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.
1. Brief Introduction
The Board of Directors of Jiangling Motors Corporation, Ltd. (hereinafter referred toas "JMC" or the "Company") hold a paper meeting during the period from June 27,2023 to June 30, 2023 to approve Service Contract for All New Ford F150 RaptorBetween Jiangling Ford Motor Technology (Shanghai) Co., Ltd., a subsidiary of theCompany, and Ford Motor (China) Ltd.
Nine Directors shall attend this Board meeting and nine Directors were present.
Whereas Ford Motor Company (“Ford”), representing 32% of the outstanding sharesof the Company, is the second largest shareholder of the Company, and Ford Motor(China) Ltd. is a whole-owned subsidiary of Ford, the transaction herein constitutes arelated party transaction.
When voting on the proposal, Director Shengpo Wu, Director Ryan Anderson andDirector Xiong Chunying withdrew from the voting, and all the other Directors agreedwith this proposal.
This related party transaction does not constitute a material asset reorganizationstipulated in Measures for the Administration of Material Asset Reorganization ofListed Companies promulgated by CSRC.
2. Brief Summary of the Related Parties
Company Name: Ford Motor (China) Ltd.Registered Address: Floor 36, Shanghai Information Tower, 211 Century Avenue,
China (Shanghai) Pilot Free Trade Zone, ChinaLegal Representative: Shengpo WuEnterprise Type: Limited Liability Company (Wholly Owned by a Foreign Legal
Person)Ford Motor (China) Ltd. (“Ford China”) is a whole-owned subsidiary of Ford MotorCompany, and its business scope includes providing relevant services for the productsmanufactured by its parent company and related companies. The latest audited financialindexes of Ford Motor Company are as follows:
| Share’s code： | 000550 | Share’s Name： | Jiangling Motors | No.： | 2023-024 |
| 200550 | Jiangling B |
Unit: US$ million
| Year 2022 | |
| Revenue | 158,057 |
| Net profit | -1,981 |
| December 31, 2022 | |
| Total assets | 255,884 |
| Total equity | 43,167 |
After inquiry, Ford Motor Company and Ford Motor (China) Ltd. are not personssubject to enforcement for dishonesty.
3. Main Contents of Service Contract for All New Ford F150 Raptor
i. “Contract Products” means Ford All New F-150 Raptor, the parts and accessoriesused on Ford All New F-150 Raptor, the extended service products such asscheduled service program, extended warranty, and others applicable to Ford AllNew F-150 Raptor.ii. Ford China authorizes Jiangling Ford Motor Technology (Shanghai) Co., Ltd. toprovide Services as specified in this Contract in China Market, including themarketing, sales and service for the Contract Products, as well as the businessand operation activities related to network establishment and management.iii. Jiangling Ford Motor Technology (Shanghai) Co., Ltd. will regularly charge
Ford China for the purposes of the matters specified in this Service Contract.iv. This Contract shall come into force from July 1, 2023 and shall last until the end
of life cycle of Ford All New F-150 Raptor.
Note: the annual amount of service fees charged to Ford China is expected to rangefrom about RMB 30 million to RMB 60 million.
4. Pricing Policy of the Related Party Transaction
Pricing of the service fees in this Contract is based on contracted price, and the pricesare determined through the process of cost assessment, quotes, and negotiations.
5. Purpose and Impact of the Related Party Transaction on JMCThe related party transaction will help to improve the sales channel construction ofJiangling Ford Motor Technology (Shanghai) Co., Ltd. and increase the Company’sincome.
6. The total amount of the related party transactions from January 1, 2023 to May 31,2023 taken place between Ford Motor Company and the Company is about RMB 72.52million, and between Ford China and the Company is about RMB 28.73 million.
7. Opinions from Independent Directors
Independent Directors of the Company, Mr. Yu Zhuoping, Mr. Chen Jiangfeng, and Ms.Wang Yue, expressed their opinions on Service Contract for All New F150 Raptor
between Jiangling Ford Motor Technology (Shanghai) Co., Ltd. and Ford China asfollows:
1. We have been informed of the meeting agenda prior to the meeting;
2. We have known Service Contract for All New F150 Raptor between Jiangling FordMotor Technology (Shanghai) Co., Ltd. and Ford China, and after seriously review, webelieve that the provisions in this Contract are in line with the general businessprinciples and are fair and reasonable.
8. Documents for Reference
1. Resolution of the Board of Directors of Jiangling Motors Corporation, Ltd.;
2. Opinions from Independent Directors on Service Contract for All New F150 Raptor.
Board of DirectorsJiangling Motors Corporation, Ltd.July 1, 2023