Great Wall Motor Company Limited(601633)
Rules of procedure of the board of directors
(Revised Version)
Chapter I General Provisions
Article 1 in order to ensure the standardized operation of Great Wall Motor Company Limited(601633) (hereinafter referred to as “the company”), improve the work efficiency of the board of directors and the level of scientific decision-making according to law, standardize the composition, responsibilities, authorities and operation procedures of the board of directors, and safeguard the interests of the company and the legitimate rights and interests of shareholders, according to the company law of the people’s Republic of China (hereinafter referred to as “the company law”) The securities law of the people’s Republic of China (hereinafter referred to as the “Securities Law”), the governance standards for listed companies, the Listing Rules of Shanghai Stock Exchange (hereinafter referred to as the “Listing Rules of Shanghai Stock Exchange”) These rules are formulated by the rules for the listing of securities on the stock exchange of Hong Kong Limited (hereinafter referred to as the “Listing Rules of the stock exchange”) (the first two are collectively referred to as the “Listing Rules”), the Great Wall Motor Company Limited(601633) articles of Association (hereinafter referred to as the “articles of association”) and other laws, regulations, rules and normative documents. Chapter II powers and responsibilities of the board of directors
Article 2 the board of directors shall exercise its functions and powers in accordance with the articles of association, be responsible for convening the general meeting of shareholders, reporting to the general meeting of shareholders, implementing the resolutions of the general meeting of shareholders and being responsible to the general meeting of shareholders.
Article 3 the board of directors is the company’s permanent decision-making body and exercises decision-making power in accordance with these rules in terms of the company’s development strategy, business plan, financial monitoring, personnel management, etc.
Article 4 the functions and powers of the board of directors on the company’s development strategy and operation management include:
(i) Authority to be submitted to the general meeting of shareholders for approval
1. Formulate plans for major acquisition, acquisition or sale of assets, related party transactions that have not been exempted from convening the general meeting of shareholders by the company’s stock exchange, and transactions that must be approved by shareholders according to the Listing Rules of the stock exchange where the company is listed;
2. Formulate plans for the company to increase or reduce its registered capital and issue bonds;
3. Draw up plans for the merger, division, dissolution, liquidation and change of corporate form of the company;
4. Formulate the amendment plan of the articles of association.
（2） Authority not required to submit to the general meeting of shareholders for approval
1. Determine the company’s business plan;
2. Decide on the establishment and adjustment plan of the company’s internal management organization and branches;
3. Decide on the establishment and composition of the special committee of the board of directors;
4. Formulate the basic management system of the company;
5. Manage the company’s information disclosure;
6. Listen to the work report of the chairman of the company and check relevant work;
7. Decide on various investment plans within the authority of the board of directors.
Article 5 the functions and powers of the board of directors over the company’s financial monitoring include:
(i) Authority to be submitted to the general meeting of shareholders for approval
1. Formulate the company’s annual financial plan;
2. Formulate the company’s profit distribution policy, profit distribution or loss recovery plan;
3. When disposing of fixed assets, if the sum of the expected value of the fixed assets to be disposed and the value of the fixed assets disposed within the four months before the disposal proposal exceeds 33% of the value of the fixed assets shown in the balance sheet recently considered by the general meeting of shareholders, the board of directors shall formulate a fixed assets disposal plan; 4. Formulate the plan for the company to hire, dismiss or no longer renew the accounting firm that conducts external audit on the company.
（2） Authority not required to submit to the general meeting of shareholders for approval
1. Determine the audit work plan of the company;
2. When disposing of fixed assets, if the sum of the expected value of the fixed assets to be disposed and the value of the fixed assets disposed within the four months before the disposal proposal does not exceed 33% of the value of the fixed assets shown in the balance sheet recently considered by the general meeting of shareholders, the board of directors shall formulate a fixed assets disposal plan; 3. Decide on transactions that need not be submitted to the general meeting of shareholders for approval.
（3） The board of directors shall explain the qualified audit report issued by the certified public accountant on the company’s financial report to the general meeting of shareholders.
（4） Financial reporting and internal control
1. The management of the company shall provide sufficient explanations and sufficient materials to the board of directors so that the board of directors can make a sound review on the financial and other materials submitted to them for approval;
2. The directors shall acknowledge their responsibility to prepare accounts in the corporate governance report, and the auditors shall also make a statement on their reporting responsibility in the audit report on the relevant financial statements. Unless it is inappropriate to assume that the company will continue its business, the accounts prepared by the directors shall be based on the continuous operation of the company, supplemented by assumptions or reservations when necessary. If the directors know that there are major uncertain events or circumstances that will seriously affect the company’s ability to continue operation, the directors shall clearly and significantly disclose and discuss these uncertain factors in detail in the corporate governance report. The corporate governance report should contain sufficient information to enable investors to understand the seriousness and significance of the current events. To the extent reasonable and appropriate, the company may refer to other relevant parts of the annual report. Any such reference must be clear and unambiguous, and the corporate governance report cannot only list cross referenced references without any discussion on relevant matters;
3. The responsibility of the relevant board of directors to evaluate the company’s performance in a balanced, clear and clear manner applies to the annual report and interim report, other announcements involving price sensitive information and other financial information required to be disclosed under the listing rules, as well as the reports submitted to the regulators and the information required to be disclosed under the law.
The directors shall review the effectiveness of the internal control system of the company and its subsidiaries at least once a year, and report to the shareholders that the review has been completed in the corporate governance report. The review should cover all important monitoring aspects, including financial monitoring, operational monitoring, compliance monitoring and risk management functions.
Article 6 the board of directors independently exercises the functions and powers of financial monitoring:
(i) Manage the company’s financial information disclosure;
（2） According to the Listing Rules of Shanghai Stock Exchange, approve the related party transactions with the same subject matter or with the same related person with an accumulated amount of less than 30 million yuan within 12 consecutive months, or accounting for less than 5% of the net asset value of the company’s latest audited consolidated accounting statements;
（3） Approve the test conducted according to the asset ratio, income ratio, consideration ratio and equity ratio specified in the Listing Rules of the stock exchange, and any connected transaction whose ratio test is less than 5%;
（4） The amount or proportion involved in approving the acquisition and sale of assets (including enterprise owner’s equity, physical assets or other property rights) meets the following criteria and does not belong to related party transactions: 1 To approve the transactions that are tested according to the asset ratio, income ratio, profit ratio, consideration ratio and equity ratio specified in the Listing Rules of the stock exchange, and any ratio test is less than 25%;
2. Investment in fixed assets, including but not limited to new fixed assets investment projects and technological transformation investment projects. The total investment of these individual projects shall not exceed 50% of the company’s net assets in the latest audited consolidated accounting statements;
3. Long term investment, including external equity investment and external debt investment. The total investment of a single project shall not exceed 50% of the company’s net assets in the latest audited consolidated accounting statements of the company;
4. Before making decisions on market development, merger and acquisition, investment in new fields, etc., the board of directors may employ social consulting institutions to provide professional opinions on projects with investment or merger and acquisition assets amounting to more than 10% of the company’s total assets as an important basis for the decision-making of the board of directors.
If the total assets or transaction amount involved in the purchase or sale of assets of the company, regardless of whether the subject matter of the transaction is related or not, exceeds 30% of the company’s latest audited total assets through cumulative calculation within 12 consecutive months, it shall be submitted to the general meeting of shareholders for deliberation and approved by more than two-thirds of the voting rights held by the shareholders attending the meeting.
（5） If the approved total amount does not reach 50% of the net assets in the audited consolidated financial statements of the company in the latest fiscal year, the company guarantees to the outside world.
（6） The sum of the expected selling value of the fixed assets to be disposed and the selling value of the fixed assets disposed within the four months before the disposal proposal is approved, which does not exceed 33% of the selling value of the fixed assets shown in the balance sheet recently considered by the general meeting of shareholders.
If laws and regulations, the CSRC or the stock exchange where the company’s shares are listed have different provisions or requirements on the above matters, the board of directors shall comply with their provisions or requirements.
Article 7 the board of directors shall supervise and inspect the development and operation of the company:
(i) Supervise the implementation of the company’s development strategy;
（2） Review the company’s sustainable development and ESG related reports;
（3） Supervise and inspect the implementation of the company’s annual financial budget and final accounts; Check the completion of various plans;
（4） Evaluate the company’s business performance every year, find business problems in time, put forward improvement suggestions, and supervise the implementation of the company’s senior management;
（5） Timely evaluate the company’s business improvement plan and implementation effect, and investigate the major problems in the company’s business performance;
（6） Identify the obstacles faced in the development of the company, detect the change trend of the company, and put forward correction suggestions for the development of the company;
（7） Discuss all development opportunities and risks faced by the company, as well as changes in objective factors that have a wide impact on the company;
（8） Ensure the smooth information exchange of the company, and evaluate the information to make it accurate, complete and timely;
（9） The management team of the company is required to submit the minutes of the production and operation meeting to the Secretariat of the board of directors after each production and operation meeting.
Article 8 senior managers refer to the general manager, deputy general manager, financial director and Secretary of the board of directors of the company. The personnel management authority of the board of directors to directors and senior managers includes:
(i) Authority to be submitted to the general meeting of shareholders for approval
1. Determine the remuneration standard of directors;
2. Election of directors;
3. Removal of directors;
（2） Authority not required to submit to the general meeting of shareholders for approval
1. Determine the company’s human resources development strategy and planning;
2. Determine the main responsibilities and authorities of the general manager, financial principal, qualified accountant, Secretary of the board of directors and joint company secretary;
3. Appoint or dismiss the general manager, financial director, qualified accountant, Secretary of the board of directors and joint company secretary of the company; Appoint or dismiss the deputy general manager and other senior managers of the company according to the nomination of the general manager;
4. Determine the remuneration, allowances, rewards and punishments of senior managers other than directors and supervisors of the company; Determine the company’s future stock option (or similar) incentive plan according to the long-term incentive plan approved by the general meeting of shareholders; 5. Listen to the work report of the general manager of the company and evaluate the work performance of the general manager;
6. Approve or appoint shareholder representatives to subsidiaries, and recommend candidates for directors, supervisors and senior managers to subsidiaries in accordance with the articles of association or agreement of subsidiaries;
7. Approve various employee pensions, pension plans and other employee welfare plans.
Article 9 the powers of the board of directors to supervise and inspect the development and operation of the company include:
(i) Supervise the implementation of the company’s annual financial budget and check the completion of various plans; （2） Review the reports related to the company’s sustainable development and ESG matters, and supervise the progress of sustainable development;
（3） Regularly evaluate the company’s business performance, put forward improvement plans, and supervise the implementation of the company’s management;
（4） Discuss the development opportunities and risks faced by the company, study the changes of various objective factors affecting the company, identify the obstacles faced in the development of the company, analyze the change trend of the company, and put forward the revision scheme of the company’s development strategy;
（5） Review the effectiveness of the internal control system of the company and its subsidiaries at least once a year, and report to the shareholders in the corporate governance report that the review has been completed. The review should cover all important monitoring aspects, including financial monitoring, operational monitoring, compliance monitoring and risk management functions.
Article 10 the board of directors has the right to exercise the decision-making power on other major issues related to strategic development, operation and management, financial audit, personnel management, etc. that are not required to be exercised by the general meeting of shareholders in the articles of association and these rules. When the board of directors delegates some of its functions and powers to the management, it shall clarify the scope of authorization, especially the scope of matters that the management shall report to the board of directors and obtain prior approval.
The company shall formally divide the rights reserved by the board of directors and the rights entrusted by the board of directors to the management. The company regularly reviews the division of the above functions and powers to ensure that they meet the needs of the company.
Chapter III composition and subordinate institutions of the board of directors
Article 11 the board of Directors consists of seven directors, with one chairman and one vice chairman. Each director shall ensure that he can devote enough time and energy to handling the company’s affairs, otherwise he shall not accept the appointment. Three of them are executive directors, who are responsible for handling the daily affairs assigned by the company.
One is a non-executive director who does not handle daily affairs. The appointment of a non-executive director shall have a specified term of office and shall be subject to re-election. All directors appointed to fill casual vacancies shall be elected by the shareholders at the first general meeting after their appointment.
Three are independent non-executive directors. Independent non-executive directors shall not be held by the company’s shareholders or employees of shareholder units, internal personnel of the company (such as the company’s managers or employees) and personnel associated with the company or interested in the company’s management. Independent non-executive directors shall account for at least one third of the members of the board of directors.
Independent non-executive directors refer to directors who do not hold other positions except directors in the company and have no relationship with the company and its major shareholders that may hinder their independent and objective judgment.
Article 12 the main responsibilities of the chairman are as follows:
(i) The chairman shall be responsible for ensuring that the Directors receive sufficient information in a timely manner, and the relevant information must be complete and reliable;
（2） The chairman shall ensure the effective operation of the board of directors, perform its due responsibilities, and discuss all important and appropriate matters in a timely manner. The chairman shall be mainly responsible for determining and approving the agenda of each board meeting, and, where appropriate, taking into account any matters proposed to be added to the agenda by other directors;
（3） The chairman ensures that the company develops good corporate governance practices and procedures;
（4） The chairman shall encourage all directors to devote themselves to the affairs of the board of directors and set an example to ensure that the actions of the board of directors are in the best interests of the company;
（5） The chairman shall hold a meeting with non-executive directors (including independent non-executive directors) at least once a year without the presence of executive directors;
（6） The chairman shall ensure that appropriate steps are taken to maintain effective contact with shareholders and that shareholders’ opinions can be transmitted to the whole board of directors;
（7） The chairman shall promote
