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Exhibit 99.1

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS
SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS REPORT

FOR THE YEARS ENDED
31 DECEMBER 2016, 2015 AND 2014



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT
AUDITORS REPORT

FOR THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014



|                                                     |  |       
|---------------------------------------------------- |  | ------
|Contents                                             |  | Page  
|                                                     | 
|Independent Auditors Report                         |  | 1 - 2 
|                                                     | 
|Consolidated balance sheets                          |  | 1 - 2 
|                                                     | 
|Consolidated income statements                       |  | 3     
|                                                     | 
|Consolidated cash flow statements                    |  | 4     
|                                                     | 
|Consolidated statements of changes in owners equity |  | 5     
|                                                     | 
|Notes to the consolidated financial statements       |  | 6 - 70



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Independent Auditors Report

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. (formerly known as Shanghai Yanfeng Johnson
Controls Seating Co., Ltd.) and its subsidiaries, which comprise the consolidated balance sheets as of 31 December 2016 and 2014, and the related consolidated statements of income, changes in owners equity and cash flow for the
years then ended.

Managements 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 Peoples 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.

Auditors 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
Companys 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
Companys 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.



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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. (formerly known as Shanghai Yanfeng Johnson Controls Seating Co., Ltd.) and its subsidiaries as of 31 December 2016 and 2014, and the results of their operations and their cash flows for the years then ended in
accordance with the requirements of Accounting Standards for Business Enterprises in the Peoples Republic of China.

Other Matters

The accompanying consolidated balance sheet of Yanfeng Adient Seating Co., Ltd. (formerly known as Shanghai Yanfeng Johnson Controls Seating
Co., Ltd.) as of 31 December 2015, and the related consolidated statements of income, changes in owners equity and cash flow for the year 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 2015 financial statements to be audited and they are, therefore, not covered by this report.

Accounting Standards for Business Enterprises in the Peoples 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 14 to the consolidated financial statements.

/s/ PricewaterhouseCoopers Zhong Tian LLP

PricewaterhouseCoopers Zhong Tian LLP

Shanghai, the
Peoples Republic of China

20 June 2017



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

CONSOLIDATED BALANCE SHEETS AS AT 31 DECEMBER 2016, 2015 AND 2014

(AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|                             |  |      |          |  |                              |  |                |                                         |  |  |                              |  |  |  |                | 
|---------------------------- |  | ---- | -------- |  | ---------------------------- |  | -------------- | --------------------------------------- |  |  | ---------------------------- |  |  |  | -------------- | 
|ASSETS                       |  | Note |          |  | 31 December 2016Consolidated |  |                | 31 December 2015Consolidated(Unaudited) |  |  | 31 December 2014Consolidated | 
|Current assets               |  |      |          |  |                              |  |                |                                         |  |  |                              |  |  |  |                | 
|Cash at bank and on hand     |  |      | 7(1)     |  |                              |  | 6,469,119,196  |                                         |  |  | 3,939,894,113                |  |  |  | 3,165,627,901  | 
|Notes receivable             |  |      | 7(2)     |  |                              |  | 1,686,686,411  |                                         |  |  | 1,198,378,148                |  |  |  | 1,030,656,745  | 
|Accounts receivable          |  |      | 7(3(a))  |  |                              |  | 5,851,806,068  |                                         |  |  | 5,697,029,340                |  |  |  | 4,688,450,612  | 
|Advances to suppliers        |  |      | 7(4)     |  |                              |  | 120,306,449    |                                         |  |  | 130,127,043                  |  |  |  | 162,716,875    | 
|Interest receivable          |  |      |          |  |                              |  | 5,550,044      |                                         |  |  | 1,678,489                    |  |  |  | 394,637        | 
|Dividends receivable         |  |      |          |  |                              |  | 12,071,405     |                                         |  |  | 16,336,555                   |  |  |  |               | 
|Other receivables            |  |      | 7(3(b))  |  |                              |  | 315,785,308    |                                         |  |  | 228,573,927                  |  |  |  | 464,461,266    | 
|Inventories                  |  |      | 7(5)     |  |                              |  | 797,678,665    |                                         |  |  | 701,202,676                  |  |  |  | 638,115,225    | 
|Other current assets         |  |      | 7(6)     |  |                              |  | 160,712,360    |                                         |  |  | 352,709,670                  |  |  |  | 49,714,736     | 
|                             |  |      |          |  |                              |  |                |                                         |  |  |                              |  |  |  |                | 
|Total current assets         |  |      |          |  |                              |  | 15,419,715,906 |                                         |  |  | 12,265,929,961               |  |  |  | 10,200,137,997 | 
|                             |  |      |          |  |                              |  |                |                                         |  |  |                              |  |  |  |                | 
|Non-current assets           |  |      |          |  |                              |  |                |                                         |  |  |                              |  |  |  |                | 
|Long-term equity investments |  |      | 7(7)     |  |                              |  | 190,255,274    |                                         |  |  | 158,752,993                  |  |  |  | 76,331,842     | 
|Fixed assets                 |  |      | 7(8)     |  |                              |  | 1,719,813,378  |                                         |  |  | 1,778,145,645                |  |  |  | 1,537,142,169  | 
|Construction in progress     |  |      | 7(9)     |  |                              |  | 442,223,123    |                                         |  |  | 334,405,828                  |  |  |  | 485,022,530    | 
|Intangible assets            |  |      | 7(10)    |  |                              |  | 294,578,758    |                                         |  |  | 290,139,232                  |  |  |  | 362,271,077    | 
|Goodwill                     |  |      | 7(11)    |  |                              |  | 71,566,642     |                                         |  |  | 71,566,642                   |  |  |  | 71,566,642     | 
|Long-term prepaid expenses   |  |      | 7(12)    |  |                              |  | 196,028,241    |                                         |  |  | 195,116,898                  |  |  |  | 202,556,024    | 
|Deferred tax assets          |  |      | 7(13(a)) |  |                              |  | 831,379,541    |                                         |  |  | 546,116,880                  |  |  |  | 335,832,409    | 
|Other non-current assets     |  |      | 7(14)    |  |                              |  | 57,461,692     |                                         |  |  | 99,787,600                   |  |  |  | 53,009,636     | 
|                             |  |      |          |  |                              |  |                |                                         |  |  |                              |  |  |  |                | 
|Total non-current assets     |  |      |          |  |                              |  | 3,803,306,649  |                                         |  |  | 3,474,031,718                |  |  |  | 3,123,732,329  | 
|                             |  |      |          |  |                              |  |                |                                         |  |  |                              |  |  |  |                | 
|TOTAL ASSETS                 |  |      |          |  |                              |  | 19,223,022,555 |                                         |  |  | 15,739,961,679               |  |  |  | 13,323,870,326 | 
|                             |  |      |          |  |                              |  |                |                                         |  |  |                              |  |  |  |                | 



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

CONSOLIDATED BALANCE SHEETS AS AT 31 DECEMBER 2016, 2015 AND 2014 (CONTINUED)

(AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|                                                           |  |      |          |  |                              |  |                |                                         |  |  |                              |   |  |  |                |  
|---------------------------------------------------------- |  | ---- | -------- |  | ---------------------------- |  | -------------- | --------------------------------------- |  |  | ---------------------------- | - |  |  | -------------- | -
|LIABILITIES AND OWNERS EQUITY                             |  | Note |          |  | 31 December 2016Consolidated |  |                | 31 December 2015Consolidated(Unaudited) |  |  | 31 December 2014Consolidated |  
|Current liabilities                                        |  |      |          |  |                              |  |                |                                         |  |  |                              |   |  |  |                |  
|Short-term borrowings                                      |  |      | 7(15)    |  |                              |  | 408,884,232    |                                         |  |  | 75,000,000                   |   |  |  | 100,000,000    |  
|Notes payable                                              |  |      | 7(16)    |  |                              |  | 666,979,006    |                                         |  |  | 457,179,867                  |   |  |  | 441,557,489    |  
|Accounts payable                                           |  |      | 7(17)    |  |                              |  | 9,860,133,825  |                                         |  |  | 8,468,879,463                |   |  |  | 6,510,519,647  |  
|Advances from customers                                    |  |      |          |  |                              |  | 31,006,431     |                                         |  |  | 55,982,936                   |   |  |  | 50,804,021     |  
|Employee benefits payable                                  |  |      | 7(18)    |  |                              |  | 792,960,721    |                                         |  |  | 621,152,813                  |   |  |  | 548,588,559    |  
|Taxes payable                                              |  |      | 7(19)    |  |                              |  | 709,246,804    |                                         |  |  | 560,021,549                  |   |  |  | 407,355,491    |  
|Dividends payable                                          |  |      |          |  |                              |  |               |                                         |  |  |                             |   |  |  | 36,552,986     |  
|Other payables                                             |  |      | 7(20)    |  |                              |  | 2,354,357,460  |                                         |  |  | 1,546,190,411                |   |  |  | 1,652,806,503  |  
|Current portion of Long-term borrowings                    |  |      | 7(21)    |  |                              |  | 5,398,000      |                                         |  |  | 5,398,000                    |   |  |  | 5,398,000      |  
|                                                           |  |      |          |  |                              |  |                |                                         |  |  |                              |   |  |  |                |  
|Total current liabilities                                  |  |      |          |  |                              |  | 14,828,966,479 |                                         |  |  | 11,789,805,039               |   |  |  | 9,753,582,696  |  
|                                                           |  |      |          |  |                              |  |                |                                         |  |  |                              |   |  |  |                |  
|Non-current liabilities                                    |  |      |          |  |                              |  |                |                                         |  |  |                              |   |  |  |                |  
|Long-term borrowings                                       |  |      | 7(21)    |  |                              |  | 8,107,000      |                                         |  |  | 13,505,000                   |   |  |  | 18,903,000     |  
|Provisions                                                 |  |      |          |  |                              |  | 3,937,103      |                                         |  |  | 4,206,400                    |   |  |  | 4,037,176      |  
|Deferred income                                            |  |      |          |  |                              |  | 9,995,949      |                                         |  |  | 7,402,636                    |   |  |  | 5,440,000      |  
|Deferred tax liabilities                                   |  |      | 7(13(d)) |  |                              |  |               |                                         |  |  | 241,500                      |   |  |  | 18,599,893     |  
|                                                           |  |      |          |  |                              |  |                |                                         |  |  |                              |   |  |  |                |  
|Total non-current liabilities                              |  |      |          |  |                              |  | 22,040,052     |                                         |  |  | 25,355,536                   |   |  |  | 46,980,069     |  
|                                                           |  |      |          |  |                              |  |                |                                         |  |  |                              |   |  |  |                |  
|Total liabilities                                          |  |      |          |  |                              |  | 14,851,006,531 |                                         |  |  | 11,815,160,575               |   |  |  | 9,800,562,765  |  
|                                                           |  |      |          |  |                              |  |                |                                         |  |  |                              |   |  |  |                |  
|Owners equity                                             |  |      |          |  |                              |  |                |                                         |  |  |                              |   |  |  |                |  
|Paid-in capital                                            |  |      |          |  |                              |  | 439,853,380    |                                         |  |  | 439,853,380                  |   |  |  | 439,853,380    |  
|Other comprehensive income/(loss)                          |  |      | 7(32(b)) |  |                              |  | 983,955        |                                         |  |  | (307,041                     | ) |  |  | (32,010        | )
|Surplus reserve                                            |  |      | 7(22)    |  |                              |  | 376,736,592    |                                         |  |  | 329,063,052                  |   |  |  | 284,833,010    |  
|Undistributed profits                                      |  |      | 7(23)    |  |                              |  | 3,005,135,145  |                                         |  |  | 2,635,032,872                |   |  |  | 2,354,813,576  |  
|Total equity attributable to equity
holders of the Company |  |      |          |  |                              |  | 3,822,709,072  |                                         |  |  | 3,403,642,263                |   |  |  | 3,079,467,956  |  
|Minority interest                                          |  |      |          |  |                              |  | 549,306,952    |                                         |  |  | 521,158,841                  |   |  |  | 443,839,605    |  
|                                                           |  |      |          |  |                              |  |                |                                         |  |  |                              |   |  |  |                |  
|Total owners equity                                       |  |      |          |  |                              |  | 4,372,016,024  |                                         |  |  | 3,924,801,104                |   |  |  | 3,523,307,561  |  
|                                                           |  |      |          |  |                              |  |                |                                         |  |  |                              |   |  |  |                |  
|TOTAL LIABILITIES AND OWNERS EQUITY                       |  |      |          |  |                              |  | 19,223,022,555 |                                         |  |  | 15,739,961,679               |   |  |  | 13,323,870,326 |  
|                                                           |  |      |          |  |                              |  |                |                                         |  |  |                              |   |  |  |                |  

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



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014

(AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|                                              |  |                                                                                 |          |  |                  |  |                |                             |                 |   |                  |   |                 |   |                |  |                 |  
|--------------------------------------------- |  | ------------------------------------------------------------------------------- | -------- |  | ---------------- |  | -------------- | --------------------------- | --------------- | - | ---------------- | - | --------------- | - | -------------- |  | --------------- | -
|Item                                          |  | Note                                                                            |          |  | 2016Consolidated |  |                | 2015Consolidated(Unaudited) |                 |   | 2014Consolidated |  
|Revenue                                       |  |                                                                                 | 7(24)    |  |                  |  | 29,122,501,178 |                             |                 |   | 26,572,050,764   |   |                 |   | 24,485,129,870 | 
|Less:                                         |  | Cost of sales                                                                   |          |  | 7(24)(27)        |  |                |                             | (24,215,383,432 | ) |                  |   | (22,023,017,968 | ) |                |  | (20,287,565,383 | )
|                                              |  | Taxes and surcharges                                                            |          |  | 7(25)            |  |                |                             | (162,720,549    | ) |                  |   | (119,877,553    | ) |                |  | (85,497,846     | )
|                                              |  | Selling and distribution expenses                                               |          |  | 7(27)            |  |                |                             | (205,949,433    | ) |                  |   | (175,878,437    | ) |                |  | (174,129,174    | )
|                                              |  | General and administrative expenses                                             |          |  | 7(27)            |  |                |                             | (1,961,292,873  | ) |                  |   | (1,838,254,817  | ) |                |  | (1,834,888,595  | )
|Add:                                          |  | Financial incomenet                                                            |          |  | 7(26)            |  |                |                             | 61,250,943      |   |                  |   | 59,098,880      |   |                |  | 25,205,319      |  
|Less:                                         |  | Asset impairment losses                                                         |          |  | 7(28)            |  |                |                             | (63,734,715     | ) |                  |   | (9,380,519      | ) |                |  | (4,671,239      | )
|Add:                                          |  | Investment income                                                               |          |  | 7(29)            |  |                |                             | 54,019,531      |   |                  |   | 48,357,857      |   |                |  | 13,897,472      |  
|                                              |  | Including: Share of profit of associates and joint ventures                     |          |  |                  |  |                |                             | 54,019,531      |   |                  |   | 40,459,106      |   |                |  | 13,897,472      |  
|                                              |  |                                                                                 |          |  |                  |  |                |                             |                 |   |                  |   |                 |   |                |  |                 |  
|Operating profit                              |  |                                                                                 |          |  |                  |  | 2,628,690,650  |                             |                 |   | 2,513,098,207    |   |                 |   | 2,137,480,424  | 
|                                              |  |                                                                                 |          |  |                  |  |                |                             |                 |   |                  |   |                 |   |                |  |                 |  
|Add:                                          |  | Non-operating income                                                            |          |  | 7(30(a))         |  |                |                             | 76,222,382      |   |                  |   | 45,819,087      |   |                |  | 45,272,000      |  
|                                              |  | Including: Gains on disposal of non-current assets                              |          |  |                  |  |                |                             | 3,695,321       |   |                  |   | 1,676,650       |   |                |  | 13,714,861      |  
|Less:                                         |  | Non-operating expenses                                                          |          |  | 7(30(b))         |  |                |                             | (25,091,655     | ) |                  |   | (14,512,924     | ) |                |  | (14,525,030     | )
|                                              |  | Including: Losses on disposal of non-current assets                             |          |  |                  |  |                |                             | (22,076,927     | ) |                  |   | (4,669,157      | ) |                |  | (10,808,449     | )
|                                              |  |                                                                                 |          |  |                  |  |                |                             |                 |   |                  |   |                 |   |                |  |                 |  
|Total profit                                  |  |                                                                                 |          |  |                  |  | 2,679,821,377  |                             |                 |   | 2,544,404,370    |   |                 |   | 2,168,227,394  | 
|                                              |  |                                                                                 |          |  |                  |  |                |                             |                 |   |                  |   |                 |   |                |  |                 |  
|Less:                                         |  | Income tax expenses                                                             |          |  | 7(31)            |  |                |                             | (507,528,891    | ) |                  |   | (463,389,635    | ) |                |  | (388,801,668    | )
|                                              |  |                                                                                 |          |  |                  |  |                |                             |                 |   |                  |   |                 |   |                |  |                 |  
|Net profit                                    |  |                                                                                 |          |  |                  |  | 2,172,292,486  |                             |                 |   | 2,081,014,735    |   |                 |   | 1,779,425,726  | 
|                                              |  |                                                                                 |          |  |                  |  |                |                             |                 |   |                  |   |                 |   |                |  |                 |  
|                                              |  | Attributable to equity owners of the Company                                    |          |  |                  |  |                |                             | 1,851,677,150   |   |                  |   | 1,775,435,020   |   |                |  | 1,591,845,675   |  
|                                              |  | Minority interests                                                              |          |  |                  |  |                |                             | 320,615,336     |   |                  |   | 305,579,715     |   |                |  | 187,580,051     |  
|Other comprehensive income/(loss), net of tax |  |                                                                                 | 7(32(a)) |  |                  |  | 1,290,996      |                             |                 |   | (275,031         | ) |                 |   | 114,990        | 
|                                              |  | Translation differences on translation of foreign currency
financial statements |          |  |                  |  |                |                             | 1,290,996       |   |                  |   | (275,031        | ) |                |  | 114,990         |  
|                                              |  |                                                                                 |          |  |                  |  |                |                             |                 |   |                  |   |                 |   |                |  |                 |  
|Total comprehensive income                    |  |                                                                                 |          |  |                  |  | 2,173,583,482  |                             |                 |   | 2,080,739,704    |   |                 |   | 1,779,540,716  | 
|                                              |  |                                                                                 |          |  |                  |  |                |                             |                 |   |                  |   |                 |   |                |  |                 |  
|                                              |  | Attributable to equity owners of the Company                                    |          |  |                  |  |                |                             | 1,852,968,146   |   |                  |   | 1,775,159,989   |   |                |  | 1,591,960,665   |  
|                                              |  | Attributable to minority interests                                              |          |  |                  |  |                |                             | 320,615,336     |   |                  |   | 305,579,715     |   |                |  | 187,580,051     |  

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



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

CONSOLIDATED CASH FLOW STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014

(AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|--------------------------------------------------------------------------------------------- |  | ---- | -------- |  | ---------------- |  | --------------- | --------------------------- |  |  | ---------------- | - |  |  | --------------- | -
|Item                                                                                          |  | Note |          |  | 2016Consolidated |  |                 | 2015Consolidated(Unaudited) |  |  | 2014Consolidated |  
|Cash flows from operating activities                                                          |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Cash received from sales of goods or rendering of services                                    |  |      |          |  |                  |  | 34,235,663,913  |                             |  |  | 30,668,864,213   |   |  |  | 28,945,292,864  |  
|Refund of taxes and surcharges                                                                |  |      |          |  |                  |  | 69,554,852      |                             |  |  | 13,781,018       |   |  |  | 34,090,499      |  
|Cash received relating to other operating activities                                          |  |      |          |  |                  |  | 124,863,278     |                             |  |  | 74,044,037       |   |  |  | 43,456,279      |  
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Sub-total of cash inflows                                                                     |  |      |          |  |                  |  | 34,430,082,043  |                             |  |  | 30,756,689,268   |   |  |  | 29,022,839,642  |  
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Cash paid for goods and services                                                              |  |      |          |  |                  |  | (24,673,063,749 | )                           |  |  | (22,770,981,843  | ) |  |  | (22,077,186,618 | )
|Cash paid to and on behalf of employees                                                       |  |      |          |  |                  |  | (1,756,520,779  | )                           |  |  | (1,553,146,820   | ) |  |  | (1,402,532,782  | )
|Payments of taxes and surcharges                                                              |  |      |          |  |                  |  | (1,915,679,241  | )                           |  |  | (1,781,651,976   | ) |  |  | (1,434,245,412  | )
|Cash paid relating to other operating activities                                              |  |      |          |  |                  |  | (2,126,466,694  | )                           |  |  | (1,653,278,352   | ) |  |  | (1,441,512,528  | )
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Sub-total of cash outflows                                                                    |  |      |          |  |                  |  | (30,471,730,463 | )                           |  |  | (27,759,058,991  | ) |  |  | (26,355,477,340 | )
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Net cash flows from operating activities                                                      |  |      | 7(33(a)) |  |                  |  | 3,958,351,580   |                             |  |  | 2,997,630,277    |   |  |  | 2,667,362,302   |  
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Cash flows from investing activities                                                          |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Cash received from disposal of investments                                                    |  |      |          |  |                  |  | 475,667,980     |                             |  |  | 50,646,471       |   |  |  | 89,724,800      |  
|Cash received from returns on investments                                                     |  |      |          |  |                  |  | 35,749,485      |                             |  |  | 16,244,436       |   |  |  | 3,070,735       |  
|Net cash received from disposal of fixed assets, intangible assets and other long-term
assets |  |      |          |  |                  |  | 28,354,118      |                             |  |  | 211,692,165      |   |  |  | 191,304,314     |  
|Net cash received from disposal of subsidiaries and other business units                      |  |      |          |  |                  |  | 21,500,000      |                             |  |  | 13,510,827       |   |  |  |                |  
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Sub-total of cash inflows                                                                     |  |      |          |  |                  |  | 561,271,583     |                             |  |  | 292,093,899      |   |  |  | 284,099,849     |  
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Cash paid to acquire fixed assets, intangible assets and other long-term assets               |  |      |          |  |                  |  | (412,877,178    | )                           |  |  | (476,099,495     | ) |  |  | (767,637,244    | )
|Cash paid to acquire investments                                                              |  |      |          |  |                  |  | (311,650,522    | )                           |  |  | (315,000,000     | ) |  |  | (90,371,271     | )
|Net cash paid to acquire subsidiaries and other business units                                |  |      |          |  |                  |  |                |                             |  |  | (62,298,600      | ) |  |  |                |  
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Sub-total of cash outflows                                                                    |  |      |          |  |                  |  | (724,527,700    | )                           |  |  | (853,398,095     | ) |  |  | (858,008,515    | )
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Net cash flows used in investing activities                                                   |  |      |          |  |                  |  | (163,256,117    | )                           |  |  | (561,304,196     | ) |  |  | (573,908,666    | )
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Cash flows from financing activities                                                          |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Cash received from borrowings                                                                 |  |      |          |  |                  |  | 718,055,869     |                             |  |  | 75,855,064       |   |  |  | 400,000,000     |  
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Sub-total of cash inflows                                                                     |  |      |          |  |                  |  | 718,055,869     |                             |  |  | 75,855,064       |   |  |  | 400,000,000     |  
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Cash repayments of borrowings                                                                 |  |      |          |  |                  |  | (390,324,988    | )                           |  |  | (105,496,657     | ) |  |  | (601,999,500    | )
|Cash payments for distribution of profits or interest expenses                                |  |      |          |  |                  |  | (1,684,947,936  | )                           |  |  | (1,664,108,967   | ) |  |  | (1,567,648,168  | )
|Including: Cash payments for profits to minority shareholders of subsidiaries                 |  |      |          |  |                  |  | (291,750,289    | )                           |  |  | (250,598,100     | ) |  |  | (142,793,799    | )
|Cash payments relating to other financing activities                                          |  |      |          |  |                  |  |                |                             |  |  |                 |   |  |  | (87,504,313     | )
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Sub-total of cash outflows                                                                    |  |      |          |  |                  |  | (2,075,272,924  | )                           |  |  | (1,769,605,624   | ) |  |  | (2,257,151,981  | )
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Net cash flows used in financing activities                                                   |  |      |          |  |                  |  | (1,357,217,055  | )                           |  |  | (1,693,750,560   | ) |  |  | (1,857,151,981  | )
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Effect of foreign exchange rate changes on cash and cash equivalents                          |  |      |          |  |                  |  |                |                             |  |  |                 |   |  |  |                |  
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Net increase in cash and cash equivalents                                                     |  |      | 7(33(b)) |  |                  |  | 2,437,878,408   |                             |  |  | 742,575,521      |   |  |  | 236,301,655     |  
|Add: Cash and cash equivalents at beginning of year                                           |  |      |          |  |                  |  | 3,741,333,102   |                             |  |  | 2,998,757,581    |   |  |  | 2,762,455,926   |  
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  
|Cash and cash equivalents at end of year                                                      |  |      | 7(33(c)) |  |                  |  | 6,179,211,510   |                             |  |  | 3,741,333,102    |   |  |  | 2,998,757,581   |  
|                                                                                              |  |      |          |  |                  |  |                 |                             |  |  |                  |   |  |  |                 |  

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 -



---

##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS EQUITY FOR THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014

(AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|                                                                                |  |      |          |  |                                               |  |             |                |  |  |                 |   |  |                      |             |   |                                 |  |                |                   |  |  |                     |   |  |  |              |   |  |  |                |  
|------------------------------------------------------------------------------- |  | ---- | -------- |  | --------------------------------------------- |  | ----------- | -------------- |  |  | --------------- | - |  | -------------------- | ----------- | - | ------------------------------- |  | -------------- | ----------------- |  |  | ------------------- | - |  |  | ------------ | - |  |  | -------------- | -
|                                                                                |  |      |          |  | Attributable to equity holders of the Company |  |             |                |  |  |                 |  
|Item                                                                            |  | Note |          |  | Paid-incapital                                |  |             | Capitalsurplus |  |  | Surplusreserves |   |  | Undistributedprofits |             |   | Othercomprehensiveincome/(loss) |  |                | Minorityinterests |  |  | Total ownersequity |  
|Balance at 1 January 2014                                                       |  |      |          |  |                                               |  | 439,853,380 |                |  |  | 1,148,851       |   |  |                      | 242,136,006 |   |                                 |  | 2,266,775,854  |                   |  |  | (147,000            | ) |  |  | 542,008,809  |   |  |  | 3,491,775,900  |  
|Movements for the year ended 31 December 2014                                   |  |      |          |  |                                               |  |             |                |  |  |                 |   |  |                      |             |   |                                 |  |                |                   |  |  |                     |   |  |  |              |   |  |  |                |  
|Total Comprehensive income                                                      |  |      |          |  |                                               |  |             |                |  |  |                 |   |  |                      |             |   |                                 |  |                |                   |  |  |                     |   |  |  |              |   |  |  |                |  
|Net profit                                                                      |  |      |          |  |                                               |  |            |                |  |  |                |   |  |                      |            |   |                                 |  | 1,591,845,675  |                   |  |  |                    |   |  |  | 187,580,051  |   |  |  | 1,779,425,726  |  
|Other comprehensive income                                                      |  |      |          |  |                                               |  |             |                |  |  |                 |   |  |                      |             |   |                                 |  |                |                   |  |  |                     |   |  |  |              |   |  |  |                |  
|Translation differences on translation of foreign currency financial statements |  |      | 7(32(a)) |  |                                               |  |            |                |  |  |                |   |  |                      |            |   |                                 |  |               |                   |  |  | 114,990             |   |  |  |             |   |  |  | 114,990        |  
|Total Comprehensive income for the year                                         |  |      |          |  |                                               |  |            |                |  |  |                |   |  |                      |            |   |                                 |  | 1,591,845,675  |                   |  |  | 114,990             |   |  |  | 187,580,051  |   |  |  | 1,779,540,716  |  
|Capital contribution and withdrawal by owners                                   |  |      |          |  |                                               |  |             |                |  |  |                 |   |  |                      |             |   |                                 |  |                |                   |  |  |                     |   |  |  |              |   |  |  |                |  
|Disposal of subsidairies                                                        |  |      |          |  |                                               |  |            |                |  |  |                |   |  |                      |            |   |                                 |  |               |                   |  |  |                    |   |  |  | (34,123,771  | ) |  |  | (34,123,771    | )
|Transaction with minority interests                                             |  |      |          |  |                                               |  |            |                |  |  | (1,148,851      | ) |  |                      | (2,189,800  | ) |                                 |  |               |                   |  |  |                    |   |  |  | (80,951,299  | ) |  |  | (84,289,950    | )
|Profit distribution                                                             |  |      |          |  |                                               |  |             |                |  |  |                 |   |  |                      |             |   |                                 |  |                |                   |  |  |                     |   |  |  |              |   |  |  |                |  
|Appropriation to surplus reserves                                               |  |      |          |  |                                               |  |            |                |  |  |                |   |  |                      | 44,886,804  |   |                                 |  | (44,886,804    | )                 |  |  |                    |   |  |  |             |   |  |  |               |  
|Profit distribution to equity owners                                            |  |      |          |  |                                               |  |            |                |  |  |                |   |  |                      |            |   |                                 |  | (1,413,873,089 | )                 |  |  |                    |   |  |  | (170,346,785 | ) |  |  | (1,584,219,874 | )
|Appropriation to staff welfare and incentive funds                              |  |      |          |  |                                               |  |            |                |  |  |                |   |  |                      |            |   |                                 |  | (45,048,060    | )                 |  |  |                    |   |  |  | (327,400     | ) |  |  | (45,375,460    | )
|Balance at 31 December 2014                                                     |  |      |          |  |                                               |  | 439,853,380 |                |  |  |                |   |  |                      | 284,833,010 |   |                                 |  | 2,354,813,576  |                   |  |  | (32,010             | ) |  |  | 443,839,605  |   |  |  | 3,523,307,561  |  
|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 (Unaudited)                       |  |      |          |  |                                               |  |             |                |  |  |                 |   |  |                      |             |   |                                 |  |                |                   |  |  |                     |   |  |  |              |   |  |  |                |  
|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(32(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 subsidairies                                                        |  |      |          |  |                                               |  |            |                |  |  |                |   |  |                      |            |   |                                 |  |               |                   |  |  |                    |   |  |  | (13,601,251  | ) |  |  | (13,601,251    | )
|Profit distribution                                                             |  |      |          |  |                                               |  |             |                |  |  |                 |   |  |                      |             |   |                                 |  |                |                   |  |  |                     |   |  |  |              |   |  |  |                |  
|Appropriation to surplus reserves                                               |  |      |          |  |                                               |  |            |                |  |  |                |   |  |                      | 44,230,042  |   |                                 |  | (44,230,042    | )                 |  |  |                    |   |  |  |             |   |  |  |               |  
|Profit distribution to equity owners                                            |  |      |          |  |                                               |  |            |                |  |  |                |   |  |                      |            |   |                                 |  | (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 (Unaudited)                                         |  |      |          |  |                                               |  | 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(32(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                                               |  |      |          |  |                                               |  |            |                |  |  |                |   |  |                      | 47,673,540  |   |                                 |  | (47,673,540    | )                 |  |  |                    |   |  |  |             |   |  |  |               |  
|Profit distribution to equity owners                                            |  |      |          |  |                                               |  |            |                |  |  |                |   |  |                      |            |   |                                 |  | (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  |  

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 -



---

##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(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 Companys responsible person on 20 June 2017.



|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 14 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 2016, 2015 and 2014 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 2016, 2015 and 2014 and of its financial performance, cash flows and other information for the years then ended.



- 6 -



---

##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|4 | Summary of significant accounting policies and accounting estimates
|- | -------------------------------------------------------------------



|(1) | Accounting year
|--- | ---------------

The Companys accounting year starts on 1 January and ends on 31
December.



|(2) | Functional currency
|--- | -------------------

The functional currency of the Companys domestic subsidiaries is
Renminbi (RMB) and the functional currency of the Companys foreign subsidiaries is local currency.



|(3) | Foreign currency translation
|--- | ----------------------------



|(a) | Foreign currency transactions
|--- | -----------------------------

Foreign currency transactions are translated into RMB 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 RMB 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.



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|4 | Summary of significant accounting policies and accounting estimates (Contd)
|- | ----------------------------------------------------------------------------



|(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 Groups intention and ability to hold the financial assets. The financial assets held by the Group are mainly
receivables.



|(a) | Receivables
|--- | -----------

Receivables, including accounts receivable and other receivables, 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 assets 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.



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|4 | Summary of significant accounting policies and accounting estimates (Contd)
|- | ----------------------------------------------------------------------------



|(6) | Receivables
|--- | -----------

Receivables comprise accounts receivable and other receivables. 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.



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|4 | Summary of significant accounting policies and accounting estimates (Contd)
|- | ----------------------------------------------------------------------------



|(8) | Long-term equity investments
|--- | ----------------------------

Long-term equity investments comprise the Companys
long-term equity investments in its subsidiaries, and the Groups long-term equity investments in its 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 Groups share of the fair value of the investees identifiable net assets at the time of acquisition, the investment is initially measured
at that cost. Where the initial investment cost is less than the Groups share of the fair value of the investees identifiable net assets at the time of acquisition, the difference is included in profit or loss for the current period and
the cost of the long-term equity investment is adjusted upwards accordingly.

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 Groups net investment in investees are reduced to zero. However, if the Group has obligations for additional losses and the criteria with respect to recognition of provisions under the accounting standards on contingencies are
satisfied, the Group continues recognising the investment losses and the provisions. The Groups share of the changes in investees owners equity other than those arising from the net profit or loss, other comprehensive income and
profit distribution is recognised in capital surplus with a corresponding adjustment to the carrying amounts of the long-term equity investment. The carrying amount of the investment is reduced by the Groups share of the profit distribution or
cash dividends declared by the investees. Unrealised gains or losses on transactions between the Group and its investees are eliminated to the extent of the Groups equity interest in the investees, based on which the investment income or
losses are recognised. Any losses resulting from transactions between the Group and its investees, which are attributable to asset impairment losses are not eliminated.



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|4 | Summary of significant accounting policies and accounting estimates (Contd)
|- | ----------------------------------------------------------------------------



|(9) | Fixed assets
|--- | ------------

Fixed assets comprise buildings, machinery and equipment, motor vehicles,
computers and electronic equipment, tooling and office equipment. 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 usefullives |            |  | Estimatedresidual 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.



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|4 | Summary of significant accounting policies and accounting estimates (Contd)
|- | ----------------------------------------------------------------------------



|(10) | 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.



|(11) | 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.



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|4 | Summary of significant accounting policies and accounting estimates (Contd)
|- | ----------------------------------------------------------------------------



|(12) | 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.



|(13) | 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.



|(14) | 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.



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|4 | Summary of significant accounting policies and accounting estimates (Contd)
|- | ----------------------------------------------------------------------------



|(15) | 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 assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an
assets 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.



|(16) | 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.



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|4 | Summary of significant accounting policies and accounting estimates (Contd)
|- | ----------------------------------------------------------------------------



|(17) | 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.



|(18) | 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
Groups 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 Groups
employees participate in the basic pension plan set up and administered by local authorities of Ministry of Human Resource and Social Security. Monthly payments of premiums on the basic pensions are calculated according to the bases and percentage
prescribed by the relevant local authorities. When employees retire, the relevant local authorities are obliged to pay the basic pensions to them. The amounts based on the above calculations are recognised as liabilities in the accounting period in
which the service has been rendered by the employees, with a corresponding charge to the profit or loss for the current period or the cost of relevant assets.



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|4 | Summary of significant accounting policies and accounting estimates (Contd)
|- | ----------------------------------------------------------------------------



|(19) | 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.



|(20) | 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.

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.



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|4 | Summary of significant accounting policies and accounting estimates (Contd)
|- | ----------------------------------------------------------------------------



|(20) | Deferred tax assets and deferred tax liabilities (Contd)
|---- | ---------------------------------------------------------

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.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



|(21) | 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 Groups activities. Revenue is stated net of rebates, discounts and returns.

Revenue is recognised when its 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 Groups activities as described below:



|(a) | Sale of goods
|--- | -------------

Revenue is recognised when all the risks and rewards incidental to ownership of
goods have been substantially transferred to the buyers with no more continuous management or control over the goods, the economic benefits associated with the transaction will flow to the Group, and the relevant revenue and cost can be reliably
measured. Upon delivery of the products, the buyer has the right to sell 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.



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YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|4 | Summary of significant accounting policies and accounting estimates (Contd)
|- | ----------------------------------------------------------------------------



|(22) | Government grants
|---- | -----------------

Government grants refer to the monetary or
non-monetary assets obtained by the Group from the government, including tax return, financial subsidy and etc.

Government grants are recognised when the grants can be received and the Group can comply with all attached conditions. If a government grant
is a monetary asset, it will be measured at the amount received or receivable. If a government grant is a non-monetary asset, it will be measured at its fair value. If it is unable to obtain its fair value
reliably, it will be measured at its nominal amount.

Government grants related to assets refer to government grants which are obtained by
the Group for the purposes of purchase, construction or acquisition of the long-term assets. Government grants related to income refer to the government grants other than those related to assets.

Government grants related to assets will be recorded as deferred income and recognised evenly in profit or loss over the useful lives of the
related assets. However, the government grants measured at their nominal amounts will be directly recorded in profit and loss for the current period.

Government grants related to income will be recorded as deferred income and recognised in profit or loss in the period in which the related
expenses are recognised if the grants are intended to compensate for future expenses or losses, and otherwise recognised in profit or loss for the current period if the grants are used to compensate for expenses or losses that have been incurred.



|(23) | 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.



|(24) | Profit distribution
|---- | -------------------

Proposed profit distribution is recognised as a liability in the period in
which it is approved by the Board of Directors meeting.



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|4 | Summary of significant accounting policies and accounting estimates (Contd)
|- | ----------------------------------------------------------------------------



|(25) | 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.



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|4 | Summary of significant accounting policies and accounting estimates (Contd)
|- | ----------------------------------------------------------------------------



|(26) | 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(11)).

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 managements 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.



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(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 baseEnterprise income tax (a)

25% and 20%

Taxable incomeValue 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)Business tax

5%

Taxable turnover amountCity maintenance and construction tax

7%, 5% and 1%

The payment amount of VAT and business tax




|(a) | In 2016, 2015 and 2014, 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). 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, 2015 and 2014.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Shanghai Jixiang Automobile Roof Trimming Co., Ltd. (Shanghai Jixiang Automobile) is a domestic enterprise set up in Shanghai. It was certificated as the hi-technology
enterprise by Shanghai Science and Technology Committee in 2012 (valid for 3 years) and 2015 (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 2016, 2015 and 2014.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Guangzhou Dongfeng Johnson Controls Automotive Seating Co., Ltd. (Guangzhou Dongfeng Johnson Seating) is a foreign-invested production enterprise set up in coastal economic development zone. It was
certificated as the hi-technology enterprise by Guangzhou Province Science and Technology Agency 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, 2015 and 2014.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|5 | Taxation (Contd)
|- | -----------------



|(a) | In 2016, 2015 and 2014, the enterprise income tax rates applicable to the Company and its subsidiaries are as follows (Contd):
|--- | -------------------------------------------------------------------------------------------------------------------------------





| | (4) | Wuhu Johnson Controls Yunhe Automotive Seating Co., Ltd. (Wuhu Johnson Yunhe) 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 of Wuhu Johnson Yunhe is 15% in 2016.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Hefei Johnson Controls Yunhe Automotive Seating Co., Ltd. (Hefei Yunhe Johnson) 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 2012 (valid for 3 years) and 2015 (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 of Hefei Yunhe Johnson is 15% in 2016, 2015 and 2014.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Shenyang Yanfeng Johnson Controls Seating Co., Ltd. (Shenyang Yanfeng Johnson Seating) is a domestic enterprise set up in Shenyang. It was certificated as the
hi-technology enterprise by Liaoning Office of Science and Technology 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 of Shenyang Yanfeng Johnson Seating is 15% in 2016, 2015 and 2014.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (7) | Chongqing Yanfeng Adient Automotive Components Co., Ltd. (Chongqing Yanfeng Adient, formerly known as Chongqing Yanfeng Johnson Controls Automotive Components Co., Ltd.) is a foreign-invested
manufacturing enterprise set up in Chongqing. It was certificated as the hi-technology enterprise for the first time in July 2010, then 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 2016, 2015 and 2014.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|5 | Taxation (Contd)
|- | -----------------



|(a) | In 2016, 2015 and 2014, the enterprise income tax rates applicable to the Company and its subsidiaries are as follows (Contd):
|--- | -------------------------------------------------------------------------------------------------------------------------------



| | (8) | Daqing Yanfeng Adient Automotive Components Co., Ltd. (Daqing Yanfeng Adient, formerly known as Daqing Yanfeng Jonhnson Controls 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 of Daqing Yanfeng Adient is 15% in 2016.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (9) | Chongqing Yanfeng Adient Fengao Automotive Components Co., Ltd. (Chongqing Fengao, formerly known as Chongqing Yanfeng Johnson Controls Fengao Automotive Components Co., Ltd.) 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.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (10) | Chengdu Yanfeng Adient Automotive Components Co., Ltd. (Chengdu Yanfeng Adient, formerly known as Chengdu Yanfeng Johnson Controls Automotive Components Co., Ltd.) 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 2016.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (11) | The applicable income tax rate of other domestic entities is 25% in year 2016, 2015 and 2014. And for Yanfeng Johnson Controls (Thailand) Co., Ltd., the applicable income tax is 20% in year 2016, 2015 and 2014.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(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.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|6 | Subsidiaries
|- | ------------



|(1) | Significant subsidiaries included in the consolidation scope as at 31 December 2016 are as follows:
|--- | ---------------------------------------------------------------------------------------------------



Place ofregistration

Registered
capital

Nature of business and principal activities

% interest held bythe Company

% voting right heldby the CompanyDirectly


Indirectly

Directly


IndirectlyShenyang Yanfeng
Johnson Seating

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
%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
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
%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
%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
%




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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|6 | Subsidiaries (Contd)
|- | ---------------------



|(1) | Significant subsidiaries included in the consolidation scope as at 31 December 2016 are as follows (Contd):
|--- | ------------------------------------------------------------------------------------------------------------



Place ofregistration

Registered
capital

Nature of business and principal activities

% interest held by theCompany

% voting right held bythe CompanyDirectly

Indirectly

Directly

IndirectlyNingbo 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%Guangzhou
Donfeng Johnson
Seating

Guangzhou

USD 4,066,330

Design, production and processing of automotive seating assembly and relevant parts, sales of self-manufactured products.

50%



62.5%


(a) The newly established subsidiaries of the Group in 2016 included Haerbin Yanfeng Adient
Automotive Components Co., Ltd, Chengdu Yanfeng Adient and Yanfeng Johnson GmbH. The newly established subsidiaries of the Group in 2015 included Yanfeng Johnson Controls America Seating, Inc., Chongqing Fengao. The newly established subsidiaries of
the Group in 2014 included Nantong Yanfeng Johnson Controls Seating Components Co., Ltd., Langfang Yanfeng Johnson Controls Automotive Components Co., Ltd., Nanchang Yanfeng Johnson Controls Automotive Components Co., Ltd. and Hangzhou Yanfeng
Johnson Controls Automotive Components Co., Ltd..

(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..

(c) On 26 September 2014, the Company purchased 45%
equity interest of its subsidiary Shanghai Johnson Controls Automotive Metal Components Co., Ltd. from JCI. After the acquisition, Shanghai Johnson Controls Automotive Metal Components Co., Ltd. became a wholly-owned subsidiary of the Company (Note
8(a)).

(d) On 21 February 2014, the Companys former subsidiary Wuhan Johnson Controls Yunhe Automotive Seating Co., Ltd. was
dissolved and liquidated.



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|6 | Subsidiaries (Contd)
|- | ---------------------



|(2) | Information of non-wholly-owned subsidiaries
|--- | --------------------------------------------



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 2016320,615,336

291,750,289

549,306,952Total profit attributable to minority shareholders for the year ended
31 December 2015 (Unaudited)

Dividends paid to minority interests for the year ended
31 December 2015
(Unaudited)

Accumulated minority interests as at 31 December 2015
(Unaudited)305,579,715

214,045,114

521,158,841Total profit attributable to minority shareholders for the year ended
31 December 2014

Dividends paid to minority interests for the year ended
31 December 2014

Accumulated minority interests as at 31 December 2014187,580,051

170,346,785

444,472,126


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
2016Current assets

Non-current
assets

Total assets

Current
liabilities

Non-currentliabilities

Total liabilities6,094,461,705

1,056,890,738

7,151,352,443

5,884,416,455

18,133,103

5,902,549,55831 December 2015
(Unaudited)Current assets

Non-current assets

Total assets

Current liabilities

Non-currentliabilities

Total liabilities4,885,026,193

885,503,988

5,770,530,181

4,563,721,745

24,041,900

4,587,763,64531 December
2014Current assets

Non-current assets

Total assets

Current liabilities

Non-currentliabilities

Total liabilities4,424,732,193

835,075,697

5,259,807,890

4,196,754,935

33,892,988

4,230,647,923




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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|6 | Subsidiaries (Contd)
|- | ---------------------



|(2) | Information of non-wholly-owned subsidiaries (Contd)
|--- | -----------------------------------------------------



2016Revenue

Net profit

Total comprehensive
income

Cash flows fromoperating activities10,755,375,494

678,043,346

678,043,346

1,156,481,6632015
(Unaudited)Revenue

Net profit

Total comprehensive
income

Cash flows from operatingactivities10,509,628,494

647,904,303

647,904,303

224,033,3642014Revenue

Net profit

Total comprehensive
income

Cash flows fromoperating activities9,535,246,058

415,106,959

415,106,959

781,707,192




|7 | Notes to the consolidated financial statements
|- | ----------------------------------------------



|(1) | Cash at bank and on hand
|--- | ------------------------



31 December 2016


31 December 2015
(Unaudited)


31 December 2014Cash on hand


21,513



26,270



43,942Cash at bank


6,179,189,997



3,741,306,832



2,998,713,639Other cash balances (a)


289,907,686



198,561,011



166,870,3206,469,119,196



3,939,894,113



3,165,627,901


(a) As at 31 December 2016, 2015 and 2014, 289,907,686, 198,561,011 and 166,719,551 is pledged as guarantee for the
Group to issue notes payable of 325,076,774, 228,819,635 and 235,486,021 (Note 7(16)).

(2) Notes receivable



31 December 2016


31 December 2015
(Unaudited)


31 December 2014Bank acceptance notes


1,686,686,411



1,198,378,148



1,030,656,745


As at 31 December 2016, 2015 and 2014, notes receivable with amount of 152,544,483, 222,124,500 and
204,357,084 is pledged as guarantee for the Group to issue notes payable of 152,544,483, 221,724,500 and 206,071,468 (Note 7(16)).



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(3) | Accounts receivable and other receivables
|--- | -----------------------------------------



|(a) | Accounts receivable
|--- | -------------------



31 December2015
(Unaudited)








31 December2016Accounts receivable


5,713,997,765











5,932,536,523Increase in
the currentyear


Decrease in
the currentyearLess: Provision for bad debts


(16,968,425
)


(63,787,666
)


25,636



(80,730,455
)5,697,029,340











5,851,806,068




31 December2014








31 December2015
(Unaudited)Accounts receivable


4,698,378,707











5,713,997,765Increase in
the currentyear


Decrease in
the currentyearLess: Provision for bad debts


(9,928,095
)


(7,056,982
)


16,652



(16,968,425
)4,688,450,612











5,697,029,340




31 December2013








31 December2014Accounts receivable


4,508,391,003











4,698,378,707Increase in
the currentyear


Decrease in
the currentyearLess: Provision for bad debts


(9,732,869
)


(713,560
)


518,334



(9,928,095
)4,498,658,134











4,688,450,612




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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(3) | Accounts receivable and other receivables (Contd)
|--- | --------------------------------------------------



|(a) | Accounts receivable (Contd)
|--- | ----------------------------



The aging of accounts receivable and related provisions for bad debts are analysed below:



|              |  |                  |               |  |                             |  |        |                        |  |  |             |   |  |                   |               |  |                        |  |        |        |  |  |                   |   |  |                        |               |  |  |  |        |   |  |  |            |  
|------------- |  | ---------------- | ------------- |  | --------------------------- |  | ------ | ---------------------- |  |  | ----------- | - |  | ----------------- | ------------- |  | ---------------------- |  | ------ | ------ |  |  | ----------------- | - |  | ---------------------- | ------------- |  |  |  | ------ | - |  |  | ---------- | -
|              |  | 31 December 2016 |               |  | 31 December 2015(Unaudited) |  |        | 31 December 2014       | 
|              |  | Amount           |               |  | % of totalbalance           |  |        | Provision forbad debts |  |  | Amount      |   |  | % of totalbalance |               |  | Provision forbad debts |  |        | Amount |  |  | % of totalbalance |   |  | Provision forbad debts |              
|Within 1 year |  |                  | 5,817,926,740 |  |                             |  | 98.06  | %                      |  |  | (19,287,472 | ) |  |                   | 5,442,373,758 |  |                        |  | 95.25  | %      |  |  | (2,415,833        | ) |  |                        | 4,658,158,997 |  |  |  | 99.14  | % |  |  | (806,662   | )
|1 to 2 years  |  |                  | 28,484,340    |  |                             |  | 0.48   | %                      |  |  | (8,404,214  | ) |  |                   | 244,636,126   |  |                        |  | 4.28   | %      |  |  | (3,379,236        | ) |  |                        | 32,565,341    |  |  |  | 0.69   | % |  |  | (3,305,603 | )
|2 to 3 years  |  |                  | 66,184,420    |  |                             |  | 1.12   | %                      |  |  | (33,097,746 | ) |  |                   | 19,388,759    |  |                        |  | 0.34   | %      |  |  | (3,784,961        | ) |  |                        | 2,220,905     |  |  |  | 0.05   | % |  |  | (463,760   | )
|Over 3 years  |  |                  | 19,941,023    |  |                             |  | 0.34   | %                      |  |  | (19,941,023 | ) |  |                   | 7,599,122     |  |                        |  | 0.13   | %      |  |  | (7,388,395        | ) |  |                        | 5,433,464     |  |  |  | 0.12   | % |  |  | (5,352,070 | )
|              |  |                  |               |  |                             |  |        |                        |  |  |             |   |  |                   |               |  |                        |  |        |        |  |  |                   |   |  |                        |               |  |  |  |        |   |  |  |            |  
|              |  |                  | 5,932,536,523 |  |                             |  | 100.00 | %                      |  |  | (80,730,455 | ) |  |                   | 5,713,997,765 |  |                        |  | 100.00 | %      |  |  | (16,968,425       | ) |  |                        | 4,698,378,707 |  |  |  | 100.00 | % |  |  | (9,928,095 | )
|              |  |                  |               |  |                             |  |        |                        |  |  |             |   |  |                   |               |  |                        |  |        |        |  |  |                   |   |  |                        |               |  |  |  |        |   |  |  |            |  



- 29 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(3) | Accounts receivable and other receivables (Contd)
|--- | --------------------------------------------------



|(b) | Other receivables
|--- | -----------------



31 December2015
(Unaudited)








31 December2016Related party cash pool lending














150,982,542Receivables for modules paid-on- behalf of others



147,645,565











102,700,877Deposits


50,064,467











53,632,667Receivables from sales of fixed assets


4,226











653,120Receivables from equity transfer


21,500,000











Others


10,305,418











10,944,572229,519,676











318,913,778Increase in
the current year


Decrease in
the current yearLess: Provision for bad debts


(945,749
)


(2,182,721
)






(3,128,470
)228,573,927











315,785,308




31 December2014








31 December2015
(Unaudited)Receivables for modules paid-on- behalf of others



200,755,931











147,645,565Deposits


32,193,079











50,064,467Receivables from equity transfer














21,500,000Receivables from sales of fixed assets


160,032,610











4,226Related party cash pool lending


50,646,471











Others


21,779,364











10,305,418465,407,455











229,519,676Increase in
the current year


Decrease in
the current yearLess: Provision for bad debts


(946,189
)






440



(945,749
)464,461,266











228,573,927




- 30 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(3) | Accounts receivable and other receivables (Contd)
|--- | --------------------------------------------------



|(b) | Other receivables (Contd)
|--- | --------------------------



31 December2013








31 December2014Receivables for modules paid-on- behalf of others



81,666,069











200,755,931Receivables from sales of fixed assets


160,193,792











160,032,610Related party cash pool lending














50,646,471Deposits


50,363,255











32,193,079Receivables from equity transfer


30,909,408











Others


45,402,205











21,779,364368,534,729











465,407,455Increase in
the current year


Decrease in
the current yearLess: Provision for bad debts


(934,051
)


(12,138
)






(946,189
)367,600,678











464,461,266




- 31 -



---

##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(3) | Accounts receivable and other receivables (Contd)
|--- | --------------------------------------------------



|(b) | Other receivables (Contd)
|--- | --------------------------



Other receivables and related provisions for bad debts are analysed below:



31 December 2016


31 December 2015(Unaudited)


31 December 2014Amount


% of totalbalance


Provisionfor baddebts


Amount


% of totalbalance


Provisionfor baddebts


Amount


% of totalbalance


Provisionfor baddebtsWithin 1 year


254,354,215



79.76
%


(2,194,859
)


196,262,868



85.51
%






288,793,103



62.05
%


(12,138
)1 to 2 years


42,589,819



13.35
%






24,176,246



10.53
%


(12,138
)


171,149,988



36.77
%


(440
)2 to 3 years


15,068,384



4.72
%






4,745,088



2.07
%






3,385,685



0.73
%


Over 3 years


6,901,360



2.17
%


(933,611
)


4,335,474



1.89
%


(933,611
)


2,078,679



0.45
%


(933,611
)318,913,778



100.00
%


(3,128,470
)


229,519,676



100.00
%


(945,749
)


465,407,455



100.00
%


(946,189
)




|(4) | Advances to suppliers
|--- | ---------------------

The ageing of advances to suppliers is analysed as follows:



31 December 2016


31 December 2015(Unaudited)


31 December 2014Amount


% of totalbalance


Amount


% of totalbalance


Amount


% of totalbalanceWithin 1 year


115,464,553



95.98
%


125,531,008



96.47
%


151,640,917



93.19
%1 to 2 years


1,769,829



1.47
%


2,941,987



2.26
%


8,693,203



5.34
%2 to 3 years


1,516,302



1.26
%


132,283



0.10
%


2,382,755



1.47
%Over 3 years


1,555,765



1.29
%


1,521,765



1.17
%






120,306,449



100.00
%


130,127,043



100.00
%


162,716,875



100.00
%




- 32 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(5) | Inventories
|--- | -----------



|                                                         |  |                             |             |   |  |  |                                    |    |  |  |                             |   |  |  |             |  
|-------------------------------------------------------- |  | --------------------------- | ----------- | - |  |  | ---------------------------------- | -- |  |  | --------------------------- | - |  |  | ----------- | -
|                                                         |  | 31 December2015
(Unaudited) |             |   |  |  |                                    |    |  |  | 31 December2016             |  
|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 inthe currentyear         |    |  |  | Write-off inthe currentyear |   |  |  |             |  
|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 |  
|                                                         |  |                             |             |   |  |  |                                    |    |  |  |                             |   |  |  |             |  
|                                                         |  |                             |             |  
|                                                         |  | 31 December2014             |             |   |  |  |                                    |    |  |  | 31 December2015
(Unaudited) |  
|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 |  |                             |             |   |  |  | (AccrualReversal inthe currentyear | )/ |  |  | Write-off inthe currentyear |   |  |  |             |  
|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 |  
|                                                         |  |                             |             |   |  |  |                                    |    |  |  |                             |   |  |  |             |  



- 33 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(5) | Inventories (Contd)
|--- | --------------------



|                                                         |  |                 |             |   |  |  |                                    |    |  |  |                             |  |  |  |             |  
|-------------------------------------------------------- |  | --------------- | ----------- | - |  |  | ---------------------------------- | -- |  |  | --------------------------- |  |  |  | ----------- | -
|                                                         |  | 31 December2013 |             |   |  |  |                                    |    |  |  | 31 December2014             | 
|Cost -                                                   |  |                 |             |   |  |  |                                    |    |  |  |                             |  |  |  |             |  
|Raw materials                                            |  |                 | 504,552,628 |   |  |  |                                    |    |  |  |                             |  |  |  | 495,782,759 |  
|Work in progress                                         |  |                 | 21,841,835  |   |  |  |                                    |    |  |  |                             |  |  |  | 32,424,927  |  
|Finished goods                                           |  |                 | 131,202,783 |   |  |  |                                    |    |  |  |                             |  |  |  | 147,067,879 |  
|                                                         |  |                 |             |   |  |  |                                    |    |  |  |                             |  |  |  |             |  
|                                                         |  |                 | 657,597,246 |   |  |  |                                    |    |  |  |                             |  |  |  | 675,275,565 |  
|                                                         |  |                 |             |   |  |  |                                    |    |  |  |                             |  |  |  |             |  
|Less: Provision for declines in the value of inventories |  |                 |             |   |  |  | (AccrualReversal inthe currentyear | )/ |  |  | Write-off inthe currentyear |  |  |  |             |  
|Raw materials                                            |  |                 | (31,728,613 | ) |  |  | (1,724,450                         | )  |  |  | 2,262,231                   |  |  |  | (31,190,832 | )
|Work in progress                                         |  |                 | (1,248,134  | ) |  |  | 443,016                            |    |  |  |                            |  |  |  | (805,118    | )
|Finished goods                                           |  |                 | (2,500,283  | ) |  |  | (2,664,107                         | )  |  |  |                            |  |  |  | (5,164,390  | )
|                                                         |  |                 |             |   |  |  |                                    |    |  |  |                             |  |  |  |             |  
|                                                         |  |                 | (35,477,030 | ) |  |  | (3,945,541                         | )  |  |  | 2,262,231                   |  |  |  | (37,160,340 | )
|                                                         |  |                 |             |   |  |  |                                    |    |  |  |                             |  |  |  |             |  
|                                                         |  |                 | 622,120,216 |   |  |  |                                    |    |  |  |                             |  |  |  | 638,115,225 |  
|                                                         |  |                 |             |   |  |  |                                    |    |  |  |                             |  |  |  |             |  



|(6) | Other current assets
|--- | --------------------



|                                             |  |                  |             |  |                              |  |             |                  |  |  |            | 
|-------------------------------------------- |  | ---------------- | ----------- |  | ---------------------------- |  | ----------- | ---------------- |  |  | ---------- | 
|                                             |  | 31 December 2016 |             |  | 31 December 2015
(Unaudited) |  |             | 31 December 2014 | 
|Input VAT to be
deducted                     |  |                  | 151,229,616 |  |                              |  | 31,452,580  |                  |  |  | 42,212,988 | 
|Prepaid income tax                           |  |                  | 9,441,318   |  |                              |  | 6,094,030   |                  |  |  | 7,158,847  | 
|Related party entrusted loans (Note 9(4(e))) |  |                  |            |  |                              |  | 315,000,000 |                  |  |  |           | 
|Others                                       |  |                  | 41,426      |  |                              |  | 163,060     |                  |  |  | 342,901    | 
|                                             |  |                  |             |  |                              |  |             |                  |  |  |            | 
|                                             |  |                  | 160,712,360 |  |                              |  | 352,709,670 |                  |  |  | 49,714,736 | 
|                                             |  |                  |             |  |                              |  |             |                  |  |  |            | 



- 34 -



---

##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(7) | Long-term equity investments
|--- | ----------------------------



|                                                               |  |                  |             |  |                              |  |             |                  |  |  |            | 
|-------------------------------------------------------------- |  | ---------------- | ----------- |  | ---------------------------- |  | ----------- | ---------------- |  |  | ---------- | 
|                                                               |  | 31 December 2016 |             |  | 31 December 2015
(Unaudited) |  |             | 31 December 2014 | 
|Associates (a)                                                 |  |                  | 140,094,694 |  |                              |  | 108,432,277 |                  |  |  | 76,331,842 | 
|Joint venture (b)                                              |  |                  | 50,160,580  |  |                              |  | 50,320,716  |                  |  |  |           | 
|                                                               |  |                  |             |  |                              |  |             |                  |  |  |            | 
|                                                               |  |                  | 190,255,274 |  |                              |  | 158,752,993 |                  |  |  | 76,331,842 | 
|Less: Provision for impairment of long-term equity investments |  |                  |            |  |                              |  |            |                  |  |  |           | 
|                                                               |  |                  |             |  |                              |  |             |                  |  |  |            | 
|                                                               |  |                  | 190,255,274 |  |                              |  | 158,752,993 |                  |  |  | 76,331,842 | 
|                                                               |  |                  |             |  |                              |  |             |                  |  |  |            | 



|(a) | Associates
|--- | ----------

Investments in associates are set out below:



|                             |  |                        |   |  |                                         |  |            |                                              |  |  |                              |   |  |  |             | 
|---------------------------- |  | ---------------------- | - |  | --------------------------------------- |  | ---------- | -------------------------------------------- |  |  | ---------------------------- | - |  |  | ----------- | 
|31 December
2015 (Unaudited) |  | 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 (Unaudited) |  
|76,331,842                   |  |                        |  |  |                                         |  | 40,365,585 |                                              |  |  | (8,265,150                   | ) |  |  | 108,432,277 | 
|                             |  |                        |   |  |                                         |  |            |                                              |  |  |                              |   |  |  |             | 
|                             |  |                        |   | 
|31 December
2013             |  | Increase in
investment |   |  | Share of net
profit under equity method |  |            | Profit/Cash
dividends declared by
associates |  |  | 31 December
2014             |  
|62,434,370                   |  |                        |  |  |                                         |  | 13,897,472 |                                              |  |  |                             |   |  |  | 76,331,842  | 
|                             |  |                        |   |  |                                         |  |            |                                              |  |  |                              |   |  |  |             | 



- 35 -



---

##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(7) | Long-term equity investments (Contd)
|--- | -------------------------------------



|(a) | Associates (Contd)
|--- | -------------------



General information of significant associates:



|                                                                           |  |                       |       |  |                      |  |       |                    |  |                                                                                                             |  |  |                                          |   |  |  |     | 
|-------------------------------------------------------------------------- |  | --------------------- | ----- |  | -------------------- |  | ----- | ------------------ |  | ----------------------------------------------------------------------------------------------------------- |  |  | ---------------------------------------- | - |  |  | --- | 
|                                                                           |  | Majorbusinesslocation |       |  | Place ofregistration |  |       | Nature of business |  | Interestheld                                                                                                |  |  | Whetherstrategic tothe Groupsactivities |  
|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 Johnson Automotive Seating Co., Ltd. (Dongfeng Johnson Seating) |  |                       | 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 Taijis 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
2015 (Unaudited) |  | 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
(Unaudited) |  
|                            |  |                        | 62,298,600 |  |                                         |  | 93,521   |                                              |  |  | (12,071,405                  | ) |  |  | 50,320,716 | 
|                             |  |                        |            |  |                                         |  |          |                                              |  |  |                              |   |  |  |            | 



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(7) | Long-term equity investments (Contd)
|--- | -------------------------------------



|(b) | Joint venture (Contd)
|--- | ----------------------



General information of significant joint venture:



|             |  |                       |          |  |                      |  |          |                    |  |                                                                                                                                                                                                          |  |  |                                          |   |  |  |     | 
|------------ |  | --------------------- | -------- |  | -------------------- |  | -------- | ------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ---------------------------------------- | - |  |  | --- | 
|             |  | Majorbusinesslocation |          |  | Place ofregistration |  |          | Nature of business |  | Interestheld                                                                                                                                                                                             |  |  | Whetherstrategic tothe Groupsactivities |  
|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.



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(8) | Fixed assets
|--- | ------------



|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |                |  
|-------------------------------------- |  | --------- | ------------ | - | ----------------------- |  | ------------- | -------------- |  |  | ------------------------------------------------------- | - |  | ------- | ------------ | - | ----- |  | ------------ | - |  |  | -------------- | -
|                                       |  | Buildings |              |   | Machinery and
equipment |  |               | Motor
vehicles |  |  | Computers and
electronic equipment and
office equipment |   |  | Tooling |              |   | Total | 
|Cost                                   |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |                |  
|31 December 2015 (Unaudited)           |  |           | 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 increase 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 (Unaudited)           |  |           | (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 (Unaudited)           |  |           |             |   |                         |  | (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     | )
|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |                |  
|Net book value                         |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |                |  
|31 December 2016                       |  |           | 583,279,192  |   |                         |  | 981,513,178   |                |  |  | 438,747                                                 |   |  |         | 103,332,868  |   |       |  | 51,249,393   |   |  |  | 1,719,813,378  |  
|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |                |  



- 38 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(8) | Fixed assets (Contd)
|--- | ---------------------



|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |                |  
|-------------------------------------- |  | --------- | ------------ | - | ----------------------- |  | ------------- | -------------- |  |  | ------------------------------------------------------- | - |  | ------- | ------------ | - | ----- |  | ------------ | - |  |  | -------------- | -
|                                       |  | 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 increase 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 (Unaudited)           |  |           | 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 (Unaudited)           |  |           | (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 (Unaudited)           |  |           |             |   |                         |  | (3,168,540    | )              |  |  |                                                        |   |  |         |             |   |       |  | (753,177     | ) |  |  | (3,921,717     | )
|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |                |  
|Net book value                         |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |                |  
|31 December 2015 (Unaudited)           |  |           | 662,530,504  |   |                         |  | 949,981,957   |                |  |  | 3,485,612                                               |   |  |         | 112,975,736  |   |       |  | 49,171,836   |   |  |  | 1,778,145,645  |  
|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |                |  



- 39 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(8) | Fixed assets (Contd)
|--- | ---------------------



|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |               |  
|-------------------------------------- |  | --------- | ------------ | - | ----------------------- |  | ------------- | -------------- |  |  | ------------------------------------------------------- | - |  | ------- | ------------ | - | ----- |  | ------------ | - |  |  | ------------- | -
|                                       |  | Buildings |              |   | Machinery and
equipment |  |               | Motor
vehicles |  |  | Computers and
electronic equipment and
office equipment |   |  | Tooling |              |   | Total | 
|Cost                                   |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |               |  
|31 December 2013                       |  |           | 519,463,143  |   |                         |  | 1,358,811,728 |                |  |  | 10,844,001                                              |   |  |         | 173,411,318  |   |       |  | 147,725,780  |   |  |  | 2,210,255,970 |  
|Transfer from construction in progress |  |           | 145,122,080  |   |                         |  | 331,208,637   |                |  |  | 3,523,355                                               |   |  |         | 64,807,963   |   |       |  | 45,480,626   |   |  |  | 590,142,661   |  
|Other increase in the current year     |  |           | 15,001,081   |   |                         |  | 6,465,285     |                |  |  | 210,256                                                 |   |  |         | 3,923,914    |   |       |  | 1,395,301    |   |  |  | 26,995,837    |  
|Decrease in the current year           |  |           | (14,742,725  | ) |                         |  | (293,843,803  | )              |  |  | (3,485,478                                              | ) |  |         | (22,738,579  | ) |       |  | (51,465,060  | ) |  |  | (386,275,645  | )
|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |               |  
|31 December 2014                       |  |           | 664,843,579  |   |                         |  | 1,402,641,847 |                |  |  | 11,092,134                                              |   |  |         | 219,404,616  |   |       |  | 143,136,647  |   |  |  | 2,441,118,823 |  
|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |               |  
|Accumulated depreciation               |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |               |  
|31 December 2013                       |  |           | (77,872,259  | ) |                         |  | (568,593,538  | )              |  |  | (7,193,895                                              | ) |  |         | (105,554,851 | ) |       |  | (117,369,709 | ) |  |  | (876,584,252  | )
|Increase in the current year           |  |           | (29,531,678  | ) |                         |  | (127,840,535  | )              |  |  | (1,870,214                                              | ) |  |         | (32,105,787  | ) |       |  | (20,692,286  | ) |  |  | (212,040,500  | )
|Decrease in the current year           |  |           | 3,744,395    |   |                         |  | 140,023,170   |                |  |  | 2,306,652                                               |   |  |         | 11,292,572   |   |       |  | 31,668,707   |   |  |  | 189,035,496   |  
|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |               |  
|31 December 2014                       |  |           | (103,659,542 | ) |                         |  | (556,410,903  | )              |  |  | (6,757,457                                              | ) |  |         | (126,368,066 | ) |       |  | (106,393,288 | ) |  |  | (899,589,256  | )
|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |               |  
|Provision for impairment loss          |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |               |  
|31 December 2013                       |  |           |             |   |                         |  | (4,916,956    | )              |  |  |                                                        |   |  |         | (20,821      | ) |       |  | (1,151,027   | ) |  |  | (6,088,804    | )
|Decrease in the current year           |  |           |             |   |                         |  | 1,553,024     |                |  |  |                                                        |   |  |         | 20,821       |   |       |  | 127,561      |   |  |  | 1,701,406     |  
|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |               |  
|31 December 2014                       |  |           |             |   |                         |  | (3,363,932    | )              |  |  |                                                        |   |  |         |             |   |       |  | (1,023,466   | ) |  |  | (4,387,398    | )
|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |               |  
|Net book value                         |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |               |  
|31 December 2014                       |  |           | 561,184,037  |   |                         |  | 842,867,012   |                |  |  | 4,334,677                                               |   |  |         | 93,036,550   |   |       |  | 35,719,893   |   |  |  | 1,537,142,169 |  
|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |               |  
|31 December 2013                       |  |           | 441,590,884  |   |                         |  | 785,301,234   |                |  |  | 3,650,106                                               |   |  |         | 67,835,646   |   |       |  | 29,205,044   |   |  |  | 1,327,582,914 |  
|                                       |  |           |              |   |                         |  |               |                |  |  |                                                         |   |  |         |              |   |       |  |              |   |  |  |               |  

In 2016, 2015 and 2014, the amount of depreciation expense charged to cost of sales were 246,862,381,
213,440,384 and 178,646,061, respectively.

In 2016, 2015 and 2014, the amount of depreciation expense charged to selling expenses were
24,687, 14,910 and 512, respectively.

In 2016, 2015 and 2014, the amount of depreciation expense charged to general and administrative
expenses were 63,736,201, 47,612,987 and 33,393,927, respectively.



- 40 -



---

##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(9) | Construction in progress
|--- | ------------------------



|                                                           |  |                             |             |  |                             |  |             |                          |  |  |                                        |   |  |                 |             |   |  |  |             | 
|---------------------------------------------------------- |  | --------------------------- | ----------- |  | --------------------------- |  | ----------- | ------------------------ |  |  | -------------------------------------- | - |  | --------------- | ----------- | - |  |  | ----------- | 
|Project name                                               |  | 31 December2015
(Unaudited) |             |  | Increase in
the currentyear |  |             | Transfer to
fixed assets |  |  | Transfer to
long-term
prepaid expenses |   |  | 31 December2016 |            
|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 | 
|                                                           |  |                             |             |  |                             |  |             |                          |  |  |                                        |   |  |                 |             |   |  |  |             | 



|                                                           |  |                 |             |  |                             |  |             |                           |  |  |                          |  |  |                                        |              |   |                            |  |             |                             |  |  |             |   |  |  |             | 
|---------------------------------------------------------- |  | --------------- | ----------- |  | --------------------------- |  | ----------- | ------------------------- |  |  | ------------------------ |  |  | -------------------------------------- | ------------ | - | -------------------------- |  | ----------- | --------------------------- |  |  | ----------- | - |  |  | ----------- | 
|Project name                                               |  | 31 December2014 |             |  | Increase in
the currentyear |  |             | Transferfrom
fixed assets |  |  | Transfer to
fixed assets |  |  | Transfer to
long-term
prepaid expenses |              |   | Decrease inthe currentyear |  |             | 31 December2015
(Unaudited) | 
|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 | 
|                                                           |  |                 |             |  |                             |  |             |                           |  |  |                          |  |  |                                        |              |   |                            |  |             |                             |  |  |             |   |  |  |             | 



- 41 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(9) | Construction in progress (Contd)
|--- | ---------------------------------



|                                                           |  |                 |             |  |                              |  |             |                          |  |  |                                        |   |  |                 |             |   |  |  |             | 
|---------------------------------------------------------- |  | --------------- | ----------- |  | ---------------------------- |  | ----------- | ------------------------ |  |  | -------------------------------------- | - |  | --------------- | ----------- | - |  |  | ----------- | 
|Name of projects                                           |  | 31 December2013 |             |  | Increase in
the current year |  |             | Transfer to
fixed assets |  |  | Transfer to
long-term
prepaid expenses |   |  | 31 December2014 |            
|Building and improvements                                  |  |                 | 100,579,204 |  |                              |  | 325,973,833 |                          |  |  | (145,122,080                           | ) |  |                 | (78,245,075 | ) |  |  | 203,185,882 | 
|Machinery and equipment                                    |  |                 | 289,380,413 |  |                              |  | 274,864,503 |                          |  |  | (331,208,637                           | ) |  |                 | (11,430,196 | ) |  |  | 221,606,083 | 
|Other projects                                             |  |                 | 63,260,774  |  |                              |  | 110,781,735 |                          |  |  | (113,811,944                           | ) |  |                 |            |   |  |  | 60,230,565  | 
|                                                           |  |                 |             |  |                              |  |             |                          |  |  |                                        |   |  |                 |             |   |  |  |             | 
|                                                           |  |                 | 453,220,391 |  |                              |  | 711,620,071 |                          |  |  | (590,142,661                           | ) |  |                 | (89,675,271 | ) |  |  | 485,022,530 | 
|Including: Capitalised borrowing cost                      |  |                 | 1,384,961   |  |                              |  |            |                          |  |  | (1,384,961                             | ) |  |                 |            |   |  |  |            | 
|                                                           |  |                 |             |  |                              |  |             |                          |  |  |                                        |   |  |                 |             |   |  |  |             | 
|Less: Provision for impairment of construction in progress |  |                 |            |  |                              |  |            |                          |  |  |                                       |   |  |                 |            |   |  |  |            | 
|                                                           |  |                 |             |  |                              |  |             |                          |  |  |                                        |   |  |                 |             |   |  |  |             | 
|                                                           |  |                 | 453,220,391 |  |                              |  | 711,620,071 |                          |  |  | (590,142,661                           | ) |  |                 | (89,675,271 | ) |  |  | 485,022,530 | 
|                                                           |  |                 |             |  |                              |  |             |                          |  |  |                                        |   |  |                 |             |   |  |  |             | 



|(10) | Intangible assets
|---- | -----------------



|                                                    |  |      |               |  |                              |  |             |                              |  |  |                              |  |  |                                        |             |   |                  |  |             |                         |  |  |             |  |  |  |              |  
|--------------------------------------------------- |  | ---- | ------------- |  | ---------------------------- |  | ----------- | ---------------------------- |  |  | ---------------------------- |  |  | -------------------------------------- | ----------- | - | ---------------- |  | ----------- | ----------------------- |  |  | ----------- |  |  |  | ------------ | -
|                                                    |  | Cost |               |  | 31 December 2015
(Unaudited) |  |             | Increase in
the current year |  |  | Decrease in
the current year |  |  | Amortisationcharged in thecurrent year |             |   | 31 December
2016 |  |             | Accumulatedamortisation | 
|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 |  |  |  |              |  
|                                                    |  |      |               |  |                              |  |             |                              |  |  |                              |  |  |                                        |             |   |                  |  |             |                         |  |  |             |  |  |  |              |  



- 42 -



---

##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(10) | Intangible assets (Contd)
|---- | --------------------------



|                                                    |  |      |               |  |                 |  |             |                              |  |  |                              |  |  |                                        |          |   |                              |  |              |                         |  |  |             |  |  |  |              |  
|--------------------------------------------------- |  | ---- | ------------- |  | --------------- |  | ----------- | ---------------------------- |  |  | ---------------------------- |  |  | -------------------------------------- | -------- | - | ---------------------------- |  | ------------ | ----------------------- |  |  | ----------- |  |  |  | ------------ | -
|                                                    |  | Cost |               |  | 31 December2014 |  |             | Increase in
the current year |  |  | Decrease in
the current year |  |  | Amortisationcharged in thecurrent year |          |   | 31 December
2015 (Unaudited) |  |              | Accumulatedamortisation | 
|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 |  |  |  |              |  
|                                                    |  |      |               |  |                 |  |             |                              |  |  |                              |  |  |                                        |          |   |                              |  |              |                         |  |  |             |  |  |  |              |  
|                                                    |  |      |               |  |                 |  |            
|                                                    |  | Cost |               |  | 31 December2013 |  |             | Increase in
the current year |  |  | Decrease in
the current year |  |  | Amortisationcharged in thecurrent year |          |   | 31 December
2014             |  |              | Accumulatedamortisation | 
|Land use rights                                     |  |      | 289,798,854   |  |                 |  | 256,297,708 |                              |  |  | 8,914,858                    |  |  |                                        |         |   |                              |  | (6,679,581   | )                       |  |  | 258,532,985 |  |  |  | (31,265,869  | )
|Patents                                             |  |      | 495,000       |  |                 |  | 411,833     |                              |  |  |                             |  |  |                                        |         |   |                              |  | (36,167      | )                       |  |  | 375,666     |  |  |  | (119,334     | )
|Software                                            |  |      | 103,367,028   |  |                 |  | 17,985,768  |                              |  |  | 26,959,569                   |  |  |                                        | (658,658 | ) |                              |  | (14,587,878  | )                       |  |  | 29,698,801  |  |  |  | (73,668,227  | )
|Customer relationship                               |  |      | 848,841,900   |  |                 |  | 313,095,108 |                              |  |  |                             |  |  |                                        |         |   |                              |  | (239,431,483 | )                       |  |  | 73,663,625  |  |  |  | (775,178,275 | )
|                                                    |  |      |               |  |                 |  |             |                              |  |  |                              |  |  |                                        |          |   |                              |  |              |                         |  |  |             |  |  |  |              |  
|                                                    |  |      | 1,242,502,782 |  |                 |  | 587,790,417 |                              |  |  | 35,874,427                   |  |  |                                        | (658,658 | ) |                              |  | (260,735,109 | )                       |  |  | 362,271,077 |  |  |  | (880,231,705 | )
|                                                    |  |      |               |  |                 |  |             |                              |  |  |                              |  |  |                                        |          |   |                              |  |              |                         |  |  |             |  |  |  |              |  
|Less: Provision for impairment of intangible assets |  |      |               |  |                 |  |            |                              |  |  |                             |  |  |                                        |         |   |                              |  |              |                         |  |  |            |  |  |  |              |  
|                                                    |  |      |               |  |                 |  |             |                              |  |  |                              |  |  |                                        |          |   |                              |  |              |                         |  |  |             |  |  |  |              |  
|                                                    |  |      |               |  |                 |  | 587,790,417 |                              |  |  | 35,874,427                   |  |  |                                        | (658,658 | ) |                              |  |              |                         |  |  | 362,271,077 |  |  |  |              |  
|                                                    |  |      |               |  |                 |  |             |                              |  |  |                              |  |  |                                        |          |   |                              |  |              |                         |  |  |             |  |  |  |              |  



- 43 -



---

##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



(11) Goodwill



|                               |  |                             |            |  |                              |  |   |                              |  |  |                             |  |  |  |            | 
|------------------------------ |  | --------------------------- | ---------- |  | ---------------------------- |  | - | ---------------------------- |  |  | --------------------------- |  |  |  | ---------- | 
|                               |  | 31 December2015
(Unaudited) |            |  | Increase in
the current year |  |   | Decrease in
the current year |  |  | 31 December2016             | 
|Goodwill                       |  |                             | 71,566,642 |  |                              |  |  |                              |  |  |                            |  |  |  | 71,566,642 | 
|Less: Provision for impairment |  |                             |           |  |                              |  |  |                              |  |  |                            |  |  |  |           | 
|                               |  |                             |            |  |                              |  |   |                              |  |  |                             |  |  |  |            | 
|                               |  |                             | 71,566,642 |  |                              |  |  |                              |  |  |                            |  |  |  | 71,566,642 | 
|                               |  |                             |            |  |                              |  |   |                              |  |  |                             |  |  |  |            | 
|                               |  |                             |            | 
|                               |  | 31 December2014             |            |  | Increase in
the current year |  |   | Decrease in
the current year |  |  | 31 December2015
(Unaudited) | 
|Goodwill                       |  |                             | 71,566,642 |  |                              |  |  |                              |  |  |                            |  |  |  | 71,566,642 | 
|Less: Provision for impairment |  |                             |           |  |                              |  |  |                              |  |  |                            |  |  |  |           | 
|                               |  |                             |            |  |                              |  |   |                              |  |  |                             |  |  |  |            | 
|                               |  |                             | 71,566,642 |  |                              |  |  |                              |  |  |                            |  |  |  | 71,566,642 | 
|                               |  |                             |            |  |                              |  |   |                              |  |  |                             |  |  |  |            | 
|                               |  |                             |            | 
|                               |  | 31 December2013             |            |  | Increase in
the current year |  |   | Decrease in
the current year |  |  | 31 December2014             | 
|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 five-year budget approved by management. The cash flows beyond the five-year period are calculated based on the following estimated growth rates.

The main assumptions applied in calculating discounted future cash flows are as follows:



|              |  |  |      |  
|------------- |  |  | ---- | -
|Growth rate   |  |  | 12.0 | %
|Gross margin  |  |  | 20.0 | %
|Discount rate |  |  | 17.0 | %

The weighted average growth rates applied by management 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 respective groups within
the corresponding operating segment.



|(12) | Long-term prepaid expenses
|---- | --------------------------



|                                                         |  |                  |             |  |                              |  |             |                  |  |  |             | 
|-------------------------------------------------------- |  | ---------------- | ----------- |  | ---------------------------- |  | ----------- | ---------------- |  |  | ----------- | 
|                                                         |  | 31 December 2016 |             |  | 31 December 2015
(Unaudited) |  |             | 31 December 2014 | 
|Improvements to fixed assets held under operating leases |  |                  | 182,621,388 |  |                              |  | 179,174,199 |                  |  |  | 189,829,072 | 
|Software                                                 |  |                  | 147,650     |  |                              |  | 584,334     |                  |  |  | 2,509,712   | 
|Others                                                   |  |                  | 13,259,203  |  |                              |  | 15,358,365  |                  |  |  | 10,217,240  | 
|                                                         |  |                  |             |  |                              |  |             |                  |  |  |             | 
|                                                         |  |                  | 196,028,241 |  |                              |  | 195,116,898 |                  |  |  | 202,556,024 | 
|                                                         |  |                  |             |  |                              |  |             |                  |  |  |             | 



- 44 -



---

##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(13) | Deferred tax assets and deferred tax liabilities
|---- | ------------------------------------------------



|(a) | Deferred tax assets
|--- | -------------------



|                                                           |  |                    |             |  |                               |  |               |                    |  |  |                               |  |  |                    |               |  |                               |  |             |  |  |  |               | 
|---------------------------------------------------------- |  | ------------------ | ----------- |  | ----------------------------- |  | ------------- | ------------------ |  |  | ----------------------------- |  |  | ------------------ | ------------- |  | ----------------------------- |  | ----------- |  |  |  | ------------- | 
|                                                           |  | 31 December 2016   |             |  | 31 December 2015(Unaudited)   |  |               | 31 December 2014   | 
|                                                           |  | Deferred taxassets |             |  | Deductibletemporarydifference |  |               | Deferred taxassets |  |  | Deductibletemporarydifference |  |  | Deferred taxassets |               |  | Deductibletemporarydifference | 
|Provisions for asset impairment                            |  |                    | 19,481,023  |  |                               |  | 113,203,687   |                    |  |  | 9,560,137                     |  |  |                    | 55,463,501    |  |                               |  | 9,969,371   |  |  |  | 52,422,022    | 
|Depreciation of fixed assets                               |  |                    | 3,190,153   |  |                               |  | 17,038,480    |                    |  |  | 4,477,205                     |  |  |                    | 21,513,376    |  |                               |  | 6,666,212   |  |  |  | 26,732,055    | 
|Accrued expenses, accounts receivable and accounts payable |  |                    | 778,137,801 |  |                               |  | 3,919,738,157 |                    |  |  | 502,335,531                   |  |  |                    | 2,486,895,028 |  |                               |  | 288,981,601 |  |  |  | 1,454,697,632 | 
|Accrued payroll                                            |  |                    | 27,160,131  |  |                               |  | 168,946,288   |                    |  |  | 19,049,565                    |  |  |                    | 119,149,427   |  |                               |  | 16,308,003  |  |  |  | 107,641,939   | 
|Deductible losses                                          |  |                    | 1,639,537   |  |                               |  | 6,558,148     |                    |  |  | 8,975,147                     |  |  |                    | 35,900,585    |  |                               |  | 11,817,121  |  |  |  | 47,268,490    | 
|Deferred income                                            |  |                    | 1,770,896   |  |                               |  | 7,083,583     |                    |  |  | 1,719,295                     |  |  |                    | 7,402,636     |  |                               |  | 1,360,000   |  |  |  | 5,440,000     | 
|Amortisation of intangible assets                          |  |                    |            |  |                               |  |              |                    |  |  |                              |  |  |                    |              |  |                               |  | 730,101     |  |  |  | 2,920,405     | 
|                                                           |  |                    |             |  |                               |  |               |                    |  |  |                               |  |  |                    |               |  |                               |  |             |  |  |  |               | 
|                                                           |  |                    | 831,379,541 |  |                               |  | 4,232,568,343 |                    |  |  | 546,116,880                   |  |  |                    | 2,726,324,553 |  |                               |  | 335,832,409 |  |  |  | 1,697,122,543 | 
|                                                           |  |                    |             |  |                               |  |               |                    |  |  |                               |  |  |                    |               |  |                               |  |             |  |  |  |               | 
|Including:                                                 |  |                    |             |  |                              
|Expected to be recovered within one year (inclusive)       |  |                    | 827,442,771 |  |                               |  |               |                    |  |  | 538,515,249                   |  |  |                    |               |  |                               |  | 318,540,723 |  |  |  |               | 
|Expected to be recovered after one year                    |  |                    | 3,936,770   |  |                               |  |               |                    |  |  | 7,601,631                     |  |  |                    |               |  |                               |  | 17,291,686  |  |  |  |               | 
|                                                           |  |                    |             |  |                               |  |               |                    |  |  |                               |  |  |                    |               |  |                               |  |             |  |  |  |               | 
|                                                           |  |                    | 831,379,541 |  |                               |  |               |                    |  |  | 546,116,880                   |  |  |                    |               |  |                               |  | 335,832,409 |  |  |  |               | 
|                                                           |  |                    |             |  |                               |  |               |                    |  |  |                               |  |  |                    |               |  |                               |  |             |  |  |  |               | 



|(b) | Deductible temporary differences and deductible losses that are not recognised as deferred tax assets are analysed as follows:
|--- | ------------------------------------------------------------------------------------------------------------------------------



|                                 |  |                  |            |  |                              |  |           |                  |  |  |           | 
|-------------------------------- |  | ---------------- | ---------- |  | ---------------------------- |  | --------- | ---------------- |  |  | --------- | 
|                                 |  | 31 December 2016 |            |  | 31 December 2015
(Unaudited) |  |           | 31 December 2014 | 
|Deductible temporary differences |  |                  | 28,817,623 |  |                              |  |          |                  |  |  |          | 
|Deductible losses                |  |                  | 16,702,985 |  |                              |  | 4,495,525 |                  |  |  | 7,609,676 | 
|                                 |  |                  |            |  |                              |  |           |                  |  |  |           | 
|                                 |  |                  | 45,520,608 |  |                              |  | 4,495,525 |                  |  |  | 7,609,676 | 
|                                 |  |                  |            |  |                              |  |           |                  |  |  |           | 



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(13) | Deferred tax assets and deferred tax liabilities (Contd)
|---- | ---------------------------------------------------------



|(c) | Deductible losses that are not recognised as deferred tax assets will be expired as follows:
|--- | --------------------------------------------------------------------------------------------



|                     |  |                  |            |  |                              |  |           |                  |  |  |           | 
|-------------------- |  | ---------------- | ---------- |  | ---------------------------- |  | --------- | ---------------- |  |  | --------- | 
|                     |  | 31 December 2016 |            |  | 31 December 2015
(Unaudited) |  |           | 31 December 2014 | 
|Within 1 year        |  |                  |           |  |                              |  | 4,495,525 |                  |  |  | 3,114,151 | 
|Between 1 to 2 years |  |                  |           |  |                              |  |          |                  |  |  | 4,495,525 | 
|Between 2 to 3 years |  |                  |           |  |                              |  |          |                  |  |  |          | 
|Between 3 to 4 years |  |                  |           |  |                              |  |          |                  |  |  |          | 
|Over 4 years         |  |                  | 16,702,985 |  |                              |  |          |                  |  |  |          | 
|                     |  |                  |            |  |                              |  |           |                  |  |  |           | 
|                     |  |                  | 16,702,985 |  |                              |  | 4,495,525 |                  |  |  | 7,609,676 | 
|                     |  |                  |            |  |                              |  |           |                  |  |  |           | 



|(d) | Deferred tax liabilities
|--- | ------------------------



|                                                                     |  |                         |   |                             |                             |                  |                         |  |         |                             |  |                         |  |  |                             |  |  |           
|-------------------------------------------------------------------- |  | ----------------------- | - | --------------------------- | --------------------------- | ---------------- | ----------------------- |  | ------- | --------------------------- |  | ----------------------- |  |  | --------------------------- |  |  | ----------
|                                                                     |  | 31 December 2016        |   | 31 December 2015(Unaudited) |                             | 31 December 2014
|                                                                     |  | Deferred taxliabilities |   |                             | Taxable
temporarydifference |                  | Deferred taxliabilities |  |         | Taxable
temporarydifference |  | Deferred taxliabilities |  |  | Taxable
temporarydifference
|Business combinations involving
enterprises not under common control |  |                         |  |                             |                             |                 |                         |  |        |                             |  |                        |  |  | 18,485,081                  |  |  | 73,940,324
|Depreciation of fixed assets                                         |  |                         |  |                             |                             |                 |                         |  | 241,500 |                             |  | 965,999                 |  |  | 114,812                     |  |  | 459,248   
|                                                                     |  |                         |   |                             |                             |                  |                         |  |         |                             |  |                         |  |  |                             |  |  |           
|                                                                     |  |                         |  |                             |                             |                 |                         |  | 241,500 |                             |  | 965,999                 |  |  | 18,599,893                  |  |  | 74,399,572
|                                                                     |  |                         |   |                             |                             |                  |                         |  |         |                             |  |                         |  |  |                             |  |  |           
|Including:                                                           |  |                         |   |                             |                             |                  |                         |  |         |                             |  |                         |  |  |                             |  |  |           
|Expected to be recovered within one year (inclusive)                 |  |                         |  |                             |                             |                  |                         |  | 241,500 |                             |  |                         |  |  | 18,599,893                  |  |  |           
|Expected to be recovered after one year                              |  |                         |  |                             |                             |                  |                         |  |        |                             |  |                         |  |  |                            |  |  |           
|                                                                     |  |                         |   |                             |                             |                  |                         |  |         |                             |  |                         |  |  |                             |  |  |           
|                                                                     |  |                         |  |                             |                             |                  |                         |  | 241,500 |                             |  |                         |  |  | 18,599,893                  |  |  |           
|                                                                     |  |                         |   |                             |                             |                  |                         |  |         |                             |  |                         |  |  |                             |  |  |           



- 46 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(14) | Other non-current assets
|---- | ------------------------



|                              |  |                  |            |  |                              |  |            |                  |  |  |            | 
|----------------------------- |  | ---------------- | ---------- |  | ---------------------------- |  | ---------- | ---------------- |  |  | ---------- | 
|                              |  | 31 December 2016 |            |  | 31 December 2015
(Unaudited) |  |            | 31 December 2014 | 
|Prepayment for equipment      |  |                  | 39,899,868 |  |                              |  | 50,533,076 |                  |  |  | 30,967,176 | 
|Rental deposits               |  |                  | 17,561,824 |  |                              |  | 19,798,915 |                  |  |  | 22,042,460 | 
|Prepayment for land use right |  |                  |           |  |                              |  | 29,455,609 |                  |  |  |           | 
|                              |  |                  |            |  |                              |  |            |                  |  |  |            | 
|                              |  |                  | 57,461,692 |  |                              |  | 99,787,600 |                  |  |  | 53,009,636 | 
|                              |  |                  |            |  |                              |  |            |                  |  |  |            | 



|(15) | Short-term borrowings
|---- | ---------------------



|          |  |          |  |                  |             |  |                              |  |            |                  |  |  |             | 
|--------- |  | -------- |  | ---------------- | ----------- |  | ---------------------------- |  | ---------- | ---------------- |  |  | ----------- | 
|          |  | Currency |  | 31 December 2016 |             |  | 31 December 2015
(Unaudited) |  |            | 31 December 2014 | 
|Unsecured |  | RMB      |  |                  | 408,884,232 |  |                              |  | 75,000,000 |                  |  |  | 100,000,000 | 
|          |  |          |  |                  |             |  |                              |  |            |                  |  |  |             | 

As at 31 December 2016, 2015 and 2014, the weighted average interest rate of short-term borrowings is
4.38%, 6.02% and 6.43% per annum, respectively.



|(16) | Notes payable
|---- | -------------



|                      |  |                  |             |  |                              |  |             |                  |  |  |             | 
|--------------------- |  | ---------------- | ----------- |  | ---------------------------- |  | ----------- | ---------------- |  |  | ----------- | 
|                      |  | 31 December 2016 |             |  | 31 December 2015
(Unaudited) |  |             | 31 December 2014 | 
|Bank acceptance notes |  |                  | 666,979,006 |  |                              |  | 457,179,867 |                  |  |  | 441,557,489 | 
|                      |  |                  |             |  |                              |  |             |                  |  |  |             | 

As at 31 December 2016, 2015 and 2014, bank acceptance notes of 325,076,774, 228,819,635 and 235,486,021
were secured with bank deposits of 289,907,686, 198,561,011 and 166,719,551 (Note 7(1)).

As at 31 December 2016, 2015 and 2014, bank
acceptance notes of 152,544,483, 221,724,500 and 206,071,468 were secured with notes receivable of 152,544,483, 222,124,500 and 204,357,084 (Note 7(2)).



|(17) | Accounts payable
|---- | ----------------



|              |  |                  |               |  |                              |  |               |                  |  |  |               | 
|------------- |  | ---------------- | ------------- |  | ---------------------------- |  | ------------- | ---------------- |  |  | ------------- | 
|              |  | 31 December 2016 |               |  | 31 December 2015
(Unaudited) |  |               | 31 December 2014 | 
|Within 1 year |  |                  | 9,748,879,362 |  |                              |  | 8,346,912,180 |                  |  |  | 6,459,349,263 | 
|1 to 2 years  |  |                  | 85,196,150    |  |                              |  | 108,949,525   |                  |  |  | 40,263,804    | 
|2 to 3 years  |  |                  | 22,907,089    |  |                              |  | 9,008,700     |                  |  |  | 7,786,083     | 
|Over 3 years  |  |                  | 3,151,224     |  |                              |  | 4,009,058     |                  |  |  | 3,120,497     | 
|              |  |                  |               |  |                              |  |               |                  |  |  |               | 
|              |  |                  | 9,860,133,825 |  |                              |  | 8,468,879,463 |                  |  |  | 6,510,519,647 | 
|              |  |                  |               |  |                              |  |               |                  |  |  |               | 



- 47 -



---

##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(18) | Employee benefits payable
|---- | -------------------------



|                                         |  |                  |             |  |                              |  |             |                  |  |  |             | 
|---------------------------------------- |  | ---------------- | ----------- |  | ---------------------------- |  | ----------- | ---------------- |  |  | ----------- | 
|                                         |  | 31 December 2016 |             |  | 31 December 2015
(Unaudited) |  |             | 31 December 2014 | 
|Short-term employee benefits payable (a) |  |                  | 771,593,541 |  |                              |  | 606,859,311 |                  |  |  | 538,637,755 | 
|Defined contribution plans payable (b)   |  |                  | 21,367,180  |  |                              |  | 14,293,502  |                  |  |  | 9,950,804   | 
|                                         |  |                  |             |  |                              |  |             |                  |  |  |             | 
|                                         |  |                  | 792,960,721 |  |                              |  | 621,152,813 |                  |  |  | 548,588,559 | 
|                                         |  |                  |             |  |                              |  |             |                  |  |  |             | 



|(a) | Short-term employee benefits payable
|--- | ------------------------------------



|                                                    |  |                              |             |  |                             |  |               |                             |  |  |                              |   |  |  |             | 
|--------------------------------------------------- |  | ---------------------------- | ----------- |  | --------------------------- |  | ------------- | --------------------------- |  |  | ---------------------------- | - |  |  | ----------- | 
|                                                    |  | 31 December
2015 (Unaudited) |             |  | Increase in thecurrent year |  |               | Decrease in thecurrent 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 | 
|                                                    |  |                              |             |  |                             |  |               |                             |  |  |                              |   |  |  |             | 
|                                                    |  |                              |             | 
|                                                    |  | 31 December
2014             |             |  | Increase in thecurrent year |  |               | Decrease in thecurrent year |  |  | 31 December
2015 (Unaudited) |  
|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 | 
|                                                    |  |                              |             |  |                             |  |               |                             |  |  |                              |   |  |  |             | 



- 48 -



---

##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(18) | Employee benefits payable (Contd)
|---- | ----------------------------------



|(a) | Short-term employee benefits payable (Contd)
|--- | ---------------------------------------------



|                                                    |  |                 |             |  |                             |  |               |                             |  |  |                 |   |  |  |             | 
|--------------------------------------------------- |  | --------------- | ----------- |  | --------------------------- |  | ------------- | --------------------------- |  |  | --------------- | - |  |  | ----------- | 
|                                                    |  | 31 December2013 |             |  | Increase in thecurrent year |  |               | Decrease in thecurrent year |  |  | 31 December2014 |  
|Wages and salaries, bonus, allowances and subsidies |  |                 | 226,914,167 |  |                             |  | 1,130,907,576 |                             |  |  | (1,097,202,464  | ) |  |  | 260,619,279 | 
|Staff welfare                                       |  |                 |            |  |                             |  | 28,970,535    |                             |  |  | (28,970,535     | ) |  |  |            | 
|Social security contributions                       |  |                 | 12,057,713  |  |                             |  | 67,536,120    |                             |  |  | (65,216,348     | ) |  |  | 14,377,485  | 
|                                                    |  |                 |             |  |                             |  |               |                             |  |  |                 |   |  |  |             | 
|Including: Medical insurance                        |  |                 | 6,641,342   |  |                             |  | 57,526,220    |                             |  |  | (56,795,199     | ) |  |  | 7,372,363   | 
|Work injury insurance                               |  |                 | 1,965,662   |  |                             |  | 3,900,702     |                             |  |  | (3,611,188      | ) |  |  | 2,255,176   | 
|Maternity insurance                                 |  |                 | 3,450,709   |  |                             |  | 6,109,198     |                             |  |  | (4,809,961      | ) |  |  | 4,749,946   | 
|                                                    |  |                 |             |  |                             |  |               |                             |  |  |                 |   |  |  |             | 
|Housing funds                                       |  |                 | 5,512,519   |  |                             |  | 69,194,114    |                             |  |  | (65,492,955     | ) |  |  | 9,213,678   | 
|Labour union funds and employee education funds     |  |                 | 14,494,462  |  |                             |  | 25,723,259    |                             |  |  | (23,343,225     | ) |  |  | 16,874,496  | 
|Other short-term employee benefits                  |  |                 | 161,052     |  |                             |  | 2,419,505     |                             |  |  | (1,494,481      | ) |  |  | 1,086,076   | 
|Staff welfare and incentive funds                   |  |                 | 197,913,333 |  |                             |  | 45,375,460    |                             |  |  | (6,822,052      | ) |  |  | 236,466,741 | 
|                                                    |  |                 |             |  |                             |  |               |                             |  |  |                 |   |  |  |             | 
|                                                    |  |                 | 457,053,246 |  |                             |  | 1,370,126,569 |                             |  |  | (1,288,542,060  | ) |  |  | 538,637,755 | 
|                                                    |  |                 |             |  |                             |  |               |                             |  |  |                 |   |  |  |             | 

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
|--- | ----------------------------------



|                       |  |                  |             |  |                |  |            | 
|---------------------- |  | ---------------- | ----------- |  | -------------- |  | ---------- | 
|                       |  | 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 (Unaudited) |            
|                       |  | 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 | 
|                       |  |                  |             |  |                |  |            | 
|                       | 
|                       |  | 2014             |            
|                       |  | Amount payable   |             |  | Ending balance | 
|Basic pensions         |  |                  | 108,658,194 |  |                |  | 6,489,804  | 
|Unemployment insurance |  |                  | 8,206,064   |  |                |  | 3,461,000  | 
|                       |  |                  |             |  |                |  |            | 
|                       |  |                  | 116,864,258 |  |                |  | 9,950,804  | 
|                       |  |                  |             |  |                |  |            | 



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(19) | Taxes payable
|---- | -------------



|                                          |  |                  |             |  |                              |  |             |                  |  |  |             | 
|----------------------------------------- |  | ---------------- | ----------- |  | ---------------------------- |  | ----------- | ---------------- |  |  | ----------- | 
|                                          |  | 31 December 2016 |             |  | 31 December 2015
(Unaudited) |  |             | 31 December 2014 | 
|Enterprise income tax payable             |  |                  | 439,098,114 |  |                              |  | 302,092,879 |                  |  |  | 194,557,016 | 
|Unpaid VAT                                |  |                  | 237,394,873 |  |                              |  | 223,572,378 |                  |  |  | 179,644,760 | 
|Withholding individual income
tax payable |  |                  | 8,695,828   |  |                              |  | 9,871,414   |                  |  |  | 5,188,415   | 
|Others                                    |  |                  | 24,057,989  |  |                              |  | 24,484,878  |                  |  |  | 27,965,300  | 
|                                          |  |                  |             |  |                              |  |             |                  |  |  |             | 
|                                          |  |                  | 709,246,804 |  |                              |  | 560,021,549 |                  |  |  | 407,355,491 | 
|                                          |  |                  |             |  |                              |  |             |                  |  |  |             | 



|(20) | Other payables
|---- | --------------



|                                                       |  |                  |               |  |                              |  |               |                  |  |  |               | 
|------------------------------------------------------ |  | ---------------- | ------------- |  | ---------------------------- |  | ------------- | ---------------- |  |  | ------------- | 
|                                                       |  | 31 December 2016 |               |  | 31 December 2015
(Unaudited) |  |               | 31 December 2014 | 
|Accrued expenses                                       |  |                  | 1,945,410,740 |  |                              |  | 1,270,897,055 |                  |  |  | 1,353,331,749 | 
|Modules fee payables                                   |  |                  | 202,794,863   |  |                              |  | 88,193,425    |                  |  |  | 60,145,386    | 
|Payables for purchase of
property, plant and equipment |  |                  | 84,347,957    |  |                              |  | 40,303,467    |                  |  |  | 108,869,302   | 
|Service fee payables                                   |  |                  | 50,534,097    |  |                              |  | 62,195,223    |                  |  |  | 19,364,734    | 
|Other payables
paid-on-behalf of the Group by
others   |  |                  | 18,096,164    |  |                              |  | 33,294,050    |                  |  |  | 60,349,267    | 
|Transportation fee payables                            |  |                  | 10,582,666    |  |                              |  | 2,809,094     |                  |  |  | 400,571       | 
|Others                                                 |  |                  | 42,590,973    |  |                              |  | 48,498,097    |                  |  |  | 50,345,494    | 
|                                                       |  |                  |               |  |                              |  |               |                  |  |  |               | 
|                                                       |  |                  | 2,354,357,460 |  |                              |  | 1,546,190,411 |                  |  |  | 1,652,806,503 | 
|                                                       |  |                  |               |  |                              |  |               |                  |  |  |               | 



|(21) | Long-term borrowings
|---- | --------------------



|                                               |  |                  |            |   |                              |  |            |                  |  |  |            |  
|---------------------------------------------- |  | ---------------- | ---------- | - | ---------------------------- |  | ---------- | ---------------- |  |  | ---------- | -
|                                               |  | 31 December 2016 |            |   | 31 December 2015
(Unaudited) |  |            | 31 December 2014 | 
|Unsecured                                      |  |                  | 13,505,000 |   |                              |  | 18,903,000 |                  |  |  | 24,301,000 |  
|Less: Current portion of long-
term borrowings |  |                  | (5,398,000 | ) |                              |  | (5,398,000 | )                |  |  | (5,398,000 | )
|                                               |  |                  |            |   |                              |  |            |                  |  |  |            |  
|                                               |  |                  | 8,107,000  |   |                              |  | 13,505,000 |                  |  |  | 18,903,000 |  
|                                               |  |                  |            |   |                              |  |            |                  |  |  |            |  

As at 31 December 2016, 2015 and 2014, the weighted average interest rate of long-term borrowings is
5.15%, 6.15% and 6.55% per annum, respectively.



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(22) | Surplus reserve
|---- | ---------------



|                          |  |                             |             |  |                             |  |            |                             |  |  |                             |   |  |  |             | 
|------------------------- |  | --------------------------- | ----------- |  | --------------------------- |  | ---------- | --------------------------- |  |  | --------------------------- | - |  |  | ----------- | 
|                          |  | 31 December2015
(Unaudited) |             |  | Increase in
the currentyear |  |            | Decrease in
the currentyear |  |  | 31 December2016             |  
|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 December2014             |             |  | Increase in
the currentyear |  |            | Decrease in
the currentyear |  |  | 31 December2015
(Unaudited) |  
|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 | 
|                          |  |                             |             |  |                             |  |            |                             |  |  |                             |   |  |  |             | 
|                          |  |                             |             | 
|                          |  | 31 December2013             |             |  | Increase in
the currentyear |  |            | Decrease in
the currentyear |  |  | 31 December2014             |  
|Reserve Fund              |  |                             | 103,413,601 |  |                             |  | 14,962,268 |                             |  |  | (2,189,800                  | ) |  |  | 116,186,069 | 
|Enterprise Expansion Fund |  |                             | 138,722,405 |  |                             |  | 29,924,536 |                             |  |  |                            |   |  |  | 168,646,941 | 
|                          |  |                             |             |  |                             |  |            |                             |  |  |                             |   |  |  |             | 
|                          |  |                             | 242,136,006 |  |                             |  | 44,886,804 |                             |  |  | (2,189,800                  | ) |  |  | 284,833,010 | 
|                          |  |                             |             |  |                             |  |            |                             |  |  |                             |   |  |  |             | 

In accordance with the Law of the PRC on Chinese Foreign Equity Joint Ventures and the Companys Articles
of Association, the Company appropriated 15,891,180, 14,743,347 and 14,962,268 to Reverse Fund for the years of 2016, 2015 and 2014, respectively, and 31,782,360, 29,486,695 and 29,924,536 to the Enterprise Expansion Fund for the years of 2016, 2015
and 2014, respectively.



|(23) | Undistributed profits
|---- | ---------------------

In accordance with the resolution at the Board of Directors
meeting dated on 5 May 2016, 7 August 2015 and 12 May 2014, the Company proposed a dividend in the amount of 1,385,874,680, 1,406,453,166 and 1,413,873,089 to the investors, respectively.



- 51 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(24) | Revenue and cost of sales
|---- | -------------------------



|                                  |  |         |                |  |                  |  |                 |         |  |  |                |  |  |         |                 |   |               |  |                |  |  |  |                 |  
|--------------------------------- |  | ------- | -------------- |  | ---------------- |  | --------------- | ------- |  |  | -------------- |  |  | ------- | --------------- | - | ------------- |  | -------------- |  |  |  | --------------- | -
|                                  |  | 2016    |                |  | 2015 (Unaudited) |  |                 | 2014    | 
|                                  |  | Revenue |                |  | Cost of sales    |  |                 | Revenue |  |  | Cost of sales  |  |  | Revenue |                 |   | Cost of sales | 
|Revenue from main operations      |  |         |                |  |                  |  |                 |         |  |  |                |  |  |         |                 |   |               |  |                |  |  |  |                 |  
|- sales of automotive spare parts |  |         | 28,543,605,353 |  |                  |  | (23,910,736,255 | )       |  |  | 25,946,688,824 |  |  |         | (21,576,248,882 | ) |               |  | 23,300,080,576 |  |  |  | (19,212,615,952 | )
|Revenue from other operations     |  |         |                |  |                  |  |                 |         |  |  |                |  |  |         |                 |   |               |  |                |  |  |  |                 |  
|- sales of raw materials          |  |         | 366,746,804    |  |                  |  | (215,932,018    | )       |  |  | 332,415,663    |  |  |         | (307,126,311    | ) |               |  | 1,088,884,852  |  |  |  | (1,039,139,938  | )
|- service income                  |  |         | 191,903,654    |  |                  |  | (81,143,480     | )       |  |  | 265,741,206    |  |  |         | (120,826,588    | ) |               |  | 49,801,832     |  |  |  | (7,330,000      | )
|- others                          |  |         | 20,245,367     |  |                  |  | (7,571,679      | )       |  |  | 27,205,071     |  |  |         | (18,816,187     | ) |               |  | 46,362,610     |  |  |  | (28,479,493     | )
|                                  |  |         |                |  |                  |  |                 |         |  |  |                |  |  |         |                 |   |               |  |                |  |  |  |                 |  
|                                  |  |         | 29,122,501,178 |  |                  |  | (24,215,383,432 | )       |  |  | 26,572,050,764 |  |  |         | (22,023,017,968 | ) |               |  | 24,485,129,870 |  |  |  | (20,287,565,383 | )
|                                  |  |         |                |  |                  |  |                 |         |  |  |                |  |  |         |                 |   |               |  |                |  |  |  |                 |  



|(25) | Taxes and surcharges
|---- | --------------------



|                                      |  |      |             |  |                  |  |             |      |  |  |            | 
|------------------------------------- |  | ---- | ----------- |  | ---------------- |  | ----------- | ---- |  |  | ---------- | 
|                                      |  | 2016 |             |  | 2015
(Unaudited) |  |             | 2014 | 
|City maintenance and construction tax |  |      | 69,269,617  |  |                  |  | 59,994,242  |      |  |  | 38,920,905 | 
|Educational surcharge                 |  |      | 62,249,763  |  |                  |  | 53,004,452  |      |  |  | 36,606,013 | 
|Others                                |  |      | 31,201,169  |  |                  |  | 6,878,859   |      |  |  | 9,970,928  | 
|                                      |  |      |             |  |                  |  |             |      |  |  |            | 
|                                      |  |      | 162,720,549 |  |                  |  | 119,877,553 |      |  |  | 85,497,846 | 
|                                      |  |      |             |  |                  |  |             |      |  |  |            | 



|(26) | Financial incomenet
|---- | --------------------



|                                        |  |      |            |   |                  |  |            |      |  |  |            |  
|--------------------------------------- |  | ---- | ---------- | - | ---------------- |  | ---------- | ---- |  |  | ---------- | -
|                                        |  | 2016 |            |   | 2015
(Unaudited) |  |            | 2014 | 
|Interest income                         |  |      | 67,827,500 |   |                  |  | 68,066,033 |      |  |  | 43,790,505 |  
|Interest costsborrowings               |  |      | (6,316,721 | ) |                  |  | (7,057,701 | )    |  |  | (9,211,536 | )
|Charges for discounted notes receivable |  |      | (173,065   | ) |                  |  | (92,465    | )    |  |  | (53,771    | )
|Exchange gains/(losses)net             |  |      | 4,911,656  |   |                  |  | 2,633,550  |      |  |  | (5,828,481 | )
|Others                                  |  |      | (4,998,427 | ) |                  |  | (4,450,537 | )    |  |  | (3,491,398 | )
|                                        |  |      |            |   |                  |  |            |      |  |  |            |  
|                                        |  |      | 61,250,943 |   |                  |  | 59,098,880 |      |  |  | 25,205,319 |  
|                                        |  |      |            |   |                  |  |            |      |  |  |            |  



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(27) | Expenses by nature
|---- | ------------------

The cost of sales, selling expenses, general and administrative expenses in
the income statements are listed as follows by nature:



|                                                              |  |      |                |  |                  |  |                |      |  |  |                |  
|------------------------------------------------------------- |  | ---- | -------------- |  | ---------------- |  | -------------- | ---- |  |  | -------------- | -
|                                                              |  | 2016 |                |  | 2015
(Unaudited) |  |                | 2014 | 
|Changes in inventories of finished goods and work in progress |  |      | 40,586,926     |  |                  |  | (132,579,173   | )    |  |  | (26,448,188    | )
|Consumed raw materials and low value consumables, etc.        |  |      | 22,059,980,339 |  |                  |  | 20,489,628,165 |      |  |  | 18,518,827,158 |  
|Employee benefits expenses                                    |  |      | 1,878,409,508  |  |                  |  | 1,590,618,954  |      |  |  | 1,441,615,367  |  
|Research and development expenses                             |  |      | 391,857,460    |  |                  |  | 266,918,928    |      |  |  | 290,649,240    |  
|Depreciation and amortisation expenses                        |  |      | 391,254,028    |  |                  |  | 398,139,629    |      |  |  | 502,251,363    |  
|Rental expenses                                               |  |      | 209,235,385    |  |                  |  | 170,677,949    |      |  |  | 154,885,771    |  
|Transportation and logistics fee                              |  |      | 181,107,054    |  |                  |  | 181,461,700    |      |  |  | 186,555,000    |  
|Utilities                                                     |  |      | 121,804,031    |  |                  |  | 145,971,042    |      |  |  | 102,474,719    |  
|After-sales service fee                                       |  |      | 9,411,125      |  |                  |  | 6,564,753      |      |  |  | 7,145,671      |  
|Advertising expenses                                          |  |      | 1,475,148      |  |                  |  | 1,765,506      |      |  |  | 1,375,313      |  
|Others                                                        |  |      | 1,097,504,734  |  |                  |  | 917,983,769    |      |  |  | 1,117,251,738  |  
|                                                              |  |      |                |  |                  |  |                |      |  |  |                |  
|                                                              |  |      | 26,382,625,738 |  |                  |  | 24,037,151,222 |      |  |  | 22,296,583,152 |  
|                                                              |  |      |                |  |                  |  |                |      |  |  |                |  



|(28) | Asset impairment losses
|---- | -----------------------



|                                                  |  |      |            |   |                  |  |           |      |  |  |           | 
|------------------------------------------------- |  | ---- | ---------- | - | ---------------- |  | --------- | ---- |  |  | --------- | 
|                                                  |  | 2016 |            |   | 2015
(Unaudited) |  |           | 2014 | 
|Bad debts provision                               |  |      | 65,970,387 |   |                  |  | 7,056,982 |      |  |  | 725,698   | 
|(Reversal of)/Decline in the value of inventories |  |      | (2,235,672 | ) |                  |  | 2,323,537 |      |  |  | 3,945,541 | 
|                                                  |  |      |            |   |                  |  |           |      |  |  |           | 
|                                                  |  |      | 63,734,715 |   |                  |  | 9,380,519 |      |  |  | 4,671,239 | 
|                                                  |  |      |            |   |                  |  |           |      |  |  |           | 



|(29) | Investment income
|---- | -----------------



|                                                      |  |      |            |  |                  |  |            |      |  |  |            | 
|----------------------------------------------------- |  | ---- | ---------- |  | ---------------- |  | ---------- | ---- |  |  | ---------- | 
|                                                      |  | 2016 |            |  | 2015
(Unaudited) |  |            | 2014 | 
|Share of net profit of investees under equity method  |  |      | 54,019,531 |  |                  |  | 40,459,106 |      |  |  | 13,897,472 | 
|Gains on disposal of long-term equity Investments (a) |  |      |           |  |                  |  | 7,898,751  |      |  |  |           | 
|                                                      |  |      |            |  |                  |  |            |      |  |  |            | 
|                                                      |  |      | 54,019,531 |  |                  |  | 48,357,857 |      |  |  | 13,897,472 | 
|                                                      |  |      |            |  |                  |  |            |      |  |  |            | 



|(a) | Gain from disposal of long-term equity investments attributes to the disposal of 50% equity interest of Baoding Yanfeng Johnson Automotive Seating Co., Ltd. in 2015.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



- 53 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(30) | Non-operating income and expenses
|---- | ---------------------------------



|(a) | Non-operating income
|--- | --------------------



|                                        |  |      |            |  |                  |  |            |      |  |  |            | 
|--------------------------------------- |  | ---- | ---------- |  | ---------------- |  | ---------- | ---- |  |  | ---------- | 
|                                        |  | 2016 |            |  | 2015
(Unaudited) |  |            | 2014 | 
|Government grant                        |  |      | 70,847,989 |  |                  |  | 34,676,251 |      |  |  | 27,429,208 | 
|Gains on disposal of non-current assets |  |      | 3,695,321  |  |                  |  | 1,676,650  |      |  |  | 13,714,861 | 
|Others                                  |  |      | 1,679,072  |  |                  |  | 9,466,186  |      |  |  | 4,127,931  | 
|                                        |  |      |            |  |                  |  |            |      |  |  |            | 
|                                        |  |      | 76,222,382 |  |                  |  | 45,819,087 |      |  |  | 45,272,000 | 
|                                        |  |      |            |  |                  |  |            |      |  |  |            | 



|(b) | Non-operating expenses
|--- | ----------------------



|                                   |  |      |            |  |                  |  |            |      |  |  |            | 
|---------------------------------- |  | ---- | ---------- |  | ---------------- |  | ---------- | ---- |  |  | ---------- | 
|                                   |  | 2016 |            |  | 2015
(Unaudited) |  |            | 2014 | 
|Losses on disposal of fixed assets |  |      | 22,076,927 |  |                  |  | 4,669,157  |      |  |  | 10,808,449 | 
|Others                             |  |      | 3,014,728  |  |                  |  | 9,843,767  |      |  |  | 3,716,581  | 
|                                   |  |      |            |  |                  |  |            |      |  |  |            | 
|                                   |  |      | 25,091,655 |  |                  |  | 14,512,924 |      |  |  | 14,525,030 | 
|                                   |  |      |            |  |                  |  |            |      |  |  |            | 



|(31) | Income tax expenses
|---- | -------------------



|                    |  |      |              |   |                  |  |              |      |  |  |              |  
|------------------- |  | ---- | ------------ | - | ---------------- |  | ------------ | ---- |  |  | ------------ | -
|                    |  | 2016 |              |   | 2015
(Unaudited) |  |              | 2014 | 
|Current income tax  |  |      | 793,033,052  |   |                  |  | 692,032,499  |      |  |  | 523,415,144  |  
|Deferred income tax |  |      | (285,504,161 | ) |                  |  | (228,642,864 | )    |  |  | (134,613,476 | )
|                    |  |      |              |   |                  |  |              |      |  |  |              |  
|                    |  |      | 507,528,891  |   |                  |  | 463,389,635  |      |  |  | 388,801,668  |  
|                    |  |      |              |   |                  |  |              |      |  |  |              |  

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:



|                                                                                                                                  |  |      |               |   |                  |  |               |      |  |  |               |  
|--------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------------- | - | ---------------- |  | ------------- | ---- |  |  | ------------- | -
|                                                                                                                                  |  | 2016 |               |   | 2015
(Unaudited) |  |               | 2014 | 
|Total profit                                                                                                                      |  |      | 2,679,821,377 |   |                  |  | 2,544,404,370 |      |  |  | 2,168,227,394 |  
|                                                                                                                                  |  |      |               |   |                  |  |               |      |  |  |               |  
|Income tax expenses calculated at applicable tax rates                                                                            |  |      | 669,955,344   |   |                  |  | 636,101,093   |      |  |  | 542,056,849   |  
|Investment income under equity method                                                                                             |  |      | (8,102,930    | ) |                  |  | (6,068,866    | )    |  |  | (2,084,621    | )
|Effect of favourable tax rates                                                                                                    |  |      | (131,879,937  | ) |                  |  | (146,627,863  | )    |  |  | (129,982,885  | )
|Additional deduction of research and development expenses                                                                         |  |      | (6,179,545    | ) |                  |  | (9,984,951    | )    |  |  | (9,608,501    | )
|Effect of change in the tax rates                                                                                                 |  |      | 1,190,062     |   |                  |  | 1,336,323     |      |  |  | (2,237,894    | )
|Costs, expenses and losses not deductible for tax purposes                                                                        |  |      | 3,035,020     |   |                  |  | 17,797,833    |      |  |  | 7,366,230     |  
|Deductible losses and deductible temporary differences for which no deferred income tax asset was
recognised                      |  |      | 6,541,466     |   |                  |  |              |      |  |  | 778,538       |  
|Reversal of previously recognised/(Utilisation of previously unrecognised) deductible losses and
deductible temporary differences |  |      | 10,873,546    |   |                  |  | (52,862,590   | )    |  |  | (8,383,048    | )
|Prior year income tax reconciliation differences                                                                                  |  |      | (37,904,135   | ) |                  |  | 23,698,656    |      |  |  | (9,103,000    | )
|                                                                                                                                  |  |      |               |   |                  |  |               |      |  |  |               |  
|Income tax expenses                                                                                                               |  |      | 507,528,891   |   |                  |  | 463,389,635   |      |  |  | 388,801,668   |  
|                                                                                                                                  |  |      |               |   |                  |  |               |      |  |  |               |  



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(32) | 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
|--- | -----------------------------------------------------------------------------------------------------------------------------



|                                                                                           |  |                   |           |  |            |  |   |                      |  |  |           | 
|------------------------------------------------------------------------------------------ |  | ----------------- | --------- |  | ---------- |  | - | -------------------- |  |  | --------- | 
|                                                                                           |  | 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 (Unaudited)  |         
|                                                                                         |  | Amount
before tax |          |   | Incometax |  |   | 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 | )
|                                                                                         |  |                   |          |   |           |  |   |                      |  |  |          |  



|                                                                                           |  |                   |         |  |           |  |   |                      |  |  |         | 
|------------------------------------------------------------------------------------------ |  | ----------------- | ------- |  | --------- |  | - | -------------------- |  |  | ------- | 
|                                                                                           |  | 2014              |        
|                                                                                           |  | Amount
before tax |         |  | Incometax |  |   | 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              |  |                   | 114,990 |  |           |  |  |                      |  |  | 114,990 | 
|Less: Reclassification of previous other comprehensive income to profit or loss            |  |                   |        |  |           |  |  |                      |  |  |        | 
|                                                                                           |  |                   |         |  |           |  |   |                      |  |  |         | 
|                                                                                           |  |                   | 114,900 |  |           |  |  |                      |  |  | 114,900 | 
|                                                                                           |  |                   |         |  |           |  |   |                      |  |  |         | 



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(32) | Other comprehensive income/(loss) (Contd)
|---- | ------------------------------------------



|(b) | Reconciliation of other comprehensive income/(loss)
|--- | ---------------------------------------------------



|                                                          |  |                                                                         |           |   |                   |  |           |       |  |  |   |  |  |  |           |  
|--------------------------------------------------------- |  | ----------------------------------------------------------------------- | --------- | - | ----------------- |  | --------- | ----- |  |  | - |  |  |  | --------- | -
|                                                          |  | Attributable to equity ownersof the Company                             |           |   | Minorityinterests |  |           | Total | 
|                                                          |  | Differencesarising fromtranslationof foreigncurrencyfinancialstatements |           |   | Sub-total         |  |           |       |  |  |   | 
|31 December 2013                                          |  |                                                                         | (147,000  | ) |                   |  | (147,000  | )     |  |  |  |  |  |  | (147,000  | )
|Movements for the year ended 31 December 2014             |  |                                                                         | 114,990   |   |                   |  | 114,990   |       |  |  |  |  |  |  | 114,990   |  
|                                                          |  |                                                                         |           |   |                   |  |           |       |  |  |   |  |  |  |           |  
|31 December 2014                                          |  |                                                                         | (32,010   | ) |                   |  | (32,010   | )     |  |  |  |  |  |  | (32,010   | )
|                                                          |  |                                                                         |           |   |                   |  |           |       |  |  |   |  |  |  |           |  
|Movements for the year ended 31 December 2015 (Unaudited) |  |                                                                         | (275,031  | ) |                   |  | (275,031  | )     |  |  |  |  |  |  | (275,031  | )
|                                                          |  |                                                                         |           |   |                   |  |           |       |  |  |   |  |  |  |           |  
|31 December 2015 (Unaudited)                              |  |                                                                         | (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   |  
|                                                          |  |                                                                         |           |   |                   |  |           |       |  |  |   |  |  |  |           |  



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|7 | Notes to the consolidated financial statements (Contd)
|- | -------------------------------------------------------



|(33) | Notes to the consolidated cash flow statements
|---- | ----------------------------------------------



|(a) | Reconciliation from net profit to cash flows from operating activities
|--- | ----------------------------------------------------------------------



|                                                                                         |  |      |               |   |                  |  |                |      |  |  |               |  
|---------------------------------------------------------------------------------------- |  | ---- | ------------- | - | ---------------- |  | -------------- | ---- |  |  | ------------- | -
|                                                                                         |  | 2016 |               |   | 2015
(Unaudited) |  |                | 2014 | 
|Net profit                                                                               |  |      | 2,172,292,486 |   |                  |  | 2,081,014,735  |      |  |  | 1,779,425,726 |  
|Add: Provisions for asset impairment                                                     |  |      | 63,734,715    |   |                  |  | 9,380,519      |      |  |  | 4,671,239     |  
|Depreciation of fixed assets                                                             |  |      | 310,623,269   |   |                  |  | 261,068,281    |      |  |  | 212,040,500   |  
|Amortisation of intangible assets                                                        |  |      | 30,801,181    |   |                  |  | 98,681,146     |      |  |  | 260,735,109   |  
|Amortisation of long-term prepaid expenses                                               |  |      | 49,829,578    |   |                  |  | 38,390,202     |      |  |  | 29,475,754    |  
|Losses/(Gains) on disposal of fixed assets, intangible assets and other long-term assets |  |      | 18,381,606    |   |                  |  | 2,992,507      |      |  |  | (2,906,412    | )
|Financial (income)/expenses                                                              |  |      | (3,032,122    | ) |                  |  | (4,983,235     | )    |  |  | 6,842,052     |  
|Investment income                                                                        |  |      | (54,019,531   | ) |                  |  | (48,357,857    | )    |  |  | (13,897,472   | )
|Increase in deferred tax assets                                                          |  |      | (285,262,661  | ) |                  |  | (210,718,377   | )    |  |  | (83,489,083   | )
|Decrease in deferred tax liabilities                                                     |  |      | (241,500      | ) |                  |  | (18,358,393    | )    |  |  | (51,124,393   | )
|Increase in inventories                                                                  |  |      | (94,240,317   | ) |                  |  | (65,755,469    | )    |  |  | (17,678,319   | )
|Increase in operating receivables                                                        |  |      | (871,936,802  | ) |                  |  | (1,261,835,070 | )    |  |  | (415,978,727  | )
|Increase in operating payables                                                           |  |      | 2,621,421,678 |   |                  |  | 2,116,111,288  |      |  |  | 959,246,328   |  
|                                                                                         |  |      |               |   |                  |  |                |      |  |  |               |  
|Net cash flows from operating activities                                                 |  |      | 3,958,351,580 |   |                  |  | 2,997,630,277  |      |  |  | 2,667,362,302 |  
|                                                                                         |  |      |               |   |                  |  |                |      |  |  |               |  



|(b) | Net increase in cash and cash equivalents
|--- | -----------------------------------------



|                                                             |  |      |                |   |                  |  |                |      |  |  |                |  
|------------------------------------------------------------ |  | ---- | -------------- | - | ---------------- |  | -------------- | ---- |  |  | -------------- | -
|                                                             |  | 2016 |                |   | 2015
(Unaudited) |  |                | 2014 | 
|Cash and cash equivalents at the end of the year             |  |      | 6,179,211,510  |   |                  |  | 3,741,333,102  |      |  |  | 2,998,757,581  |  
|Less: Cash and cash equivalents at the beginning of the year |  |      | (3,741,333,102 | ) |                  |  | (2,998,757,581 | )    |  |  | (2,762,455,926 | )
|                                                             |  |      |                |   |                  |  |                |      |  |  |                |  
|Net increase in cash and cash equivalents                    |  |      | 2,437,878,408  |   |                  |  | 742,575,521    |      |  |  | 236,301,655    |  
|                                                             |  |      |                |   |                  |  |                |      |  |  |                |  



|(c) | Cash and cash equivalents
|--- | -------------------------



|                                                 |  |                 |               |   |                             |  |               |                 |  |  |               |  
|------------------------------------------------ |  | --------------- | ------------- | - | --------------------------- |  | ------------- | --------------- |  |  | ------------- | -
|                                                 |  | 31 December2016 |               |   | 31 December2015
(Unaudited) |  |               | 31 December2014 | 
|Cash at bank and on hand (Note 7(1))             |  |                 | 6,469,119,196 |   |                             |  | 3,939,894,113 |                 |  |  | 3,165,627,901 |  
|Less: Other restricted cash balances             |  |                 | (289,907,686  | ) |                             |  | (198,561,011  | )               |  |  | (166,870,320  | )
|                                                 |  |                 |               |   |                             |  |               |                 |  |  |               |  
|Cash and cash equivalents at the end of the year |  |                 | 6,179,211,510 |   |                             |  | 3,741,333,102 |                 |  |  | 2,998,757,581 |  
|                                                 |  |                 |               |   |                             |  |               |                 |  |  |               |  



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|8 | Business combination
|- | --------------------



|(a) | Equity transactions with minority interest
|--- | ------------------------------------------

On 26 September 2014, the Company acquired 45%
equity interest of its subsidiary, Shanghai Johnson Automotive Metal from JCI. After the acquisition, Shanghai Johnson Automotive Metal Components Co. Ltd. became a wholly-owned subsidiary of the Company. Capital surplus and surplus reserve
adjustments of the deal are as follows:



|                                                                                                                                                                             |  |  |             |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----------- | -
|Cost of combination -                                                                                                                                                        |  |  |             |  
|Cash paid                                                                                                                                                                    |  |  | 84,289,950  |  
|                                                                                                                                                                             |  |  |             |  
|Total combination cost                                                                                                                                                       |  |  | 84,289,950  |  
|Less: the share of the subsidiarys net identifiable assets continually calculated from the
combination date based on the newly acquired equity ratio at the transaction day |  |  | (80,951,299 | )
|                                                                                                                                                                             |  |  |             |  
|                                                                                                                                                                             |  |  | 3,338,651   |  
|                                                                                                                                                                             |  |  |             |  
|Including: Capital surplus adjustment                                                                                                                                        |  |  | 1,148,851   |  
|Surplus reserve adjustment                                                                                                                                                   |  |  | 2,189,800   |  



|9 | 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.



- 58 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|9 | Related parties and related party transactions (Contd)
|- | -------------------------------------------------------



|(1) | The parent company and subsidiaries (Contd)
|--- | --------------------------------------------



|(b) | Registered capital and changes in registered capital of the parent company
|--- | --------------------------------------------------------------------------



|             |  |                              |               |  |                     |     |   |                              |  |  |               | 
|------------ |  | ---------------------------- | ------------- |  | ------------------- | --- | - | ---------------------------- |  |  | ------------- | 
|             |  | 31 December
2015 (Unaudited) |               |  | Current yearchanges |     |   | 31 December
2016             | 
|             |  | RMB                          |               |  |                     | RMB |  
|Yanfeng Trim |  |                              | 1,078,947,853 |  |                     |     |  |                              |  |  | 1,078,947,853 | 
|             |  |                              |               |  |                     |     |   |                              |  |  |               | 
|             |  |                              |              
|             |  | 31 December
2014             |               |  | Current yearchanges |     |   | 31 December
2015 (Unaudited) | 
|             |  | RMB                          |               |  |                     | RMB |  
|Yanfeng Trim |  |                              | 1,078,947,853 |  |                     |     |  |                              |  |  | 1,078,947,853 | 
|             |  |                              |               |  |                     |     |   |                              |  |  |               | 
|             |  |                              |              
|             |  | 31 December
2013             |               |  | Current yearchanges |     |   | 31 December
2014             | 
|             |  | USD                          |               |  |                     | RMB |  
|Yanfeng Trim |  |                              | 139,233,200   |  |                     |     |  |                              |  |  | 1,078,947,853 | 
|             |  |                              |               |  |                     |     |   |                              |  |  |               | 

Note: Yanfeng Trim changed from foreign-invested production enterprise to domestic enterprise approved by
Shanghai Municipal Commission of Commerce (Grant No: Shanghai Foreign Investment approve [2013] No.3573). After the registration changes in Shanghai Industrial and Commercial Bureau, the registered capital changed from USD 139,233,200 to RMB
1,078,947,853. The parent company obtained an updated business licence on 6 January 2014.



|(c) | The proportion of interests and voting rights in the Company held by the parent company
|--- | ---------------------------------------------------------------------------------------



|             |  |                 |       |   |                             |  |       |                 |  |  |               |   |  |               |       |   |               |  |       |   |  |  |       |  
|------------ |  | --------------- | ----- | - | --------------------------- |  | ----- | --------------- |  |  | ------------- | - |  | ------------- | ----- | - | ------------- |  | ----- | - |  |  | ----- | -
|             |  | 31 December2016 |       |   | 31 December 2015(Unaudited) |  |       | 31 December2014 | 
|             |  | 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 | %
|             |  |                 |       |   |                             |  |       |                 |  |  |               |   |  |               |       |   |               |  |       |   |  |  |       |  



- 59 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|9 | Related parties and related party transactions (Contd)
|- | -------------------------------------------------------



|(2) | Related parties that do not control or are not controlled by the Company
|--- | ------------------------------------------------------------------------



|                                                                             |  |                                              
|---------------------------------------------------------------------------- |  | ---------------------------------------------
|                                                                             |  | Relationship with the Group                  
|Guangzhou Dongfeng Johnson Seating (ii)                                      |  | Associate                                    
|Wuhan Taiji (ii)                                                             |  | Associate                                    
|CRH Shenyang (ii)                                                            |  | Joint venture                                
|Yanfeng Hainachuan 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             
|Yanfeng Gabriel (Shanghai) Automotive Safety Systems
Co., Ltd. (iii)         |  | Subsidiary of the parent company             
|Dongfeng Automotive Trim Systems Co., Ltd. (iii)                             |  | Subsidiary of the parent company             
|Yanfeng Johnson Controls Automotive Seating Mechanical
Parts Co., Ltd. (iii) |  | Subsidiary of the parent company             
|Yanfeng Visteon Automotive Electronics Co., Ltd. (iii)                       |  | Joint venture of the parent 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 General Motors Sales Co., Ltd. (iii)                                    |  | Subsidiary 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
|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 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   
|Nanjing Iveco Automobile Co., Ltd. (iii)                                     |  | Joint venture 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   
|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    
|Pan Asia Technical Automotive Center Co., Ltd. (iii)                         |  | Joint venture of the ultimate holding company
|SAIC Volkswagen Sales Co., Ltd. (iii)                                        |  | Subsidiary of the ultimate holding company   
|Shanghai Koito Automotive Lamp Co., Ltd. (iii)                               |  | Joint venture of the ultimate holding company
|Shanghai LEAR STEC Automotive Parts Co., Ltd.
(iii)                          |  | Associate 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   



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|9 | Related parties and related party transactions (Contd)
|- | -------------------------------------------------------



|(2) | Related parties that do not control or are not controlled by the Company (Contd)
|--- | ---------------------------------------------------------------------------------



|                                                                                          |  |                                                 
|----------------------------------------------------------------------------------------- |  | ------------------------------------------------
|                                                                                          |  | Relationship with the Group                     
|Adient plc (i) (iv)                                                                       |  | Ultimate holding company of Adient Asia         
|Johnson Controls Automotive Interior Investment Co., Limited (iv)                         |  | Subsidiary of Johnson Controls International plc
|Guangzhou Johnson Controls Automotive Interior Systems Co., Ltd. (iv)                     |  | Joint venture of Adient plc                     
|Changsha Guangzhou Automobile Johnson Controls Automotive Interior Systems Co., Ltd. (iv) |  | Joint venture 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                        
|Other subsidiaries of Adient plc (iv)                                                     |  | Subsidiary of Adient plc                        



| | (i) | In 2016, Johnson Controls International plc, the former ultimate holding company of the Companys 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 Groups 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
|--- | -----------------



|                                                      |  |      |               |  |                  |  |               |      |  |  |               | 
|----------------------------------------------------- |  | ---- | ------------- |  | ---------------- |  | ------------- | ---- |  |  | ------------- | 
|                                                      |  | 2016 |               |  | 2015
(Unaudited) |  |               | 2014 | 
|SAIC, its subsidiaries, associates and joint ventures |  |      | 6,498,294,883 |  |                  |  | 6,040,834,033 |      |  |  | 4,237,372,070 | 
|Associates and Joint ventures                         |  |      | 324,582,271   |  |                  |  | 186,911,048   |      |  |  |              | 
|Adient and JCI, its subsidiaries and joint ventures   |  |      | 109,494,707   |  |                  |  | 120,581,231   |      |  |  | 410,815,392   | 
|                                                      |  |      |               |  |                  |  |               |      |  |  |               | 
|                                                      |  |      | 6,932,371,861 |  |                  |  | 6,348,326,312 |      |  |  | 4,648,187,462 | 
|                                                      |  |      |               |  |                  |  |               |      |  |  |               | 



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|9 | Related parties and related party transactions (Contd)
|- | -------------------------------------------------------



|(3) | Related party transactions (Contd)
|--- | -----------------------------------



|(c) | Sale of goods
|--- | -------------



|                                                      |  |      |                |  |                  |  |                |      |  |  |                | 
|----------------------------------------------------- |  | ---- | -------------- |  | ---------------- |  | -------------- | ---- |  |  | -------------- | 
|                                                      |  | 2016 |                |  | 2015
(Unaudited) |  |                | 2014 | 
|SAIC, its subsidiaries, associates and joint ventures |  |      | 18,688,195,185 |  |                  |  | 16,507,946,364 |      |  |  | 15,798,341,005 | 
|Adient and JCI, its subsidiaries and joint ventures   |  |      | 629,760,415    |  |                  |  | 630,717,292    |      |  |  | 1,206,475,766  | 
|Associates and Joint ventures                         |  |      | 83,612,859     |  |                  |  | 177,185,654    |      |  |  | 46,748,588     | 
|                                                      |  |      |                |  |                  |  |                |      |  |  |                | 
|                                                      |  |      | 19,401,568,459 |  |                  |  | 17,315,849,310 |      |  |  | 17,051,565,359 | 
|                                                      |  |      |                |  |                  |  |                |      |  |  |                | 



|(d) | Technical service fee
|--- | ---------------------



|                                                    |  |      |            |  |                  |  |            |      |  |  |            | 
|--------------------------------------------------- |  | ---- | ---------- |  | ---------------- |  | ---------- | ---- |  |  | ---------- | 
|                                                    |  | 2016 |            |  | 2015
(Unaudited) |  |            | 2014 | 
|Adient and JCI, its subsidiaries and joint ventures |  |      | 54,457,867 |  |                  |  | 11,094,631 |      |  |  | 25,794,485 | 
|SAIC, its subsidiaries and joint ventures           |  |      |           |  |                  |  |           |      |  |  | 441,814    | 
|                                                    |  |      |            |  |                  |  |            |      |  |  |            | 
|                                                    |  |      | 54,457,867 |  |                  |  | 11,094,631 |      |  |  | 26,236,299 | 
|                                                    |  |      |            |  |                  |  |            |      |  |  |            | 



|(e) | (Decrease)/Increase on entrusted loans and cash poolnet
|--- | --------------------------------------------------------



|                                                      |  |      |              |   |                  |  |             |      |  |  |         | 
|----------------------------------------------------- |  | ---- | ------------ | - | ---------------- |  | ----------- | ---- |  |  | ------- | 
|                                                      |  | 2016 |              |   | 2015
(Unaudited) |  |             | 2014 | 
|SAIC, its subsidiaries, associates and joint ventures |  |      | (149,017,458 | ) |                  |  | 300,000,000 |      |  |  |        | 
|Associates and Joint ventures                         |  |      | (15,000,000  | ) |                  |  | (35,646,471 | )    |  |  | 646,471 | 
|                                                      |  |      |              |   |                  |  |             |      |  |  |         | 
|                                                      |  |      | (164,017,458 | ) |                  |  | 264,353,529 |      |  |  | 646,471 | 
|                                                      |  |      |              |   |                  |  |             |      |  |  |         | 



|(f) | Interest income from entrusted loans and cash pool
|--- | --------------------------------------------------



|                                                      |  |      |           |  |                  |  |            |      |  |  |           | 
|----------------------------------------------------- |  | ---- | --------- |  | ---------------- |  | ---------- | ---- |  |  | --------- | 
|                                                      |  | 2016 |           |  | 2015
(Unaudited) |  |            | 2014 | 
|SAIC, its subsidiaries, associates and joint ventures |  |      | 8,782,308 |  |                  |  | 11,903,333 |      |  |  |          | 
|Associates and Joint ventures                         |  |      | 566,535   |  |                  |  | 137,603    |      |  |  | 2,369,484 | 
|                                                      |  |      |           |  |                  |  |            |      |  |  |           | 
|                                                      |  |      | 9,348,843 |  |                  |  | 12,040,936 |      |  |  | 2,369,484 | 
|                                                      |  |      |           |  |                  |  |            |      |  |  |           | 



|(g) | Transfer of fixed assets
|--- | ------------------------



|                                                      |  |      |   |  |                 |  |   |      |  |  |             | 
|----------------------------------------------------- |  | ---- | - |  | --------------- |  | - | ---- |  |  | ----------- | 
|                                                      |  | 2016 |   |  | 2015(Unaudited) |  |   | 2014 | 
|SAIC, its subsidiaries, associates and joint ventures |  |      |  |  |                 |  |  |      |  |  | 239,181,461 | 
|                                                      |  |      |   |  |                 |  |   |      |  |  |             | 



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|9 | Related parties and related party transactions (Contd)
|- | -------------------------------------------------------



|(4) | Receivables from and payables to related parties
|--- | ------------------------------------------------



|(a) | Accounts receivable
|--- | -------------------



|                                                      |  |                 |               |  |                             |  |               |                 |  |  |               | 
|----------------------------------------------------- |  | --------------- | ------------- |  | --------------------------- |  | ------------- | --------------- |  |  | ------------- | 
|                                                      |  | 31 December2016 |               |  | 31 December2015
(Unaudited) |  |               | 31 December2014 | 
|SAIC, its subsidiaries, associates and joint ventures |  |                 | 3,573,100,002 |  |                             |  | 3,535,400,441 |                 |  |  | 2,476,788,674 | 
|Adient and JCI, its subsidiaries and joint ventures   |  |                 | 160,191,396   |  |                             |  | 254,272,885   |                 |  |  | 282,348,127   | 
|Associates and Joint ventures                         |  |                 | 68,419,242    |  |                             |  | 67,727,656    |                 |  |  | 68,544,572    | 
|                                                      |  |                 |               |  |                             |  |               |                 |  |  |               | 
|                                                      |  |                 | 3,801,710,640 |  |                             |  | 3,857,400,982 |                 |  |  | 2,827,681,373 | 
|                                                      |  |                 |               |  |                             |  |               |                 |  |  |               | 



|(b) | Notes receivable
|--- | ----------------



|                                                      |  |                 |            |  |                             |  |             |                 |  |  |             | 
|----------------------------------------------------- |  | --------------- | ---------- |  | --------------------------- |  | ----------- | --------------- |  |  | ----------- | 
|                                                      |  | 31 December2016 |            |  | 31 December2015
(Unaudited) |  |             | 31 December2014 | 
|SAIC, its subsidiaries, associates and joint ventures |  |                 | 80,319,000 |  |                             |  | 198,155,751 |                 |  |  | 143,284,958 | 
|Associates and Joint ventures                         |  |                 |           |  |                             |  | 11,764,000  |                 |  |  | 36,075,000  | 
|                                                      |  |                 |            |  |                             |  |             |                 |  |  |             | 
|                                                      |  |                 | 80,319,000 |  |                             |  | 209,919,751 |                 |  |  | 179,359,958 | 
|                                                      |  |                 |            |  |                             |  |             |                 |  |  |             | 



|(c) | Advances to suppliers
|--- | ---------------------



|                                                      |  |                 |           |  |                             |  |           |                 |  |  |           | 
|----------------------------------------------------- |  | --------------- | --------- |  | --------------------------- |  | --------- | --------------- |  |  | --------- | 
|                                                      |  | 31 December2016 |           |  | 31 December2015
(Unaudited) |  |           | 31 December2014 | 
|SAIC, its subsidiaries, associates and joint ventures |  |                 | 2,693,546 |  |                             |  | 2,700,000 |                 |  |  | 2,700,000 | 
|                                                      |  |                 |           |  |                             |  |           |                 |  |  |           | 



|(d) | Other receivables
|--- | -----------------



|                                                      |  |                 |             |  |                             |  |            |                 |  |  |             | 
|----------------------------------------------------- |  | --------------- | ----------- |  | --------------------------- |  | ---------- | --------------- |  |  | ----------- | 
|                                                      |  | 31 December2016 |             |  | 31 December2015
(Unaudited) |  |            | 31 December2014 | 
|SAIC, its subsidiaries, associates and joint ventures |  |                 | 154,655,835 |  |                             |  | 40,933,096 |                 |  |  | 213,200,582 | 
|                                                      |  |                 |             |  |                             |  |            |                 |  |  |             | 



|(e) | Other current assets
|--- | --------------------



|                                                      |  |                 |   |  |                             |  |             |                 |  |  |   | 
|----------------------------------------------------- |  | --------------- | - |  | --------------------------- |  | ----------- | --------------- |  |  | - | 
|                                                      |  | 31 December2016 |   |  | 31 December2015
(Unaudited) |  |             | 31 December2014 | 
|SAIC, its subsidiaries, associates and joint ventures |  |                 |  |  |                             |  | 300,000,000 |                 |  |  |  | 
|Associates and Joint ventures                         |  |                 |  |  |                             |  | 15,000,000  |                 |  |  |  | 
|                                                      |  |                 |   |  |                             |  |             |                 |  |  |   | 
|                                                      |  |                 |  |  |                             |  | 315,000,000 |                 |  |  |  | 
|                                                      |  |                 |   |  |                             |  |             |                 |  |  |   | 



|(f) | Dividends receivable
|--- | --------------------



|                              |  |                 |            |  |                             |  |            |                 |  |  |   | 
|----------------------------- |  | --------------- | ---------- |  | --------------------------- |  | ---------- | --------------- |  |  | - | 
|                              |  | 31 December2016 |            |  | 31 December2015
(Unaudited) |  |            | 31 December2014 | 
|Associates and Joint ventures |  |                 | 12,071,405 |  |                             |  | 16,336,555 |                 |  |  |  | 
|                              |  |                 |            |  |                             |  |            |                 |  |  |   | 



- 63 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|9 | Related parties and related party transactions (Contd)
|- | -------------------------------------------------------



|(4) | Receivables from and payables to related parties (Contd)
|--- | ---------------------------------------------------------



|(g) | Cash at bankdeposit in SAIC, its subsidiaries, associates and joint ventures
|--- | -----------------------------------------------------------------------------



|                                                      |  |                 |               |  |                             |  |             |                 |  |  |             | 
|----------------------------------------------------- |  | --------------- | ------------- |  | --------------------------- |  | ----------- | --------------- |  |  | ----------- | 
|                                                      |  | 31 December2016 |               |  | 31 December2015
(Unaudited) |  |             | 31 December2014 | 
|SAIC, its subsidiaries, associates and joint ventures |  |                 | 1,509,271,765 |  |                             |  | 385,533,629 |                 |  |  | 112,121,166 | 
|                                                      |  |                 |               |  |                             |  |             |                 |  |  |             | 



|(h) | Accounts payable
|--- | ----------------



|                                                      |  |                 |               |  |                             |  |               |                 |  |  |             | 
|----------------------------------------------------- |  | --------------- | ------------- |  | --------------------------- |  | ------------- | --------------- |  |  | ----------- | 
|                                                      |  | 31 December2016 |               |  | 31 December2015
(Unaudited) |  |               | 31 December2014 | 
|SAIC, its subsidiaries, associates and joint ventures |  |                 | 1,633,962,197 |  |                             |  | 1,355,522,304 |                 |  |  | 777,445,836 | 
|Associates and Joint ventures                         |  |                 | 109,748,062   |  |                             |  | 76,470,959    |                 |  |  |            | 
|Adient and JCI, its subsidiaries and joint ventures   |  |                 | 32,727,281    |  |                             |  | 22,165,380    |                 |  |  | 48,256,121  | 
|                                                      |  |                 |               |  |                             |  |               |                 |  |  |             | 
|                                                      |  |                 | 1,776,437,540 |  |                             |  | 1,454,158,643 |                 |  |  | 825,701,957 | 
|                                                      |  |                 |               |  |                             |  |               |                 |  |  |             | 



|(i) | Notes payable
|--- | -------------



|                                                      |  |                 |            |  |                             |  |            |                 |  |  |            | 
|----------------------------------------------------- |  | --------------- | ---------- |  | --------------------------- |  | ---------- | --------------- |  |  | ---------- | 
|                                                      |  | 31 December2016 |            |  | 31 December2015
(Unaudited) |  |            | 31 December2014 | 
|SAIC, its subsidiaries, associates and joint ventures |  |                 | 89,010,000 |  |                             |  | 21,133,578 |                 |  |  | 36,513,000 | 
|                                                      |  |                 |            |  |                             |  |            |                 |  |  |            | 



|(j) | Other payables
|--- | --------------



|                                                      |  |                 |           |  |                             |  |   |                 |  |  |   | 
|----------------------------------------------------- |  | --------------- | --------- |  | --------------------------- |  | - | --------------- |  |  | - | 
|                                                      |  | 31 December2016 |           |  | 31 December2015
(Unaudited) |  |   | 31 December2014 | 
|SAIC, its subsidiaries, associates and joint ventures |  |                 | 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 December2016 |            |  | 31 December2015
(Unaudited) |  |            | 31 December2014 | 
|- Lessee                                              |  |                 |            |  |                             |  |            |                 |  |  |            | 
|SAIC, its subsidiaries, associates and joint ventures |  |                 | 49,120,982 |  |                             |  | 36,939,538 |                 |  |  | 41,311,628 | 
|                                                      |  |                 |            |  |                             |  |            |                 |  |  |            | 



- 64 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|10 | 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 2016 |             |  | 31 December 2015
(Unaudited) |  |            | 31 December 2014 | 
|Buildings, machinery and equipment |  |                  | 117,327,496 |  |                              |  | 16,596,507 |                  |  |  | 80,488,440 | 
|                                   |  |                  |             |  |                              |  |            |                  |  |  |            | 



|(2) | Operating lease commitments
|--- | ---------------------------

The future minimum lease payments due under the signed
irrevocable operating leases contracts are summarised as follows:



|              |  |                  |             |  |                              |  |             |                  |  |  |             | 
|------------- |  | ---------------- | ----------- |  | ---------------------------- |  | ----------- | ---------------- |  |  | ----------- | 
|              |  | 31 December 2016 |             |  | 31 December 2015
(Unaudited) |  |             | 31 December 2014 | 
|Within 1 year |  |                  | 140,730,559 |  |                              |  | 132,460,943 |                  |  |  | 131,592,517 | 
|1 and 2 years |  |                  | 108,597,927 |  |                              |  | 120,530,998 |                  |  |  | 113,931,992 | 
|2 and 3 years |  |                  | 98,372,305  |  |                              |  | 114,024,576 |                  |  |  | 105,257,607 | 
|Over 3 years  |  |                  | 294,351,515 |  |                              |  | 361,243,744 |                  |  |  | 284,160,625 | 
|              |  |                  |             |  |                              |  |             |                  |  |  |             | 
|              |  |                  | 642,052,306 |  |                              |  | 728,260,261 |                  |  |  | 634,942,741 | 
|              |  |                  |             |  |                              |  |             |                  |  |  |             | 



|11 | Financial risk
|-- | --------------

The Groups 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 Groups overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse
effects on the Groups financial performance.



|(1) | Market risk
|--- | -----------



|(a) | Foreign exchange risk
|--- | ---------------------

The Groups major operational activities are carried out in
Mainland China and a majority of the transactions are denominated in RMB. The Group is exposed to foreign exchange risk arising from the recognised assets and liabilities, and future transactions denominated in foreign currencies, primarily with
respect to US dollars. The Groups 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.



- 65 -



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|11 | Financial risk (Contd)
|-- | -----------------------



|(1) | Market risk (Contd)
|--- | --------------------



|(a) | Foreign exchange risk (Contd)
|--- | ------------------------------



As at 31 December 2016, 2015 and 2014, the carrying amounts in RMB equivalent of the
Groups assets and liabilities denominated in foreign currencies are summarized below:



|                                                        |  |                  |             |  |        |  |             |       |  |  |             | 
|------------------------------------------------------- |  | ---------------- | ----------- |  | ------ |  | ----------- | ----- |  |  | ----------- | 
|                                                        |  | 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(Unaudited) |            
|                                                        |  | 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 | 
|                                                        |  |                             |             |  |        |  |             |       |  |  |             | 



|                                                        |  |                  |             |  |        |  |             |       |  |  |             | 
|------------------------------------------------------- |  | ---------------- | ----------- |  | ------ |  | ----------- | ----- |  |  | ----------- | 
|                                                        |  | 31 December 2014 |            
|                                                        |  | USD              |             |  | Others |  |             | Total | 
|Financial assets denominated in foreign currency -      |  |                  |             |  |        |  |             |       |  |  |             | 
|Cash at bank and on hand                                |  |                  | 53,521,080  |  |        |  | 24,670,080  |       |  |  | 78,191,160  | 
|Receivables                                             |  |                  | 209,023,397 |  |        |  | 222,641,716 |       |  |  | 431,665,113 | 
|                                                        |  |                  |             |  |        |  |             |       |  |  |             | 
|                                                        |  |                  | 262,544,477 |  |        |  | 247,311,796 |       |  |  | 509,856,273 | 
|                                                        |  |                  |             |  |        |  |             |       |  |  |             | 
|Financial liabilities denominated in foreign currency - |  |                  |             |  |        |  |             |       |  |  |             | 
|Payables                                                |  |                  | 41,166,835  |  |        |  | 91,832,808  |       |  |  | 132,999,643 | 
|                                                        |  |                  |             |  |        |  |             |       |  |  |             | 

As at 31 December 2016, 2015 and 2014, if the RMB had strengthened/weakened by 10% against the USD while
all other variables had been held constant, the Groups profit before tax for the years would have been approximately 12,566,290, 16,872,369 and 22,137,764 lower/higher for various financial assets and liabilities denominated in USD.



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|11 | Financial instrument and risk (Contd)
|-- | --------------------------------------



|(1) | Market risk (Contd)
|--- | --------------------



|(b) | Interest rate risk
|--- | ------------------

The Groups 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 2016, 2015 and 2014, the Groups long-term interest bearing borrowings were RMB-denominated with floating rates, amounting to 8,107,000, 13,505,000 and 18,903,000 (Note 7(21)).

The
Groups 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 Groups
outstanding floating rate borrowings, and therefore could have a material adverse effect on the Groups 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 2016, 2015 and 2014, the Group did not enter into any interest rate swap agreements.

As at 31 December 2016, 2015 and 2014, if interest rates on the floating rate borrowings had risen/fallen by 50 basis points while all
other variables had been held constant, the Groups net profit would have decreased/increased by approximately 40,535, 67,525 and 94,515, 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 2016, 2015 and 2014, cash deposited at state-owned banks, other medium or large size listed
banks and related party were approximately 6,468 million, 3,934 million and 3,160 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.



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|11 | Financial instrument and risk (Contd)
|-- | --------------------------------------



|(3) | Liquidity risk
|--- | --------------

Cash flow forecasting is performed by each subsidiary of the Group and
aggregated by the Groups finance department in its headquarters. The Groups finance department at its headquarters monitors rolling forecasts of the Groups 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 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(Unaudited) |               
|                      |  | 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  | 
|                      |  |                             |                |  |              |  |            |              |  |  |       |  |  |  |                | 
|                      | 
|                      |  | 31 December 2014            |               
|                      |  | Within 1 year               |                |  | 1 to 5 years |  |            | Over 5 years |  |  | Total | 
|Short-term borrowings |  |                             | 100,000,000    |  |              |  |           |              |  |  |      |  |  |  | 100,000,000    | 
|Notes payable         |  |                             | 441,557,489    |  |              |  |           |              |  |  |      |  |  |  | 441,557,489    | 
|Accounts payable      |  |                             | 6,510,519,647  |  |              |  |           |              |  |  |      |  |  |  | 6,510,519,647  | 
|Interest payable      |  |                             | 6,023,194      |  |              |  | 1,841,602  |              |  |  |      |  |  |  | 7,864,796      | 
|Dividends payable     |  |                             | 36,552,986     |  |              |  |           |              |  |  |      |  |  |  | 36,552,986     | 
|Other payables        |  |                             | 299,474,754    |  |              |  |           |              |  |  |      |  |  |  | 299,474,754    | 
|Long-term borrowings  |  |                             | 5,398,000      |  |              |  | 18,903,000 |              |  |  |      |  |  |  | 24,301,000     | 
|                      |  |                             |                |  |              |  |            |              |  |  |       |  |  |  |                | 
|                      |  |                             | 7,399,526,070  |  |              |  | 20,744,602 |              |  |  |      |  |  |  | 7,420,270,672  | 
|                      |  |                             |                |  |              |  |            |              |  |  |       |  |  |  |                | 



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED

31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless otherwise stated)



|12 | 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.



|13 | Capital management
|-- | ------------------

The Groups capital management policies aim to safeguard the
Groups ability to continue as a going concern in order to provide returns for 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 Groups total capital is calculated as owners equity as shown in the
consolidated balance sheet. The Group is not subject to external mandatory capital requirements.



|14 | Reconciliation to United States generally accepted accounting principles
|-- | ------------------------------------------------------------------------

The financial
statements have been prepared in accordance with Accounting Standards for Business Enterprises in the Peoples 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 2016, 2015 and 2014 which would be required if U.S. GAAP were to be applied instead of PRC GAAP are summarized as follows:



|                                        |  |      |               |   |                  |  |               |      |  |  |               |  
|--------------------------------------- |  | ---- | ------------- | - | ---------------- |  | ------------- | ---- |  |  | ------------- | -
|                                        |  | 2016 |               |   | 2015
(Unaudited) |  |               | 2014 | 
|Net profit under PRC GAAP               |  |      | 2,172,292,486 |   |                  |  | 2,081,014,735 |      |  |  | 1,779,425,726 |  
|Adjustments:                            |  |      |               |   |                  |  |               |      |  |  |               |  
|Inventory impairment reversals (a)      |  |      | (2,965,596    | ) |                  |  | 618,444       |      |  |  | 525,473       |  
|Staff Welfare and Incentive Fund (b)    |  |      | (9,884,955    | ) |                  |  | (4,356,968    | )    |  |  | (6,822,052    | )
|Tax effect of the reconciling items (c) |  |      | 444,839       |   |                  |  | (92,767       | )    |  |  | (78,821       | )
|                                        |  |      |               |   |                  |  |               |      |  |  |               |  
|Net profit under U.S. GAAP              |  |      | 2,159,886,774 |   |                  |  | 2,077,183,444 |      |  |  | 1,773,050,326 |  
|                                        |  |      |               |   |                  |  |               |      |  |  |               |  



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##### Table of Contents

YANFENG ADIENT SEATING CO., LTD.

(FORMERLY KNOWN AS SHANGHAI YANFENG JOHNSON CONTROLS SEATING CO., LTD.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED 31 DECEMBER 2016, 2015 AND 2014 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2015 ARE UNAUDITED)

(All amounts in RMB Yuan unless
otherwise stated)



14 Reconciliation to United States generally accepted accounting principles (Contd)



The effects of the significant adjustments to owners equity for the years ended
31 December 2016, 2015 and 2014 which would be required if U.S. GAAP were to be applied instead of PRC GAAP are summarized as follows:



|                                        |  |                  |               |   |                              |  |               |                  |  |  |               |  
|--------------------------------------- |  | ---------------- | ------------- | - | ---------------------------- |  | ------------- | ---------------- |  |  | ------------- | -
|                                        |  | 31 December 2016 |               |   | 31 December 2015
(Unaudited) |  |               | 31 December 2014 | 
|Owners equity under PRC GAAP           |  |                  | 4,372,016,024 |   |                              |  | 3,924,801,104 |                  |  |  | 3,523,307,561 |  
|Adjustments:                            |  |                  |               |   |                              |  |               |                  |  |  |               |  
|Inventory impairment reversals (a)      |  |                  | (3,130,580    | ) |                              |  | 618,444       |                  |  |  | 525,473       |  
|Staff Welfare and Incentive Fund (b)    |  |                  | 316,115,041   |   |                              |  | 277,256,403   |                  |  |  | 236,466,741   |  
|Tax effect of the reconciling items (c) |  |                  | 469,587       |   |                              |  | (92,767       | )                |  |  | (78,821       | )
|                                        |  |                  |               |   |                              |  |               |                  |  |  |               |  
|Owners equity under U.S. GAAP          |  |                  | 4,685,470,072 |   |                              |  | 4,202,583,184 |                  |  |  | 3,760,220,954 |  
|                                        |  |                  |               |   |                              |  |               |                  |  |  |               |  



|(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 Companys 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 Companys 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, 2016, 2015 and 2014 was 15%.



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