Jiangling Motors Co., Ltd
Independent Director Working System
Chapter 1 General Provisions
Article 1 In order to give full play to the role of Independent Directors of Jiangling
Motors Co., Ltd (hereinafter referred to as “JMC”) in corporate governance,
further complete JMC’s governance structure, promote JMC’s standard
operation, and effectively protect the legal rights and interests of all
shareholders, especially minority shareholders, this System is formulated
according to the provisions of “Securities Law of the People’s Republic of
China” (hereinafter referred to as “Securities Law”), “Company Law of the
People’s Republic of China” (hereinafter referred to as “Company Law”),
“Measures for the Administration of Independent Directors of Listed
Companies” issued by China Securities Regulatory Commission
(hereinafter referred to as “CSRC”), “Rules Governing the Listing of Stocks
on the Shenzhen Stock Exchange” and “Guidelines of the Shenzhen Stock
Exchange on Self-Regulation for Listed Companies No.1 - Standard
Operation of Listed Companies on the Main Board” issued by Shenzhen
Stock Exchange (hereinafter referred to as “SZSE”), and relevant laws,
regulations and normative documents, as well as the “Articles of
Association of Jiangling Motors Co., Ltd” (hereinafter referred to as
“Articles of Association”).
Article 2 An Independent Director is a Director who does not hold any position in the
Company other than that of a Director, and who does not have any direct or
indirect interest in the Company, its major shareholders, or actual
controllers, or any other relationship that may affect his or her independent
and objective judgments. An Independent Director shall perform his/her
duties independently and shall not be influenced by the Company, its major
shareholders, actual controllers and other entities or individuals.
Article 3 An Independent Director shall assume duty of loyalty and duty of care to
the Company and all its shareholders, and shall, in accordance with the
provisions of laws, administrative regulations, rules of the CSRC, SZSE,
and the Articles of Association, conscientiously perform his/her duties, play
the role of participating in decision-making, conducting supervision, checks
and balances, and providing professional advice in the Board of Directors,
safeguard the overall interests of the Company, and protect the lawful rights
and interests of minority shareholders.
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Article 4 The number of Independent Directors of the Company shall account for not
less than one-third of the members of the Board of Directors and include at
least one accounting professional. The members of the Audit Committee
shall be Directors who do not serve as senior executives of the Company, of
whom more than half shall be Independent Directors, and the accounting
professional among the Independent Directors shall act as convener.
Article 5 The Company shall provide necessary guarantee for Independent Directors
to perform their duties in accordance with the law.
Chapter 2 Qualifications
Article 6 The following basic conditions shall be met for a person serving as an
Independent Director:
(I) Be qualified to serve as a Director of a listed company in accordance
with laws, administrative regulations and other relevant provisions;
(II) Meet the independence requirements set forth in Article 8 of this
System;
(III) Have basic knowledge of the operation of listed companies and be
familiar with relevant laws, administrative regulations, rules and
regulations;
(IV) Have more than five years of working experience in law, accounting
or economics necessary for performing the duties of an Independent
Director;
(V) Have good personal integrity and have no major dishonest acts or
other bad records;
(VI) Other conditions stipulated by laws, administrative regulations, rules
of the CSRC, business rules of stock exchanges and the Articles of
Association.
Article 7 In principle, an Independent Director may work in the capacity of
Independent Director at up to three domestic listed companies and shall
ensure that he/she has sufficient time and energy to effectively perform
his/her duties as an Independent Director.
Article 8 An Independent Director must remain independent. None of the following
persons may serve as an Independent Director:
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(I) A person who holds a position in the Company or any of its affiliates, or
his/her spouse, parents, children, or major social relations;
(II) A natural person shareholder who directly or indirectly holds 1% or more
of the shares issued by the Company or who ranks among the top 10
shareholders of the Company, or his/her spouse, parents, or children;
(III) A person who holds a position in a shareholder entity that directly or
indirectly holds 5% or more of the shares issued by the Company or that
ranks among the top five shareholders of the Company, or his/her spouse,
parents, or children;
(IV) A person who holds a position in an affiliate of the controlling
shareholder or actual controller of the Company, or his/her spouse,
parents, or children;
(V) A person who has significant business transactions with the Company or
its controlling shareholder, actual controller, or any of their respective
affiliates, or a person who holds a position in an entity that has
significant business transactions with the Company or in the entity of the
controlling shareholder or actual controller;
(VI) A person who provides financial, legal, consulting, sponsorship, or other
services to the Company, its controlling shareholder, actual controller, or
any of their respective affiliates, including but not limited to all members
of the project team, reviewers at all levels, persons who sign the reports,
partners, Directors, senior executives, and the primary persons in charge
of an intermediary that provides services;
(VII) A person who falls under any of the circumstances set forth in
subparagraphs (1) through (6) in the last 12 months;
(VIII) Any other person who does not work independently as prescribed by
laws, administrative regulations, rules of the CSRC, business rules of the
stock exchanges, and the Articles of Association.
The affiliates of the controlling shareholder or actual controller of the
Company as mentioned in subparagraphs (4) through (6) of the preceding
paragraph shall not include any enterprise that is, together with the
Company, under control of the same state-owned assets management
institution and has no affiliation with the Company according to the relevant
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provisions. “Major social relations” refer to siblings, spouses of siblings,
parents of spouses, siblings of spouses, spouses of children, parents of
children’s spouses, etc.; “significant business transactions” refer to any
business transactions which, according to the “Rules Governing the Listing
of Stocks on the Shenzhen Stock Exchange” and other relevant provisions
of the SZSE or the Articles of Association, are required to be submitted to
the general meeting of shareholders for consideration, or other material
matters determined by the SZSE; “serving” refers to serving as Directors,
supervisors, senior executives and other employees.
Article 9 The accounting professional among the Independent Directors shall have
rich professional knowledge and experience in accounting and meet at least
one of the following conditions:
(I) Have the qualification as a certified public accountant;
(II) Have a senior professional title in accounting, auditing or financial
management, professional title of an associate professor or higher
level, or a doctoral degree;
(III) Have a senior professional title in economic management and more
than five years of full-time working experience in accounting,
auditing or financial management.
Article 10 Candidates for Independent Directors shall have good personal integrity
and shall not be subject to the circumstances specified in relevant laws,
regulations, normative documents, etc. where they shall not be
nominated as a Director of a listed company, and shall not have the
following adverse records:
(I) Anyone who has been subject to administrative punishment by the
CSRC or criminal punishment by a competent judicial authority for
securities and futures related crimes within the last thirty-six
months;
(II) Anyone who has been investigated by the CSRC or a competent
judicial authority for suspected securities and futures related crimes,
for which a clear conclusion has not yet been reached;
(III) Anyone who has been publicly denounced or notified and criticized
by a stock exchange for more than three times within the last
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thirty-six months;
(IV) Anyone who has major dishonest acts or other bad records;
(V) Anyone who has been proposed to the general meeting of
shareholders by the Board of Directors for dismissal for less than
twelve months because he/she has failed to attend three consecutive
meetings of the Board of Directors in person during his/her past
service as an Independent Director or because he/she has failed to
attend two consecutive meetings of the Board of Directors in person
and has not delegated other Directors to attend the meetings of the
Board of Directors;
(VI) Other circumstances determined by the SZSE.
Chapter 3 Procedures for Nomination, Election and Replacement
Article 11 The Board of Directors, the Board of Supervisors and shareholders who
individually or jointly hold more than 1% of the shares issued by the
Company may propose candidates for Independent Directors, who shall
be determined through the election at the general meeting of
shareholders.
The nominator specified in the preceding paragraph shall not nominate a
person who has interest in the nominator or any other close relationship
that may affect the independent performance of duties as an Independent
Director candidate.
Article 12 The nominator of an Independent Director shall obtain the nominee’s
consent before nomination. The nominator shall be fully aware of the
nominee’s occupation, educational background, professional title,
detailed work experience, all concurrent positions, and whether the
nominee has any major dishonest act or other bad records, and give
his/her opinions on whether the nominee satisfies the requirements for
independence and other requirements for serving as an Independent
Director.
The nominee shall make a public statement regarding his/her compliance
with the independence and other requirements for serving as an
Independent Director.
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Article 13 To elect two or more Independent Directors, a cumulative voting system
shall be adopted at a general meeting of shareholders of the Company.
The voting by minority shareholders shall be counted separately and
disclosed.
Article 14 The term of office of an Independent Director shall be the same as that of
other Directors of the Company and may be renewed upon expiration,
and the consecutive terms of office shall generally not exceed six years.
Any person who has served as an Independent Director for six
consecutive years shall not be nominated as a candidate for the
Independent Director of the Company within thirty-six months from the
date of occurrence of such fact.
Article 15 Prior to the expiry of the term of office of an Independent Director, the
Company may remove him/her from office according to statutory
procedures. If the Company removes an Independent Director from office
before the expiration date, it shall promptly disclose the specific reasons
and basis therefore. If an Independent Director has any objection to the
removal, the Company shall disclose it in a timely manner.
Any Independent Director who fails to comply with the provisions of
subparagraph (1) or (2) of Article 6 of the System shall immediately
cease the performance of his/her duties and resign. If he/she fails to
submit a resignation, the Board of Directors shall immediately remove
him/her from office in accordance with the relevant provisions as soon as
it knows or should have known the fact.
If an Independent Director submits his/her resignation or is removed from
office since he/she falls under any of the circumstances specified in the
preceding paragraph, resulting in the failure of the ratio of Independent
Directors in the Board of Directors or its special committee to comply
with the System or the Articles of Association of the Company, or in a
lack of an accounting professional among the Independent Directors, the
Company shall complete the by-election within 60 days after the
occurrence of the aforesaid fact.
Article 16 An Independent Director may submit his/her resignation before the
expiry of his/her term of office. An Independent Director who resigns
shall submit a written resignation to the Board of Directors, in which
he/she shall explain any information related to his/her resignation or any
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information to which the attention of the shareholders and creditors of the
Company shall be drawn in his/her opinion. The Company shall disclose
the reasons for the resignation of the Independent Director and any
matters of concern.
If the resignation of an Independent Director will result in the failure of
the ratio of Independent Directors in the Board of Directors or its special
committee to comply with the provisions of the System or the Articles of
Association of the Company, or in a lack of an accounting professional
among the Independent Directors, the Independent Director who plans to
resign shall continue to perform his/her duties until the date when a new
Independent Director is elected. The Company shall complete the
by-election within 60 days after the Independent Director submits his/her
resignation.
Chapter 4 Duties and Way of Duties Performing
Article 17 Independent Directors shall perform the following duties:
(I) To participate in the decision-making of the Board of Directors and
express specific opinions on the matters deliberated;
(II) To supervise the matters on potential material conflicts of interest
between the Company and its controlling shareholder, actual
controller, directors, and senior executives specified in Article 19
herein and Articles 26, 27, and 28 of the “Measures for the
Administration of Independent Directors of Listed Companies”,
promote the decisions made by the Board of Directors to be in line
with the interests of the Company as a whole, and protect the lawful
rights and interests of minority shareholders;
(III) To provide professional and objective advice on the operation and
development of the Company, and promote the improvement of the
decision-making level of the Board of Directors;
(IV) To perform other duties prescribed by laws, administrative
regulations, rules of the CSRC, and the Articles of Association of
the Company.
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Article 18 The Independent Directors may exercise the following special powers
and functions:
(I) To independently engage intermediaries to audit, consult or inspect
specific matters of the Company;
(II) To propose the convening of an extraordinary general meeting of
shareholders to the Board of Directors;
(III) To propose the convening of a meeting of the Board of Directors;
(IV) To publicly solicit shareholders’ rights from shareholders in
accordance with the law;
(V) To give independent opinions on matters that may damage the rights
and interests of the Company or minority shareholders;
(VI) To exercise other powers and functions prescribed by laws,
administrative regulations, rules of the CSRC, and the Articles of
Association of the Company.
An Independent Director’s exercise of powers and functions set forth in
subparagraphs (1) through (3) of the preceding paragraph shall be subject
to the consent of a majority of all Independent Directors.
The Company shall make a disclosure in a timely manner if an
Independent Director exercises the powers and functions specified in
paragraph 1. If an Independent Director is unable to exercise the
aforesaid powers and functions, the Company shall disclose the specific
circumstances and reasons therefor.
Article 19 The following matters shall be submitted to the Board of Directors for
consideration after being approved by a majority of all Independent
Directors of the Company:
(I) Related party transactions that shall be disclosed;
(II) Nomination or removal of Directors;
(II) The plans of the Company and the relevant parties for the
modification or waiver of their undertakings;
(III) The decisions made and measures taken by the Board of Directors
of the acquired company;
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(IV) Other matters prescribed by laws, administrative regulations, rules
of the CSRC, or the Articles of Association of the Company.
Article 20 An Independent Director shall attend a meeting of the Board of Directors
in person. If an Independent Director is unable to attend a meeting in
person for any reason, he/she shall review the meeting materials in
advance, form specific opinions, and entrust in writing another
Independent Director to attend the meeting on his/her behalf.
Where an Independent Director fails to attend two consecutive meetings
of the Board of Directors in person and fails to entrust another
Independent Director to attend the meeting on his/her behalf, the Board
of Directors shall, within 30 days from the date of occurrence of such a
fact, propose the convening of a general meeting of shareholders to
remove the Independent Director from office.
Article 21 Before a meeting of the Board of Directors is convened, an Independent
Director may communicate with the secretary of the Board of Directors
and make inquiry, request the supplements of materials, or offer opinions
and recommendations concerning the matters to be deliberated. The
Board of Directors and relevant personnel shall conscientiously study the
issues, requests, and opinions put forward by the Independent Director
and promptly provide feedback on the implementation of amendments to
the proposals and other matters to the Independent Director.
Article 22 An Independent Director shall pay continuous attention to the
implementation of resolutions of the Board of Directors on the matters
related to Article 19 herein and the matters proposed by the special
committee, and if the Independent Director finds any violation of laws,
administrative regulations, rules of the CSRC, business rules of the stock
exchanges, or the Articles of Association of the Company, or violation of
the resolution adopted at the general meeting of shareholders or the
meeting of the Board of Directors, the Independent Director shall report
the violation to the Board of Directors in a timely manner and may
require the Company to make a written explanation thereon. The
Company shall promptly disclose any involved matter that shall be
disclosed.
If the Company fails to make an explanation or a timely disclosure in
accordance with the provisions of the preceding paragraph, the
Independent Director may report it to the CSRC and the stock exchanges.
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Article 23 The Company shall, on a periodical or unscheduled basis, convene
meetings attended solely by Independent Directors (hereinafter referred
to as “special meetings of Independent Directors”). The matters specified
in subparagraphs (1) through (3) of paragraph 1 of Article 18 and Article
19 herein shall be deliberated at the special meetings of Independent
Directors.
Article 24 An Independent Director shall attend the meetings of special committee in
person. If an Independent Director is unable to attend a meeting in person
for any reason, he/she shall review the meeting materials in advance,
form specific opinions, and entrust in writing another Independent
Director to attend the meeting on his/her behalf.
Article 25 The Independent Directors shall spend no less than fifteen days per year
working on-site at the Company. In addition to attending the general
meeting of shareholders, meetings of the Board of Directors and its
special committee, and special meetings of Independent Directors in
accordance with the provisions, the Independent Directors may perform
their duties by various means such as obtaining information on the
operation of the Company on a regular basis, listening to reports from the
management, communicating with intermediaries such as the head of the
internal audit organization and the accounting firm that undertakes the
auditing business of the Company, conducting on-site inspections, and
communicating with the minority shareholders.
Article 26 The Independent Directors shall make working records to record in detail
the performance of their duties. Information obtained by the Independent
Directors in the course of performing their duties, minutes of relevant
meetings, records of communications with the Company and staff of
intermediaries, etc., shall form an integral part of the work records. With
respect to the important contents of the work records, the Independent
Directors may request the secretary of the Board of Directors and other
relevant personnel to sign for confirmation, and the Company and
relevant personnel shall cooperate with them.
The work records of the Independent Directors and the information
provided by the Company to Independent Directors should be kept for at
least ten years.
Article 27 An Independent Director shall submit an annual report on his/her duties
to the annual general meeting of shareholders to explain the performance
of his/her duties. The report shall contain the following contents:
(I) The frequency, methods and votes of attending the meetings of the
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Board of Directors, and the frequency of attending the general
meetings of shareholders;
(II) The participation in the work of special committee of the Board of
Directors and special meetings of Independent Directors;
(III) The consideration of the matters set out in Article 19 herein, and
Articles 26, 27 and 28 of the “Measures for the Administration of
Independent Directors of Listed Companies”, and the exercise of the
special powers and functions of the Independent Directors as set out
in Article 18(I) herein;
(IV) Significant matters, manners and results for the communication
with the internal audit organization and the accounting firm that
undertakes the Company’s auditing business regarding the
Company’s financial and business status;
(V) Communication with minority shareholders;
(VI) The time and content of on-site work at the Company;
(VII) Other circumstances of the performance of duties.
The annual report of the Independent Directors shall be disclosed no later
than the date when the Company gives notice of its annual general
meeting of shareholders.
Article 28 The Independent Directors shall conduct an annual self-examination of
their independence and submit the self-examination result to the Board of
Directors. The Board of Directors shall annually assess the independence
of the incumbent Independent Directors and issue special opinions, which
shall be disclosed at the same time as the annual report.
Chapter 5 Duty Performance Guarantee
Article 29 The Company shall provide necessary working conditions and personnel
support for the Independent Directors to perform their duties, and
designate the Securities Department, secretary of the Board of Directors
and other special departments and special personnel to assist the
Independent Directors to perform their duties.
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Article 30 The secretary of the Board of Directors shall ensure the smooth flow of
information between the Independent Directors and other directors,
senior executives and other relevant personnel, and ensure that the
Independent Directors have access to sufficient resources and necessary
professional advice in the performance of their duties.
Article 31 The Company shall guarantee that Independent Directors enjoy the same
right to information as other directors. In order to ensure the effective
exercise of the powers and functions of Independent Directors, the
Company shall inform the Independent Directors of the Company’s
operation on a regular basis, provide information, and organize or
cooperate with the Independent Directors to carry out on-site inspections
and other work.
The Company may organize Independent Directors to participate in
research and argumentation and other links before the Board of Directors
considers major and complex matters, so as to fully listen to the
Independent Directors’ opinions, and provide timely feedback to
Independent Directors on the adoption of their opinions.
Article 32 The Company shall give notice of Board meetings to Independent
Directors in a timely manner, provide relevant meeting materials no later
than the notice period for board meetings stipulated by laws,
administrative regulations, rules of the CSRC or the Articles of
Association, and provide Independent Directors with effective
communication channels. The Company shall keep the said meeting
materials for at least ten years.
If two or more Independent Directors believe that the materials for a
meeting are incomplete, insufficiently argued or not provided in a timely
manner, they may propose in writing to the Board of Directors to adjourn
the meeting or postpone the consideration of the matter, and the Board of
Directors shall adopt such proposal.
Article 33 Where an Independent Director exercises his/her powers and functions,
the Company’s directors, senior executives and other relevant persons
shall cooperate with him/her, and shall not refuse, obstruct or conceal
relevant information, or interfere with his/her independent exercise of
his/her powers and functions.
If an Independent Director encounters obstruction in the exercise of
his/her powers and functions in accordance with the law, he/she may
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explain the situation to the Board of Directors, request the directors,
senior executives and other relevant persons to cooperate with him/her,
and put the specific circumstances of the obstruction and the solution of
the situation in his/her work records; if he/she still fails to eliminate the
obstruction, he/she may report the situation to the CSRC and the stock
exchanges.
Where matters relating to the performance of duties by an Independent
Director involve information that should be disclosed, the Company shall
handle disclosure matters in a timely manner; where the Company does
not disclose such information, the Independent Director may directly
apply for disclosure or report to the CSRC and the stock exchanges.
Article 34 The Company shall bear the expenses incurred by the Independent
Directors in engaging professional organizations and exercising other
powers and functions.
Article 35 The Company shall offer Independent Directors allowances appropriate
to their duties. The criteria for the allowances shall be formulated by the
Board of Directors, considered and approved by the general meeting of
shareholders, and disclosed in the annual report of the Company.
Except for the allowances above, Independent Directors shall not obtain
other benefits from the Company, its major shareholders, actual
controllers, or interested entities and persons.
Chapter 6 Supplementary Provisions
Article 36 The Board of Directors of the Company shall be responsible for
formulating, proposing draft amendments to and interpreting the present
System. This System shall enter into force after the consideration and
approval by the Board of Directors, and the same shall apply when it is
amended.
Article 37 In case of any matters not specified herein or any inconsistency between
the System and the “Company Law”, “Securities Law” and other laws
and regulations, as well as relevant provisions issued by the CSRC and
the SZSE, the latter shall prevail.
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