Jiangling Motors Corporation, Ltd.

2018 Internal Control Self-assessment Report

Reporting date: March**, 2019

To the shareholders of Jiangling Motors Corporation, Ltd.We have performed self-assessment on the effectiveness of internal control of Jiangling MotorsCorporation, Ltd. (hereafter referred as “the Company”) as at 31 December 2018, the referencedate, in accordance with the Basic Standard for Enterprise Internal Control together with itsApplication Guidelines and other regulatory requirements (hereafter referred to as the C-SOX),combined with the internal control policies and assessment methodology on the basis of regularand special internal control inspections.I. Important Statement of the Board of DirectorsThe Board of Directors is responsible for the establishment, improvement and effectiveimplementation of internal control policies, the assessment on the internal control status, as wellas the disclosure of the self-assessment report on internal control. The Supervisory Board isresponsible for supervision over the internal control policies establishment and implementation.The Management is responsible for the implementation of internal control in the daily operations.The Board of Directors and its members, the Supervisory Board and its members, and thesenior executives are jointly and severally liable for the truthfulness, accuracy andcompleteness of the information disclosed in the report and confirm that the informationdisclosed herein does not contain false statements, misrepresentations or major omissions.The goals of internal control are to comply with the stated management policies and applicable

governmental laws & regulations, to safeguard corporate assets, to protect the truthfulness andcompleteness of financial information, to enhance the effectiveness and efficiency of operatingresults so as to carry out the corporate strategies. Because of its inhere limitations, internalcontrol can only provide reasonable assurance to these goals. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may becomeinadequate because of changes in conditions, or that the degree of compliance with the policiesor procedures may deteriorate.II. Internal Control Self-assessment ConclusionThe Company’s control deficiency identification result shows that no material weakness overfinancial reporting is identified, as at 31 December, 2018. The Board of Directors believes JMCis compliant with the C-SOX requirements to have maintained effective internal control overfinancial reporting in all material respects.

The Company’s control deficiency identification result shows that no material weakness overnon-financial reporting is identified, as at 31 December, 2018.No factors affecting the effectiveness of internal control occurred between the reference date forthe Internal Control Self-assessment Report and the final disclosure date.III. Internal Control Self-assessment Implementation1. Self-assessment ScopeA risk oriented method is adopted to determine that Jiangling Motors Corporation, Ltd. (JMC)along with its wholly owned subsidiaries JMC Heavy Duty Vehicle Co. Ltd. (JMCH) and JMCSales Company, Ltd. (JMC Sales. Co.) are included in the self-assessment scope. The totalvalue of assets and operating revenue of the entities in scope counts for 100% of that disclosedin the consolidated financial statements.The key areas in scope are: corporate governance structure, development strategy, institutionalsetting, responsibilities and accountabilities, human resources policies, enterprise culture,social responsibility, and the operational effectiveness of the following activities as treasury,assets, purchasing & payables, sales & revenue, research & development, construction project,budget, contracts implementation, related parties transaction, IT applications, internal reportingand information disclosure, etc.The key processes of high risk for JMC are: sales & revenue, purchasing & payables, inventory,major investment projects, research and development, construction project management, fixedassets, treasury, financial reporting and contracts management.The entities, operations and high risk areas scoped in the self-assessment have alreadycovered the key aspects of Company’s operations and management. There are no majoromissions.2. Self-assessment Basis and Internal Control Deficiency Determination CriteriaThe Company conducts internal control self- assessment per the C-SOX requirements.The Board members discussed and defined specific and practical criteria for the determinationof internal control deficiencies, with consideration of the regulatory requirements combined withthe Company’s business scale, industry characteristics, risk appetite, risk tolerance and otherfactors. The control deficiencies are categorized to financial reporting and non financialreporting ones. And detailed criteria listed as below are consistent with the historical data.1) Criteria for Internal Control Deficiency over Financial Reporting

Control deficiencies can be classified as material, significant, and minor.

(1) Quantitative Criteria for Internal Control Deficiency over Financial Reporting

A. Material Weakness

a) Misstatement in the Income Statement is more than 5% of the annual profit

before taxationb) Misclassification in the Income Statement is more than 0.4% of the annual

sales revenuec) Adjustment of net assets in the Balance Sheet is more than 1% of the

shareholders' equityd) Adjustment of asset or liability in the Balance Sheet is more than 0.6% of the

total assetse) Adjustment in the Cash Flow Statement is more than 3% of the total net cash

flow in the operating activities.B. Significant Deficiency

a) Misstatement in the Income Statement is more than 2.5% of the annual profit

before taxationb) Misclassification in the Income Statement is more than 0.2% of the annual

sales revenuec) Adjustment of net assets in the Balance Sheet is more than 0.5% of the

Shareholders' equityd) Adjustment of asset or liability in the Balance Sheet is more than 0.3% of the

Total assetse) Adjustment in the Cash Flow Statement is more than 1.5% of the total net cash

flow from the operating activities.C. Minor Deficiency

All the deficiencies that don’t meet the quantitative criteria for significant(2) Qualitative Criteria for Internal Control Deficiency over Financial Reporting

A. Material Weakness