(1)     Shareholders and Shareholders’ General Meeting
i.      Shareholders’ General Meeting
        The shareholders’ general meeting is the highest authority of the Company and shall exercises its duties and powers in accordance with law to decide on significant matters of the Company. The annual  general  meetings  or  extraordinary  general  meetings  held  each  year  provide  a  channel  of direct communication between the directors and the shareholders of the Company. The Company regards  the  shareholders’  general  meeting  an  important  event  of  the  Company.  The  notice  of  a shareholders’  general  meeting  will  be  dispatched  45  days  prior  to  the  date  of  the  meeting.  All shareholders are encouraged to attend the shareholders’ general meeting, and all Directors and members of the senior management are requested to make their best effort to attend the meeting.
        The  Company’s  annual  general  meeting  was  held  on  18  June  2007  to  consider  and  approve matters in relation to the 2006 Annual Report; and an extraordinary general meeting was held on 9 October 2007 to consider and approve such matters in relation to the re-election of directors and supervisors.
ii.     Substantial Shareholder
        Dongfeng  Motor  Corporation  is  our  substantial  shareholder,  holding  66.86%  of  shares  of  the Company. The company has never, whether directly or indirectly, interferred with the Company’s decision-making or operations outside the general meetings.
        Information  on  shareholdings  of  the  top  substantial  shareholders  (based  on  their  shareholdings) during the reporting period is set out on page 31 of this annual report.
(2)     Directors and the Board of Directors
i.      Directors
AppointmentofDirectors
        Directors are elected at shareholders’ general meetings and passed by over one-half of the voting rights  held  by  shareholders  (including  proxies)  present  at  the  shareholders’  general  meetings. Shareholders,  the  Board  of  Directors  or  the  supervisory  committee  of  the  Company  shall  have the right to nominate candidates for directorship in writing. The term of office of a director shall be  three  years  and,  upon  expiry  of  their  terms,  their  appointment  is  subject  to  re-election  at  a shareholders’ general meeting.
        As  the  term  of  office  of  the  First  Session  of  the  Board  of  Directors  of  the  Company  expired  on 9  October  2007,  members  of  the  First  Session  of  the  Board  of  Directors  were  re-elected  to  be members  of  the  Second  Session  of  the  Board  of  Directors  as  nominated  by  Dongfeng  Motor Corporation at the extraordinary general meeting held on 9 October 2007. The term of office of the Second Session of the Board of Directors shall expire on 9 October 2010. The current Board of Directors of the Company consists of twelve Directors, five of which are executive directors, four  of which are non-executive directors and three of which are independent non-executive directors. The  size  and  composition  of  the  Board  of  Directors  are  in  compliance  with  the  requirements  of relevant  laws  and  regulations.  Details  of  members  of  the  Board  are  set  out  on  page  32  of  this annual report.
IndependenceofDirectors
|        The  independent  non-executive  directors  of  the  Company  include  Sun  Shuyi,  Ng  Lin-fung  and Yang  Xianzu.  Sun  Shuyi  is  qualified  as  a  PRC  certified  public  accountant  and  senior  engineer. At  the  time  of  preparing  the  annual  report,  the  Company  obtained  the  annual  confirmation  from  all independent non-executive directors in respect of their independence under Rule 3.13 of the Listing  Rules.  The  Company  is  of  the  opinion  that  all  independent  non-executive  directors  are independent.
        All   independent   non-executive   directors   have   been   able   to   dutifully   perform   their   fiduciary obligations  under  the  requirements  of  relevant  laws  and  regulations.  Independent  directors  have participated  in  the  discussion  of  and  decision  on  significant  matters  with  the  Board  of  Directors and  each  special  committee  under  the  Board  of  Directors.  They  have  also  provide  advice  on the  Company’s  normal  operations  based  on  their  professional  knowledge  and  experience,  and seriously  reviewed  the  fairness  or  equality  of  connected  transactions  and  cash  flows  between related  parties.  Independent  directors  expressed  their  independent  views  and  carried  out  duties independently  without  any  interference  by  substantial  shareholders,  effective  controlling  parties or other interested units and individuals of the Company. The independent directors have made active contribution to the Company by upholding the overall interests of the Company, protecting the  legal  rights  of  the  whole  shareholders  and  promoting  the  healthy  development  of  the Company.
        During the reporting period, the independent non-executive directors of the Company expressed no dissent in respect of any matters of the Company.