMB1,599,215 and RMB515,098 were included in cost of sales and selling distribution expenses, general and administrative expenses and research and development expenses(the six months ended 30 June 2020: RMB5,775,094, RMB1,450,734, RMB 0 and RMB 0), respectively.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(13)Intangible assets
Land use rightsSoftware use feesNon-patent technologiesAfter-sales services management modelOthersTotal
Cost
31 December 2020751,625,667206,965,791540,153,07036,979,1841,599,5161,537,323,228
Increase in the current period
Transfer from construction in progress-14,623,715---14,623,715
Internal research and development--194,823,495--194,823,495
Decrease in the current period
Disposal------
30 June 2021751,625,667221,589,506734,976,56536,979,1841,599,5161,746,770,438
Accumulated amortisation
31 December 2020(181,512,922)(130,785,042)(216,248,050)(36,979,184)(1,599,516)(567,124,714)
Increase in the current period
Provision(7,786,924)(12,666,156)(56,909,822)--(77,362,902)
Decrease in the current period
Disposal------
30 June 2021(189,299,846)(143,451,198)(273,157,872)(36,979,184)(1,599,516)(644,487,616)
Provision for impairment
31 December 2020--(38,806,961)--(38,806,961)
Increase in the current period
Provision------
30 June 2021--(38,806,961)--(38,806,961)
Carrying amount
30 June 2021562,325,82178,138,308423,011,732--1,063,475,861
31 December 2020570,112,74576,180,749285,098,059--931,391,553
For the six months ended 30 June 2021, amortisation charged to intangible assets amounted to RMB77,362,902 (the six months ended 30 June 2020: RMB58,225,513), of which the amounts charged to cost of sales, selling and distribution expenses, general and administrative expenses, and research and development expenses were RMB273,069, RMB223,108, RMB19,015,855 and RMB57,850,870 respectively. (the six months ended 30 June 2020: RMB 273,069,RMB 179,314,RMB 18,893,016 and RMB 38,880,114).

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(13)Intangible assets (Cont’d)
The Group's development expenditures are set out below:
31 December 2020Increase in the current periodDecrease in the current period30 June 2021
Recognised as intangible assetsWrite off
Automobile products development project173,473,24250,413,638(194,823,495)-29,063,385
Expenditures on research and development of the Group incurred in the six months ended 30 June 2021 amounted to RMB776,879,828 (the six months ended 30 June 2020: RMB823,946,960) in total, of which RMB726,466,190 (the six months ended 30 June 2020: RMB696,582,452) was recognised in profit or loss for the current period, RMB21,350,253 (the six months ended 30 June 2020: RMB86,341,229) was recognised as intangible assets for the current period and RMB29,063,385 (the six months ended 30 June 2020: RMB41,023,279) was included in the ending balance of development expenditures. As at 30 June 2021, the intangible assets developed by the Group accounted for 40% (31 December 2020: 31%) of the carrying amount of intangible assets.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(14)Deferred tax assets and deferred tax liabilities
(a)Deferred tax assets before offsetting
30 June 202131 December 2020
Deductible temporary differences and deductible tax lossesDeferred tax assetsDeductible temporary differences and deductible lossesDeferred tax assets
Accrued expenses and provisions4,818,974,4061,097,011,9613,918,637,644896,970,479
Recoverable losses1,995,262,058304,346,9572,032,780,205307,105,716
Provision for asset impairment859,642,508134,539,799897,520,189140,838,024
Non-patent technology132,289,55028,462,021108,124,02623,281,348
Retirement benefits plan65,518,69315,186,80467,587,00015,497,050
Deferred income48,943,7737,341,56649,944,6257,491,694
Employee education funds unpaid59,205,8529,272,79942,695,0146,607,339
Others76,045,09511,456,91254,068,7758,189,817
8,055,881,9351,607,618,8197,171,357,4781,405,981,467
Including:
Expected to be recovered within one year (inclusive)1,275,807,7101,065,699,235
Expected to be recovered after one year331,811,109340,282,232
1,607,618,8191,405,981,467

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(14)Deferred tax assets and deferred tax liabilities (Cont’d)
(b)Deferred tax liabilities before offsetting
30 June 202131 December 2020
Taxable temporary differencesDeferred tax liabilitiesTaxable temporary differencesDeferred tax liabilities
Depreciation of fixed assets1,386,782,904272,291,6721,247,553,627235,959,055
Net losses related to debt exemption and equity transactions between parent and subsidiary785,943,493117,891,524682,000,000102,300,000
Amortisation of intangible assets40,945,5796,328,26038,367,9395,779,320
Differences between the fair value of the identifiable net assets and carrying amount arising from business combinations not under common control97,392,18424,348,04698,780,65624,695,164
Others3,211,507802,8771,095,069273,767
2,314,275,667421,662,3792,067,797,291369,007,306
Including:
Expected to be recovered within one year (inclusive)171,737,530147,540,386
Expected to be recovered after one year249,924,849221,466,920
421,662,379369,007,306

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(14)Deferred tax assets and deferred tax liabilities (Cont’d)
(c)Deductible temporary differences and deductible losses that are not recognised as deferred tax assets are analysed as follows:
30 June 202131 December 2020
Deductible losses117,022,793171,901,892
Deductible temporary differences467,5583,119,574
117,490,351175,021,466
(d)Deductible losses that are not recognised as deferred tax assets will be expired in following years:
30 June 202131 December 2020
2024117,022,793171,901,892
(e)The net balances of deferred tax assets and liabilities after offsetting are as follows:
30 June 202131 December 2020
Offsetting amountBalance after offsettingOffsetting amountBalance after offsetting
Deferred tax assets(279,422,809)1,328,196,010(242,012,142)1,163,969,325
Deferred tax liabilities(279,422,809)142,239,570(242,012,142)126,995,164

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(15)Provision for asset impairment and losses
31 December 2020Increase in the current periodDecrease in the current period30 June 2021
ReversalWrite-off
Provision for bad debts of accounts receivable233,902,000-(7,566,556)-226,335,444
Including: Provision for bad debts on the individual basis186,293,298-(2,000,000)-184,293,298
Provision for bad debts on the grouping basis47,608,702-(5,566,556)-42,042,146
Provision for bad debts of other receivables217,909177,179--395,088
Sub-total234,119,909177,179(7,566,556)-226,730,532
Provision for inventories141,966,728--(21,125,331)120,841,397
Provision for impairment of fixed assets494,875,495--(763,383)494,112,112
Provision for impairment of construction in progress691,646---691,646
Provision for impairment of goodwill89,028,412---89,028,412
Provision for impairment of intangible assets38,806,961---38,806,961
Sub-total765,369,242--(21,888,714)743,480,528
999,489,151177,179(7,566,556)(21,888,714)970,211,060

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(16)Short-term borrowings
30 June 202131 December 2020
Credit loan500,000,000500,000,000
As at June 31 2021, the interest rate for the short-term loan is 2.85% (December 31, 2020: 2.05% to 3.15%).
(17)Derivative financial liabilities
30 June 202131 December 2020
Derivative financial liabilities -
Forward exchange contracts8,165,7423,716,727
As at 30 June 2021 and 31 December 2020, derivative financial liabilities mainly represented forward exchange contracts.
(18)Notes payable
30 June 202131 December 2020
Bank acceptance notes1,565,665-
(19)Accounts payable
30 June 202131 December 2020
Payable for spare parts9,207,129,6579,672,652,729
Payable for raw and auxiliary materials201,416,746353,563,148
9,408,546,40310,026,215,877
As at 30 June 2021, accounts payable with ageing over 1 year amounted to RMB406,639,200 (31 December 2020: RMB431,202,897), which mainly represented materials payable for which settlement price has not yet been determined, and such payables had not been finally settled yet.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(20)Contract liabilities
30 June 202131 December 2020
Advances for automobiles and automobile parts113,014,269521,367,837
Advances for maintenance and warranty services148,455,912136,685,473
261,470,181658,053,310
Less: Contract liabilities expected to be included in revenue after one year (Note 4(31))(105,589,814)(99,526,464)
155,880,367558,526,846
(21)Employee benefits payable
30 June 202131 December 2020
Short-term employee benefits payable (a)490,146,268617,598,452
Defined contribution plans payable (b)135,984,526135,699,978
Defined benefit plans payable (c)3,415,0003,415,000
Termination benefits payable (d)2,655,1762,655,176
632,200,970759,368,606
(a)Short-term employee benefits
31 December 2020Increase in the current periodDecrease in the current period30 June 2021
Wages and salaries, bonus, allowances and subsidies539,376,8811,009,880,252(1,158,816,011)390,441,122
Staff welfare26,872,50554,777,228(47,177,698)34,472,035
Social security contributions3,877,46653,558,925(53,401,795)4,034,596
Including: Medical insurance-45,145,334(44,992,082)153,252
Work injury insurance3,877,4663,166,398(3,162,671)3,881,193
Maternity insurance-5,247,193(5,247,042)151
Housing funds-73,446,013(73,276,315)169,698
Labour union funds and employee education funds47,471,60039,788,461(26,231,244)61,028,817
Other short-term employee benefits-4,848,118(4,848,118)-
617,598,4521,236,298,997(1,363,751,181)490,146,268

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(21)Employee benefits payable (Cont’d)
(b)Defined contribution plans
31 December 2020Increase in the current periodDecrease in the current period30 June 2021
Basic pensions131,620,467107,073,450(106,814,225)131,879,692
Supplementary pensions-10,400,000(10,400,000)-
Unemployment insurance4,079,5113,399,495(3,374,172)4,104,834
135,699,978120,872,945(120,588,397)135,984,526
(c)Defined benefit plans
31 December 2020Increase in the current periodDecrease in the current period30 June 2021
Post-retirement benefits payable (Note 4(30))3,415,0001,282,213(1,282,213)3,415,000
(d)Termination benefits payable
30 June 202131 December 2020
Early retirement benefits payable (Note 4(30))1,317,0001,317,000
Other termination benefits (i)1,338,1761,338,176
2,655,1762,655,176
(i) For the six months ended 30 June 2021, other termination benefits paid by the Group for termination of the employment relationship were RMB13,174,883.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(22)Taxes payable
30 June 202131 December 2020
Enterprise income tax payable164,607,33688,142,260
Consumption tax payable65,438,70878,952,885
Unpaid VAT36,066,49526,439,025
Land use tax payable4,819,3545,746,521
City maintenance and construction tax payable2,558,4802,005,985
Educational surcharge payable1,827,4861,432,847
Others16,297,13815,725,704
291,614,997218,445,227
(23)Other payables
30 June 202131 December 2020
Ordinary share dividends payable3,006,966,9596,463,836
Construction expenses2,694,444,8042,213,691,765
Research and development project expenses712,135,448673,089,112
Advertising and new product planning fees192,331,108161,524,470
Construction expenses181,182,323290,525,592
Goods transportation expenses163,702,631148,274,852
Deposit payable146,416,93097,973,078
Technological transformation project expenses46,511,28321,530,592
Trademark management fees13,153,2762,485,538
Consulting expenses11,514,27210,298,545
Others856,541,020527,992,245
8,024,900,0544,153,849,625
As at 30 June 2021, other payables with ageing over 1 year of RMB1,075,939,516 (31December 2020: RMB819,824,836) mainly comprised deposits collected from logistics companies, distributors and repair stations, payables for projects and payables for research and development expenses. Such payables had not been finally settled yet in view of the continuing business transactions with distributors and service providers, and engineering projects and research and development projects that have not yet been accepted and completed.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(24)Current portion of non-current liabilities
30 June 202131 December 2020
Current portion of lease liabilities (Note 4(27))16,179,74210,481,886
Current portion of long-term borrowings (Note 4(26))423,034427,277
16,602,77610,909,163
(25)Other current liabilities
30 June 202131 December 2020
Provisions expected to be settled within one year (Note 4(28))368,170,576343,121,509
Others14,686,95767,777,819
382,857,533410,899,328
(26)Long-term borrowings
30 June 202131 December 2020
Secured borrowings2,749,7222,990,943
Less: Current portion of long-term borrowings (Note 4(24))(423,034)(427,277)
2,326,6882,563,666
The above secured borrowings were long-term borrowings amounting to USD 425,647 secured by JMCF, borrowed from Industrial and Commercial Bank of China (“ICBC”), Nanchang Ganjiang Sub-branch with interest payable every half year and the principal was paid in instalments between 10 December 2007 and 27 October 2027. For the six months ended 30 June 2021, the interest rate of long-term borrowings was 1.5% (For the Six Months Ended 30 June 2020: 1.5%).
Starting dateMaturity dateCurrencyInterest rate (%)30 June 202131 December 2020
Amount in foreign currencyRMB equivalentAmount in foreign currencyRMB equivalent
ICBC Nanchang Ganjiang Sub-branch27 February 199827 October 2027USD1.5%425,6472,749,722458,3892,990,943
(27)Lease liabilities
30 June 202131 December 2020
Lease liabilities44,033,76529,480,838
Less: Current portion of non-current liabilities (Note 4(24))(16,179,742)(10,481,886)
27,854,02318,998,952
(a)As at the six months ended 30 June 2021, the lease payment related to the lease contract that the Group has signed but has not yet begun to execute is RMB361,843,200((Note 11 (3))(December 31, 2020: RMB361,843,200).

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(28)Provisions
31 December 2020Increase in the current periodDecrease in the current period30 June 2021
Product warranties i)511,619,012238,355,518(197,813,393)552,161,137
provision for contracts27,398,636-(4,392,114)23,006,522
539,017,648238,355,518(202,205,507)575,167,659
Less: Provisions expected to be settled within one year (Note 4(25))(343,121,509)(368,170,576)
195,896,139206,997,083
i)Product warranties are expenses expected to be incurred during the warranty period from free after-sales services, product warranty and other services for vehicles sold.
(29)Deferred income
31 December 2020Increase in the current periodDecrease in the current period30 June 2021Reason
Government grants (a)49,944,625960,000(1,960,852)48,943,773Subsidy for projects
(a)Government grants
31 December 2020Increase in the current periodDecrease in the current period30 June 2021Asset related/ Income related
Recognised in other incomeOffset financial expenses
Research and development-related subsidies47,519,981960,000(200,727)-48,279,254Income related
Government interest subsidies1,760,125--(1,760,125)-Income related
Others664,519---664,519Income related
49,944,625960,000(200,727)
48,943,773(1,760,125)

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(30)Long-term employee benefits payable
30 June 202131 December 2020
Supplementary retirement benefits and early-retirement benefits eligible for recognition of provisions65,518,69367,587,000
Less: Payable within one year(4,732,000)(4,732,000)
60,786,69362,855,000
The retirement and early-retirement benefits payable within one year are included in employee benefits payable(Note 4(21)(c), (d)).
For retired and early-retired employees, the Group provides them with certain amount of supplementary benefits during their retirement or early-retirement period. The amount of benefits depends on the employee's position, length of service and salary at the time of retirement or early-retirement, and is adjusted in accordance with inflation rate and other factors. The Group's obligations for supplementary retirement and early-retirement benefits as at the balance sheet date are calculated using projected unit credit method and are reviewed by an external independent actuary.
(a)Movements of retirement and early-retirement benefits of the Group are as follows:
Present value of the obligations of the defined benefit plan
30 June 202131 December 2020
Opening balance67,587,00068,441,000
Cost of defined benefit plan recognised in profit or loss for the current period
- Current service cost-1,242,000
- Past service cost--
- Actuarial (gains)/losses recognised immediately-(843,000)
- Net interest-2,324,000
Remeasurement of net liabilities for defined benefit plan
- Actuarial losses-485,000
Other movements
- Benefits paid(2,068,307)(4,062,000)
Ending balance65,518,69367,587,000

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(30)Long-term employee benefits payable (Cont'd)
(b)The actuarial assumptions used to determine the present value of defined benefit plan obligations
30 June 202131 December 2020
Discount rates——3.75%
Inflation rate——2.0%
Salaries and benefits growth rates——0%-6%
Future mortality assumptions were determined based on the China Life Insurance Mortality Table (2010-2013), which is publicly available statistical information for the Chinese region.
(31)Other non-current liabilities
30 June 202131 December 2020
Contract liabilities expected to be included in revenue after one year (Note 4(20))105,589,81499,526,464

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(32)Share capital
31 December 2020Movements for the current period30 June 2021
Shares newly issuedBonus shareTransfer from capital surplusOthersSub-total
Shares subject to trading restriction -
Other domestic shares
Including: Shares held by domestic non-state-owned legal persons745,140-----745,140
Shares held by domestic natural persons5,700-----5,700
750,840-----750,840
Shares not subject to trading restriction -
Ordinary shares denominated in RMB518,463,160-----518,463,160
Domestically listed foreign shares344,000,000-----344,000,000
862,463,160-----862,463,160
863,214,000-----863,214,000
Since the implementation of the Company's Scheme on Share Split Reform on 13 February 2006, as at 30 June 2021, there were 750,840 shares currently unavailable for trading.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(32)Share capital (Cont’d)
31 December 2019Movements for the current year31 December 2020
Shares newly issuedBonus shareTransfer from capital surplusOthersSub-total
Shares subject to trading restriction -
Other domestic shares
Including: Shares held by domestic non-state-owned legal persons749,940---(4,800)(4,800)745,140
Shares held by domestic natural persons975---4,7254,7255700
750,915---(75)(75)750,840
Shares not subject to trading restriction -
Ordinary shares denominated in RMB518,463,085---7575518,463,160
Domestically listed foreign shares344,000,000-----344,000,000
862,463,085---7575862,463,160
863,214,000-----863,214,000

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(33)Capital surplus
31 December 2020Increase in the current periodDecrease in the current period30 June 2021
Share premium816,609,422--816,609,422
Other capital surplus22,833,068--22,833,068
839,442,490--839,442,490
31 December 2019Increase in the current yearDecrease in the current year31 December 2020
Share premium816,609,422--816,609,422
Other capital surplus22,833,068--22,833,068
839,442,490--839,442,490

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(34)Other comprehensive income
Other comprehensive income in the balance sheetOther comprehensive income in the income statement for the Six Months Ended 30 June 2021
31 December 2020Attributable to the parent company after tax30 June 2021Amount incurred before income tax for the current periodLess: Transfer-out of previous other comprehensive income in the current periodLess: Income tax expensesAttributable to the parent company after tax
Other comprehensive income items which will not be reclassified to profit or loss
Actuarial gains on defined benefit plans(11,759,250)-(11,759,250)----
Other comprehensive income in the balance sheetOther comprehensive income in the income statement for the year ended 31 December 2020
31 December 2019Attributable to the parent company after tax31 December 2020Amount incurred before income tax for the current yearLess: Transfer-out of previous other comprehensive income in the current yearLess: Income tax expensesAttributable to the parent company after tax
Other comprehensive income items which will not be reclassified to profit or loss
Actuarial gains on defined benefit plans(11,395,500)(363,750)(11,759,250)(485,000)-121,250(363,750)

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(35)Surplus reserve
31 December 2020Increase in the current periodDecrease in the current period30 June 2021
Statutory surplus reserve431,607,000--431,607,000
31 December 2019Increase in the current yearDecrease in the current year31 December 2020
Statutory surplus reserve431,607,000--431,607,000
In accordance with the Company Law of the People's Republic of China, the Company’s Articles of Association and the resolution of the Board of Directors, the Company should appropriate 10% of net profit for the year to the statutory surplus reserve, and the Company can cease appropriation when the statutory surplus reserve accumulated to more than 50% of the registered capital. The statutory surplus reserve can be used to make up for the loss or increase the share capital upon approval from the appropriate authorities. As the accumulated appropriation to the statuary surplus reserve exceeded 50% of the registered capital, no appropriation was made in the current period(2020: Nil).
The Company appropriates for the discretionary surplus reserve after the shareholders’ meeting approves the proposal from the Board of Directors. The discretionary surplus reserve can be used to compensate for the losses incurred in prior years or increase the share capital upon approval from appropriate authorities.
(36)Retained earnings
Six months ended 30 June
20212020
Retained earnings at the beginning of the year8,863,969,7698,373,695,791
Add: Net profit attributable to shareholders of the parent company for the current period405,214,055207,771,782
Less: Ordinary share dividends payable (a)(3,000,531,864)(60,424,980)
Retained earnings at the end of the period6,268,651,9608,521,042,593
(a)? According to the resolution of the board of directors on March 26th, 2021, the board of directors proposed that the Company distribute cash dividends of RMB3.476 per share to all shareholders. Based on the issued shares of 863,214,000, the proposed cash dividends total RMB3,000,531,864, and the proposal was approved by the shareholders' meeting on June 25, 2021

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(37)Revenue and cost of sales
Six months ended 30 June
20212020
Revenue from main business17,360,624,10913,877,590,851
Revenue from other business314,996,979195,827,027
17,675,621,08814,073,417,878
Six months ended 30 June
20212020
Cost of sales from main business14,756,422,65911,670,570,165
Cost of sales from other business293,802,060189,552,200
15,050,224,71911,860,122,365
(a)Revenue and cost of sales from main business
Six months ended 30 June
20212020
Revenue from main businessCost of sales from main businessRevenue from main businessCost of sales from main business
Sales of automobiles16,283,174,18313,950,596,20613,030,304,98611,046,531,024
Sales of automobile parts1,023,854,381747,849,973809,320,498582,437,916
Automobile maintenance services53,595,54557,976,48037,965,36741,601,225
17,360,624,10914,756,422,65913,877,590,85111,670,570,165
(b)Revenue and cost of sales from other business
Six months ended 30 June
20212020
Revenue from other businessCost of sales from other businessRevenue from other businessCost of sales from other business
Sales of materials257,593,313238,590,185162,807,656155,071,014
Others57,403,66655,211,87533,019,37134,481,186
314,996,979293,802,060195,827,027189,552,200

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(37)Revenue and cost of sales (Cont’d)
(c)The Group's revenue in 2021 was broken down as follows:
Six months ended 30 June 2021
AutomobilesAutomobile partsAutomobile maintenance servicesMaterials and othersTotal
Revenue from main business16,283,174,1831,023,854,38153,595,545-17,360,624,109
Including: Recognised at a time point16,283,174,1831,023,854,381--17,307,028,564
Recognised within a certain period--53,595,545-53,595,545
Revenue from other business---314,996,979314,996,979
16,283,174,1831,023,854,38153,595,545314,996,97917,675,621,088
(i)As at 30 June 2021, the amount of revenue corresponding to the performance obligation of the Group that has been contracted but not yet performed or not fulfilled was RMB148,455,912, which was expected to be recognised between 2021 and 2026.
(38)Taxes and surcharges
Six months ended 30 June
20212020
Consumption tax366,921,695271,679,866
City maintenance and construction tax46,652,03450,598,211
Educational surcharge42,987,98143,310,138
Land use tax9,534,2679,774,064
Real estate tax8,736,5548,220,537
Stamp tax4,155,7892,779,740
Others253,194216,586
479,241,514386,579,142

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(39)Selling and distribution expenses
Six months ended 30 June
20212020
Promotion expenses241,079,45291,894,222
Warranties238,355,518155,588,778
Advertising and new product planning fees139,947,287138,350,765
Sales network construction expenses122,520,26041,733,973
Salaries and benefits96,986,50670,754,094
Storage expenses30,124,25317,822,522
Packaging material expenses18,318,54214,586,046
Depreciation and amortisation expenses2,917,6193,147,018
Others59,264,98158,309,902
949,514,418592,187,320
(40)General and administrative expenses
Six months ended 30 June
20212020
Salaries and benefits303,656,754264,648,937
Depreciation and amortisation expenses84,531,170100,780,734
Trademark management fees22,232,06020,627,894
General office expenses10,744,5287,103,298
Repair expenses6,143,5577,181,637
Travelling expenses3,114,9162,092,846
Others99,394,55556,692,100
529,817,540459,127,446
(41)Research and development expenses
Six months ended 30 June
20212020
Salaries and benefits273,546,646277,417,893
Research and development expenses123,421,584102,381,915
Design fee93,888,283145,947,582
Depreciation and amortisation expenses90,393,42074,219,195
Materials expenses72,889,99927,797,465
Others72,326,25868,818,402
726,466,190696,582,452

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(42)Financial expenses
Six months ended 30 June
20212020
Interest costs13,014,76518,259,820
Add: Interest expenses on lease liabilities878,444802,145
Less: Government subsidies (Note 4(29))(1,760,125)-
Interest expenses12,133,08419,061,965
Less: Interest income from bank deposits(142,004,807)(89,499,630)
Fund occupation fee (a)(7,142,858)(4,740,888)
Interest income(149,147,665)(94,240,518)
Exchange gains or losses(8,772,108)7,561,075
Others344,402885,665
(145,442,287)(66,731,813)
(a)The fund occupation fee is the fee paid to the Group at the rate agreed by both parties when the distributors delay payment or settle with a bill of exchange.
(43)Expenses by nature
The cost of sales, selling and distribution expenses, general and administrative expenses and research and development expenses in the income statement are listed as follows by nature:
Six months ended 30 June
20212020
Changes in inventories of finished goods and work in progress201,864,808280,051,275
Consumed raw materials, low value consumables, etc.13,230,742,78210,272,137,288
Employee benefits1,370,346,8251,196,965,144
Depreciation of fixed assets433,395,705517,638,550
Amortisation of intangible assets77,362,90258,225,513
Depreciation of right-of-use assets7,354,2207,225,828
Transportation expenses424,338,871255,909,419
Warranties238,355,518155,588,778
Promotion expenses241,079,45291,894,222
Advertising and new product planning fees139,947,287138,350,765
Design fee93,888,283145,947,582
Research and development expenses123,421,584102,381,915
Fixed asset repair and maintenance expenses63,661,30641,966,653
Others610,263,324343,736,651
17,256,022,86713,608,019,583

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(44)Asset impairment losses
Six months ended 30 June
20212020
Provision for inventories-23,856,596
Impairment of fixed assets-10,251,114
-34,107,710
(45)Credit impairment losses
Six months ended 30 June
20212020
Losses on bad debts of accounts receivable(7,566,557)66,317,513
Losses on bad debts of other receivables177,179(74,702)
(7,389,378)66,242,811
(46)Other income
Six months ended 30 June
20212020Asset related/ Income related
Subsidy for operating activities324,065,109138,966,751Income related
Research and development activities related subsidies9,227,72726,672,716Income related
333,292,836165,639,467
(47)Investment income
Six months ended 30 June
20212020
Investment income from financial assets held for trading10,204,59232,619,541
Investment losses from long-term equity investment under equity method(264,201)(3,024,554)
Losses on discount of financing receivables(13,053,249)-
Investment loss from forward exchange settlement(7,750,384)(1,316,987)
(10,863,242)28,278,000
There is no significant restriction on the remittance of investment income to the Group.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(48)Gains on changes in fair value
Six months ended 30 June
20212020
Financial assets at fair value through profit or loss —
Structural deposits(681,478)7,990,657
Derivative financial assets and derivative financial liabilities -
(Losses)/Income on forward exchange contracts(4,449,015)2,021,384
(5,130,493)10,012,041
(49)Gains on disposal of assets
Six months ended 30 June
20212020Amount recognised in non-recurring profit or loss in six months ended 30 June 2021
Income/(losses) on disposal of assets11,152,182(581,955)11,152,182

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(50)Non-operating income
Six months ended 30 June
20212020Amount recognised in non-recurring profit or loss in six months ended 30 June 2021
Compensation and penalty income1,520,3951,434,7431,520,395
Government grants (a)-40,000-
Others989,8822,124,450989,882
2,510,2773,599,1932,510,277
(a)Details of government grants
Six months ended 30 June
20212020Asset related/ Income related
Others-40,000Income related
(51)Non-operating expenses
Six months ended 30 June
20212020Amount recognised in non-recurring profit or loss in six months ended 30 June 2021
Losses on scrapping of assets143,57425,278,620143,574
Donations1,995,0004,936,6821,995,000
Others446,40822,950446,408
2,584,98230,238,2522,584,982
(52)Income tax expenses
Six months ended 30 June
20212020
Current income tax calculated based on tax law and related regulations165,333,17412,440,650
Deferred income tax(148,982,279)1,696,507
16,350,89514,137,157

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(52)Income tax expenses (Cont’d)
The reconciliation from income tax calculated based on the applicable tax rates and total profit presented in the consolidated income statement to the income tax expenses is listed below:
Six months ended 30 June
20212020
Total profit421,564,950221,908,939
Income tax calculated at applicable tax rates49,035,8114,273,820
Effect of change in the tax rates14,052,43216,397,340
Tax credit-(68,983)
Super deduction(73,910,521)(74,643,356)
Non-taxable income39,630453,683
Equity transactions and debt exemption between parent and subsidiary25,985,873-
Costs, expenses and losses not deductible for tax purposes15,530,448143,379
Utilisation of previously unrecognised deductible temporary differences(663,003)(16,441,318)
Deductible losses for which no deferred tax asset was recognised-84,022,592
Utilisation of the deductible loss of the unrecognized deferred tax asset in the previous period(13,719,775)-
Income tax expenses16,350,89514,137,157
(53)Earnings per share
(a)Basic earnings per share
Basic earnings per share are calculated by dividing consolidated net profit attributable to ordinary shareholders of the parent company by the weighted average number of outstanding ordinary shares of the parent company:
Six months ended 30 June
20212020
Consolidated net profit attributable to ordinary shareholders of the parent company405,214,055207,771,782
Weighted average number of ordinary shares outstanding issued by the Company863,214,000863,214,000
Basic earnings per share0.470.24

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(53)Earnings per share (Cont’d)
(b)Diluted earnings per share
Diluted earnings per share are calculated by dividing consolidated net profit attributable to ordinary shareholders of the parent company adjusted based on the dilutive potential ordinary shares by the adjusted weighted average number of outstanding ordinary shares of the Company. As there were no dilutive potential ordinary shares in six months ended 30 June 2021 (six months ended 30 June 2020: Nil), diluted earnings per share equalled to basic earnings per share.
(54)Notes to the cash flow statement
(a)Cash received relating to other operating activities
Six months ended 30 June
20212020
Government grants334,382,070164,857,450
Deposits from distributors78,002,97222,539,331
Deposits for bidding22,377,00028,090,361
Quality claims277,752530,263
Input VAT refund-23,559,902
Others15,919,1396,343,077
450,958,933245,920,384
(b)Cash paid relating to other operating activities
Six months ended 30 June
20212020
Research and development expenses271,562,707515,676,803
Warranties216,744,709136,325,584
Advertising expenses113,004,161122,999,651
Promotion expenses185,146,657147,975,736
Guarantees49,908,69917,904,238
Maintenance expenses44,654,15020,729,104
Travel expenses17,919,91412,873,171
Others336,429,854255,310,888
1,235,370,8511,229,795,175
(c)Cash received relating to other investing activities
Six months ended 30 June
20212020
Interest from cash at bank116,825,86289,946,934
Interest from acceptance notes4,895,3254,229,944
Interest from credit sales1,020,8091,983,609
Investment income from forward exchange settlement79,024611,945
122,821,02096,772,432

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(54)Notes to the cash flow statement (Cont’d)
(d)Cash paid relating to other financing activities
Six months ended 30 June
20212020
Repayments of lease liabilities4,409,4234,800,032
(55)Supplementary information to the cash flow statement
(a)Supplementary information to the cash flow statement
Reconciliation from net profit to cash flows from operating activities
Six months ended 30 June
20212020
Net profit405,214,055207,771,782
Add: Asset impairment losses (Note 4(44))-34,107,710
Credit impairment losses (Note 4(45))(7,389,378)66,242,811
Depreciation of fixed assets (Note 4(10))433,395,705517,638,550
Amortisation of intangible assets (Note 4(13))77,362,90258,225,513
Depreciation of right-of-use assets (Note 4(12))7,354,2207,225,828
Increase in provisions36,150,01132,984,461
(Income)/Losses on disposal of long-term assets(11,008,608)25,860,575
Financial expenses(145,788,789)(67,128,763)
Investment losses/( income) (Note 4(47))10,863,242(28,278,000)
(Gains)/losses on changes in fair value (Note 4(48))5,130,493(10,012,041)
(Increase)/decrease in deferred tax assets(164,226,685)2,013,602
Increase/(Decrease) in deferred tax liabilities15,244,406(317,095)
(Increase)/Decrease in inventories(139,999,996)216,420,338
Increase in other cash and cash equivalents(1,565,665)(49,718,600)
Increase in operating receivables(279,516,996)(728,501,730)
Decrease/(increase) in operating payables(171,301,068)449,748,686
Net cash flows from operating activities69,917,849734,283,627

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4Notes to the consolidated financial statements (Cont’d)
(55)Supplementary information to the cash flow statement (Cont’d)
(b)Net increase in cash
Six months ended 30 June
20212020
Cash at the end of the period10,948,621,0707,872,553,804
Less: Cash at the beginning of the year(11,121,955,129)(8,937,936,658)
Net increase in cash(173,334,059)(1,065,382,854)
(c)Cash and cash equivalents
30 June 202131 December 2020
Bank deposit available for payment at any time10,948,621,07011,121,955,129
(56)Monetary items denominated in foreign currency
30 June 2021
Amounts denominated in foreign currenciesTranslation exchange rateAmounts in RMB
Long-term borrowings -
USD425,6476.46012,749,722
Other payables -
USD18,322,3986.4601118,364,523
EUR33,2887.6862255,858
118,620,381

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

5Interests in other entities
(1)Interests in subsidiaries
Structure of the enterprise group
SubsidiariesPlace of major businessPlace of registrationNature of businessShareholding (%)Method of acquisition
DirectIndirect
JMCSNanchang, JiangxiNanchang, JiangxiRetail, wholesale and lease of automobiles100%Set up by investment
JMCHTaiyuan, ShanxiTaiyuan, ShanxiManufacture and sales of automobiles100%Business combinations not involving enterprises under common control
SZFJShenzhen, GuangdongShenzhen, GuangdongRetail, wholesale and lease of automobiles100%Set up by investment
GZFJGuangzhou, GuangdongGuangzhou, GuangdongRetail, wholesale and lease of automobiles100%Set up by investment
JMPC (i)Taiyuan, ShanxiTaiyuan, ShanxiManufacture and sales of engines100%Establishment through split-off by JMCH
(i) according to the resolution of the Board of Directors’ meeting on June 19, 2020, JMPC was established by split-off of JMCH. The Company directly holds 100% equity of JMPC and JMCH respectively after the split.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

5Interests in other entities (Cont’d)
(2)Interests in associates
Summarised information of insignificant associates
Six months ended 30 June
20212020
Aggregated carrying amount of investments39,232,34737,910,003
Aggregate of the following items in proportion
Net profit (i)(264,201)(3,024,554)
Other comprehensive income (i)--
Total comprehensive income(264,201)(3,024,554)
(i) The net profit and other comprehensive income have taken into account the impacts of both the fair value of the identifiable assets and liabilities upon the acquisition of investment in joint ventures and associates and the unification of accounting policies adopted by the joint ventures and the associates to those adopted by the Group.
6Segment information
Revenue and profits of the Company mainly arise from production and domestic sales of automobiles, and the primary assets of the Group are all located in China. Management of the Group assesses the operating performance of the Group as a whole. Therefore, no segment report is prepared for the current period.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions
(1)Information of major shareholders
(a)General information of major shareholders
Type of enterprisePlace of registrationLegal representativeNature of businessCode of organisation
JICState-owned enterpriseNanchang, ChinaQiu TiangaoInvestment and asset management91360125MA38LUR91F
Ford Motor Company (“Ford”)Foreign enterpriseUnited StatesWilliam Clay Ford, Jr.Manufacture and sales of automobilesN/A
(b)Registered capital and changes in major shareholders
31 December 2020Increase in the current periodDecrease in the current period30 June 2021
JIC1,000,000,000--1,000,000,000
FordUSD 41,000,000--USD 41,000,000
(c)The percentages of shareholding and voting rights in the Company held by major shareholders
30 June 202131 December 2020
Shareholding (%)Voting rights (%)Shareholding (%)Voting rights (%)
JIC41.03%41.03%41.03%41.03%
Ford32%32%32%32%
(2)Information of subsidiaries
The general information and other related information of subsidiaries are set out in Note 5(1).
(3)Information of associates
The information of associates that have related party transactions with the Group is set out in Note 5(2).

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(4)Information of other related parties
Related partiesRelationship with the Group
JMCGShareholder of JIC
Chongqing Changan Automobile Co., Ltd.Shareholder of JIC
JMCG Jingma Motors Co., Ltd.Wholly-owned subsidiary of JMCG
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd.Wholly-owned subsidiary of JMCG
Jiangxi Lingrui Recycling Resources Development CorporationWholly-owned subsidiary of JMCG
Nanchang Gear Co., Ltd.Wholly-owned subsidiary of JMCG
Jiangling Material Co., Ltd.Wholly-owned subsidiary of JMCG
Jiangxi JMCG Industry Co., Ltd.Wholly-owned subsidiary of JMCG
Jiangxi Jiangling Chassis Co., Ltd.Wholly-owned subsidiary of JMCG
Nanchang JMCG Shishun Logistics Co., Ltd.Wholly-owned subsidiary of JMCG
JMCFWholly-owned subsidiary of JMCG
Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd.Wholly-owned subsidiary of JMCG
Nanchang JMCG Xinchen Auto Component Co., Ltd.Wholly-owned subsidiary of JMCG
Jingdezhen Shishun Logistics Co., Ltd.Wholly-owned subsidiary of JMCG
Ford Global Technologies,LLCWholly-owned subsidiary of Ford
Ford Motor (China) Co., Ltd.Wholly-owned subsidiary of Ford
Ford Motor Research & Engineering (Nanjing) Co., Ltd.Wholly-owned subsidiary of Ford
Ford Motor Co. Thailand Ltd.Wholly-owned subsidiary of Ford
Ford Otomotiv Sanayi A.S.Holding subsidiary of Ford
Auto Alliance (Thailand) Co., Ltd.Holding subsidiary of Ford
Ford Vietnam LimitedHolding subsidiary of Ford
Ford Trading Company, LLCHolding subsidiary of Ford
Changan Ford Automobile Co., Ltd.Joint venture of Ford
Nanchang JMCG Frame Co., LtdSubsidiary under indirect control of JMCG
Nanchang JMCG Liancheng Auto Component Co., Ltd.Subsidiary under indirect control of JMCG

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(4)Information of other related parties (Cont’d)
Related partiesRelationship with the Group
Nanchang Lianda Machinery Co., Ltd.Subsidiary under indirect control of JMCG
Jiangling Aowei Automobile Spare Part Co., Ltd.Subsidiary under indirect control of JMCG
Jiangxi JMCG Boya brake system Co., LtdSubsidiary under indirect control of JMCG
Jiangxi JMCG Shangrao Industrial Co., Ltd.Subsidiary under indirect control of JMCG
NC.Gear Forging FactorySubsidiary under indirect control of JMCG
JMCG Jiangxi Engineering Construction Co., Ltd.Subsidiary under indirect control of JMCG
Jiangxi Yizhi Zhixing Automobile Operation Service Co., Ltd.Subsidiary under indirect control of JMCG
Guizhou Wanfu Vehicle Sales & Service Co., Ltd.Group subsidiary of JIC’s shareholder
Chongqing Anfu Vehicle Marketing Co., Ltd.Group subsidiary of JIC’s shareholder
Chengdu Wanxing Vehicle Sales & Service Co., Ltd.Group subsidiary of JIC’s shareholder
Chongqing Anbo Vehicle Sales Co., Ltd.Group subsidiary of JIC’s shareholder
Yunan Wanfu Vehicle Sales & Service Co., Ltd.Group subsidiary of JIC’s shareholder
Dali Wanfu Vehicle Sales & Service Co., Ltd.Group subsidiary of JIC’s shareholder
Beijing Beifang Changfu Vehicle Sales & Service Co., Ltd.Group subsidiary of JIC’s shareholder
China Changan Group Hefei Investing Co., Ltd.Group subsidiary of JIC’s shareholder
Beijing Baiwang Changfu Vehicle Sales & Service Co., Ltd.Group subsidiary of JIC’s shareholder
Honghe Wanfu Vehicle Sales & Service Co., Ltd.Group subsidiary of JIC’s shareholder
China Changan Group Tianjin Sales Co., Ltd.Group subsidiary of JIC’s shareholder
Anhui Wanyou Vehicle Sales & Service Co., Ltd.Group subsidiary of JIC’s shareholder
Guizhou Wanjia Vehicle Sales & Service Co., Ltd.Group subsidiary of JIC’s shareholder
Jiangxi Jiangling Lear Interior System Co., Ltd.Joint venture of JMCG
Jiangxi ISUZU Co., Ltd.Joint venture of JMCG
Nanchang Jiangling HuaXiang Auto Components Co., Ltd.Joint venture of JMCG

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(4)Information of other related parties (Cont’d)
Related partiesRelationship with the Group
Nanchang Unistar Electric & Electronics Co., Ltd.Joint venture of JMCG
Nanchang Yinlun Heat-exchanger Co., Ltd.Joint venture of JMCG
Jiangxi ISUZU Engine Co., Ltd.Joint venture of JMCG
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.Associate of JMCG
Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd.Associate of JMCG
Jiangxi JMCG Specialty Vehicles Co., Ltd.Associate of JMCG
Jiangxi Jiangling Group Special Vehicle Co., Ltd.Associate of JMCG
Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd.Associate of JMCG
Nanchang Baojiang Steel Processing Distribution Co., Ltd.Associate of JMCG
Magna PT Powertrain (Jiangxi) Co., Ltd. (i)Associate of JMCG
Faurecia Emissions Control Technologies (Nanchang) Co., Ltd.Associate of JMCG
Jiangling Motor Holdings Co., Ltd.Associate of JMCG
Jiangxi Lingyun Automobile Industry Technology Co.,LtdAssociate of JMCG
Nanchang Hengou Industry Co., Ltd.Associate of JMCG
Jiujiang Fuwantong Vehicle Co., Ltd.Associate of JMCG
Jiangxi Fuxiang Vehicle Co., Ltd.Associate of JMCG
Ji'an Qingyuan District Yongfuda Vehicle Co., Ltd.Associate of JMCG
Yichun Xinfu Vehicle Co., Ltd.Associate of JMCG
Jiangxi Zhonglian Intelligent Logistics Co., Ltd.Associate of JMCG
Jiangling Motor Electricity Vehicle Co., Ltd.Associate of JMCG
Jiangxi Jiangling Group Health Science and Technology Co., Ltd.Associate of JMCG
(i)In December 2020, the GETRAG (Jiangxi) Transmission Company has been renamed to Magna PT Powertrain (Jiangxi) Co., Ltd.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(5)Related party transactions
(a)Purchase and sales of goods, provision and receipt of services
Purchase of goods:
Six months ended 30 June
Related partiesNature of related party transactions20212020
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd.Purchase of spare parts559,640,678383,892,896
Nanchang Baojiang Steel Processing Distribution Co., Ltd.Purchase of raw materials487,650,466405,185,757
Jiangxi Jiangling Chassis Co., Ltd.Purchase of spare parts454,821,789355,113,008
Magna PT Powertrain (Jiangxi) Co., Ltd.Purchase of spare parts416,304,253336,800,228
FordPurchase of spare parts406,714,749331,917,143
Nanchang Jiangling HuaXiang Auto Components Co., Ltd.Purchase of spare parts386,207,282272,438,364
Jiangxi Jiangling Lear Interior System Co., Ltd.Purchase of spare parts253,713,165203,467,840
Faurecia Emissions Control Technologies (Nanchang) Co., Ltd.Purchase of spare parts204,996,379211,129,621
Nanchang JMCG Liancheng Auto Component Co., Ltd.Purchase of spare parts192,440,537178,564,686
Nanchang JMCG Shishun Logistics Co., Ltd.Purchase of spare parts186,331,354180,731,669
Jiangxi Zhonglian Intelligent Logistics Co., Ltd.Purchase of spare parts179,718,350-
Nanchang Unistar Electric & Electronics Co., Ltd.Purchase of spare parts157,062,782130,765,035
Hanon SystemsPurchase of spare parts113,038,22686,204,275
JMCGPurchase of spare parts95,172,79171,583,876
Nanchang Yinlun Heat-exchanger Co., Ltd.Purchase of spare parts57,322,49830,324,257
Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd.Purchase of spare parts51,246,46145,571,842
Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd.Purchase of spare parts40,864,84532,436,589
Nanchang Lianda Machinery Co., Ltd.Purchase of spare parts39,419,20032,528,800
Jiangxi JMCG Specialty Vehicles Co., Ltd.Purchase of spare parts24,377,54720,244,154
Changan Ford Automobile Co., Ltd.Purchase of spare parts22,322,57116,159,043
Auto Alliance (Thailand) Co., Ltd.Purchase of spare parts22,108,46945,263,124
Jiangling Motor Holdings Co., Ltd.Purchase of spare parts20,348,18319,423,653
Jiangxi JMCG Boya brake system Co., LtdPurchase of spare parts17,753,7946,169,098

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(5)Related party transactions (Cont’d)
(a)Purchase and sales of goods, provision and receipt of services (Cont'd)
Purchase of goods (Cont'd):
Six months ended 30 June
Related partiesNature of related party transactions20212020
Jiangxi Lingyun Automobile Industry Technology Co.,LtdPurchase of spare parts16,903,9925,462,414
Ford Otomotiv Sanayi A.S.Purchase of spare parts14,985,07225,895,662
Jiangxi Jiangling Group Special Vehicle Co., Ltd.Purchase of spare parts14,710,06918,057,702
Jiangling Material Co., Ltd.Purchase of raw materials14,381,15710,789,819
Jiangling Aowei Automobile Spare Part Co., Ltd.Purchase of spare parts12,432,7099,133,485
Nanchang JMCG Xinchen Auto Component Co., Ltd.Purchase of spare parts8,531,9476,833,446
Jiangxi JMCG Industry Co., Ltd.Purchase of spare parts5,555,782270,582
Jiangxi ISUZU Engine Co., Ltd.Purchase of spare parts5,385,78511,670,041
NC.Gear Forging FactoryPurchase of spare parts4,600,0123,436,975
Jiangxi Lingrui Recycling Resources Development CorporationPurchase of spare parts3,603,4064,876,295
Ford Motor Co. Thailand Ltd.Purchase of spare parts1,761,5333,620,884
Jiangxi JMCG Shangrao Industrial Co., Ltd.Purchase of spare parts1,532,7131,383,417
Jiangxi Jiangling Group Health Science and Technology Co., Ltd.Purchase of epidemic prevention materials75,7522,214,000
Nanchang Gear Co., Ltd.Purchase of spare parts-3,700,664
Other related partiesPurchase of spare parts378,2773,655,968
4,494,414,5753,506,916,312
The products purchased by the Group from related parties are divided into two categories: purchase of imported parts and purchase of domestic parts. ? The pricing on imported parts purchased from Ford or its suppliers is based on the agreed price by both parties. ? The pricing on domestic accessories purchased from other related parties is determined through quotation, cost accounting, and negotiation between the two parties, and is adjusted regularly.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(5)Related party transactions (Cont’d)
(a)Purchase and sales of goods, provision and receipt of services (Cont'd)
Receipt of services:
Six months ended 30 June
Related partiesNature of related party transactions20212020
Nanchang JMCG Shishun Logistics Co., Ltd.Transportation/Truckage183,101,437145,365,321
Ford Global Technologies,LLCTrademark management fees/Technical development137,193,141111,064,126
JMCG Jiangxi Engineering Construction Co., Ltd.Engineering construction/Maintenance fee91,462,137126,634,929
FordEngineering service/Personnel costs45,133,925128,825,062
Changan Ford Automobile Co., Ltd.Service fee/Labor costs, etc.16,626,55026,903,713
Jiangxi JMCG Industry Co., Ltd.Dinning fee10,818,91210,620,614
Ford Otomotiv Sanayi A.S.Technical service/Technical development/ Personnel costs9,025,90613,953,012
Jiangxi Zhonglian Intelligent Logistics Co., Ltd.Transportation/Rental fee, etc.7,759,5242,143,309
Ford Motor (China) Co., Ltd.Personnel costs6,622,0705,607,007
Jiangling Motor Holdings Co., Ltd.Personnel costs/Labor costs5,041,950100,700
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.Agent fee, etc.4,734,3923,720,284
Ford Motor Research & Engineering (Nanjing) Co., Ltd.Personnel costs3,698,2075,380,878
Nanchang Jiangling HuaXiang Auto Components Co., Ltd.Design fee/Experimental costs2,175,305-
Jiangxi JMCG Specialty Vehicles Co., Ltd.Promotion1,139,6484,099,057
Chongqing Changan Automobile Co., Ltd.Personnel costs840,139638,559
Magna PT Powertrain (Jiangxi) Co., Ltd.Design fee44,0004,551,480
Other related parties3,706,8233,543,314
529,124,066593,151,365

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(5)Related party transactions (Cont’d)
(a)Purchase and sales of goods, provision and receipt of services (Cont'd)
Sales of goods
Six months ended 30 June
Related partiesNature of related party transactions20212020
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.Sales of automobiles and accessories1,448,104,620515,648,431
Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd.Sales of automobiles116,350,946247,784,771
Jiangxi Lingrui Recycling Resources Development CorporationScrapping materials and utilities46,091,11237,417,132
Jiangxi Jiangling Chassis Co., Ltd.Sales of accessories35,912,12625,066,364
Jiangxi JMCG Specialty Vehicles Co., Ltd.Sales of automobiles and accessories29,087,061116,257,012
JMCG Jingma Motors Co., Ltd.Sales of automobiles and accessories28,334,16221,175,865
Jiangxi Zhonglian Intelligent Logistics Co., Ltd.Sales of accessories24,575,547-
Jiangxi Jiangling Group Special Vehicle Co., Ltd.Sales of automobiles22,609,91419,430,202
Dali Wanfu Vehicle Sales & Service Co., Ltd.Sales of automobiles and accessories21,352,95622,654,665
Chengdu Wanxing Vehicle Sales & Service Co., Ltd.Sales of automobiles and accessories20,425,6953,839,113
Chongqing Anfu Vehicle Marketing Co., Ltd.Sales of automobiles and accessories19,801,6305,983,015

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(5)Related party transactions (Cont’d)
(a)Purchase and sales of goods, provision and receipt of services (Cont'd)
Sales of goods (Cont'd):
Six months ended 30 June
Related partiesNature of related party transactions20212020
Chongqing Anbo Vehicle Sales Co., Ltd.Sales of automobiles and accessories18,291,9435,520,116
Nanchang JMCG Shishun Logistics Co., Ltd.Sales of automobiles and accessories12,279,63411,258,826
Guizhou Wanfu Vehicle Sales & Service Co., Ltd.Sales of automobiles and accessories7,888,81311,046,682
Jiujiang Fuwantong Vehicle Co., Ltd.Sales of automobiles and accessories6,759,7458,476,498
China Changan Group Tianjin Sales Co., Ltd.Sales of automobiles and accessories5,932,997217,533
Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd.Sales of accessories4,950,891-
Nanchang JMCG Liancheng Auto Component Co., Ltd.Sales of accessories4,850,08120,393,560
Nanchang Hengou Industry Co., Ltd.Sales of accessories4,575,6893,794,800
Guizhou Wanjia Vehicle Sales & Service Co., Ltd.Sales of automobiles and accessories3,745,325-
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd.Sales of automobiles and accessories, utilities3,429,67699,880,081
Beijing Beifang Changfu Vehicle Sales & Service Co., Ltd.Sales of automobiles and accessories3,394,9188,291,761
Jiangxi ISUZU Co., Ltd.Sales of accessories2,382,506151,096
Jiangxi Jiangling Lear Interior System Co., Ltd.Sales of accessories2,376,7362,349,992

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(5)Related party transactions (Cont’d)
(a)Purchase and sales of goods, provision and receipt of services (Cont'd)
Sales of goods (Cont'd):
Six months ended 30 June
Related partiesNature of related party transactions20212020
Nanchang Jiangling HuaXiang Auto Components Co., Ltd.Sales of accessories1,620,1153,933,437
Anhui Wanyou Vehicle Sales & Service Co., Ltd.Sales of automobiles and accessories1,425,731-
Jiangxi Yizhi Zhixing Automobile Operation Service Co., Ltd.Sales of automobiles1,302,655-
Jiangxi JMCG Industry Co., Ltd.Sales of accessories,scrapping materials and utilities1,265,8861,532,473
Nanchang Lianda Machinery Co., Ltd.Sales of accessories1,236,605273,615
Yunan Wanfu Vehicle Sales & Service Co., Ltd.Sales of automobiles and accessories567,4723,000,142
Beijing Baiwang Changfu Vehicle Sales & Service Co., Ltd.Sales of automobiles and accessories381,6761,312,986
China Changan Group Hefei Investing Co., Ltd.Sales of automobiles and accessories134,1768,700,430
Jiangxi Fuxiang Vehicle Co., Ltd.Sales of automobiles and accessories, utilities78,5161,962,208
Yichun Xinfu Vehicle Co., Ltd.Sales of automobiles and accessories70,7961,178,868
Ji'an Qingyuan District Yongfuda Vehicle Co., Ltd.Sales of automobiles and accessories50,5821,404,914
Honghe Wanfu Vehicle Sales & Service Co., Ltd.Sales of automobiles and accessories47,1901,553,651
Jingdezhen Shishun Logistics Co., Ltd.Sales of automobiles-2,389,380

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(5)Related party transactions (Cont’d)
(a)Purchase and sales of goods, provision and receipt of services (Cont'd)
Sales of goods (Cont'd):
Six months ended 30 June
Related partiesNature of related party transactions20212020
Other related parties1,769,5473,450,991
1,903,455,6701,217,330,610
The Group’s pricing on goods sold to related parties is based on the agreed price by both parties.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(5)Related party transactions (Cont’d)
(b)Leases
(i)The lease income recognised in the current period with the Group as the lessor:
Six months ended 30 June
Name of the lesseeType of the leased asset20212020
Jiangling Material Co., Ltd.Buildings60,550-
Jiangxi ISUZU Co., Ltd.Buildings31,37153,411
91,92153,411
(ii)Increase of right-of-use assets in the current period with the Group as the lessee
Six months ended 30 June
Name of the lessorType of the leased asset20212020
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.Buildings16,852,582-
JMCGBuildings182,766-
17,035,348-
(iii)Interest expenses on lease liabilities in the current period of the Group as the lessee:
Six months ended 30 June
20212020
JMCG221,943305,570
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.213,55741,038
435,500346,608

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(5)Related party transactions (Cont’d)
(c)Guarantee received
GuarantorGuaranteed amountStarting dateEnding dateFully performed or not
JMCF2,749,7225 March 200130 October 2029Not fully performed
2021 first half-year, JMCF provided guarantees for some bank borrowings of the Group, with a maximum guarantee limit of USD2,282,123. As at 30 June 2021, JMCF provided borrowing guarantee to the bank borrowing of USD425,647, equivalent to RMB2,749,722 (31 December 2020: USD458,389, equivalent to RMB2,990,943) for the Group.
(d)Transfer of assets
Six months ended 30 June
Related partiesNature of related party transactions20212020
Jiangxi JMCG Industry Co., Ltd.Sales of fixed assets-1,447
-1,447
The pricing on transfer of assets between the Group and related parties is based on the agreed price by both parties.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(5)Related party transactions (Cont’d)
(e)Purchase of assets
Six months ended 30 June
Related partiesNature of related party transactions20212020
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd.Purchase of fixed assets4,946,7441,370,067
Magna PT Powertrain (Jiangxi) Co., Ltd.Purchase of fixed assets2,480,0003,480,000
Nanchang Jiangling HuaXiang Auto Components Co., Ltd.Purchase of fixed assets444,600-
Jiangling Motor Holdings Co., Ltd.Purchase of fixed assets-337,660
7,871,3445,187,727
The pricing on purchase of assets between the Group and related parties is based on the agreed price by both parties.
(f)Provision of technology sharing
Six months ended 30 June
Related partiesNature of related party transactions20212020
Ford Motor Research & Engineering (Nanjing) Co., Ltd.Technical service24,740,0008,290,000
Ford Vietnam LimitedTechnical service12,780,00011,123,000
Jiangxi ISUZU Co., Ltd.Technical service4,615,000-
FordTechnical service3,230,0006,974,000
Ford Trading Company, LLCTechnical service2,350,000-
Ford Otomotiv Sanayi A.S.Technical service340,000-
48,055,00026,387,000
The Group’s pricing on technology sharing provided to related parties is based on the agreed price by both parties.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(5)Related party transactions (Cont’d)
(g)Purchase of fuel consumption integral acquisition
Six months ended 30 June
Related party20212020
Jiangling Motor Holdings Co., Ltd.177,528,259-
Jiangling Motor Electricity Vehicle Co., Ltd.11,186,31823,315,612
188,714,57723,315,612
-
The Group’s pricing on fuel consumption integral purchased from related parties is based on the agreed price by both parties.
(h)Remuneration of key management
Six months ended 30 June
20212020
Remuneration of key management11,096,7006,783,165
(i)Interest income
Six months ended 30 June
20212020
JMCF9,065,2028,942,382

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(6)Receivables from and payables to related parties
Receivables from related parties:
30 June 202131 December 2020
AmountProvision for bad debtsAmountProvision for bad debts
Accounts receivable
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.869,532,495(528,716)1,081,916,003(2,368,381)
Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd.53,564,546(23,176)22,613,476(47,488)
Jiangxi JMCG Specialty Vehicles Co., Ltd.31,701,175(14,811)9,705,710(20,997)
JMCG Jingma Motors Co., Ltd.19,608,976(48,948)4,953,579(14,861)
Jiangxi Zhonglian Intelligent Logistics Co., Ltd.14,043,419(35,055)--
Nanchang JMCG Frame Co., Ltd6,941,722(17,328)11,499,163(34,497)
Ford Vietnam Limited6,390,000(15,951)19,500,000(97,500)
Jiangxi Jiangling Group Special Vehicle Co., Ltd.3,287,145(1,422)3,340,025(7,014)
Ford3,230,000(8,063)6,304,000(31,520)
Jiangxi ISUZU Co., Ltd.2,988,138(7,459)1,103,086(3,309)
Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd.2,443,304(6,099)943,109(2,829)
Ford Trading Company, LLC2,350,000(5,866)--
Nanchang JMCG Liancheng Auto Component Co., Ltd.1,650,455(4,120)8,906,500(26,720)
Ford Motor Research & Engineering (Nanjing) Co., Ltd.1,367,400(3,413)890,400(4,452)
Nanchang Hengou Industry Co., Ltd.1,220,975(3,048)394,513(1,184)
Jiangxi Jiangling Chassis Co., Ltd.--4,786,897(14,361)
Nanchang JMCG Shishun Logistics Co., Ltd.--4,267,697(12,803)
Jiangxi Jiangling Lear Interior System Co., Ltd.926,020(2,312)1,192,642(3,578)
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd.591,682(1,477)1,539,411(4,618)
Other related parties2,595,941(5,376)2,016,965(6,044)
1,024,433,393(732,640)1,185,873,176(2,702,156)

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(6)Receivables from and payables to related parties (Cont’d)
Receivables from related parties (Cont'd):
30 June 202131 December 2020
AmountProvision for bad debtsAmountProvision for bad debts
Other receivables
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.25,190,512(75,572)35,201,661(105,605)
Other related parties145,870(445)6,644(20)
25,336,382(76,017)35,208,305(105,625)

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(6)Receivables from and payables to related parties (Cont’d)
Receivables from related parties (Cont'd):
30 June 202131 December 2020
Advances to suppliersNanchang Baojiang Steel Processing Distribution Co., Ltd.489,145,695355,529,951
Financing receivablesJMCG Jingma Motors Co., Ltd.7,387,2905,172,364
Prepayment for projectsJiangxi Jiangling Motors Imp. & Exp. Co., Ltd.177,1601,239,661
Bank balancesJMCF771,587,9281,231,825,734
Payables to related parties:
30 June 202131 December 2020
Accounts payableNanchang Jiangling HuaXiang Auto Components Co., Ltd.473,583,419600,620,464
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd.423,742,898450,355,413
Jiangxi Jiangling Chassis Co., Ltd.336,602,865381,961,882
Jiangxi Jiangling Lear Interior System Co., Ltd.229,848,248244,023,570
Ford210,415,771165,212,418
Magna PT Powertrain (Jiangxi) Co., Ltd.210,393,489257,203,673
Jiangxi Zhonglian Intelligent Logistics Co., Ltd.163,864,546343,739
Nanchang JMCG Liancheng Auto Component Co., Ltd.153,999,210177,586,249
Faurecia Emissions Control Technologies (Nanchang) Co., Ltd.140,062,610140,584,875
Hanon Systems104,228,065119,546,495
JMCG95,458,246108,139,686
Nanchang Unistar Electric & Electronics Co., Ltd.89,113,683107,067,804
Nanchang JMCG Shishun Logistics Co., Ltd.87,796,370112,968,126
Nanchang JMCG Mekra-Lang Vehicle Mirror Co., Ltd.48,372,14684,273,999
Nanchang Yinlun Heat-exchanger Co., Ltd.34,995,66239,863,083

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(6)Receivables from and payables to related parties (Cont’d)
Payables to related parties (Cont'd):
30 June 202131 December 2020
Accounts payableJiangxi JMCG Specialty Vehicles Co., Ltd.27,215,02944,095,229
Jiangxi Jiangling Group Special Vehicle Co., Ltd.26,854,64517,656,588
Changan Ford Automobile Co., Ltd.25,640,0017,408,214
Jiangxi Lingge Non-ferrous Metal Die-casting Co., Ltd.22,833,96933,997,041
Nanchang Lianda Machinery Co., Ltd.21,647,67131,713,777
Auto Alliance (Thailand) Co., Ltd.12,868,6984,294,750
Jiangling Aowei Automobile Spare Part Co., Ltd.11,392,20711,243,037
Jiangxi Lingyun Automobile Industry Technology Co.,Ltd11,158,2755,184,778
Jiangxi JMCG Boya brake system Co., Ltd10,694,3718,797,919
Jiangling Motor Holdings Co., Ltd.9,740,67611,635,750
Nanchang JMCG Xinchen Auto Component Co., Ltd.8,753,9955,721,038
Jiangxi ISUZU Engine Co., Ltd.5,456,011441,696
Jiangxi Lingrui Recycling Resources Development Corporation3,531,5314,814,171
Jiangxi JMCG Industry Co., Ltd.2,870,0931,044,850
Ford Otomotiv Sanayi A.S.2,838,7374,727,288
NC.Gear Forging Factory2,524,035921,767
Jiangling Material Co., Ltd.1,190,9781,955,537
Jiangxi JMCG Shangrao Industrial Co., Ltd.845,6241,144,320
Nanchang Gear Co., Ltd.90,0243,414,942
Other related parties731,945666,052
3,011,355,7433,190,630,220

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(6)Receivables from and payables to related parties (Cont’d)
Payables to related parties (Cont'd):
30 June 202131 December 2020
Other payablesJiangling Motor Holdings Co., Ltd.177,758,6401,480,192
Ford Global Technologies,LLC65,202,29818,050,765
Ford49,365,74048,814,942
Jiangxi JMCG Specialty Vehicles Sales Corporation, Ltd.27,247,58723,287,853
Nanchang JMCG Shishun Logistics Co., Ltd.11,516,6818,370,326
Magna PT Powertrain (Jiangxi) Co., Ltd.11,246,73113,139,275
Jiangling Motor Electricity Vehicle Co., Ltd.11,186,318-
Jiangxi Jiangling Group Special Vehicle Co., Ltd.10,905,47510,269,987
Jiangxi Jiangling Special Purpose Vehicle Co., Ltd.6,194,3191,588,791
JMCG Jiangxi Engineering Construction Co., Ltd.5,834,0857,117,653
Jiangxi JMCG Specialty Vehicles Co., Ltd.4,243,5093,682,741
Ford Otomotiv Sanayi A.S.3,789,6495,265,976
Faurecia Emissions Control Technologies (Nanchang) Co., Ltd.3,042,4553,285,350
Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd.2,838,8091,456,956
Nanchang Baojiang Steel Processing Distribution Co., Ltd.2,722,0601,944,877
Chongqing Changan Automobile Co., Ltd.2,621,2341,781,095
Ford Motor (China) Co., Ltd.2,134,9872,570,952
Jiangxi JMCG Industry Co., Ltd.1,903,5073,726,567
Changan Ford Automobile Co., Ltd.1,491,63418,503,441
Hanon Systems1,475,0001,475,000
Ford Motor Research & Engineering (Nanjing) Co., Ltd.1,284,1591,345,255
Jiangxi Jiangling Lear Interior System Co., Ltd.1,207,0001,207,000
Nanchang Jiangling HuaXiang Auto Components Co., Ltd.951,8592,481,859
JMCG-2,313,728
Other related parties4,232,8715,600,327
.410,396,607188,760,908

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

7Related parties and related party transactions (Cont'd)
(6)Receivables from and payables to related parties (Cont’d)
Payables to related parties (Cont'd):
30 June 202131 December 2020
Contract liabilitiesOther related parties1,402,3072,191,137
Lease liabilitiesJiangxi Jiangling Motors Imp. & Exp. Co., Ltd.17,066,139-
JMCG8,135,2829,033,918
25,201,4219,033,918
(7)Commitments in relation to related parties
Capital commitments30 June 202131 December 2020
JMCG Jiangxi Engineering Construction Co., Ltd.195,204,618377,223,784
Guarantee of commitments in relation to related parties is set out in Note 7(5)(c).
8Contingencies
As at 30 June 2021, the Group had no contingencies that needed to be accounted for in the notes to the financial statements.
9Commitments
Capital expenditure commitments
Capital expenditures contracted by the Group but are not yet necessary to be presented on the balance sheet as at the balance sheet date are as follows:
30 June 202131 December 2020
Buildings, machinery and equipment823,830,0001,127,750,000

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

10Events after the balance sheet date
(1)Disposal of equity in subsidiary
The Company and Yunnan Yunnei Power Group Co., Ltd. signed the relevant equity transaction contract in accordance with the relevant trading rules of Shanghai United Property Rights Exchange. As of the disclosure date of this report, the relevant equity trading is still in process.
By consensus, the company has signed the corresponding equity transfer agreement for the sale of 100% equity of JMCH to Volvo Lastvagnar Aktiebolag. As of the disclosure date of this report, the relevant equity trading is still in process.
11Financial instrument and risk
The Group's activities expose it to a variety of financial risks, which mainly comprise market risk (primarily including foreign exchange risk and interest rate risk), credit risk and liquidity risk. The above financial risks and the Group's risk management policies to mitigate the risks are as follows: The Board of Directors is responsible for planning and establishing the Group's risk management framework, formulating the Group's risk management policies, and supervising the implementation of risk management measures. The Group has established risk management policies to identify and analyse the risks faced by the Group. These risk management policies specify the risks such as market risk, credit risk and liquidity risk management. The Group regularly evaluates the market environment and changes in the Group's operating activities to determine whether to update the risk management policies or not. The Group's risk management is carried out under policies approved by the Board of Directors. The business departments of the Group work closely to identify and evaluate related risks, and determine countermeasures with management to avoid or reduce the adverse impact of the related risks on the Company. The internal audit department of the Group conducts periodical audit to the controls and procedures for risk management and reports the audit results to the Risk Management Committee of the Group.
(1)Market risk
(a)Foreign exchange risk
The Group’s major operational activities are carried out in Mainland China and a majority of the transactions are denominated in RMB. The Group is exposed to foreign exchange risk arising from the recognised assets and liabilities, and future transactions denominated in foreign currencies, primarily with respect to USD. The Group monitors the amount of assets and liabilities, and transactions denominated in foreign currencies to minimise the foreign exchange risk. Therefore, the Group signed forward exchange contracts to mitigate the foreign exchange risk (Note 4(17)).

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

11 (1) (a)Financial instrument and risk (Cont’d) Market risk (Cont’d) Foreign exchange risk (Cont’d) The financial assets and the financial liabilities denominated in foreign currencies, which are held by the Company and the subsidiaries of the Group, whose recording currencies were RMB, were expressed in RMB as at 30 June 2021 and 31 December 2020 as follows:
30 June 2021
USDEURTotal
Financial liabilities denominated in foreign currency -
Derivative financial liabilities8,165,742-8,165,742
Current portion of long-term borrowings423,034-423,034
Long-term borrowings2,326,688-2,326,688
Other payables118,364,523255,858118,620,381
129,279,987255,858129,535,845
31 December 2020
USDEURTotal
Financial liabilities denominated in foreign currency -
Derivative financial liabilities3,716,727-3,716,727
Current portion of long-term borrowings427,277-427,277
Long-term borrowings2,563,666-2,563,666
Other payables70,936,7561,469,68272,406,438
77,644,4261,469,68279,114,108
As at 30 June 2021, if the RMB had strengthened/weakened by 10% against the USD while all other variables had been held constant, the Group’s net profit would have been approximately RMB10,988,799 (31 December 2020: approximately RMB6,599,776) higher/lower for the financial assets and liabilities dominated in foreign currencies whose recording currency is RMB; if the RMB had strengthened/weakened by 10% against the EUR while all other variables had been held constant, the Group’s net profit would have been approximately RMB21,748 higher/lower (31 December 2020: approximately RMB142,961).
(b)Interest rate risk
The Group's interest rate risk mainly arises from interest-bearing debts such as short-term loans and long-term bank loans. The financial liabilities of floating interest rate expose the Group to cash flow interest rate risk, and the financial liabilities of fixed interest rate expose the Group to fair value interest rate risk. The Group determines the relative proportions of fixed-rate and floating-rate contracts based on the prevailing market environment. As of June 30, 2021, the Group’s short-term borrowings of RMB500,000,000 (December 31, 2020: RMB500,000,000) are fixed-rate borrowings, and long-term borrowings of USD 425,647 (December 31, 2020: USD 458,389) are fixed-rate borrowings, therefor no significant cash flow interest rate risk.
As at 30 June 2021 and 31 December 2020, no significant difference between the fair value and the carrying amount of the Group’s borrowings with fixed-rate.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

11Financial instrument and risk (Cont’d)
(2)Credit risk
The Group’s credit risk mainly arises from cash and cash equivalent, notes receivable, accounts receivable, financial assets held for trading, other receivables and derivative financial assets at fair value through profit or loss that are not included in the impairment assessment scope. The carrying amount of the Group’s financial assets reflects its maximum credit exposure on the balance sheet date.
The Group expects that there is no significant credit risk associated with cash at bank and on hand since they are deposited at state-owned banks and other medium or large size listed banks with good reputation and high credit rating. The Group does not expect that there will be significant losses from non-performance by these banks.
In addition, the Group has policies to limit the credit exposure on notes receivable, accounts receivable, financing receivables and other receivables. The Group assesses the credit quality of and sets credit limits on its customers by taking into account their financial position, the availability of guarantee from third parties, their credit history and other factors such as current market conditions. The credit history of the customers is regularly monitored by the Group. In respect of customers with a poor credit history, the Group will use written payment reminders, or shorten or cancel credit periods, to ensure the overall credit risk of the Group is limited to a controllable extent.
As at 30 June 2021, the Group had no significant collateral or other credit enhancements held as a result of the debtor’s mortgage (31 December 2020: Nil).
(3)Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the Group. The Group monitors rolling forecasts of its short-term and long-term liquidity requirements to ensure it has sufficient cash and securities that are readily convertible to cash to meet operational needs, while maintaining sufficient headroom on its undrawn committed borrowing facilities from major financial institutions so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities to meet the short-term and long-term liquidity requirements.
On the balance sheet date, the undiscounted contractual cash flows of various financial liabilities of the Group are listed as follows based on the maturity date:
30 June 2021
Within 1 year1 to 2 years2 to 5 yearsOver 5 yearsTotal
short-term borrowing
—principal500,000,000---500,000,000
—interest-----
Derivative financial liabilities8,165,742---8,165,742
Accounts payable9,408,546,403---9,408,546,403
Other payables8,024,900,054---8,024,900,054
Lease liabilities17,841,59218,735,10410,272,078-46,848,774
Long-term borrowings-
- Principal423,034423,0341,269,102634,5522,749,722
- Interest39,65933,31461,8699,518144,360
17,959,916,48419,191,45211,603,049644,07017,991,355,055

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

11Financial instrument and risk (Cont’d)
(3)Liquidity risk (Cont’d)
31 December 2020
Within 1 year1 to 2 years2 to 5 yearsOver 5 yearsTotal
short-term borrowing500,000,000---500,000,000
—principal2,173,333---2,173,333
—interest3,716,727---3,716,727
Derivative financial liabilities10,026,215,877---10,026,215,877
Accounts payable4,153,849,625---4,153,849,625
Other payables11,683,62511,419,3668,646,930-31,749,921
Lease liabilities
Long-term borrowings427,277427,2771,281,833854,5562,990,943
- Principal43,26236,85372,10316,023168,241
14,698,109,72611,883,49610,000,866870,57914,720,864,667
(i)As at June 30, 2021, the lease payment related to the lease contract that the Group has signed but has not yet begun to execute as follows(Note 4(27)(a))(December 31, 2020:RMB 361,843,200):
30 June 2021
Within 1 year1 to 2 years2 to 5 yearsTotal
Future contractual cash flows not included in lease liabilities72,368,64072,368,640217,105,920361,843,200
12Fair value estimates
The level in which fair value measurement is categorised is determined by the level of the fair value hierarchy of the lowest level input that is significant to the entire fair value measurement:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

12Fair value estimates (Cont’d)
(1)Assets and liabilities measured at fair value on a recurring basis
As at 30 June 2021, the assets measured at fair value on a recurring basis by the above three levels were analysed below:
Level 1Level 2Level 3Total
Financial assets -
Financial assets held for trading-
Structured deposits--553,211,507553,211,507
Financing receivables-
Notes receivables--428,573,213428,573,213
--981,784,720981,784,720
As at 30 June 2021, the liabilities measured at fair value on a recurring basis by the above three levels were analysed below:
Level 1Level 2Level 3Total
Financial liabilities -
Derivative financial liabilities-
Forward foreign exchange contract-8,165,742-8,165,742
As at 31 December 2020, the assets measured at fair value on a recurring basis by the above three levels were analysed below:
Level 1Level 2Level 3Total
Structured deposits-803,892,985803,892,985
Financial assets -
Financing receivables
Notes receivables--815,583,669815,583,669
--1,619,476,6541,619,476,654
As at 31 December 2020, the liabilities measured at fair value on a recurring basis by the above three levels were analysed below:
Level 1Level 2Level 3Total
Financial liabilities -
Derivative financial liabilities
Forward foreign exchange contract-3,716,727-3,716,727

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

12Fair value estimates (Cont’d)
(1)Assets and liabilities measured at fair value on a recurring basis (Cont’d)
The Group takes the date on which events causing the transfers between the levels take place as the timing specific for recognising the transfers. There is no transfer between Level 1 and Level 2 for the current period.
The fair value of financial instruments traded in an active market is determined at the quoted market price; and the fair value of those not traded in an active market is determined by the Group using valuation technique. The valuation models used mainly comprise discounted cash flow model and market comparable corporate model. The inputs of valuation technique mainly include risk-free interest rate, benchmark rate, exchange rate, etc.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

12Fair value estimates (Cont’d)
(1)Assets and liabilities measured at fair value on a recurring basis (Cont'd)
The changes in Level 3 financial assets are analysed below:
31 December 2020IncreaseDecrease30 June 2021Gains recognised in profit or loss (a)Changes in unrealised gains or losses included in profit or loss in 2021 with respect to assets still held as at 30 June 2021 - gains or losses on changes in fair value
Financial assets
Financial assets held for trading -
Monetary fund-500,000,000(500,000,000)-198,622-
Structural deposits803,892,9851,099,318,522(1,350,000,000)553,211,50710,005,970(681,478)
Financing receivables -
Notes receivable815,583,6691,581,300,701(1,968,311,157)428,573,213--
Total assets1,619,476,6543,180,619,223(3,818,311,157)981,784,72010,204,592(681,478)
(a)Gains recognised in profit or loss is recognised in investment income in the income statement.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

12Fair value estimates (Cont’d)
(1)Assets and liabilities measured at fair value on a recurring basis (Cont'd)
The changes in Level 3 financial assets are analysed below (Cont'd):
31 December 2019IncreaseDecrease31 December 2020Gains recognised in profit or loss (a)Changes in unrealised gains or losses included in profit or loss in 2020 with respect to assets still held as at 31 December 2020 - gains or losses on changes in fair value
Financial assets
Financial assets held for trading -
Monetary fund-500,000,000(500,000,000)-244,059-
Structural deposits-15,610,892,985(14,807,000,000)803,892,98577,605,6033,892,985
Financing receivables -
Notes receivable289,044,3732,325,165,208(1,798,625,912)815,583,669--
Total assets289,044,37318,436,058,193(17,105,625,912)1,619,476,65477,849,6623,892,985
(a)Gains recognised in profit or loss is recognised in investment income in the income statement.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

12Fair value estimates (Cont’d)
(2)Assets measured at fair value on a non-recurring basis
As at 30 June 2021 and 31 December 2020, the Group did not have assets measured at fair value on a non-recurring basis.
(3)Assets and liabilities not measured at fair value but for which the fair value is disclosed
The Group’s financial assets and liabilities measured at amortised cost mainly comprise notes receivable, accounts receivable, other receivables, short-term borrowing, account payables, long-term borrowings, etc.
The carrying amount of the Group's financial assets and liabilities not measured at fair value is a reasonable approximation of their fair value.
The fair value of long-term borrowings is the present value of the contractually determined stream of future cash flows discounted at the rate of interest applied at that time by the market to instruments of comparable credit status and providing substantially the same cash flows on the same terms, and categorised within Level 3 of the fair value hierarchy.
13Capital management
The Group’s capital management policies aim to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.
The Group's total capital is calculated as “shareholders equity” as shown in the consolidated balance sheet. The Group is not subject to external mandatory capital requirements, and monitors capital on the basis of equity ratio.
As at 30 June 2021 and 31 December 2020, the Group's equity ratio was as follows:
30 June 202131 December 2020
Total borrowings502,749,722502,990,943
Total equities8,391,156,20010,986,474,009
Equity ratio5.99%4.58%

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

14Notes to the Company’s financial statements
(1)Accounts receivable
30 June 202131 December 2020
Accounts receivable3,278,994,4003,502,761,954
Less: Provision for bad debts(170,482,313)(171,881,303)
3,108,512,0873,330,880,651
(a)The ageing of accounts receivable is analysed as follows:
30 June 202131 December 2020
Within 1 year2,841,807,8743,043,074,741
1 to 2 years5,027,9695,223,812
2 to 3 years400,079,957454,463,401
Overdue over 3 years32,078,600-
3,278,994,4003,502,761,954
(b)As at 30 June 2021, the five largest accounts receivable aggregated by debtor were analysed as follows:
BalanceAmount of provision for bad debts% of total balance
Company 11,714,945,725-52.30%
Company 2860,205,437(499,576)26.23%
Company 3147,567,312-4.50%
Company 472,480,000(72,480,000)2.21%
Company 553,938,618(134,642)1.64%
2,849,137,092(73,114,218)86.88%
(c)Provision for bad debts
For accounts receivable, irrespective of whether a significant financing component exists, the Company measures the loss provision according to the lifetime expected credit losses.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

14Notes to the Company’s financial statements (Cont’d)
(1)Accounts receivable (Cont’d)
(c)Provision for bad debts (Cont’d)
(i)Accounts receivable for which provision for bad debts is made on the individual basis are analysed as follows:
30 June 2021
Book balanceProvision for bad debts
AmountLifetime ECL (%)Provision for bad debts
Receivables from related parties within the Group i)1,862,632,705--
New energy subsidies receivable ii)84,903,126100%(84,903,126)
Accounts receivable for automobiles iii)72,480,000100%(72,480,000)
2,020,015,831(157,383,126)
31 December 2020
Book balanceProvision for bad debts
AmountLifetime ECL (%)Provision for bad debts
Receivables from related parties within the Group i)1,775,196,875--
New energy subsidies receivable ii)84,903,126100%(84,903,126)
Accounts receivable for automobiles iii)74,480,000100%(74,480,000)
1,934,580,001(159,383,126)
i) As at 30 June 2021, the Company's accounts receivable due from subsidiaries JMCS, SZFJ and JMPC were RMB1,714,945,725, RMB147,567,312 and RMB119,668 respectively, totalling to RMB1,862,632,705. The Company carried out individual assessment on receivables from subsidiaries. Based on the judgement of credit risk, there is no significant credit risk on receivables from subsidiaries, and there is no overdue or impairment. As at 31 December 2020, the Company's accounts receivable from subsidiaries JMCS, JMCH and GZFJ were RMB1,605,066,624, RMB167,353,472 and RMB2,776,779 respectively, totalling to RMB1,775,196,875. The Company carried out individual assessment on receivables from subsidiaries. Based on the judgement of credit risk, there is no significant credit risk on receivables from subsidiaries, and there is no overdue or impairment.
ii) As at 30 June 2021, state subsidies for new energy automobiles receivable amounted to RMB84,903,126 (31 December 2020: RMB84,903,126). As the corresponding new energy vehicles may not meet the corresponding subsidy policy standards, the Company considered the receivables cannot be collected, therefore, full provision was made for those receivables.
iii) As at 30 June 2021 and 31 December 2020, since these companies in debts were involved in several legal proceedings, the Company considered that it was difficult to recover such receivables, therefore, full provision was made for those receivables.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

14Notes to the Company’s financial statements (Cont’d)
(1)Accounts receivable (Cont’d)
(c)Provision for bad debts (Cont’d)
(ii)Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows:
Grouping - Sales of general automobiles:
30 June 2021
Book balanceProvision for bad debts
AmountLifetime ECL (%)Amount
Not overdue838,332,1660.04%(374,072)
Overdue for 1 to 30 days7,584,3720.07%(5,426)
Overdue for 31 to 60 days119,4252.59%(3,092)
846,035,963(382,590)
Grouping - Sales of general automobiles:
31 December 2020
Book balanceProvision for bad debts
AmountLifetime ECL (%)Amount
Not overdue1,096,348,0570.21%(2,303,427)
Overdue for 1 to 30 days70,701,6140.21%(148,544)
Overdue for 31 to 60 days345,7986.35%(21,961)
1,167,395,469(2,473,932)
Grouping - Sales of new energy automobiles:
30 June 2021
Book balanceProvision for bad debts
AmountLifetime ECL (%)Amount
Not overdue122,873,6635.01%(6,160,075)
Overdue for 1 to 30 days---
Overdue for 31 to 60 days---
Overdue for 61 to 90 days---
Overdue over 90 days23,243,55025.34%(5,890,472)
146,117,213(12,050,547)
31 December 2020
Book balanceProvision for bad debts
AmountLifetime ECL (%)Amount
Not overdue138,042,4624.94%(6,826,200)
Overdue for 1 to 30 days--
Overdue for 31 to 60 days23,243,55010.25%(2,381,426)
161,286,012(9,207,626)

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

14Notes to the Company’s financial statements (Cont’d)
(1)Accounts receivable (Cont’d)
(c)Provision for bad debts (Cont’d)
(ii)Accounts receivable for which provision for bad debts is made on the grouping basis are analysed as follows (Cont’d):
Grouping - spare parts:
30 June 2021
Book balanceProvision for bad debts
AmountLifetime ECL (%)Amount
Not overdue266,825,3930.25%(666,050)
31 December 2020
Book balanceProvision for bad debts
AmountLifetime ECL (%)Amount
Not overdue206,087,0990.30%(618,261)
Overdue for 1 to 30 days19,968,9330.30%(59,907)
Overdue for 31 to 60 days10,595,3100.50%(52,977)
Overdue for 61 to 90 days1,295,0450.60%(7,770)
Overdue over 90 days1,554,0855.00%(77,704)
239,500,472(816,619)
(iii)The provision for bad debts in the current period amounted to RMB601,010, and RMB2,000,000 was reversed. The significant amounts reversed were as follows:
Reasons for reversal/recoveryBasis and justification for determining the provision for bad debtsAmount of reversalReasons for reversal/ recovery
Accounts receivable 1The actual receipt of account receivables relating to the provision for bad debts made in the prior period.The aforesaid companies in debts had difficulties in operation and were involved in several legal proceedings, so the Group considered that it was difficult to recover such receivables, so related provision for bad debts was made in full amount.2,000,000Received
(d)In the six months ended 30 June 2021, no accounts receivable had been written off.
(e)As at 30 June 2021 and 31 December 2020, the Company did not have accounts receivable that were pledged.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

14Notes to the Company’s financial statements (Cont’d)
(2)Other receivables
30 June 202131 December 2020
Interest receivable from cash at bank67,457,83149,458,968
Receivables from JMCH44,679,4101,247,724,942
Import working capital advances25,000,00035,000,000
Deposits receivable8,897,1317,072,745
Advances for research and development projects5,160,9144,559,669
Cash advance696,898680,403
Others90,199,73215,599,236
242,091,9161,360,095,963
Less: Provision for bad debts(389,874)(188,740)
241,702,0421,359,907,223
(a)The ageing of other receivables is analysed as follows:
30 June 202131 December 2020
Within 1 year236,912,4211,359,304,567
Over 1 year5,179,495791,396
242,091,9161,360,095,963

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

14Notes to the Company’s financial statements (Cont’d)
(2)Other receivables (Cont'd)
(b)Provision for losses and changes in book balance statements
Stage 1Stage 3Total
12-month ECL (grouping)12-month ECL (individual)Sub-totalLifetime ECL (credit impaired)
Book balanceProvision for bad debtsBook balanceProvision for bad debtsProvision for bad debtsBook balanceProvision for bad debtsProvision for bad debts
31 December 2020112,371,021(188,740)1,247,724,942-(188,740)--(188,740)
Balance increase/(decrease) in the current period85,041,485-(1,203,045,532)-----
Provision for bad debts in the current period-(201,134)--(201,134)--(201,134)
30 June 2021197,412,506(389,874)44,679,410-(389,874)--(389,874)
As at 30 June 2021, the Group had no other receivables transferred from Stage 1 to Stage 3, and no other receivables reversed from Stage 3 to Stage 1.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

14Notes to the Company’s financial statements (Cont’d)
(2)Other receivables (Cont’d)
(b)Provision for losses and changes in book balance statements (Cont’d)
As at 30 June 2021 and 31 December 2020, the Company did not have any other receivables at Stage 2. Other receivables at Stage 1 and Stage 3 were analysed below:
(i)As at 30 June 2021 and 31 December 2020, provision for bad debts of other receivables on the individual basis was analysed as follows:
30 June 2021
Stage 1Book balance12-month ECL (%)Provision for bad debtsReason
Receivables from JMCH44,679,410--i)
31 December 2020
Stage 1Book balance12-month ECL (%)Provision for bad debtsReason
Receivables from JMCH1,247,724,942--i)
i) As at 30 June 2021, the Company’s other receivables from subsidiary JMCH were RMB44,679,410 (31 December 2020: RMB1,247,724,942). The Company carried out individual assessment on receivables from subsidiaries. Based on the judgement of credit risk, there is no significant credit risk on receivables from subsidiaries, and there is no overdue or impairment.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

14Notes to the Company’s financial statements (Cont’d)
(2)Other receivables (Cont'd)
(b)Provision for losses and changes in book balance statements (Cont’d)
(ii)As at 30 June 2021 and 31 December 2020, the Company’s other receivables with provision for bad debts on the grouping basis were analysed below:
Other receivables with provision on the grouping basis at Stage 1:
30 June 202131 December 2020
Book balanceProvision for lossesBook balanceProvision for losses
AmountProvision ratioAmountAmountProvision ratioAmount
Grouping of interest receivable from cash at bank i):
Within 1 year67,457,831--49,458,968--
Grouping of operating advances and guarantees:
Within 1 year124,775,1800.30%(374,326)62,120,6570.30%(186,365)
Over 1 year5,179,4950.30%(15,548)791,3960.30%(2,375)
197,412,506(389,874)112,371,021(188,740)
As at 30 June 2021 and 31 December 2020, the Company’s interest receivable from cash at bank mainly came from four major state-owned banks or national joint-stock banks. Therefore, the Company expected there was no significant loss on related interest receivable from non-performance by these banks.
As at June 30, 2021, the Company has no other receivables in the second and third stage.
(c)In the six months ended 30 June 2021, the amount of bad debt provision was RMB 201,134.
(d)In the six months ended 30 June 2021, no other receivables had been written off.
(e)As at 30 June 2021, the five largest other receivables aggregated by debtor were analysed as follows:
NatureBalanceAgeing% of total balanceProvision for bad debts
Company 1Subsidiary trading44,679,410Within 1 year18.46%-
Company 2Assets receivables32,555,714Within 1 year13.45%(97,667)
Company 3Expenses advances25,190,512Within 1 year10.41%(75,572)
Company 4Assets receivables18,513,359Within 1 year7.65%(55,540)
Company 5Assets receivables11,955,220Within 1 year4.94%(35,866)
132,894,21554.91%(264,645)

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

14Notes to the Company’s financial statements (Cont’d)
(3)Long-term equity investments
30 June 202131 December 2020
Subsidiaries (a)3,293,943,4932,048,000,000
Associates (b)39,232,34739,496,548
3,333,175,8402,087,496,548
Less: Provision for impairment of long-term equity investments(526,000,000)(526,000,000)
2,807,175,8401,561,496,548
(a)Subsidiaries
Changes in the current period
31 December 2020Split-offDebt exemptionProvision for impairment30 June 2021Balance of provision for impairment In 30 June 2021Cash dividends declared this period
JMCH852,000,0001,142,000,000103,943,493-2,097,943,493(526,000,000)-
JMCS50,000,000---50,000,000--
SZFJ10,000,000---10,000,000--
GZFJ10,000,000---10,000,000--
JMPC600,000,000---600,000,000--
1,522,000,0001,142,000,000103,943,493-2,767,943,493(526,000,000)-

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

14Notes to the Company’s financial statements (Cont’d)
(3)Long-term equity investments (Cont’d)
(a)Subsidiaries (Cont’d)
(i)In January 2021, the Company increased the share capital of JMCH by RMB 1,142 million in cash.
(ii)In January 2021, greed by the Company and JMCH, the Company exempted the debt of RMB103,943,493 from JMCH.
(b)Associates
Refer to Note 4(9).

SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

14Notes to the Company’s financial statements (Cont’d)
(4)Revenue and cost of sales
Six months ended 30 June
20212020
Revenue from main business16,109,269,82612,901,713,333
Revenue from other business314,288,655198,396,600
16,423,558,48113,100,109,933
Six months ended 30 June
20212020
Cost of sales from main business14,248,936,20311,010,954,908
Cost of sales from other business293,290,780186,559,118
14,542,226,98311,197,514,026
(a)Revenue and cost of sales from main business
Six months ended 30 June
20212020
Revenue from main businessCost of sales from main businessRevenue from main businessCost of sales from main business
Sales of automobiles15,039,210,40113,448,227,94312,091,989,04010,397,191,187
Sales of spare parts983,532,314742,735,696771,758,926572,162,496
Automobile maintenance services86,527,11157,972,56437,965,36741,601,225
16,109,269,82614,248,936,20312,901,713,33311,010,954,908
(b)Revenue and cost of sales from other business
Six months ended 30 June
20212020
Revenue from other businessCost of sales from other businessRevenue from other businessCost of sales from other business
Sales of materials257,777,393238,667,848157,745,817149,930,871
Others56,511,26254,622,93240,650,78336,628,247
314,288,655293,290,780198,396,600186,559,118

SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

14Notes to the Company’s financial statements (Cont’d)
(4)Revenue and cost of sales (Cont’d)
(c)The breakdown of revenue earned in 2021 was as follows:
Six months ended 30 June 2021
AutomobilesSpare partsAutomobile maintenance servicesMaterials and othersTotal
Revenue from main business15,039,210,401983,532,31486,527,111-16,109,269,826
Including: Recognised at a time point15,039,210,401983,532,314--16,022,742,715
Recognised within a certain period--86,527,111-86,527,111
Revenue from other business---314,288,655314,288,655
15,039,210,401983,532,31486,527,111314,288,65516,423,558,481
(i)As at 30 June 2021, the amount of revenue corresponding to the performance obligation of the Company that had been contracted but not yet performed or not fulfilled was RMB137,930,962, which was expected to be recognised between 2021 and 2026.
(5)Investment income
Six months ended 30 June
20212020
Investment income from financial assets held for trading3,894,45732,619,541
Investment loss from forward exchange settlement(7,750,384)(1,316,987)
Investment income from long-term equity investment under equity method(264,201)(3,024,554)
Losses on discounts for financing receivables(498,879)-
(4,619,007)28,278,000
There is no significant restriction on the remittance of investment income to the Company.

SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

1Statement of non-recurring profit or loss
Six months ended 30 June
20212020
Profit or loss on disposal of non-current assets11,008,608(25,860,575)
Government grants recognised in profit or loss for the current period335,052,961165,679,468
Gains and losses arising from changes in fair value of financial assets and liabilities held at fair value through profit or loss, and investment gains and losses from disposal of related financial assets and liabilities(2,676,284)41,314,596
Fund occupation fee received from non-financial institutions7,142,8594,740,888
Reversal of provision for impairment of receivables tested individually2,000,000-
Net amount of other non-operating income and expenses68,869(1,400,440)
Other profit and loss items that meet the definition of non-recurring profit and loss(5,423,293)-
347,173,720184,473,937
Effect of income tax(55,801,540)(26,053,489)
Effect of gains and losses on minority interests (net of tax)--
291,372,180158,420,448
Basis for preparation of statement of non-recurring profit or loss
Under the requirements in the Explanatory Announcement No. 1 on Information Disclosure by Companies Offering Securities to the Public - Non-recurring Profit or Loss [2008] from CSRC, non-recurring profit or loss refers to that arises from transactions and events that are not directly relevant to ordinary activities, or that are relevant to ordinary activities, but are extraordinary and not expected to recur frequently that would have an influence on users of financial statements making economic decisions on the financial performance and profitability of an enterprise.

SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2021

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2Return on net assets and earnings per share
Weighted average return on net assets (%)Earnings per share
Basic earnings per shareDiluted earnings per share
Six months ended 30 June
202120202021202020212020
Net profit attributable to ordinary shareholders of the Company3.62%1.96%0.470.240.470.24
Net profit attributable to ordinary shareholders of the Company, net of non-recurring profit or loss1.02%0.47%0.130.06