Complaint and Investigation Procedures for Accounting, Internal Accounting Controls, Auditing Matters, or Questionable Financial Practices
(Adopted by the Board of Directors of NIO INC. on August 10, 2018, effective upon the effectiveness of its registration statement on Form F-1 relating to its initial public offering on September 11, 2018)
The following procedures have been adopted by the Audit Committee and the Board of Directors of NIO Inc. (the “Company”) to govern the receipt, retention and treatment of complaints about accounting, internal accounting controls, auditing matters or questionable financial practices (“Accounting Complaints”), and to protect the confidential, anonymous reporting of Accounting Complaints by employees.
It is the policy of the Company to treat Accounting Complaints seriously and expeditiously.
Employees will be given the opportunity to submit confidential and anonymous Accounting Complaints for review by the Company. Accounting Complaints include, without limitation, complaints about the following:
- fraud against investors, securities fraud, mail or wire fraud, bank fraud, or fraudulent statements to the U.S. Securities and Exchange Commission (the “SEC”) or members of the investing public;
- violations of SEC rules and regulations applicable to the Company and related to accounting, internal accounting controls and auditing matters;
- intentional error or fraud in the preparation, review or audit of any financial statement of the Company; and
- significant deficiencies in or intentional noncompliance with the Company’s internal accounting controls.
If requested by the employee, the Company will protect the confidentiality and anonymity of the employee to the fullest extent possible, consistent with the need to conduct an adequate review. Vendors, customers, business partners and other parties external to the Company will also be given the opportunity to submit Accounting Complaints; however, the Company is not obligated to keep Accounting Complaints from non-employees confidential or to maintain the anonymity of non-employees.
The Board of Directors of the Company has appointed the General Counsel of the Company, Fang Liu, as the Chief Compliance Officer for the Company (the “Compliance Officer”). Accounting Complaints will be reviewed under Audit Committee direction and oversight by the Company’s Compliance Officer or such other persons as the Audit Committee determines to be appropriate.
The Company will abide by all laws that prohibit retaliation against employees who lawfully submit complaints under these procedures.
In the event that the Company contracts with a third party to handle complaints or any part of the complaint process, the third party will comply with these policies and procedures.
Receipt of Accounting Complaints
Any person may submit an Accounting Complaint by e-mail to the Compliance Officer at Fang Liu or by mail to the Compliance Officer or the Audit Committee at Building 20. No. 56 Antuo Road, Anting Town, Jiading District, Shanghai, The People's Republic of China or any other principle business address as updated and filed by the Company with SEC from time to time. Employees submitting this information need not provide their name or other personal information and reasonable efforts will be used to conduct the investigation that follows from an Accounting Complaint from an employee in a manner that protects the confidentiality and anonymity of the employee submitting the Accounting Complaint.
Treatment of Accounting Complaints
- 1.Unless otherwise directed by the Audit Committee, an Accounting Complaint made under these procedures shall be directed to the Company’s Compliance Officer, who shall report directly to the Audit Committee on such matters.
- 2.Compliance Officer shall review the Accounting Complaint, and may investigate it himself or herself or may assign another employee, outside counsel, advisor, expert (including internal auditing staff) or third-party service provider (including the external auditor) to investigate, or assist in investigating the Accounting Complaint. Compliance Officer may direct that any individual assigned to investigate an Accounting Complaint work at the direction of or in conjunction with Compliance Officer or any other attorney in the course of the investigation.
- 3.Unless otherwise directed by Compliance Officer, the person assigned to investigate will conduct an investigation of the Accounting Complaint and report his or her findings or recommendations to the Compliance Officer. If the investigator is in a position to recommend appropriate disciplinary or corrective action, the investigator also may recommend disciplinary or corrective action.
- 4.If determined to be necessary by Compliance Officer or the Audit Committee, the Company shall provide for appropriate funding, as determined by Compliance Officer or the Audit Committee, to obtain and pay for additional resources that may be necessary to conduct the investigation, including without limitation, retaining outside counsel and/or expert witnesses; provided that funding in excess of US$100,000 with respect to the investigation of any individual Accounting Complaint must be approved by the Audit Committee.
- 5.At least once per calendar quarter and whenever else as deemed necessary by Compliance Officer, Compliance Officer shall submit to the Audit Committee, and to any other member of Company management designated by the Audit Committee, a report that summarizes each Accounting Complaint made within the last 12 months, if any, and shows specifically: (a) the complainant (unless anonymous, in which case the report will so indicate), (b) a description of the substance of the Accounting Complaint, (c) the status of the investigation, (d) any conclusions reached by the investigator, and (e) findings and recommendations.
- 6.At any time with regard to any Accounting Complaint, Compliance Officer, after obtaining approval from the Audit Committee, may specify a different procedure for investigating and treating such an Accounting Complaint, such as when the Accounting Complaint concerns pending litigation.
Access to Reports and Records and Disclosure of Investigation Results
All reports and records associated with Accounting Complaints are considered confidential information and access will be restricted to members of the Audit Committee, the Company’s Legal Department, employees of the Company or outside counsel or other advisors involved in investigating an Accounting Complaint as contemplated by these procedures. Access to reports and records may be granted to other parties at the discretion of the Audit Committee.
Accounting Complaints and any resulting investigations, reports or resulting actions will generally not be disclosed to the public except as required by any legal requirements or regulations or by any corporate policy in place at the time.
Retention of Records
All Accounting Complaints and documents relating to such Accounting Complaints made through the procedures outlined above shall be retained for at least five years from the date of the complaint, after which the information may be destroyed unless the information may be relevant to any pending or potential litigation, inquiry, or investigation, in which case the information may not be destroyed and must be retained for the duration of that litigation, inquiry, or investigation and thereafter as necessary.