UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended September 30, 2017
or
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 001-37757
Adient plc
(exact name of Registrant as specified in its charter)
Ireland | 98-1328821 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
25-28 North Wall Quay, IFSC, Dublin 1, Ireland
(Address of principal executive offices)
Registrants telephone number, including area code: 414-220-8900
Securities registered pursuant to Section 12(b) of the Act:
(Title of class) |
(Name of exchange on which registered) | |
Ordinary Shares, par value $0.001 | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act. Yes ☐ No ☒
Note: Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting stock held by non-affiliates of the Registrant, as of March 31, 2017, the last business day of the Registrants most recently completed second fiscal quarter, was approximately $6.8 billion. At September 30, 2017, 93,142,283 ordinary shares were outstanding.
Documents Incorporated by Reference
Portions of the Registrants definitive proxy statement relating to its 2018 annual general meeting of shareholders that was held on March 12, 2018 (the 2018 Proxy Statement) are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The 2018 Proxy Statement was filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.
Explanatory Note
This Amendment No. 1 to Form 10-K (this Amendment) amends the Annual Report on Form 10-K for the fiscal year ended September 30, 2017, originally filed on November 22, 2017 (the Original 10-K), of Adient plc (Adient). Adient is filing this Amendment to amend Item 15 to include the separate financial statements of Yanfeng Adient Seating Co, Ltd. (YFAS), which was formerly known as Shanghai Yanfeng Johnson Controls Seating Co, Ltd., as required by Rule 3-09 of Regulation S-X because YFAS was deemed significant to Adient under Rule 3-09 of Regulation S-X (the Rule 3-09 financial statements). The Rule 3-09 financial statements were not included in the Original 10-K because, as previously disclosed, YFASs fiscal year ended on December 31, 2017, after the date of the filing of the Original 10-K. The Rule 3-09 financial statements include consolidated balance sheets of YFAS as of December 31, 2017, 2016 and 2015 and the related consolidated income statements, changes in owners equity, and cash flows for each of the three years in the period ended December 31, 2017. In accordance with Rule 3-09 of Regulation S-X, only the financial statements as of and for the year ended December 31, 2016 are required to be audited. The Rule 3-09 financial statements as of and for the years ended December 31, 2017 and December 31, 2015 are unaudited. The Rule 3-09 financial statements were prepared and provided to Adient by YFAS.
This Amendment should be read in conjunction with the Original 10-K. The Original 10-K has not been amended or updated to reflect events occurring after November 22, 2017, except as specifically set forth in this Amendment, including to reflect Frederick A. Henderson as the Interim Chief Executive Officer on the signature page to the Amendment and the certifications accompanying the Amendment.
PART IV
Item 15. | Exhibits, Financial Statement Schedules |
(a) | Documents filed as part of this report |
(1) | All financial statements |
Index to Consolidated Financial Statements | Page | |||
Report of Independent Registered Public Accounting Firm |
53 | |||
Consolidated Statements of Income for the years ended September 30, 2017, 2016 and 2015 |
55 | |||
Consolidated Statements of Comprehensive Income (Loss) for the years ended September 30, 2017, 2016 and 2015 |
56 | |||
Consolidated Statements of Financial Position as of September 30, 2017 and 2016 |
57 | |||
Consolidated Statements of Cash Flows for the years ended September 30, 2017, 2016 and 2015 |
58 | |||
Consolidated Statements of Shareholders Equity for the years ended September 30, 2017, 2016 and 2015 |
59 | |||
Notes to Consolidated Financial Statements |
60 | |||
Schedule II - Valuation and Qualifying Accounts for the years ended September 30, 2017, 2016 and 2015 |
107 |
(2) | Financial Statement Schedules |
ADIENT AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Year Ended September 30, |
||||||||||||
(in millions) | 2017 | 2016 | 2015 | |||||||||
Accounts Receivable - Allowance for Doubtful Accounts |
||||||||||||
Balance at beginning of period |
$ | 21 | $ | 12 | $ | 11 | ||||||
Provision charged to costs and expenses |
13 | 17 | 14 | |||||||||
Reserve adjustments |
(14 | ) | (8 | ) | (13 | ) | ||||||
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Balance at end of period |
$ | 20 | $ | 21 | $ | 12 | ||||||
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Deferred Tax Assets - Valuation Allowance |
||||||||||||
Balance at beginning of period |
$ | 267 | $ | 392 | $ | 459 | ||||||
Allowance provision for new operating and other loss carryforwards |
23 | 53 | 24 | |||||||||
Allowance provision (benefit) adjustments |
(67 | ) | (178 | ) | (91 | ) | ||||||
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Balance at end of period |
$ | 223 | $ | 267 | $ | 392 | ||||||
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The financial statements of YFAS and its consolidated subsidiaries required by Rule 3-09 of Regulation S-X are provided as Exhibit 99.1 to this Amendment.
All other financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto included in this Amendment.
(3) | Exhibits required by Item 601 of Regulation S-K |
EXHIBIT INDEX
# | Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Adient hereby undertakes to furnish copies of any of the omitted schedules and exhibits upon request by the SEC. |
| Previously filed with the Original 10-K. |
* | Denotes management contract or compensatory plan or arrangement required to be filed as an exhibit hereto. |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Adient plc | ||
By: | /s/ Frederick A. Henderson | |
Frederick A. Henderson | ||
Interim Chief Executive Officer | ||
Date: | June 29, 2018 | |
By: | /s/ Jeffrey M. Stafeil | |
Jeffrey M. Stafeil | ||
Executive Vice President and Chief Financial Officer | ||
Date: | June 29, 2018 |
Exhibit 23.2
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-214320) of Adient plc of our report dated June 20, 2017 relating to the consolidated financial statements of Yanfeng Adient Seating Co., Ltd., which appears in this Form 10-K/A.
/s/ PricewaterhouseCoopers Zhong Tian LLP
PricewaterhouseCoopers Zhong Tian LLP
Shanghai, the Peoples Republic of China
June 29, 2018
Exhibit 31.3
Certification of Chief Financial Officer Pursuant to
Securities Exchange Act Rules 13a-14(a) and 15d-14(a)
as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
I, Frederick A. Henderson, certify that:
1. I have reviewed this Amendment to the Annual Report on Form 10-K/A of Adient plc for the year ended September 30, 2017;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report; and
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
By: | /s/ Frederick A. Henderson | |
Frederick A. Henderson | ||
Interim Chief Executive Officer | ||
Date: | June 29, 2018 |
Exhibit 31.4
Certification of Chief Financial Officer Pursuant to
Securities Exchange Act Rules 13a-14(a) and 15d-14(a)
as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
I, Jeffrey M. Stafeil, certify that:
1. I have reviewed this Amendment to the Annual Report on Form 10-K/A of Adient plc for the year ended September 30, 2017;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report; and
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
By: | /s/ Jeffrey M. Stafeil | |
Jeffrey M. Stafeil | ||
Executive Vice President and Chief Financial Officer | ||
Date: | June 29, 2018 |
Exhibit 32.2
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with Amendment to the Annual Report on Form 10-K/A of Adient plc for the year ended September 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the Report), Frederick A. Henderson, as Interim Chief Executive Officer of Adient plc, and Jeffrey M. Stafeil, as Chief Financial Officer of Adient plc, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Adient plc.
Adient plc | ||
By: | /s/ Frederick A. Henderson | |
Frederick A. Henderson | ||
Interim Chief Executive Officer | ||
Date: | June 29, 2018 |
By: | /s/ Jeffrey M. Stafeil | |
Jeffrey M. Stafeil | ||
Executive Vice President and Chief Financial Officer | ||
Date: | June 29, 2018 |
A signed original of this written statement required by Section 906 has been provided to Adient plc and will be retained by Adient plc and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 99.1
YANFENG ADIENT SEATING CO., LTD.
CONSOLIDATED FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT AUDITORS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015
Report of Independent Auditors
To the Board of Directors of Yanfeng Adient Seating Co., Ltd.:
We have audited the accompanying consolidated financial statements of Yanfeng Adient Seating Co., Ltd. and its subsidiaries, which comprise the consolidated balance sheet as of 31 December 2016, and the related consolidated statements of income, changes in owners equity and cash flows for the year then ended.
Managements Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the requirements of Accounting Standards for Business Enterprises in the Peoples Republic of China; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Companys preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
- 1 -
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Yanfeng Adient Seating Co., Ltd. and its subsidiaries as of 31 December 2016, and the results of their operations and their cash flows for the year then ended in accordance with the requirements of Accounting Standards for Business Enterprises in the Peoples Republic of China.
Other Matters
The accompanying consolidated balance sheets of Yanfeng Adient Seating Co., Ltd. as of 31 December 2017 and 2015, and the related consolidated statements of income, changes in owners equity and cash flows for the years then ended are presented for purposes of complying with Rule 3-09 of SEC Regulation S-X; however, Rule 3-09 does not require the 2017 and 2015 financial statements to be audited and they are, therefore, not covered by this report.
Accounting Standards for Business Enterprises in the Peoples Republic of China vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and effect of such differences is presented in Note 13 to the consolidated financial statements.
/s/ PricewaterhouseCoopers Zhong Tian LLP
PricewaterhouseCoopers Zhong Tian LLP
Shanghai, the Peoples Republic of China
20 June 2017
- 2 -
YANFENG ADIENT SEATING CO., LTD.
CONSOLIDATED BALANCE SHEETS AS AT 31 DECEMBER 2017, 2016 AND 2015
(AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE UNAUDITED)
(All amounts in RMB Yuan unless otherwise stated)
ASSETS |
Note | 31 December 2017* Consolidated |
31 December 2016 Consolidated |
31 December 2015* Consolidated |
||||||||||||
Current assets |
||||||||||||||||
Cash at bank and on hand |
7 | (1) | 8,133,672,578 | 6,469,119,196 | 3,939,894,113 | |||||||||||
Notes receivable |
7 | (2) | 1,400,014,717 | 1,686,686,411 | 1,198,378,148 | |||||||||||
Accounts receivable |
7 | (3(a)) | 8,172,820,877 | 5,851,806,068 | 5,697,029,340 | |||||||||||
Advances to suppliers |
7 | (4) | 203,060,113 | 120,306,449 | 130,127,043 | |||||||||||
Interest receivable |
5,400,938 | 5,550,044 | 1,678,489 | |||||||||||||
Dividends receivable |
12,872,698 | 12,071,405 | 16,336,555 | |||||||||||||
Other receivables |
7 | (3(b)) | 828,205,531 | 315,785,308 | 228,573,927 | |||||||||||
Inventories |
7 | (5) | 894,975,575 | 797,678,665 | 701,202,676 | |||||||||||
Other current assets |
7 | (6) | 147,488,522 | 160,712,360 | 352,709,670 | |||||||||||
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Total current assets |
19,798,511,549 | 15,419,715,906 | 12,265,929,961 | |||||||||||||
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Non-current assets |
||||||||||||||||
Long-term equity investments |
7 | (7) | 210,259,121 | 190,255,274 | 158,752,993 | |||||||||||
Investment properties |
7 | (8) | 42,529,486 | | | |||||||||||
Fixed assets |
7 | (9) | 1,828,614,100 | 1,719,813,378 | 1,778,145,645 | |||||||||||
Construction in progress |
7 | (10) | 278,761,927 | 442,223,123 | 334,405,828 | |||||||||||
Intangible assets |
7 | (11) | 360,392,024 | 294,578,758 | 290,139,232 | |||||||||||
Goodwill |
7 | (12) | 71,566,642 | 71,566,642 | 71,566,642 | |||||||||||
Long-term prepaid expenses |
7 | (13) | 164,414,655 | 196,028,241 | 195,116,898 | |||||||||||
Deferred tax assets |
7 | (14(a)) | 1,090,403,831 | 831,379,541 | 546,116,880 | |||||||||||
Other non-current assets |
7 | (15) | 80,605,952 | 57,461,692 | 99,787,600 | |||||||||||
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Total non-current assets |
4,127,547,738 | 3,803,306,649 | 3,474,031,718 | |||||||||||||
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TOTAL ASSETS |
23,926,059,287 | 19,223,022,555 | 15,739,961,679 | |||||||||||||
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* | Not covered by the AUDITORS report included herein |
The accompanying notes form an integral part of these consolidated financial statements.
Legal representative: Mingkang He Principal in charge of accounting: Haifeng Mao Head of accounting department: Jianjun Chu
- 3 -
YANFENG ADIENT SEATING CO., LTD.
CONSOLIDATED BALANCE SHEETS AS AT 31 DECEMBER 2017, 2016 AND 2015 (CONTINUED)
(AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE UNAUDITED)
(All amounts in RMB Yuan unless otherwise stated)
LIABILITIES AND OWNERS EQUITY |
Note | 31 December 2017* Consolidated |
31 December 2016 Consolidated |
31 December 2015* Consolidated |
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Current liabilities |
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Short-term borrowings |
7 | (16) | 551,280,196 | 408,884,232 | 75,000,000 | |||||||||||
Notes payable |
7 | (17) | 653,798,483 | 666,979,006 | 457,179,867 | |||||||||||
Accounts payable |
7 | (18) | 12,797,027,105 | 9,860,133,825 | 8,468,879,463 | |||||||||||
Advances from customers |
18,356,209 | 31,006,431 | 55,982,936 | |||||||||||||
Employee benefits payable |
7 | (19) | 847,097,224 | 792,960,721 | 621,152,813 | |||||||||||
Taxes payable |
7 | (20) | 656,622,866 | 709,246,804 | 560,021,549 | |||||||||||
Other payables |
7 | (21) | 3,527,012,379 | 2,354,357,460 | 1,546,190,411 | |||||||||||
Current portion of long-term borrowings |
7 | (22) | 3,000,000 | 5,398,000 | 5,398,000 | |||||||||||
Current portion of non-current liabilities |
22,770 | | | |||||||||||||
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Total current liabilities |
19,054,217,232 | 14,828,966,479 | 11,789,805,039 | |||||||||||||
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Non-current liabilities |
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Long-term borrowings |
7 | (22) | 1,500,000 | 8,107,000 | 13,505,000 | |||||||||||
Provisions |
3,371,338 | 3,937,103 | 4,206,400 | |||||||||||||
Deferred income |
7 | (23) | 9,117,415 | 9,995,949 | 7,402,636 | |||||||||||
Deferred tax liabilities |
7 | (14(d)) | | | 241,500 | |||||||||||
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Total non-current liabilities |
13,988,753 | 22,040,052 | 25,355,536 | |||||||||||||
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Total liabilities |
19,068,205,985 | 14,851,006,531 | 11,815,160,575 | |||||||||||||
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Owners equity |
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Paid-in capital |
439,853,380 | 439,853,380 | 439,853,380 | |||||||||||||
Other comprehensive income/(loss) |
7 | (36(b)) | 1,414,254 | 983,955 | (307,041 | ) | ||||||||||
Surplus reserve |
7 | (24) | 441,810,777 | 376,736,592 | 329,063,052 | |||||||||||
Undistributed profits |
7 | (25) | 3,463,983,805 | 3,005,135,145 | 2,635,032,872 | |||||||||||
Total equity attributable to equity owners of the Company |
4,347,062,216 | 3,822,709,072 | 3,403,642,263 | |||||||||||||
Minority interests |
510,791,086 | 549,306,952 | 521,158,841 | |||||||||||||
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Total owners equity |
4,857,853,302 | 4,372,016,024 | 3,924,801,104 | |||||||||||||
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TOTAL LIABILITIES AND OWNERS EQUITY |
23,926,059,287 | 19,223,022,555 | 15,739,961,679 | |||||||||||||
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* | Not covered by the AUDITORS report included herein |
The accompanying notes form an integral part of these consolidated financial statements.
Legal representative: Mingkang He Principal in charge of accounting: Haifeng Mao Head of accounting department: Jianjun Chu
- 4 -
YANFENG ADIENT SEATING CO., LTD.
CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015
(AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE UNAUDITED)
(All amounts in RMB Yuan unless otherwise stated)
Item |
Note | 2017* Consolidated |
2016 Consolidated |
2015* Consolidated |
||||||||||||||
Revenue |
7 | (26) | 32,043,195,882 | 29,122,501,178 | 26,572,050,764 | |||||||||||||
Less: |
Cost of sales |
7 | (26)(29) | (26,532,394,041 | ) | (24,215,383,432 | ) | (22,023,017,968 | ) | |||||||||
Taxes and surcharges |
7 | (27) | (196,541,376 | ) | (162,720,549 | ) | (119,877,553 | ) | ||||||||||
Selling and distribution expenses |
7 | (29) | (256,281,872 | ) | (205,949,433 | ) | (175,878,437 | ) | ||||||||||
General and administrative expenses |
7 | (29) | (2,321,871,291 | ) | (1,961,292,873 | ) | (1,838,254,817 | ) | ||||||||||
Add: |
Financial income - net |
7 | (28) | 29,127,149 | 61,250,943 | 59,098,880 | ||||||||||||
Less: |
Asset impairment losses |
7 | (30) | (2,945,857 | ) | (63,734,715 | ) | (9,380,519 | ) | |||||||||
Add: |
Investment income |
7 | (31) | 78,876,757 | 54,019,531 | 48,357,857 | ||||||||||||
Including: Share of profit of associates and joint |
78,876,545 | 54,019,531 | 40,459,106 | |||||||||||||||
Less: |
Losses on disposals of assets |
7 | (32) | (3,021,988 | ) | (18,381,606 | ) | (2,992,507 | ) | |||||||||
Add: |
Other income |
7 | (33) | 129,108,171 | | | ||||||||||||
Operating profit |
2,967,251,534 | 2,610,309,044 | 2,510,105,700 | |||||||||||||||
Add: |
Non-operating income |
7 | (34(a)) | 2,346,311 | 72,527,061 | 44,142,437 | ||||||||||||
Less: |
Non-operating expenses |
7 | (34(b)) | (1,873,547 | ) | (3,014,728 | ) | (9,843,767 | ) | |||||||||
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Total profit |
2,967,724,298 | 2,679,821,377 | 2,544,404,370 | |||||||||||||||
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Less: |
Income tax expenses |
7 | (35) | (589,007,692 | ) | (507,528,891 | ) | (463,389,635 | ) | |||||||||
Net profit |
2,378,716,606 | 2,172,292,486 | 2,081,014,735 | |||||||||||||||
Classified by continuity of operations |
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Net profit from continuing operations |
2,378,716,606 | 2,172,292,486 | 2,081,014,735 | |||||||||||||||
Net profit from discontinued operations |
| | | |||||||||||||||
Classified by ownership of the equity |
||||||||||||||||||
Attributable to equity owners of the Company |
2,083,076,727 | 1,851,677,150 | 1,775,435,020 | |||||||||||||||
Minority interests |
295,639,879 | 320,615,336 | 305,579,715 | |||||||||||||||
Other comprehensive income/(loss), net of tax |
7 | (36(a)) | 430,299 | 1,290,996 | (275,031 | ) | ||||||||||||
Translation differences on translation of foreign currency financial statements |
430,299 | 1,290,996 | (275,031 | ) | ||||||||||||||
|
|
|
|
|
|
|||||||||||||
Total comprehensive income |
2,379,146,905 | 2,173,583,482 | 2,080,739,704 | |||||||||||||||
|
|
|
|
|
|
|||||||||||||
Attributable to equity owners of the Company |
2,083,507,026 | 1,852,968,146 | 1,775,159,989 | |||||||||||||||
Attributable to minority interests |
295,639,879 | 320,615,336 | 305,579,715 |
* | Not covered by the AUDITORS report included herein |
The accompanying notes form an integral part of these consolidated financial statements.
Legal representative: Mingkang He Principal in charge of accounting: Haifeng Mao Head of accounting department: Jianjun Chu
- 5 -
YANFENG ADIENT SEATING CO., LTD.
CONSOLIDATED CASH FLOW STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015
(AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE UNAUDITED)
(All amounts in RMB Yuan unless otherwise stated)
Item |
Note | 2017* Consolidated |
2016 Consolidated |
2015* Consolidated |
||||||||||||
Cash flows from operating activities |
||||||||||||||||
Cash received from sales of goods or rendering of services |
37,188,574,231 | 34,235,663,913 | 30,668,864,213 | |||||||||||||
Refund of taxes and surcharges |
80,158,334 | 69,554,852 | 13,781,018 | |||||||||||||
Cash received relating to other operating activities |
184,480,725 | 124,863,278 | 74,044,037 | |||||||||||||
Sub-total of cash inflows |
37,453,213,290 | 34,430,082,043 | 30,756,689,268 | |||||||||||||
Cash paid for goods and services |
(26,183,767,105 | ) | (24,673,063,749 | ) | (22,770,981,843 | ) | ||||||||||
Cash paid to and on behalf of employees |
(2,003,249,397 | ) | (1,756,520,779 | ) | (1,553,146,820 | ) | ||||||||||
Payments of taxes and surcharges |
(2,679,623,127 | ) | (1,915,679,241 | ) | (1,781,651,976 | ) | ||||||||||
Cash paid relating to other operating activities |
(2,121,766,998 | ) | (2,126,466,694 | ) | (1,653,278,352 | ) | ||||||||||
Sub-total of cash outflows |
(32,988,406,627 | ) | (30,471,730,463 | ) | (27,759,058,991 | ) | ||||||||||
Net cash flows from operating activities |
7 | (37(a)) | 4,464,806,663 | 3,958,351,580 | 2,997,630,277 | |||||||||||
Cash flows from investing activities |
||||||||||||||||
Cash received from disposal of investments |
279,239,352 | 475,667,980 | 50,646,471 | |||||||||||||
Cash received from returns on investments |
67,768,049 | 35,749,485 | 16,244,436 | |||||||||||||
Net cash received from disposal of fixed assets, intangible assets and other long-term assets |
24,565,265 | 28,354,118 | 211,692,165 | |||||||||||||
Net cash received from disposal of subsidiaries and other business units |
| 21,500,000 | 13,510,827 | |||||||||||||
Sub-total of cash inflows |
371,572,666 | 561,271,583 | 292,093,899 | |||||||||||||
Cash paid to acquire fixed assets, intangible assets and other long-term assets |
(524,461,586 | ) | (412,877,178 | ) | (476,099,495 | ) | ||||||||||
Cash paid to acquire investments |
(837,615,093 | ) | (311,650,522 | ) | (315,000,000 | ) | ||||||||||
Net cash paid to acquire subsidiaries and other business units |
| | (62,298,600 | ) | ||||||||||||
Sub-total of cash outflows |
(1,362,076,679 | ) | (724,527,700 | ) | (853,398,095 | ) | ||||||||||
Net cash flows used in investing activities |
(990,504,013 | ) | (163,256,117 | ) | (561,304,196 | ) | ||||||||||
Cash flows from financing activities |
||||||||||||||||
Cash received from borrowings |
844,949,190 | 718,055,869 | 75,855,064 | |||||||||||||
Sub-total of cash inflows |
844,949,190 | 718,055,869 | 75,855,064 | |||||||||||||
Cash repayments of borrowings |
(711,559,282 | ) | (390,324,988 | ) | (105,496,657 | ) | ||||||||||
Cash payments for distribution of profits or interest expenses |
(1,848,390,388 | ) | (1,684,947,936 | ) | (1,664,108,967 | ) | ||||||||||
Including: Cash payments for profits to minority shareholders of subsidiaries |
(333,196,736 | ) | (291,750,289 | ) | (250,598,100 | ) | ||||||||||
Sub-total of cash outflows |
(2,559,949,670 | ) | (2,075,272,924 | ) | (1,769,605,624 | ) | ||||||||||
Net cash flows used in financing activities |
(1,715,000,480 | ) | (1,357,217,055 | ) | (1,693,750,560 | ) | ||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents |
| | | |||||||||||||
Net increase in cash and cash equivalents |
7 | (37(b)) | 1,759,302,170 | 2,437,878,408 | 742,575,521 | |||||||||||
Add: Cash and cash equivalents at beginning of year |
6,179,211,510 | 3,741,333,102 | 2,998,757,581 | |||||||||||||
Cash and cash equivalents at end of year |
7 | (37(c)) | 7,938,513,680 | 6,179,211,510 | 3,741,333,102 |
* | Not covered by the AUDITORS report included herein |
The accompanying notes form an integral part of these consolidated financial statements.
Legal representative: Mingkang He Principal in charge of accounting: Haifeng Mao Head of accounting department: Jianjun Chu
- 6 -
YANFENG ADIENT SEATING CO., LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS EQUITY FOR THE YEARS ENDED 31 DECEMBER 2017*, 2016 AND 2015*
(AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE UNAUDITED)
(All amounts in RMB Yuan unless otherwise stated)
Attributable to equity holders of the Company | ||||||||||||||||||||||||||||
Item |
Note | Paid-in capital |
Surplus reserves |
Undistributed profits |
Other comprehensive income/(loss) |
Minority interests |
Total owners equity |
|||||||||||||||||||||
Balance at 1 January 2015 |
439,853,380 | 284,833,010 | 2,354,813,576 | (32,010 | ) | 443,839,605 | 3,523,307,561 | |||||||||||||||||||||
Movements for the year ended 31 December 2015 | ||||||||||||||||||||||||||||
Total comprehensive income |
||||||||||||||||||||||||||||
Net profit |
| | 1,775,435,020 | | 305,579,715 | 2,081,014,735 | ||||||||||||||||||||||
Other comprehensive loss |
||||||||||||||||||||||||||||
Translation differences on translation of foreign currency financial statements |
7 | (36(a)) | | | | (275,031 | ) | | (275,031 | ) | ||||||||||||||||||
Total comprehensive income for the year |
| | 1,775,435,020 | (275,031 | ) | 305,579,715 | 2,080,739,704 | |||||||||||||||||||||
Capital contribution and withdrawal by owners |
||||||||||||||||||||||||||||
Disposal of a subsidiary |
| | | | (13,601,251 | ) | (13,601,251 | ) | ||||||||||||||||||||
Profit distribution | ||||||||||||||||||||||||||||
Appropriation to surplus reserves |
7 | (24) | | 44,230,042 | (44,230,042 | ) | | | | |||||||||||||||||||
Profit distribution to equity owners |
7 | (25) | | | (1,406,453,166 | ) | | (214,045,114 | ) | (1,620,498,280 | ) | |||||||||||||||||
Appropriation to staff welfare and incentive funds |
| | (44,532,516 | ) | | (614,114 | ) | (45,146,630 | ) | |||||||||||||||||||
Balance at 31 December 2015 |
439,853,380 | 329,063,052 | 2,635,032,872 | (307,041 | ) | 521,158,841 | 3,924,801,104 | |||||||||||||||||||||
Balance at 1 January 2016 |
439,853,380 | 329,063,052 | 2,635,032,872 | (307,041 | ) | 521,158,841 | 3,924,801,104 | |||||||||||||||||||||
Movements for the year ended 31 December 2016 |
||||||||||||||||||||||||||||
Total comprehensive income |
||||||||||||||||||||||||||||
Net profit |
| | 1,851,677,150 | | 320,615,336 | 2,172,292,486 | ||||||||||||||||||||||
Other comprehensive income |
||||||||||||||||||||||||||||
Translation differences on translation of foreign currency financial statements |
7 | (36(a)) | | | | 1,290,996 | | 1,290,996 | ||||||||||||||||||||
Total comprehensive income for the year |
| | 1,851,677,150 | 1,290,996 | 320,615,336 | 2,173,583,482 | ||||||||||||||||||||||
Profit distribution |
||||||||||||||||||||||||||||
Appropriation to surplus reserves |
7 | (24) | | 47,673,540 | (47,673,540 | ) | | | | |||||||||||||||||||
Profit distribution to equity owners |
7 | (25) | | | (1,385,874,680 | ) | | (291,750,289 | ) | (1,677,624,969 | ) | |||||||||||||||||
Appropriation to staff welfare and incentive funds |
| | (48,026,657 | ) | | (716,936 | ) | (48,743,593 | ) | |||||||||||||||||||
Balance at 31 December 2016 |
439,853,380 | 376,736,592 | 3,005,135,145 | 983,955 | 549,306,952 | 4,372,016,024 | ||||||||||||||||||||||
Balance at 1 January 2017 |
439,853,380 | 376,736,592 | 3,005,135,145 | 983,955 | 549,306,952 | 4,372,016,024 | ||||||||||||||||||||||
Movements for the year ended 31 December 2017 |
||||||||||||||||||||||||||||
Total comprehensive income |
||||||||||||||||||||||||||||
Net profit |
| | 2,083,076,727 | | 295,639,879 | 2,378,716,606 | ||||||||||||||||||||||
Other comprehensive income |
||||||||||||||||||||||||||||
Translation differences on translation of foreign currency financial statements |
7 | (36(a)) | | | | 430,299 | | 430,299 | ||||||||||||||||||||
Total comprehensive income for the year |
| | 2,083,076,727 | 430,299 | 295,639,879 | 2,379,146,905 | ||||||||||||||||||||||
Capital contribution and withdrawal by owners |
||||||||||||||||||||||||||||
Disposal of a subsidiary |
| | | | (470,521 | ) | (470,521 | ) | ||||||||||||||||||||
Profit distribution |
||||||||||||||||||||||||||||
Appropriation to surplus reserves |
7 | (24) | | 65,074,185 | (65,074,185 | ) | | | | |||||||||||||||||||
Profit distribution to equity owners |
7 | (25) | | | (1,493,770,914 | ) | | (333,196,736 | ) | (1,826,967,650 | ) | |||||||||||||||||
Appropriation to staff welfare and incentive funds |
| | (65,382,968 | ) | | (488,488 | ) | (65,871,456 | ) | |||||||||||||||||||
Balance at 31 December 2017 |
439,853,380 | 441,810,777 | 3,463,983,805 | 1,414,254 | 510,791,086 | 4,857,853,302 |
* | Not covered by the AUDITORS report included herein |
The accompanying notes form an integral part of these consolidated financial statements.
Legal representative: Mingkang He Principal incharge of accounting: Haifeng Mao Head of accounting department: Jianjun Chu
- 7 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
1 | General information |
Yanfeng Adient Seating Co., Ltd. (formerly known as Shanghai Yanfeng Johnson Controls Seating Co., Ltd., the Company) is a sino-foreign joint venture company set up by Yanfeng Automotive Trim Systems Co., Ltd. (Yanfeng Trim and formerly known as Yanfeng Visteon Automotive Trim Systems Co., Ltd.) and Johnson Controls International Inc. (JCI) on 18 December 1997. The approved operating period is 25 years and the registered capital is USD 24,770,700.
After several times of equity interest transfer till 8 November 2012, the investors of the Company were changed to Yanfeng Trim and Johnson Controls Asia Holding Co., Ltd., with 50.01% and 49.99% of equity interest respectively. The registered capital of the Company was changed to USD 62,000,000. On 2 February 2017, Johnson Controls Asia Holding Co., Ltd. was renamed as Adient Asia Holding Co., Ltd. (Adient Asia). In April 2017, the Company was renamed as Yanfeng Adient Seating Co., Ltd..
The approved scope of business operation of the Company and its subsidiaries (together, the Group) is to develop and manufacture automobile seats and their spare parts, provide technical service for automobile seating, and sell its own products.
These financial statements are authorised for issue by the Companys responsible person on 29 June 2018.
2 | Basis of preparation |
The financial statements are prepared in accordance with the Accounting Standard for Business Enterprises - Basic Standard, the specific accounting standards and other relevant regulations issued by the Ministry of Finance on 15 February 2006 and in subsequent periods (hereafter collectively referred to as the Accounting Standard for Business Enterprises or CAS). In addition, information relating to the nature and effect of significant differences between CAS and accounting principles generally accepted in the United States of America is presented in Note 13 to the consolidated financial statements of the Group.
The financial statements are prepared on a going concern basis.
3 | Statement of compliance with the Accounting Standards for Business Enterprises |
The financial statements of the Group for the years ended 31 December 2017, 2016 and 2015 are in compliance with the Accounting Standards for Business Enterprises, and truly and completely present the consolidated financial position of the Group as at 31 December 2017, 2016 and 2015 and of its financial performance, cash flows and other information for the years then ended.
- 8 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates |
(1) | Accounting year |
The Companys accounting year starts on 1 January and ends on 31 December.
(2) | Recording currency |
The Companys recording currency is Renminbi (RMB). The recording currency of the Companys subsidiaries is determined based on the primary economic environment in which they operate. The recording currency of the Companys domestic subsidiaries is RMB and the recording currency of the Companys foreign subsidiaries is local currency. The financial statements are presented in RMB.
(3) | Foreign currency translation |
(a) | 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.
(b) | Translation of foreign currency financial statements |
The asset and liability items in the balance sheets for overseas operations are translated at the spot exchange rates on the balance sheet date. Among the owners equity items, the items other than undistributed profits are translated at the spot exchange rates of the transaction dates. The income and expense items in the income statements of overseas operations are translated at the spot exchange rates of the transaction dates. The differences arising from the above translation are presented in other comprehensive income. The cash flows of overseas operations are translated at the spot exchange rates on the dates of the cash flows. The effect of exchange rate changes on cash is presented separately in the cash flow statement.
(4) | 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.
- 9 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(5) | Financial assets |
Financial assets are classified into the following categories at initial recognition: financial assets at fair value through profit or loss, receivables, available-for-sale financial assets and held-to-maturity investments. The classification of financial assets depends on the Groups intention and ability to hold the financial assets. The financial assets held by the Group are mainly receivables.
(a) | Receivables |
Receivables, including accounts receivable, other receivables and notes receivable, are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market (Note 4(6)).
(b) | Recognition and measurement |
Financial assets are recognised at fair value on the balance sheet when the Group becomes a party to the contractual provisions of the financial instrument. In the case of financial assets at fair value through profit or loss, the related transaction costs incurred at the time of acquisition are recognised in profit or loss for the current period. For other financial assets, transaction costs that are attributable to acquisition of the financial assets are included in their initially recognised amounts. A financial asset is derecognised when the contractual rights to receive the cash flows from the financial asset have expired, or all the substantial risks and rewards of ownership of the financial asset have been transferred.
Receivables are subsequently measured at amortised cost by using the effective interest method.
(c) | Impairment of financial assets |
The Group assesses the carrying amounts of financial assets other than those at fair value through profit or loss at each balance sheet date. If there is objective evidence that a financial asset is impaired, an impairment loss is provided for.
When an impairment loss on a financial asset carried at amortised cost has occurred, the amount of the impairment loss is provided for at the difference between the assets carrying amount and the present value of its estimated future cash flows (excluding future credit losses that have not been incurred). If there is objective evidence that the value of the financial asset recovered and the recovery is related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed and the amount of reversal is recognised in profit or loss.
- 10 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(6) | Receivables |
Receivables comprise accounts receivable, other receivables and notes receivable. Accounts receivable arising from sale of goods or rendering of services are initially recognised at fair value of the contractual payments from the buyers or service recipients.
Receivables with amounts that are individually significant are subject to separate assessment for impairment. If there exists objective evidence that the Group will not be able to collect the amount under the original terms, a provision for bad debts of that receivable is made at the difference between its carrying amount and the present value of its estimated future cash flows.
Receivables with amounts that are not individually significant and those receivables that have been individually assessed for impairment and have not been found impaired are classified into certain groupings based on their credit risk characteristics. Provision for bad debts is determined based on the historical loss experience for groupings of receivables with similar credit risk characteristics, taking into consideration of the current circumstances.
When the Group transfers the accounts receivable to the financial institutions without recourse, the difference between the proceeds received from the transaction and their carrying amounts and the related taxes is recognised in profit or loss for the current period.
(7) | Inventories |
Inventories include raw materials, work in progress and finished goods, and are stated at the lower of cost and net realisable value.
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.
Provision for decline in the value of 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.
The Group adopts the perpetual inventory system.
- 11 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(8) | Long-term equity investments |
Long-term equity investments comprise the Companys long-term equity investments in its subsidiaries, and the Groups long-term equity investments in its joint ventures and associates.
(a) | Subsidiaries |
Subsidiaries are the investees over which the Company is able to exercise control.
(b) | Joint ventures and associates |
A joint venture is a joint arrangement which is structured through a separate vehicle over which the Group has joint control together with other parties and only has rights to the net assets of the arrangement based on legal forms, contractual terms and other facts and circumstances; An associate is the investee over which the Group has significant influence on its financial and operating policy decisions.
Investments in joint ventures and associates are accounted for using the equity method. Where the initial investment cost exceeds the Groups share of the fair value of the investees 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 Groups share of the fair value of the investees 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.
Under the equity method of accounting, the Group recognises the investment income 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 investment together with any long-term interests that, in substance, form part of the Groups 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 Groups share of the changes in investees owners 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 Groups 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 Groups 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.
- 12 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(9) | Investment properties |
Investment properties, including land use rights that have already been leased out, buildings that are held for the purpose of leasing and buildings that are being constructed or developed for future use for leasing, are measured initially at cost. Subsequent expenditures incurred in relation to an investment property are included in the cost of the investment property when it is probable that the associated economic benefits will flow to the Group and their costs can be reliably measured; otherwise, the expenditures are recognised in profit or loss for the period in which they are incurred.
Investment properties are subsequently measured using the cost model and are depreciated or amortised to their estimated residual values over their estimated useful lives. The estimated useful lives, the estimated residual values expressed as a percentage of cost and the annual depreciation (amortisation) rates of investment properties are as follows:
Estimated useful lives |
Estimated residual values |
Annual depreciation rates |
||||||||||
Land use rights |
50 years | 0 | % | 2 | % | |||||||
Buildings |
20 years | 0 | % | 5 | % |
When an investment property is transferred to owner-occupied properties, it is reclassified as fixed asset or intangible asset with the carrying amount at the date of the transfer. When an owner-occupied property is transferred out for earning rentals or for capital appreciation, the fixed asset or intangible asset is transferred to investment properties with the carrying amount at the date of the transfer.
The estimated useful life and the estimated residual value of an investment property and the depreciation (amortisation) method applied to the asset are reviewed, and adjusted as appropriate at each year-end.
An investment property is derecognised on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. The net amount of proceeds from sale, transfer, retirement or damage of an investment property after its carrying amount and related taxes and expenses is recognised in profit or loss for the current period.
- 13 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(10) | Fixed assets |
Fixed assets comprise buildings, machinery and equipment, motor vehicles, computers and electronic equipment and office equipment and tooling. Fixed assets purchased or constructed by the Group are initially measured at cost at the time of acquisition. Fixed assets contributed by the Chinese investor are initially recorded at their approved value upon its contribution to the Company.
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.
Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their estimated 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 residual values expressed as a percentage of cost and the annual depreciation rates of fixed assets are as follows:
Estimated useful lives |
Estimated residual values |
Annual depreciation rates |
||||||||||
Buildings |
5-20 years | 0%-10% | 4.5%-20% | |||||||||
Machinery and equipment |
3-15 years | 0%-5% | 6.33%-33.3% | |||||||||
Motor vehicles |
3-6 years | 0%-5% | 15.83%-33.3% | |||||||||
Computers and electronic equipment and office equipment |
3-7 years | 0%-5% | 13.57%-33.3% | |||||||||
Tooling |
3-5 years | 0%-5% | 19%-33.3% |
The estimated useful life and the estimated residual value of a fixed asset and the depreciation method applied to the asset are reviewed, and adjusted as appropriate at each year-end.
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.
- 14 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(11) | 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 following month.
(12) | Intangible assets |
Intangible assets include land use rights, patent rights and non-patented technology and software, and are measured at cost. Intangible assets also include identifiable assets acquired from business combinations involving enterprises not under common control, such as customer relationship, and are measured at fair value at the time of acquisition.
(a) | Land use rights |
Land use rights are amortised on the straight-line basis over their estimated useful lives. 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.
(b) | Patent rights and non-patented technology |
Patent rights and non-patented technology are amortised on a straight-line basis over the patent protection period as stipulated by the laws.
(c) | Software |
Software is amortised on a straight-line basis over the period as stipulated by law.
(d) | Customer relationship |
Customer relationship acquired from business combination involving enterprises not under common control are amortised over their beneficial periods.
(e) | 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 as appropriate.
- 15 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(13) | 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 is recognised in profit or loss in the period in which it is incurred; expenditure on the development phase is capitalised only if all of the following conditions are satisfied:
| it is technically feasible to complete the intangible asset so that it will be available for use or sale; |
| management intends to complete the intangible asset and use or sell it; |
| it can be demonstrated how the intangible asset will generate economic benefits; |
| there are adequate technical, financial and other resources to complete the development and the ability to use or sell the intangible asset; and |
| the expenditure attributable to the intangible asset during its development phase can be reliably measured. |
Other development expenditures that do not meet the conditions above are recognised in profit or loss in the period in which they are incurred. Development costs previously recognised as expenses are not recognised as an asset in a subsequent period. Capitalised expenditure on the development phase is presented as development costs in the balance sheet and transferred to intangible assets at the date that the asset is ready for its intended use.
(14) | Goodwill |
Goodwill is recognised at the excess of the cost of a business combination involving enterprises not under common control over the interest in the fair value of the acquirees identifiable net assets acquired in the business combination as at the acquisition date.
(15) | Long-term prepaid expenses |
Long-term prepaid expenses include the expenditure for improvements to fixed assets held under operating leases, and other expenditures that have been incurred but should be recognised as expenses over more than one year in the current and subsequent periods. Long-term prepaid expenses are amortised on the straight-line basis over the expected beneficial period and are presented at actual expenditure net of accumulated amortisation.
- 16 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(16) | Impairment of long-term assets |
Fixed assets, construction in progress, intangible assets with finite useful lives, long-term equity investments in subsidiaries, joint ventures and associates and long-term prepaid expenses 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 annually, 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 impairment loss are recognised for the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an assets fair value less costs to sell 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 annually for impairment, irrespective of whether there is any indication that it may be impaired. In conducting the test, the carrying value 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.
(17) | 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.
- 17 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(18) | Borrowings |
Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings of which the period is within one year (inclusive) are classified as the short-term borrowings, and the others are classified as long-term borrowings.
(19) | 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 and post-employment 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 and etc. The short-term employee benefits actually occurred are recognised as a liability in the accounting period in which the service is rendered by the employees, with a corresponding charge to the profit or loss for the current period or the cost of relevant assets. Non-monetary benefits are measured at fair value.
(b) | Post-employment benefits |
The Group classifies post-employment benefit plans as defined contribution 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. During the reporting period, the Groups post-employment benefits mainly include the premiums or contributions on basic pensions and unemployment insurance, both of which belong to defined contribution plans.
Basic pensions
The Groups employees participate in the basic pension plan set up and administered by local authorities of Ministry of Human Resource and Social Security. Monthly payments of premiums on the basic pensions are calculated according to the bases and percentage prescribed by the relevant local authorities. When employees retire, the relevant local authorities are obliged to pay the basic pensions to them. The amounts based on the above calculations are recognised as liabilities in the accounting period in which the service has been rendered by the employees, with a corresponding charge to the profit or loss for the current period or the cost of relevant assets.
- 18 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(20) | Provisions |
Provisions for product warranties and 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 surrounding 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.
(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 loss). 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.
- 19 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(21) | Deferred tax assets and deferred tax liabilities (Contd) |
Deferred tax liabilities are recognised for temporary differences arising from investments in subsidiaries, associates and joint ventures, except where the Group is able to control the timing of reversal of the temporary difference, and it is probable that the temporary difference will not reverse in the foreseeable future. When it is probable that the temporary differences arising from investments in subsidiaries, associates and joint ventures will be reversed in the foreseeable future and that the taxable profit will be available in the future against which the temporary differences can be utilised, the corresponding deferred tax assets are recognised.
Deferred tax assets and liabilities are offset when:
| the deferred taxes 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. |
(22) | Revenue recognition |
The amount of revenue is determined in accordance with the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Groups activities. Revenue is stated net of discounts, rebates and returns.
Revenue is recognised when its probable that the economic benefits associated with the transaction will flow to the Group, the related revenue can be reliably measured, and the specific criteria of revenue recognition have been met for each type of the Groups activities as described below:
(a) | Sale of goods |
The Group manufactures and sells automobile seating products. Revenue is recognised when the Group has delivered the products to the location specified in the sales contract and the buyer has confirmed the acceptance of the products. Upon delivery of the products, the buyer has the right to sell the products and takes the risks of any obsolescence and loss of the products.
(b) | Rendering of services |
Revenue is recognised when service is completed and it is probable that the associated economic benefits will flow to the Group and its total revenue and cost can be reliably measured.
- 20 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(23) | Government grants |
Government grants refer to the monetary or non-monetary assets obtained by the Group from the government, including tax return, financial subsidy and etc.
Government grants are recognised when the grants can be received and the Group can comply with all attached conditions. If a government grant is a monetary asset, it will be measured at the amount received or receivable. If a government grant is a non-monetary asset, it will be measured at its fair value. If it is unable to obtain its fair value reliably, it will be measured at its nominal amount.
Government grants related to assets refer to government grants which are obtained by the Group for the purposes of purchase, construction or acquisition of the long-term assets. Government grants related to income refer to the government grants other than those related to assets.
Government grants related to assets are either deducted against the carrying amount of the assets, or recorded as deferred income and recognised in profit or loss on a systemic basis over the useful lives of the assets. Government grants related to income that compensate the future costs, expenses or losses are recorded as deferred income and recognised in profit or loss, or deducted against related costs, expenses or losses in reporting the related expenses; government grants related to income that compensate the incurred costs, expenses or losses are recognised in profit or loss, or deuducted against related costs, expenses or losses directly in current period. The Group applies the presentation method consistently to the similar government grants in the financial statements.
Government grants that are related to ordinary activities are included in operating profit, otherwise, they are recorded in non-operating income or expenses.
(24) | Leases |
A lease that transfers substantially all the risks and rewards incidental to ownership of an asset is a finance lease. An operating lease is a lease other than a finance lease.
Lease payments under an operating lease are recognised on a straight-line basis over the period of the lease, and are either capitalised as part of the cost of related assets, or charged as an expense for the current period.
Rental income from an operating lease is recognised on a straight-line basis over the period of the lease.
(25) | Profit distribution |
Proposed profit distribution is recognised as a liability in the period in which it is approved by the Board of Directors meeting.
- 21 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(26) | 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 and 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 involving enterprises not 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.
All significant intra-group balances, transactions and unrealised profits are eliminated in the consolidated financial statements. The portion of subsidiaries owners equity and the portion of subsidiaries net profits and losses and comprehensive incomes for the period not attributable to the Company are recognised as minority interests, net profit attributed to minority interests and total comprehensive incomes attributed to minority interests, and presented separately in the consolidated financial statements under owners equity, net profits and total comprehensive income respectively. 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.
- 22 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(27) | Critical accounting estimates and judgments |
The Group continually evaluates the critical accounting estimates and key judgments applied based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
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 financial year are outlined below:
(i) | Accounting estimates on impairment of goodwill |
The Group tests annually whether goodwill has suffered any impairment. The recoverable amount of asset groups and groups of asset groups is the present value of the future cash flows expected to be derived from them. These calculations require use of estimates (Note 7(12)).
If management revises the gross margin that is used in the calculation of the future cash flows of asset groups and groups of asset groups, and the revised gross margin is lower than the one currently used, the Group would need to recognise further impairment against goodwill.
If management revises the pre-tax discount rate applied to the discounted cash flows, and the revised pre-tax discount rate is higher than the one currently applied, the Group would need to recognise further impairment against goodwill.
If the actual gross margin/pre-tax discount rate is higher/lower than managements estimates, the impairment loss of goodwill previously provided for is not allowed to be reversed by the Group.
(ii) | Income taxes |
The Group is subject to income taxes in numerous jurisdictions. There are some transactions and events for which the ultimate tax determination 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 jurisdictions. 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.
- 23 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
4 | Summary of significant accounting policies and accounting estimates (Contd) |
(28) | Significant changes in accounting policies |
In 2017, the Ministry of Finance released the Accounting Standard for Business Enterprises No. 42Non-current Assets or Disposal Groups Held for Sale and Discontinued Operations, revised Accounting Standard for Business Enterprises No. 16Government Grants and the Circular on Amendment to Formats of Financial Statements of General Industry and its interpretation (Cai Kuai [2017] 30). The financial statements are prepared in accordance with the above standards and circular, and impacts are as follows:
The nature and the reasons of the changes in accounting policies | The line items affected | The amounts affected | ||||||||
1 January 2017 | ||||||||||
The Group recorded the tax refund and other fiscal subsidies obtained in 2017 in other income. The comparatives for the years ended 31 December 2016 and 2015 were not restated. | Not applicable | Not applicable | ||||||||
2016 | 2015 | |||||||||
The Group recorded the gains or losses on disposals of fixed assets occurred in 2017, in losses on disposals of assets. The comparatives for the years ended 31 December 2016 and 2015 were restated accordingly. | Losses on disposals of assets
Non-operating income
Non-operating expenses |
|
18,381,606
3,695,321
(22,076,927 |
) |
|
2,992,507
1,676,650
(4,669,157 |
) |
- 24 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
5 | Taxation |
The main categories and rates of taxes applicable to the Group during the current year are set out below:
Type | Tax rate | Taxable base | ||
Enterprise income tax (a) |
25% and 20% | Taxable income | ||
Value added tax (VAT) (b) |
17%, 11%, 6% and others | Taxable value added amount (Tax payable is calculated using the taxable sales amount multiplied by the applicable tax rate less deductible VAT input of current period) | ||
City maintenance and construction tax |
7%, 5% and 1% | The payment amount of VAT and business tax |
(a) | In 2017, 2016 and 2015, the enterprise income tax rates applicable to the Company and its subsidiaries are as follows: |
(1) | The Company is a foreign-invested production enterprise set up in Pudong New Area, Shanghai. It was certificated as the hi-technology enterprise by Shanghai Science and Technology Committee in 2014 (valid for 3 years) and 2017 (valid for 3 years), respectively. According to the Guo Shui Han (2009), No. 203 The notice on implementing preferential corporate income tax rate of hi-technology enterprises, the applicable income tax rate is 15% in year 2017, 2016 and 2015. |
(2) | Shanghai Jixiang Automobile Roof Trimming Co., Ltd. is a domestic enterprise set up in Shanghai. It was certificated as the hi-technology enterprise by Shanghai Science and Technology Committee in 2015 (valid for 3 years). According to the Guo Shui Han (2009), No. 203 The notice on implementing preferential corporate income tax rate of hi-technology enterprises, the applicable income tax rate is 15% in year 2017, 2016 and 2015. |
(3) | Guangzhou Dongfeng Adient Automotive Seating Co., Ltd. (formerly known as Guangzhou Dongfeng Johnson Controls Automotive Seating Co., Ltd.) is a foreign-invested production enterprise set up in coastal economic development zone. It was certificated as the hi-technology enterprise by Department of Science and Technology of Guangdong Province in 2014. According to the Guo Shui Han (2009), No. 203 The notice on implementing preferential corporate income tax rate of hi-technology enterprises, the applicable income tax rate is 15% in year 2016 and 2015. |
- 25 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
5 | Taxation (Contd) |
(a) | In 2017, 2016 and 2015, the enterprise income tax rates applicable to the Company and its subsidiaries are as follows (Contd): |
(4) | Wuhu Adient Yunhe Automotive Seating Co., Ltd. (formerly known as Wuhu Johnson Controls Yunhe Automotive Seating Co., Ltd.) is a foreign-invested manufacturing enterprise set up in Wuhu Economic and Technological Development Zone. It was certificated as the hi-technology enterprise by Department of Science and Technology of Anhui Province, Department of Finance of Anhui province, National Tax Bureau of Anhui Province and Local Tax Bureau of Anhui Province on 21 October 2016 (valid for 3 years). According to the Guo Shui Han (2009) No. 203 The notice on implementing preferential corporate income tax rate of hi-technology enterprises, the applicable income tax rate is 15% in 2017 and 2016. |
(5) | Hefei Adient Yunhe Automotive Seating Co., Ltd. (formerly known as Hefei Johnson Controls Yunhe Automotive Seating Co., Ltd.) is a foreign-invested manufacturing enterprise set up in Hefei Economic and Technological Development Zone. It was certificated as the hi-technology enterprise by Hefei Science and Technology Committee in 2015 (valid for 3 years). According to the Guo Shui Han (2009) No. 203 The notice on implementing preferential corporate income tax rate of hi-technology enterprises, the applicable income tax rate is 15% in 2017, 2016 and 2015. |
(6) | Yanfeng Adient (Shenyang) Seating Co., Ltd. (Shenyang Yanfeng Adient, formerly known as Shenyang Yanfeng Johnson Controls Seating Co., Ltd.) is a domestic enterprise set up in Shenyang. It was certificated as the hi-technology enterprise by Department of Science and Technology of Liaoning Province in 2013 (valid for 3 years) and 2016 (valid for 3 years), respectively. According to the Guo Shui Han (2009) No. 203 The notice on implementing preferential corporate income tax rate of hi-technology enterprises, the applicable income tax rate is 15% in 2017, 2016 and 2015. |
(7) | Chongqing Yanfeng Adient Automotive Components Co., Ltd. (Chongqing Yanfeng Adient) is a foreign-invested manufacturing enterprise set up in Chongqing. It was certificated as the hi-technology enterprise again through the review in October 2013 (valid until December 2015) and July 2016, respectively. According to the Guo Shui Han (2009), No. 203 The notice on implementing preferential corporate income tax rate of hi-technology enterprises, the applicable income tax rate is 15% in 2017, 2016 and 2015. |
- 26 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
5 | Taxation (Contd) |
(a) | In 2017, 2016 and 2015, the enterprise income tax rates applicable to the Company and its subsidiaries are as follows (Contd): |
(8) | Daqing Yanfeng Adient Automotive Components Co., Ltd. is a domestic enterprise set up in Daqing in 2014. It was certificated as the hi-technology enterprise for the first time in 2015 (valid for 3 years). According to the Guo Shui Han (2009) No. 203 The notice on implementing preferential corporate income tax rate of hi-technology enterprises, the applicable income tax rate is 15% in 2017 and 2016. |
(9) | Jiangsu Yueda Yanfeng Adient Automotive Seating Co., Ltd. (formerly known as Jiangsu Yueda Yanfeng Johnson Controls Automotive Seating Co., Ltd.) is a domestic enterprise set up in Yancheng. It was certificated as the hi-technology enterprise by Department of Science and Technology of Jiangsu Province on 30 November 2016 (valid for 3 years). According to the Guo Shui Han (2009), No. 203 The notice on implementing preferential corporate income tax rate of hi-technology enterprises, the applicable income tax rate is 15% in 2017. |
(10) | Chongqing Yanfeng Adient Fengao Automotive Components Co., Ltd. (Chongqing Fengao) is a domestic enterprise set up in Chongqing in 2015. Entitled to the preferential policy for development of the west regions, the applicable income tax rate of Chongqing Fengao is 15% in 2016. |
(11) | Chengdu Yanfeng Adient Automotive Components Co., Ltd. (Chengdu Yanfeng Adient) is a domestic enterprise set up in Chengdu in 2016. Entitled to the preferential policy for development of the west regions, the applicable income tax rate of Chengdu Yanfeng Adient is 15% in 2017 and 2016. |
(12) | The applicable income tax rate of other domestic entities is 25% in year 2017, 2016 and 2015. And for Yanfeng (Thailand) Co., Ltd., the applicable income tax is 20% in year 2017, 2016 and 2015. |
(b) | Pursuant to the Circular on the Overall Promotion of Pilot Program of Levying VAT in place of Business Tax (Cai Shui [2016] 36) jointly issued by the Ministry of Finance and the State Administration of Taxation, revenue from service leasing of the subsidiary of the Group is subject to VAT from 1 May 2016, and the applicable tax rate is 11%, while the business tax was 5% before then. |
- 27 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
6 | Subsidiaries |
(1) | Significant subsidiaries included in the consolidation scope as at 31 December 2017 are as follows: |
Place of registration |
Registered capital |
Nature of business and principal activities |
% interest held by the Company Directly Indirectly |
% voting right held by the Company Directly Indirectly |
||||||||||||||
Shenyang Yanfeng Adient |
Shenyang | |
RMB 30,000,000 |
|
Develop, produce and sell automotive interior, automotive seating overhead systems and parts production and provide after-sale service. Self-management or agency of import and export of goods and technologies (excluding goods prohibited or restricted by the national authorities). | 100 | % | 100 | % | |||||||||
Yanfeng Adient (Yantai) Seating Co., Ltd. (formerly known as Yantai Yanfeng Johnson Controls Seating Co., Ltd.) |
Yantai | |
RMB 35,000,000 |
|
Production and sales of automotive seating assembly, parts and functional high molecule materials for automobile; import and export of goods and technologies. | 100 | % | 100 | % | |||||||||
Nanjing Yanfeng Adient Seating Co., Ltd. (formerly known as NanjingYanfeng Johnson Controls Seating Co., Ltd.) |
Nanjing | |
RMB 45,000,000 |
|
Produce and sell automotive seating and provide after-sale service; import and export goods and service | 60 | % | 60 | % | |||||||||
Yanfeng Adient (Shanghai Jiading) Seating Co., Ltd. (formerly known as Shanghai Yanfeng Johnson Controls Anting Seating Assembly Co., Ltd.) |
Shanghai | |
RMB 15,000,000 |
|
Design, develop, produce and sell automotive seating and provide after-sale service; import and export goods. | 100 | % | 100 | % | |||||||||
Chongqing Yanfeng Adient |
Chongqing | |
USD 7,500,000 |
|
Design, produce and sale automotive seating, sunshades, auto roof trims and related parts and provide after-sale service. | 50 | % | 62.50 | % | |||||||||
Yanfeng Adient (Wuhan) Seating Co., Ltd. (formerly known as Wuhan Yanfeng Johnson Controls Seating Co., Ltd.) |
Wuhan | |
RMB 45,000,000 |
|
Design, development, manufacture and sales of automotive seating, auto roof trims, sunshades, trim systems and related parts, provision of technical engineering service, import and export of goods (excluding goods prohibited or restricted by the national authorities). | 100 | % | 100 | % |
- 28 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
6 | Subsidiaries (Contd) |
(1) | Significant subsidiaries included in the consolidation scope as at 31 December 2017 are as follows (Contd): |
Place of registration |
Registered capital |
Nature of business and principal activities |
% interest held by the Company Directly Indirectly |
% voting right held by the Company Directly Indirectly | ||||||||||
Yanfeng Adient (Ningbo) Seating Co., Ltd. (formerly known as Ningbo Yanfeng Johnson Controls Seating Co., Ltd.) |
Ningbo | |
RMB 35,000,000 |
|
Design, development, manufacture and provision of technical engineering service of automotive seating, auto roof trims, sunshades, trim systems and related parts, sales of self-manufactured products, import and export of self-run and agent products and technologies (excluding goods and technologies prohibited or restricted by the national authorities). | 100% | 100% |
(a) The newly established subsidiaries of the Group in 2017 included Xiangtan Yanfeng Adient Automotive Components Co., Ltd., Taizhou Yanfeng Adient Automotive Components Co., Ltd. and Yanfeng Adient (Changshu) Seating Co., Ltd. The newly established subsidiaries of the Group in 2016 included Haerbin Yanfeng Adient Automotive Components Co., Ltd, Chengdu Yanfeng Adient and Yanfeng Adient Germany Seating GmbH (formerly known as Yanfeng Johnson Controls Germany Seating GmbH). The newly established subsidiaries of the Group in 2015 included Yanfeng Adient America Seating Inc. (formerly known as Yanfeng Johnson Controls America Seating, Inc.) and Chongqing Fengao.
(b) In 2015, the Company disposed 50% equity interest of its subsidiary, Baoding Yanfeng Johnson Controls Seating Co., Ltd. to Great Wall Automobile Holding Co., Ltd..
- 29 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
6 | Subsidiaries (Contd) |
(2) | Information of non-wholly-owned subsidiaries |
Total profit attributable to minority shareholders for the year ended 31 December 2017 |
Dividends paid to minority interests for the year ended 31 December 2017 |
Accumulated minority interests as at 31 December 2017 | ||
295,639,879 | 333,196,736 | 510,791,086 | ||
Total profit attributable to minority shareholders for the year ended 31 December 2016 | Dividends paid to minority interests for the year ended 31 December 2016 | Accumulated minority interests as at 31 December 2016 | ||
320,615,336 | 291,750,289 | 549,306,952 | ||
Total profit attributable to minority shareholders for the year ended 31 December 2015 | Dividends paid to minority interests for the year ended 31 December 2015 | Accumulated minority interests as at 31 December 2015 | ||
305,579,715 | 214,045,114 | 521,158,841 |
There is no individually subsidiary with significant non-wholly-owned interest within the group. Considering all the subsidiaries are automobile industry related companies, their principal activities are production and sale of automotive parts as well as components and they all operate their business in China mainland, the summarised aggregated financial information for all the subsidiaries that have non-wholly-owned interests are set out below:
31 December 2017 |
||||||||||||||||||||
Current assets | Non-current assets |
Total assets | Current liabilities |
Non-current liabilities |
Total liabilities | |||||||||||||||
6,613,955,042 |
1,179,786,779 | 7,793,741,821 | 6,658,480,423 | 11,920,490 | 6,670,400,913 | |||||||||||||||
31 December 2016 |
||||||||||||||||||||
Current assets | Non-current assets |
Total assets | Current liabilities |
Non-current liabilities |
Total liabilities | |||||||||||||||
6,094,461,705 |
1,056,890,738 | 7,151,352,443 | 5,884,416,455 | 18,133,103 | 5,902,549,558 | |||||||||||||||
31 December 2015 |
||||||||||||||||||||
Current assets | Non-current assets |
Total assets | Current liabilities |
Non-current liabilities |
Total liabilities | |||||||||||||||
4,885,026,193 |
885,503,988 | 5,770,530,181 | 4,563,721,745 | 24,041,900 | 4,587,763,645 |
- 30 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
6 | Subsidiaries (Contd) |
(2) | Information of non-wholly-owned subsidiaries (Contd) |
2017 |
||||||||||||
Revenue | Net profit | Total comprehensive income |
Cash flows from operating activities |
|||||||||
11,589,006,649 |
626,758,381 | 626,758,381 | 1,268,118,975 | |||||||||
2016 |
||||||||||||
Revenue | Net profit | Total comprehensive income |
Cash flows from operating activities |
|||||||||
10,755,375,494 |
678,043,346 | 678,043,346 | 1,156,481,663 | |||||||||
2015 |
||||||||||||
Revenue | Net profit | Total comprehensive income |
Cash flows from operating activities |
|||||||||
10,509,628,494 |
647,904,303 | 647,904,303 | 224,033,364 |
7 | Notes to the consolidated financial statements |
(1) | Cash at bank and on hand |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Cash on hand |
19,307 | 21,513 | 26,270 | |||||||||
Cash at bank |
7,938,494,373 | 6,179,189,997 | 3,741,306,832 | |||||||||
Other cash balances (a) |
195,158,898 | 289,907,686 | 198,561,011 | |||||||||
|
|
|
|
|
|
|||||||
8,133,672,578 | 6,469,119,196 | 3,939,894,113 | ||||||||||
|
|
|
|
|
|
(a) | As at 31 December 2017, 2016 and 2015, 195,158,898, 289,907,686 and 198,561,011 is pledged as guarantee for the Group to issue notes payable of 237,154,087, 325,076,774 and 228,819,635 (Note 7(17)). |
(2) | Notes receivable |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Bank acceptance notes |
1,400,014,717 | 1,686,686,411 | 1,198,378,148 | |||||||||
|
|
|
|
|
|
As at 31 December 2017, 2016 and 2015, notes receivable with amount of 236,414,979, 152,544,483 and 222,124,500 is pledged as guarantee for the Group to issue notes payable of 230,171,732, 152,544,483 and 221,724,500 (Note 7(17)).
- 31 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(3) | Accounts receivable and other receivables |
(a) | Accounts receivable |
31 December 2016 |
31 December 2017 |
|||||||||||||||
Accounts receivable |
5,932,536,523 | 8,256,708,592 | ||||||||||||||
Increase in the current year |
Decrease in the current |
|||||||||||||||
Less: Provision for bad debts |
(80,730,455 | ) | (3,789,237 | ) | 631,977 | (83,887,715 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
5,851,806,068 | 8,172,820,877 | |||||||||||||||
|
|
|
|
|||||||||||||
31 December 2015 |
31 December 2016 |
|||||||||||||||
Accounts receivable |
5,713,997,765 | 5,932,536,523 | ||||||||||||||
Increase in the current year |
Decrease in the current |
|||||||||||||||
Less: Provision for bad debts |
(16,968,425 | ) | (63,787,666 | ) | 25,636 | (80,730,455 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
5,697,029,340 | 5,851,806,068 | |||||||||||||||
|
|
|
|
|||||||||||||
31 December 2014 |
31 December 2015 |
|||||||||||||||
Accounts receivable |
4,698,378,707 | 5,713,997,765 | ||||||||||||||
Increase in the current year |
Decrease in the current |
|||||||||||||||
Less: Provision for bad debts |
(9,928,095 | ) | (7,056,982 | ) | 16,652 | (16,968,425 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
4,688,450,612 | 5,697,029,340 | |||||||||||||||
|
|
|
|
- 32 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(3) | Accounts receivable and other receivables (Contd) |
(a) | Accounts receivable (Contd) |
The aging of accounts receivable and related provisions for bad debts are analysed below:
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||||||||||||||||||||||||||
Amount | % of total balance |
Provision for bad debts |
Amount | % of total balance |
Provision for bad debts |
Amount | % of total balance |
Provision for bad debts |
||||||||||||||||||||||||||||
Within 1 year |
8,179,122,053 | 99.06 | % | (36,085,610 | ) | 5,817,926,740 | 98.06 | % | (19,287,472 | ) | 5,442,373,758 | 95.25 | % | (2,415,833 | ) | |||||||||||||||||||||
1 to 2 years |
27,233,389 | 0.33 | % | (3,128,392 | ) | 28,484,340 | 0.48 | % | (8,404,214 | ) | 244,636,126 | 4.28 | % | (3,379,236 | ) | |||||||||||||||||||||
2 to 3 years |
11,603,363 | 0.14 | % | (5,923,926 | ) | 66,184,420 | 1.12 | % | (33,097,746 | ) | 19,388,759 | 0.34 | % | (3,784,961 | ) | |||||||||||||||||||||
Over 3 years |
38,749,787 | 0.47 | % | (38,749,787 | ) | 19,941,023 | 0.34 | % | (19,941,023 | ) | 7,599,122 | 0.13 | % | (7,388,395 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
8,256,708,592 | 100.00 | % | (83,887,715 | ) | 5,932,536,523 | 100.00 | % | (80,730,455 | ) | 5,713,997,765 | 100.00 | % | (16,968,425 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 33 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(3) | Accounts receivable and other receivables (Contd) |
(b) | Other receivables |
31 December 2016 |
31 December 2017 |
|||||||||||||||
Related party cash pool lending |
150,982,542 | 694,358,284 | ||||||||||||||
Receivables for modules paid-on-behalf of others |
102,700,877 | 103,917,630 | ||||||||||||||
Deposits |
53,632,667 | 21,922,930 | ||||||||||||||
Receivables from sales of fixed assets |
653,120 | 3,037,638 | ||||||||||||||
Others |
10,944,572 | 4,981,187 | ||||||||||||||
|
|
|
|
|||||||||||||
318,913,778 | 828,217,669 | |||||||||||||||
Reversal in the current year |
Write-off in the current year |
|||||||||||||||
Less: Provision for bad debts |
(3,128,470 | ) | 2,182,720 | 933,612 | (12,138 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
315,785,308 | 828,205,531 | |||||||||||||||
|
|
|
|
|||||||||||||
31 December 2015 |
31 December 2016 |
|||||||||||||||
Related party cash pool lending |
| 150,982,542 | ||||||||||||||
Receivables for modules paid-on-behalf of others |
147,645,565 | 102,700,877 | ||||||||||||||
Deposits |
50,064,467 | 53,632,667 | ||||||||||||||
Receivables from sales of fixed assets |
4,226 | 653,120 | ||||||||||||||
Receivables from equity transfer |
21,500,000 | | ||||||||||||||
Others |
10,305,418 | 10,944,572 | ||||||||||||||
|
|
|
|
|||||||||||||
229,519,676 | 318,913,778 | |||||||||||||||
Increase in the current year |
Decrease in the current year |
|||||||||||||||
Less: Provision for bad debts |
(945,749 | ) | (2,182,721 | ) | | (3,128,470 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
228,573,927 | 315,785,308 | |||||||||||||||
|
|
|
|
- 34 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(3) | Accounts receivable and other receivables (Contd) |
(b) | Other receivables (Contd) |
31 December 2014 |
31 December 2015 |
|||||||||||||||
Receivables for modules paid-on-behalf of others |
200,755,931 | 147,645,565 | ||||||||||||||
Deposits |
32,193,079 | 50,064,467 | ||||||||||||||
Receivables from equity transfer |
| 21,500,000 | ||||||||||||||
Receivables from sales of fixed assets |
160,032,610 | 4,226 | ||||||||||||||
Related party cash pool lending |
50,646,471 | | ||||||||||||||
Others |
21,779,364 | 10,305,418 | ||||||||||||||
|
|
|
|
|||||||||||||
465,407,455 | 229,519,676 | |||||||||||||||
Increase in the current year |
Decrease in the current year |
|||||||||||||||
Less: Provision for bad debts |
(946,189 | ) | | 440 | (945,749 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
464,461,266 | 228,573,927 | |||||||||||||||
|
|
|
|
- 35 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(3) | Accounts receivable and other receivables (Contd) |
(b) | Other receivables (Contd) |
Other receivables and related provisions for bad debts are analysed below:
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||||||||||||||||||||||||||
Amount | % of total balance |
Provision for bad debts |
Amount | % of total balance |
Provision for bad debts |
Amount | % of total balance |
Provision for bad debts |
||||||||||||||||||||||||||||
Within 1 year |
805,632,588 | 97.27 | % | | 254,354,215 | 79.76 | % | (2,194,859 | ) | 196,262,868 | 85.51 | % | | |||||||||||||||||||||||
1 to 2 years |
8,434,324 | 1.02 | % | | 42,589,819 | 13.35 | % | | 24,176,246 | 10.53 | % | (12,138 | ) | |||||||||||||||||||||||
2 to 3 years |
3,658,154 | 0.44 | % | | 15,068,384 | 4.72 | % | | 4,745,088 | 2.07 | % | | ||||||||||||||||||||||||
Over 3 years |
10,492,603 | 1.27 | % | (12,138 | ) | 6,901,360 | 2.17 | % | (933,611 | ) | 4,335,474 | 1.89 | % | (933,611 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
828,217,669 | 100.00 | % | (12,138 | ) | 318,913,778 | 100.00 | % | (3,128,470 | ) | 229,519,676 | 100.00 | % | (945,749 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) | Advances to suppliers |
The ageing of advances to suppliers is analysed as follows:
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||||||||||||||
Amount | % of total balance |
Amount | % of total balance |
Amount | % of total balance |
|||||||||||||||||||
Within 1 year |
199,510,957 | 98.25 | % | 115,464,553 | 95.98 | % | 125,531,008 | 96.47 | % | |||||||||||||||
1 to 2 years |
2,313,617 | 1.14 | % | 1,769,829 | 1.47 | % | 2,941,987 | 2.26 | % | |||||||||||||||
2 to 3 years |
360,539 | 0.18 | % | 1,516,302 | 1.26 | % | 132,283 | 0.10 | % | |||||||||||||||
Over 3 years |
875,000 | 0.43 | % | 1,555,765 | 1.29 | % | 1,521,765 | 1.17 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
203,060,113 | 100.00 | % | 120,306,449 | 100.00 | % | 130,127,043 | 100.00 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
- 36 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(5) | Inventories |
31 December 2016 |
31 December 2017 |
|||||||||||||||
Cost - |
||||||||||||||||
Raw materials |
552,763,560 | 602,556,481 | ||||||||||||||
Work in progress |
36,748,461 | 17,096,427 | ||||||||||||||
Finished goods |
234,736,592 | 299,240,009 | ||||||||||||||
|
|
|
|
|||||||||||||
824,248,613 | 918,892,917 | |||||||||||||||
|
|
|
|
|||||||||||||
Less: Provision for declines in the value of inventories |
|
(Accrual Reversal in the current year |
)/
|
|
Write-off in the current year |
|
||||||||||
Raw materials |
(23,817,530 | ) | 433,754 | 2,874,182 | (20,509,594 | ) | ||||||||||
Work in progress |
(31,664 | ) | (36,483 | ) | | (68,147 | ) | |||||||||
Finished goods |
(2,720,754 | ) | (1,536,611 | ) | 917,764 | (3,339,601 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
(26,569,948 | ) | (1,139,340 | ) | 3,791,946 | (23,917,342 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
797,678,665 | 894,975,575 | |||||||||||||||
|
|
|
|
31 December 2015 |
31 December 2016 |
|||||||||||||||
Cost - |
||||||||||||||||
Raw materials |
422,758,307 | 552,763,560 | ||||||||||||||
Work in progress |
21,343,381 | 36,748,461 | ||||||||||||||
Finished goods |
290,728,598 | 234,736,592 | ||||||||||||||
|
|
|
|
|||||||||||||
734,830,286 | 824,248,613 | |||||||||||||||
|
|
|
|
|||||||||||||
Less: Provision for declines in the value of inventories |
|
Reversal in the current year |
|
|
Write-off in the current year |
|
||||||||||
Raw materials |
(28,454,633 | ) | 1,030,809 | 3,606,294 | (23,817,530 | ) | ||||||||||
Work in progress |
(873,759 | ) | 839,603 | 2,492 | (31,664 | ) | ||||||||||
Finished goods |
(4,299,218 | ) | 365,260 | 1,213,204 | (2,720,754 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
(33,627,610 | ) | 2,235,672 | 4,821,990 | (26,569,948 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
701,202,676 | 797,678,665 | |||||||||||||||
|
|
|
|
- 37 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(5) | Inventories (Contd) |
31 December 2014 |
31 December 2015 |
|||||||||||||||
Cost - |
||||||||||||||||
Raw materials |
495,782,759 | 422,758,307 | ||||||||||||||
Work in progress |
32,424,927 | 21,343,381 | ||||||||||||||
Finished goods |
147,067,879 | 290,728,598 | ||||||||||||||
|
|
|
|
|||||||||||||
675,275,565 | 734,830,286 | |||||||||||||||
|
|
|
|
|||||||||||||
Less: Provision for declines in the value of inventories |
|
(Accrual Reversal in the current year |
)/
|
|
Write-off in the current year |
|
||||||||||
Raw materials |
(31,190,832 | ) | (1,708,382 | ) | 4,444,581 | (28,454,633 | ) | |||||||||
Work in progress |
(805,118 | ) | 22,032 | (90,673 | ) | (873,759 | ) | |||||||||
Finished goods |
(5,164,390 | ) | (637,187 | ) | 1,502,359 | (4,299,218 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
(37,160,340 | ) | (2,323,537 | ) | 5,856,267 | (33,627,610 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
638,115,225 | 701,202,676 | |||||||||||||||
|
|
|
|
(6) | Other current assets |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Input VAT to be deducted |
123,276,797 | 151,229,616 | 31,452,580 | |||||||||
Related party entrusted loans (Note 8(4(e))) |
15,000,000 | | 315,000,000 | |||||||||
Prepaid income tax |
9,121,155 | 9,441,318 | 6,094,030 | |||||||||
Others |
90,570 | 41,426 | 163,060 | |||||||||
|
|
|
|
|
|
|||||||
147,488,522 | 160,712,360 | 352,709,670 | ||||||||||
|
|
|
|
|
|
- 38 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(7) | Long-term equity investments |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Associates (a) |
163,821,432 | 140,094,694 | 108,432,277 | |||||||||
Joint venture (b) |
46,437,689 | 50,160,580 | 50,320,716 | |||||||||
|
|
|
|
|
|
|||||||
210,259,121 | 190,255,274 | 158,752,993 | ||||||||||
Less: Provision for impairment of long-term equity investments |
| | | |||||||||
|
|
|
|
|
|
|||||||
210,259,121 | 190,255,274 | 158,752,993 | ||||||||||
|
|
|
|
|
|
(a) | Associates |
Investments in associates are set out below:
31 December 2016 |
Increase in investment |
Share of net profit under equity method |
Profit/Cash dividends declared by associates |
31 December 2017 |
||||||||||||
140,094,694 |
| 69,726,738 | (46,000,000 | ) | 163,821,432 | |||||||||||
31 December 2015 |
Increase in investment |
Share of net profit under equity method |
Profit/Cash dividends declared by associates |
31 December 2016 |
||||||||||||
108,432,277 |
| 54,179,667 | (22,517,250 | ) | 140,094,694 | |||||||||||
31 December 2014 |
Increase in investment |
Share of net profit under equity method |
Profit/Cash dividends declared by associates |
31 December 2015 |
||||||||||||
76,331,842 |
| 40,365,585 | (8,265,150 | ) | 108,432,277 |
- 39 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(7) | Long-term equity investments (Contd) |
(a) | Associates (Contd) |
General information of significant associates:
Major business location |
Place of registration |
Nature of business | Interest held |
Whether strategic to the Groups activities |
||||||||||||||
Wuhan Taiji Johnson Controls Seating Co., Ltd. (Wuhan Taiji) (i) |
Wuhan | Wuhan | Design, develop, produce and process auto key parts; sell the produced parts and provide after-sale service | 20.00 | % | Yes | ||||||||||||
Dongfeng Adient Automotive Seating Co., Ltd. (Dongfeng Adient Seating, formerly known as Dongfeng Johnson Automotive Seating Co., Ltd.) |
Wuhan | Wuhan | Design, develop, produce and process auto key parts; sell the produced parts and provide after-sale service | 50.00 | % | Yes |
(i) | The Company holds 20% of the ownership interesting of, and the decisions on Wuhan Taijis relevant activities are made by the Board of Directors. As the Company has the right to designate 1 out of total 7 board members in Wuhan Taiji, the Company has the voting rights of 14.29% in Wuhan Taiji. |
(b) | Joint venture |
Investments in joint ventures are set out below:
31 December 2016 |
Increase in investment |
Share of net profit under equity method |
Profit/Cash dividends declared by associates |
31 December 2017 |
||||||||||||
50,160,580 |
| 9,149,807 | (12,872,698 | ) | 46,437,689 | |||||||||||
31 December 2015 |
Increase in investment |
Share of net profit under equity method |
Profit/Cash dividends declared by associates |
31 December 2016 |
||||||||||||
50,320,716 |
| (160,136 | ) | | 50,160,580 | |||||||||||
31 December 2014 |
Increase in investment |
Share of net profit under equity method |
Profit/Cash dividends declared by associates |
31 December 2015 |
||||||||||||
|
62,298,600 | 93,521 | (12,071,405 | ) | 50,320,716 |
- 40 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(7) | Long-term equity investments (Contd) |
(b) | Joint venture (Contd) |
General information of significant joint venture:
Major business location |
Place of registration |
Nature of business | Interest held |
Whether activities | ||||||
CRH Automotive Shenyang Co., Ltd. (CRH Shenyang) | Shenyang | Shenyang | Design, develop, manufacture, sell auto seats frame and relevant parts; provide after-sale service; import and export goods (exclude those forbidden by the State or restricted by imports and exports). | 50.00% | Yes |
On 30 September 2015, the Company acquired 50% of the equity interest of CRH Shenyang from Johnson Controls Solingen Beteiligungs GmbH with the consideration of USD 9,800,000. After the acquisition, the Company owned 50% equity interest of CRH Shenyang, which is treated as a joint venture company.
(8) | Investment properties |
Buildings and relevant land use rights |
||||
31 December 2016 |
| |||
Transfer from construction in progress |
42,529,486 | |||
|
|
|||
31 December 2017 |
42,529,486 | |||
|
|
|||
Accumulated depreciation and amortisation |
||||
31 December 2016 |
| |||
Increase in the current year |
| |||
|
|
|||
31 December 2017 |
| |||
|
|
|||
Provision for impairment loss |
||||
31 December 2016 and 2017 |
| |||
|
|
|||
Carrying amount |
||||
31 December 2017 |
42,529,486 | |||
|
|
|||
31 December 2016 |
| |||
|
|
- 41 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(9) | Fixed assets |
Buildings | Machinery and equipment |
Motor vehicles |
Computers and electronic equipment and office equipment |
Tooling | Total | |||||||||||||||||||
Cost |
||||||||||||||||||||||||
31 December 2016 |
765,812,975 | 1,749,296,461 | 6,838,925 | 257,756,641 | 172,609,872 | 2,952,314,874 | ||||||||||||||||||
Transfer from construction in progress |
58,878,093 | 355,802,525 | 5,887,788 | 32,222,418 | 69,308,003 | 522,098,827 | ||||||||||||||||||
Other increases in the current year |
93,202 | 88,572 | | 9,286 | 5,828 | 196,888 | ||||||||||||||||||
Decrease in the current year |
(6,833,018 | ) | (55,055,220 | ) | (185,379 | ) | (30,637,992 | ) | (27,736,142 | ) | (120,447,751 | ) | ||||||||||||
Transfer to long-term prepaid expenses |
| | | (30,086 | ) | (127,350 | ) | (157,436 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
31 December 2017 |
817,951,252 | 2,050,132,338 | 12,541,334 | 259,320,267 | 214,060,211 | 3,354,005,402 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Accumulated depreciation |
||||||||||||||||||||||||
31 December 2016 |
(182,533,783 | ) | (764,667,167 | ) | (6,400,178 | ) | (154,423,773 | ) | (121,076,895 | ) | (1,229,101,796 | ) | ||||||||||||
Increase in the current year |
(46,101,317 | ) | (246,635,251 | ) | (1,850,999 | ) | (42,533,912 | ) | (49,280,656 | ) | (386,402,135 | ) | ||||||||||||
Decrease in the current year |
2,789,225 | 39,354,577 | 138,727 | 30,357,139 | 19,869,631 | 92,509,299 | ||||||||||||||||||
Transfer to long-term prepaid expenses |
| | | 10,029 | 82,778 | 92,807 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
31 December 2017 |
(225,845,875 | ) | (971,947,841 | ) | (8,112,450 | ) | (166,590,517 | ) | (150,405,142 | ) | (1,522,901,825 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Provision for impairment loss |
||||||||||||||||||||||||
31 December 2016 |
| (3,116,116 | ) | | | (283,584 | ) | (3,399,700 | ) | |||||||||||||||
Decrease in the current year |
| 856,303 | | | 53,920 | 910,223 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
31 December 2017 |
| (2,259,813 | ) | | | (229,664 | ) | (2,489,477 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Carrying amount 31 |
||||||||||||||||||||||||
December 2017 |
592,105,377 | 1,075,924,684 | 4,428,884 | 92,729,750 | 63,425,405 | 1,828,614,100 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
- 42 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(9) | Fixed assets (Contd) |
Buildings | Machinery and equipment |
Motor vehicles |
Computers and electronic equipment and office equipment |
Tooling | Total | |||||||||||||||||||
Cost |
||||||||||||||||||||||||
31 December 2015 |
806,451,196 | 1,578,270,298 | 11,203,963 | 257,206,427 | 163,297,902 | 2,816,429,786 | ||||||||||||||||||
Transfer from construction in progress |
34,002,825 | 223,872,862 | 1,093,938 | | 46,014,855 | 304,984,480 | ||||||||||||||||||
Other increases in the current year |
| | | 38,872,721 | | 38,872,721 | ||||||||||||||||||
Decrease in the current year |
(9,484,015 | ) | (80,492,536 | ) | (1,568,282 | ) | (24,154,674 | ) | (30,838,177 | ) | (146,537,684 | ) | ||||||||||||
Transfer to long-term prepaid expenses |
(20,102,952 | ) | (1,221,416 | ) | | (5,128 | ) | | (21,329,496 | ) | ||||||||||||||
Cost adjustment |
(33,346,512 | ) | (5,408,656 | ) | | (1,349,765 | ) | | (40,104,933 | ) | ||||||||||||||
Reclassification |
(11,707,567 | ) | 34,275,909 | (3,890,694 | ) | (12,812,940 | ) | (5,864,708 | ) | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
31 December 2016 |
765,812,975 | 1,749,296,461 | 6,838,925 | 257,756,641 | 172,609,872 | 2,952,314,874 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Accumulated depreciation |
||||||||||||||||||||||||
31 December 2015 |
(143,920,692 | ) | (625,119,801 | ) | (7,718,351 | ) | (144,230,691 | ) | (113,372,889 | ) | (1,034,362,424 | ) | ||||||||||||
Increase in the current year |
(49,375,221 | ) | (183,487,123 | ) | (1,512,307 | ) | (40,831,996 | ) | (35,416,622 | ) | (310,623,269 | ) | ||||||||||||
Decrease in the current year |
2,039,813 | 62,145,418 | 1,371,317 | 22,879,917 | 24,134,045 | 112,570,510 | ||||||||||||||||||
Transfer to long-term prepaid expenses |
3,121,358 | 190,889 | | 1,140 | | 3,313,387 | ||||||||||||||||||
Reclassification |
5,600,959 | (18,396,550 | ) | 1,459,163 | 7,757,857 | 3,578,571 | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
31 December 2016 |
(182,533,783 | ) | (764,667,167 | ) | (6,400,178 | ) | (154,423,773 | ) | (121,076,895 | ) | (1,229,101,796 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Provision for impairment loss |
||||||||||||||||||||||||
31 December 2015 |
| (3,168,540 | ) | | | (753,177 | ) | (3,921,717 | ) | |||||||||||||||
Decrease in the current year |
| 52,424 | | | 469,593 | 522,017 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
31 December 2016 |
| (3,116,116 | ) | | | (283,584 | ) | (3,399,700 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Carrying amount |
||||||||||||||||||||||||
31 December 2016 |
583,279,192 | 981,513,178 | 438,747 | 103,332,868 | 51,249,393 | 1,719,813,378 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
- 43 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(9) | Fixed assets (Contd) |
Buildings | Machinery and equipment |
Motor vehicles |
Computers and electronic equipment and office equipment |
Tooling | Total | |||||||||||||||||||
Cost |
||||||||||||||||||||||||
31 December 2014 |
664,843,579 | 1,402,641,847 | 11,092,134 | 219,404,616 | 143,136,647 | 2,441,118,823 | ||||||||||||||||||
Transfer from construction in progress |
141,831,535 | 306,246,174 | 1,525,343 | 61,610,827 | 40,643,272 | 551,857,151 | ||||||||||||||||||
Other increases in the current year |
53,000 | 24,471 | | 454,101 | 159,025 | 690,597 | ||||||||||||||||||
Decrease in the current year |
(276,918 | ) | (105,538,409 | ) | (1,413,514 | ) | (21,053,528 | ) | (20,641,042 | ) | (148,923,411 | ) | ||||||||||||
Transfer to construction in progress |
| (25,103,785 | ) | | (3,209,589 | ) | | (28,313,374 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
31 December 2015 |
806,451,196 | 1,578,270,298 | 11,203,963 | 257,206,427 | 163,297,902 | 2,816,429,786 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Accumulated depreciation |
||||||||||||||||||||||||
31 December 2014 |
(103,659,542 | ) | (556,410,903 | ) | (6,757,457 | ) | (126,368,066 | ) | (106,393,288 | ) | (899,589,256 | ) | ||||||||||||
Increase in the current year |
(40,528,317 | ) | (159,961,886 | ) | (1,953,950 | ) | (36,015,268 | ) | (22,608,860 | ) | (261,068,281 | ) | ||||||||||||
Decrease in the current year |
267,167 | 72,123,397 | 993,056 | 17,255,175 | 15,629,259 | 106,268,054 | ||||||||||||||||||
Transfer to construction in progress |
| 19,129,591 | | 897,468 | | 20,027,059 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
31 December 2015 |
(143,920,692 | ) | (625,119,801 | ) | (7,718,351 | ) | (144,230,691 | ) | (113,372,889 | ) | (1,034,362,424 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Provision for impairment loss |
||||||||||||||||||||||||
31 December 2014 |
| (3,363,932 | ) | | | (1,023,466 | ) | (4,387,398 | ) | |||||||||||||||
Decrease in the current year |
| 195,392 | | | 270,289 | 465,681 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
31 December 2015 |
| (3,168,540 | ) | | | (753,177 | ) | (3,921,717 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Carrying amount |
||||||||||||||||||||||||
31 December 2015 |
662,530,504 | 949,981,957 | 3,485,612 | 112,975,736 | 49,171,836 | 1,778,145,645 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
In 2017, 2016 and 2015, the amount of depreciation expense charged to cost of sales were 313,444,037, 246,862,381 and 213,440,384, respectively.
In 2017, 2016 and 2015, the amount of depreciation expense charged to selling expenses were 25,648, 24,687 and 14,910, respectively.
In 2017, 2016 and 2015, the amount of depreciation expense charged to general and administrative expenses were 72,932,450, 63,736,201 and 47,612,987, respectively.
- 44 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(10) | Construction in progress |
Project name | 31 December 2016 |
Increase in the current |
Transfer to fixed assets |
Transfer to long-term prepaid |
Transfer to intangible assets |
Transfer to investment |
Decrease in year |
31 December 2017 |
||||||||||||||||||||||||
Building and improvements |
153,518,569 | 28,398,407 | (58,878,093 | ) | (11,276,429 | ) | | (42,529,486 | ) | | 69,232,968 | |||||||||||||||||||||
Machinery and equipment |
216,942,984 | 283,936,643 | (355,802,525 | ) | (14,982,963 | ) | | | (200,000 | ) | 129,894,139 | |||||||||||||||||||||
Other projects |
71,761,570 | 130,949,613 | (107,418,209 | ) | (3,537,361 | ) | (12,120,793 | ) | | | 79,634,820 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
442,223,123 | 443,284,663 | (522,098,827 | ) | (29,796,753 | ) | (12,120,793 | ) | (42,529,486 | ) | (200,000 | ) | 278,761,927 | ||||||||||||||||||||
Including: Capitalised borrowing cost |
| | | | | | | | ||||||||||||||||||||||||
Less: Provision for impairment of construction in progress |
| (200,000 | ) | | | | | 200,000 | | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
442,223,123 | 443,084,663 | (522,098,827 | ) | (29,796,753 | ) | (12,120,793 | ) | (42,529,486 | ) | | 278,761,927 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Project name | 31 December 2015 | Increase in the current year |
Transfer to fixed assets |
Transfer to long-term prepaid expenses |
31 December 2016 | |||||||||||||||
Building and improvements |
118,710,057 | 90,173,145 | (34,002,825 | ) | (21,361,808 | ) | 153,518,569 | |||||||||||||
Machinery and equipment |
167,382,588 | 278,237,083 | (223,872,862 | ) | (4,803,825 | ) | 216,942,984 | |||||||||||||
Other projects |
48,313,183 | 70,846,066 | (47,108,793 | ) | (288,886 | ) | 71,761,570 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
334,405,828 | 439,256,294 | (304,984,480 | ) | (26,454,519 | ) | 442,223,123 | ||||||||||||||
Including: Capitalised borrowing cost |
| | | | | |||||||||||||||
Less: Provision for impairment of construction in progress |
| | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
334,405,828 | 439,256,294 | (304,984,480 | ) | (26,454,519 | ) | 442,223,123 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
- 45 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(10) | Construction in progress (Contd) |
Project name | 31 December 2014 |
Increase in the current |
Transfer from fixed assets |
Transfer to fixed assets |
Transfer to long-term prepaid expenses |
Decrease in the current year |
31 December 2015 |
|||||||||||||||||||||
Building and improvements |
203,185,882 | 80,800,335 | | (141,831,535 | ) | (22,146,220 | ) | (1,298,405 | ) | 118,710,057 | ||||||||||||||||||
Machinery and equipment |
221,606,083 | 267,408,574 | 5,974,194 | (306,246,174 | ) | (10,538,111 | ) | (10,821,978 | ) | 167,382,588 | ||||||||||||||||||
Other projects |
60,230,565 | 89,964,495 | 2,312,121 | (103,779,442 | ) | (35,100 | ) | (379,456 | ) | 48,313,183 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
485,022,530 | 438,173,404 | 8,286,315 | (551,857,151 | ) | (32,719,431 | ) | (12,499,839 | ) | 334,405,828 | |||||||||||||||||||
Including: Capitalised borrowing cost |
| | | | | | | |||||||||||||||||||||
Less: Provision for impairment of construction in progress |
| | | | | | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
485,022,530 | 438,173,404 | 8,286,315 | (551,857,151 | ) | (32,719,431 | ) | (12,499,839 | ) | 334,405,828 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11) | Intangible assets |
Cost | 31 December 2016 |
Increase in the current year |
Amortisation charged in the current year |
31 December 2017 |
Accumulated amortisation |
|||||||||||||||||||
Land use rights |
399,694,892 | 263,218,172 | 93,105,000 | (22,657,180 | ) | 333,665,992 | (66,028,900 | ) | ||||||||||||||||
Patents |
495,000 | 298,889 | | (36,167 | ) | 262,722 | (232,278 | ) | ||||||||||||||||
Software |
160,476,467 | 31,061,697 | 17,673,825 | (22,272,212 | ) | 26,463,310 | (134,013,157 | ) | ||||||||||||||||
Customer relationship |
825,411,900 | | | | | (825,411,900 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
1,386,078,259 | 294,578,758 | 110,778,825 | (44,965,559 | ) | 360,392,024 | (1,025,686,235 | ) | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Less: Provision for impairment of intangible assets |
| | | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
294,578,758 | 110,778,825 | 360,392,024 | ||||||||||||||||||||||
|
|
|
|
|
|
- 46 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(11) | Intangible assets (Contd) |
Cost | 31 December 2015 |
Increase in the current year |
Decrease in the current year |
Amortisation charged in the current year |
31 December 2016 |
Accumulated amortisation |
||||||||||||||||||||||
Land use rights |
306,589,892 | 252,203,150 | 30,335,209 | (11,960,599 | ) | (7,359,588 | ) | 263,218,172 | (43,371,720 | ) | ||||||||||||||||||
Patents |
495,000 | 335,055 | | | (36,166 | ) | 298,889 | (196,111 | ) | |||||||||||||||||||
Software |
142,802,642 | 37,601,027 | 16,866,097 | | (23,405,427 | ) | 31,061,697 | (111,740,945 | ) | |||||||||||||||||||
Customer relationship |
825,411,900 | | | | | | (825,411,900 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1,275,299,434 | 290,139,232 | 47,201,306 | (11,960,599 | ) | (30,801,181 | ) | 294,578,758 | (980,720,676 | ) | |||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||
Less: Provision for impairment of intangible assets |
| | | | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
290,139,232 | 47,201,306 | (11,960,599 | ) | 294,578,758 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Cost | 31 December 2014 |
Increase in the current year |
Decrease in the current year |
Amortisation charged in the current year |
31 December 2015 |
Accumulated amortisation |
||||||||||||||||||||||
Land use rights |
289,794,984 | 258,532,985 | | | (6,329,835 | ) | 252,203,150 | (37,591,834 | ) | |||||||||||||||||||
Patents |
495,000 | 375,666 | | | (40,611 | ) | 335,055 | (159,945 | ) | |||||||||||||||||||
Software |
125,936,545 | 29,698,801 | 26,618,345 | (69,044 | ) | (18,647,075 | ) | 37,601,027 | (88,335,518 | ) | ||||||||||||||||||
Customer relationship |
825,411,900 | 73,663,625 | | | (73,663,625 | ) | | (825,411,900 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1,241,638,429 | 362,271,077 | 26,618,345 | (69,044 | ) | (98,681,146 | ) | 290,139,232 | (951,499,197 | ) | |||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||
Less: Provision for impairment of intangible assets |
| | | | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
362,271,077 | 26,618,345 | (69,044 | ) | 290,139,232 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
- 47 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(12) | Goodwill |
31 December 2016 |
Increase in the current year |
Decrease in the current year |
31 December 2017 |
|||||||||||||
Goodwill |
71,566,642 | | | 71,566,642 | ||||||||||||
Less: Provision for impairment |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
71,566,642 | | | 71,566,642 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
31 December 2015 |
Increase in the current year |
Decrease in the current year |
31 December 2016 |
|||||||||||||
Goodwill |
71,566,642 | | | 71,566,642 | ||||||||||||
Less: Provision for impairment |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
71,566,642 | | | 71,566,642 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
31 December 2014 |
Increase in the current year |
Decrease in the current year |
31 December 2015 |
|||||||||||||
Goodwill |
71,566,642 | | | 71,566,642 | ||||||||||||
Less: Provision for impairment |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
71,566,642 | | | 71,566,642 | |||||||||||||
|
|
|
|
|
|
|
|
The recoverable amount of asset groups and groups of asset groups is calculated using the estimated cash flows determined according to the three-year budget approved by management, together with the constant growth rates thereafter. The latter are set out in the following table.
The main assumptions applied in calculating discounted future cash flows are as follows:
Growth rate |
12 | % | ||
Gross margin |
18 | % | ||
Discount rate |
17 | % |
The growth rates mentioned above are the weighted average growth rates applied by management to extrapolate cash flows beyond the three-year period, and the growth rates are consistent with those estimated in the industry reports, and do not exceed the long-term average growth rates of each product. Management determines budgeted gross margin based on past experience and forecast on future market development. The discount rates used by management are the pre-tax interest rates that are able to reflect the risks specific to the related asset groups and groups of asset groups. The above assumptions are used to assess the recoverable amount of each asset group and group of asset groups within the corresponding operating segment.
(13) | Long-term prepaid expenses |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Improvements to fixed assets held under operating leases |
156,879,052 | 182,621,388 | 179,174,199 | |||||||||
Software |
| 147,650 | 584,334 | |||||||||
Others |
7,535,603 | 13,259,203 | 15,358,365 | |||||||||
|
|
|
|
|
|
|||||||
164,414,655 | 196,028,241 | 195,116,898 | ||||||||||
|
|
|
|
|
|
- 48 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(14) | Deferred tax assets and deferred tax liabilities |
(a) | Deferred tax assets |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||||||||||||||
Deferred tax assets |
Deductible temporary difference |
Deferred tax assets |
Deductible temporary difference |
Deferred tax assets |
Deductible temporary difference |
|||||||||||||||||||
Provisions for asset impairment |
20,633,379 | 111,836,540 | 19,481,023 | 113,203,687 | 9,560,137 | 55,463,501 | ||||||||||||||||||
Depreciation of fixed assets |
1,295,205 | 9,981,627 | 3,190,153 | 17,038,480 | 4,477,205 | 21,513,376 | ||||||||||||||||||
Amortisation of long-term prepaid expenses |
2,254,799 | 15,031,991 | | | | | ||||||||||||||||||
Accrued expenses and accounts payable |
1,053,271,240 | 5,348,617,949 | 778,137,801 | 3,919,738,157 | 502,335,531 | 2,486,895,028 | ||||||||||||||||||
Accrued payroll |
5,690,242 | 34,712,085 | 27,160,131 | 168,946,288 | 19,049,565 | 119,149,427 | ||||||||||||||||||
Deferred income |
1,962,772 | 7,851,089 | 1,770,896 | 7,083,583 | 1,719,295 | 7,402,636 | ||||||||||||||||||
Deductible losses |
5,296,194 | 21,184,773 | 1,639,537 | 6,558,148 | 8,975,147 | 35,900,585 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
1,090,403,831 | 5,549,216,054 | 831,379,541 | 4,232,568,343 | 546,116,880 | 2,726,324,553 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Including: |
|
|||||||||||||||||||||||
Expected to be recovered within one year (inclusive) |
1,085,568,850 | 827,442,771 | 538,515,249 | |||||||||||||||||||||
Expected to be recovered after one year |
4,834,981 | 3,936,770 | 7,601,631 | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
1,090,403,831 | 831,379,541 | 546,116,880 | ||||||||||||||||||||||
|
|
|
|
|
|
(b) | Deductible temporary differences and deductible losses that are not recognised as deferred tax assets are analysed as follows: |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Deductible temporary differences |
| 28,817,623 | | |||||||||
Deductible losses |
46,742,064 | 16,702,985 | 4,495,525 | |||||||||
|
|
|
|
|
|
|||||||
46,742,064 | 45,520,608 | 4,495,525 | ||||||||||
|
|
|
|
|
|
- 49 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(14) | Deferred tax assets and deferred tax liabilities (Contd) |
(c) | Deductible losses that are not recognised as deferred tax assets will be expired as follows: |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Within 1 year |
| | 4,495,525 | |||||||||
Between 1 to 2 years |
| | | |||||||||
Between 2 to 3 years |
| | | |||||||||
Between 3 to 4 years |
5,240,533 | | | |||||||||
Over 4 years |
41,501,531 | 16,702,985 | | |||||||||
|
|
|
|
|
|
|||||||
46,742,064 | 16,702,985 | 4,495,525 | ||||||||||
|
|
|
|
|
|
(d) | Deferred tax liabilities |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||||||||||||||
Deferred tax liabilities |
Taxable temporary difference |
Deferred tax liabilities |
Taxable temporary difference |
Deferred tax liabilities |
Taxable temporary difference |
|||||||||||||||||||
Depreciation of fixed assets |
| | | | 241,500 | 965,999 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Including: |
| |||||||||||||||||||||||
Expected to be recovered within one year (inclusive) |
| | 241,500 | |||||||||||||||||||||
Expected to be recovered after one year |
| | | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
| | 241,500 | ||||||||||||||||||||||
|
|
|
|
|
|
- 50 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(15) | Other non-current assets |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Prepayment for equipment |
64,819,673 | 39,899,868 | 50,533,076 | |||||||||
Rental deposits |
15,786,279 | 17,561,824 | 19,798,915 | |||||||||
Prepayment for land use right |
| | 29,455,609 | |||||||||
|
|
|
|
|
|
|||||||
80,605,952 | 57,461,692 | 99,787,600 | ||||||||||
|
|
|
|
|
|
(16) | Short-term borrowings |
Currency | 31 December 2017 | 31 December 2016 | 31 December 2015 | |||||||||||||
Unsecured |
RMB | 551,280,196 | 408,884,232 | 75,000,000 | ||||||||||||
|
|
|
|
|
|
As at 31 December 2017, 2016 and 2015, the weighted average interest rate of short-term borrowings is 4.40%, 4.38% and 6.02% per annum, respectively.
(17) | Notes payable |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Bank acceptance notes |
653,798,483 | 666,979,006 | 457,179,867 | |||||||||
|
|
|
|
|
|
As at 31 December 2017, 2016 and 2015, bank acceptance notes of 237,154,087, 325,076,774 and 228,819,635 were secured with bank deposits of 195,158,898, 289,907,686 and 198,561,011 (Note 7(1)).
As at 31 December 2017, 2016 and 2015, bank acceptance notes of 230,171,732, 152,544,483 and 221,724,500 were secured with notes receivable of 236,414,979, 152,544,483 and 222,124,500 (Note 7(2)).
(18) | Accounts payable |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Within 1 year |
12,681,476,125 | 9,748,879,362 | 8,346,912,180 | |||||||||
1 to 2 years |
89,826,663 | 85,196,150 | 108,949,525 | |||||||||
2 to 3 years |
25,658,428 | 22,907,089 | 9,008,700 | |||||||||
Over 3 years |
65,889 | 3,151,224 | 4,009,058 | |||||||||
|
|
|
|
|
|
|||||||
12,797,027,105 | 9,860,133,825 | 8,468,879,463 | ||||||||||
|
|
|
|
|
|
- 51 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(19) | Employee benefits payable |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Short-term employee benefits payable (a) |
831,474,529 | 771,593,541 | 606,859,311 | |||||||||
Defined contribution plans payable (b) |
15,622,695 | 21,367,180 | 14,293,502 | |||||||||
|
|
|
|
|
|
|||||||
847,097,224 | 792,960,721 | 621,152,813 | ||||||||||
|
|
|
|
|
|
(a) | Short-term employee benefits payable |
31 December 2016 |
Increase in the current year |
Decrease in the current year |
31 December 2017 |
|||||||||||||
Wages and salaries, bonus, allowances and subsidies |
411,675,946 | 1,489,660,689 | (1,486,063,018 | ) | 415,273,617 | |||||||||||
Staff welfare |
| 141,248,778 | (140,954,342 | ) | 294,436 | |||||||||||
Social security contributions |
9,463,619 | 84,333,102 | (81,620,023 | ) | 12,176,698 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Including: Medical insurance |
7,296,574 | 69,361,143 | (68,648,524 | ) | 8,009,193 | |||||||||||
Work injury insurance |
759,177 | 6,369,010 | (6,019,878 | ) | 1,108,309 | |||||||||||
Maternity insurance |
1,407,868 | 8,602,949 | (6,951,621 | ) | 3,059,196 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Housing funds |
11,402,998 | 83,767,222 | (81,903,063 | ) | 13,267,157 | |||||||||||
Labour union funds and employee education funds |
22,226,096 | 23,487,067 | (25,990,750 | ) | 19,722,413 | |||||||||||
Other short-term employee benefits |
709,841 | 1,202,100 | (1,081,323 | ) | 830,618 | |||||||||||
Staff welfare and incentive funds |
316,115,041 | 65,871,456 | (12,076,907 | ) | 369,909,590 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
771,593,541 | 1,889,570,414 | (1,829,689,426 | ) | 831,474,529 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
31 December 2015 |
Increase in the current year |
Decrease in the current year |
31 December 2016 |
|||||||||||||
Wages and salaries, bonus, allowances and subsidies |
295,220,972 | 1,431,467,945 | (1,315,012,971 | ) | 411,675,946 | |||||||||||
Staff welfare |
| 114,470,992 | (114,470,992 | ) | | |||||||||||
Social security contributions |
9,116,375 | 66,392,937 | (66,045,693 | ) | 9,463,619 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Including: Medical insurance |
4,891,372 | 58,270,190 | (55,864,988 | ) | 7,296,574 | |||||||||||
Work injury insurance |
665,975 | 5,273,526 | (5,180,324 | ) | 759,177 | |||||||||||
Maternity insurance |
3,559,028 | 2,849,221 | (5,000,381 | ) | 1,407,868 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Housing funds |
7,865,810 | 80,420,576 | (76,883,388 | ) | 11,402,998 | |||||||||||
Labour union funds and employee education funds |
17,081,193 | 29,525,357 | (24,380,454 | ) | 22,226,096 | |||||||||||
Other short-term employee benefits |
318,558 | 1,037,775 | (646,492 | ) | 709,841 | |||||||||||
Staff welfare and incentive funds |
277,256,403 | 48,743,593 | (9,884,955 | ) | 316,115,041 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
606,859,311 | 1,772,059,175 | (1,607,324,945 | ) | 771,593,541 | ||||||||||||
|
|
|
|
|
|
|
|
- 52 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(19) | Employee benefits payable (Contd) |
(a) | Short-term employee benefits payable (Contd) |
31 December 2014 |
Increase in the current year |
Decrease in the current year |
31 December 2015 |
|||||||||||||
Wages and salaries, bonus, allowances and subsidies |
260,619,279 | 1,132,303,027 | (1,097,701,334 | ) | 295,220,972 | |||||||||||
Staff welfare |
| 87,717,100 | (87,717,100 | ) | | |||||||||||
Social security contributions |
14,377,485 | 83,877,705 | (89,138,815 | ) | 9,116,375 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Including: Medical insurance |
7,372,363 | 71,839,820 | (74,320,811 | ) | 4,891,372 | |||||||||||
Work injury insurance |
2,255,176 | 4,984,132 | (6,573,333 | ) | 665,975 | |||||||||||
Maternity insurance |
4,749,946 | 7,053,753 | (8,244,671 | ) | 3,559,028 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Housing funds |
9,213,678 | 95,555,097 | (96,902,965 | ) | 7,865,810 | |||||||||||
Labour union funds and employee education funds |
16,874,496 | 25,619,638 | (25,412,941 | ) | 17,081,193 | |||||||||||
Other short-term employee benefits |
1,086,076 | 3,157,495 | (3,925,013 | ) | 318,558 | |||||||||||
Staff welfare and incentive funds |
236,466,741 | 45,146,630 | (4,356,968 | ) | 277,256,403 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
538,637,755 | 1,473,376,692 | (1,405,155,136 | ) | 606,859,311 | ||||||||||||
|
|
|
|
|
|
|
|
In accordance with the Circular on Accounting Treatment of Enterprises Following the Implementation of the Company Law (Cai Qi [2006]67) issued by the Ministry of Finance on 15 March 2006, if the board of directors determines to continue the accrual for the staff welfare and incentive fund, the Company should specify the purposes of the fund, and the conditions and procedures for using the fund. The fund should be managed as a liability.
(b) | Defined contribution plans payable |
2017 | ||||||||
Amount payable | Ending balance | |||||||
Basic pensions |
169,528,098 | 14,558,763 | ||||||
Unemployment insurance |
5,459,505 | 1,063,932 | ||||||
|
|
|
|
|||||
174,987,603 | 15,622,695 | |||||||
|
|
|
|
|||||
2016 | ||||||||
Amount payable | Ending balance | |||||||
Basic pensions |
147,378,646 | 19,608,691 | ||||||
Unemployment insurance |
7,715,280 | 1,758,489 | ||||||
|
|
|
|
|||||
155,093,926 | 21,367,180 | |||||||
|
|
|
|
|||||
2015 | ||||||||
Amount payable | Ending balance | |||||||
Basic pensions |
151,997,339 | 13,380,326 | ||||||
Unemployment insurance |
10,391,553 | 913,176 | ||||||
|
|
|
|
|||||
162,388,892 | 14,293,502 | |||||||
|
|
|
|
- 53 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(20) | Taxes payable |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Enterprise income tax payable |
416,057,834 | 439,098,114 | 302,092,879 | |||||||||
Unpaid VAT |
200,453,088 | 237,394,873 | 223,572,378 | |||||||||
Withholding individual income tax payable |
15,867,945 | 8,695,828 | 9,871,414 | |||||||||
Others |
24,243,999 | 24,057,989 | 24,484,878 | |||||||||
|
|
|
|
|
|
|||||||
656,622,866 | 709,246,804 | 560,021,549 | ||||||||||
|
|
|
|
|
|
(21) | Other payables |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Accrued expenses |
2,897,471,960 | 1,945,410,740 | 1,270,897,055 | |||||||||
Modules fee payables |
314,966,958 | 202,794,863 | 88,193,425 | |||||||||
Payables for purchase of long-term assets |
133,318,793 | 84,347,957 | 40,303,467 | |||||||||
Service fee payables |
63,833,732 | 50,534,097 | 62,195,223 | |||||||||
Transportation fee payables |
30,867,845 | 10,582,666 | 2,809,094 | |||||||||
Other payables paid-on-behalf of the Group by others |
18,811,831 | 18,096,164 | 33,294,050 | |||||||||
Others |
67,741,260 | 42,590,973 | 48,498,097 | |||||||||
|
|
|
|
|
|
|||||||
3,527,012,379 | 2,354,357,460 | 1,546,190,411 | ||||||||||
|
|
|
|
|
|
(22) | Long-term borrowings |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Unsecured |
4,500,000 | 13,505,000 | 18,903,000 | |||||||||
Less: Current portion of long-term borrowings |
(3,000,000 | ) | (5,398,000 | ) | (5,398,000 | ) | ||||||
|
|
|
|
|
|
|||||||
1,500,000 | 8,107,000 | 13,505,000 | ||||||||||
|
|
|
|
|
|
As at 31 December 2017, 2016 and 2015, the weighted average interest rate of long-term borrowings is 4.55%, 5.15% and 6.15% per annum, respectively.
(23) | Deferred income |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Government grants (a) |
9,117,415 | 9,995,949 | 7,402,636 | |||||||||
|
|
|
|
|
|
- 54 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(23) | Deferred income (Contd) |
(a) | Government grants |
31 December 2016 |
Increase in the current year |
Charged to other income |
31 December 2017 |
Asset related/ Income related |
||||||||||||||||
Enterprise Development Special Fund |
6,089,000 | | | 6,089,000 | Asset related | |||||||||||||||
Other asset-related subsidies |
3,906,949 | 1,164,730 | (2,153,264 | ) | 2,918,415 | Asset related | ||||||||||||||
Other income-related subsidies |
| 110,000 | | 110,000 | Income related | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
9,995,949 | 1,274,730 | (2,153,264 | ) | 9,117,415 | ||||||||||||||||
|
|
|
|
|
|
|
|
The government grants recognised in profit or loss or deducted against related expenses in the current year are set out as follows:
Government grants | Nature | Amount | Presentation items | |||||||
Information intelligence subsidies |
Fiscal subsidies (hi-technology subsidies) |
1,733,270 | Other income | |||||||
Other fiscal subsidies |
Fiscal subsidies | 419,994 | Other income | |||||||
|
|
|||||||||
2,153,264 | ||||||||||
|
|
- 55 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(23) | Deferred income (Contd) |
(a) | Government grants (Contd) |
31 December 2015 |
Increase in the current year |
Charged to non-operating income |
31 December 2016 |
Asset related/ Income related |
||||||||||||||||
Enterprise Development Special Fund |
6,089,000 | | | 6,089,000 | Asset related | |||||||||||||||
Other asset-related subsidies |
1,313,636 | 2,765,583 | (172,270 | ) | 3,906,949 | Asset related | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
7,402,636 | 2,765,583 | (172,270 | ) | 9,995,949 | ||||||||||||||||
|
|
|
|
|
|
|
|
The government grants recognised in profit or loss or deducted against related expenses in the current year are set out as follows:
Government grants | Nature | Amount | Presentation items | |||||||||
Information intelligence subsidies |
Fiscal subsidies (hi-technology subsidies) |
172,270 | Non-operating income | |||||||||
|
|
- 56 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(23) | Deferred income (Contd) |
(a) | Government grants (Contd) |
31 December 2014 |
Increase in the current year |
Charged to non-operating income |
31 December 2015 |
Asset related/ Income related |
||||||||||||||||
Enterprise Development Special Fund |
5,440,000 | 649,000 | | 6,089,000 | Asset related | |||||||||||||||
Other asset-related subsidies |
| 2,800,000 | (1,486,364 | ) | 1,313,636 | Asset related | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
5,440,000 | 3,449,000 | (1,486,364 | ) | 7,402,636 | ||||||||||||||||
|
|
|
|
|
|
|
|
The government grants recognised in profit or loss or deducted against related expenses in the current year are set out as follows:
Government grants | Nature | Amount | Presentation items | |||||||||
Information intelligence subsidies |
Fiscal subsidies (hi-technology subsidies) |
1,486,364 | Non-operating income | |||||||||
|
|
- 57 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(24) | Surplus reserve |
31 December 2016 |
Increase in the current year |
Decrease in the current year |
31 December 2017 |
|||||||||||||
Reserve Fund |
146,820,596 | 21,691,395 | | 168,511,991 | ||||||||||||
Enterprise Expansion Fund |
229,915,996 | 43,382,790 | | 273,298,786 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
376,736,592 | 65,074,185 | | 441,810,777 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
31 December 2015 |
Increase in the current year |
Decrease in the current year |
31 December 2016 |
|||||||||||||
Reserve Fund |
130,929,416 | 15,891,180 | | 146,820,596 | ||||||||||||
Enterprise Expansion Fund |
198,133,636 | 31,782,360 | | 229,915,996 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
329,063,052 | 47,673,540 | | 376,736,592 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
31 December 2014 |
Increase in the current year |
Decrease in the current year |
31 December 2015 |
|||||||||||||
Reserve Fund |
116,186,069 | 14,743,347 | | 130,929,416 | ||||||||||||
Enterprise Expansion Fund |
168,646,941 | 29,486,695 | | 198,133,636 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
284,833,010 | 44,230,042 | | 329,063,052 | |||||||||||||
|
|
|
|
|
|
|
|
In accordance with the Law of the PRC on Chinese Foreign Equity Joint Ventures and the Companys Articles of Association, the Company appropriated 21,691,395, 15,891,180 and 14,743,347 to Reserve Fund for the years of 2017, 2016 and 2015, respectively, and 43,382,790, 31,782,360 and 29,486,695 to the Enterprise Expansion Fund for the years of 2017, 2016 and 2015, respectively.
(25) | Undistributed profits |
In accordance with the resolution at the Board of Directors meeting dated on 8 May 2017, 5 May 2016, and 7 August 2015, the Company proposed a dividend in the amount of 1,493,770,914, 1,385,874,680 and 1,406,453,166 to the investors, respectively.
- 58 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(26) | Revenue and cost of sales |
2017 | 2016 | 2015 | ||||||||||||||||||||||
Revenue | Cost of sales | Revenue | Cost of sales | Revenue | Cost of sales | |||||||||||||||||||
Revenue from main operations |
||||||||||||||||||||||||
- sales of automotive spare parts |
31,247,431,443 | (26,011,033,680 | ) | 28,543,605,353 | (23,910,736,255 | ) | 25,946,688,824 | (21,576,248,882 | ) | |||||||||||||||
Revenue from other operations |
||||||||||||||||||||||||
- service income |
388,691,895 | (302,641,103 | ) | 191,903,654 | (81,143,480 | ) | 265,741,206 | (120,826,588 | ) | |||||||||||||||
- sales of raw materials |
359,516,400 | (195,735,293 | ) | 366,746,804 | (215,932,018 | ) | 332,415,663 | (307,126,311 | ) | |||||||||||||||
- others |
47,556,144 | (22,983,965 | ) | 20,245,367 | (7,571,679 | ) | 27,205,071 | (18,816,187 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
32,043,195,882 | (26,532,394,041 | ) | 29,122,501,178 | (24,215,383,432 | ) | 26,572,050,764 | (22,023,017,968 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(27) | Taxes and surcharges |
2017 | 2016 | 2015 | ||||||||||
City maintenance and construction tax |
81,994,619 | 69,269,617 | 59,994,242 | |||||||||
Educational surcharge |
80,752,122 | 62,249,763 | 53,004,452 | |||||||||
Others |
33,794,635 | 31,201,169 | 6,878,859 | |||||||||
|
|
|
|
|
|
|||||||
196,541,376 | 162,720,549 | 119,877,553 | ||||||||||
|
|
|
|
|
|
(28) | Financial income - net |
2017 | 2016 | 2015 | ||||||||||
Interest income |
86,808,732 | 67,827,500 | 68,066,033 | |||||||||
Interest costs - borrowings |
(20,952,425 | ) | (6,316,721 | ) | (7,057,701 | ) | ||||||
Charges for discounted notes receivable |
(8,902,309 | ) | (173,065 | ) | (92,465 | ) | ||||||
Exchange (losses)/gains - net |
(25,419,145 | ) | 4,911,656 | 2,633,550 | ||||||||
Others |
(2,407,704 | ) | (4,998,427 | ) | (4,450,537 | ) | ||||||
|
|
|
|
|
|
|||||||
29,127,149 | 61,250,943 | 59,098,880 | ||||||||||
|
|
|
|
|
|
- 59 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(29) | Expenses by nature |
The cost of sales, selling expenses, general and administrative expenses in the income statements are listed as follows by nature:
2017 | 2016 | 2015 | ||||||||||
Changes in inventories of finished goods and work in progress |
(44,851,383 | ) | 40,586,926 | (132,579,173 | ) | |||||||
Consumed raw materials and low value consumables, etc. |
24,184,797,504 | 22,059,980,339 | 20,489,628,165 | |||||||||
Employee benefits expenses |
1,998,686,561 | 1,878,409,508 | 1,590,618,954 | |||||||||
Research and development expenses |
506,250,624 | 391,857,460 | 266,918,928 | |||||||||
Depreciation and amortisation expenses |
496,272,154 | 391,254,028 | 398,139,629 | |||||||||
Rental expenses |
233,653,070 | 209,235,385 | 170,677,949 | |||||||||
Transportation and logistics fee |
221,398,652 | 181,107,054 | 181,461,700 | |||||||||
Utilities |
126,211,508 | 121,804,031 | 145,971,042 | |||||||||
Other expenses |
1,388,128,514 | 1,108,391,007 | 926,314,028 | |||||||||
|
|
|
|
|
|
|||||||
29,110,547,204 | 26,382,625,738 | 24,037,151,222 | ||||||||||
|
|
|
|
|
|
(30) | Asset impairment losses |
2017 | 2016 | 2015 | ||||||||||
Bad debts provision |
1,606,517 | 65,970,387 | 7,056,982 | |||||||||
Decline in/(Reversal of) the value of inventories |
1,139,340 | (2,235,672 | ) | 2,323,537 | ||||||||
Impairment of construction in progress |
200,000 | | | |||||||||
|
|
|
|
|
|
|||||||
2,945,857 | 63,734,715 | 9,380,519 | ||||||||||
|
|
|
|
|
|
(31) | Investment income |
2017 | 2016 | 2015 | ||||||||||
Share of net profit of investees under equity method |
78,876,545 | 54,019,531 | 40,459,106 | |||||||||
Gains on disposal of long-term equity Investments (a) |
212 | | 7,898,751 | |||||||||
|
|
|
|
|
|
|||||||
78,876,757 | 54,019,531 | 48,357,857 | ||||||||||
|
|
|
|
|
|
(a) | Gain on disposal of long-term equity investments in 2015 attributes to the disposal of 50% equity interest of Baoding Yanfeng Johnson Automotive Seating Co., Ltd. in 2015. |
(32) | Losses on disposals of assets |
2017 | 2016 | 2015 | ||||||||||
Losses on disposals of fixed assets, net |
2,524,116 | 18,381,606 | 2,992,507 | |||||||||
Others |
497,872 | | | |||||||||
|
|
|
|
|
|
|||||||
3,021,988 | 18,381,606 | 2,992,507 | ||||||||||
|
|
|
|
|
|
- 60 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(33) | Other income |
2017 | 2016 | 2015 | Asset related/ Income related |
|||||||||||||
Tax refund |
78,342,922 | | | Income related | ||||||||||||
Special fiscal subsidies |
47,135,626 | | | Income related | ||||||||||||
Other asset-related subsidies |
2,153,264 | | | Asset related | ||||||||||||
Other income-related subsidies |
1,476,359 | | | Income related | ||||||||||||
|
|
|
|
|
|
|||||||||||
129,108,171 | | | ||||||||||||||
|
|
|
|
|
|
(34) | Non-operating income and expenses |
(a) | Non-operating income |
2017 | 2016 | 2015 | ||||||||||
Government grant |
| 70,847,989 | 34,676,251 | |||||||||
Others |
2,346,311 | 1,679,072 | 9,466,186 | |||||||||
|
|
|
|
|
|
|||||||
2,346,311 | 72,527,061 | 44,142,437 | ||||||||||
|
|
|
|
|
|
(b) | Non-operating expenses |
2017 | 2016 | 2015 | ||||||||||
Others |
1,873,547 | 3,014,728 | 9,843,767 | |||||||||
|
|
|
|
|
|
(35) | Income tax expenses |
2017 | 2016 | 2015 | ||||||||||
Current income tax |
848,031,982 | 793,033,052 | 692,032,499 | |||||||||
Deferred income tax |
(259,024,290 | ) | (285,504,161 | ) | (228,642,864 | ) | ||||||
|
|
|
|
|
|
|||||||
589,007,692 | 507,528,891 | 463,389,635 | ||||||||||
|
|
|
|
|
|
- 61 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(35) | Income tax expenses (Contd) |
The reconciliation from income tax calculated based on the applicable tax rates and total profit presented in the consolidated financial statements to the income tax expenses is listed below:
2017 | 2016 | 2015 | ||||||||||
Total profit |
2,967,724,298 | 2,679,821,377 | 2,544,404,370 | |||||||||
|
|
|
|
|
|
|||||||
Income tax expenses calculated at applicable tax rates |
741,931,075 | 669,955,344 | 636,101,093 | |||||||||
Investment income under equity method |
(11,831,513 | ) | (8,102,930 | ) | (6,068,866 | ) | ||||||
Effect of favourable tax rates |
(146,106,657 | ) | (131,879,937 | ) | (146,627,863 | ) | ||||||
Additional deduction of research and development expenses |
(12,071,490 | ) | (6,179,545 | ) | (9,984,951 | ) | ||||||
Effect of change in the tax rates |
(628,102 | ) | 1,190,062 | 1,336,323 | ||||||||
Costs, expenses and losses not deductible for tax purposes |
7,450,807 | 3,035,020 | 17,797,833 | |||||||||
Deductible losses and deductible temporary differences for which no deferred income tax asset was recognised |
10,375,383 | 6,541,466 | | |||||||||
Reversal of previously recognised/(Utilisation of previously unrecognised) deductible losses and deductible temporary differences |
1,687,064 | 10,873,546 | (52,862,590 | ) | ||||||||
Prior year income tax reconciliation differences |
(1,798,875 | ) | (37,904,135 | ) | 23,698,656 | |||||||
|
|
|
|
|
|
|||||||
Income tax expenses |
589,007,692 | 507,528,891 | 463,389,635 | |||||||||
|
|
|
|
|
|
(36) | Other comprehensive income/(loss) |
(a) | Items of other comprehensive income/(loss) with the related income tax effect and the amount reclassified to profit or loss |
2017 | ||||||||||||
Amount before tax |
Income tax | Net amount after tax |
||||||||||
Other comprehensive income items which will be reclassified subsequently to profit or loss |
||||||||||||
Differences arising from translation of foreign currency financial statements |
430,299 | | 430,299 | |||||||||
Less: Reclassification of previous other comprehensive income to profit or loss |
| | | |||||||||
|
|
|
|
|
|
|||||||
430,299 | | 430,299 | ||||||||||
|
|
|
|
|
|
- 62 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(36) | Other comprehensive income/(loss) (Contd) |
(a) | Items of other comprehensive income/(loss) with the related income tax effect and the amount reclassified to profit or loss (Contd) |
2016 | ||||||||||||
Amount before tax |
Income tax | Net amount after tax |
||||||||||
Other comprehensive income items which will be reclassified subsequently to profit or loss Differences arising from translation of foreign currency financial statements |
1,290,996 | | 1,290,996 | |||||||||
Less: Reclassification of previous other comprehensive income to profit or loss |
| | | |||||||||
|
|
|
|
|
|
|||||||
1,290,996 | | 1,290,996 | ||||||||||
|
|
|
|
|
|
|||||||
2015 | ||||||||||||
Amount before tax |
Income tax | Net amount after tax |
||||||||||
Other comprehensive loss items which will be reclassified subsequently to profit or loss Differences arising from translation of foreign currency financial statements |
(275,031 | ) | | (275,031 | ) | |||||||
Less: Reclassification of previous other comprehensive income to profit or loss |
| | | |||||||||
|
|
|
|
|
|
|||||||
(275,031 | ) | | (275,031 | ) | ||||||||
|
|
|
|
|
|
(b) | Reconciliation of other comprehensive income/(loss) |
Attributable to equity owners of the Company |
Minority interests |
Total | ||||||||||||||
Differences arising from translation of foreign currency financial statements |
Sub-total | |||||||||||||||
31 December 2014 |
(32,010 | ) | (32,010 | ) | | (32,010 | ) | |||||||||
Movements for the year ended 31 December 2015 |
(275,031 | ) | (275,031 | ) | | (275,031 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
31 December 2015 |
(307,041 | ) | (307,041 | ) | | (307,041 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Movements for the year ended 31 December 2016 |
1,290,996 | 1,290,996 | | 1,290,996 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
31 December 2016 |
983,955 | 983,955 | | 983,955 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Movements for the year ended 31 December 2017 |
430,299 | 430,299 | | 430,299 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
31 December 2017 |
1,414,254 | 1,414,254 | | 1,414,254 | ||||||||||||
|
|
|
|
|
|
|
|
- 63 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
7 | Notes to the consolidated financial statements (Contd) |
(37) | Notes to the consolidated cash flow statements |
(a) | Reconciliation from net profit to cash flows from operating activities |
2017 | 2016 | 2015 | ||||||||||
Net profit |
2,378,716,606 | 2,172,292,486 | 2,081,014,735 | |||||||||
Add: Provisions for asset impairment |
2,945,857 | 63,734,715 | 9,380,519 | |||||||||
Depreciation of fixed assets |
386,402,135 | 310,623,269 | 261,068,281 | |||||||||
Amortisation of intangible assets |
44,965,559 | 30,801,181 | 98,681,146 | |||||||||
Amortisation of long-term prepaid expenses |
64,904,460 | 49,829,578 | 38,390,202 | |||||||||
Losses on disposal of fixed assets, intangible assets and other long-term assets |
3,021,988 | 18,381,606 | 2,992,507 | |||||||||
Financial expenses/(income) |
9,654,911 | (3,032,122 | ) | (4,983,235 | ) | |||||||
Investment income |
(78,876,757 | ) | (54,019,531 | ) | (48,357,857 | ) | ||||||
Increase in deferred tax assets |
(259,024,290 | ) | (285,262,661 | ) | (210,718,377 | ) | ||||||
Decrease in deferred tax liabilities |
| (241,500 | ) | (18,358,393 | ) | |||||||
Increase in inventories |
(98,436,250 | ) | (94,240,317 | ) | (65,755,469 | ) | ||||||
Increase in operating receivables |
(1,958,865,113 | ) | (871,936,802 | ) | (1,261,835,070 | ) | ||||||
Increase in operating payables |
3,969,397,557 | 2,621,421,678 | 2,116,111,288 | |||||||||
|
|
|
|
|
|
|||||||
Net cash flows from operating activities |
4,464,806,663 | 3,958,351,580 | 2,997,630,277 | |||||||||
|
|
|
|
|
|
(b) | Net increase in cash and cash equivalents |
2017 | 2016 | 2015 | ||||||||||
Cash and cash equivalents at the end of the year |
7,938,513,680 | 6,179,211,510 | 3,741,333,102 | |||||||||
Less: Cash and cash equivalents at the beginning of the year |
(6,179,211,510 | ) | (3,741,333,102 | ) | (2,998,757,581 | ) | ||||||
|
|
|
|
|
|
|||||||
Net increase in cash and cash equivalents |
1,759,302,170 | 2,437,878,408 | 742,575,521 | |||||||||
|
|
|
|
|
|
(c) | Cash and cash equivalents |
31 December 2017 |
31 December 2016 |
31 December 2015 |
||||||||||
Cash at bank and on hand (Note 7(1)) |
8,133,672,578 | 6,469,119,196 | 3,939,894,113 | |||||||||
Less: Other restricted cash balances |
(195,158,898 | ) | (289,907,686 | ) | (198,561,011 | ) | ||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents at the end of the year |
7,938,513,680 | 6,179,211,510 | 3,741,333,102 | |||||||||
|
|
|
|
|
|
- 64 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
8 | Related parties and related party transactions |
(1) | The parent company and subsidiaries |
The general information and other related information of the subsidiaries is set out in Note 6.
(a) | General information of the parent company |
Place of registration |
Nature of business | |||
Yanfeng Trim |
Shanghai, China | Development and production of plastic and decorating products used for automobiles, trucks and motorcycles, moulds, stamping parts, standard fasteners; sales of self-produced products, import and export of products and technologies, industrial investment; technical development, transfer, consultancy and service, and business information consultancy in the special area of auto parts; and self-owned house leasing. |
The parent company is Yanfeng Trim and the ultimate holding company is Shanghai Automotive Industry Corporation.
(b) | Registered capital and changes in registered capital of the parent company |
31 December 2016 |
Current year changes |
31 December 2017 |
||||||||||
RMB | RMB | |||||||||||
Yanfeng Trim |
1,078,947,853 | | 1,078,947,853 | |||||||||
|
|
|
|
|
|
|||||||
31 December 2015 |
Current year changes |
31 December 2016 |
||||||||||
RMB | RMB | |||||||||||
Yanfeng Trim |
1,078,947,853 | | 1,078,947,853 | |||||||||
|
|
|
|
|
|
|||||||
31 December 2014 |
Current year changes |
31 December 2015 |
||||||||||
RMB | RMB | |||||||||||
Yanfeng Trim |
1,078,947,853 | | 1,078,947,853 | |||||||||
|
|
|
|
|
|
(c) | The proportion of interests and voting rights in the Company held by the parent company |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||||||||||||||
Share holding |
Voting rights |
Share holding |
Voting rights |
Share holding |
Voting rights |
|||||||||||||||||||
Yanfeng Trim |
50.01 | % | 50.00 | % | 50.01 | % | 50.00 | % | 50.01 | % | 50.00 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
- 65 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
8 | Related parties and related party transactions (Contd) |
(2) | Related parties that do not control or are not controlled by the Company |
Relationship with the Group | ||
Dongfeng Adient Seating (ii) |
Associate | |
Wuhan Taiji (ii) |
Associate | |
CRH Shenyang (ii) |
Joint venture | |
Shanghai Yanfeng Jinqiao Automotive Trim Systems Co., Ltd. (iii) |
Subsidiary of the parent company | |
Yanfeng Automotive Trim Systems Liuzhou Co., Ltd. (iii) |
Subsidiary of the parent company | |
Yanfeng Automotive Trim Systems Guangzhou Co., Ltd. (iii) |
Subsidiary of the parent company | |
Shanghai Songjiang Chunshen Plastic Products Co., Ltd. (iii) |
Subsidiary of the parent company | |
Yanfeng Automotive Interior Systems (Shanghai) Co., Ltd. (iii) |
Subsidiary of the parent company | |
Yanfeng Hainachuan Automotive Trim Systems Co., Ltd. (iii) |
Subsidiary of the parent company | |
Yanfeng Visteon Automotive Electronics Co., Ltd. (iii) |
Associate of the parent company | |
Yanfeng Key (Shanghai) Automotive Safety Systems Co., Ltd. (iii) |
Joint venture of the parent company | |
Adient Yanfeng Seating Mechanism Co., Ltd. (formerly known as Yanfeng Johnson Controls Automotive Seating Mechanical Parts Co., Ltd.) (iii) |
Joint venture of the parent company | |
Shanghai Key Automotive Plastic Component Co., Ltd. (iii) |
Joint venture of the parent company | |
Dongfeng Automotive Trim Systems Co., Ltd. (iii) |
Joint venture of the parent company | |
SAIC General Motors Sales Co., Ltd. (iii) |
Subsidiary of the ultimate holding company | |
SAIC Finance Co., Ltd. (iii) |
Subsidiary of the ultimate holding company | |
SAIC Motor Corporation Limited (iii) |
Subsidiary of the ultimate holding company | |
Jiangsu ANJI Logistics Co., Ltd. (iii) |
Subsidiary of the ultimate holding company | |
Shanghai ANJI-CEVA Automotive Logistics Co., Ltd. (iii) |
Subsidiary of the ultimate holding company | |
Shanghai Sanhuan Spring Co., Ltd. (iii) |
Subsidiary of the ultimate holding company | |
Nanjing Automobile (Group) Corporation (iii) |
Subsidiary of the ultimate holding company | |
Donghua Automotive Industrial Co., Ltd. (iii) |
Subsidiary of the ultimate holding company | |
SAIC GM Wuling Co., Ltd. (iii) |
Subsidiary of the ultimate holding company | |
SAIC Activity Centre Co., Ltd. (iii) |
Subsidiary of the ultimate holding company | |
SAIC Maxus Vehicle Co., Ltd. (iii) |
Subsidiary of the ultimate holding company | |
SAIC Volkswagen Sales Co., Ltd. (iii) |
Subsidiary of the ultimate holding company | |
Shanghai Haitong International Automotive Logistics Co., Ltd. (iii) |
Subsidiary of the ultimate holding company | |
Chongqing Zhonghai Spring Co., Ltd. (iii) |
Subsidiary of the ultimate holding company | |
SAIC (Yantai) Industrial Co., Ltd. (iii) |
Subsidiary of the ultimate holding company | |
Shanghai International Automotive City Development Co., Ltd. (iii) |
Associate of the ultimate holding company | |
Shanghai Boze Auto Parts Co., Ltd. (iii) |
Associate of the ultimate holding company | |
Shanghai LEAR STEC Automotive Parts Co., Ltd. (iii) |
Associate of the ultimate holding company | |
SAIC Volkswagen Automotive Co., Ltd. (iii) |
Joint venture of the ultimate holding company | |
SAIC General Motors Co., Ltd (iii) |
Joint venture of the ultimate holding company | |
Shanghai GM (Shenyang) Norsom Motors Co., Ltd. (iii) |
Joint venture of the ultimate holding company | |
SAIC GM Dong Yue Motors Co., Ltd. (iii) |
Joint venture of the ultimate holding company | |
Shanghai TRW Automotive Safety Systems Co., Ltd. (iii) |
Joint venture of the ultimate holding company | |
Nanjing Iveco Automobile Co., Ltd. (iii) |
Joint venture of the ultimate holding company | |
Pan Asia Technical Automotive Center Co., Ltd. (iii) |
Joint venture of the ultimate holding company | |
Shanghai Koito Automotive Lamp Co., Ltd. (iii) |
Joint venture of the ultimate holding company |
- 66 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
8 | Related parties and related party transactions (Contd) |
(2) | Related parties that do not control or are not controlled by the Company (Contd) |
Relationship with the Group | ||
Adient plc (i) (iv) |
Ultimate holding company of Adient Asia | |
Johnson Controls Automotive Interior Investment Co., Limited (i) (iv) |
Subsidiary of Johnson Controls International plc | |
Anhui Adient Xinnangang Automobile Trim Co., Ltd. (iv) |
Subsidiary of Adient plc | |
Adient Bochum Ltd. & Co. KG (iv) |
Subsidiary of Adient plc | |
Adient Hungary Kft. (iv) |
Subsidiary of Adient plc | |
Kinryo Kogyo Co., Ltd. (iv) |
Subsidiary of Adient plc | |
Guangzhou Adient Automotive Seating Co., Ltd. (formerly known as Guangzhou Johnson Controls Automotive Interior Systems Co., Ltd.) (iv) |
Joint venture of Adient plc | |
Changsha Adient Auto Parts Co., Ltd. (formerly known as Changsha Guangzhou Automobile Johnson Controls Automotive Interior Systems Co., Ltd.) (iv) |
Joint venture of Adient plc | |
Other subsidiaries of Adient plc (iv) |
Subsidiary of Adient plc |
(i) | In 2016, Johnson Controls International plc, the former ultimate holding company of the Companys investor Adient Asia, spin off its automotive seating business and interiors business including Adient Asia and established an independent company Adient plc which was listed in NYSE on 31 October 2016. Accordingly, Johnson Controls International plc and its subsidiaries are no longer related parties of Adient plc and its subsidiaries. |
(ii) | The related parties are collectively referred to as Associates and Joint ventures. |
(iii) | The related parties are collectively referred to as SAIC, its subsidiaries, associates and joint ventures. |
(iv) | The related parties are collectively referred to as Adient and JCI, its subsidiaries and joint ventures. |
(3) | Related party transactions |
(a) | Pricing policies |
The Groups pricing on products sold to related parties, purchased from related parties, rendering of services and lease payments are negotiated by both parties and by making reference to the market price.
(b) | Purchase of goods |
2017 | 2016 | 2015 | ||||||||||
SAIC, its subsidiaries, associates and joint ventures |
6,956,914,161 | 6,498,294,883 | 6,040,834,033 | |||||||||
Associates and Joint ventures |
633,584,983 | 324,582,271 | 186,911,048 | |||||||||
Adient and JCI, its subsidiaries and joint ventures |
497,208,601 | 109,494,707 | 120,581,231 | |||||||||
|
|
|
|
|
|
|||||||
8,087,707,745 | 6,932,371,861 | 6,348,326,312 | ||||||||||
|
|
|
|
|
|
- 67 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
8 | Related parties and related party transactions (Contd) |
(3) | Related party transactions (Contd) |
(c) | Sale of goods |
2017 | 2016 | 2015 | ||||||||||
SAIC, its subsidiaries, associates and joint ventures |
19,826,281,099 | 18,688,195,185 | 16,507,946,364 | |||||||||
Adient and JCI, its subsidiaries and joint ventures |
803,593,799 | 629,760,415 | 630,717,292 | |||||||||
Associates and Joint ventures |
101,654,541 | 83,612,859 | 177,185,654 | |||||||||
|
|
|
|
|
|
|||||||
20,731,529,439 | 19,401,568,459 | 17,315,849,310 | ||||||||||
|
|
|
|
|
|
(d) | Technical service fee |
2017 | 2016 | 2015 | ||||||||||
SAIC, its subsidiaries, associates and joint ventures |
70,139,730 | | | |||||||||
Adient and JCI, its subsidiaries and joint ventures |
31,344,660 | 54,457,867 | 11,094,631 | |||||||||
|
|
|
|
|
|
|||||||
101,484,390 | 54,457,867 | 11,094,631 | ||||||||||
|
|
|
|
|
|
(e) | Increase/(Decrease) on entrusted loans and cash pool - net |
2017 | 2016 | 2015 | ||||||||||
SAIC, its subsidiaries, associates and joint ventures |
443,761,187 | (149,017,458 | ) | 300,000,000 | ||||||||
Associates and Joint ventures |
114,615,610 | (15,000,000 | ) | (35,646,471 | ) | |||||||
|
|
|
|
|
|
|||||||
558,376,797 | (164,017,458 | ) | 264,353,529 | |||||||||
|
|
|
|
|
|
(f) | Interest income from entrusted loans and cash pool |
2017 | 2016 | 2015 | ||||||||||
SAIC, its subsidiaries, associates and joint ventures |
9,636,399 | 8,782,308 | 11,903,333 | |||||||||
Associates and Joint ventures |
1,661,115 | 566,535 | 137,603 | |||||||||
|
|
|
|
|
|
|||||||
11,297,514 | 9,348,843 | 12,040,936 | ||||||||||
|
|
|
|
|
|
- 68 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
8 | Related parties and related party transactions (Contd) |
(4) | Receivables from and payables to related parties |
(a) | Accounts receivable |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
SAIC, its subsidiaries, associates and joint ventures |
6,773,882,081 | 3,573,100,002 | 3,535,400,441 | |||||||||
Adient and JCI, its subsidiaries and joint ventures |
313,213,838 | 160,191,396 | 254,272,885 | |||||||||
Associates and Joint ventures |
84,559,064 | 68,419,242 | 67,727,656 | |||||||||
|
|
|
|
|
|
|||||||
7,171,654,983 | 3,801,710,640 | 3,857,400,982 | ||||||||||
|
|
|
|
|
|
(b) | Notes receivable |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
SAIC, its subsidiaries, associates and joint ventures |
81,970,500 | 80,319,000 | 198,155,751 | |||||||||
Associates and Joint ventures |
| | 11,764,000 | |||||||||
|
|
|
|
|
|
|||||||
81,970,500 | 80,319,000 | 209,919,751 | ||||||||||
|
|
|
|
|
|
(c) | Advances to suppliers |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
SAIC, its subsidiaries, associates and joint ventures |
2,243,546 | 2,693,546 | 2,700,000 | |||||||||
|
|
|
|
|
|
(d) | Other receivables |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
SAIC, its subsidiaries, associates and joint ventures |
594,743,730 | 154,655,835 | 40,933,096 | |||||||||
Associates and Joint ventures |
99,614,554 | | | |||||||||
|
|
|
|
|
|
|||||||
694,358,284 | 154,655,835 | 40,933,096 | ||||||||||
|
|
|
|
|
|
(e) | Other current assets |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Associates and Joint ventures |
15,000,000 | | 15,000,000 | |||||||||
SAIC, its subsidiaries, associates and joint ventures |
| | 300,000,000 | |||||||||
|
|
|
|
|
|
|||||||
15,000,000 | | 315,000,000 | ||||||||||
|
|
|
|
|
|
(f) | Dividends receivable |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Associates and Joint ventures |
12,872,698 | 12,071,405 | 16,336,555 | |||||||||
|
|
|
|
|
|
- 69 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
8 | Related parties and related party transactions (Contd) |
(4) | Receivables from and payables to related parties (Contd) |
(g) | Cash at bank - deposit in SAIC, its subsidiaries, associates and joint ventures |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
SAIC, its subsidiaries, associates and joint ventures |
2,326,653,158 | 1,509,271,765 | 385,533,629 | |||||||||
|
|
|
|
|
|
(h) | Accounts payable |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
SAIC, its subsidiaries, associates and joint ventures |
4,243,653,215 | 1,633,962,197 | 1,355,522,304 | |||||||||
Associates and Joint ventures |
262,329,935 | 109,748,062 | 76,470,959 | |||||||||
Adient and JCI, its subsidiaries and joint ventures |
110,414,579 | 32,727,281 | 22,165,380 | |||||||||
|
|
|
|
|
|
|||||||
4,616,397,729 | 1,776,437,540 | 1,454,158,643 | ||||||||||
|
|
|
|
|
|
(i) | Notes payable |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
SAIC, its subsidiaries, associates and joint ventures |
41,630,000 | 89,010,000 | 21,133,578 | |||||||||
|
|
|
|
|
|
(j) | Other payables |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
SAIC, its subsidiaries, associates and joint ventures |
2,623,882 | 4,535,939 | | |||||||||
Adient and JCI, its subsidiaries and joint ventures |
1,918,956 | | | |||||||||
|
|
|
|
|
|
|||||||
4,542,838 | 4,535,939 | | ||||||||||
|
|
|
|
|
|
(5) | Commitments in relation to related parties |
The commitments in relation to related parties contracted for by the Group but not yet necessary to be recognised on the balance sheet as at the balance sheet date are as follows:
(a) | Leases |
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
- Lessee |
||||||||||||
SAIC, its subsidiaries, associates and joint ventures |
90,558,920 | 49,120,982 | 36,939,538 | |||||||||
|
|
|
|
|
|
- 70 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
9 | Commitments |
(1) | Capital commitments |
Capital expenditures contracted for by the Group but are not yet necessary to be recognised on the balance sheet as at the balance sheet date are as follows:
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Buildings, machinery and equipment |
108,938,923 | 117,327,496 | 16,596,507 | |||||||||
|
|
|
|
|
|
(2) | Operating lease commitments |
The future minimum lease payments due under the signed irrevocable operating leases contracts are summarised as follows:
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Within 1 year |
140,700,650 | 140,730,559 | 132,460,943 | |||||||||
1 and 2 years |
116,925,255 | 108,597,927 | 120,530,998 | |||||||||
2 and 3 years |
111,404,872 | 98,372,305 | 114,024,576 | |||||||||
Over 3 years |
343,124,106 | 294,351,515 | 361,243,744 | |||||||||
|
|
|
|
|
|
|||||||
712,154,883 | 642,052,306 | 728,260,261 | ||||||||||
|
|
|
|
|
|
10 | Financial risk |
The Groups activities expose it to a variety of financial risks: market risk (primarily including currency risk and interest rate risk), credit risk and liquidity risk. The Groups overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Groups financial performance.
(1) | Market risk |
(a) | Foreign exchange risk |
The Groups 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 US dollars. The Groups finance department at its headquarters is responsible for monitoring the amount of assets and liabilities, and transactions denominated in foreign currencies to minimise the foreign exchange risk. Therefore, the Group may consider entering into forward exchange contracts or currency swap contracts to mitigate the foreign exchange risk.
- 71 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
10 | Financial risk (Contd) |
(1) | Market risk (Contd) |
(a) | Foreign exchange risk (Contd) |
The financial assets and the financial liabilities denominated in foreign currencies, which are held by the subsidiaries of the Group, whose recording currencies are RMB, are expressed in RMB as at 31 December 2017, 2016 and 2015 as follows:
31 December 2017 | ||||||||||||
USD | Others | Total | ||||||||||
Financial assets denominated in foreign currency - |
||||||||||||
Cash at bank and on hand |
16,064,657 | 15,968,386 | 32,033,043 | |||||||||
Receivables |
156,009,983 | 214,098,674 | 370,108,657 | |||||||||
|
|
|
|
|
|
|||||||
172,074,640 | 230,067,060 | 402,141,700 | ||||||||||
|
|
|
|
|
|
|||||||
Financial liabilities denominated in foreign currency - |
||||||||||||
Payables |
38,254,620 | 129,818,845 | 168,073,465 | |||||||||
|
|
|
|
|
|
31 December 2016 | ||||||||||||
USD | Others | Total | ||||||||||
Financial assets denominated in foreign currency - |
||||||||||||
Cash at bank and on hand |
24,397,693 | 25,997,605 | 50,395,298 | |||||||||
Receivables |
158,187,444 | 259,685,501 | 417,872,945 | |||||||||
|
|
|
|
|
|
|||||||
182,585,137 | 285,683,106 | 468,268,243 | ||||||||||
|
|
|
|
|
|
|||||||
Financial liabilities denominated in foreign currency - |
||||||||||||
Payables |
56,922,242 | 116,890,582 | 173,812,824 | |||||||||
|
|
|
|
|
|
31 December 2015 | ||||||||||||
USD | Others | Total | ||||||||||
Financial assets denominated in foreign currency - |
||||||||||||
Cash at bank and on hand |
43,742,685 | 21,370,564 | 65,113,249 | |||||||||
Receivables |
173,800,678 | 250,854,243 | 424,654,921 | |||||||||
|
|
|
|
|
|
|||||||
217,543,363 | 272,224,807 | 489,768,170 | ||||||||||
|
|
|
|
|
|
|||||||
Financial liabilities denominated in foreign currency - |
||||||||||||
Payables |
48,819,672 | 121,748,654 | 170,568,326 | |||||||||
|
|
|
|
|
|
As at 31 December 2017, 2016 and 2015, if the RMB had strengthened/weakened by 10% against the USD while all other variables had been held constant, the Groups profit after tax for the years would have been approximately 10,705,602, 12,566,290 and 16,872,369 lower/higher for various financial assets and liabilities denominated in USD.
- 72 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
10 | Financial risk (Contd) |
(1) | Market risk (Contd) |
(b) | Interest rate risk |
The Groups interest rate risk mainly arises from related party entrusted loans and interest-bearing bank borrowings. Financial liabilities issued at floating rates expose the Group to cash flow interest rate risk. Financial liabilities issued at fixed rates expose the Group to fair value interest rate risk. The Group determines the relative proportions of its fixed rate and floating rate contracts depending on the prevailing market conditions. As at 31 December 2017, 2016 and 2015, the Groups long-term interest bearing borrowings were RMB-denominated with floating rates, amounting to 1,500,000, 8,107,000 and 13,505,000 (Note 7(22)).
The Groups finance department at its headquarters continuously monitors the interest rate position of the Group. Increases in interest rates will increase the cost of new borrowing and the interest expenses with respect to the Groups outstanding floating rate borrowings, and therefore could have a material adverse effect on the Groups financial performance. The Group makes adjustments timely with reference to the latest market conditions and may enter into interest rate swap agreements to mitigate its exposure to interest rate risk. During 2017, 2016 and 2015, the Group did not enter into any interest rate swap agreements.
As at 31 December 2017, 2016 and 2015, if interest rates on the floating rate borrowings had risen/fallen by 50 basis points while all other variables had been held constant, the Groups total profit would have decreased/increased by approximately 7,500, 40,535 and 67,525, respectively.
(2) | Credit risk |
Credit risk is managed on the grouping basis. Credit risk mainly arises from cash at bank, accounts receivable, other receivables and notes receivable etc.
The Group expects that there is no significant credit risk associated with cash at bank since they are deposited at state-owned banks, other medium or large size listed banks and related party. As at 31 December 2017, 2016 and 2015, cash deposited at state-owned banks, other medium or large size listed banks and related party were approximately 8,132 million, 6,468 million and 3,934 million, respectively. Management does not expect that there will be any significant losses from non-performance by these counterparties.
In addition, the Group has policies to limit the credit exposure on accounts receivable, other receivables and notes receivable. 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.
- 73 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
10 | Financial risk (Contd) |
(3) | Liquidity risk |
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the Groups finance department in its headquarters. The Groups finance department at its headquarters monitors rolling forecasts of the Groups short-term and long-term liquidity requirements to ensure it has sufficient cash that are readily convertible to cash to meet operational needs, while maintaining sufficient headroom on its undrawn committed borrowing facilities from major financial institution 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.
The financial liabilities of the Group at the balance sheet date are analysed by their maturity date below at their undiscounted contractual cash flow:
31 December 2017 | ||||||||||||||||
Within 1 year | 1 to 5 years | Over 5 years | Total | |||||||||||||
Short-term borrowings |
551,280,196 | | | 551,280,196 | ||||||||||||
Notes payable |
653,798,483 | | | 653,798,483 | ||||||||||||
Accounts payable |
12,797,027,105 | | | 12,797,027,105 | ||||||||||||
Interest payable |
13,353,335 | 6,125 | | 13,359,460 | ||||||||||||
Other payables |
3,527,012,379 | | | 3,527,012,379 | ||||||||||||
Long-term borrowings |
3,000,000 | 1,500,000 | | 4,500,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
17,545,471,498 | 1,506,125 | | 17,546,977,623 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
31 December 2016 | ||||||||||||||||
Within 1 year | 1 to 5 years | Over 5 years | Total | |||||||||||||
Short-term borrowings |
408,884,232 | | | 408,884,232 | ||||||||||||
Notes payable |
666,979,006 | | | 666,979,006 | ||||||||||||
Accounts payable |
9,860,133,825 | | | 9,860,133,825 | ||||||||||||
Interest payable |
12,410,831 | 231,970 | | 12,642,801 | ||||||||||||
Other payables |
2,354,357,460 | | | 2,354,357,460 | ||||||||||||
Long-term borrowings |
5,398,000 | 8,107,000 | | 13,505,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
13,308,163,354 | 8,338,970 | | 13,316,502,324 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
31 December 2015 | ||||||||||||||||
Within 1 year | 1 to 5 years | Over 5 years | Total | |||||||||||||
Short-term borrowings |
75,000,000 | | | 75,000,000 | ||||||||||||
Notes payable |
457,179,867 | | | 457,179,867 | ||||||||||||
Accounts payable |
8,468,879,463 | | | 8,468,879,463 | ||||||||||||
Interest payable |
4,678,717 | 900,386 | | 5,579,103 | ||||||||||||
Other payables |
275,293,356 | | | 275,293,356 | ||||||||||||
Long-term borrowings |
5,398,000 | 13,505,000 | | 18,903,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
9,286,429,403 | 14,405,386 | | 9,300,834,789 | |||||||||||||
|
|
|
|
|
|
|
|
- 74 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
11 | Fair value estimates |
(1) | Financial assets and liabilities not measured at fair value |
Financial assets and liabilities measured at amortised cost mainly include receivables, short-term borrowings, payables and long-term borrowings etc.
The carrying amount of the financial assets and liabilities not measured at fair value is a reasonable approximation of their fair value.
12 | Capital management |
The Groups capital management policies aim to safeguard the Groups ability to continue as a going concern in order to provide returns for investors and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to investors, refund capital to investors or sell assets to reduce debts.
The Groups total capital is calculated as owners equity as shown in the consolidated balance sheets. The Group is not subject to external mandatory capital requirements.
13 | Reconciliation to United States generally accepted accounting principles |
The financial statements have been prepared in accordance with Accounting Standards for Business Enterprises in the Peoples Republic of China (PRC GAAP), which differ in certain respects from accounting principles generally accepted in the United States of America (U.S. GAAP). The significant differences are described in the reconciliation tables below. Other differences do not have a significant effect on either net profit or owners equity. The effects of the significant adjustments to net profit for the years ended 31 December 2017, 2016 and 2015 which would be required if U.S. GAAP were to be applied instead of PRC GAAP are summarized as follows:
2017 | 2016 | 2015 | ||||||||||
Net profit under PRC GAAP |
2,378,716,606 | 2,172,292,486 | 2,081,014,735 | |||||||||
Adjustments: |
||||||||||||
Inventory impairment reversals (a) |
2,694,821 | (2,965,596 | ) | 618,444 | ||||||||
Staff Welfare and Incentive Fund (b) |
(12,076,907 | ) | (9,884,955 | ) | (4,356,968 | ) | ||||||
Tax effect of the reconciling items (c) |
(404,223 | ) | 444,839 | (92,767 | ) | |||||||
|
|
|
|
|
|
|||||||
Net profit under U.S. GAAP |
2,368,930,297 | 2,159,886,774 | 2,077,183,444 | |||||||||
|
|
|
|
|
|
- 75 -
YANFENG ADIENT SEATING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2017, 2016 AND 2015 (AMOUNTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2015 ARE NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN)
(All amounts in RMB Yuan unless otherwise stated)
13 | Reconciliation to United States generally accepted accounting principles (Contd) |
The effects of the significant adjustments to owners equity for the years ended 31 December 2017, 2016 and 2015 which would be required if U.S. GAAP were to be applied instead of PRC GAAP are summarized as follows:
31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||
Owners equity under PRC GAAP |
4,857,853,302 | 4,372,016,024 | 3,924,801,104 | |||||||||
Adjustments: |
||||||||||||
Inventory impairment reversals (a) |
(435,759 | ) | (3,130,580 | ) | 618,444 | |||||||
Staff Welfare and Incentive Fund (b) |
369,909,590 | 316,115,041 | 277,256,403 | |||||||||
Tax effect of the reconciling items (c) |
65,364 | 469,587 | (92,767 | ) | ||||||||
|
|
|
|
|
|
|||||||
Owners equity under U.S. GAAP |
5,227,392,497 | 4,685,470,072 | 4,202,583,184 | |||||||||
|
|
|
|
|
|
(a) | Inventory impairment reversals |
Under PRC GAAP, reversals of inventory impairment charges (limited to the amounts of the original impairment) are required for subsequent recoveries. Impairments and any subsequent reversals are included in a separate profit and loss line item - Asset impairment losses, which is outside of cost of goods sold. Under U.S. GAAP, reversals of impairments are prohibited, as a write-down of inventories to the lower of cost or market creates a new cost basis that subsequently cannot be reversed.
(b) | Staff Welfare and Incentive Fund |
In accordance with the Law of the PRC on Chinese-Foreign Equity Joint Ventures and the Companys Articles of Association, the Company appropriated the Staff Welfare and Incentive Fund of net profit after setting off accumulated losses of previous years and before profit distributions to the investors. The Staff Welfare and Incentive Fund is restricted to fund payments of special bonus to employees and for the collective welfare of employees. None of it is allowed to be transferred to the Company in terms of cash dividends, loans or advances, nor can it be distributed except under liquidation.
Under PRC GAAP, appropriation of the Staff Welfare and Incentive Fund is a liability in nature and accounted for as a transfer from retained earnings to Staff Welfare and Incentive Fund, a liability account. Subsequent payments is accounted for as a release of the Companys liability.
Under U.S. GAAP, appropriation to the Staff Welfare and Incentive Fund is accounted for as a transfer from retained earnings to the statutory reserves. Subsequent payment is accounted for as expenses or assets based on the usage of the payment, and proportionate retained earnings and the statutory reserves are reversed concurrently.
(c) | Tax effect of the reconciling items |
The applicable statutory tax rate used to calculate the tax effect of the reconciling items on the net profit reconciliation between PRC GAAP and U.S. GAAP for the year ended December 31, 2017, 2016 and 2015 was 15%.
- 76 -