Jiangling Motors Corporation, Ltd.Public Announcement on Forecast ofthe Routine Related Party Transactions in 2023
Jiangling Motors Corporation, Ltd. and its Board members undertake that theinformation disclosed herein is truthful, accurate and complete and does notcontain any false statement, misrepresentation or major omission.
I. Brief IntroductionThe Board of Directors of Jiangling Motors Corporation, Ltd. (hereinafter referred toas "JMC" or the "Company") approved the 2023 routine related party transactionforecast proposal on December 9, 2022.
The routine related party transaction forecast proposal covered all the related partieswith JMC, where total annual transaction with each of them is projected to be overRMB 42 million. These related parties were clarified as Type A and Type B. Type Ameans the related parties with JMC, where total annual transactions with each of themis projected to be over RMB 420 million, and Type B means the related parties withJMC, where total annual transactions with each of them is projected to be betweenRMB 42 million and RMB 420 million.
The Board of Directors approved the 2023 forecast proposal for type A routine relatedparty transactions and authorized the Execute Committee to finalize detailed contractswith the individual related parties and to submit them to the Shareholders’ Meetingfor approval. When voting on the proposals at the shareholders’ meeting, Ford MotorCompany (“Ford”) will withdraw from the voting on the related party transactionsassociated with Ford and its affiliates; Nanchang Jiangling Investment Co., Ltd.(“JIC”) will withdraw from the voting on the related party transactions associatedwith Nanchang Jiangling Investment Co., Ltd. and its affiliates, associated withJiangling Motors Group Co., Ltd. (“JMCG”) and its affiliates, and associated withChangan Automobile Co., Ltd. and its affiliates.
The Board of Directors approved the 2023 forecast proposal for type B routine relatedparty transactions and authorized the Execute Committee to sign detailed contractswith the individual related parties.
Nine directors shall attend this meeting and eight were present. Director YuanMingxue did not attend this meeting, and he authorized Chairman Qiu Tiangao toexercise voting rights on his behalf.
| Share’s code： | 000550 | Share’s Name： | Jiangling Motors | No.： | 2022-044 |
| 200550 | Jiangling B |
When voting on the proposal, Director Shengpo Wu, Director Ryan Anderson andDirector Xiong Chunying withdrew from the voting on the related party transactionsassociated with Ford and its affiliates; Director Qiu Tiangao and Director Jin Wenhuiwithdrew from the voting on the related party transactions associated with JMCG andits affiliates; Director Qiu Tiangao, Director Jin Wenhui and Director Yuan Mingxuewithdrew from the voting on the related party transactions associated with NanchangJiangling Investment Co., Ltd. and its affiliates; all the other Directors agreed with theproposal.
II. Types and amounts of routine related party transactions
1. Main Content and amounts of routine related party transactions in 2023i. Type A, which means the related parties with JMC, where total annualtransactions with each of them is projected to be over RMB 420 million, are listedas follows:
RMB million
| Related Party | Category | Content | 2023 Forecast Transaction Amount | 2022 Actual Transaction Amount from January to October |
| JMCG Finance Company | Deposit interest and accumulation settlement amount | Deposit interest | 36 | 27 |
| Guarantees | 2 | 2 | ||
| Payment settlement Deposits | 20,123 | 11,702 | ||
| Subtotal | 20,161 | 11,731 | ||
| Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. and its subsidiaries | Purchase | Purchase of goods and service | 36 | 13 |
| Sales | Sales of goods and service | 8,133 | 4,724 | |
| Subtotal | 8,169 | 4,737 | ||
| JMCG and its subsidiaries | Purchase | Purchase of goods and service | 4,778 | 2,732 |
| Sales | Sales of goods and service | 680 | 397 | |
| Subtotal | 5,458 | 3,129 | ||
| Ford and its subsidiaries | Purchase | Purchase of goods and service | 1,432 | 740 |
| Sales | Sales of goods and service | 109 | 60 | |
| Subtotal | 1,541 | 800 | ||
| Jiangxi Huaxiang Auto Components Co., Ltd. | Purchase | Purchase of goods and service | 1,181 | 741 |
| Sales | Sales of goods and | 4 | 3 | |
service
| service | ||||
| Subtotal | 1,185 | 744 | ||
| Nanchang Baojiang Steel Processing Distribution Co., Ltd. | Purchase | Purchase of goods and service | 1,156 | 712 |
| Subtotal | 1,156 | 712 | ||
| Magna PT Powertrain (Jiangxi) Co., Ltd. | Purchase | Purchase of goods and service | 1,153 | 713 |
| Sales | Sales of goods and service | 1 | 1 | |
| Subtotal | 1,154 | 714 | ||
| Jiangxi Jiangling Lear Interior System Co., Ltd. | Purchase | Purchase of goods and service | 803 | 495 |
| Sales | Sales of goods and service | 15 | 10 | |
| Subtotal | 818 | 505 | ||
| Jiangxi JMCG Specialty Vehicles Co., Ltd. and its subsidiaries | Purchase | Purchase of goods and service | 90 | 24 |
| Sales | Sales of goods and service | 642 | 490 | |
| Subtotal | 732 | 514 | ||
| Nanchang Faurecia Emissions Control Technologies Co., Ltd. | Purchase | Purchase of goods and service | 618 | 380 |
| Subtotal | 618 | 380 | ||
| China South Industries Group Corporation Total and Subsidiaries | Purchase | Purchase of goods and service | 14 | 9 |
| Sales | Sales of goods and service | 556 | 259 | |
| Subtotal | 570 | 268 | ||
| Nanchang Unistar Electric & Electronics Co., Ltd. | Purchase | Purchase of goods and service | 430 | 267 |
| Subtotal | 430 | 267 | ||
ii. Type B, which means the related parties with JMC, where total annual transactionswith each of them is projected to be between RMB 42 million and RMB 420 million,are listed as follows:
RMB million
| Related Party | Category | Content | 2023 Forecast Transaction Amount | 2022 Actual Transaction Amount from January to October |
Hanon Systems(Nanchang) Co., Ltd.
| Hanon Systems (Nanchang) Co., Ltd. | Purchase | Purchase of goods and service | 200 | 124 |
| Subtotal | 200 | 124 | ||
| Nanchang JMCG SMR Huaxiang Mirror Co., Ltd. | Purchase | Purchase of goods and service | 133 | 82 |
| Sales | Sales of goods and service | 14 | 10 | |
| Subtotal | 147 | 92 | ||
| Nanchang Yinlun Heat-exchanger Co., Ltd. | Purchase | Purchase of goods and service | 138 | 85 |
| Subtotal | 138 | 85 | ||
| Changan Ford Automobile Co., Ltd. | Purchase | Purchase of goods and service | 71 | 46 |
| Subtotal | 71 | 46 | ||
| JMCG New Energy Vehicle Co., Ltd. | Purchase | Purchase of goods and service | 42 | 64 |
| Sales | Sales of goods and service | 1 | 1 | |
| Subtotal | 43 | 65 | ||
2. Main Content and amounts of routine related party transactions in 2022
RMB million
| Related Party | Category | Content | 2022 Actual Transaction Amount from January to October | 2022 Forecast Transaction Amount | Actual Transaction Amount from January to October as % of Similar Business | Differences Between Actual Transaction Amount from January to October and Forecast Transaction Amount (%) |
| JMCG Finance Company | Deposit interest and accumulation settlement amount | Deposit interest | 27 | 25 | 13.85% | 8.00% |
| Guarantees | 2 | 2 | 100% | 0.00% | ||
| Payment settlement Deposits | 11,702 | 33,138 | 35.12% | -64.69% | ||
| Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. and its subsidiaries | Purchase | Purchase of goods and service | 13 | 42 | 0.07% | -69.05% |
| Sales | Sales of goods and service | 4,724 | 4,190 | 19.37% | 12.74% | |
| JMCG and its subsidiaries | Purchase | Purchase of goods and service | 2,732 | 6,503 | 14.46% | -57.99% |
Sales
| Sales | Sales of goods and service | 397 | 736 | 1.63% | -46.06% | |
| Ford and its subsidiaries | Purchase | Purchase of goods and service | 740 | 1,778 | 3.92% | -58.38% |
| Sales | Sales of goods and service | 60 | 173 | 0.25% | -65.32% | |
| Jiangxi Huaxiang Auto Components Co., Ltd. | Purchase | Purchase of goods and service | 741 | 981 | 3.92% | -24.46% |
| Sales | Sales of goods and service | 3 | 5 | 0.01% | -40.00% | |
| Nanchang Baojiang Steel Processing Distribution Co., Ltd. | Purchase | Purchase of goods and service | 712 | 1,335 | 3.77% | -46.67% |
| Magna PT Powertrain (Jiangxi) Co., Ltd. | Purchase | Purchase of goods and service | 713 | 1,028 | 3.77% | -30.64% |
| Sales | Sales of goods and service | 1 | 1 | 0 | 0.00% | |
| Jiangxi Jiangling Lear Interior System Co., Ltd. | Purchase | Purchase of goods and service | 495 | 645 | 2.62% | -23.26% |
| Sales | Sales of goods and service | 10 | 7 | 0.04% | 42.86% | |
| Jiangxi JMCG Specialty Vehicles Co., Ltd. and its subsidiaries | Purchase | Purchase of goods and service | 24 | 64 | 0.13% | -62.50% |
| Sales | Sales of goods and service | 490 | 675 | 2.01% | -27.41% | |
| Nanchang Faurecia Emissions Control Technologies Co., Ltd. | Purchase | Purchase of goods and service | 380 | 590 | 2.01% | -35.59% |
| China South Industries Group Corporation and its subsidiaries | Purchase | Purchase of goods and service | 9 | 10 | 0.05% | -10.00% |
| Sales | Sales of goods and service | 259 | 688 | 1.06% | -62.35% | |
| Nanchang Unistar Electric & Electronics Co., Ltd. | Purchase | Purchase of goods and service | 267 | 370 | 1.41% | -27.84% |
| Hanon Systems (Nanchang) Co., Ltd. | Purchase | Purchase of goods and service | 124 | 262 | 0.66% | -52.67% |
| JMCG New Energy Vehicle Co., Ltd. | Purchase | Purchase of goods and service | 64 | 150 | 0.34% | -57.33% |
| Sales | Sales of goods and service | 1 | 1 | 0 | 0.00% | |
| Nanchang JMCG SMR Huaxiang | Purchase | Purchase of goods and service | 82 | 135 | 0.43% | -39.26% |
Mirror Co., Ltd.
| Mirror Co., Ltd. | Sales | Sales of goods and service | 10 | 13 | 0.04% | -23.08% | |
| Nanchang Yinlun Heat-exchanger Co., Ltd. | Purchase | Purchase of goods and service | 85 | 143 | 0.45% | -40.56% | |
| Changan Ford Automobile CO., Ltd. | Purchase | Purchase of goods and service | 46 | 102 | 0.24% | -54.90% | |
| Explanation by the Board of Directors of the Company on the difference between the actual amount and the forecast amount of the routine related party transactions | The Company carried out the forecast on the upper limit of the transaction limit and submitted it to the shareholders’ meeting for review and approval when the amount of the routine related party transactions in 2022 was expected to be. The final actual amount of the part of the related party transactions is 20% less than the projected amount, which is due to the fact that the Company and the related parties do not trigger or reduce the sales commodity and the purchase of the goods according to the actual demand of the Company. It is a normal business behavior. | ||||||
| Explanation by Independent Directors of the Company on the difference between the actual amount and the forecast amount of the routine related party transactions | In our opinion, where the actual amount of routine related party transactions of the Company occurring in 2022 is more than 20% below the forecast amount, it is due to the fact that the Company and related parties did not trigger or reduce the sales of goods and purchase of goods according to the actual needs of the Company. It is a normal business behavior, in line with the objective situation, and without harming the interests of the Company and minority shareholders. | ||||||
Disclosure date and index of the Forecast Proposal of Routine Related Party Transactions In2022: the No. 2021-068 announcement was published on the website www.cninfo.com.cn onDecember 21, 2021.
III. Brief Summary of Related Parties
| Name | Legal Representative | Registered Capital | Main Business Scope | Registered Address | Relationship |
| JMCG Finance Company | Ling Xingguo | RMB 800 million | Primarily providing financial services to JMCG and its affiliates, including credit, account clearing and deposit, etc. | Nanchang City | Subsidiary of JMCG |
| Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | Sun Xiaoquan | RMB 33.61 million | Import and export business of all kinds of goods and technology; logistics and packing, etc. | Nanchang City | Associate of JMCG |
| JMCG | Qiu Tiangao | RMB 1,500 million | Manufacturing of vehicle, engine, chassis, modified vehicle, automotive components, vehicle quality test, sales of in-house produced commodity and providing relevant after sale services. | Nanchang City | Actual Controller of JIC |
| Ford Motor Company | William Clay Ford Jr. | $ 1.222 billion | Vehicle manufacturing and sales and other business | Detroit, U.S.A | Controlling shareholder of |
the Company(hold 32%equity)
| the Company (hold 32% equity) | |||||
| Jiangxi Huaxiang Auto Components Co., Ltd. | Du Yongchun | RMB 40 million | Manufacturing and sales of automotive components. | Nanchang City | Joint venture of JMCG |
| Nanchang Baojiang Steel Processing Distribution Co., Ltd | Zhou Zhongxi | RMB 147.40 million | Processing, selling, distribution and storage of steel. | Nanchang City | Associate of JMCG |
| Magna PT Powertrain (Jiangxi) Co., Ltd. | Li Xiang | Euro 131.27 million | Manufacture and sell transmissions and related components | Nanchang City | Associate of JMCG |
| Jiangxi Jiangling Lear Interior System Co., Ltd. | Chang Hongshun | USD 10.215 million | Design, production, sales for all kinds of cars, modified cars, transformer car full sets of seats, sponge business | Nanchang City | Joint venture of JMCG |
| Jiangxi JMCG Specialty Vehicles Co., Ltd. and its subsidiaries | Wu Xiaolin | RMB 60 million | Manufacturing and sales of automotive components and modified vehicles. | Nanchang City | Associate of JMCG |
| Nanchang Faurecia Emissions Control Technologies Co., Ltd. | Huang Pinhui | USD $ 8 million | Development, production and sales of automobile exhausting system. | Nanchang City | Associate of JMCG |
| China South Industries Group Corporation | Xu Xianping | RMB 35,300 million | Investment, operation and management of state-owned assets | Beijing City | Actual controller of JIC |
| Nanchang Unistar Electric & Electronics Co., Ltd. | Pan Xiaolin | RMB 50 million | Auto wiring, development, manufacturing, sales and after-sales service of electronic parts. | Nanchang City | Joint venture of JMCG |
| Hanon Systems (Nanchang) Co., Ltd. | Zhang Xiaoping | USD $ 5.6 million | Manufacturing of climate control systems (excluding compressors), refrigerant lines, brake lines and fuel tubes used for automobile. | Nanchang City | Associate of JMC |
| JMCG New Energy Vehicle Co., Ltd. | Qiu Tiangao | RMB 2,000 million | R & D, production and sales of new energy vehicles and auto parts. | Nanchang City | Associate of JMCG |
| Nanchang JMCG SMR Huaxiang Mirror Co., Ltd. | He Jiukun | RMB 50 million | Automotive mirrors and other automotive parts products (except engines) development, manufacturing, wholesale, retail and service. | Nanchang City | Associate of JMCG |
| Nanchang Yinlun Heat-exchanger Co., Ltd. | Xu Xiaomin | RMB 40 million | Development, production and sales of automobile heat exchange system. | Nanchang City | Associate of JMCG |
| Changan Ford | Zhu Huarong | USD | Development, production and sales of | Chongqing | Joint venture of |
Automobile Co.,Ltd.
| Automobile Co., Ltd. | $ 241 million | automobiles and parts; provide after-sales services, training services, warehousing services and other services. | City | Changan Automobile Co., Ltd. |
Financial information of the related parties in 2021was shown as follows:
RMB million
| No. | Name | Total Assets | Net Assets | Revenue | Profit after tax |
| 1 | JMCG Finance Company | 12,492 | 1,401 | 360 | 120 |
| 2 | Jiangxi Jiangling Motors Imp. & Exp. Co., Ltd. | 1,558 | 248 | 4,942 | 27 |
| 3 | JMCG | 17,535 | 6,765 | 2,257 | 312 |
| 4 | Ford | US$ 257,000 million | US$ 48,600 million | US$ 136,300 million | US$ 17,900 million |
| 5 | Jiangxi Huaxiang Auto Components Co., Ltd. | 686 | 300 | 1,003 | 36 |
| 6 | Nanchang Baojiang Steel Processing Distribution Co., Ltd. | 764 | 218 | 1,940 | 37 |
| 7 | Magna PT Powertrain (Jiangxi) Co., Ltd. | 5,283 | 2,987 | 4,557 | 418 |
| 8 | Jiangxi Jiangling Lear Interior System Co., Ltd. | 430 | 159 | 639 | 29 |
| 9 | Jiangxi JMCG Specialty Vehicles Co., Ltd. | 1,183 | 594 | 1,060 | 77 |
| 10 | Nanchang Faurecia Emissions Control Technologies Co., Ltd. | 458 | 157 | 306 | 30 |
| 11 | China South Industries Group Corporation | 400,674 | 147,795 | 136,333 | 4,188 |
| 12 | Nanchang Unistar Electric & Electronics Co., Ltd. | 475 | 70 | 505 | 1 |
| 13 | Hanon Systems (Nanchang) Co., Ltd. | 387 | 194 | 317 | -12 |
| 14 | JMCG New Energy Vehicle Co., Ltd. | 3,049 | 279 | 418 | -200 |
| 15 | Nanchang JMCG SMR Huaxiang Mirror Co., Ltd. | 123 | 73 | 150 | 7 |
| 16 | Nanchang Yinlun Heat-exchanger Co., Ltd. | 122 | 51 | 145 | 1 |
| 17 | Changan Ford Automobile CO., Ltd. | 40,685 | 5,979 | 61,765 | 2,284 |
After inquiry, all the above mentioned related legal persons are not the persons to beexecuted for dishonesty.
Performance capability analysis: the above-mentioned related parties can strictlyabide by the contract agreements in their business dealings with the Company.Combined with the main financial indicators and business conditions of the relatedparties, the related parties are fully capable of performing their transactions with theCompany.
IV. Main Content of the Routine Related Party Transaction
1. Transaction Pricing Mechanism
When the Company sells goods to or purchases goods from related parties, if the priceof the same products is offered in the market, the Company will use the market price.If unable or difficult to obtain comparable market data for prices of unique productsor services, prices are determined through the process of supplier quotes, costingassessment and negotiation.
2. Signing of Related Party Transaction Contracts
According to the actual progress of production and operation, the Company will signspecific contracts in time on an equal basis with the related parties.
V. Purpose of Related Party Transactions and Impact on JMCAll the above-mentioned related party transactions are regular and recurringtransactions between JMC and the related parties, and they are necessary for JMC tomaintain its daily operation. The goods purchased from the related parties are mainlyunique parts for JMC products.
The transactions between JMC and the related parties follow the principles of fairness,openness and justice. All the transactions meet the requirements of relevant laws andregulations, which do not damage the benefit of the Company and minorityshareholders.
VI. Opinions from Independent DirectorsIndependent Directors, Mr. Chen Jiangfeng, Ms. Wang Yue and Mr. Yu Zhuopingexpressed their opinions on the above-mentioned routine related party transactions asfollows:
1. We have been informed of the meeting agenda prior to the meeting;
2. We have known the routine related party transactions of the Company, and believethat the routine related party transaction forecast proposal is necessary and reasonablefor the Company’s daily operation, and voting procedures of the proposal complieswith the relevant requirements of the laws & regulations.
3. In our opinion, where the actual amount of routine related party transactions of theCompany occurring in 2022 is more than 20% below the forecast amount, it is due tothe fact that the Company and related parties did not trigger or reduce the sales ofgoods and purchase of goods according to the actual needs of the Company. It is anormal business behavior, in line with the objective situation, and without harming
the interests of the Company and minority shareholders.
VII. Documents for Reference
1. Resolutions of the Board of Directors of JMC;
2. Opinions from Independent Directors on the abovementioned routine related partytransaction forecast proposal.
Board of DirectorsJiangling Motors Corporation, Ltd.December 13, 2022