Exhibit 99.1 YANFENG ADIENT SEATING CO., LTD. CONSOLIDATED
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT AUDITOR FOR THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016




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YANFENG ADIENT SEATING CO., LTD. CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT AUDITOR FOR THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016  Contents

PageReport of Independent Auditor

1 - 2Consolidated balance sheets

3Consolidated income statements

4Consolidated cash flow statements

5Consolidated statements of changes in owners equity

6Notes to the consolidated financial statements

7 - 79




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Report of Independent Auditors To the Board of Directors of Yanfeng Adient Seating Co., Ltd.: We have audited the accompanying consolidated financial statements of Yanfeng Adient Seating Co., Ltd. and its subsidiaries, which comprise the consolidated
balance sheets as of 31 December 2018 and 2016, and the related consolidated statements of income, of changes in owners equity and of 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.  - 1 -




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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. and its subsidiaries as of 31 December 2018 and 2016, 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. and its subsidiaries as of 31 December 2017, and the related consolidated
statements of income, of changes in owners equity and of 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 2017 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 13 to the consolidated financial statements. /s/ PricewaterhouseCoopers Zhong Tian LLP PricewaterhouseCoopers Zhong Tian LLP Shanghai, the
Peoples Republic of China 24 June 2019  - 2 -




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YANFENG ADIENT SEATING CO., LTD. CONSOLIDATED BALANCE SHEETS AS AT 31 DECEMBER 2018, 2017* AND 2016 (All amounts in RMB Yuan unless otherwise stated)  ASSETS

Note


31 December 2018Consolidated


31 December 2017*Consolidated(Restatement)


31 December 2016Consolidated(Restatement)Current assetsCash at bank and on hand


7
(1)


9,297,999,049



8,133,672,578



6,469,119,196Notes and accounts receivables


7
(2)


6,536,310,093



9,572,835,594



7,538,492,479Advances to suppliers


7
(4)


164,039,316



203,060,113



120,306,449Other receivables


7
(3)


761,450,480



846,479,167



333,406,757Inventories


7
(5)


699,247,505



894,975,575



797,678,665Other current assets


7
(6)


262,322,994



147,488,522



160,712,360Total current assets






17,721,369,437



19,798,511,549



15,419,715,906Non-current assetsLong-term equity investments


7
(7)


187,583,985



210,259,121



190,255,274Investment properties


7
(8)


41,346,528



42,529,486



Fixed assets


7
(9)


1,889,156,233



1,828,614,100



1,719,813,378Construction in progress


7
(10)


364,441,463



278,761,927



442,223,123Intangible assets


7
(11)


382,752,582



360,392,024



294,578,758Goodwill


7
(12)


71,566,642



71,566,642



71,566,642Long-term prepaid expenses


7
(13)


131,768,290



164,414,655



196,028,241Deferred tax assets


7
(14(a))


1,510,284,687



1,090,403,831



831,379,541Other non-current assets


7
(15)


53,966,768



80,605,952



57,461,692Total non-current assets






4,632,867,178



4,127,547,738



3,803,306,649TOTAL ASSETS






22,354,236,615



23,926,059,287



19,223,022,555LIABILITIES AND OWNERS EQUITY

Note


31 December 2018Consolidated


31 December 2017*Consolidated(Restatement)


31 December 2016Consolidated(Restatement)Current liabilitiesShort-term borrowings


7
(16)


578,660,000



551,280,196



408,884,232Notes and accounts payables


7
(17)


11,112,601,027



13,450,825,588



10,527,112,831Advances from customers






16,559,431



18,356,209



31,006,431Employee benefits payable


7
(18)


835,145,685



847,097,224



792,960,721Taxes payable


7
(19)


545,954,818



656,622,866



709,246,804Other payables


7
(20)


3,975,311,258



3,527,012,379



2,354,357,460Current portion of long-term borrowings


7
(21)


1,500,000



3,000,000



5,398,000Current portion of non-current liabilities






22,770



22,770



Total current liabilities






17,065,754,989



19,054,217,232



14,828,966,479Non-current liabilitiesLong-term borrowings


7
(21)






1,500,000



8,107,000Provisions






6,569,571



3,371,338



3,937,103Deferred income


7
(22)


14,135,470



9,117,415



9,995,949Total non-current liabilities






20,705,041



13,988,753



22,040,052Total liabilities






17,086,460,030



19,068,205,985



14,851,006,531Owners equityPaid-in capital






439,853,380



439,853,380



439,853,380Other comprehensive income/(loss)


7
(35(b))


1,515,997



1,414,254



983,955Surplus reserve


7
(23)


508,075,017



441,810,777



376,736,592Undistributed profits


7
(24)


3,774,252,967



3,463,983,805



3,005,135,145Total equity attributable to equity owners of the Company






4,723,697,361



4,347,062,216



3,822,709,072Minority interests






544,079,224



510,791,086



549,306,952Total owners equity






5,267,776,585



4,857,853,302



4,372,016,024TOTAL LIABILITIES AND OWNERS EQUITY






22,354,236,615



23,926,059,287



19,223,022,555  *
Not covered by the AUDITORS report included herein The accompanying notes form an integral part of these consolidated financial statements.  Legal representative: Jianxu Jia         Principal in charge of accounting: Chungao Zang         Head of accounting department: Jianjun Chu  - 3 -




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YANFENG ADIENT SEATING CO., LTD. CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2018, 2017* AND 2016 (All amounts in RMB Yuan unless otherwise stated)  Item

Note


2018Consolidated


2017*Consolidated(Restatement)


2016Consolidated(Restatement)Revenue


7
(25)


33,315,911,601



32,043,195,882



29,122,501,178Less:

Cost of sales


7
(25)(28)


(27,732,668,176
)


(26,532,394,041
)


(24,215,383,432
)Taxes and surcharges


7
(26)


(125,178,415
)


(196,541,376
)


(162,720,549
)Selling and distribution expenses


7
(28)


(262,664,282
)


(256,281,872
)


(205,949,433
)General and administrative expenses


7
(28)


(1,228,709,486
)


(1,323,142,177
)


(1,071,416,757
)Research and development expenses


7
(28)


(1,009,683,099
)


(998,729,114
)


(889,876,116
)Add:

Financial income - net


7
(27)


121,914,465



17,829,635



51,902,100Including: Interest expenses






(33,145,222
)


(29,854,734
)


(6,489,786
)Interest income






148,779,198



75,511,218



58,478,657Less:

Asset impairment losses


7
(29)


(10,801,480
)


(2,945,857
)


(63,734,715
)Add:

Other income


7
(32)


115,237,585



129,108,171



Add:

Investment income


7
(30)


87,055,079



90,174,271



63,368,374Including: Share of profit of associates and joint ventures






66,200,119



78,876,545



54,019,531Less:

Losses on disposals of assets


7
(31)


(2,352,770
)


(3,021,988
)


(18,381,606
)Operating profit






3,268,061,022



2,967,251,534



2,610,309,044Add:

Non-operating income


7
(33(a))


4,511,490



2,346,311



72,527,061Less:

Non-operating expenses


7
(33(b))


(3,801,129
)


(1,873,547
)


(3,014,728
)Total profit






3,268,771,383



2,967,724,298



2,679,821,377Less:

Income tax expenses


7
(34)


(562,455,731
)


(589,007,692
)


(507,528,891
)Net profit






2,706,315,652



2,378,716,606



2,172,292,486Classified by continuity of operationsNet profit from continuing operations






2,706,315,652



2,378,716,606



2,172,292,486Net profit from discontinued operations














Classified by ownership of the equityAttributable to equity owners of the Company






2,481,903,963



2,083,076,727



1,851,677,150Minority interests






224,411,689



295,639,879



320,615,336Other comprehensive income, net of tax


7
(35(a))


101,743



430,299



1,290,996Translation differences on translation of foreign currency financial statements






101,743



430,299



1,290,996Total comprehensive income






2,706,417,395



2,379,146,905



2,173,583,482Attributable to equity owners of the Company






2,482,005,706



2,083,507,026



1,852,968,146Attributable to minority interests






224,411,689



295,639,879



320,615,336  *
Not covered by the AUDITORS report included herein The accompanying notes form an integral part of these consolidated financial statements.  Legal representative: Jianxu Jia         Principal in charge of accounting: Chungao Zang         Head of accounting department: Jianjun Chu  - 4 -




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YANFENG ADIENT SEATING CO., LTD. CONSOLIDATED CASH FLOW STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2018, 2017* AND 2016 (All amounts in RMB Yuan unless otherwise stated)  Item

Note


2018Consolidated


2017*Consolidated


2016ConsolidatedCash flows from operating activitiesCash received from sales of goods or rendering of services






42,620,231,769



37,188,574,231



34,235,663,913Refund of taxes and surcharges






80,523,553



80,158,334



69,554,852Cash received relating to other operating activities






127,319,648



184,480,725



124,863,278Sub-total of cash inflows






42,828,074,970



37,453,213,290



34,430,082,043Cash paid for goods and services






(32,914,683,413
)


(26,183,767,105
)


(24,673,063,749
)Cash paid to and on behalf of employees






(2,335,518,600
)


(2,003,249,397
)


(1,756,520,779
)Payments of taxes and surcharges






(1,966,165,908
)


(2,679,623,127
)


(1,915,679,241
)Cash paid relating to other operating activities






(2,123,658,626
)


(2,121,766,998
)


(2,126,466,694
)Sub-total of cash outflows






(39,340,026,547
)


(32,988,406,627
)


(30,471,730,463
)Net cash flows from operating activities


7
(36(a))


3,488,048,423



4,464,806,663



3,958,351,580Cash flows used in investing activitiesCash received from disposal of investments






235,645,347



279,239,352



475,667,980Cash received from returns on investments






103,980,826



67,768,049



35,749,485Net cash received from disposal of fixed assets, intangible assets and other long-term
assets






14,751,486



24,565,265



28,354,118Net cash received from disposal of subsidiaries and other business units














21,500,000Sub-total of cash inflows






354,377,659



371,572,666



561,271,583Cash paid to acquire fixed assets, intangible assets and other long-term assets






(650,226,838
)


(524,461,586
)


(412,877,178
)Cash paid to acquire investments










(837,615,093
)


(311,650,522
)Sub-total of cash outflows






(650,226,838
)


(1,362,076,679
)


(724,527,700
)Net cash flows used in investing activities






(295,849,179
)


(990,504,013
)


(163,256,117
)Cash flows used in financing activitiesCash received from borrowings






990,189,943



844,949,190



718,055,869Sub-total of cash inflows






990,189,943



844,949,190



718,055,869Cash repayments of borrowings






(964,983,332
)


(711,559,282
)


(390,324,988
)Cash payments for distribution of profits or interest expenses






(2,142,677,741
)


(1,848,390,388
)


(1,684,947,936
)Including: Cash payments for profits to minority shareholders of subsidiaries






(77,397,401
)


(333,196,736
)


(291,750,289
)Sub-total of cash outflows






(3,107,661,073
)


(2,559,949,670
)


(2,075,272,924
)Net cash flows used in financing activities






(2,117,471,130
)


(1,715,000,480
)


(1,357,217,055
)Effect of foreign exchange rate changes on cash and cash equivalents














Net increase in cash and cash equivalents


7
(36(b))


1,074,728,114



1,759,302,170



2,437,878,408Add: Cash and cash equivalents at beginning of year






7,938,513,680



6,179,211,510



3,741,333,102Cash and cash equivalents at end of year


7
(36(c))


9,013,241,794



7,938,513,680



6,179,211,510  *
Not covered by the AUDITORS report included herein The accompanying notes form an integral part of these consolidated financial statements.  Legal representative: Jianxu Jia         Principal in charge of accounting: Chungao Zang         Head of accounting department: Jianjun Chu  - 5 -




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YANFENG ADIENT SEATING CO., LTD. CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS EQUITY FOR THE YEARS ENDED 31 DECEMBER 2018, 2017* AND 2016 (All amounts in RMB Yuan unless otherwise stated)  Item

Note


Attributable to equity holders of the Company


Minorityinterests


Total ownersequityPaid-incapital


Surplusreserves


Undistributedprofits


Othercomprehensiveincome/(loss)Balance at 1 January 2016






439,853,380



329,063,052



2,635,032,872



(307,041
)


521,158,841



3,924,801,104Movements for the year ended 31 December 2016Total comprehensive incomeNet profit














1,851,677,150







320,615,336



2,172,292,486Other comprehensive incomeTranslation differences on translation of foreign currency financial statements


7
(35(a))














1,290,996







1,290,996Total comprehensive income for the year














1,851,677,150



1,290,996



320,615,336



2,173,583,482Profit distributionAppropriation to surplus reserves


7
(23)






47,673,540



(47,673,540
)










Profit distribution to equity owners


7
(24)










(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



4,372,016,024Balance at 1 January 2017






439,853,380



376,736,592



3,005,135,145



983,955



549,306,952



4,372,016,024Movements for the year ended 31 December 2017*Total comprehensive incomeNet profit














2,083,076,727







295,639,879



2,378,716,606Other comprehensive incomeTranslation differences on translation of foreign currency financial statements


7
(35(a))














430,299







430,299Total comprehensive income for the year














2,083,076,727



430,299



295,639,879



2,379,146,905Capital contribution and withdrawal by ownersDisposal of a subsidiary






















(470,521
)


(470,521
)Profit distributionAppropriation to surplus reserves


7
(23)






65,074,185



(65,074,185
)










Profit distribution to equity owners


7
(24)










(1,493,770,914
)






(333,196,736
)


(1,826,967,650
)Appropriation to staff welfare and incentive funds














(65,382,968
)






(488,488
)


(65,871,456
)Balance at 31 December 2017*






439,853,380



441,810,777



3,463,983,805



1,414,254



510,791,086



4,857,853,302Balance at 1 January 2018






439,853,380



441,810,777



3,463,983,805



1,414,254



510,791,086



4,857,853,302Movements for the year ended 31 December 2018Total comprehensive incomeNet profit














2,481,903,963







224,411,689



2,706,315,652Other comprehensive incomeTranslation differences on translation of foreign currency financial statements


7
(35(a))














101,743







101,743Total comprehensive income for the year














2,481,903,963



101,743



224,411,689



2,706,417,395Profit distributionAppropriation to surplus reserves


7
(23)






66,264,240



(66,264,240
)










Profit distribution to equity owners


7
(24)










(2,038,991,145
)






(190,933,981
)


(2,229,925,126
)Appropriation to staff welfare and incentive funds














(66,379,416
)






(189,570
)


(66,568,986
)Balance at 31 December 2018






439,853,380



508,075,017



3,774,252,967



1,515,997



544,079,224



5,267,776,585  *
Not covered by the AUDITORS report included herein The accompanying notes form an integral part of these consolidated financial statements.  Legal representative: Jianxu Jia         Principal in charge of accounting: Chungao Zang         Head of accounting department: Jianjun Chu   - 6 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE
AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  1
General information Yanfeng Adient Seating Co., Ltd. (formerly known as Shanghai Yanfeng Johnson Controls Seating Co., Ltd., the Company)
is a sino-foreign joint venture company set up by Yanfeng Automotive Trim Systems Co., Ltd. (Yanfeng Trim and formerly known as Yanfeng Visteon Automotive Trim Systems Co., Ltd.) and Johnson Controls International Inc.
(JCI) on 18 December 1997. The approved operating period is 25 years and the registered capital is USD 24,770,700. After
several times of equity interest transfer till 8 November 2012, the investors of the Company were changed to Yanfeng Trim and Johnson Controls Asia Holding Co., Ltd., with 50.01% and 49.99% of equity interest respectively. The registered
capital of the Company was changed to USD 62,000,000. On 2 February 2017, Johnson Controls Asia Holding Co., Ltd. was renamed as Adient Asia Holding Co., Ltd. (Adient Asia). In April 2017, the Company was renamed as Yanfeng
Adient Seating Co., Ltd.. The approved scope of business operation of the Company and its subsidiaries (together, the
Group) is to develop and manufacture automobile seats and their spare parts, provide technical service for automobile seating, and sell its own products. For the year ended 31 December 2018, the Groups actual business scope was the
same as the scope of operation. These financial statements are authorised for issue by the Companys responsible person on
24 June 2019.  2
Basis of preparation The financial statements are prepared in accordance with the Accounting Standards for Business Enterprises - Basic Standard, and the
specific accounting standards and other relevant regulations issued by the Ministry of Finance of the P.R. China on 15 February 2006 and in subsequent periods (hereafter collectively referred to as the Accounting Standards for Business
Enterprises or CAS). 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 Company for the years ended 31 December 2018, 31 December 2017 and 31 December 2016 are in
compliance with the Accounting Standards for Business Enterprises, and truly and completely present the consolidated financial position of the Company as at 31 December 2018, 31 December 2017 and 31 December 2016 and of its financial
performance, cash flows and other information for the years then ended.  - 7 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (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)
Recording currency The Companys recording currency is Renminbi (RMB). The recording currency of the Companys subsidiaries is determined based on the
primary economic environment in which they operate. The recording currency of the Companys domestic subsidiaries is RMB and the recording currency of the Companys foreign subsidiaries is local currency. The financial statements are
presented in RMB.  (3)
Foreign currency translation  (a)
Foreign currency transactions Foreign currency transactions are translated into recording currency using the exchange rates prevailing at the dates of the transactions. At the balance sheet date, monetary items denominated in foreign currencies are translated into recording currency using the spot exchange
rates on the balance sheet date. Exchange differences arising from these translations are recognised in profit or loss for the current period, except for those attributable to foreign currency borrowings that have been taken out specifically for
acquisition or construction of qualifying assets, which are capitalised as part of the cost of those assets. Non-monetary items denominated in foreign currencies that are measured at historical costs are
translated at the balance sheet date using the spot exchange rates at the date of the transactions. The effect of exchange rate changes on cash is presented separately in the cash flow statement.  (b)
Translation of foreign currency financial statements The asset and liability items in the balance sheets for overseas operations are translated at the spot exchange rates on the balance sheet
date. Among the owners equity items, the items other than undistributed profits are translated at the spot exchange rates of the transaction dates. The income and expense items in the income statements of overseas operations are
translated at the spot exchange rates of the transaction dates. The differences arising from the above translation are presented in other comprehensive income. The cash flows of overseas operations are translated at the spot exchange rates on the
dates of the cash flows. The effect of exchange rate changes on cash is presented separately in the cash flow statement.  (4)
Cash and cash equivalents Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand, and short-term and highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.  - 8 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (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 notes and accounts receivables 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.  - 9 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (6)
Receivables Receivables comprise notes and accounts receivables and other receivables. Notes and accounts receivables 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 receivables 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.  - 10 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (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 Groups long-term equity investments in its joint ventures and associates.  (a)
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 are satisfied, the Group continues recognising the investment losses and the provisions at the amount it expects
to undertake. The Groups share of the changes in investees owners equity other than those arising from the net profit or loss, other comprehensive income and profit distribution is recognised in capital surplus with a corresponding
adjustment to the carrying amounts of the long-term equity investment. The carrying amount of the investment is reduced by the Groups share of the profit distribution or cash dividends declared by the investees. Unrealised gains or losses on
transactions between the Group and its investees are eliminated to the extent of the Groups equity interest in the investees, based on which the investment income or losses are recognised. Any losses resulting from transactions between the
Group and its investees, which are attributable to asset impairment losses are not eliminated.  - 11 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (9)
Investment properties Investment properties, including land use rights that have already been leased out, buildings that are held for the purpose of leasing and
buildings that are being constructed or developed for future use for leasing, are measured initially at cost. Subsequent expenditures incurred in relation to an investment property are included in the cost of the investment property when it is
probable that the associated economic benefits will flow to the Group and their costs can be reliably measured; otherwise, the expenditures are recognised in profit or loss for the period in which they are incurred. Investment properties are subsequently measured using the cost model and are depreciated or amortised to their estimated residual values over
their estimated useful lives. The estimated useful lives, the estimated residual values expressed as a percentage of cost and the annual depreciation (amortisation) rates of investment properties are as follows:  Estimated usefullives


Estimatedresidual values


Annual
depreciation ratesLand use rights


50 years



0
%


2
%Buildings


20 years



0
%


5
% When an investment property is transferred to owner-occupied properties, it is reclassified as fixed asset or
intangible asset with the carrying amount at the date of the transfer. When an owner-occupied property is transferred out for earning rentals or for capital appreciation, the fixed asset or intangible asset is transferred to investment properties
with the carrying amount at the date of the transfer. The estimated useful life and the estimated residual value of an investment property
and the depreciation (amortisation) method applied to the asset are reviewed, and adjusted as appropriate at each year-end. An investment property is derecognised on disposal or when the investment property is permanently withdrawn from use and no future economic
benefits are expected from its disposal. The net amount of proceeds from sale, transfer, retirement or damage of an investment property after its carrying amount and related taxes and expenses is recognised in profit or loss for the current period.  - 12 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (10)
Fixed assets Fixed assets comprise buildings, machinery and equipment, motor vehicles, computers and electronic equipment and office equipment and tooling.
Fixed assets purchased or constructed by the Group are initially measured at cost at the time of acquisition. Fixed assets contributed by the Chinese investor are initially recorded at their approved value upon its contribution to the Company. Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable that the associated economic
benefits will flow to the Group and the related cost can be reliably measured. The carrying amount of the replaced part is derecognised. All the other subsequent expenditures are recognised in profit or loss for the period in which they are
incurred. Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their estimated residual
values over their estimated useful lives. For the fixed assets that have been provided for impairment loss, the related depreciation charge is prospectively determined based upon the adjusted carrying amounts over their remaining useful lives. The estimated useful lives, the estimated residual values expressed as a percentage of cost and the annual depreciation rates of fixed assets
are as follows:  Estimated usefullives


Estimatedresidual values


Annual
depreciation ratesBuildings


5-20 years



0%-10
%


4.50%-20.00
%Machinery and equipment


3-15 years



0%-5
%


6.33%-33.33
%Motor vehicles


3-6 years



0%-5
%


15.83%-33.33
%Computers and electronic equipment and office equipment


3-7 years



0%-5
%


13.57%-33.33
%Tooling


3-5 years



0%-5
%


19.00%-33.33
% 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.  - 13 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (11)
Construction in progress Construction in progress is measured at actual cost. Actual cost comprises construction costs, installation costs, borrowing costs that are
eligible for capitalisation and other costs necessary to bring the fixed assets ready for their intended use. Construction in progress is transferred to fixed assets when the assets are ready for their intended use, and depreciation is charged
starting from the following month.  (12)
Intangible assets Intangible assets include land use rights, patent rights and non-patented technology and software, and
are measured at cost. Intangible assets also include identifiable assets acquired from business combinations involving enterprises not under common control, such as customer relationships, 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.  - 14 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (13)
Research and development The expenditure on an internal research and development project is classified into expenditure on the research phase and expenditure on the
development phase based on its nature and whether there is material uncertainty that the research and development activities can form an intangible asset at the end of the project. Expenditure on the research phase is recognised in profit or loss in the period in which it is incurred; expenditure on the development phase
is capitalised only if all of the following conditions are satisfied:  

it is technically feasible to complete the intangible asset so that it will be available for use or sale;  

management intends to complete the intangible asset and use or sell it;  

it can be demonstrated how the intangible asset will generate economic benefits;  

there are adequate technical, financial and other resources to complete the development and the ability to use or
sell the intangible asset; and  

the expenditure attributable to the intangible asset during its development phase can be reliably measured. Other development expenditures that do not meet the conditions above are recognised in profit or loss in the period in
which they are incurred. Development costs previously recognised as expenses are not recognised as an asset in a subsequent period. Capitalised expenditure on the development phase is presented as development costs in the balance sheet and
transferred to intangible assets at the date that the asset is ready for its intended use.  (14)
Goodwill Goodwill is recognised at the excess of the cost of a business combination involving enterprises not under common control over the interest in
the fair value of the acquirees identifiable net assets acquired in the business combination as at the acquisition date.  (15)
Long-term prepaid expenses Long-term prepaid expenses include the expenditure for improvements to fixed assets held under operating leases, and other expenditures that
have been incurred but should be recognised as expenses over more than one year in the current and subsequent periods. Long-term prepaid expenses are amortised on the straight-line basis over the expected beneficial period and are presented at
actual expenditure net of accumulated amortisation.  - 15 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (16)
Impairment of long-term assets Fixed assets, construction in progress, intangible assets with finite useful lives, long-term equity investments in 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.  (17)
Borrowing costs The borrowing costs that are directly attributable to acquisition and construction of an asset that needs a substantially long period of time
for its intended use commence to be capitalised and recorded as part of the cost of the asset when expenditures for the asset and borrowing costs have been incurred, and the activities relating to the acquisition and construction that are necessary
to prepare the asset for its intended use have commenced. The capitalisation of borrowing costs ceases when the asset under acquisition or construction becomes ready for its intended use and the borrowing costs incurred thereafter are recognised in
profit or loss for the current period. Capitalisation of borrowing costs is suspended during periods in which the acquisition or construction of an asset is interrupted abnormally and the interruption lasts for more than 3 months, until the
acquisition or construction is resumed.  - 16 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (18)
Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the
effective interest method. Borrowings of which the period is within one year (inclusive) are classified as the short-term borrowings, and the others are classified as long-term borrowings.  (19)
Employee benefits Employee benefits refer to all forms of consideration or compensation given by the Group in exchange for service rendered by employees or for
termination of employment relationship, which include short-term employee benefits and post-employment benefits.  (a)
Short-term employee benefits Short-term employee benefits include wages or salaries, bonus, allowances and subsidies, staff welfare, premiums or contributions on medical
insurance, work injury insurance and maternity insurance, housing funds, union running costs and employee education costs, short-term paid absences and etc. The short-term employee benefits actually occurred are recognised as a liability in the
accounting period in which the service is rendered by the employees, with a corresponding charge to the profit or loss for the current period or the cost of relevant assets. Non-monetary benefits are measured
at fair value.  (b)
Post-employment benefits The Group classifies post-employment benefit plans as defined contribution plans. Defined contribution plans are post-employment benefit plans
under which the Group pays fixed contributions into a separate fund and will have no obligation to pay further contributions. During the reporting period, the 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.  - 17 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (20)
Provisions Provisions for product warranties and etc. are recognised when the Group has a present obligation, it is probable that an outflow of economic
benefits will be required to settle the obligation, and the amount of the obligation can be measured reliably. A provision is initially
measured at the best estimate of the expenditure required to settle the related present obligation. Factors surrounding a contingency, such as the risks, uncertainties and the time value of money, are taken into account as a whole in reaching the
best estimate of a provision. Where the effect of the time value of money is material, the best estimate is determined by discounting the related future cash outflows. The increase in the discounted amount of the provision arising from passage of
time is recognised as interest expense. The carrying amount of provisions is reviewed at each balance sheet date and adjusted to reflect
the current best estimate. The provisions expected to be settled within one year since the balance sheet date are classified as current
liabilities.  (21)
Deferred tax assets and deferred tax liabilities Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differences arising between the tax bases of assets
and liabilities and their carrying amounts (temporary differences). Deferred tax asset is recognised for the deductible losses that can be carried forward to subsequent years for deduction of the taxable profit in accordance with the tax laws. No
deferred tax liability is recognised for a temporary difference arising from the initial recognition of goodwill. No deferred tax asset or deferred tax liability is recognised for the temporary differences resulting from the initial recognition of
assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or deductible loss). At the balance sheet date, deferred tax assets and deferred tax liabilities are measured
at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. Deferred tax assets are
only recognised for deductible temporary differences, deductible losses and tax credits to the extent that it is probable that taxable profit will be available in the future against which the deductible temporary differences, deductible losses and
tax credits can be utilised.  - 18 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (21)
Deferred tax assets and deferred tax liabilities (Contd) Deferred tax liabilities are recognised for temporary differences arising from investments in subsidiaries, associates and joint ventures,
except where the Group is able to control the timing of reversal of the temporary difference, and it is probable that the temporary difference will not reverse in the foreseeable future. When it is probable that the temporary differences arising
from investments in subsidiaries, associates and joint ventures will be reversed in the foreseeable future and that the taxable profit will be available in the future against which the temporary differences can be utilised, the corresponding
deferred tax assets are recognised. Deferred tax assets and liabilities are offset when:  

the deferred taxes are related to the same tax payer within the Group and the same taxation authority; and,  

that tax payer within the Group has a legally enforceable right to offset current tax assets against current tax
liabilities.  (22)
Revenue recognition The amount of revenue is determined in accordance with the fair value of the consideration received or receivable for the sale of goods and
services in the ordinary course of the Groups activities. Revenue is stated net of discounts, rebates 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 The Group manufactures and sells automobile seating products. Revenue is recognised when the Group has delivered the products to the location
specified in the sales contract and the buyer has confirmed the acceptance of the products. Upon delivery of the products, the buyer has the right to sell the products and takes the risks of any obsolescence and loss of the products.  (b)
Rendering of services Revenue is recognised when service is completed and it is probable that the associated economic benefits will flow to the Group and its total
revenue and cost can be reliably measured.  (c)
Developing of projects Revenue is recognised when the project is completed and is checked and accepted by the clients, and its probable that the economic
benefits associated with the transaction will flow to the Group, the related revenue can be reliably measured.  - 19 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (23)
Government grants Government grants refer to the monetary or non-monetary assets obtained by the Group from the
government, including tax return, financial subsidy and etc. Government grants are recognised when the grants can be received and the
Group can comply with all attached conditions. If a government grant is a monetary asset, it will be measured at the amount received or receivable. If a government grant is a non-monetary asset, it will be
measured at its fair value. If it is unable to obtain its fair value reliably, it will be measured at its nominal amount. Government
grants related to assets refer to government grants which are obtained by the Group for the purposes of purchase, construction or acquisition of the long-term assets. Government grants related to income refer to the government grants other than
those related to assets. Government grants related to assets are either deducted against the carrying amount of the assets, or recorded as
deferred income and recognised in profit or loss on a systemic basis over the useful lives of the assets. Government grants related to income that compensate the future costs, expenses or losses are recorded as deferred income and recognised in
profit or loss, or deducted against related costs, expenses or losses in reporting the related expenses; government grants related to income that compensate the incurred costs, expenses or losses are recognised in profit or loss, or deducted against
related costs, expenses or losses directly in current period. The Group applies the presentation method consistently to the similar government grants in the financial statements. Government grants that are related to ordinary activities are included in operating profit, otherwise, they are recorded in non-operating income or expenses.  (24)
Leases A lease that transfers substantially all the risks and rewards incidental to ownership of an asset is a finance lease. An operating lease is a
lease other than a finance lease. Lease payments under an operating lease are recognised on a straight-line basis over the period of the
lease, and are either capitalised as part of the cost of related assets, or charged as an expense for the current period. Rental income
from an operating lease is recognised on a straight-line basis over the period of the lease.  (25)
Profit distribution Proposed profit distribution is recognised as a liability in the period in which it is approved by the Board of Directors meeting.  - 20 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (26)
Preparation of consolidated financial statements The consolidated financial statements comprise the financial statements of the Company and all of its subsidiaries. Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidated
from the date that such control ceases. For a subsidiary that is acquired in a business combination involving enterprises under common control, it is included in the consolidated financial statements from the date when it, together with the Company,
comes under common control of the ultimate controlling party. The portion of the net profits realised before the combination date is presented separately in the consolidated income statement. In preparing the consolidated financial statements, where the accounting policies and the accounting periods of the Company and subsidiaries
are inconsistent, the financial statements of the subsidiaries are adjusted in accordance with the accounting policies and the accounting period of the Company. For subsidiaries acquired from business combinations involving enterprises not under
common control, the individual financial statements of the subsidiaries are adjusted based on the fair value of the identifiable net assets at the acquisition date. All significant intra-group balances, transactions and unrealised profits are eliminated in the consolidated financial statements. The portion
of subsidiaries owners equity and the portion of subsidiaries net profits and losses and comprehensive incomes for the period not attributable to the Company are recognised as minority interests, net profit attributed to minority
interests and total comprehensive incomes attributed to minority interests, and presented separately in the consolidated financial statements under owners equity, net profits and total comprehensive income respectively. Unrealised profits and
losses resulting from the sale of assets by the Company to its subsidiaries are fully eliminated against net profit attributable to owners of the parent. Unrealised profits and losses resulting from the sale of assets by a subsidiary to the Company
are eliminated and allocated between net profit attributable to owners of the parent and net profit attributed to minority interests in accordance with the allocation proportion of the parent in the subsidiary. Unrealised profits and losses
resulting from the sale of assets by one subsidiary to another are eliminated and allocated between net profit attributable to owners of the parent and net profit attributed to minority interests in accordance with the allocation proportion of the
parent in the subsidiary. If the accounting treatment of a transaction is inconsistent in the financial statements at the Group level and
at the Company or its subsidiary level, adjustment will be made from the perspective of the Group.  - 21 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (27)
Critical accounting estimates and judgments The Group continually evaluates the critical accounting estimates and key judgments applied based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances. The critical accounting estimates and
key assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below:  (i)
Accounting estimates on impairment of goodwill The Group tests annually whether goodwill has suffered any impairment. The recoverable amount of asset groups and groups of asset groups is the
present value of the future cash flows expected to be derived from them. These calculations require use of estimates (Note 7(12)). If
management revises the gross margin that is used in the calculation of the future cash flows of asset groups and groups of asset groups, and the revised gross margin is lower than the one currently used, the Group would need to recognise further
impairment against goodwill. If management revises the pre-tax discount rate applied to the
discounted cash flows, and the revised pre-tax discount rate is higher than the one currently applied, the Group may need to recognise 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.  - 22 -




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YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (28)
Significant changes in accounting policies In 2018, the Ministry of Finance issued the Circular on the Amendment to the Formats of Corporate Financial Statements for the Year of
2018 (Cai Kuai [2018] 15). The financial statements are prepared in accordance with the above circular with restating comparative figures of 2017, 2016 and impacts are as follows: Impact on consolidated balance sheets and income statements are as follows:  (a)

The nature and the reasons of the changes in accounting policies

The line items affected


The amounts affectedThe Group31 December
2017


31 December
2016The Group grouped notes receivable and accounts receivables as notes and accounts
receivables.

Notes receivable


Less 8,172,820,877



Less 5,851,806,068Accounts receivables


Less 1,400,014,717



Less 1,686,686,411Notes and accounts receivables


Add 9,572,835,594



Add 7,538,492,479The Group grouped interests receivable and dividends receivable and other
receivables as other receivables.

Interests receivable


Less 5,400,938



Less 5,550,044Dividends receivable


Less 12,872,698



Less 12,071,405Other receivables


Add 18,273,636



Add 17,621,449  - 23 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (28)
Significant changes in accounting policies (Contd)  (a)
Impact on consolidated balance sheets and income statements are as follows (Contd):   The nature and the reasons of the changes in accounting policies

The line items affected


The amounts affectedThe Group31 December
2017


31 December
2016The Group grouped notes payable andaccounts payable as notes and accounts
payables.

Notes payable


Less 653,798,483



Less 666,979,006Accounts payable


Less 12,797,027,105



Less 9,860,133,825Notes and accounts payables


Add 13,450,825,588



Add 10,527,112,831  - 24 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  4
Summary of significant accounting policies and accounting estimates (Contd)  (28)
Significant changes in accounting policies (Contd)  (a)
Impact on consolidated balance sheets and income statements are as follows (Contd):   The nature and the reasons of the changes in accounting policies

The line items affected


The amounts affected2017


2016The Group presented research and development expenses separately from general and
administrative expenses.

Research and development expenses


Add 998,729,114



Add 889,876,116General and administrative expenses


Less 998,729,114



Less 889,876,116The Group reclassified interest income arising from entrusted loan from financial
income to investment income.

Financial income


Less 11,297,514



Less 9,348,843Investment income


Add 11,297,514



Add 9,348,843
  - 25 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  5
Taxation The main categories and rates of taxes applicable to the Group during the years 2018, 2017 and 2016 are set out below:  Type

Tax rate

Taxable baseEnterprise income tax (a)

25% and 20%

Taxable incomeValue added tax (VAT) (b)

17%, 16%, 11%, 10%, 6% and others

Taxable value added amount (Tax payable is calculated using the taxable sales amount multiplied by the applicable tax rate less deductible VAT input of current period)City maintenance and construction tax

7%, 5% and 1%

The payment amount of VAT
  (a)
In 2018, 2017 and 2016, the enterprise income tax rates applicable to the Company and its subsidiaries are as
follows:  (1)
The Company is a foreign-invested production enterprise set up in Pudong New Area, Shanghai. It was
certificated as the hi-technology enterprise by Shanghai Science and Technology Committee in 2014 (valid for 3 years) and 2017 (valid for 3 years), respectively (GF201731001090). 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 2018, 2017 and 2016.  (2)
Shanghai Jixiang Automobile Roof Trimming Co., Ltd. is a domestic enterprise set up in Shanghai. It was
certificated as the hi-technology enterprise by Shanghai Science and Technology Committee in 2015 (valid for 3 years) and 2018 (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 2018, 2017 and 2016.  (3)
Guangzhou Dongfeng Adient Automotive Seating Co., Ltd. is a foreign-invested production enterprise set up in
coastal economic development zone. It was certificated as the hi-technology enterprise by Department of Science and Technology of Guangdong Province in 2014. According to the Guo Shui Han (2009), No. 203
The notice on implementing preferential corporate income tax rate of hi-technology enterprises, the applicable income tax rate is 15% in year 2016.  (4)
Wuhu Adient Yunhe Automotive Seating Co., Ltd. is a foreign-invested manufacturing enterprise set up in Wuhu
Economic and Technological Development Zone. It was certificated as the hi-technology enterprise by Department of Science and Technology of Anhui Province, Department of Finance of Anhui province, National Tax
Bureau of Anhui Province and Local Tax Bureau of Anhui Province on 21 October 2016 (valid for 3 years, GR201634000612). 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 2018, 2017 and 2016.  - 26 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)   5
Taxation (Contd)  (a)
In 2018, 2017 and 2016, the enterprise income tax rates applicable to the Company and its subsidiaries are as
follows (Contd):  (5)
Hefei Adient Yunhe Automotive Seating Co., Ltd. is a foreign-invested manufacturing enterprise set up in Hefei
Economic and Technological Development Zone. It was certificated as the hi-technology enterprise by Hefei Science and Technology Committee in 2015 (valid for 3 years) and 2018 (valid for 3 years,
GR201834001000). 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 2018, 2017 and 2016.  (6)
Yanfeng Adient (Shenyang) Seating Co., Ltd. (Shenyang Yanfeng Adient) is a domestic enterprise set
up in Shenyang. It was certificated as the hi-technology enterprise by Department of Science and Technology of Liaoning Province in 2016 (valid for 3 years, GF201621000205). 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 2018, 2017 and 2016.  (7)
Jiangsu Yueda Yanfeng Adient Automotive Seating Co., Ltd. is a domestic enterprise set up in Yancheng. It was
certificated as the hi-technology enterprise by Department of Science and Technology of Jiangsu Province on 30 November 2016 (valid for 3 years, GR201632003222). 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 2018 and 2017.  (8)
Chengdu Yanfeng Adient Automotive Components Co., Ltd (Chengdu Yanfeng Adient) is a domestic
enterprise set up in Chengdu, Sichuan. Entitled to the preferential policy for development of the west regions, the applicable income tax rate of Chengdu Yanfeng Adient is 15% in year 2018, 2017 and 2016.  (9)
Chongqing Yanfeng Adient Automotive Components Co., Ltd. (Chongqing Yanfeng Adient) is a
foreign-invested manufacturing enterprise set up in Chongqing. It was certificated as the hi-technology enterprise again through the review in July 2016(valid for 3 years, GR201651100279). 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 2018, 2017 and 2016.  (10)
Daqing Yanfeng Adient Automotive Components Co., Ltd. is a domestic enterprise set up in Daqing in 2014. It was
certificated as the hi-technology enterprise for the first time in 2015. According to the Guo Shui Han (2009) No. 203 The notice on implementing preferential corporate income tax rate of hi-technology enterprises, the applicable income tax rate is 15% in year 2017 and 2016.  (11)
Chongqing Yanfeng Adient 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 year 2016.  - 27 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  5
Taxation (Contd)  (a)
In 2018, 2017 and 2016, the enterprise income tax rates applicable to the Company and its subsidiaries are as
follows (Contd):  (12)
The applicable income tax rate of other domestic entities, or the 11 entities in other years that do not
mentioned in the previous sections, is 25% in year 2018, 2017 and 2016. And for Yanfeng (Thailand) Co., Ltd., the applicable income tax rate is 20% in year 2018, 2017 and 2016. For Yanfeng Adient America Seating Inc and Yanfeng Adient Germany
Seating GmbH, the applicable income tax rate is 21% and 15% in year 2018.  (b)
Pursuant to the Circular on Enterprise Income Tax Policy concerning Deductions for Equipment and
Appliances (Cai Shui [2018] 54) issued by the State Administration of Taxation, during the period from 1 January 2018 to 31 December 2020, the cost of newly purchased equipment with the original cost less than RMB 5 million can
be fully deducted against taxable profit in the next month after the asset is put into use, instead of being depreciated annually for tax filing.  (c)
Pursuant to the Circular on Adjustment of Tax Rate of Value Added Tax (Cai Shui [2018] 32) jointly
issued by the Ministry of Finance and the State Administration of Taxation, the applicable tax rate of revenue arising from selling the auto parts of the Company, the domestic subsidiary of the Group, is 16% from 1 May 2018, while it was 17%
before then.  - 28 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  6
Subsidiaries  (1)
Significant subsidiaries included in the consolidation scope as at 31 December 2018 are as follows:  Share holding (%)


Voting rights (%)Place of
registration


Registered
Capital


Nature of business

Direct


Indirect


Direct


IndirectShenyang Yanfeng Adient


Shenyang



RMB30,000,000


Develop, produce and sell automotive interior, automotive seating overhead systems and parts production and provide after-sale service. Self-management or agency of import and export of goods and technologies (excluding goods
prohibited or restricted by the national authorities).


100
%






100
%Yanfeng Adient (Yantai) Seating Co., Ltd.


Yantai



RMB35,000,000


Production and sales of automotive seating assembly, parts and functional high molecule materials for automobile; import and export of goods and technologies.


100
%






100
%Nanjing Yanfeng Adient Seating Co., Ltd.


Nanjing



RMB45,000,000


Produce and sell automotive seating and provide after-sale service; import and export goods and service


60
%






60
%Yanfeng Adient (Shanghai Jiading) Seating Co., Ltd.


Shanghai



RMB15,000,000


Design, develop, produce and sell automotive seating and provide after-sale service; import and export goods.


100
%






100
%Yanfeng Adient (Ningbo) Seating Co., Ltd.


Ningbo



RMB35,000,000


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
%  - 29 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  6
Subsidiaries (Contd)  (1)
Significant subsidiaries included in the consolidation scope as at 31 December 2018 are as follows
(Contd):  Share holding (%)


Voting rights (%)Place of
registration


Registered
Capital


Nature of business

Direct


Indirect


Direct


IndirectYanfeng Adient (Wuhan) Seating Co., Ltd.


Wuhan



RMB45,000,000


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
%Chengdu Yanfeng Adient (a)


Chengdu



RMB10,000,000


Design, development, manufacture and sales of automotive seating, auto roof trims, sunshades, trim systems and related parts; provide relative technical and after-sale services






100
%






100
%Chongqing Yanfeng Adient


Chongqing



USD7,500,000


Design, produce and sale automotive seating, sunshades, auto roof trims and related parts and provide after-sale service.


50
%






62.50
% (a) The newly established subsidiaries of the Group in 2018 included Yanfeng Adient (Liuzhou) Seating Co.,
Ltd., Yanfeng Adient (Rudong) Seating Co., Ltd., Yanfeng Adient (India) Private Limited, Yanfeng Adient (Ningde) Seating Co., Ltd., Yanfeng Adient (Zhengzhou) Seating Co., Ltd. and Yanfeng Adient Fangde Electric Engine Co., Ltd. The newly
established subsidiaries of the Group in 2017 included Xiangtan Yanfeng Adient Automotive Components Co., Ltd., Taizhou Yanfeng Adient Automotive Components Co., Ltd. and Yanfeng Adient (Changshu) Seating Co., Ltd. The newly established subsidiaries
of the Group in 2016 included Haerbin Yanfeng Adient Automotive Components Co., Ltd, Chengdu Yanfeng Adient and Yanfeng Adient Germany Seating GmbH. (b) In 2018, the Company closed Johnson Controls Automotive Systems (Kunshan) Co., Ltd. In 2017, the Company closed Zhejiang Yanjiang Sanjing
Vehicle Parts Co., Ltd. In 2016, the Company did not close any companies.  - 30 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  6
Subsidiaries (Contd)  (2)
Information of non-wholly-owned subsidiaries  Total profit attributable to minorityshareholders for the year ended31 December 2018

Dividends declared to minorityinterests for the year ended
31 December 2018

Accumulated minorityinterests as at 31 December2018224,411,689

190,933,981

544,079,224Total profit attributable to minority shareholders for the year ended 31 December 2017

Dividends declared to minority interests for the year ended
31 December 2017

Accumulated minority interests as at 31 December 2017295,639,879

333,196,736

510,791,086Total profit attributable to minority shareholders for the year ended 31 December 2016

Dividends declared to minority interests for the year ended
31 December 2016

Accumulated minority interests as at 31 December 2016320,615,336

291,750,289

549,306,952 In 2018, 2017 and 2016, dividends
paid to minority interests were RMB 77,397,401, RMB 33,196,736 and RMB 291,750,289, respectively. 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 2018Current assets

Non-currentassets


Total assets


Current
liabilities


Non-currentliabilities


Total liabilities5,810,066,449


1,371,148,443



7,181,214,892



5,965,872,370



15,786,728



5,981,659,09831 December 2017Current assets

Non-currentassets


Total assets


Current
liabilities


Non-currentliabilities


Total liabilities6,613,955,042


1,179,786,779



7,793,741,821



6,658,480,423



11,920,490



6,670,400,91331 December 2016Current assets

Non-currentassets


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



5,902,549,558  - 31 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  6
Subsidiaries (Contd)  (2)
Information of non-wholly-owned subsidiaries (Contd)  2018Revenue

Net profit


Total comprehensiveincome


Cash flows fromoperating activities11,314,074,835


494,810,785



494,810,785



192,890,1512017Revenue

Net profit


Total comprehensiveincome


Cash flows fromoperating activities11,589,006,649


626,758,381



626,758,381



1,268,118,9752016Revenue

Net profit


Total comprehensiveincome


Cash flows fromoperating activities10,755,375,494


678,043,346



678,043,346



1,156,481,663  7
Notes to the consolidated financial statements  (1)
Cash at bank and on hand  31 December 2018


31 December 2017


31 December 2016Cash on hand


8,652



19,307



21,513Cash at bank


9,013,233,142



7,938,494,373



6,179,189,997Other cash balances (a)


284,757,255



195,158,898



289,907,6869,297,999,049



8,133,672,578



6,469,119,196  (a)
As at 31 December 2018, 2017 and 2016, RMB 284,757,255, RMB 195,158,898 and RMB 289,907,686 of bank
deposit is pledged as guarantee for the Group to issue notes payable of RMB 258,170,177, RMB 237,154,087 and RMB 325,076,774 (Note 7(17)(a)).  (2)
Notes and accounts receivables  31 December 2018


31 December 2017


31 December 2016Notes receivable (a)


2,004,305,172



1,400,014,717



1,686,686,411Accounts receivables (b)


4,532,004,921



8,172,820,877



5,851,806,0686,536,310,093



9,572,835,594



7,538,492,479  (a)
Notes receivable  31 December 2018


31 December 2017


31 December 2016Bank acceptance notes


2,004,305,172



1,400,014,717



1,686,686,411 As at 31 December 2018, 2017 and 2016, notes receivable with amount of RMB 242,674,481, RMB 236,414,979
and RMB 152,544,483 is pledged as guarantee for the Group to issue notes payable of RMB 257,245,279, RMB 230,171,732 and RMB 152,544,483 (Note 7(17)(a)).  - 32 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (2)
Notes and accounts receivables (Contd)  (b)
Accounts receivables  31 December2017








31 December2018Accounts receivables


8,256,708,592











4,609,816,822Reversal in
the current year


Write-off in
the current yearLess: Provision for bad debts


(83,887,715
)


3,090,578



2,985,236



(77,811,901
)8,172,820,877











4,532,004,92131 December2016








31 December2017Accounts receivables


5,932,536,523











8,256,708,592Accrual in
the current year


Write-off in
the current yearLess: Provision for bad debts


(80,730,455
)


(3,789,237
)


631,977



(83,887,715
)5,851,806,068











8,172,820,87731 December2015








31 December2016Accounts receivables


5,713,997,765











5,932,536,523Accrual in
the current year


Write-off in
the current yearLess: Provision for bad debts


(16,968,425
)


(63,787,666
)


25,636



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











5,851,806,068  - 33 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (2)
Notes and accounts receivables (Contd)  (b)
Accounts receivables (Contd)  The aging of accounts receivables and related provisions for bad debts are analysed below:  31 December 2018


31 December 2017


31 December 2016Amount


% of totalbalance


Provision forbad debts


Amount


% of totalbalance


Provision forbad debts


Amount


% of totalbalance


Provision forbad debtsWithin 1 year


4,508,867,365



97.80
%


(20,886,218
)


8,179,122,053



99.06
%


(36,085,610
)


5,817,926,740



98.06
%


(19,287,472
)1 to 2 years


48,804,894



1.06
%


(8,604,789
)


27,233,389



0.33
%


(3,128,392
)


28,484,340



0.48
%


(8,404,214
)2 to 3 years


7,647,338



0.17
%


(3,823,669
)


11,603,363



0.14
%


(5,923,926
)


66,184,420



1.12
%


(33,097,746
)Over 3 years


44,497,225



0.97
%


(44,497,225
)


38,749,787



0.47
%


(38,749,787
)


19,941,023



0.34
%


(19,941,023
)4,609,816,822



100.00
%


(77,811,901
)


8,256,708,592



100.00
%


(83,887,715
)


5,932,536,523



100.00
%


(80,730,455
)  - 34 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (3)
Other receivables  31 December
2017








31 December
2018Related party cash pool lending


694,358,284











473,712,938Receivables for modules paid-on-behalf of others


103,917,630











170,686,050Material price difference


594,627











48,187,104Interest receivables


7,509,235











28,479,926Dividends


12,872,698











18,935,255Deposits


21,922,930











15,490,870Others


5,315,901











5,958,337846,491,305











761,450,480Reversal in
the current year


Write-off in
the current yearLess: Provision for bad debts


(12,138
)


12,138







846,479,167











761,450,48031 December
2016








31 December
2017Related party cash pool lending


150,982,542











694,358,284Receivables for modules paid-on-behalf of others


102,700,877











103,917,630Deposits


53,632,667











21,922,930Dividends


12,071,405











12,872,698Interest receivables


5,550,044











7,509,235Material price difference














594,627Others


11,597,692











5,315,901336,535,227











846,491,305Reversal in
the current year


Write-off in
the current yearLess: Provision for bad debts


(3,128,470
)


2,182,720



933,612



(12,138
)333,406,757











846,479,167  - 35 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (3)
Other receivables (Contd)  31 December2015








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











53,632,667Dividends


16,336,555











12,071,405Interest receivables


1,678,489











5,550,044Receivables from equity transfer


21,500,000











Others


10,309,644











11,597,692247,534,720











336,535,227Accrual in
the current year


Write-off in
the current yearLess: Provision for bad debts


(945,749
)


(2,182,721
)






(3,128,470
)246,588,971











333,406,757  - 36 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (3)
Other receivables (Contd)  Other receivables and related provisions for bad debts are analysed below:  31 December 2018


31 December 2017


31 December 2016Amount


% of totalbalance


Provision for
bad debts


Amount


% of totalbalance


Provision for
bad debts


Amount


% of totalbalance


Provision for
bad debtsWithin 1 year


728,976,869



95.73
%






823,906,224



97.33
%






271,975,664



80.82
%


(2,194,859
)1 to 2 years


13,523,741



1.78
%






8,434,324



1.00
%






42,589,819



12.66
%


2 to 3 years


7,618,296



1.00
%






3,658,154



0.43
%






15,068,384



4.48
%


Over 3 years


11,331,574



1.49
%






10,492,603



1.24
%


(12,138
)


6,901,360



2.04
%


(933,611
)761,450,480



100.00
%






846,491,305



100.00
%


(12,138
)


336,535,227



100.00
%


(3,128,470
)  (4)
Advances to suppliers The ageing of advances to suppliers is analysed as follows:  31 December 2018


31 December 2017


31 December 2016Amount


% of totalbalance


Amount


% of totalbalance


Amount


% of totalbalanceWithin 1 year


158,247,276



96.47
%


199,510,957



98.25
%


115,464,553



95.98
%1 to 2 years


5,341,881



3.26
%


2,313,617



1.14
%


1,769,829



1.47
%2 to 3 years


450,159



0.27
%


360,539



0.18
%


1,516,302



1.26
%Over 3 years










875,000



0.43
%


1,555,765



1.29
%164,039,316



100.00
%


203,060,113



100.00
%


120,306,449



100.00
%  - 37 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (5)
Inventories  31 December2017








31 December2018Cost -Raw materials


602,556,481











523,152,832Work in progress


17,096,427











20,328,713Finished goods


299,240,009











188,737,324918,892,917











732,218,869Less: Provision for declines in the value of inventories






Accrual inthe current
year



Write-off inthe current
yearRaw materials


(20,509,594
)


(9,603,523
)


2,844,815



(27,268,302
)Work in progress


(68,147
)


(126,953
)






(195,100
)Finished goods


(3,339,601
)


(3,540,553
)


1,372,192



(5,507,962
)(23,917,342
)


(13,271,029
)


4,217,007



(32,971,364
)894,975,575











699,247,50531 December2016








31 December2017Cost -Raw materials


552,763,560











602,556,481Work in progress


36,748,461











17,096,427Finished goods


234,736,592











299,240,009824,248,613











918,892,917Less: Provision for declines in the value of inventories






(AccrualReversal in
the current year
)/


Write-off inthe current
yearRaw materials


(23,817,530
)


433,754



2,874,182



(20,509,594
)Work in progress


(31,664
)


(36,483
)






(68,147
)Finished goods


(2,720,754
)


(1,536,611
)


917,764



(3,339,601
)(26,569,948
)


(1,139,340
)


3,791,946



(23,917,342
)797,678,665











894,975,575  - 38 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (5)
Inventories (Contd)  31 December2015








31 December2016Cost -Raw materials


422,758,307











552,763,560Work in progress


21,343,381











36,748,461Finished goods


290,728,598











234,736,592734,830,286











824,248,613Less: Provision for declines in the value of inventories






Reversal inthe current
year



Write-off inthe current
yearRaw 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  (6)
Other current assets  31 December 2018


31 December 2017


31 December 2016Input VAT to be deducted


253,201,082



123,276,797



151,229,616Prepaid income tax


7,817,048



9,121,155



9,441,318Related party entrusted loans (Note 8(4)(d))






15,000,000



Others


1,304,864



90,570



41,426262,322,994



147,488,522



160,712,360  - 39 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (7)
Long-term equity investments  31 December 2018


31 December 2017


31 December 2016Associates (a)


149,489,926



163,821,432



140,094,694Joint venture (b)


38,094,059



46,437,689



50,160,580187,583,985



210,259,121



190,255,274Less: Provision for impairment of long-term equity investments










187,583,985



210,259,121



190,255,274  (a)
Associates Investments in associates are set out below:  31 December
2017

Increase in
investment


Share of netprofit underequity method


Profit/Cashdividends declaredby associates


31 December
2018163,821,432






55,608,494



(69,940,000
)


149,489,92631 December
2016

Increase in
investment


Share of netprofit underequity method


Profit/Cashdividends declaredby associates


31 December
2017140,094,694






69,726,738



(46,000,000
)


163,821,43231 December
2015

Increase in
investment


Share of netprofit underequity method


Profit/Cashdividends declaredby associates


31 December
2016108,432,277






54,179,667



(22,517,250
)


140,094,694  - 40 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (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


Whether
strategic to
the GroupsactivitiesWuhan Taiji Adient Seating Co., Ltd. (Wuhan Taiji formerly known as Wuhan Taiji
Johnson Controls Seating Co., Ltd.) (i)


Wuhan



Wuhan


Design, develop, produce and process auto key parts; sell the produced parts and provide after-sale service


20.00
%


YesDongfeng Adient Automotive Seating Co., Ltd. (Dongfeng Adient 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. Summarised financial information for significant associates  31 December 2018


31 December 2017


31 December 2016Current assets


1,200,716,516



1,586,899,084



1,311,922,920Non-current assets


295,963,873



277,068,182



224,340,564Total assets


1,496,680,389



1,863,967,266



1,536,263,484Current liabilities


1,109,472,246



1,446,257,505



1,167,924,878Non-current liabilities










Total liabilities


1,109,472,246



1,446,257,505



1,167,924,878Net assets


387,208,143



417,709,761



368,338,606Shares of net assets based on share holding (i)


144,796,073



159,127,579



135,400,841Adjustments (ii)


4,693,853



4,693,853



4,693,853Carrying amount of investment in joint ventures


149,489,926



163,821,432



140,094,694  - 41 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (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)  Summarised financial information for significant associates (Contd)  31 December 2018


31 December 2017


31 December 2016Revenue


3,510,917,720



3,805,236,233



2,757,494,140Net profit


169,198,382



192,371,153



166,712,188Other comprehensive income










Total comprehensive income


169,198,382



192,371,153



166,712,188Dividends received from associates by the Group for the current year


69,940,000



46,000,000



26,782,400 (i) The Group calculates the shares of net assets in proportion of the shareholdings and based on the amount
attributable to the parent company of the associates in their consolidated financial statements, which has taken into account the impact of both the fair value of the identifiable assets and liabilities of the associates upon acquisition of
investment in associates and the unification of accounting policies adopted by the associates to those adopted by the Company. (ii) The
adjustments include the goodwill arising from the acquisition of the investment in the associates by the Group, the elimination of unrealised profits or losses resulting from transactions between the Group and the associates, impairment loss and
unrecognised excess loss.  (b)
Joint venture Investments in joint ventures are set out below:  31 December
2017

Increase ininvestment


Share of netprofit underequity method


Profit/Cashdividends declaredby associates


31 December201846,437,689






10,591,625



(18,935,255
)


38,094,05931 December
2016

Increase in
investment


Share of netprofit underequity method


Profit/Cashdividends declaredby associates


31 December201750,160,580






9,149,807



(12,872,698
)


46,437,68931 December
2015

Increase ininvestment


Share of netprofit underequity method


Profit/Cashdividends declaredby associates


31 December201650,320,716






(160,136
)






50,160,580  - 42 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (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 joint venture:  Majorbusinesslocation


Place ofregistration


Nature of business

Interestheld


Whetherstrategic tothe GroupsactivitiesCRH Automotive Shenyang Co., Ltd. (CRH Shenyang)


Shenyang



Shenyang


Design, develop, manufacture, sell auto seats frame and relevant parts; provide after-sale service; import and export goods (exclude those forbidden by the State or restricted by imports and exports).


50.00
%


Yes  (8)
Investment properties Buildings and relevant land use rights  Cost 31December 2017


42,529,486Transfer from construction in progress


765,30831 December 2018


43,294,794Accumulated depreciation and amortisation31 December 2017


Increase in the current year


(1,948,266
)31 December 2018


(1,948,266
)Carrying amount31 December 2018


41,346,528Cost31 December 2016


Transfer from construction in progress


42,529,48631 December 2017


42,529,486Accumulated depreciation and amortisation31 December 2016


Increase in the current year


31 December 2017


Carrying amount31 December 2017


42,529,486  - 43 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (9)
Fixed assets  Buildings


Machinery and
equipment


Motor
vehicles


Computers and
electronic equipment and
officeequipment


Tooling


TotalCost31 December 2017


817,951,252



2,050,132,338



12,541,334



259,320,267



214,060,211



3,354,005,402Transfer from construction in progress


4,273,903



327,567,319



5,016,988



53,124,161



81,320,875



471,303,246Other increases in the current year


1,116,638



11,251,865



142,883



1,846,637



2,820,252



17,178,275Decrease in the current year


(45,000
)


(28,406,444
)


(1,605,841
)


(8,514,733
)


(4,356,031
)


(42,928,049
)31 December 2018


823,296,793



2,360,545,078



16,095,364



305,776,332



293,845,307



3,799,558,874Accumulated depreciation31 December 2017


(225,845,875
)


(971,947,841
)


(8,112,450
)


(166,590,517
)


(150,405,142
)


(1,522,901,825
)Increase in the current year


(50,239,578
)


(264,341,867
)


(2,744,395
)


(44,742,896
)


(55,011,796
)


(417,080,532
)Decrease in the current year


45,000



20,265,780



1,341,973



7,362,310



3,686,787



32,701,85031 December 2018


(276,040,453
)


(1,216,023,928
)


(9,514,872
)


(203,971,103
)


(201,730,151
)


(1,907,280,507
)Provision for impairment loss31 December 2017






(2,259,813
)










(229,664
)


(2,489,477
)Increase in the current year






(633,167
)














(633,167
)Decrease in the current year






510















51031 December 2018






(2,892,470
)










(229,664
)


(3,122,134
)Carrying amount31 December 2018


547,256,340



1,141,628,680



6,580,492



101,805,229



91,885,492



1,889,156,233  - 44 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (9)
Fixed assets (Contd)  Buildings


Machinery and
equipment


Motor
vehicles


Computers and
electronic equipment and
officeequipment


Tooling


TotalCost31 December 2016


765,812,975



1,749,296,461



6,838,925



257,756,641



172,609,872



2,952,314,874Transfer from construction in progress


58,878,093



355,802,525



5,887,788



32,222,418



69,308,003



522,098,827Other increases in the current year


93,202



88,572







9,286



5,828



196,888Decrease in the current year


(6,833,018
)


(55,055,220
)


(185,379
)


(30,637,992
)


(27,736,142
)


(120,447,751
)Transfer to long-term prepaid expenses














(30,086
)


(127,350
)


(157,436
)31 December 2017


817,951,252



2,050,132,338



12,541,334



259,320,267



214,060,211



3,354,005,402Accumulated depreciation31 December 2016


(182,533,783
)


(764,667,167
)


(6,400,178
)


(154,423,773
)


(121,076,895
)


(1,229,101,796
)Increase in the current year


(46,101,317
)


(246,635,251
)


(1,850,999
)


(42,533,912
)


(49,280,656
)


(386,402,135
)Decrease in the current year


2,789,225



39,354,577



138,727



30,357,139



19,869,631



92,509,299Transfer to long-term prepaid expenses














10,029



82,778



92,80731 December 2017


(225,845,875
)


(971,947,841
)


(8,112,450
)


(166,590,517
)


(150,405,142
)


(1,522,901,825
)Provision for impairment loss31 December 2016






(3,116,116
)










(283,584
)


(3,399,700
)Decrease in the current year






856,303











53,920



910,22331 December 2017






(2,259,813
)










(229,664
)


(2,489,477
)Carrying amount31 December 2017


592,105,377



1,075,924,684



4,428,884



92,729,750



63,425,405



1,828,614,100  - 45 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (9)
Fixed assets (Contd)  Buildings


Machinery and
equipment


Motor
vehicles


Computers and
electronic equipment and
officeequipment


Tooling


TotalCost31 December 2015


806,451,196



1,578,270,298



11,203,963



257,206,427



163,297,902



2,816,429,786Transfer from construction in progress


34,002,825



223,872,862



1,093,938







46,014,855



304,984,480Other increases in the current year














38,872,721







38,872,721Decrease 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



2,952,314,874Accumulated depreciation31 December 2015


(143,920,692
)


(625,119,801
)


(7,718,351
)


(144,230,691
)


(113,372,889
)


(1,034,362,424
)Increase in the current year


(49,375,221
)


(183,487,123
)


(1,512,307
)


(40,831,996
)


(35,416,622
)


(310,623,269
)Decrease in the current year


2,039,813



62,145,418



1,371,317



22,879,917



24,134,045



112,570,510Transfer to long-term prepaid expenses


3,121,358



190,889







1,140







3,313,387Reclassification


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 loss31 December 2015






(3,168,540
)










(753,177
)


(3,921,717
)Decrease in the current year






52,424











469,593



522,01731 December 2016






(3,116,116
)










(283,584
)


(3,399,700
)Carrying amount31 December 2016


583,279,192



981,513,178



438,747



103,332,868



51,249,393



1,719,813,378 In 2018, 2017 and 2016, the amount of depreciation expense charged to cost of sales were RMB 328,563,804, RMB
313,444,037 and RMB 246,862,381, respectively. In 2018, 2017 and 2016, the amount of depreciation expense charged to research and
development expenses were RMB 39,028,327, RMB 25,644,243 and RMB 28,918,334, respectively. In 2018, 2017 and 2016, the amount of
depreciation expense charged to selling expenses were RMB 25,649, RMB 25,648 and RMB 24,687, respectively. In 2018, 2017 and 2016, the
amount of depreciation expense charged to general and administrative expenses were RMB 49,462,752, RMB 47,288,207 and RMB 34,817,867, respectively.  - 46 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (10)
Construction in progress  Project name

31 December2017


Increase in
the currentyear


Transfer to
fixed assets


Transfer to
long-term
prepaidexpenses


Transfer to
intangibleassets


Transfer to
investmentproperties


Decrease inthe currentyear


31 December2018Building and improvements


69,232,968



51,504,218



(4,273,903
)


(10,113,248
)






(765,308
)


(980,599
)


104,604,128Machinery and equipment


129,894,139



410,311,345



(327,567,319
)


(6,985,673
)










(270,829
)


205,381,663Other projects


79,634,820



175,688,466



(139,462,024
)






(61,360,645
)






(44,945
)


54,455,672278,761,927



637,504,029



(471,303,246
)


(17,098,921
)


(61,360,645
)


(765,308
)


(1,296,373
)


364,441,463Including: Capitalised borrowing cost






























Less: Provision for impairment of construction in progress






























278,761,927



637,504,029



(471,303,246
)


(17,098,921
)


(61,360,645
)


(765,308
)


(1,296,373
)


364,441,463  - 47 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (10)
Construction in progress (Contd)  Project name

31 December2016


Increase in
the currentyear


Transfer to
fixed assets


Transfer to
long-term
prepaidexpenses


Transfer to
intangibleassets


Transfer to
investmentproperties


Decreasein thecurrentyear


31 December2017Building and improvements


153,518,569



28,398,407



(58,878,093
)


(11,276,429
)






(42,529,486
)






69,232,968Machinery and equipment


216,942,984



283,936,643



(355,802,525
)


(14,982,963
)










(200,000
)


129,894,139Other projects


71,761,570



130,949,613



(107,418,209
)


(3,537,361
)


(12,120,793
)










79,634,820442,223,123



443,284,663



(522,098,827
)


(29,796,753
)


(12,120,793
)


(42,529,486
)


(200,000
)


278,761,927Including: Capitalised borrowing cost






























Less: Provision for impairment of construction in progress






(200,000
)


















200,000



442,223,123



443,084,663



(522,098,827
)


(29,796,753
)


(12,120,793
)


(42,529,486
)






278,761,927  Project name

31 December 2015


Increase in
the current year


Transfer to
fixed assets


Transfer to
long-term
prepaid expenses


31 December 2016Building and improvements


118,710,057



90,173,145



(34,002,825
)


(21,361,808
)


153,518,569Machinery and equipment


167,382,588



278,237,083



(223,872,862
)


(4,803,825
)


216,942,984Other projects


48,313,183



70,846,066



(47,108,793
)


(288,886
)


71,761,570334,405,828



439,256,294



(304,984,480
)


(26,454,519
)


442,223,123Including: 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  - 48 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (11)
Intangible assets  Cost


31 December2017


Increase in
the current year


Amortisationcharged in thecurrent year


Decrease in
the current year


31 December
2018


AccumulatedamortisationLand use rights


399,694,892



333,665,992







(22,639,676
)






311,026,316



(88,668,576
)Patents


495,000



262,722







(127,762
)






134,960



(360,040
)Software


196,295,597



26,463,310



36,369,059



(22,003,716
)


(74,933
)


40,753,720



(155,541,877
)Non-patent technology


30,837,586







30,837,586











30,837,586



Customer relationship


533,881,400























(533,881,400
)1,161,204,475



360,392,024



67,206,645



(44,771,154
)


(74,933
)


382,752,582



(778,451,893
)Less: Provision for impairment of intangible assets






















360,392,024



67,206,645











382,752,582  Cost


31 December2016


Increase in the
current year


Amortisationcharged in thecurrent year


31 December
2017


AccumulatedamortisationLand use rights


399,694,892



263,218,172



93,105,000



(22,657,180
)


333,665,992



(66,028,900
)Patents


495,000



298,889







(36,167
)


262,722



(232,278
)Software


160,476,467



31,061,697



17,673,825



(22,272,212
)


26,463,310



(134,013,157
)Customer relationship


825,411,900



















(825,411,900
)1,386,078,259



294,578,758



110,778,825



(44,965,559
)


360,392,024



(1,025,686,235
)Less: Provision for impairment of intangible assets


















294,578,758



110,778,825







360,392,024  - 49 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (11)
Intangible assets (Contd)  Cost


31 December2015


Increase in
the current year


Decrease in
the current year


Amortisationcharged in thecurrent year


31 December
2016


AccumulatedamortisationLand 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  - 50 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (12)
Goodwill  31 December2017


Increase in
the current year


Decrease in
the current year


31 December2018Goodwill


71,566,642











71,566,642Less: Provision for impairment














71,566,642











71,566,64231 December2016


Increase in
the current year


Decrease in
the current year


31 December2017Goodwill


71,566,642











71,566,642Less: Provision for impairment














71,566,642











71,566,642  31 December2015


Increase in
the current year


Decrease in
the current year


31 December2016Goodwill


71,566,642











71,566,642Less: Provision for impairment














71,566,642











71,566,642 The recoverable amount of asset groups and groups of asset groups is calculated using the estimated cash flows
determined according to the three-year budget approved by management, together with the constant growth rates thereafter. The latter are set out in the following table. The main assumptions applied in calculating discounted future cash flows are as follows:  Growth rate


4
%Gross margin


16
%Discount rate


17
% The growth rates mentioned above are the weighted average growth rates applied by management to extrapolate
cash flows beyond the three-year period, and the growth rates are consistent with those estimated in the industry reports, and do not exceed the long-term average growth rates of each product. Management determines budgeted gross margin based on
past experience and forecast on future market development. The discount rates used by management are the pre-tax interest rates that are able to reflect the risks specific to the related asset groups and
groups of asset groups. The above assumptions are used to assess the recoverable amount of each asset group and group of asset groups within the corresponding operating segment.  (13)
Long-term prepaid expenses  31 December 2018


31 December 2017


31 December 2016Improvements to fixed
assets held under
operating leases


124,120,670



156,879,052



182,621,388Software










147,650Others


7,647,620



7,535,603



13,259,203131,768,290



164,414,655



196,028,241  - 51 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (14)
Deferred tax assets and deferred tax liabilities  (a)
Deferred tax assets  31 December 2018


31 December 2017


31 December 2016Deferred taxassets


Deductibletemporarydifference


Deferred taxassets


Deductibletemporarydifference


Deferred taxassets


DeductibletemporarydifferenceProvisions for asset impairment


21,356,591



116,200,729



20,633,379



111,836,540



19,481,023



113,203,687Depreciation of fixed assets


9,966,815



62,355,547



1,295,205



9,981,627



3,190,153



17,038,480Amortisation of long-term prepaid expenses










2,254,799



15,031,991







Accrued expenses and accounts payable


1,430,062,002



7,141,338,768



1,053,271,240



5,348,617,949



778,137,801



3,919,738,157Accrued payroll


8,141,074



47,454,161



5,690,242



34,712,085



27,160,131



168,946,288Deferred income


2,892,300



12,568,240



1,962,772



7,851,089



1,770,896



7,083,583Deductible losses


63,988,585



255,954,341



5,296,194



21,184,773



1,639,537



6,558,148Provision


485,776



2,629,978















1,536,893,143



7,638,501,764



1,090,403,831



5,549,216,054



831,379,541



4,232,568,343Including:Expected to be recovered within one year (inclusive)


1,449,978,909







1,085,568,850







827,442,771Expected to be recovered after one year


86,914,234







4,834,981







3,936,7701,536,893,143







1,090,403,831







831,379,541  (b)
Deductible temporary differences and deductible losses that are not recognised as deferred tax assets are
analysed as follows:  31 December 2018


31 December 2017


31 December 2016Deductible temporary differences










28,817,623Deductible losses






46,742,064



16,702,985



46,742,064



45,520,608  - 52 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (14)
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 2018


31 December 2017


31 December 2016Within 1 year










Between 1 to 2 years










Between 2 to 3 years










Between 3 to 4 years






5,240,533



Over 4 years






41,501,531



16,702,985



46,742,064



16,702,985  (d)
Deferred tax liabilities  31 December 2018


31 December 2017


31 December 2016Deferred taxliabilities


Taxabletemporarydifference


Deferred taxliabilities


Taxabletemporarydifference


Deferred taxliabilities


TaxabletemporarydifferenceDepreciation of fixed assets


26,608,456



117,098,760















Including:Expected to be recovered within one year (inclusive)


5,214,740















Expected to be recovered after one year


21,393,716















26,608,456















  (e)
The net balances of deferred tax assets and liabilities after offsetting are as follows:  31 December 2018


31 December 2017


31 December 2016Deferred tax assets, net


1,510,284,687



1,090,403,831



831,379,541  - 53 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (15)
Other non-current assets  31 December 2018


31 December 2017


31 December 2016Prepayment for equipment


40,666,389



64,819,673



39,899,868Rental deposits


13,300,379



15,786,279



17,561,82453,966,768



80,605,952



57,461,692  (16)
Short-term borrowings  Currency


31 December 2018


31 December 2017


31 December 2016Unsecured


RMB



578,660,000



551,280,196



408,884,232 As at 31 December 2018, 2017 and 2016, the weighted average interest rate of short-term borrowings is
4.57%, 4.40% and 4.38% per annum, respectively.  (17)
Notes and accounts payable  31 December 2018


31 December 2017


31 December 2016Notes payable (a)


665,390,579



653,798,483



666,979,006Accounts payable (b)


10,447,210,448



12,797,027,105



9,860,133,82511,112,601,027



13,450,825,588



10,527,112,831  (a)
Notes payable  31 December 2018


31 December 2017


31 December 2016Bank acceptance notes


665,390,579



653,798,483



666,979,006 As at 31 December 2018, 2017 and 2016, bank acceptance notes of RMB 258,170,177, RMB 237,154,087 and RMB
325,076,774 were secured with bank deposits of RMB 284,757,255, RMB 195,158,898 and RMB 289,907,686 (Note 7(1)). As at 31 December
2018, 2017 and 2016, bank acceptance notes of RMB 257,245,279, RMB 230,171,732 and RMB 152,544,483 were secured with notes receivable of RMB 242,674,481, RMB 236,414,979 and RMB 152,544,483 (Note 7(2)(a)).  (b)
Accounts payable  31 December 2018


31 December 2017


31 December 2016Payment for goods


10,443,534,582



12,793,184,831



9,860,133,825Others


3,675,866



3,842,274



10,447,210,448



12,797,027,105



9,860,133,825  - 54 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)   (18)
Employee benefits payable  31 December 2018


31 December 2017


31 December 2016Short-term employee benefits payable (a)


816,643,016



831,474,529



771,593,541Defined contribution plans payable (b)


18,502,669



15,622,695



21,367,180835,145,685



847,097,224



792,960,721  (a)
Short-term employee benefits payable  31 December2017


Increase in thecurrent year


Decrease in thecurrent year


31 December2018Wages and salaries, bonus, allowances and subsidies


415,273,617



1,646,027,829



(1,605,593,750
)


455,707,696Staff welfare


294,436



108,856,363



(105,743,754
)


3,407,045Social security contributions


12,176,698



100,345,310



(101,541,719)



10,980,289Including: Medical insurance


8,009,193



83,187,795



(85,424,412
)


5,772,576Work injury insurance


1,108,309



6,829,819



(7,250,968
)


687,160Maternity insurance


3,059,196



10,327,696



(8,866,339)



4,520,553Housing funds


13,267,157



128,950,351



(131,180,954
)


11,036,554Labour union funds and employee education funds


19,722,413



32,894,214



(27,392,822
)


25,223,805Other short-term employee benefits


830,618



1,043,665



(1,535,604
)


338,679Staff welfare and incentive funds


369,909,590



66,568,986



(126,529,628
)


309,948,948831,474,529



2,084,686,718



(2,099,518,231
)


816,643,01631 December2016


Increase in thecurrent year


Decrease in thecurrent year


31 December2017Wages and salaries, bonus, allowances and subsidies


411,675,946



1,489,660,689



(1,486,063,018
)


415,273,617Staff welfare






141,248,778



(140,954,342
)


294,436Social security contributions


9,463,619



84,333,102



(81,620,023)



12,176,698Including: Medical insurance


7,296,574



69,361,143



(68,648,524
)


8,009,193Work injury insurance


759,177



6,369,010



(6,019,878
)


1,108,309Maternity insurance


1,407,868



8,602,949



(6,951,621)



3,059,196Housing funds


11,402,998



83,767,222



(81,903,063
)


13,267,157Labour union funds and employee education funds


22,226,096



23,487,067



(25,990,750
)


19,722,413Other short-term employee benefits


709,841



1,202,100



(1,081,323
)


830,618Staff welfare and incentive funds


316,115,041



65,871,456



(12,076,907
)


369,909,590771,593,541



1,889,570,414



(1,829,689,426
)


831,474,529  - 55 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (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 December2015


Increase in thecurrent year


Decrease in thecurrent year


31 December2016Wages and salaries, bonus, allowances and subsidies


295,220,972



1,431,467,945



(1,315,012,971
)


411,675,946Staff welfare






114,470,992



(114,470,992
)


Social security contributions


9,116,375



66,392,937



(66,045,693)



9,463,619Including: Medical insurance


4,891,372



58,270,190



(55,864,988
)


7,296,574Work injury insurance


665,975



5,273,526



(5,180,324
)


759,177Maternity insurance


3,559,028



2,849,221



(5,000,381)



1,407,868Housing funds


7,865,810



80,420,576



(76,883,388
)


11,402,998Labour union funds and employee education funds


17,081,193



29,525,357



(24,380,454
)


22,226,096Other short-term employee benefits


318,558



1,037,775



(646,492
)


709,841Staff welfare and incentive funds


277,256,403



48,743,593



(9,884,955
)


316,115,041606,859,311



1,772,059,175



(1,607,324,945
)


771,593,541  (b)
Defined contribution plans payable  2018Amount payable


Ending balanceBasic pensions


224,024,929



17,521,898Unemployment insurance


6,774,048



980,771230,798,977



18,502,6692017Amount payable


Ending balanceBasic pensions


169,528,098



14,558,763Unemployment insurance


5,459,505



1,063,932174,987,603



15,622,6952016Amount payable


Ending balanceBasic pensions


147,378,646



19,608,691Unemployment insurance


7,715,280



1,758,489155,093,926



21,367,180  - 56 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)   (19)
Taxes payable  31 December 2018


31 December 2017


31 December 2016Enterprise income tax payable


481,588,064



416,057,834



439,098,114Unpaid VAT


44,727,170



200,453,088



237,394,873Withholding individual income tax payable


6,251,468



15,867,945



8,695,828Others


13,388,116



24,243,999



24,057,989545,954,818



656,622,866



709,246,804  (20)
Other payables  31 December 2018


31 December 2017


31 December 2016Accrued expenses


2,906,378,476



2,897,471,960



1,945,410,740Modules fee payables


626,924,525



314,966,958



202,794,863Payables for purchase of long-term assets


135,718,398



133,318,793



84,347,957Dividend payables


113,536,580







Service fee payables


71,544,812



63,833,732



50,534,097Expenses paid by others on behalf of the Group


66,157,854



18,811,831



18,096,164Transportation fee payables


16,427,855



30,867,845



10,582,666Others


38,622,758



67,741,260



42,590,9733,975,311,258



3,527,012,379



2,354,357,460  (21)
Long-term borrowings  31 December 2018


31 December 2017


31 December 2016Unsecured


1,500,000



4,500,000



13,505,000Less: Current portion of long-term borrowings


(1,500,000
)


(3,000,000
)


(5,398,000
)



1,500,000



8,107,000 As at 31 December 2018, 2017 and 2016, the weighted average interest rate of long-term borrowings is
5.06%, 4.55% and 5.15% per annum, respectively.  (22)
Deferred income  31 December 2018


31 December 2017


31 December 2016Government grants (a)


14,135,470



9,117,415



9,995,949  - 57 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (22)
Deferred income (Contd)  (a)
Government grants  31 December2017


Increase in thecurrent year


Charged toother income


31 December2018


Asset related/Income relatedEnterprise Development Special Fund


6,089,000











6,089,000



Asset relatedOther asset-related subsidies


2,918,415



7,675,000



(2,656,945
)


7,936,470



Asset relatedOther income-related subsidies


110,000











110,000



Income related9,117,415



7,675,000



(2,656,945
)


14,135,470 The government grants recognised in profit or loss or deducted against related expenses in the year 2018 are
set out as follows:  Government grants

Nature

Amount


Presentation itemsInformation intelligence subsidies

Fiscal subsidies (hi-technology subsidies)


172,270



Other incomeOther fiscal subsidies

Fiscal subsidies


2,484,675



Other income2,656,945  - 58 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (22)
Deferred income (Contd)  (a)
Government grants (Contd)  31 December2016


Increase in thecurrent year


Charged toother income


31 December2017


Asset related/Income relatedEnterprise Development Special Fund


6,089,000











6,089,000



Asset relatedOther asset-related subsidies


3,906,949



1,164,730



(2,153,264
)


2,918,415



Asset relatedOther income-related subsidies






110,000







110,000



Income related9,995,949



1,274,730



(2,153,264
)


9,117,415 The government grants recognised in profit or loss or deducted against related expenses in the year 2017 are
set out as follows:  Government grants

Nature

Amount


Presentation itemsInformation intelligence subsidies

Fiscal subsidies (hi-technology subsidies)


1,733,270



Other incomeOther fiscal subsidies

Fiscal subsidies


419,994



Other income2,153,264  - 59 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (22)
Deferred income (Contd)  (a)
Government grants (Contd)  31 December2015


Increase in thecurrent year


Charged tonon-operatingincome


31 December2016


Asset related/Income relatedEnterprise Development Special Fund


6,089,000











6,089,000



Asset relatedOther asset-related subsidies


1,313,636



2,765,583



(172,270
)


3,906,949



Asset related7,402,636



2,765,583



(172,270
)


9,995,949 The government grants recognised in profit or loss or deducted against related expenses in the year 2016 are
set out as follows:  Government grants

Nature

Amount


Presentation itemsInformation intelligence subsidies

Fiscal subsidies (hi-technology subsidies)


172,270



Non-operating income  - 60 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)   (23)
Surplus reserve  31 December2017


Increase in
the current year


Decrease in
the current year


31 December2018Reserve Fund


168,511,991



22,088,080







190,600,071Enterprise Expansion Fund


273,298,786



44,176,160







317,474,946441,810,777



66,264,240







508,075,01731 December2016


Increase in
the current year


Decrease in
the current year


31 December2017Reserve Fund


146,820,596



21,691,395







168,511,991Enterprise Expansion Fund


229,915,996



43,382,790







273,298,786376,736,592



65,074,185







441,810,77731 December2015


Increase in
the current year


Decrease in
the current year


31 December2016Reserve Fund


130,929,416



15,891,180







146,820,596Enterprise Expansion Fund


198,133,636



31,782,360







229,915,996329,063,052



47,673,540







376,736,592 In accordance with the Law of the PRC on Chinese Foreign Equity Joint Ventures and the Companys Articles
of Association, the Company appropriated RMB 22,088,080, RMB 21,691,395 and RMB 15,891,180 to Reserve Fund for the years of 2018, 2017 and 2016, respectively, and RMB 44,176,160, RMB 43,382,790 and RMB 31,782,360 to the Enterprise Expansion Fund for
the years of 2018, 2017 and 2016, respectively.  (24)
Undistributed profits In accordance with the resolution at the Board of Directors meeting dated on 23 May 2018, 8 May 2017, and 5 May 2016, the
Company proposed a dividend in the amount of RMB 2,038,991,145, RMB 1,493,770,914 and RMB 1,385,874,680 to the investors, respectively.  - 61 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)   (25)
Revenue and cost of sales  2018


2017


2016Revenue


Cost of sales


Revenue


Cost of sales


Revenue


Cost of salesRevenue from main operations- sales of automotive spare parts


32,474,029,564



(27,360,907,165
)


31,247,431,443



(26,011,033,680
)


28,543,605,353



(23,910,736,255
)Revenue from other operations- sales of raw materials


389,532,355



(132,592,960
)


359,516,400



(195,735,293
)


366,746,804



(215,932,018
)- service income


381,564,501



(191,639,970
)


388,691,895



(302,641,103
)


191,903,654



(81,143,480
)- others


70,785,181



(47,528,081
)


47,556,144



(22,983,965
)


20,245,367



(7,571,679
)33,315,911,601



(27,732,668,176
)


32,043,195,882



(26,532,394,041
)


29,122,501,178



(24,215,383,432
)  (26)
Taxes and surcharges  2018


2017


2016City maintenance and construction tax


46,998,407



81,994,619



69,269,617Educational surcharge


46,266,440



80,752,122



62,249,763Others


31,913,568



33,794,635



31,201,169125,178,415



196,541,376



162,720,549  (27)
Financial income - net  2018


2017


2016Interest income


148,779,198



75,511,218



58,478,657Interest costs - borrowings


(26,289,474
)


(20,952,425
)


(6,316,721
)Charges for discounted notes receivable


(6,855,748
)


(8,902,309
)


(173,065
)Exchange gains/(losses) - net


9,460,142



(25,419,145
)


4,911,656Others


(3,179,653
)


(2,407,704
)


(4,998,427
)121,914,465



17,829,635



51,902,100  - 62 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)   (28)
Expenses by nature The cost of sales, selling expenses, general and administrative expenses and research and development expenses in the income statements are
listed as follows by nature:  2018


2017


2016Changes in inventories of finished goods and work in progress


107,270,399



(44,851,383
)


40,586,926Consumed raw materials and low value consumables, etc.


24,882,462,206



24,184,797,504



22,059,980,339Employee benefits expenses


2,248,916,709



1,998,686,561



1,878,409,508Depreciation and amortisation expenses


522,293,316



496,272,154



391,254,028Sample Experimental manufacturing expenses


261,794,721



161,938,159



102,642,058Transportation and logistics fee


231,219,524



221,398,652



181,107,054Rental expenses


225,299,598



233,653,070



209,235,385Experiment and inspection expenses


192,077,986



299,650,447



96,197,190Consulting fee


182,869,519



165,879,871



104,054,781Maintenance cost


131,534,567



133,919,273



129,191,717Utilities


122,494,624



126,211,508



121,804,031Other expenses


1,125,491,874



1,132,991,388



1,068,162,72130,233,725,043



29,110,547,204



26,382,625,738 No research and development expenses were capitalized in 2018, 2017 and 2016.  (29)
Asset impairment losses  2018


2017


2016Accrual in/(Reversal of) the value of inventories


13,271,029



1,139,340



(2,235,672
)Impairment of fixed assets


633,167







Bad debts (reversal)/provision


(3,102,716
)


1,606,517



65,970,387Impairment of construction in progress






200,000



10,801,480



2,945,857



63,734,715  (30)
Investment income  2018


2017


2016Share of net profit of investees under equity method


66,200,119



78,876,545



54,019,531Interest income from entrusted loans and cash pool


20,854,960



11,297,514



9,348,843Gains on disposal of long-term equity Investments






212



87,055,079



90,174,271



63,368,374  - 63 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)   (31)
Losses on disposals of assets  2018


2017


2016Losses on disposals of long-term prepaid expenses, net


1,460,416



497,872



Losses on disposals of construction in progress, net


738,376







Losses on disposals of fixed assets, net


153,978



2,524,116



18,381,6062,352,770



3,021,988



18,381,606  (32)
Other income  2018


2017


2016


Asset related/
Income relatedTax refund


57,541,043



78,342,922







Income relatedSpecial fiscal subsidies


54,911,613



47,135,626







Income relatedOther asset-related subsidies


2,656,945



2,153,264







Asset relatedOther income-related subsidies


127,984



1,476,359







Income related115,237,585



129,108,171



  (33)
Non-operating income and expenses  (a)
Non-operating income  2018


2017


2016Government grant










70,847,989Others


4,511,490



2,346,311



1,679,0724,511,490



2,346,311



72,527,061  (b)
Non-operating expenses  2018


2017


2016Others


3,801,129



1,873,547



3,014,728  (34)
Income tax expenses  2018


2017


2016Current income tax


982,336,587



848,031,982



793,033,052Deferred income tax


(419,880,856
)


(259,024,290
)


(285,504,161
)562,455,731



589,007,692



507,528,891  - 64 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (34)
Income tax expenses (Contd)  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:  2018


2017


2016Total profit


3,268,771,383



2,967,724,298



2,679,821,377Income tax expenses calculated at applicable tax rates


817,192,846



741,931,075



669,955,344Investment income under equity method


(9,930,018
)


(11,831,513
)


(8,102,930
)Effect of favourable tax rates


(208,007,157
)


(146,106,657
)


(131,879,937
)Additional deduction of research and development expenses


(13,314,447
)


(12,071,490
)


(6,179,545
)Effect of change in the tax rates






(628,102
)


1,190,062Costs, expenses and losses not deductible for tax purposes


10,358,294



7,450,807



3,035,020Deductible losses and deductible temporary differences for which no deferred income tax asset was
recognised


172,182



10,375,383



6,541,466(Utilisation of previously unrecognised)/ Reversal of previously recognised deductible losses and
deductible temporary differences


(25,434,500
)


1,687,064



10,873,546Prior year income tax reconciliation differences


(8,581,469
)


(1,798,875
)


(37,904,135
)Income tax expenses


562,455,731



589,007,692



507,528,891  (35)
Other comprehensive income  (a)
Items of other comprehensive income with the related income tax effect and the amount reclassified to profit or
loss  2018Amount
before tax


Income tax


Net amount
after taxOther comprehensive income items which will be reclassified subsequently to profit or
lossDifferences arising from translation of foreign currency financial statements


101,743







101,743Less: Reclassification of previous other comprehensive income to profit or loss










101,743







101,743  - 65 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (35)
Other comprehensive income (Contd)  (a)
Items of other comprehensive income with the related income tax effect and the amount reclassified to profit or
loss (Contd)  2017Amount
before tax


Income tax


Net amount
after taxOther comprehensive income items which will be reclassified subsequently to profit or loss
Differences arising from translation of foreign currency financial statements


430,299







430,299Less: Reclassification of previous other comprehensive income to profit 
or loss










430,299







430,2992016Amount
before tax


Income tax


Net amount
after taxOther comprehensive loss items which will be reclassified subsequently to profit or loss
Differences arising from translation of foreign currency financial statements


1,290,996







1,290,996Less: Reclassification of previous other comprehensive income to profit 
or loss










1,290,996







1,290,996  (b)
Reconciliation of other comprehensive income/(loss)  Attributable to equity ownersof the Company


Minorityinterests


TotalDifferences arisingfrom translation offoreign currencyfinancial statements


Sub-total31 December 2015


(307,041
)


(307,041
)






(307,041
)Movements for the year ended 31 December 2016


1,290,996



1,290,996







1,290,99631 December 2016


983,955



983,955







983,955Movements for the year ended 31 December 2017


430,299



430,299







430,29931 December 2017


1,414,254



1,414,254







1,414,254Movements for the year ended 31 December 2018


101,743



101,743







101,74331 December 2018


1,515,997



1,515,997







1,515,997  - 66 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  7
Notes to the consolidated financial statements (Contd)  (36)
Notes to the consolidated cash flow statements  (a)
Reconciliation from net profit to cash flows from operating activities  2018


2017


2016Net profit


2,706,315,652



2,378,716,606



2,172,292,486Add: Provisions for asset impairment


10,801,480



2,945,857



63,734,715Depreciation of fixed assets


417,080,532



386,402,135



310,623,269Amortisation of intangible assets


44,771,154



44,965,559



30,801,181Amortisation of long-term prepaid expenses


58,493,364



64,904,460



49,829,578Depreciation of investment properties


1,948,266







Losses on disposal of fixed assets, intangible assets and other long-term assets


2,352,770



3,021,988



18,381,606Financial expenses


26,289,474



20,952,425



6,316,721Investment income


(87,055,079
)


(90,174,271
)


(63,368,374
)Increase in deferred tax assets


(419,880,856
)


(259,024,290
)


(285,262,661
)Decrease in deferred tax liabilities










(241,500
)Decrease/(Increase) in inventories


182,457,041



(98,436,250
)


(94,240,317
)Decrease/(Increase) in operating receivables


2,720,701,496



(1,958,865,113
)


(871,936,802
)(Decrease)/Increase in operating payables


(2,176,226,871
)


3,969,397,557



2,621,421,678Net cash flows from operating activities


3,488,048,423



4,464,806,663



3,958,351,580  (b)
Net increase in cash and cash equivalents  2018


2017


2016Cash and cash equivalents at the end of the year


9,013,241,794



7,938,513,680



6,179,211,510Less: Cash and cash equivalents at the beginning of the year


(7,938,513,680
)


(6,179,211,510
)


(3,741,333,102
)Net increase in cash and cash equivalents


1,074,728,114



1,759,302,170



2,437,878,408  (c)
Cash and cash equivalents  31 December2018


31 December2017


31 December
2016Cash at bank and on hand (Note 7(1))


9,297,999,049



8,133,672,578



6,469,119,196Less: Other restricted cash balances


(284,757,255
)


(195,158,898
)


(289,907,686
)Cash and cash equivalents at the end of the year


9,013,241,794



7,938,513,680



6,179,211,510  - 67 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  8
Related parties and related party transactions  (1)
The parent company and subsidiaries The general information and other related information of the subsidiaries is set out in Note 6.  (a)
General information of the parent company  Place of
registration

Nature of businessYanfeng Trim

Shanghai, China

Development and production of plastic and decorating products used for automobiles, trucks and motorcycles, moulds, stamping parts, standard fasteners; sales of self-produced products, import and export of products and
technologies, industrial investment; technical development, transfer, consultancy and service, and business information consultancy in the special area of auto parts; and self-owned house leasing. The parent company is Yanfeng Trim and the ultimate holding company is Shanghai Automotive Industry
Corporation.  (b)
Registered capital and changes in registered capital of the parent company  31 December
2017


Current yearchanges


31 December
2018RMB





RMBYanfeng Trim


1,078,947,853







1,078,947,85331 December
2016


Current yearchanges


31 December
2017RMB





RMBYanfeng Trim


1,078,947,853







1,078,947,85331 December
2015


Current yearchanges


31 December
2016RMB





RMBYanfeng Trim


1,078,947,853







1,078,947,853  (c)
The proportion of interests and voting rights in the Company held by the parent company  31 December 2018


31 December 2017


31 December 2016Share
holding


Voting
rights


Share
holding


Voting
rights


Share
holding


Voting
rightsYanfeng Trim


50.01
%


50.00
%


50.01
%


50.00
%


50.01
%


50.00
%  - 68 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  8
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 GroupDongfeng Adient Seating (ii)

AssociateWuhan Taiji (ii)

AssociateCRH Shenyang (ii)

Joint ventureShanghai Yanfeng Jinqiao Automotive Trim Systems Co., Ltd. (iii)

Subsidiary of the parent companyYanfeng Automotive Trim Systems Guangzhou Co., Ltd. (iii)

Subsidiary of the parent companyShanghai Songjiang Chunshen Plastic Products Co., Ltd. (iii)

Subsidiary of the parent companyYanfeng Automotive Interior Systems (Shanghai) Co., Ltd. (iii)

Subsidiary of the parent companyShanghai Yankang Automative Components Co., Ltd. (iii)

Subsidiary of the parent companyBeijing BAIC Motor Yanfeng Automative Components Co., Ltd. (iii)

Subsidiary of the parent companyYankang (Rugao) Automative Components Co., Ltd. (iii)

Subsidiary of the parent companyYanfeng Visteon Automotive Electronics Co., Ltd. (iii)

Associate of the parent companyYanfeng Key (Shanghai) Automotive Safety Systems Co., Ltd. (iii)

Joint venture of the parent companyAdient Yanfeng Seating Mechanism Co., Ltd. (iii)

Joint venture of the parent companyShanghai Key Automotive Plastic Component Co., Ltd. (iii)

Joint venture of the parent companyYanfeng Adient (Changshu) Seating Machinery Parts Co., Ltd. (iii)

Joint venture of the parent companyDongfeng Automotive Trim Systems Co., Ltd. (iii)

Joint venture of the parent companySAIC General Motors Sales Co., Ltd. (iii)

Subsidiary of the ultimate holding companySAIC Finance Co., Ltd. (iii)

Subsidiary of the ultimate holding companySAIC Motor Corporation Limited (iii)

Subsidiary of the ultimate holding companyJiangsu ANJI Logistics Co., Ltd. (iii)

Subsidiary of the ultimate holding companyShanghai ANJI-CEVA Automotive Logistics Co., Ltd. (iii)

Subsidiary of the ultimate holding companyShanghai Sanhuan Spring Co., Ltd. (iii)

Subsidiary of the ultimate holding companyNanjing Automobile (Group) Corporation (iii)

Subsidiary of the ultimate holding companyDonghua Automotive Industrial Co., Ltd. (iii)

Subsidiary of the ultimate holding companySAIC GM Wuling Co., Ltd. (iii)

Subsidiary of the ultimate holding companySAIC Activity Centre Co., Ltd. (iii)

Subsidiary of the ultimate holding companySAIC Maxus Vehicle Co., Ltd. (iii)

Subsidiary of the ultimate holding companySAIC Volkswagen Sales Co., Ltd. (iii)

Subsidiary of the ultimate holding companyShanghai Haitong International Automotive Logistics Co., Ltd. (iii)

Subsidiary of the ultimate holding companyChongqing Zhonghai Spring Co., Ltd. (iii)

Subsidiary of the ultimate holding companyNanjing MG Automative Trading Co., Ltd. (iii)

Subsidiary of the ultimate holding companyShanghai International Automotive City Development Co., Ltd. (iii)

Associate of the ultimate holding companyShanghai Boze Auto Parts Co., Ltd. (iii)

Associate of the ultimate holding companyShanghai LEAR STEC Automotive Parts Co., Ltd. (iii)

Associate of the ultimate holding companySAIC Volkswagen Automotive Co., Ltd. (iii)

Joint venture of the ultimate holding companySAIC General Motors Co., Ltd (iii)

Joint venture of the ultimate holding companyShanghai GM (Shenyang) Norsom Motors Co., Ltd.(iii)

Joint venture of the ultimate holding companySAIC GM Dong Yue Motors Co., Ltd. (iii)

Joint venture of the ultimate holding company  - 69 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  8
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 GroupShanghai TRW Automotive Safety Systems Co., Ltd. (iii)

Joint venture of the ultimate holding companyNanjing Iveco Automobile Co., Ltd. (iii)

Joint venture of the ultimate holding companyShanghai Koito Automotive Lamp Co., Ltd. (iii)

Joint venture of the ultimate holding companyShanghai Tongzhou Automative Components Co., Ltd. (iii)

Joint venture of the ultimate holding companyAdient plc (i) (iv)

Ultimate holding company of Adient AsiaAnhui Adient Xinnangang Automobile Trim Co., Ltd. (iv)

Subsidiary of Adient plcKinryo Kogyo Co., Ltd. (iv)

Subsidiary of Adient plcGuangzhou Adient Automotive Seating Co., Ltd. (iv)

Subsidiary of Adient plcChangsha Adient Auto Parts Co., Ltd (iv)

Subsidiary of Adient plcOther 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  2018


2017


2016SAIC, its subsidiaries, associates and joint ventures


7,998,704,118



7,058,894,379



6,498,294,883Associates and Joint ventures


601,676,483



633,584,983



324,582,271Adient and JCI, its subsidiaries and joint ventures


470,609,580



497,208,601



109,494,7079,070,990,181



8,189,687,963



6,932,371,861  - 70 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  8
Related parties and related party transactions (Contd)  (3)
Related party transactions (Contd)  (c)
Sale of goods  2018


2017


2016SAIC, its subsidiaries, associates and joint ventures


21,350,575,491



19,925,396,626



18,688,195,185Adient and JCI, its subsidiaries and joint ventures


521,821,709



803,593,799



629,760,415Associates and Joint ventures


59,715,050



101,654,541



83,612,85921,932,112,250



20,830,644,966



19,401,568,459  (d)
Technical service fee  2018


2017


2016SAIC, its subsidiaries, associates and joint ventures


71,475,320



70,139,730



Adient and JCI, its subsidiaries and joint ventures


45,173,056



31,344,660



54,457,867116,648,376



101,484,390



54,457,867  (e)
Increase/(Decrease) on entrusted loans and cash pool - net  2018


2017


2016SAIC, its subsidiaries, associates and joint ventures


121,752,264



(443,761,187
)


149,017,458Associates and Joint ventures


114,719,890



(114,615,610
)


15,000,000236,472,154



(558,376,797
)


164,017,458  (f)
Interest income and expenses from entrusted loans and cash pool- net  2018


2017


2016SAIC, its subsidiaries, associates and joint ventures


18,892,661



9,636,399



8,782,308Associates and Joint ventures


1,962,020



1,661,115



566,53520,854,681



11,297,514



9,348,843  (g)
Purchase of long-term assets  2018


2017


2016SAIC, its subsidiaries, associates and joint ventures


73,107,599







  - 71 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  8
Related parties and related party transactions (Contd)  (4)
Receivables from and payables to related parties  (a)
Notes and accounts receivables  31 December 2018


31 December 2017


31 December 2016SAIC, its subsidiaries, associates and joint ventures


3,844,430,901



6,905,966,873



3,653,419,002Adient and JCI, its subsidiaries and joint ventures


241,517,928



313,213,838



160,191,396Associates and Joint ventures


95,894,679



84,559,064



68,419,2424,181,843,508



7,303,739,775



3,882,029,640  (b)
Advances to suppliers  31 December 2018


31 December 2017


31 December 2016SAIC, its subsidiaries, associates and joint ventures


10,474,163



2,243,546



2,693,546  (c)
Other receivables  31 December 2018


31 December 2017


31 December 2016SAIC, its subsidiaries, associates and joint ventures


489,914,438



594,743,730



154,655,835Associates and Joint ventures


18,935,255



112,487,252



12,071,405508,849,693



707,230,982



166,727,240  (d)
Other current assets  31 December 2018


31 December 2017


31 December 2016Associates and Joint ventures






15,000,000



  - 72 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  8
Related parties and related party transactions (Contd)  (4)
Receivables from and payables to related parties (Contd)  (e)
Cash at bank - deposit in SAIC, its subsidiaries, associates and joint ventures  31 December 2018


31 December 2017


31 December 2016SAIC, its subsidiaries, associates and joint ventures


1,811,430,396



2,326,653,158



1,509,271,765  (f)
Notes payable and accounts payable  31 December 2018


31 December 2017


31 December 2016SAIC, its subsidiaries, associates and joint ventures


1,663,717,900



4,293,590,126



1,722,972,197Associates and Joint ventures


200,575,015



262,329,935



109,748,062Adient and JCI, its subsidiaries and joint ventures


53,935,601



110,414,579



32,727,2811,918,228,516



4,666,334,640



1,865,447,540  (g)
Other payables  31 December 2018


31 December 2017


31 December 2016Adient and JCI, its subsidiaries and joint ventures


79,676,099



1,918,956



SAIC, its subsidiaries, associates and joint ventures






2,623,882



4,535,93979,676,099



4,542,838



4,535,939  (5)
Commitments in relation to related parties The commitments in relation to related parties contracted for by the Group but not yet necessary to be recognised on the balance sheet as at
the balance sheet date are as follows:  (a)
Leases  31 December 2018


31 December 2017


31 December 2016- LesseeSAIC, its subsidiaries, associates and joint ventures


84,391,765



90,558,920



49,120,982  - 73 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  9
Commitments  (1)
Capital commitments Capital expenditures contracted for by the Group but are not yet necessary to be recognised on the balance sheet as at the balance sheet date
are as follows:  31 December 2018


31 December 2017


31 December 2016Buildings, machinery and equipment


45,963,602



108,938,923



117,327,496  (2)
Operating lease commitments The future minimum lease payments due under the signed irrevocable operating leases contracts are summarised as follows:  31 December 2018


31 December 2017


31 December 2016Within 1 year


159,228,397



140,700,650



140,730,5591 and 2 years


131,942,062



116,925,255



108,597,9272 and 3 years


116,737,697



111,404,872



98,372,305Over 3 years


310,344,520



343,124,106



294,351,515718,252,676



712,154,883



642,052,306  10
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.  - 74 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  10
Financial risk (Contd)  (1)
Market risk (Contd)  (a)
Foreign exchange risk (Contd)  The financial assets and the financial liabilities denominated in foreign currencies, which
are held by the subsidiaries of the Group, whose recording currencies are RMB, are expressed in RMB as at 31 December 2018, 2017 and 2016 as follows:  31 December 2018USD


Others


TotalFinancial assets denominated in foreign currency -Cash at bank and on hand


50,213,457



65,760,379



115,973,836Receivables


122,414,691



213,130,083



335,544,774172,628,148



278,890,462



451,518,610Financial liabilities denominated in foreign currency -Payables


40,311,332



126,466,498



166,777,83031 December 2017USD


Others


TotalFinancial assets denominated in foreign currency -Cash at bank and on hand


16,064,657



15,968,386



32,033,043Receivables


156,009,983



214,098,674



370,108,657172,074,640



230,067,060



402,141,700Financial liabilities denominated in foreign currency -Payables


38,254,620



129,818,845



168,073,46531 December 2016USD


Others


TotalFinancial assets denominated in foreign currency -Cash at bank and on hand


24,397,693



25,997,605



50,395,298Receivables


158,187,444



259,685,501



417,872,945182,585,137



285,683,106



468,268,243Financial liabilities denominated in foreign currency -Payables


56,922,242



116,890,582



173,812,824 As at 31 December 2018, 2017 and 2016, if the RMB had strengthened/weakened by 10% against the USD while
all other variables had been held constant, the Groups profit after tax for the years would have been approximately RMB 13,231,682, RMB 13,382,002 and RMB 12,566,290 lower/higher for various financial assets and liabilities denominated in USD.  - 75 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  10
Financial 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 2018, 2017 and 2016, the Groups long-term interest bearing borrowings were RMB-denominated with floating rates, amounting to Nil, 1,500,000 and
8,107,000 (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 2018, 2017 and 2016, the Group did not
enter into any interest rate swap agreements. As at 31 December 2018, 2017 and 2016, 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 total profit would have decreased/increased by approximately Nil, 7,500 and 40,535, respectively.  (2)
Credit risk Credit risk is managed on the grouping basis. Credit risk mainly arises from cash at bank, notes and accounts receivables, other receivables
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 2018, 2017 and 2016, cash deposited at state-owned banks, other medium or large size listed banks and related party were approximately 9,287 million,
8,132 million and 6,468 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 notes and accounts receivables, other receivables. The Group assesses the
credit quality of and sets credit limits on its customers by taking into account their financial position, the availability of guarantee from third parties, their credit history and other factors such as current market conditions. The credit history
of the customers is regularly monitored by the Group. In respect of customers with a poor credit history, the Group will use written payment reminders, or shorten or cancel credit periods, to ensure the overall credit risk of the Group is limited to
a controllable extent. As at the balance sheet date, the Group has no significant collateral or other credit enhancements held as a result
of the debtors mortgage.  - 76 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  10
Financial 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 2018Within 1 year


1 to 5 years


Over 5 years


TotalShort-term borrowings


578,660,000











578,660,000Notes and accounts payable


11,112,601,027











11,112,601,027Other payables


3,990,807,212











3,990,807,212Long-term borrowings


1,500,000











1,500,00015,683,568,239











15,683,568,23931 December 2017Within 1 year


1 to 5 years


Over 5 years


TotalShort-term borrowings


551,280,196











551,280,196Notes and accounts payable


13,450,825,588











13,450,825,588Other payables


3,540,365,714



6,125







3,540,371,839Long-term borrowings


3,000,000



1,500,000







4,500,00017,545,471,498



1,506,125







17,546,977,62331 December 2016Within 1 year


1 to 5 years


Over 5 years


TotalShort-term borrowings


408,884,232











408,884,232Notes and accounts payable


10,527,112,831











10,527,112,831Other payables


2,366,768,291



231,970







2,367,000,261Long-term borrowings


5,398,000



8,107,000







13,505,00013,308,163,354



8,338,970







13,316,502,324  - 77 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  11
Fair value estimates  (1)
Financial assets and liabilities not measured at fair value Financial assets and liabilities measured at amortised cost mainly include receivables, short-term borrowings, payables and long-term
borrowings etc. The carrying amount of the financial assets and liabilities not measured at fair value is a reasonable approximation of
their fair value.  12
Capital management The 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 sheets. The Group is not
subject to external mandatory capital requirements.  13
Reconciliation to United States generally accepted accounting principles The financial statements have been prepared in accordance with Accounting Standards for Business Enterprises in the 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 2018, 2017 and 2016 which would be required if U.S. GAAP were to
be applied instead of PRC GAAP are summarized as follows:  2018


2017


2016Net profit under PRC GAAP


2,706,315,652



2,378,716,606



2,172,292,486Adjustments:Inventory impairment reversals (a)


(135,814
)


2,694,821



(2,965,596
)Staff Welfare and Incentive Fund (b)


(126,529,628
)


(12,076,907
)


(9,884,955
)Tax effect of the reconciling items (c)


20,372



(404,223
)


444,839Net profit under U.S. GAAP


2,579,670,582



2,368,930,297



2,159,886,774  - 78 -




---

YANFENG ADIENT SEATING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED 31 DECEMBER 2018, 2017 AND 2016 (AMOUNTS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2017 IS NOT COVERED BY THE AUDITORS REPORT INCLUDED HEREIN) (All amounts in RMB Yuan unless otherwise stated)  13
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 2018, 2017 and 2016 which would be required if U.S. GAAP were to be applied instead of PRC GAAP are summarized as follows:  31 December 2018


31 December 2017


31 December 2016Owners equity under PRC GAAP


5,267,776,585



4,857,853,302



4,372,016,024Adjustments:Inventory impairment reversals (a)


(571,573
)


(435,759
)


(3,130,580
)Staff Welfare and Incentive Fund (b)


309,948,948



369,909,590



316,115,041Tax effect of the reconciling items (c)


85,736



65,364



469,587Owners equity under U.S. GAAP


5,577,239,696



5,227,392,497



4,685,470,072  (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, 2018, 2017 and 2016 was 15%.  - 79 -