BAIC Motor Corporation Limited — Proxy Solicitation & Information Statement 2015

Nov 5, 2015

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

If you are in doubt as to any aspect of this circular or as to the action you should take, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountants or other professional adviser.

If you have sold or transferred all your shares in BAIC Motor Corporation Limited, you should at once hand this circular and the accompanying proxy form and the reply slip to the purchaser(s) or transferee(s) or to the bank, stockbroker or other agent through whom the sale or the transfer was effected for transmission to the purchaser(s) or transferee(s).

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北京汽車股份有限公司 BAIC MOTOR CORPORATION LIMITED[*]

(A joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1958)

PROPOSED AMENDMENTS TO THE RULES OF PROCEDURES FOR THE BOARD

AND

NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING FOR 2015

A letter from the Board is set out on pages 2 to 9 of this circular.

A notice convening the EGM to be held at 2:00 p.m. on Tuesday, 22 December 2015 at Multi-purpose Hall, 1st Floor, the South Tower of Beijing Automotive Industry R&D Base, No.99 Shuanghe Road, Shunyi District, Beijing, the PRC is set out on pages 10 to 11 of this circular. A form of proxy and a reply slip for use at the EGM are also enclosed. Such form of proxy and the reply slip are also published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.baicmotor.com).

Whether or not you propose to attend the EGM, holders of H Shares of the Company are requested to complete the enclosed form of proxy in accordance with the instruction printed thereon and return it to the Hong Kong share registrar of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 24 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude the Shareholders from attending and voting in person at the EGM or any adjournment thereof if they so wish. Shareholders who intend to attend the EGM in person or by proxy should complete the reply slip in accordance with the instructions printed thereon and return it to the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited, on or before Wednesday, 2 December 2015.

* For identification purpose only

6 November 2015

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING FOR
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

• “Board”

the board of directors of the Company

• “Company”

BAIC Motor Corporation Limited, a joint stock company incorporated in the PRC with limited liability

• “Director(s)” the director(s) of the Company

• “EGM”

the first extraordinary general meeting for 2015 to be convened and held by the Company

• “H Share(s)”

overseas listed foreign shares in the ordinary share capital of the Company with a nominal value of RMB1.00 each, to be subscribed for and traded in Hong Kong dollars and listed and traded on The Stock Exchange of Hong Kong Limited

“Listing Rules”

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

“PRC”

the People’s Republic of China, which for the purposes of this circular excludes Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan

• “Shareholder(s)” the shareholder(s) of the Company

• “the Rules of Procedures for the Rules of Procedures for the Board of BAIC Motor the Board” Corporation Limited

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LETTER FROM THE BOARD

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北京汽車股份有限公司 BAIC MOTOR CORPORATION LIMITED[*]

(A joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1958)

Directors:

Name

Mr. Xu Heyi Mr. Zhang Xiyong Mr. Li Zhili Mr. Li Feng Mr. Ma Chuanqi Mr. Qiu Yinfu Mr. Hubertus Troska Mr. Bodo Uebber Ms. Wang Jing Mr. Yang Shi Mr. Fu Yuwu Mr. Wong Lung Tak Patrick Mr. Bao Robert Xiaochen Mr. Zhao Fuquan Mr. Liu Kaixiang

Position

Chairman of the Board and non-executive Director Non-executive Director Non-executive Director Executive Director and president Non-executive Director Non-executive Director Non-executive Director Non-executive Director Non-executive Director Non-executive Director Independent non-executive Director Independent non-executive Director Independent non-executive Director Independent non-executive Director Independent non-executive Director

Registered address:

The fifth building Block 25 Shuntong Road Shunyi District Beijing 101300, China

Principal place of business

in Hong Kong: 36/F, Tower Two Times Square 1 Matheson Street Causeway Bay Hong Kong

6 November 2015

To the Shareholders

Dear Sir or Madam,

PROPOSED AMENDMENTS TO THE RULES OF PROCEDURES FOR THE BOARD

I. INTRODUCTION

The Company intends to hold the EGM at 2:00 p.m. on Tuesday, 22 December 2015 at Multi-purpose Hall, 1st Floor, the South Tower of Beijing Automotive Industry R&D Base, No.99 Shuanghe Road, Shunyi District, Beijing, the PRC. The notice to convene the EGM has been dispatched on 6 November 2015, and is set out on pages 10 to 11 of this circular.

* For identification purpose only

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with details of the resolution to be proposed by the Board and the Shareholders for them to consider and approve as ordinary resolution at the EGM and provide relevant information to enable you to make an informed decision on whether to vote for or against or abstain from voting at the resolution. The resolution and details are set out in the letter from the Board.

II. MATTERS TO BE RESOLVED AT THE EGM

ORDINARY RESOLUTION

1. PROPOSED AMENDMENTS TO THE RULES OF PROCEDURES FOR THE BOARD

The specific articles to be amended to the Rules of Procedures for the Board are as follows:

Articles		Original	Original	Original		Revised
Article 8	The Strategy Committee, Nomination Committee, Remuneration					(deleted)
	Committee and Audit Committee			are established under the
	Board. All members of each of the special committee shall be
	comprised of directors	(the specific		number of members shall be
	stipulated by the terms of reference of each special committee).
Article 9	Principal duties of the	Strategy Committee are as follows:				(deleted)
	(1) to review and make suggestions for the medium-to-long-
	term development strategies (including overall-strategies,
	human resources	strategies and operation strategies) and
	development plans and		proposals of the Company, and to
	evaluate and monitor the implementation of such plans;
	(2) to review the annual		operation plans and investment
	proposals of the Company;
	(3) to review and make suggestions for plans regarding the
	increase or reduction of		the registered capital, and proposals
	of corporate merger, division,			and dissolution or change of
	the form of the Company;
	(4) to review and make suggestions for				matters such as major
	investment, financing,		guarantee, capital operation and
	asset operation which		are subject to the approval of the
	Board or the chairman		of the	Board as authorized by the
	Board;

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LETTER FROM THE BOARD

Articles		Original	Revised
	(5)	to review and make suggestions for matters such as major
		business reorganization, acquisition, merger and asset
		transfer which are subject to the approval of the Board or
		the chairman of the Board as authorized by the Board;
	(6)	to review and make suggestions for the expansion to new
		markets, new business and new products of the Company;
	(7)	to review and make suggestions for any major
		reorganization and restructuring proposal of the Company;
	(8)	to guide and supervise the implementation of relevant
		Board resolutions;
	(9)	other duties as conferred by the Board.
Article 10	Principal duties of the Nomination Committee are as follows:		(deleted)
	(1)	to review the structure, size and composition (including the
		skills, knowledge and experience of directors) of the Board
		at least once a year, and make suggestions to the Board in
		respect of any proposed changes to the Board according to
		the corporate strategies of the Company, and the Committee
		shall formulate the Board diversity policy;
	(2)	to examine the qualifications of candidates for directors,
		presidents and secretary to the Board and make suggestions
		to the Board in respect of the appointment or reappointment
		of directors and the succession plans of directors,
		particularly the chairman and president;
	(3)	to assess the candidates for the secretary to the Board
		proposed by the chairman, and the candidates for vice
		presidents and financial officers proposed by the president
		and provide opinions to the Board;
	(4)	to identify potential candidates from external talent markets
		within and outside China and within the Company;
	(5)	to evaluate the independence of independent non-executive
		directors; and
	(6)	other duties as conferred by the Board.

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LETTER FROM THE BOARD

Articles	Articles		Original	Revised	Revised
Article 11		Principal duties of the Remuneration Committee are as follows:		(deleted)
		(1)	to make suggestions for the general remuneration policies
			and structure for directors and senior management, and the
			establishment of formal and transparent procedures for the
			formulation of such remuneration policies, and to review
			the performance appraisal standards and conduct appraisal
			for directors and senior management, and to provide
			corresponding suggestions;
		(2)	to review and approve the proposed remuneration of the
			management according to the corporate operating
			objectives, and to make suggestions to the Board for the
			specific remuneration treatment for directors and senior
			management, including the performance-based
			remuneration plans. The Remuneration Committee shall
			consider the factors including the remuneration paid by
			comparable companies, time commitment and duties of the
			directors, employment conditions of other positions of the
			Company, and whether the remuneration shall be based on
			the results performance;
		(3)	to make suggestions to the Board for the specific
			remuneration for individual executive director and senior
			management members, including non-monetary benefits,
			pension rights and compensation (including compensation
			for the loss or termination of office or cease of
			appointment);
		(4)	to make suggestions to the Board for the remuneration of
			the non-executive directors;
		(5)	to make suggestions to the Board for the relevant
			compensation paid to executive director and senior
			management for their loss or termination of office or the
			end of their appointment, and the compensation
			arrangement regarding the removal or dismissal of directors
			due to misconduct (and to ensure the arrangements conform
			to the terms of contracts, or otherwise, the compensation
			shall be reasonable and appropriate);
		(6)	to ensure a director shall not participate in determining
			his/her own remuneration;
		(7)	other duties as conferred by the Board.

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LETTER FROM THE BOARD

Articles	Articles		Original	Revised	Revised
Article 12		Principal duties of the Audit Committee are as follows:		(deleted)
		(1)	to make suggestions for the appointment, reappointment
			and change of external auditors, handle issues relating to the
			resignation or removal of such external auditors and make
			suggestions for the appointment contracts and audit fees of
			relevant external auditors; to evaluate the work of the
			external auditors, and supervise the independence,
			objectivity, and the effectiveness, quality and results of
			work procedures of the external auditors.
			The Audit Committee shall discuss with the external auditor
			regarding the nature and scope of the audit and the relevant
			reporting obligations before the auditing work commences.
			The Audit Committee shall develop and implement policies
			on the engagement of an external auditor for non-audit
			services. For this purpose, any entity that is under common
			control, ownership or management with the audit firm, or
			any entity that is reasonably deemed as part of the domestic
			or international business of the audit firm by a reasonable
			and informed third party having knowledge of all relevant
			information shall be regarded as an external auditor. The
			Audit Committee shall report to the Board on any matters in
			respect of which it considers that action or improvement is
			needed and making recommendations as to the measures to
			be taken.
		(2)	to supervise the internal audit system and its
			implementation.
		(3)	to guide and evaluate the work of the internal auditing
			department, and to make suggestions as to the appointment
			and removal of the head of internal auditing department.
		(4)	to review the financial information of the Company and its
			disclosure:
			The Audit Committee shall monitor the legitimacy and
			integrity of the financial statements, annual reports and
			accounts, interim reports and quarterly reports (if to be
			issued), and to review significant judgments relating to
			financial reporting contained therein. For this purpose,
			when reviewing the financial statements and reports of the
			annual reports and accounts, interim reports and quarterly
			reports (if to be issued) of the Company to be submitted to
			the Board, the Committee shall focus particularly on:
			1. any changes in the accounting policies and practices;

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LETTER FROM THE BOARD

Articles			Original	Revised
		2.	areas which involve significant judgments;
		3.	significant adjustments according to the results of
			audit;
		4.	assumptions on the ongoing operations of the
			Company and any qualified opinions;
		5.	compliance with accounting standards;
		6.	compliance with the applicable listing rules and other
			legal requirements in relation to financial reporting at
			the place of listing;
		In respect of the above, members of the Committee shall
		communicate with the Board, senior management and
		qualified accountant of the Company. The Committee shall
		meet, at least twice a year, with the Company’s auditors.
		The Committee shall consider any significant or unusual
		items that are, or may need to be, reflected in such reports
		and accounts and shall give due consideration to any
		matters that have been raised by the Company’s qualified
		accountant, compliance officer or auditors.
	(5)	to review and supervise the effective implementation of the
		financial reporting system, internal control system and risk
		management system of the Company, including:
		1.	to review and examine the financial control, internal
			control and risk management system of the Company;
		2.	to discuss the internal control system with the
			management about the adequacy of resources,
			qualifications and experience of staff, training
			programs and budget of the accounting and financial
			reporting function of the Company so as to ensure the
			management has performed its duty to establish an
			effective internal control system;
		3.	to review major findings on internal control matters
			and the responses of management on its own initiative
			or as delegated by the Board;

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LETTER FROM THE BOARD

Articles			Original	Revised
		4.	where an internal audit function exists, to ensure
			co-ordination between the internal and external
			auditors; to ensure the internal audit function is
			provided with adequate resources and has appropriate
			standing within the Company; and to review and
			monitor its effectiveness;
		5.	to review the financial and accounting policies of the
			Company and its implementation;
		6.	to review the auditing report from external auditor to
			the management, queries raised by the audit or to the
			management about accounting records, financial
			accounts or control systems and the responses from the
			management;
		7.	to ensure the timely responses of Board to the issues
			raised in the auditing report from the external auditor;
		8.	to report to the Board in respect of the issues set out in
			this article;
		9.	to consider other issues raised by the Board.
	(6)	to	evaluate and discuss the following arrangements
		formulated by the Company: whistle blowing system for
		employees of the Company to report on any potential
		misconducts regarding the financial reporting, internal
		control and other aspects of the Company; to ensure that the
		Company has put in place appropriate arrangements to carry
		out	fair and independent investigation and follow-up actions
		for	such issues; to serve as the major channel between the
		Company and the external auditor and to supervise their
		relationship.
	(7)	other duties as conferred by the Board.

The Rules of Procedures for the Board are written in Chinese without an official English version. Therefore, any English translation is for reference only. In case of inconsistency, the Chinese version shall prevail.

POLL PROCEDURE

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at the EGM must be taken by poll. Therefore, the resolution set out in the notice of the EGM shall be voted by poll. Votes may be given either in person or by proxy.

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LETTER FROM THE BOARD

RECOMMENDATION

Pursuant to the relevant information disclosed in this circular, the Directors (including all independent non-executive Directors) believe that the amendments to the Rules of Procedures for the Board are in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the resolution to approve the proposed amendments to the Rules of Procedures of the Board at the EGM.

EGM

A notice convening the EGM to be held at 2:00 p.m. on Tuesday, 22 December 2015 at Multi-purpose Hall, 1st Floor, the South Tower of Beijing Automotive Industry R&D Base, No.99 Shuanghe Road, Shunyi District, Beijing, the PRC is set out on pages 10 to 11 of this circular. A form of proxy and a reply slip for use at the EGM are also enclosed. Such form of proxy and the reply slip are also published on the websites of The Stock Exchange of Hong Kong Limited and the Company.

Whether or not you propose to attend the EGM, you are requested to complete the enclosed form of proxy in accordance with the instruction printed thereon and return it to the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 24 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude the Shareholders from attending and voting in person at the EGM or any adjournment thereof if they so wish. Shareholders who intend to attend the EGM in person or by proxy should complete the reply slip in accordance with the instructions printed thereon and return it to the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited, on or before Wednesday, 2 December 2015.

CLOSURE OF REGISTER OF MEMBERS

In order to ascertain the entitlements of the Shareholders to attend the EGM, the register of members of the Company will be closed from Saturday, 21 November 2015 to Tuesday, 22 December 2015 (both days inclusive), during which period no transfer of Shares of the Company will be effected. To be eligible to attend and vote at the EGM, all transfer documents must be lodged with the H Share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong no later than 4:30 p.m. on Friday, 20 November 2015.

By order of the Board BAIC Motor Corporation Limited Xu Heyi

Chairman

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NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING FOR 2015

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北京汽車股份有限公司 BAIC MOTOR CORPORATION LIMITED[*]

(A joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1958)

NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING FOR 2015

NOTICE IS HEREBY GIVEN that the first extraordinary general meeting for 2015 of BAIC Motor Corporation Limited (the “ Company ”) will be held at 2:00 p.m. on Tuesday, 22 December 2015 at Multi-purpose Hall, 1st Floor, the South Tower of Beijing Automotive Industry R&D Base, No.99 Shuanghe Road, Shunyi District, Beijing, the PRC for the purpose of considering, and if thought fit, passing the following resolution. Unless included otherwise, capitalised terms used wherein shall have the same meanings as those defined in the circular of the Company dated 6 November 2015:

Ordinary Resolution

1. Proposed amendments to the Rules of Procedures for the Board

By order of the Board BAIC Motor Corporation Limited Xu Heyi Chairman

Beijing, the PRC, 6 November 2015

* For identification purpose only

– 10 –

NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING FOR 2015

Notes:

• (A) The register of members will be closed from Saturday, 21 November 2015 to Tuesday, 22 December 2015 (both days inclusive), during which period no transfer of the H Shares will be effected. Holders of H Shares of the Company whose names appear on the register of H Shares of the Company kept at Computershare Hong Kong Investor Services Limited on Tuesday, 22 December 2015 are entitled to attend and vote at the EGM following completion of the registration procedures. To qualify for attending and voting at the EGM, documents on transfers of H Shares of the Company, accompanied by the relevant share certificates, must be lodged with the Company’s H Share registrar, not later than 4:30 p.m. on Friday, 20 November 2015. The address of the Company’s H Share registrar is as follows: Computershare Hong Kong Investor Services Limited, Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

• (B) Holders of H Shares who intend to attend the EGM should complete and return the reply slip for attending the EGM by hand, by facsimile or by post to Computershare Hong Kong Investor Services Limited, the H Share registrar of the Company in Hong Kong, whose address is at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong on or before Wednesday, 2 December 2015.

• (C) Each Shareholder entitled to attend and vote at the EGM may, by completing the form of proxy of the Company, appoint one or more proxies to attend and vote at the EGM on its behalf. A proxy need not be a Shareholder of the Company. With respect to any Shareholder who has appointed more than one proxy, the proxy holders may only vote on a poll.

• (D) A proxy shall be appointed by a Shareholder by a written instrument signed by the appointor or his attorney duly authorized in writing. In case of a corporation, the same must be either under its common seal or under hand of its legal representative or duly authorized attorney(s). If the written instrument is signed by an attorney of the appointor, the power of attorney or other documents of authorization of such attorney shall be notarized.

• (E) To be valid, the form of proxy and the relevant notarized power of attorney (if any) and other relevant documents of authorization (if any) as mentioned in Note (D) above must be delivered to the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited (address: 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong), not less than 24 hours before the time appointed for the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude a Shareholder from attending and voting in person at the meeting if he so desires.

• (F) A Shareholder or his proxy should produce proof of identity when attending the EGM. Where a Shareholder is a legal person, the legal representative of that Shareholder or the person authorized by its board of directors or other governing body shall produce a copy of the authorization documents of the board of directors or other governing body of such Shareholder appointing such person to attend the meeting.

• (G) The EGM is expected to last for not more than half a day. Shareholders who attend the EGM shall bear their own travelling and accommodation expenses.

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