Jiangling Motors Corporation, Ltd.
2018 Work Report of the Supervisory Board
I. Work of the Supervisory Board
Pursuant to the relevant regulations in the Company Law, Securities Law and the Articles of Association of JMC as well as consistent with the spirit of being responsible to the shareholders, the Supervisory Board earnestly fulfilled its duties stipulated by the laws and regulations and energetically worked to perform its functions fully in 2018. The Supervisory Board held 7 meetings during the reporting period. The details for these meetings are as follows:
1. The Supervisory Board reviewed and passed in form of paper meeting the following resolutions from March 15 to March 22, 2018:
i. reviewed and passed the 2017 working report of the Supervisory Board;
ii. reviewed and passed the 2017 Annual Report of JMC and the extracts from the Annual Report, and expressed opinions, and
iii. reviewed the Internal Control Self-assessment Report and expressed opinions.
2. The Supervisory Board reviewed and passed the following resolution in form of paper meeting from April 17 to April 24, 2018: the Supervisory Board believed upon review that the procedure of the Board ofDirectors’ preparation and review of the 2018 First Quarter Report of JMC complied with the stipulations in the laws, regulations and CSRC provisions, and the report reflected truthfully, accurately and completely theCompany’s actual situation and did not contain any false statement, misrepresentation or major omission.
3. The Supervisory Board reviewed and passed the following resolutions in form of paper meeting from May 22 to May 29, 2018: the Supervisory Board approved the Notice on Holding 2017 AnnualShareholders’ Meeting of JMC.
4. A Supervisory Board meeting was held in the Administration Building of JMC on June 6, 2018. The following resolution was reviewed and passed at this meeting: regarding the First Half of 2018 Eight Accounting Provisions& Write-off proposal approved by the Board of Directors of the Company, the Supervisory Board believed that it is consistent with theCompany’s actual needs and situation.
5. The Supervisory Board reviewed and passed the following resolution in form of paper meeting from August 17 to August 27, 2018: the Supervisory Board believed upon review that the procedure of the Board ofDirectors’ preparation and review of the 2018 Half Year Report of JMC complied with the stipulations in the laws, regulations and CSRC provisions, and the report reflected truthfully, accurately and completely theCompany’s actual situation and did not contain any false statement, misrepresentation or major omission.
6. The Supervisory Board reviewed and passed the following resolution in form of paper meeting October 17 to October 24, 2018: the Supervisory Board believed upon review that the procedure of the Board ofDirectors’ preparation and review of the 2018 Third Quarter Report of JMC complied with the stipulations in the laws, regulations and CSRC provisions, and the report reflected truthfully, accurately and completely theCompany’s actual situation and did not contain any false statement, misrepresentation or major omission..
7. The Supervisory Board reviewed and passed the following resolutions in form of paper meeting from November 11 to November 15, 2018:
i. Jiangling Motor Holdings Co., Ltd. nominated Mr. Xiao Hu as the candidate for the Supervisor on the Supervisory Board of JMC; Mr. Zhu Yi will no longer serve as a Supervisor on the Supervisory Board of JMC. The Supervisory Board agreed to submit the aforesaid supervisor nomination by Jiangling Motor Holdings Co., Ltd. to theShareholders’ Meeting for approval.
ii. The Supervisory Board approves the Notice on Holding 2018 Second SpecialShareholders’ Meeting of JMC.
8. A Supervisory Board meeting was held in the Administration Building of JMC on December 6, 2018. The following resolution was reviewed and passed at this meeting: i. the Supervisory Board elected Mr. Xiao Hu as the Chief Supervisor of JMC.
ii. regarding the 2018 Year-end Eight Accounting Provisions& Write-off proposal approved by the Board of Directors of the Company, the Supervisory Board believed that it is consistent with theCompany’s actual needs and situation.
II. The Supervisory Board expressed its opinions on the following matters during the reporting period as follows:
1.JMC’s operation in conformity with laws
JMC operated in conformity with the Company Law, the Securities Law and the Articles of Association of the Company in 2018. The decision-making procedure was standardized and legal, and a relatively complete internal control system was established. No behaviors violating laws, regulations and the Articles of Association of the Company or harming theCompany’s interest by the Directors, President and other senior management in carrying out their duties were found.
2.JMC’s financial status
PwC Zhong Tian auditedJMC’s 2018 financial statements and issued unqualified audit reports. We believed the reports reflectJMC’s financial status, operating results and asset changes objectively and accurately.
3. In 2018, there was neither major purchase or sales of assets, and nor insider trading or situations harmful toshareholders’ interest or will lead to aJMC’s asset loss.
4.JMC’s related transactions: negotiated arm-length prices applied in imported component purchasing. The pricing for localized components was determined through
the process of inviting public bidding, discussion and business negotiation, and were adjusted periodically. The prices were fair and reasonable.
5. Opinions from the Supervisory Board on Internal Control Self-assessment Report of JMC
Per the request of Internal Control Guidance for Listed Companies published by Shenzhen Stock Exchange as well as other related regulations, the Supervisory Board expressed its opinions on the Internal Control Self-assessment Report as follows:
i. The Company has established integrated and complete internal control policies in accordance with relevant requirements of Shenzhen Stock Exchange and implemented effective controls within all the operational procedures.
ii. The Company has established a complete internal control organizational structure. An internal audit department has been set up and is sufficiently provided with professional staff, which ensures the effective internal control implementation and monitoring. and
iii. Considering the actual operating conditions of the Company, we believe the internal control deficiency determination criteria defined by the Company is reasonable, and the Internal Control Self-assessment Report is authentic and accurate.
Supervisory Board
Jiangling Motors Corporation, Ltd.
March 28, 2019