REG - Air China Ld - Articles of Association
27/10/2023 07:00
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RNS Number : 5251R Air China Ld 27 October 2023
The English translation of the articles of association of Air China Limited
(the "Articles") is for reference only. In the event of discrepancy between
the English translation and the Chinese version of the Articles, the Chinese
version shall prevail.
ARTICLES OF ASSOCIATION OF AIR CHINA LIMITED
Adopted by the first extraordinary general meeting on 30 September 2004
Approved by the State-owned Assets Supervision and Administration Commission
of the State Council on 12 October 2004
Adopted by the 2004 annual shareholder's general meeting on 30 May 2005
Approved by the State-Owned Assets Supervision and Administration Commission
of the State Council on 14 March 2006
Adopted by the 2006 first extraordinary general meeting on 28 March 2006
Approved by the State-Owned Assets Supervision and Administration Commission
of the State Council on 5 June 2006
Adopted by the 2005 annual shareholder's general meeting on 12 June 2006
Approved by the State-Owned Assets Supervision and Administration Commission
of the State Council on 28 December 2006
Adopted by the 2006 first extraordinary general meeting on 28 March 2006
Adopted by the 2006 third extraordinary general meeting on 28 December 2006
Approved by the State-Owned Assets Supervision and Administration Commission
of the State Council on 1 June 2007
Adopted by the 2006 annual shareholders' general meeting on 30 May 2007
Approved by the State-Owned Assets Supervision and Administration Commission
of the State Council on 7 August 2007
Adopted by the 2007 annual shareholders' general meeting on 30 May 2008
Approved by the State-Owned Assets Supervision and Administration Commission
of the State Council on 4 March 2009
Adopted by the 2008 annual shareholders' general meeting on 10 June 2009
Approved by the State-Owned Assets Supervision and Administration Commission
of the State Council on 19 October 2009
Adopted by the 2010 first extraordinary general meeting on 29 April 2010
Approved by the State-Owned Assets Supervision and
Administration Commission of the State Council on 26 January 2011
Adopted by the 2012 second extraordinary general meeting on 26 June 2012
Adopted by the 2012 third extraordinary general meeting on 20 December 2012
Approved by the State-Owned Assets Supervision and
Administration Commission of the State Council on 3 May 2013
Adopted by the 2015 first extraordinary general meeting on 22 December 2015
Adopted by the 2016 first extraordinary general meeting on 26 January 2016
Adopted by the 2017 first extraordinary general meeting on 23 January 2017
Adopted by the 2017 second extraordinary general meeting on 30 March 2017
Adopted by the 2017 third extraordinary general meeting on 27 October 2017
Adopted by the 2018 first extraordinary general meeting on 19 October 2018
Adopted by the 2020 annual shareholders' general meeting on 25 May 2021
Adopted by the 2021 second extraordinary general meeting on 30 December 2021
Adopted by the 2022 second extraordinary general meeting on 20 September 2022
Adopted by the 2023 third extraordinary general meeting, the 2023 first A
shareholders' class meeting and the 2023 first H shareholders' class meeting
on 26 October 2023
Contents
CHAPTER 1 : GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CHAPTER 2 : THE COMPANY'S OBJECTIVES AND SCOPE OF BUSINESS . . . 3
CHAPTER 3 : SHARES AND REGISTERED CAPITAL . . . . . . . . . . . . . . . . . . . . 4
CHAPTER 4 : INCREASE, DECREASE AND REPURCHASE OF SHARES . . . . . 6
CHAPTER 5 : SHARE TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
. . .
CHAPTER 6 : SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS . . 10
CHAPTER 7 : SHAREHOLDERS' RIGHTS AND OBLIGATIONS . . . . . . . . . . . . 15
CHAPTER 8 : SHAREHOLDERS' GENERAL MEETINGS . . . . . . . . . . . . . . . . . 19
CHAPTER 9 : THE PARTY COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
CHAPTER 10 : BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
CHAPTER 11 : INDEPENDENT DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
CHAPTER 12 : SECRETARY OF THE BOARD OF DIRECTORS . . . . . . . . . . . . . 54
CHAPTER 13 : PRESIDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
. . . . . .
CHAPTER 14 : SUPERVISORY COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
CHAPTER 15 : THE QUALIFICATIONS AND DUTIES OF THE DIRECTORS, SUPERVISORS, PRESIDENT, VICE
PRESIDENTS AND OTHER SENIOR OFFICERS OF THE COMPANY . . . . . . . . . . . . .
. . . .
60
CHAPTER 16 : FINANCIAL AND ACCOUNTING SYSTEMS, PROFIT DISTRIBUTION AND AUDIT . . . . . . .
. . . . . . . . . . . . . . . . . . .
65
CHAPTER 17 : APPOINTMENT OF ACCOUNTANCY FIRM . . . . . . . . . . . . . . . . 72
CHAPTER 18 : MERGER AND DEMERGER OF THE COMPANY . . . . . . . . . . . . 73
CHAPTER 19 : DISSOLUTION AND LIQUIDATION . . . . . . . . . . . . . . . . . . . . . . 75
CHAPTER 20 : PROCEDURES FOR AMENDMENT OF THE COMPANY'S ARTICLES OF ASSOCIATION . . . . . .
. . . . . . . . . . . . . . . . . .
78
CHAPTER 21 : NOTICES AND PUBLIC ANNOUNCEMENTS . . . . . . . . . . . . . . . 79
CHAPTER 22 : SUPPLEMENTARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
. .
CHAPTER 1: GENERAL PROVISIONS
Article 1 Air China Limited (the "Company") is a joint stock limited company established
in accordance with the Company Law of the People's Republic of China (the
"Company Law"), the Securities Law of the People's Republic of China (the
"Securities Law") and other relevant laws and regulations of the State.
The Company was established by way of promotion with the approval of the
State-owned Assets Supervision and Administration Commission of the State
Council on 30 September 2004, as evidenced by the approval document Guo Zi Gai
Ge 2004 No. 872. It was registered with and has obtained a business licence
from the State Administration for Industry & Commerce of the People's
Republic of China.
The promoters of the Company are: China National Aviation Holding
Corporation Limited and China National Aviation Corporation
(Group)
Limited (registered in Hong Kong Special Administration Region).
Article 2 The Company's registered Chinese name: 中國國際航空股份有限公司
The Company's English name: AIR CHINA LIMITED The Company's abbreviated
Chinese name: 中國國航 The Company's abbreviated English name: AIR CHINA
Article 3 The Company's address: 1st Floor-9th Floor 101, Building 1, 30 Tianzhu Road,
Shunyi District, Beijing, China.
Article 4 The Company's legal representative is the Chairman of the board of directors
of the Company.
Article 5 The Company is a joint stock limited company which has perpetual existence.
The liability of a shareholder is limited to the value of the shares held by
him, while the Company assumes liabilities to the extent of its entire assets.
The Company is an independent corporate legal person, governed by, and
existing under the protection of, the laws and regulations of the People's
Republic of China.
Article 6 In accordance with the provisions of the Company Law, the Securities Law, the
Guidance on the Articles of Association of Listed Companies (the "Guidance"),
the Standards on Corporate Governance for Listed Companies (the "CG
Standards"), the Rules Governing the Listing of Stocks on the Shanghai Stock
Exchange, the Rules Governing the Listing of Securities on The Stock Exchange
of Hong Kong Limited (the "Hong Kong Listing Rules") and other PRC laws and
administrative regulations and departmental rules, the Company amended the
original Articles of Association of the Company (the "Original Articles of
Association") and adopted these Articles of Association (the "Articles of
Association" or "these Articles of Association").
Article 7 From the date on which the Articles of Association come into effect, the
Articles of Association constitute the legally binding document regulating the
Company's organisation and activities, and the rights and obligations between
the Company and each shareholder and among the shareholders.
Article 8 The Articles of Association are binding on the Company and its shareholders,
directors, supervisors, president, vice presidents and other senior officers;
all of whom may, according to the Company's Articles of Association, assert
their
rights in respect of the affairs of the Company.
A shareholder may take action against the Company pursuant to the Company's
Articles of Association. The Company may take action against a shareholder,
directors, supervisors, president, vice presidents and other senior officers
of the Company pursuant to the Company's Articles of Association. A
shareholder may also take action against another shareholder, and may take
action against the directors, supervisors, president, vice presidents and
other senior officers of the Company pursuant to the
Company's Articles of
Association.
The "other senior officers" referred to in these Articles of Association mean
the board secretary, chief accountant, chief pilot, general legal counsel and
other senior officers appointed by the board of directors of the Company.
Article 9 The Company may invest in other enterprises; provided that unless otherwise
provided by laws, regulations and other regulatory documents, the Company
shall not act as a capital contributor which assumes joint and several
liabilities of the enterprises it invested in.
Article 10 According to the Constitution of the Communist Party of China, the Company
shall establish an organization of the Communist Party of China to carry out
the activities of the Party, establish a working organ for the Party, allocate
sufficient and competent personnel to handle Party affairs and provide
sufficient funds to operate the Party organization.
CHAPTER 2: THE COMPANY'S OBJECTIVES AND SCOPE OF BUSINESS
Article 11 The Company's objectives are: to maximise Shareholders' interests by providing
safe, fast, accurate, economical, convenient and satisfactory air package and
cargo transportation services through customer-oriented, market driven
operations with the end of advanced communications technologies, and develop
telecommunications and information businesses.
Article 12 The Company's scope of business shall be consistent with and subject to the
scope of business approved by the authority responsible for the registration
of the Company.
The Company's scope of business includes: International and domestic scheduled
and unscheduled air passenger, air cargo, mail and luggage transportation;
domestic and international business aviation services; management and
administration of aircraft, aircraft maintenance, repair and overhaul
services, business agency among airlines companies; and ground services, air
express service (other than mails and objects of the same nature as mails)
related to the main business; on-board duty free items, on-board retail of
goods and underwriting the aviation accident insurance; import and export
businesses; hotel management; undertaking exhibitions; conference services;
property management; design, production, agency and publish of advertisement;
technology training; lease of self-owned property; rental of machinery and
equipment; accommodation; catering services; sales of handicrafts and
souvenirs; wholesale of agriculture, forestry, animal husbandry and fishery
products, wholesale of food, beverages and tobacco products, wholesale of
textiles, clothing and household goods, wholesale of culture, sporting goods
and equipment, wholesale of mineral products, building materials and chemical
products, wholesale of machinery and equipment, hardware and electronic
products, general retail, special retail of food, beverage and tobacco
products, special retail of textiles, clothing and daily necessities, special
retail of cultural and sporting goods and equipment, sales of automobiles,
motorcycles, spare parts and fuels and other types of energy resources,
special retail of household appliances and electronics, special retail of
hardware, furniture and interior decoration materials, and Internet retailing.
(Catering services, accommodation and other projects subject to approval in
accordance with the law shall be operated with the approval of relevant
authorities to the extent authorized by the approval.)
Article 13 Based on its business development needs and upon approval of the relevant
governmental authorities, the Company may adjust its scope of business and
manner of operation from time to time, and may establish branch organisations
and/or representative offices (irrespective of whether controlled or owned by
it) in the PRC or overseas.
CHAPTER 3: SHARES AND REGISTERED CAPITAL
Article 14 There shall, at all times, be ordinary shares in the Company. Subject to the
approval of the department authorized by the State Council, the Company may,
according to its requirements, create different classes of shares.
Article 15 The shares issued by the Company shall each have a par value of Renminbi one
(1.00) yuan.
"Renminbi" referred to in the previous paragraph means the legal currency of
the PRC.
Article 16 The Company may issue shares to Domestic Investors and Foreign Investors
according to the laws, and shall file with the securities regulatory authority
of the State Council according to the requirements.
"Foreign Investors" referred to in the previous paragraph mean those investors
who subscribe for the shares issued by the Company and who are located in
foreign countries and in the regions of Hong Kong, Macau and Taiwan. "Domestic
Investors" mean those investors who subscribe for the shares issued by the
Company and who are located within the territory of the PRC.
Article 17 Shares which the Company issues to Domestic Investors for subscription in
Renminbi shall be referred to as "Domestic Shares". Shares which the Company
issues to Foreign Investors for subscription in foreign currencies shall be
referred to as "Foreign Shares". Foreign Shares which are listed overseas are
called "Overseas-Listed Foreign Shares". Both holders of Domestic Shares and
holders of Foreign Shares are holders of ordinary
shares, and have the same obligations and rights.
"Foreign currencies" means the legal currencies of countries or outside the
PRC which are recognised by the foreign exchange authority of the State and
which can be used to pay the share price to the Company.
Article 18 A Shares are ordinary shares in Renminbi that have been admitted for listing
on domestic stock exchanges. H Shares are shares that have been admitted for
listing on The Stock Exchange of Hong Kong Limited (the "Stock Exchange").
The A Shares of the Company shall be centralized and held in custody by the
Shanghai Branch of the China Securities Depository and Clearing Corporation
Limited. The Overseas-Listed Foreign Shares of the Company shall be held in
custody by Hong Kong Securities Clearing Company Limited.
Article 19 Upon the approval of the department authorized by the State Council, the
Company issued 6,500,000,000 ordinary shares to the promoters at the time when
the Company was established. At the time of establishment, the capital
contribution of the promoters of the Company was as follows:
Number of Date of Capital Contribution
Name of Promoters Shares Subscribed
Method of Capital Contribution
China National Aviation Holding Corporation Limited 5,054,276,915 A capital contribution of RMB560,782,100 was made in cash and a contribution 9 September
of RMB6,451,765,800 was made in form of the assets and liability of its
subsidiaries and those relating to its principal passenger and cargo 2004
businesses
China National Aviation Corporation 1,445,723,085 A capital contribution of RMB2,005,866,000 was made in form of equity interest 9 September
(Group) Limited 2004
Article 20 As approved by the competence authorities, the changes in the share capital of
the Company were as follows:
The Company shall issue additional 2,933,210,909 ordinary shares after its
incorporation, and the promoters of the Company shall sell 293,321,091
ordinary shares, all of which are H Shares.
Upon completion of the offering of the H Shares set forth above, the Company
has issued 1,639,000,000 A shares in 2006.
Upon the completion of the issuance of A shares, the Company has issued
1,179,151,364 H Shares to Cathay Pacific Airways Limited, a shareholder of
the Company, in 2006.
Upon the completion of the said additional issuance of H Shares, the Company
has issued 483,592,400 new A Shares on a non-public issue basis and
157,000,000 new H Shares to China National Aviation Corporation (Group)
Limited, a shareholder of the Company, on a non-public issue basis in the year
of 2010.
Upon the completion of the aforesaid non-public issue of A Shares and H
Shares, the Company has issued 192,796,331 new A Shares to China National
Aviation Holding Corporation Limited, a shareholder of the Company, on a
non-public issue basis in the year of 2013.
Upon the completion of the aforesaid non-public issue of A Shares, the Company
has issued 1,440,064,181 A Shares on a non-public issue basis in the year of
2017.
Upon the completion of the aforesaid non-public issue of A Shares, the Company
has issued 1,675,977,653 A Shares on a non-public issuance basis in the year
of 2023.
The present share capital structure of the Company is as follows: the Company
has a total of 16,200,792,838 ordinary shares in issue, of which
11,638,109,474 shares are held by holders of A Shares, representing
approximately 71.84% of the Company's total share capital, and 4,562,683,364
shares are held by holders of H Shares, representing approximately 28.16% of
the Company's total share capital.
Article 21 The registered capital of the Company is RMB16,200,792,838.
Article 22 The Company or the Company's subsidiaries (including the Company's affiliated
enterprises) shall not provide any assistance in the form of donates,
advances, guarantees, compensation or loans to persons who acquire or intend
to acquire the shares of the Company.
CHAPTER 4: INCREASE, DECREASE AND REPURCHASE OF SHARES
Article 23 The Company may, based on its operating and development needs, authorize the
increase of its capital pursuant to the Articles of Association.
The Company may increase its capital in the following ways:
(1) by public offering of shares;
(2) by non-public offering of shares;
(3) by issuing bonus shares to its existing shareholders;
(4) by converting the common reserve into share capital;
(5) by any other means which is prescribed by law and administrative
regulations and approved by the securities regulatory authority of the State
Council.
After the Company's increase of capital has been approved in accordance with
the provisions of the Articles of Association, the issuance thereof should be
made in accordance with the procedures set out in the relevant State laws and
administrative regulations.
Article 24 According to the provisions of the Articles of Association, the Company may
reduce its registered capital.
Article 25 The Company must prepare a balance sheet and an inventory of assets when it
reduces its registered capital.
The Company shall notify its creditors within ten (10) days of the date of the
Company's resolution for reduction of capital and shall publish an
announcement in a newspaper within thirty (30) days of the date of such
resolution. A creditor has the right within thirty (30) days of receipt of the
notice from the Company or, in the case of a creditor who does not receive
such notice, within forty-five (45) days of the date of announcement, to
require the Company to repay its debts or to provide a corresponding guarantee
for
such debt.
The Company's registered capital may not, after the reduction in capital, be
less than the minimum amount prescribed by law.
Article 26 The Company shall not acquire shares of the Company. However, except in one of
the following circumstances:
(1) reducing its registered capital;
(2) merging with another company that holds shares in the Company;
(3) using the shares for the employee share ownership plan or as share
incentive;
(4) acquiring as requested the shares of shareholders who vote against any
resolution on the merger or demerger of the Company adopted at a shareholders'
general meeting;
(5) using the shares for the conversion of the corporate bonds issued
by the listed company which are convertible into shares;
(6) necessary for safeguarding the value of the
Company and the shareholders' interests;
(7) other circumstances permitted by laws and administrative
regulations.
The Company's repurchase of its issued shares shall comply with the provisions
of Article 27 to Article 28 of these Articles of Association.
Article 27 The Company may acquire the shares of the Company by way of open and
centralized trading, or by other means approved by the laws and regulations
and the securities regulatory authority of the State Council.
The repurchase of the shares of the Company arising from the circumstances
provided under items (3), (5) and (6) of the first paragraph of Article 26 of
these Articles of Association shall be carried out by way of open and
centralized trading.
Article 28 The purchase of the shares of the Company arising from the circumstances
provided under items (1) and (2) of the first paragraph of Article 26 of the
Articles of Association shall be made by the resolution of the shareholders'
general meeting; the purchase of the shares of the Company arising from the
circumstances provided under items (3), (5) and (6) of the first paragraph of
Article 26 of the Articles of Association may be made by the resolutions of
the board of directors in a board meeting where more than two-thirds (2/3) of
directors are present under the provisions of the Articles of Association or
the authorization granted at the shareholders' general meeting.
After the purchase of the shares of the Company according to the provision of
Article 26, the shares shall be cancelled within 10 days from the date of
purchase under the circumstance of the item (1) of the first paragraph; the
shares shall be transferred or cancelled within 6 months under the
circumstances of items (2) and (4) of the first paragraph; the total number of
shares then held by the Company shall not exceed ten percent of the total
number of its issued shares and the shares so purchased shall be transferred
or cancelled within 3 years under the circumstances of items (3), (5) and (6)
of the first paragraph.
If it is otherwise provided for the repurchase and cancellation of shares
under the relevant rules of the regulatory authorities and stock exchanges of
the jurisdictions where the shares of the Company are listed, such
requirements
shall prevail.
The aggregate par value of the cancelled shares shall be deducted from the
Company's registered share capital.
CHAPTER 5: SHARE TRANSFER
Article 29 Unless otherwise provided in laws, regulations and other regulatory documents,
the shares of the Company shall be transferrable in accordance with laws
without any lien attached.
Article 30 The Company shall not accept any pledge being created over its own shares.
Article 31 The shares of the Company held by the promoters shall not be transferred
within one year from the date of establishment of the Company. The shares
issued before the Company's public offering of shares shall not be transferred
within one year from the date on which the shares of the Company are listed
and traded on a stock exchange.
The directors, supervisors and senior officers of the Company shall report to
the Company the shares of the Company held by him/her and the changes thereof.
During the term of his/her office, the shares transferred by him/her each year
shall not exceed 25% of the total shares of the Company that he/she holds. The
shares of the Company held by the aforesaid persons shall not be transferred
within one year from the date on which the shares of the Company are listed
and traded on a stock exchange. The aforesaid persons shall not transfer the
shares of the Company that he/she holds within half a year after leaving
his/her office.
Article 32 Should a shareholder, director, supervisor or senior officer holding 5% or
more of the Company's shares sells his/her shares in the Company or other
securities of equity nature within six months from the date of purchase of the
same, or repurchase the shares within six months from the date of selling the
same, the profits derived from such activities shall be vested in the Company.
The board of directors of the Company shall recover from the aforementioned
parties the gains derived therefrom, except where a securities company holding
5% or more of the shares as a result of its purchase of remaining shares after
sold under an underwriting obligation, and otherwise required by the
securities regulatory authority of the State Council.
Shares or other securities of equity nature held by directors, supervisors,
senior officers and natural person shareholders referred to in the preceding
paragraph include shares or other securities of equity nature held by their
spouses,
parents, children and under accounts of other persons.
Should the Company's board of directors not comply with the provision set
forth in the first paragraph of this Article and act accordingly, the
shareholders shall have the right to request the board of directors to duly
act in accordance with the same within 30 days. Should the Company's board of
directors not act in accordance with the same within the aforementioned
period, the shareholders shall have the right to initiate proceedings at a
People's Court directly in his/her own name for the interests of the Company.
Should the Company's board of directors not comply with the provision set out
in the first paragraph of this Article and act accordingly, the responsible
directors shall assume joint liabilities in accordance with the laws.
CHAPTER 6: SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS
Article 33 Share certificates of the Company shall be in registered form.
The share certificate of the Company shall contain the following main
particulars:
(1) the name of the Company;
(2) the date of registration and incorporation of the Company;
(3) the class of shares, par value and number of shares it represents;
(4) the share certificate number;
(5) other matters required to be stated therein by the Company Law and
the stock exchange(s) on which the Company's shares are listed.
Article 34 Share certificates of the Company may be assigned, given as a gift, inherited
or pledged in accordance with relevant provisions of laws, administrative
regulations and these Articles of Association, and relevant registration shall
be
carried out with the share registration institution authorized by the Company.
Article 35 Share certificates of the Company shall be signed by the legal representative
of the Company's board of directors. Where the stock exchange(s) on which the
Company's shares are listed require other senior officer(s) of the Company to
sign on the share certificates, the share certificates shall also be signed by
such senior officer(s). The share certificates shall take effect after being
affixed with the seal of the Company (including the seal of the Company
especially for securities). The share certificate shall be affixed with the
seal of the Company or the seal of the Company especially for securities under
the authorization of the board of directors. The signatures of the Chairman of
the board of directors or other senior officer(s) of the Company may be in
printed form. Subject to the conditions of paperless offering and trading of
the shares of the Company, the laws and rules otherwise provided by the
regulatory authorities of the jurisdictions where the shares of the Company
are listed are applicable.
Article 36 The Company shall keep a register of shareholders which shall contain the
following particulars:
(1) the name (title), address (residence) and the occupation or the
nature of the occupation of each shareholder;
(2) the class and quantity of shares held by each shareholder;
(3) the amount paid-up on or agreed to be paid-up on the shares held
by each shareholder;
(4) the share certificate number(s) of the shares held by each
shareholder;
(5) the date on which each person was entered in the register as a
shareholder;
(6) the date on which any shareholder ceased to be a shareholder.
Unless there is evidence to the contrary, the register of shareholders shall
be sufficient evidence of the shareholders' shareholdings in the Company.
Article 37 The Company may, in accordance with the mutual understanding and agreements
made between the securities authority of the State Council and overseas
securities regulatory organisations, maintain the register of shareholders of
Overseas-Listed Foreign Shares overseas and appoint overseas agent(s) to
manage such register of shareholders. The original register for holders of
Overseas-Listed Foreign Shares listed in Hong Kong shall be maintained in Hong
Kong.
A duplicate register of shareholders for the holders of Overseas-Listed
Foreign Shares shall be maintained at the Company's residence. The appointed
overseas agent(s) shall ensure consistency between the
original and the
duplicate register of shareholders at all times.
If there is any inconsistency between the original and the duplicate register
of shareholders for the holders of Overseas-Listed Foreign Shares, the
original register of shareholders shall prevail.
Article 38 The Company shall have a complete register of shareholders, which shall
comprise the following parts:
(1) the register of shareholders which is maintained at the Company's
residence (other than those share registers which are described in sub-
paragraphs (2) and (3) of this Article);
(2) the register of shareholders in respect of the holders of
Overseas-Listed
Foreign Shares of the Company which is maintained in the same place as the
overseas stock exchange on which the shares are listed; and
(3) the register of shareholders which are maintained in such other place as
the board of directors may consider necessary for the purposes of the listing
of the Company's shares.
Article 39 Different parts of the register of shareholders shall not overlap. No transfer
of any shares registered in any part of the register shall, during the
continuance of that registration, be registered in any other part of the
register.
Any change or correction to various parts of the register of shareholders
shall be carried out in accordance with the law of the place where such parts
of the
register of shareholders are maintained.
Article 40 The transfer of Overseas-Listed Foreign Shares in the Company listed in Hong
Kong shall be carried out in writing through transfer instruments in normal or
ordinary form or in the form acceptable to the board of directors; and such
transfer instrument can be signed only under hand or affixed with the seal of
the Company (if the transferor or transferee is the Company). If the
transferor or transferee is a securities clearing institution (or its
attorney) recognised by the applicable listing rules or other relevant
securities laws and regulations, signed under hand or signed in printed
mechanical form. All the transfer instruments shall be maintained at the legal
address of the Company or another place as designated by the board of
directors.
All Overseas-Listed Foreign Shares listed in Hong Kong, which have been fully
paid-up, may be freely transferred in accordance with the Articles of
Association. However, unless such transfer complies with the following
requirements, the board of directors may refuse to recognise any instrument of
transfer and would not need to provide any reason therefore:
(1) a fee of HK$2.50 per instrument of transfer or such higher amount agreed
from time to time by the Stock Exchange for registration of the instrument of
transfer and other documents relating to the right of ownership of the shares;
(2) the instrument of transfer only relates to Foreign-Listed Foreign
Shares listed in Hong Kong;
(3) the stamp duty which is chargeable on the instrument of transfer
has already been paid;
(4) the relevant share certificate(s) and any other evidence which the board
of directors may reasonably require to show that the transferor has the right
to transfer the shares have been provided;
(5) if it is intended that the shares be transferred to joint owners,
the maximum number of joint owners shall not be more than four (4);
(6) the Company does not have any lien on the relevant shares.
If the Company refuses to register a transfer of shares, the Company shall
issue to the transferor and transferee a notice regarding such decision within
2 months starting from the date of formal application for transfer of shares.
Article 41 Where provisions of laws, administrative regulations, other directives and the
relevant stock exchanges or regulatory authorities of the jurisdictions where
the shares of the Company are listed governing the period of closure of
register of members before convening the shareholders' general meeting or the
record date for determining the distribution of dividends of the Company, such
requirements shall prevail.
Article 42 Any person aggrieved and claiming to be entitled to have his name (title)
entered in or removed from the register of shareholders may apply to a court
of
competent jurisdiction for rectification of the register.
Article 43 Any person who is a registered shareholder or who claims to be entitled to
have his name (title) entered in the register of shareholders in respect of
shares in the Company may, if his share certificate (the "original
certificate") relating to the shares is lost, apply to the Company for a
replacement share certificate in respect of such shares (the "Relevant
Shares").
Application by a holder of A Shares, who has lost his share certificate, for a
replacement share certificate shall be dealt with in accordance with Article
143 of the Company Law.
Application by a holder of Overseas-Listed Foreign Shares, who has lost his
share certificate, for a replacement share certificate may be dealt with in
accordance with the law of the place where the original register of
shareholders of holders of Overseas-Listed Foreign Shares is maintained, the
rules of the stock exchange or other relevant regulations.
The issue of a replacement share certificate to a holder of H Shares, who has
lost his share certificate, shall comply with the following requirements:
(1) The applicant shall submit an application to the Company in a prescribed
form accompanied by a notarial certificate or a statutory declaration, stating
the grounds upon which the application is made, the circumstances and evidence
of the loss; and declaring that no other person is entitled to have his name
entered in the register of shareholders in respect of the Relevant Shares.
(2) The Company has not received any declaration made by any person other
than the applicant declaring that his name shall be entered into the register
of shareholders in respect of such shares before it decides to
issue a replacement share certificate to the applicant.
(3) The Company shall, if it intends to issue a replacement share certificate,
publish a notice of its intention to do so at least once every thirty (30)
days within a period of ninety (90) consecutive days in such newspapers
as may be prescribed by the board of directors.
(4) The Company shall, prior to publication of its intention to issue a
replacement share certificate, deliver to the stock exchange on which its
shares are listed, a copy of the notice to be published and may publish the
notice upon receipt of confirmation from such stock exchange that the notice
has been exhibited in the premises of the stock exchange. Such notice shall be
exhibited in the premises of the stock exchange for a period of ninety (90)
days.
In the case of an application which is made without the consent of the
registered holders of the Relevant Shares by an applicant who is not a
registered shareholder of Relevant Shares and, the Company shall deliver by
mail to such registered shareholder a copy of the notice to be published.
(5) If, by the expiration of the 90-day period referred to in paragraphs (3)
and (4) of this Article, the Company has not have received any objections from
any person in respect of the issuance of the replacement share certificate, it
may issue a replacement share certificate to the applicant pursuant to his
application.
(6) Where the Company issues a replacement share certificate pursuant to
this Article, it shall forthwith cancel the original share certificate and
document the cancellation of the original share certificate and issuance of a
replacement share certificate in the register of shareholders accordingly.
(7) All expenses relating to the cancellation of an original share
certificate and the issuance of a replacement share certificate shall be borne
by the applicant and the Company is entitled to refuse to take any action
until
reasonable security is provided by the applicant therefore.
CHAPTER 7: SHAREHOLDERS' RIGHTS AND OBLIGATIONS
Article 44 A shareholder of the Company is a person who lawfully holds shares in the
Company and whose name (title) is entered in the register of shareholders.
A shareholder shall enjoy rights and assume obligations according to the class
and amount of shares held by him; shareholders who hold shares of the same
class shall enjoy the same rights and assume the same obligations.
In the case of the joint shareholders, if one of the joint shareholders is
deceased, only the other existing shareholder of the joint shareholders shall
be deemed as the persons who have the ownership of the relevant shares. But
the board of directors has the power to require them to provide a certificate
of death as necessary for the purpose of modifying the register of
shareholders. Only the joint shareholders ranking first in the register of
shareholders have the right to accept certificates of the relevant shares,
receive notices of the Company, attend and vote at shareholders' general
meetings of the Company. Any notice that is delivered to the aforesaid
shareholder shall be considered as delivered to all the joint shareholders of
the relevant shares.
Article 45 When the Company intends to convene a shareholders' general meeting,
distribute dividends, liquidate and engage in other activities that involve
determination of shareholding, the board of directors or the convener of the
shareholders' general meeting shall decide on a date for the record of
shareholding. Shareholders whose names are registered on the share register
after the closing of the market on such date shall be the Company's
shareholders with the entitlement to the relevant rights. Should the Articles
of Association have contrary requirements, the Company shall comply with such
requirements.
Article 46 Holders of the ordinary shares of the Company shall enjoy the following
rights:
(1) the right to receive dividends and other distributions in
proportion to the number of shares held;
(2) the right to request to convene, convene, preside over, attend or appoint
a proxy to attend shareholders' general meetings and to speak and vote thereat
in proportion to the number of shares in their possession pursuant
to the laws;
(3) the right of supervisory management over the Company's business
operations and the right to present proposals or to raise queries;
(4) the right to transfer, donate or pledge the shares in their
possession in
accordance with laws, administrative regulations and provisions of the
Articles of Association;
(5) the right to obtain relevant information in accordance with the
provisions of the Articles of Association, including:
(i) the right to obtain a copy of the Articles of Association,
subject to payment of costs;
(ii) the right to inspect, and copy after payment of a reasonable fee:
(a) all parts of the register of shareholders;
(b) report on the state of the Company's share capital;
(c) minutes of shareholders' general meetings;
(d) counterfoils of corporate bonds, resolutions of the board of directors,
resolutions of the supervisory board, financial and accounting report;
(6) in the event of the termination or liquidation of the Company, the
right to
participate in the distribution of surplus assets of the Company in accordance
with the number of shares held;
(7) With respect to shareholders who vote against any resolution adopted at
the shareholders' general meeting on the merger or demerger of the Company,
the right to request the Company to acquire their shares;
(8) other rights conferred by laws, administrative regulations,
departmental rules and regulations and the Articles of Association of the
Company.
Where shareholders request for inspection of the relevant information or
demand for materials as mentioned in the preceding paragraphs, they shall
provide the Company with written documents evidencing the class and number of
shares of the Company they hold. Upon verification of the shareholder's
identity, the Company shall provide information requested by such shareholder.
Article 47 If the content of a resolution of the shareholders' general meeting or the
board of directors of the Company violates the laws or administrative
regulations, the shareholders shall have the right to submit a petition to the
People's Court to
render the same invalid.
If the procedures for convening or the method of voting at a shareholders'
general meeting or meeting of the board of directors violate the laws,
administrative regulations or these Articles of Association, or the contents
of a resolution violate these Articles of Association, the shareholders shall
have the right to submit a petition to the People's Court to revoke the same
within sixty
(60) days from the date on which such resolution is passed.
Article 48 Any director or senior officer who, when performing their duties in the
Company, violates the laws, administrative regulations, or the provisions
contained in these Articles of Association resulting in causing losses to the
Company, the shareholders individually or jointly holding 1% or more of the
shares of the Company for 180 consecutive days or more shall have the right to
request in writing the supervisory committee to initiate proceedings at a
People's Court. Where the supervisory committee, when performing its duties in
the Company, violates the laws, administrative regulations, or the provisions
contained in these Articles of Association resulting in causing losses to the
Company, the shareholders shall have the rights to request in writing to the
board of directors to initiate proceedings at a People's Court.
If the supervisory committee or the board of directors refuses to initiate
proceedings upon receipt of the written request of shareholders stated in the
preceding paragraph, or fails to initiate such proceedings within thirty (30)
days from the date on which such request is received, or in case of emergency
where failure to initiate such proceedings immediately will result in
irreparable damage to the Company's interests, the shareholders described in
the preceding paragraph shall have the right to initiate proceedings at a
People's Court
directly in their own names in the interest of the Company.
If any person infringes the lawful rights and interests of the Company, thus
causing any losses to the Company, the shareholders described in the first
paragraph of this Article may initiate proceedings at a People's Court in
accordance with the provisions of the preceding two paragraphs.
Article 49 If any director or senior officer violates the laws, administrative
regulations or these Articles of Association resulting in causing harm to the
interests of the shareholders, the shareholders may initiate proceedings at a
People's Court.
Article 50 The ordinary shareholders of the Company shall assume the following
obligations:
(1) to comply with the Articles of Association;
(2) to pay subscription monies according to the number of shares
subscribed and the method of subscription;
(3) unless otherwise provided for by the laws and regulations, not to
withdraw their shares;
(4) not to abuse the rights of the shareholders to impair the interests of the
Company or other shareholders; not to abuse the independent legal person
status of the Company and the enjoyment of limited liabilities of the
shareholders to impair the Company's creditors interest. Should the Company's
shareholders abuse their shareholder's rights and cause losses to the Company
or other shareholders, the said shareholders shall be liable for damages
pursuant to the law. Should the Company's shareholders abuse the Company's
independent legal person status and the enjoyment of limited liabilities of
the shareholders to evade debt liabilities, resulting in materially impairing
the interests of the Company's creditors, the said shareholders shall bear
joint and several liabilities to the Company's debts;
(5) other obligations imposed by laws, administrative regulations and
the Articles of Association.
Shareholders are not liable to make any further contribution to the share
capital other than according to the terms which were agreed by the subscriber
of the relevant shares at the time of subscription.
Article 51 Should a shareholders holding 5% or more of the voting shares pledges any
shares in his/her possession, he or she shall submit to the Company a written
report on the day on which he/she pledges his/her shares.
Article 52 The controlling shareholders and the de facto controlling persons of the
Company shall not make use of its connected relationship to impair the
Company's interest. The abovementioned persons who violate such provisions and
cause losses to the Company shall be liable for damages to the Company.
The controlling shareholders and the de facto controlling persons of the
Company shall have fiduciary duties to both the Company and its public
shareholders. The controlling shareholders shall exercise its rights as a
capital contributor in strict compliance with the law. The controlling
shareholders shall neither impair the legal interests of the Company and the
public shareholders through profit distribution, asset restructuring, external
investment, use of funds, provision of guarantee by borrowing funds as well as
other methods, nor shall they make use of its controlling position to impair
the interest of the Company and the public shareholders.
Article 53 A "controlling shareholder" means a shareholder who holds shares representing
50% or more of the total share capital of the Company; or a shareholder having
sufficient voting right in respect of the shares he/she holds to pose a
significant influence on the resolutions of the shareholders' general meetings
despite holding less than 50% of the total share capital of the Company.
CHAPTER 8: SHAREHOLDERS' GENERAL MEETINGS
Article 54 The shareholders' general meeting is the organ of authority of the Company,
and shall exercise the following functions and powers in accordance with laws:
(1) to decide on the Company's operational policies and investment
plans;
(2) to elect and replace directors (excluding the employee representative
director) and to decide on matters relating to the remuneration of directors;
(3) to elect and replace supervisors appointed from personnel who are
not representatives of the employees and to decide on matters relating to the
remuneration of supervisors;
(4) to examine and approve the board of directors' reports;
(5) to examine and approve the supervisory committee's reports;
(6) to examine and approve the Company's proposed preliminary and
final annual financial budgets;
(7) to examine and approve the Company's profit distribution plans and
loss recovery plans;
(8) to decide on the increase or reduction of the Company's registered
capital;
(9) to decide on matters such as merger, division, dissolution,
liquidation or change of the form of the Company;
(10) to decide on the issue of debentures by the Company;
(11) to decide on the appointment, dismissal and non-reappointment of the
accountants of the Company;
(12) to amend the Articles of Association;
(13) to resolve the material purchase and sale of assets with a value in
excess of 30% of the most recent audited total assets of the Company during
the year;
(14) to resolve issues relating to the provision of guarantee in favour of
third parties that must be approved at the shareholders' general meeting in
accordance with the laws, administrative regulations, other regulatory
documents and Articles of Association;
(15) to consider and approve the variation of use of proceeds;
(16) to consider the shares incentive program and employee share ownership
plan;
(17) to decide on other matters which, according to laws, administrative
regulations, other regulatory documents and the Articles of Association, need
to be approved by shareholders in general meetings;
Article 55 Any matters in relation to the provision of guarantee in favour of third
parties by the Company shall be approved by the board of directors. The
following matters relating to the provision of guarantee shall be submitted to
the shareholders' general meetings for examination and approval after the same
have been considered by the board of directors:
(1) Any guarantee to be provided by the Company and its controlling
subsidiaries, with the total amount of the guarantee provided in favour of
third parties that exceeds 50% of the most recent audited net assets;
(2) any guarantee provided by the Company in favour of third parties
with the total amount of the guarantee exceeds 30% of the most recent audited
total assets;
(3) any guarantee provided by the Company within one year with the
amount of guarantee exceeds 30% of the most recent audited total assets;
(4) guarantees to be provided in favour of an entity which is subject
to a gearing ratio of over 70%;
(5) any single guarantee with an amount which exceeds 10% of the most
recent audited net asset value;
(6) guarantees to be provided in favour of any shareholder, person who
exercises effective control over the Company and its affiliates;
(7) matters relating to the provision of guarantee that need to be submitted
to the shareholders' general meeting for examination and approval as required
by other laws and regulations and the Articles of Association of the Company.
If a director, president, vice president and other senior management personnel
commits any act in breach of the provisions governing the authority in respect
of the examination and approval of, and the examination procedures in relation
to, the provision of guarantee in favour of a third party under the laws,
administrative regulations or the Articles of Association of the Company,
which results in causing the Company to suffer from loss, such director,
president, vice president and senior management personnel shall be liable for
indemnity and the Company may bring an action against the same in accordance
with the law.
Article 56 Matters which should be determined at a shareholders' general meeting as
stipulated by the laws, administrative regulations and these Articles of
Association must be considered at a shareholders' general meeting in order to
protect the right of the Company's shareholders to make decision over such
matters. When necessary or under reasonable circumstances, the shareholders'
general meeting may authorize the board of directors to make a decision within
its scope of authorization granted at a shareholders' general meeting on
specific issues which are related to matters to be resolved but cannot be
determined immediately at the shareholders' general meeting.
With respect to granting authorization to the board of directors at the
shareholders' general meeting, if a matter for authorization is the matter
subject to an ordinary resolution, such authorization shall be adopted by more
than half of the voting rights held by shareholders (including their agents)
attending the shareholders' general meeting; if a matter for authorization is
the matter subject to special resolution, such authorization shall be adopted
by more than two-thirds (2/3) of the voting rights held by shareholders
(including their agents) attending the shareholders' general meeting. The
content of the scope of authorization shall be clear and specific.
Article 57 Shareholders' general meetings are divided into annual general meetings and
extraordinary general meetings. The annual general meetings shall be convened
once every year and shall be held within 6 months from the end of the
preceding financial year. Meeting venues shall be fixed for the shareholders'
general meetings, and the shareholders' general meetings shall be convened in
the on-site conference mode. The Company also provides the online voting
manner for the convenience of shareholders in attending
their general
meetings.
The Company may facilitate the shareholders participating in the shareholders'
general meetings by providing other manners and means to participate in the
shareholders' general meetings, provided that the legality and effectiveness
of the shareholders' general meeting are ensured. Shareholders are deemed to
be present in the shareholders' general meetings in the aforesaid manners and
forms.
The Company shall convene an extraordinary general meeting within 2 months of
the occurrence of any one of the following events:
(1) where the number of directors is less than the minimum number stipulated
in the Company Law or two-thirds of the number specified in the Articles of
Association;
(2) where the unrecovered losses of the Company amount to one-third of
the total amount of its share capital;
(3) where shareholders who separately or jointly holds more than 10%
of the total Company's shares make such request in writing;
(4) whenever the board of directors deems necessary or the supervisory
committee so requests;
(5) under other conditions as provided for by the
laws, administrative
regulations, departmental rules and regulations or the Articles of
Association.
The shareholding mentioned in sub-paragraph (3) above shall be calculated from
the date on which a shareholder submits his/her request in writing.
Article 58 The board of directors shall convene a shareholders' general meeting within
the time limit as stipulated in Article 57 of these Articles of Association.
The independent directors, the supervisory committee or shareholders who
separately or jointly hold shares of the Company in excess of 10% shall have
the right to propose to the board of directors and request for convening an
extraordinary general meeting. The following procedures shall be adopted
should the independent directors, the supervisory committee, shareholders who
separately or jointly hold shares of the Company in excess of 10% propose to
the board of directors and request for convening of an extraordinary general
meeting:
(1) Sign a copy, or several copies, of written request in the same form and
substance, and request the board of directors to convene a meeting, with
clearly stated topics for discussion at the meeting. Within 10 days of
receiving the aforesaid written request, the board of directors shall reply in
writing on whether or not they agree to convene the meeting.
(2) Should the board of directors agree to convene the meeting, a notice for
convening such meeting shall be issued within 5 days after the board of
directors has passed the resolution. Prior approval for making amendment to
the original proposal contained in the notice shall be obtained from the
original proposer.
(3) Should the board of directors not agree to convene the meeting as proposed
by the independent directors, it shall state its reasons and issue an
announcement of the same.
(4) Should the board of directors not agree to convene the meeting as proposed
by the supervisory committee, or not provide any reply within 10 days upon
receipt of the said request, the board of directors is deemed to be unable to
perform or failed to perform its duties in respect of convening such meeting.
The supervisory committee may convene and preside over the meeting by itself.
The procedures for convening such meeting shall be identical to those employed
by the board of directors for
convening a meeting as far as practicable.
(5) Should the board of directors not agree to convene the meeting as proposed
by the shareholders, or not provide any reply within 10 days upon receipt of
the said request, the shareholders shall propose to the
supervisory committee in writing to convene the meeting.
Should the supervisory committee agree to convene the meeting, it shall issue
a notice for convening the meeting within 5 days upon receipt of the said
request. Prior approval for making amendment to the original
proposal
contained in the notice shall be obtained from the original proposer.
Should the supervisory committee not issue a notice for the meeting within the
stipulated period, the supervisory committee shall be deemed to not convene
and preside over such meeting and shareholders who separately or jointly hold
10% or more of the Company's shares for a consecutive 90 days or more may
convene and preside over the said meeting themselves (Prior to the
announcement of the resolutions adopted at the meeting, the shares held by the
convening shareholders shall not be less than 10% of the total number of
shares). The procedures for convening such meeting shall be identical to those
employed by the board of directors for convening a meeting as far as
practicable.
Should the supervisory committee or the shareholders convene and hold a
meeting by itself/themselves pursuant to the preceding paragraphs, it/they
shall inform the board of directors in writing, and file the same with the
relevant competent departments in accordance with the applicable requirements.
The board of directors and the secretary to the board of directors shall
provide assistance in connection with the meeting. The board of directors
shall provide the share register. The Company shall bear all reasonable costs
incurred by the
meeting.
Article 59 Where the Company convenes a shareholders' general meeting, the board of
directors, the supervisory committee and shareholders who separately or
jointly hold 3% or more of the shares of the Company may submit proposals to
the Company.
Shareholders who hold, separately or jointly, more than 3% of the Company's
shares can propose an extraordinary resolution in writing to the convenor 10
days prior to the shareholders' general meeting. Within 2 days after the
receipt of the extraordinary resolution, the convenor shall issue a
supplementary notice of the general meeting to announce the content of the
extraordinary resolution. If it is otherwise provided for under the listing
rules of the jurisdictions where the shares of the Company are listed, such
requirements shall also be complied
with.
With the exception of conditions mentioned above, the convener shall neither
amend the proposals specified on the notice of the shareholders' general
meeting, nor add any new proposals after the issuance of the notice of the
shareholders' general meeting.
Article 60 Matters for discussion and determination at a shareholder's general meeting
shall be determined in accordance with the Company Law and the Articles of
Association. The shareholders' general meeting may determine any matter
stipulated by the Articles of Association.
Issues not specified in the notice as provided for in Article 62 and Article
59 of the Articles of Association or proposals which do not conform with the
requirements contained in Article 61 of the Articles of Association shall not
be voted and resolved at the shareholders' general meetings.
Article 61 Motions tabled at the shareholders' general meeting shall be the specific
proposals relating to matters which should be discussed at shareholders'
general meeting. Motions tabled at a shareholders' general meeting shall
fulfil
the following conditions:
(1) the content of such motions shall not contravene the requirements
stipulated in the laws and regulations as well as in the Articles of
Association and shall fall within the scope of business of the Company and
within the functions and powers of the shareholders' general meeting;
(2) there shall also have a clear topic for discussion and specific
issues for resolution;
(3) all motions shall be presented to or served on the convenor in
writing.
Article 62 Where the Company convenes an annual general meeting, a written notice of the
meeting shall be given to the shareholders entitled to attend this general
meeting 20 days prior to the date of the meeting. Where the Company convenes
an extraordinary general meeting, a written notice of the meeting shall be
given to the shareholders entitled to attend this general meeting 15 days
prior to the date of the meeting.
If it is otherwise provided in the laws, administrative regulations, other
regulatory documents and the securities regulatory authorities or stock
exchanges in the jurisdictions where the shares of the Company are listed,
such requirements shall prevail.
Article 63 The notice of a shareholder's general meeting shall include the following
information:
(1) the time, the venue and the duration of the meeting;
(2) matters and proposals submitted to the meeting for consideration;
(3) contain a conspicuous statement that: all shareholders are entitled to
attend the shareholders' general meeting, and may appoint proxies in writing
to attend the meeting and vote on their behalf. A proxy need not
be a shareholder of the Company;
(4) the record date of shareholding for determining the entitlement of
shareholders to attend the shareholders' general meeting;
(5) the name and telephone number of the standing contact person for
meeting affairs;
(6) the voting time and voting procedures for online voting or other
means of voting.
Article 64 In the event that the election of directors and supervisors is to be discussed
at a shareholders' general meeting, the notice of the shareholders' general
meeting shall fully disclose the details of candidates for the directors and
supervisors in
accordance with the relevant requirements.
Article 65 Notice of shareholders' general meeting shall be served on the shareholders
(whether or not such shareholder is entitled to vote at the meeting), by way
of announcement or other ways provided in Article 212. Where a notice is
served by way of announcement, upon the publication of such announcement, all
relevant persons shall be deemed to have received the notice.
Article 66 When notice of a shareholders' general meeting is dispatched, the
shareholders' general meeting shall not be postponed or cancelled without
proper reasons and the proposals stated in the notice of the shareholders'
general meeting shall not be cancelled. In the event that the shareholders'
general meeting is postponed or cancelled, the convener shall make an
announcement at least two business days prior to the originally scheduled date
of convening the shareholders' general meeting and expatiate on the reasons.
Article 67 All ordinary shareholders registered on the record date of shareholding or
their proxies shall be entitled to attend the shareholders' general meeting
and exercise their voting rights in accordance with the relevant laws,
regulations
and these Articles of Association.
Article 68 Shareholders may attend the shareholders' general meeting in person or appoint
a proxy (whether or not such person is a shareholder) to attend and vote on
their behalf.
If the shareholder is the recognized clearing house defined by the applicable
listing rules or other securities laws and regulations, such shareholder is
entitled to appoint one or more persons as his proxies to attend on his behalf
at a general meeting, but, if one or more persons have such authority, the
letter of authorization shall contain the number and class of the shares in
connection with such authorization. Such person can exercise rights equivalent
to the rights of other shareholders of the Company on behalf of the recognized
clearing house (or its attorney), including the right to speak and to vote.
Article 69 The instrument appointing a proxy shall be in writing under the hand of the
appointor or his attorney duly authorized in writing, or if the appointor is a
legal entity, either under seal or under the hand of a director or a duly
authorized attorney. The letter of authorization shall contain the number of
the shares to be represented by the attorney. The letter of authorization
shall specify the number of shares to be represented by the attorney. If
several persons are authorized as the attorney of the shareholder, the letter
of authorization shall specify the number of shares to be represented by each
attorney.
Article 70 If the instrument appointing a voting proxy is signed by a person under a
power of attorney on behalf of the appointor, such power of attorney or other
authority shall be notarially certified. A notary certified copy of that power
of attorney or other authority shall, together with the instrument appointing
the voting proxy, be deposited at the premises of the Company or at such other
place as is specified for that purpose in the notice convening the meeting.
If the appointor is a legal person, its legal representative or such person as
is authorized by resolution of its board of directors or other governing body
may attend any meeting of shareholders of the Company as a representative of
the
appointor.
Article 71 The authorization letter issued by shareholders to appoint other persons to
attend the shareholders' general meeting shall clearly state the followings:
(1) the name of the proxy;
(2) whether the proxy has the right to vote;
(3) the respective instruction of voting "for", "against" or "abstain"
for each resolution in the agenda of the shareholders' general meeting;
(4) date of signing the proxy form and the effective period;
(5) signature (or seal) of the principal. If the principal is a
corporate shareholder, the seal of the corporate shall be affixed.
Such a form shall contain a statement that, in the absence of specific
instructions from the shareholder, specifies whether the proxy may vote as he
thinks fit.
Article 72 If an individual shareholder attends the meeting in person, he/she shall
present his/her identity card or other valid documents or certificates showing
his/her identity and the shareholding certificate. If an individual
shareholder appoints a proxy to attend the shareholders' general meeting, such
proxy shall present his/ her own identification documents and the power of
attorney signed by the appointor. Legal person shareholders shall be
represented at the meeting by the legal representative or the proxy appointed
by the legal representative. If the legal representative attends the meeting,
he/she shall present his/her identity card and a valid certificate proving
his/her qualification as a legal representative. If the legal representative
of a legal person shareholder appoints a proxy to attend the shareholders'
general meeting, such proxy shall present his/her own identification documents
and the power of attorney signed by the legal representative. If a person is
authorized by resolution to attend the shareholders' general meeting upon
resolutions at the board of directors of a legal person shareholder or other
decision making authority, such person shall present his/her own
identification documents and the written authorization issued upon resolution
by the board of directors of the legal person shareholder or other decision
making authority with the legal person seal affixed thereon. The letter of
authorization shall specify its date of issue.
Article 73 In the event that the Company's board of directors, independent directors,
shareholders who have satisfied certain conditions (which are determined based
on such standards as promulgated from time to time by the relevant competent
authorities) or investor protection institutions established in accordance
with laws and regulations publicly request the shareholders to entrust them to
exercise the proposal rights, voting rights and other shareholders' rights on
their behalf, the solicitor shall disclose the soliciting announcement and
relevant soliciting documents in accordance with the laws and regulations, and
the Company shall cooperate. Consideration or de facto consideration for
soliciting the shareholders' rights publicly is prohibited. Any person who
publicly solicits the shareholders of the Company to entrust him/ her to
exercise the proposal right, voting right and other shareholders' rights on
their behalf shall also comply with other provisions stipulated by the
relevant competent authorities and the stock exchanges on which the shares of
the Company are listed and traded.
Article 74 The Chairman of the board of directors shall preside over and chair every
shareholders' general meeting. If the Chairman is unable to or does not
perform his/her duties, the vice-chairman of the board of directors shall
preside over and chair the meeting. If the vice-chairman of the board of
directors is unable to or does not perform his/her duties, a director jointly
elected by more than half of the number of directors shall preside over and
chair the meeting. If more than half of the number of directors are unable to
elect a director to preside over and chair the meeting, then shareholders
present at the meeting may elect one (1) person to act as the chairman of the
meeting. If for any reason, the shareholders fail to elect a chairman, then
the shareholder (including a proxy) holding the largest number of shares
carrying the right to vote thereat shall be the chairman of the meeting.
A shareholders' general meeting convened by the supervisory committee on their
own shall be presided by the chairman of the supervisory committee. If the
chairman of the supervisory committee is unable to or does not perform his/her
duties, a supervisor jointly elected by more than half of the number of
supervisors shall preside over the said meeting.
Where the shareholders' general meeting is convened by the shareholders on
their own, the convener shall elect a representative to preside over the
meeting.
When convening a shareholders' general meeting, should the chairman of the
meeting violates the rules and procedures, resulting that the shareholders'
general meeting becomes unable to proceed, a person may, subject to the
consent of more than half of the number of shareholders with voting rights
attending the meeting at the scene, be elected at the shareholders' general
meeting to act as the chairman of the shareholders' general meeting such that
the meeting may be continued.
Article 75 At the annual general meeting, the board of directors and the supervisory
committee shall report to the shareholders' general meeting on their
respective
work over the past year.
Article 76 Prior to voting, the chairman of the meeting shall announce the number of
shareholders and proxies present at the meeting and the total number of voting
shares held by them. The number of shareholders and proxies present at the
meeting and the total number of voting shares held by them shall be subject to
registration of the meeting.
Article 77 The convener shall ensure that the shareholders' general meeting is held
continuously until a final resolution is formed. If the shareholders' general
meeting is suspended or no resolution can be made due to force majeure and
other special reasons, necessary measures shall be taken to resume the
shareholders' general meeting as soon as possible or to terminate this
shareholders' general meeting directly, and an announcement shall be made
promptly. At the same time, the convener shall report to the local office of
securities regulatory authority of the State Council and the stock exchange in
the locality of the Company.
Article 78 Resolutions of shareholders' general meetings shall be divided into ordinary
resolutions and special resolutions.
An ordinary resolution must be passed by votes representing more than half of
the voting rights represented by the shareholders (including proxies) present
at the meeting.
A special resolution must be passed by votes representing more than two-thirds
of the voting rights represented by the shareholders (including proxies)
present at the meeting.
Article 79 A shareholder (including a proxy), when voting at a shareholders' general
meeting, may exercise such voting rights as are attached to the number of
voting shares which he represents. Except otherwise provided for election of
directors in Article 102 and election of supervisors in Article 143 of these
Articles of Association in connection with the adoption of the cumulative
voting system, each share shall have one (1) vote. The shares held by the
Company itself shall not be attached with voting rights. Those shares shall
not be counted as the total number of voting shares held by shareholders
attending the shareholders' general meetings.
Where material issues affecting the interests of small and medium investors
are being considered in the shareholders' general meeting, the votes by small
and medium investors shall be counted separately. The separate counting
results shall be disclosed to the public in a timely manner.
Article 80 In the course of considering matters relating to connected transactions at a
shareholders' general meeting, the connected shareholders shall abstain from
voting. The number of shares carrying the voting rights held by such
shareholders shall be excluded from the total number of valid votes. The
voting result of the non-connected shareholders shall be fully disclosed in
the announcement of the resolution of the shareholders' general meeting.
The said connected shareholders means the following shareholders: shareholders
who are connected parties or, in case of non-connected parties, persons who
have material interests in transactions pending for resolution or their
associates pursuant to the applicable securities listing rules as amended from
time to time.
Article 81 Unless the Company is in a crisis or other special circumstances, it shall
not, without approval by a special resolution at a shareholders' general
meeting, enter into a contract to handover all or material business management
of the Company to a person other than a director, supervisor, president, vice
president and other senior officer.
Article 82 Except for the cumulative voting system, the shareholders' general meeting
shall vote on all proposals one by one, and if there are different proposals
on the same matter, they shall be voted in chronological order in which the
proposals are made. Except for force majeure and other special reasons that
cause the shareholders' general meeting to be suspended or unable to come to
resolution, the shareholders' general meeting shall not set aside the
proposals or withhold from voting.
Article 83 When a proposal is considered at a shareholders' general meeting, no amendment
shall be made to the proposal, otherwise, the relevant change shall be
regarded as a new proposal and cannot be voted on at this shareholders'
general meeting.
Article 84 Each voting right shall be exercised either at the meeting, by online voting
or any of other available means. In case of repeated voting on the same voting
right, the result of the first vote shall prevail.
Article 85 Before voting takes place on a proposal at a shareholders' general meeting,
two shareholders' representatives shall be elected to participate in vote
counting and scrutinizing. In the event that a shareholder is related to the
matter to be considered, the relevant shareholder and his/her proxy shall not
participate in the vote counting and scrutinizing.
When voting takes place on a proposal at a shareholders' general meeting,
lawyers, representatives of shareholders and supervisors shall be jointly
responsible for vote counting and scrutinizing, and shall announce the voting
results on the spot. The voting results of resolutions shall be recorded in
the minutes.
The shareholders of the Company or their proxies who cast votes by online
voting or other means shall be entitled to check their respective voting
results through corresponding voting systems.
Article 86 A shareholders' general meeting shall not conclude earlier at the venue than
over the network or otherwise. The chairman of the meeting shall announce the
voting details and result of every proposal and announce whether a proposal
has been passed or not based on the voting result.
Before the voting result is officially announced, the relevant parties
including the Company, counting officer, monitoring officer, substantial
shareholders and network service provider involved at the venue of the
shareholders' general meeting, over the network or otherwise shall be obliged
to keep the voting details confidential.
Article 87 A shareholder attending the shareholders' general meeting shall express its
opinion of "for", "against" or "abstain" on the proposal submitted for voting.
Where a shareholder is, under the applicable listing rules as amended from
time to time, required to abstain from voting on any particular resolution or
to vote only for or only against any particular resolution, any votes cast by
or on behalf of such shareholder in contravention of such requirement or
restriction shall not be counted.
Votes that are not filled in, incorrectly filled in, or not legible, or votes
that are not cast are considered to be abstention by the voter, and the result
of the vote on the number of shares held by such voter shall be counted as
"abstained".
Article 88 Any vote of shareholders at a shareholders' general meeting must be taken by
poll except where the chairman of the meeting, in good faith, decides to allow
a resolution which relates purely to a procedural or administrative matter to
be
voted on by a show of hands.
Article 89 The following matters shall be resolved by an ordinary resolution at a
shareholders' general meeting:
(1) work reports of the board of directors and the supervisory
committee;
(2) profit distribution plans and loss recovery plans formulated by
the board of directors;
(3) election or removal of members of the board of directors and
members of the supervisory committee, their remuneration and manner of
payment;
(4) annual preliminary and final budgets, balance sheets and profit
and loss accounts and other financial statements of the Company;
(5) the appointment, removal or non-reappointment of an accounting
firm;
(6) matters other than those which are required by the laws and administrative
regulations or by the Company's Articles of Association to be adopted by
special resolution.
Article 90 The following matters shall be resolved by a special resolution at a
shareholders' general meeting:
(1) the increase or reduction in share capital and the issue of shares
of any class, warrants and other similar securities;
(2) the issue of debentures of the Company;
(3) the demerger, spin-off, merger, dissolution and liquidation or
change of the form of the Company;
(4) amendment of the Articles of Association;
(5) the material purchase or sale of assets or the provision of guarantee by
the Company during the year that is in excess of 30% of the most recent
audited total assets value of the Company;
(6) the shares incentive program;
(7) any other matter as provided for by the laws, administrative regulations
or the Articles of Association, and as considered by the shareholders at a
shareholders' general meeting, and resolved by way of an ordinary resolution,
which is of a nature which may have a material impact on the Company and
should be adopted by special resolution.
Article 91 Any resolution adopted by a shareholders' general meeting shall comply with
relevant provisions of PRC laws, administrative regulations and these Articles
of Association.
Article 92 The Company shall make a public announcement on the resolutions of the
shareholders' general meeting in accordance with the applicable laws and the
relevant provisions stipulated by the stock exchange(s) on which the shares of
the Company are listed and traded.
Article 93 If the chairman of the meeting has any doubt as to the result of a resolution
which has been put to vote at a shareholders' meeting, he may have the votes
counted. If the chairman of the meeting has not counted the votes, any
shareholder who is present in person or by proxy and who objects to the result
announced by the chairman of the meeting may, immediately after the
declaration of the result, demand that the votes be counted and the chairman
of the meeting shall have the votes counted immediately.
Article 94 If votes are counted at a shareholders' general meeting, the result of the
count shall be recorded in the minute book.
The convenor shall ensure that the particulars included in the record of the
meeting are true, accurate and complete. The Company secretary shall make the
record of the shareholders' general meeting, which shall be signed by the
person presiding the meeting (chairman of the meeting), directors,
supervisors, board secretary and convenor attending the meeting or their
representatives.
Resolutions adopted by a shareholders' general meeting shall be included in
the record of the meeting. The record of the meeting shall be in Chinese. Such
record, shareholders' attendance lists and proxy forms shall be kept at the
Company's place of residence for a period of not less than 10 years.
Article 95 Copies of the minutes of proceedings of any shareholders' meeting shall,
during business hours of the Company, be open for inspection by any
shareholder without charge. If a shareholder requests for a copy of such
minutes from the Company, the Company shall send a copy of such minutes to him
within seven (7) days after receipt of reasonable fees therefor.
CHAPTER 9: THE PARTY COMMITTEE
Article 96 According to the requirements of the Constitution of the Communist Party of
China and subject to the approval by upper Party organization, the Company
shall establish the Chinese Communist Party Committee of Air China Limited.
The Party Committee is comprised of one secretary and several other members,
and shall establish the Commission for Discipline Inspection of the Party in
accordance with the requirements.
Article 97 The Party Committee of the Company shall play a leading role, set the right
direction, keep in mind the big picture, ensure the implementation of Party
policies and principles, discuss and decide on major issues of the Company in
accordance with the regulations. Decisions relating to major operation and
management matters shall be made in accordance with relevant regulations by
the board of directors or the management after the pre-study and discussion by
the Party Committee. The main duties of the Party Committee are as follows:
(1) to enhance the political building of the Party in the Company, adhere to
and implement the fundamental system, basic system and important system of
socialism with Chinese characteristics, educate and guide all Party members to
closely align with the Party Central Committee with Comrade Xi Jinping at its
core in terms of political stance, direction, principles and path;
(2) to thoroughly study and implement Xi Jinping Thought on Socialism with
Chinese Characteristics for a New Era, study and propagate the Party's theory,
thoroughly implement the Party's line, principles and policies, supervise and
guarantee the implementation of major strategy deployments of the Party
Central Committee and the resolutions of the Party organization at a higher
level in the Company;
(3) to investigate and discuss major issues relating to the operation and
management of the Company and support the board of directors and the
management in exercising their powers and performing their duties in
accordance with the laws;
(4) to strengthen the leadership and gatekeeping role in the process of
selection and appointment of personnel of the Company, and enhance the
building of the leadership team, the cadre team and the talent team of the
Company;
(5) to undertake the main responsibility in improving Party conduct and
upholding integrity, lead and support the internal discipline inspection
committee to discharge its supervisory and disciplining responsibilities as
well as exercise strict administrative discipline and political rules and
promote Party self- governance exercised fully and with right into the
grassroots level;
(6) to strengthen the building of primary- level Party organizations and of
its contingent of Party members, unite and lead employees to devote themselves
into the reform and development of the Company;
(7) to lead the Company's ideological and political work, the spirit and
civilization progress, the United Front work and lead the mass organizations
such as the Labour Union, the Communist Youth League
and the Women's Organization of the Company.
Article 98 By insisting on and improving the leadership mechanism of "Dual Entry and
Cross Appointment", eligible members of the Party Committee may take seats in
the board of directors and the management through statutory procedures, while
eligible members of the board of directors and the management who are also
Party members may take seats in the Party Committee in accordance with
relevant requirements and procedures.
Generally, the position of the secretary of the Party Committee and the
chairman of the board of directors shall be assumed by the same person. The
president who is a Party member shall serve as the deputy secretary of the
Party Committee. The full-time deputy secretary should generally take seat in
the board of directors and hold no positions in the management.
CHAPTER 10: BOARD OF DIRECTORS
Article 99 The Company shall have a board of directors. The board of directors shall
consist of 7 to 13 directors, at least half of which shall be outside
directors (those who do not assume any position within the Company), and of
which at least 1/3 of the overall directors shall be independent directors. At
least one independent director shall have appropriate professional
qualification, or expertise in accounting or related financial management; the
board of directors shall have one (1) employee representative director.
The board of directors shall have one (1) Chairman and one (1) Deputy
Chairman.
An independent director refers to a director who does not hold any position
other than a director in the Company and has no direct or indirect interest
relationship with the Company, its substantial shareholders and actual
controllers, or any other relationship that may affect his independent and
objective judgment.
Article 100 Directors (excluding the employee representative director) shall be elected or
replaced at the shareholders' general meeting and the employee representative
director shall be elected or dismissed by the employee representative meeting
each for a term of 3 years (starting from the election date to the date on
which a new board of directors is elected at a shareholders' general meeting).
At the expiry of a director's term, the term is renewable upon re-election,
provided that the term of reappointment of an independent director shall not
be more than 6 years.
If the term of office of a director expires but re-election is not made
promptly, the said director shall continue fulfilling the duties as director
pursuant to relevant laws, administrative regulations, departmental rules and
the Articles of
Association until a new director is elected.
The list of candidates for the director (excluding the employee representative
director) shall be submitted in form of a motion to a shareholders' general
meeting for consideration. Candidates other than those for independent
directors and the employee representative director shall be nominated by the
board of directors, supervisory committee or shareholder(s) holding, alone or
together, more than three percent (3%) of the total amount of voting shares in
the Company and elected at the shareholders' general meeting.
A written notice of the intention to propose a person for election as a
director (excluding the employee representative director) and a notice in
writing by that person indicating his acceptance of such election shall have
been given to the Company seven (7) days before the date of such shareholders'
general meeting. The shortest notice period for such written notice shall be 7
days.
The outside directors shall have sufficient time and necessary knowledge and
ability to perform its duties. When an outside director performs his duties,
the Company must provide necessary information and independent directors may
directly report to the shareholders' meeting, the authority in charge of
securities of the State Council and other relevant departments thereon.
If a director is a natural person, he or she may not be required to hold
shares in the Company.
Article 101 The following procedures shall be carried out prior to the election of the
non- independent directors:
(1) The nominator of a candidate for the non-independent directors shall
seek the consent of such candidate prior to nomination and shall have a full
understanding towards the profession, education, job position, detailed
working experience and all other positions held concurrently as well as
preparing written materials containing the said information to the Company.
Candidates shall undertake to the Company in writing that they have agreed to
accept the nomination and that all disclosed information relating to them are
true and complete and shall guarantee that they will conscientiously perform
the director's responsibilities after being elected.
(2) If the nomination of a candidate for the non-independent directors is
taken place before the board meeting of the Company was convened and if the
applicable laws, regulations, other regulatory documents and/or the relevant
regulatory authorities of the jurisdictions where the shares are listed and
the listing rules contain relevant provisions, the written materials
concerning the nominee set out in sub-paragraph (1) of this Article shall be
publicly announced together with the resolutions of the
board meeting in accordance with such provisions.
(3) If a shareholder holding, alone or together, more than three percent
(3%) of the total voting shares of the Company proposes an ex tempore motion
on the election of non-independent directors (excluding the employee
representative director) at the shareholders' general meeting of the Company,
the written notice specifying the intention to propose a person for election
as a director and the willingness of the nominee to accept nomination together
with the written materials and undertakings containing such particulars of the
nominee as set out in sub- paragraph
(1) of this Article shall be despatched to the Company within ten (10) days
prior to the shareholders' general meeting. Such notice shall commence no
earlier than the day after the despatch of the notice of the meeting for
election of directors and end no later than seven (7) days prior to the date
of such meeting.
Article 102 At a shareholders' general meeting, the cumulative voting system shall be
adopted for voting on the motions for election of directors (excluding the
employee representative director). In other words, when electing two or more
directors at a shareholders' general meeting, the number of voting rights
carried by each of the shares held by a voting shareholder is the same as the
number of directors to be elected such that a shareholder may exercise the
voting rights in a way to concentrate all his votes on a particular candidate
or
to spread his votes on several candidates.
Article 103 The Chairman and the deputy Chairmen shall be elected and removed by more than
one-half of all members of the board of directors. The term of office of each
of the Chairman and the deputy chairmen shall be 3 years, which term is
renewable upon re-election.
Article 104 The board of directors shall make inquiries with the Party committee before
making decisions on major issues of the Company.
Article 105 The board of directors is responsible to the shareholders' general meeting for
formulating strategies, making decisions and preventing risks and shall
exercise the following duties and powers in accordance with
statutory
procedures and the Articles of Association:
(1) to be responsible for the convening of the shareholders' general
meeting and to report on its work to the shareholders in general meetings;
(2) to implement the resolutions passed by the shareholders in general
meetings;
(3) to determine the Company's business plans and investment
proposals;
(4) to formulate the Company's preliminary and final annual financial
budgets;
(5) to formulate the Company's profit distribution proposal and loss
recovery proposal;
(6) to formulate proposals for the increase or reduction of the
Company's registered capital and for the issuance of the Company's debentures;
(7) to draw up the Company's proposals for the merger, division,
dissolution or change of the form of the Company;
(8) to decide on other issues relating to the provision of guarantee in
favor of a third party other than those must be approved at a shareholders'
general meeting pursuant to the laws, regulations, other regulatory documents
and these Articles of Association;
(9) to decide on the external investments, purchase and sale of assets,
creation of mortgage over assets, entrusted asset management, connected
transactions, external donations and other matters within the scope of
authorization conferred by the shareholders' general meeting;
(10) to decide on the Company's internal management structure;
(11) to appoint or dismiss the president of the Company, secretary to the
board of directors, conduct appraisal on their performance and determine
remunerations; and to appoint or dismiss, with reference to the nomination by
the president, the vice presidents, chief accountant, chief pilot, general
legal counsel and other senior officers, conduct appraisal on their
performance and determine remunerations;
(12) to formulate the basic management structure of the Company;
(13) to manage matters relating to the disclosure of information by the
Company;
(14) to make recommendations to the shareholders' general meetings on the
appointment or change of the accounting firm which performs the audit work for
the Company;
(15) to hear from the Company's president reports on work performed and to
inspect the work of the president;
(16) to formulate proposals for any amendment of the Company's Articles of
Association;
(17) to determine the risk management system, the internal control system
and
the legal compliance management system of the Company, and monitor the
relevant systems and their implementation;
(18) to guide, inspect and assess the internal audit works and approve the
annual audit plan and important audit reports pursuant to laws;
(19) to promote the development of corporate governance and supervise the
legality of the operation of the management;
(20) to exercise any other powers stipulated by laws, regulations, other
regulatory documents and these Articles of Association and conferred by the
shareholders in general meetings.
Resolutions by the board of directors on matters referred to in the preceding
paragraph may be passed by the affirmative vote of more than half of the
directors (amongst which resolution on matters referred to in sub-paragraph
(8) shall require the affirmative vote of more than two-thirds of the
directors present at the board meeting) with the exception of resolutions on
matters referred to in subparagraphs (6), (7) and (16) which
shall require the
affirmative vote of more than two-thirds of all the directors.
If any director is connected with the enterprises that are involved in the
matters to be resolved by the board meetings, he shall not exercise his voting
rights for such matters, nor shall he exercise voting rights on behalf of
other directors. Such board meetings shall be convened by a majority of the
directors present thereat who are not connected. Resolutions made by the board
meetings shall be passed by a majority of the directors that are not
connected. The aforementioned matters that must be passed by two-thirds or
more of the directors shall be passed by votes of two-thirds or more of the
directors that are not connected. If the number of non-connected directors
attending the board meetings falls short of three, such matters shall be
submitted to the shareholders' general meeting of the Company for approval.
Resolutions made by the board of directors on the Company's connected
transactions shall come into effect only after they are signed by the
independent directors.
Article 106 The Chairman of the board of directors and the president may exercise part of
the functions and powers of the board of directors upon authorization by the
board of directors. The authorization by the board of directors and the
exercise of the authorized functions and powers by the authorized person shall
comply with the relevant regulations of the Measures for Authorization
Management, which is formulated by the board of directors.
Article 107 The board of directors shall not, without the prior approval of shareholders
in a general meeting, dispose of or agree to dispose of any fixed assets of
the Company where the estimated value of the consideration for the proposed
disposal and the value of the consideration for any such disposal of any fixed
assets of the Company that has been completed in the period of 4 months
immediately preceding the proposed disposal, on an aggregate basis exceeds 33%
of the value of the Company's fixed assets as shown in the latest balance
sheet which was considered at a shareholders' general meeting.
For the purposes of this Article, "disposition" includes an act involving the
transfer of an interest in assets but does not include the usage of fixed
assets for the provision of security.
The validity of a disposition by the Company shall not be affected by any
breach of the first paragraph of this Article.
Before the board of directors makes a decision on market development, merger
and acquisition, investment in new areas, etc., in relation to projects
involving investment or acquisition or merger exceeding a certain proportion
(to be determined by shareholders' meeting) of the total assets of the
Company, an independent consulting agency shall be engaged to provide
professional opinions which shall be an important basis of the decisions of
the board of
directors.
Article 108 Unless otherwise provided for in the laws, regulations, other regulatory
documents and/or the relevant requirements of regulatory authorities of the
jurisdictions where the shares are listed and the listing rules, the board of
directors shall, within the scope of authority as conferred by the
shareholders' general meeting, have the right to decide on an investment
(including risk investment) or acquisition project. For any major investment
or acquisition project which is beyond the limits of authority of the board of
directors to examine and approve thereof, the board of directors shall
organize the relevant experts and professionals to conduct an evaluation
thereof and report the same to the shareholders' general meeting for approval.
Article 109 The board of directors may establish the strategy and investment committee,
the audit and risk management committee (the supervision committee), the
nomination committee, the remuneration and appraisal committee, the aviation
safety committee and other special committees. The members' composition,
duties and responsibilities, and procedures of each special committee of the
board of directors are specifically determined according to the terms of
reference of each special committee, which are drawn up by the board of
directors.
Article 110 The Chairman of the board of directors shall exercise the following powers:
(1) to preside over shareholders' general meetings and to convene and
preside over meetings of the board of directors;
(2) to check on the implementation of resolutions passed by the board
of directors at directors' meetings;
(3) to sign the securities certificates issued by the Company;
(4) to sign important documents of the board of directors and other documents
that shall be signed by the legal representative of the Company;
(5) to exercise the authorities of legal representative;
(6) to receive reports on operation and management and study related
issues;
(7) to manage the internal audit of the Company as the primary
responsible person for internal audit work;
(8) in the event of emergency due to force majeure or major crisis that
makes it impossible to convene a board meeting in a timely manner, to exercise
special disposal powers within the authority of the board of directors in
accordance with laws and regulations and in the interests of the Company, and
to report to the board of directors after exercising such power so as to
ratify the same in accordance with the procedures;
(9) to exercise other powers conferred by the board of directors.
The vice chairman of the board of directors shall assist the chairman of the
board of directors with his/her duties. Should the chairman of the board of
directors be unable to perform or fail to perform his/her duties, the vice
chairman of the board of directors shall perform the said duties. Should the
vice chairman of the board of directors be unable to perform or fail to
perform his/her duties, a director jointly elected by more than half of the
number of Directors shall perform the said duties.
Article 111 Meetings of the board of directors shall be held at least four times every
year and shall be convened by the Chairman of the board of directors. All
directors and supervisors shall be notified of the meeting fourteen days
beforehand. The
notice of the board meetings shall contain:
(1) date, venue and duration of the meeting;
(2) reasons and matters for discussion;
(3) date of issuance of the notice.
Extraordinary meeting of the board of directors shall be convened by the
Chairman within ten days of the occurrence of any of the following events and
shall not be subject to the abovementioned period of notice:
(1) where shareholders representing more than 10% of the voting rights
propose to do so;
(2) where the chairman of the board of directors deems it necessary;
(3) where one-third or more of the directors jointly propose to do so;
(4) where one half or more of the independent directors jointly
propose to do so;
(5) where the supervisory committee proposes to do so;
(6) where the president proposes to do so;
(7) where the securities regulatory authority requires to do so; and
(8) where other circumstances specified in the Articles of Association
of the Company occur.
The meetings of the board of directors shall be conducted in Chinese and where
necessary, may have an interpreter to provide Chinese and English translation
during the meetings.
Article 112 The notice of board meeting shall be issued via the following methods:
(1) For periodic meetings of the board of directors of which the time and
venue have been stipulated by the board of directors beforehand, no notice of
the convening of such meetings will be needed.
(2) For meetings of the board of directors of which the time, venue and
agenda have not been decided by the board of directors beforehand, the
secretary of the board of directors shall notify the directors and supervisors
of the time and venue of such meeting at least 14 days in advance by telex, by
telegram, by facsimile, by express service or by registered mail or in person
or by email, unless otherwise provided for in
Article 111 herein.
(3) Notice of meetings may be served in Chinese, with an English
translation
attached thereto when necessary. A director may waive his right to receive
notice of a board meeting.
Article 113 All directors must be notified about the important matters that shall be
decided by the board of directors within the time limit stipulated in Article
112 of these Articles of Association and sufficient materials shall be
provided at the same time in strict compliance with the required procedures.
Directors may request for supplementary information. If more than one-fourth
of the directors or more than two outside directors consider that the
materials provided are not sufficient or supporting arguments are not clear,
they may jointly propose to postpone the board meeting or postpone the
discussion of certain matters on the agenda of the board meeting and the board
of directors shall accept such proposal.
Notice of a meeting shall be deemed to have been given to any director who
attends the meeting without protesting against, before or at its commencement,
any lack of notice.
In principle, the board meetings shall be convened in the form of on-site
meetings. When the directors have sufficient information to vote, they may
also pass the resolution by forms of communication such as video conference
and teleconference, or a combination of onsite meeting and other forms of
communication or present such information in writing to be considered
separately as a written resolution. If a board meeting is held in the form of
a teleconference, with the aid of similar communication equipment or a
combination of onsite meeting and the afore-mentioned forms of communication,
so long as the directors participating in the meeting can clearly hear and
communicate with each other, they shall be deemed to be present in person at
the meeting.
Article 114 A board of directors meeting shall only be convened if a majority of the
number of the board members are present (including any directors appointed
pursuant to Article 115 of these Articles of Association to attend the meeting
as the representatives of other directors). Each director has one vote. Any
resolution requires the affirmative votes of more than half of all the board
of directors in order to be passed.
Article 115 Directors shall attend the meetings of the board of directors in person. Where
a director is unable to attend a meeting for any reason, he may by a written
power of attorney appoint another director to attend the board meeting on his
behalf. The power of attorney shall set out the names of the proxies, the
matters to be dealt with by the agents, the scope of the authorization and the
effective term thereof. The powers of attorney shall be signed or sealed by
the
principals.
A Director appointed as the representative of another director to attend the
meeting shall exercise the rights of a director within the scope of authority
conferred by the appointing director. Where a director is unable to attend a
meeting of the board of directors and has not appointed a representative to
attend the meeting on his behalf, he shall be deemed to have waived his right
to vote at the meeting.
Expenses incurred by a director for attending a meeting of the board of
directors shall be paid by the Company. These expenses include the costs of
transportation between the premises of the director and the venue of the
meeting in different cities and accommodation expenses during the meeting.
Rent of the meeting place, local transportation costs and other reasonable
out- of-pocket expenses shall be paid by the Company.
Article 116 The board of directors may accept a written resolution in lieu of a board
meeting provided that a draft of such written resolution shall be delivered to
each director in person, by mail, by telegram, by facsimile or by email. If
the board of directors has delivered such proposed written resolution to all
the directors and the directors who signed and approved such resolution have
reached the required quorum, and the same have been delivered to the secretary
of the board of directors, then such resolution shall take effect as a
resolution of the board meeting, without having to hold a board meeting.
Article 117 The board of directors shall keep minutes of resolutions passed at meetings of
the board of directors in Chinese. The directors attending the board meeting
shall have the right to request to have the descriptive information on their
speech given thereat to be recorded in the minutes. Opinions of the
independent (non-executive) directors shall be clearly stated in the
resolutions of the board of directors. The minutes of each board meeting shall
be provided to all the directors promptly. Directors who wish to amend or
supplement the minutes shall submit the proposed amendments to the Chairman in
writing within one week after receipt of the meeting minutes. The minutes
shall be signed by the directors present at the meeting and the person who
recorded the minutes after they are finalised. The minutes of board meetings
shall be kept at the premises of the Company in the PRC and a complete copy of
the minutes shall be promptly sent to each director. Documents of meetings
shall be kept as permanent records.
Article 118 Where a written resolution is reached in the absence of the statutory
procedures but has been signed by the directors, even if each director has
expressed his/her view in different ways, such resolution of the board meeting
shall have no legal effect.
If a resolution of the meeting of the board of directors violates the laws,
regulations, other regulatory documents, the Company's Articles of Association
and resolutions of shareholders' general meetings, the directors who
participated in the passing of such resolution shall be directly liable
therefor. However, if it can be proven that a director had expressly objected
to the resolution when the resolution was voted on, and that such objection
was recorded in the minutes of the meeting, such director may be released from
such liability. A director who abstained from voting or was absence from the
meeting without appointing a proxy to attend on his or her behalf may not be
released from such liability. A director who had expressly objected to the
resolution during discussion but had not clearly vote against such motion may
not be released from such liability.
Article 119 Subject to all relevant laws and administrative regulations, the shareholders'
general meeting may remove any director (excluding the employee representative
director) by an ordinary resolution before the expiration of his term of
office. However, the director's right to claim for damages arising from his
removal shall not be affected thereby.
Article 120 A director may resign prior to the expiration of his term of office. If a
director resigns from his office, he shall submit a written report of his
resignation to the board of directors. Independent directors shall provide an
explanation on the circumstances which are relevant to his resignation and
which in his opinion are necessary to bring to the attention of the
shareholders and creditors of the Company.
If the resignation of a director will result in the board of directors of the
Company having less than the statutory minimum number of directors, then such
director's report of resignation shall only become effective after a new
independent director has been appointed to fill the vacancy so caused by his
resignation. The Company shall convene an ad hoc meeting or employee
representative meeting as soon as possible to elect a director to fill up the
vacancy arising from the resignation of the director. Before a decision is
made at the shareholders' general meeting or the employee representative
meeting regarding the election of the director, the functions and powers of
the resigning director and the remaining board of director shall be restricted
to a reasonable extent.
If the resignation of an independent director will result in the board of
directors of the Company or its special committees having less than the
minimum required proportion of independent directors as required by the
relevant laws and regulations or the Articles of Association or result in lack
of accounting professionals among the independent directors, then such
independent director's report of resignation shall only become effective after
a new independent director has been appointed to fill the vacancy so caused by
his resignation.
Other than conditions aforementioned, the resignation of director shall be
effective upon the delivery of its resignation report to the board of
directors.
CHAPTER 11: INDEPENDENT DIRECTORS
Article 121 Candidates for the independent directors shall be nominated by the board of
directors, supervisory committee or shareholder(s) holding, whether alone or
together, one percent (1%) or more of the total amount of voting shares in the
Company and elected at shareholders' general meeting. The investor protection
institution established according to laws may publicly request the
shareholders to entrust it to exercise the right to nominate independent
directors on their
behalf.
(1) The nominator of a candidate for the independent directors shall seek the
consent of such candidate prior to nomination and shall have a full
understanding towards the profession, education, job position, detailed
working experience and all other positions held concurrently, and whether
there is any gross dishonesty or other adverse records as well as preparing
written materials containing the said information to the Company. Candidates
shall undertake to the Company in writing that they have agreed to accept the
nomination and that all disclosed information relating to them are true and
complete and shall guarantee that they will conscientiously perform the
director's responsibilities when elected.
(2) The nominator shall provide his opinion in connection with the
qualification and independency of such nominees for acting as an independent
director. If the applicable laws, regulations, other regulatory documents
and/or the relevant listing rules contain the relevant provisions, the nominee
shall make a public statement in accordance with such provisions that there
does not exist any relationship between himself and the Company which may
influence his independent objective judgement.
(3) If the nomination of a candidate for the independent directors is taken
place before the board meeting of the Company is convened and if the
applicable laws, regulations, other regulatory documents and/or the relevant
listing rules contain the relevant provisions, the written materials
concerning the nominee set out in subparagraphs (1) and (2) of this Article
shall be publicly announced together with the resolutions of the board meeting
in accordance with such provisions.
(4) If a shareholder holding, alone or together, more than 3% of the voting
right of the Company or the supervisory committee proposes an ex tempore
motion on the election of non-independent directors, the written notice
specifying the intention to propose a person for election as a director and
the willingness of the nominee to accept nomination together with the written
materials and undertakings containing such particulars of the nominee as set
out in subparagraphs (1) and (2) of this Article shall be despatched to the
Company within ten (10) days prior to the shareholders' general meeting.
(5) Before a general meeting of shareholders is convened to elect independent
directors, if the applicable laws, regulations, other regulatory documents
and/or the relevant listing rules contain the relevant provisions, the Company
shall in accordance with such provisions submit relevant materials regarding
all nominees to the authority in charge of securities of the State Council
and/or its local residence office and the stock exchanges on which the
Company's shares are listed. If the board of directors of the Company objects
to the qualifications of the nominees, a written opinion of the board of
directors in connection therewith shall also be submitted at the same time. If
the authority in charge of securities of the State Council has an objection to
a nominee, such nominee shall not qualify to be a candidate for election as an
independent director. When convening a shareholders' general meeting to elect
independent directors, the board of directors of the Company shall explain
whether or not the authority in charge of securities of the State Council had
any objection to any of the candidates for independent directors.
Article 122 A person acting as an independent director shall fulfil the following basic
requirements:
(1) he or she shall possess the qualifications to act as the director
of the
Company in accordance the relevant requirements of laws, regulations and other
regulatory documents;
(2) he or she conforms with independence required by the relevant
laws, regulations, other regulatory documents and the listing rules;
(3) he or she possesses the basic knowledge of operation of a listed company
and is familiar with relevant laws and administrative regulations as well as
rules and regulations (including but not limited to the accounting
principles);
(4) he or she shall have not less than 5 years experience in law, accounting,
economics or other working experience necessary for performing duties of an
independent director;
(5) he or she shall have good character traits and shall not have any
gross dishonesty or other adverse records;
(6) he or she shall fulfil other conditions as provided for in these
Articles of Association.
Article 123 Independent directors shall have independence. Unless otherwise required by
the relevant laws, regulations, other regulatory documents and/or the relevant
listing rules, none of the following persons shall act as independent
directors:
(1) persons working in the Company or its subsidiaries, as well as their
direct family members or major social relations (in which direct family
members refer to their spouses, parents and children etc.; and major social
relations refer to siblings, parents-in-law, sons or daughters-in-law, spouses
of their siblings and siblings of their spouses etc.);
(2) natural person shareholders as well as their direct family members who
directly or indirectly hold not less than one percent (1%) of the issued
shares of the Company or who are ranked as the top ten shareholders of
the Company;
(3) persons as well as their direct family members who work in entities
which are such shareholders of the Company directly or indirectly holding not
less than five percent (5%) of the shares of the Company in issue or which are
ranked as the top five shareholders of the Company;
(4) persons as well as their direct family members
who work in the
subsidiary of the Company's controlling shareholder and actual
controller;
(5) persons who have material business transactions with the Company and its
controlling shareholders, actual controllers or their respective subsidiaries,
or persons who hold positions in such entities and their controlling
shareholders or actual controllers that have material business transactions
with the same;
(6) persons who provide financial, legal, consulting, recommendation and
other services for the Company, its controlling shareholders, actual
controllers or their respective subsidiaries, including but not limited to all
personnel of the project team, reviewers at all levels, personnel signing the
report, partners, directors, senior officers and principal responsible persons
of the intermediary institutions providing services;
(7) persons who have satisfied the conditions stated in sub-paragraph
(1) to sub-paragraph (6) in the last 12 months;
(8) persons who are determined by the authority in charge of
securities to be unqualified to act as independent directors.
The subsidiaries of the controlling shareholders and actual controllers of the
Company mentioned in preceding subparagraphs (4) to (6) do not include the
enterprises controlled by the same state-owned assets management institution
as the Company and not forming a connected relationship with the Company
according to relevant regulations.
Independent directors shall conduct self-examination on their independence
every year and submit the self-examination results to the board of directors.
The board of directors shall evaluate the independence of the independent
directors in office and issue special opinions every year, which shall be
disclosed together with the annual report.
Article 124 If an independent director fails to attend two consecutive board meetings in
person and to appoint other independent directors to attend on his/her behalf,
the board of directors shall propose at the shareholders' general meeting that
such independent director should be removed. Where an independent director is
removed from office prior to the expiration of his/her term of office by the
Company through statutory procedures, the Company shall make special
disclosure. The removed independent director may make a public statement if
he believes that he has been improperly removed from his office.
Article 125 Independent directors shall perform the following duties:
(1) to participate in the decision-making of the board of directors
and express clear opinions on the matters discussed;
(2) to supervise the potential material conflicts of interest between the
Company and its controlling shareholders, actual controllers, directors and
senior officers in accordance with the relevant provisions of the Measures for
the Administration of Independent Directors of Listed Companies, so as to
ensure that the decisions of the board of directors are in line with the
overall interests of the Company and protect the legitimate rights and
interests of minority shareholders;
(3) to provide professional and objective suggestions on the operation
and development of the Company, and promote the improvement of the
decision-making level of the board of directors;
(4) other duties as stipulated by laws, regulations and the Articles
of Association.
Article 126 Apart from such powers as conferred on a director under the Company Law and
other relevant laws, regulations, other regulatory documents and the Articles
of Association, an independent director shall also have the following special
functions and powers:
(1) to independently engage an intermediary to audit, consult on or
verify specific matters of the Company;
(2) to propose to the board of directors to convene an extraordinary
general meeting;
(3) to propose to convene a board meeting;
(4) to publicly solicit shareholders' rights from shareholders
according to laws;
(5) to express independent opinions on matters that may damage the
rights and interests of the Company or minority shareholders;
(6) other functions and powers as stipulated by laws, regulations and
the Articles of Association.
An independent director shall obtain the consent from more than half of all
independent directors in the case of exercising his/her functions as described
in preceding sub-paragraphs (1) to (3).
If an independent director exercises the functions and powers as described in
the sub-paragraph (1) of this Article, the Company shall timely disclose the
same. If the aforesaid functions and powers cannot be normally exercised, the
Company shall disclose the specific circumstances and reasons.
Article 127 The following matters shall be submitted to the board of directors for
consideration after being approved by more than half of all independent
directors:
(1) connected transactions that should be disclosed;
(2) changes in or waivers of commitments by the Company and related
parties;
(3) the decisions made and measures taken by the board of directors of
the acquired company in connection with the acquisition;
(4) other matters as stipulated by laws, regulations and the Articles
of Association.
Article 128 The independent directors shall hold special meetings on a regular or
irregular basis, and the matters as described in sub-paragraphs (1) to (3) of
paragraph 1 of Article 126 and Article 127 of these Articles of Association
shall be
considered at special meetings of independent directors.
The special meeting of independent directors may study and discuss other
matters of the Company as required.
The special meeting of independent directors shall be convened and presided
over by an independent director jointly recommended by more than half of the
independent directors; if the convener does not perform his duties or is
unable to perform his duties, two or more independent directors may convene
the meeting and elect a representative to preside over the meeting on their
own.
The Company shall provide convenience and support for the convening of special
meetings of independent directors.
Article 129 Independent directors shall submit an annual working report to the
shareholders' general meeting to give an account of the performance of their
duties.
CHAPTER 12: SECRETARY OF THE BOARD OF DIRECTORS
Article 130 The Company shall have one (1) secretary of the board of directors. The
secretary shall be a senior officer of the Company.
The board of directors shall establish a secretariat of the board of
directors.
Article 131 The secretary of the Company's board of directors shall be a natural person
who has the requisite professional knowledge and experience, and shall be
appointed by the board of directors.
The main tasks and duties of the secretary of the board of directors include:
(1) assist the board of directors of the Company to strengthen the development
of modern enterprise system and corporate governance mechanism with Chinese
characteristics, organize research on corporate governance and organize the
formulation of rules and regulations in relation to corporate governance;
(2) to organize the implementation of the corporate governance system
and manage the relevant affairs;
(3) assist the directors in the day-to-day work of the board of directors,
continuously provide the directors with, advise the directors of and ensure
that the directors understand the regulations, policies and requirements of
the foreign and domestic regulatory authorities on the operation of the
Company, assist the directors and the president in effectively complying with
relevant foreign and domestic laws, regulations, the Company's Articles of
Association and other relevant
regulations;
(4) responsible for the organization and preparation of documents for board
meetings and shareholders' meetings, take proper meeting minutes, ensure that
the resolutions passed at the meetings comply with statutory procedures and
supervise the implementation of the resolutions of the board of directors;
(5) responsible for the organization and coordination of
information
disclosure, coordinate the relationship with investors and enhance
transparency of the Company;
(6) participate in arranging of financing through capital markets;
(7) deal with intermediaries, regulatory authorities and media,
maintain good public relations work;
(8) assist the Chairman in formulating major proposals, establishing
or amending various rules and regulations for the operation of the board of
directors;
(9) execute other tasks assigned by the board of directors or the
chairman of the board of directors;
(10) other duties as stipulated by laws, regulations, other
regulatory documents (including the listing rules) and the Articles of
Association.
Article 132 A director or other senior management personnel of the Company may also act as
the secretary of the board of directors.
Where the office of secretary is held concurrently by a director, and an act
is required to be done by a director and a secretary separately, the person
who holds the office of director and secretary may not perform the act in a
dual capacity.
Article 133 The secretary of the board of directors shall diligently exercise his duties
in accordance with the laws, administrative regulations, departmental rules
and
the relevant provisions of these Articles of Association.
The secretary of the board of directors shall assist the Company in complying
with the relevant PRC laws and the rules of the securities exchange on which
the shares of the Company are listed.
CHAPTER 13: PRESIDENT
Article 134 The Company shall have a president who shall be appointed or dismissed by the
board of directors.
The Company shall have several vice presidents, one chief financial officer,
one chief pilot and one general legal counsel who shall assist the president.
The vice presidents, chief financial officer, chief pilot and general legal
counsel shall be nominated by the president and appointed or dismissed by the
board of the directors.
Article 135 The term of office for a president shall be 3 years and is renewable if re-
appointed.
Article 136 The president shall be accountable to the board of directors and shall
exercise the following functions and powers:
(1) to be in charge of the Company's production, operation and
management and to organize the implementation of the resolutions of the board
of
directors;
(2) to organize the implementation of the Company's annual business
plan and investment proposal;
(3) subject to applicable laws and these Articles of Association, to decide on
transactions, which are related to the Company's main business, and the value
of which shall not exceed certain amount, or certain proportion of the
Company's latest audited net assets (the said amount and proportion to be
determined by the shareholders' meeting);
(4) to sign contracts and agreements on behalf of the Company in
accordance
with the authorization granted by the board of directors or the legal
representative;
(5) to draft plans for the establishment of the Company's internal management
structure, and where necessary, make plans for general institutional
adjustment;
(6) to draft the Company's basic management system;
(7) to formulate basic rules and regulations for the Company;
(8) to propose the appointment or dismissal of the vice presidents,
chief accountant, chief pilot and general legal counsel of the Company;
(9) to appoint or dismiss management personnel other than those
required to be appointed or dismissed by the board of directors;
(10) to propose to convene an extraordinary meeting of the board of
directors;
(11) other powers conferred by the Articles of Association and the board of
directors.
Article 137 The president shall attend meetings of the board of directors. The president
who is not a director shall not have the right to vote at board meetings.
Article 138 In performing their duties and powers, the president, vice presidents, chief
accountant, chief pilot, general legal counsel and other senior officers shall
act honestly and diligently in accordance with laws, regulations, other
regulatory
documents and the Articles of Association.
CHAPTER 14: SUPERVISORY COMMITTEE
Article 139 The Company shall have a supervisory committee. The supervisory committee is a
permanent supervisory body of the Company responsible for supervising the
board of directors and its members, the president, vice presidents, chief
financial officer and other senior officers of the Company to prevent them
from abusing their powers and infringing the legal rights and interests of the
shareholders, the Company and its employees.
Article 140 The supervisory committee shall compose of five (5) supervisors. The number of
outside supervisor (hereinafter meaning supervisors who do not hold office in
the Company) shall account for one half or more of the total number of
supervisory committee members. The number of supervisors representing
employees shall not be less than one-third (1/3) of the total number of
supervisors. The supervisory committee shall have one (1) chairman who shall
be elected by more than half of the number of supervisors. Each supervisor
shall serve for a term of 3 years, which term is renewable upon reelection and
re-appointment.
The chairman of the supervisory committee shall organise the implementation of
the duties of the supervisory committee.
Article 141 The supervisory committee shall include three (3) supervisors who shall
represent the shareholders (all of whom are outside supervisors) and two (2)
supervisors who shall represent the employees. Supervisors who represent the
shareholders shall be elected or removed by the shareholders in general
meetings, and the supervisor who represents employees shall be elected or
removed by the employees democratically.
Where necessary, the supervisory committee may establish an
office responsible for the day-to-day work of the supervisory committee.
Article 142 The list of candidates for supervisors representing shareholders shall be
proposed in form of a motion to the shareholders' general meeting for
resolution. Candidates for supervisors representing employees shall be
nominated by the board of directors, supervisory committee or by
shareholder(s) holding, alone or together, more than three percent (3%) of the
total amount of voting shares in the Company and shall be elected or
removed at the shareholders' general meeting.
Article 143 The cumulative voting method shall be adopted for voting the resolution to
elect supervisors (excluding supervisors acted by staff representatives) at
the shareholders' general meeting of the Company. Namely, for the election of
more than two supervisors at the shareholders' general meeting, each share
held by the shareholders participating in the voting shall carry the voting
right equal to the total number of supervisors to be elected. The shareholders
can either cast all the votes to elect one person or cast the votes to elect
several
persons.
Article 144 The directors, president, vice presidents and other senior management of the
Company shall not act concurrently as supervisors.
Article 145 The board of supervisors' meetings shall be convened at least once every 6
months. The chairman of the board of supervisors shall convene and chair the
said meetings. Should the chairman of the board of supervisors be unable to
perform his/her duties or fail to perform his/her duties, a supervisor jointly
elected by more than half of the number of supervisors shall convene and chair
the board of supervisors' meeting. A notice of the board of supervisors'
meetings shall be delivered to all supervisors in writing 10 days prior to the
convening of the said meeting. The notice of meeting shall incorporate the
following information:
(1) The date, venue and duration of the meeting;
(2) The reason for convening the meeting and the topics for discussion
thereat;
(3) The date on which the notice is issued.
Article 146 If, at the time when the term of office of a supervisor expires, the election
of a new supervisor is not held in time, and if a supervisor resigns during
his/her term of office and causes the number of members of the supervisory
committee fall below those required by law, the incumbent supervisor shall
continue to perform his/her supervisor's responsibilities in accordance with
the relevant laws, administrative regulations and these Articles of
Association until the newly elected supervisor take his/her office.
Article 147 The supervisory committee shall be accountable to the shareholders in a
general meeting and shall exercise the following functions and powers in
accordance with law:
(1) to review the Company's financial position situation, to examine the
Company's reports prepared by the board of directors on a regular basis and to
prepare written opinion after the same have been examined;
(2) to monitor the performance directors, president, vice presidents,
financial controller and other senior officers of their duties to ensure that
they do not act in contravention of any law, regulation or the Articles of
Association, and to recommend the dismissal of any directors and senior
management personnel who has violated the laws, administrative regulations,
the Articles of Association or the resolutions passed at the shareholders'
general meetings;
(3) to demand any director, president, vice president, financial
controller or any other senior officer who acts in a manner which is harmful
to the
Company's interest to rectify such behaviour;
(4) to verify the financial information such as the financial report, business
report and plans for distribution of profits to be submitted by the board of
directors to the shareholders' general meetings and to authorize, in the
Company's name, publicly certified accountants and practising auditors to
assist in the re-examination of such information should any doubt arise in
respect thereof;
(5) to propose to a motion at the shareholder's annual general
meeting;
(6) to propose to convene an extraordinary general meeting and to
convene
and preside over the shareholders' general meetings when the board of
directors fails to do so;
(7) to propose to convene an extraordinary meeting of the board of
directors;
(8) to represent the Company in negotiations with, or in bringing
actions against, a director or senior management officer;
(9) other functions and powers specified in laws, administrative regulations
and in these Articles of Association as well as those as conferred by the
shareholders' general meeting.
The supervisory committee may make recommendations on the appointment of
accounting firm by the Company, may appoint another accounting firm in the
name of the Company when necessary to examine financial affairs of the Company
independently, and may directly report relevant information to the authorities
in charge of securities of the State Council and other relevant authorities.
Outside supervisors shall report independently to the shareholders' meeting on
whether the senior officers perform their duties honestly and diligently.
Supervisors may attend meetings of the board of directors as observers, and to
interrogate or give suggestion to the resolutions at the board of directors.
Article 148 Supervisors may require the directors, the president, vice president and other
senior management personnel to the Board and internal and external auditing
personnel to attend meetings of the supervisory committee and to answer
matters of concerns of the supervisory committee.
Article 149 Resolutions of the supervisory committee shall be passed by more than half of
the number of supervisors.
Article 150 The supervisory committee shall take minutes of the resolutions at the
meetings. Supervisors who attend the meeting and the person taking the minutes
shall sign the minutes. The supervisors attending the supervisory committee
meeting shall have the right to request to have the descriptive information on
their speech given thereat to be recorded in the minutes. Minutes of the
supervisory committee meeting shall be treated as important file and kept
properly for a period of at least 10 years.
Article 151 All reasonable fees incurred in respect of the employment of professionals
(such as, lawyers, certified public accountants or practising auditors) which
are required by the supervisory committee in the exercise of its functions and
powers shall be borne by the Company.
Article 152 A supervisor shall carry out his duties honestly and faithfully in accordance
with laws, administrative regulations and the Articles of Association.
CHAPTER 15: THE QUALIFICATIONS AND DUTIES OF THE DIRECTORS, SUPERVISORS,
PRESIDENT, VICE PRESIDENTS AND OTHER SENIOR OFFICERS OF THE COMPANY
Article 153 A person may not serve as a director, supervisor, president, vice presidents
or any other senior officers of the Company if any of the following
circumstances apply:
(1) a person who does not have or who has limited capacity for civil
conduct;
(2) a person who has been sentenced for corruption, bribery,
infringement of
property or misappropriation of property or other crimes which disrupt the
social economic order, where less than 5 years have elapsed since the
sentence was served, or a person who has been deprived of his political rights
and not more than 5 years have elapsed since the sentence was served;
(3) a person who is a former director, factory manager or manager of a company
or enterprise which has been dissolved or put into liquidation and who was
personally liable for the winding up of such company or enterprise, where less
than 3 years have elapsed since the date of completion of the insolvent
liquidation of the company or enterprise;
(4) a person who is a former legal representative of a company or enterprise
the business licence of which was revoked due to violation of law and who are
personally liable therefor, where less than 3 years have elapsed
since the date of the revocation of the business licence;
(5) a person who has a relatively large amount of debts which have
become overdue;
(6) a person who is currently under investigation by judicial organs
for violation of criminal law;
(7) a person who, according to laws, administrative
regulations or departmental rules, cannot act as a leader of an enterprise;
(8) a person other than a natural person;
(9) a person who has been convicted by the competent authority for violation
of relevant securities regulations and such conviction involves a finding that
such person has acted fraudulently or dishonestly, where less than 5 years
have elapsed since the date of such conviction;
(10) a person who has been confirmed by the authority in charge of
securities
of the State Council as being prohibited from participating in the market or
have not been released from such prohibition;
(11) other contents as provided for by the laws, administrative
regulations or departmental rules.
If any of the above circumstances occurs on the part of a director during his
term of office, the board of directors shall, starting from the date on which
they are aware thereof, forthwith cease the performance of duties by the
relevant director and propose to remove such director at the shareholders'
general meeting. If any of the above circumstances occurs on the part of the
president during his term of office, the board of directors shall, starting
from the date on which they are aware thereof, forthwith cease the performance
of duties by the relevant president and convene a board meeting to dismiss
such president. If any of the above circumstances occurs on the part of a
supervisor during his term of office, the supervisory committee shall,
starting from the date on which it is aware thereof, forthwith cease the
performance of duties by the relevant supervisor and propose to remove such
supervisor at the shareholders' general meeting or the employee
representatives' meeting.
Article 154 No director may act in his own name or on behalf of the Company or the board
of directors without legal authorization pursuant to the provisions of the
Articles of Association or by the board of directors. In the course of acting
in his own name, a director shall state his position and identity insofar as a
third party may reasonably believe that such director is acting on behalf of
the Company or the board of directors.
Article 155 The directors of the Company shall comply with the laws, administrative
regulations and these Articles of Association, and shall have the following
loyalty obligations to the Company:
(1) not to take advantage of his authority to accept bribes or other
illegal income, and not to misappropriate the property of the Company;
(2) not to misappropriate the funds of the Company;
(3) not to open an account in his own name or in the name of any other
individual to deposit the assets or funds of the Company;
(4) not to lend the Company's funds to others or provide guarantees for
others with the Company's property in violation of the provisions of these
Articles of Association and without the consent of the shareholders'
general meetings or the board of directors;
(5) not to enter into contracts or conduct transactions with the
Company in
violation of the provisions of these Articles of Association or without the
consent of the shareholders' general meeting;
(6) without the consent of the shareholders' general meeting, not to take
advantage of his authority to seek for himself or others business
opportunities that should belong to the Company, or to engage in
business of the same kind as that of the Company for himself or others;
(7) not to accept commissions from transactions with the Company for
his own benefit;
(8) not to disclose the secrets of the Company without authorization;
(9) not to damage the interests of the Company by taking advantage of
its connected relationship;
(10) other loyalty obligations stipulated by laws, administrative regulations,
departmental rules and these Articles of Association.
The income obtained by a director in violation of the provisions of this
Article shall belong to the Company; If any loss is caused to the Company,
he/she shall be liable for compensation.
Article 156 Directors shall abide by laws, administrative regulations and these Articles
of Association, and shall have the following diligence obligations to the
Company:
(1) to exercise the rights granted by the Company cautiously,
conscientiously and diligently to ensure that the business activities of the
Company comply with the requirements of national laws, administrative
regulations and various national economic policies, and that the business
activities do not exceed the business scope specified in the business license;
(2) to treat all shareholders fairly;
(3) to keep abreast of the business operation and management status of
the Company;
(4) to sign a written confirmation opinion on the periodic report of
the Company. Ensure that the information disclosed by the Company is true,
accurate and complete;
(5) to provide the board of supervisors with relevant
information and
materials truthfully, and not to hinder the board of supervisors or
supervisors from exercising their powers;
(6) other diligence obligations stipulated by laws, administrative
regulations, departmental rules and these Articles of Association.
Article 157 Directors shall be deemed to be failed to carry out their duties if they fail
to attend two consecutive board meetings in person and to appoint other
directors to attend board meetings on their behalf. The board of directors
shall propose
at the shareholders' general meeting for the removal of such directors.
Article 158 The provisions in Article 155 on the loyalty obligation of directors and in
sub- paragraphs (4), (5) and (6) of Article 156 on the diligence obligation
shall also apply to senior officers.
Article 159 Supervisors shall abide by laws, administrative regulations and these Articles
of Association, and shall have the obligations of loyalty and diligence to the
Company. Supervisors shall neither accept bribes or other illegal income by
taking advantage of their authority, nor shall they misappropriate the
property of the Company.
Article 160 All directors, supervisors and the secretary of the board of directors of the
Company shall attend the shareholders' general meeting when the meeting is
convened, and president, vice president and other senior management personnel
shall attend the same as non-voting attendees and provide response and
explanations to the interrogations and suggestion raised by the shareholders.
Directors, supervisors, presidents, vice presidents and other senior
management personnel shall inform the supervisory committee of the relevant
status and provide the same with the relevant information in accordance with
the facts and shall not preclude the supervisory committee from exercising its
functions and powers.
Article 161 If a director, supervisor, president and vice president and other senior
officer of the Company resigns or his or her term of office expires, his or
her fiduciary duty owed to the Company and shareholders may not be necessarily
discharged before his or her report of resignation takes effect or within a
reasonable period thereafter and within a reasonable period after the expiry
of his or her terms of office while his or her duty to keep confidential of
the trade secrets of the Company shall remain effective after the expiry of
his or her term of office until such secrets enter into the public domain. The
survival of other duties shall be determined in accordance with the principles
of fairness as well as taking into consideration the time interval between the
occurrence of the event concern and the timing of his or her departure
together with the circumstances and conditions under which the said person
terminates his or her relationship with the Company.
Article 162 Any director, supervisor, president, vice president and other senior
management personnel who, when performing their duties in the Company,
violates the laws, administrative regulations, departmental rules and
regulations or the provisions contained in the Articles of Association
resulting in causing losses to the Company shall be liable for indemnifying
the Company. Any director, supervisor, president, vice president or other
senior officer whose term of office has not been expired shall be liable for
compensation of any losses incurred by the Company due to his or her absence
from duty without permission.
Article 163 Subject to the exceptions provided by these Articles of Association, a
director shall not vote at the relevant meeting of the board of directors in
respect of any contract, transaction or arrangement in which he, or his
connected persons (as defined in the applicable listing rules as amended from
time to time), are materially interested and he shall not be counted as part
of the quorum of such meeting.
Article 164 Subject to the approval by the shareholders' general meeting, the Company may
take out liability insurance for any director, supervisor, president, vice
president and any other senior officer of the Company, except for those
liability resulting from the violation of laws, regulations, other regulatory
documents and the Articles of Association by such director, supervisor,
president, vice president and other senior officer of the Company.
CHAPTER 16: FINANCIAL AND ACCOUNTING SYSTEMS, PROFIT DISTRIBUTION AND AUDIT
Article 165 The Company shall establish its financial and accounting systems in accordance
with laws, administrative regulations and PRC accounting standards formulated
by the finance regulatory department of the State Council.
Article 166 The fiscal year of the Company shall be on the basis of the solar calendar
beginning on 1 January and ending on 31 December of the same year.
The Company shall use Renminbi as its standard unit of account. The accounts
shall be prepared in Chinese.
At the end of each fiscal year, the Company shall prepare a financial report
which shall be examined and verified by an accounting firm in a manner
prescribed by law.
Article 167 The board of directors of the Company shall place before the shareholders at
every annual general meeting such financial reports which the relevant laws,
administrative regulations and directives promulgated by competent regional
and central governmental authorities require the Company to prepare. Such
reports must be audited and reviewed.
Article 168 The Company's financial reports shall be made available for shareholders'
inspection at the Company twenty (20) days before the date of every
shareholders' annual general meeting. Each shareholder shall be entitled to
obtain a copy of the financial reports referred to in this Chapter.
The Company shall send to each holder of Overseas-Listed Foreign Shares by
prepaid mail at the address registered in the register of shareholders the
said reports not later than twenty-one (21) days before the date of every
annual
general meeting of the shareholders.
Provided that the laws and regulations and the relevant listing rules of the
jurisdictions where the shares of the Company are listed are complied with,
the abovementioned report may also be issued or provided to the holders of
Overseas- Listed Foreign Shares by other means as specified in Article 212
herein.
Article 169 The financial statements of the Company shall, in addition to being prepared
in accordance with PRC accounting standards and regulations, be prepared in
accordance with either international accounting standards, or that of the
place outside the PRC where the Company's shares are listed. If there is any
material difference between the financial statements prepared respectively in
accordance with the two accounting standards, such difference shall be stated
in the financial statements. In distributing its after-tax profits, the lower
of the two amounts shown in the financial statements shall be adopted.
Article 170 Any interim results or financial information published or disclosed by the
Company must also be prepared and presented in accordance with PRC accounting
standards and regulations, and also in accordance with either international
accounting standards or that of the place overseas where the Company's shares
are listed.
Article 171 The Company shall publish its financial reports four times every fiscal year,
that is, the first quarterly financial report shall be published within thirty
(30) days after the expiration of the first 3 months of each fiscal year; the
interim financial report shall be published within sixty (60) days after the
expiration of the first 6 months of each fiscal year; the third quarterly
financial report shall be published within thirty (30) days after the
expiration of the first 9 months of each fiscal year; and the annual financial
report shall be published within one
hundred and twenty (120) days after the expiration of each fiscal year.
Article 172 The Company's financial reports shall be prepared pursuant to the relevant
laws, administrative regulations and departmental rules and regulations.
Article 173 The Company shall not keep accounts other than those required by law.
Article 174 When distributing its after-tax profits in a given year, the Company shall
contribute 10% of such profits to the Company's statutory common reserve fund.
Where the accumulated amount of the statutory common reserve fund reaches 50%
or more of the registered capital of the Company, no further contribution is
required.
Where the statutory common reserve fund is insufficient to make for the losses
of the Company in the previous year, before making contribution to the
statutory common reserve fund, the profits made in the current year shall be
used to make up for the losses first.
After making contribution to the statutory common reserve fund from its after-
tax profits, the Company may, subject to resolutions adopted at a general
meeting, make contributions to discretionary common reserve funds from its
after-tax profits.
Article 175 Capital surplus fund includes the following items:
(1) premium on shares issued at a premium price;
(2) any other income designated for the capital surplus fund by the
regulations of the finance regulatory department of the State Council.
Article 176 The common reserve funds (including the statutory common reserve fund,
discretionary common reserve funds and capital surplus fund) of the Company
shall be applied for making up for losses, expanding the Company's production
and operation or capitalisation; provided that the capital surplus fund shall
not be used for covering the loss of the Company.
When capitalising the statutory common reserve fund, the balance of such fund
shall not be less than 25% of the registered capital prior to capitalisation.
Article 177 After making up for the losses and making contributions to the common reserve
fund, any remaining profits shall be distributed to the shareholders in
proportion to their respective shareholders.
The Company shall not allocate dividends or carry out other allocations in the
form of bonuses before it has compensated for its losses and made allocations
to the statutory common reserve fund. No shares of the Company held by the
Company shall participate in these allocations.
Dividends paid by the Company shall not carry any interest except where the
Company has failed to pay the dividends to the shareholders on the date on
which such dividends become payable.
Any amount paid up in advance of calls on a share shall carry interest, but
shall not entitle the holder of the share to receive, by way of advance
payment, the dividend declared and distributed thereafter.
Article 178 Basic principles for dividends distribution policy:
(1) the Company shall fully consider the returns to investors and
implements proactive dividends distribution policy;
(2) the dividends distribution policy of the Company shall remain continuous
and stable, and take into account long-term interests of the Company,
interests of all shareholders as a whole and sustainable development of the
Company;
(3) the Company shall distribute its dividends by way of cash as
priority. The Company may distribute interim dividends if the conditions
permit.
Article 179 Specific dividends distribution policy of the Company:
(1) The form of dividends distribution:
The Company may distribute dividends in cash, shares or a combination of cash
and shares or other methods permitted by the laws, administrative
regulations, departmental rules and the regulatory rules of
the
jurisdictions in which the shares of the Company are listed.
The board of directors of the Company shall have comprehensive consideration
of the factors, including its industry characteristics, development stage,
operation mode, profitability level and whether there is any significant
expenditure payment arrangement, make the differentiated cash bonus policy
according to the procedures prescribed by the Articles of Association, and
identify the proportion of the cash bonus in the profit distribution in the
current year, with proportion in compliance with the relevant stipulations of
laws, administrative regulations, normative documentation and stock exchanges.
(2) Specific conditions, proportions and intervals for distributing
cash dividends by the Company:
Save as special circumstances, the dividends shall be distributed in cash by
the Company provided that the distributable profits (i.e. the balance of
profit after tax, after making up for the losses and making contributions to
the common reserve fund in accordance with the provisions of these Articles of
Association as well as deducting otherwise approved by the relevant national
departments) realized for the current year in the financial statement of the
parent company prepared in accordance with applicable domestic and overseas
accounting standards and regulations are positive, and the cash dividends to
be distributed each year shall not be less than 15% of the applicable
distributable profits.
The applicable distributable profits shall be the lower of the distributable
profits in the financial statements of the parent company prepared by the
Company in accordance with applicable domestic and overseas accounting
standards and regulations.
Special circumstances refer to the circumstances under which the board of
directors considers that cash dividend distribution may influence the
Company's continuing operation and long-term development.
When the aforesaid conditions of cash distribution are met, cash dividends
shall be distributed once a year. The board of directors of the Company can
propose an interim dividend distribution according to
the Company's status of profitability and capital needs.
(3) Specific conditions under which the Company may issue shares in
lieu of dividends:
Where the Company is in a sound operating condition, and the board of
directors considers that the Company's stock price does not reflect the
Company's scale of capital, and issuing shares in lieu of dividends will
be in the interests of all shareholders of the Company as a whole, a proposal
for the issuance of shares in lieu of dividends may be proposed upon
fulfillment of the above conditions concerning cash dividends.
Article 180 Alteration of the Company's dividend distribution policy:
In the event of war, natural disasters and other incidents of force majeure,
or changes to the Company's external operating environment resulting in
material impact on its production and operation, or considerably significant
changes to the Company's own operating conditions, the Company may adjust its
profit distribution policy.
The board of directors shall formulate a written report concerning the
adjustment of the Company's profit distribution policy upon a special
discussion with detailed verification and reasons provided. Such written
report, along with the opinions expressed by the independent directors, shall
be submitted to the Shareholders' general meeting for approval by way of a
special resolution. In considering the changes to the profit distribution
policy, the Company may actively communicate and exchange ideas with the
Shareholders, in particular the non-substantial and minority Shareholders,
through various channels (such as providing online voting and inviting non-
substantial and minority Shareholders to participate in the meeting), duly
listen to the opinions and demands of non-substantial and minority
Shareholders and provide prompt responses to their questions.
Article 181 Procedures for considering and approving the dividend distribution proposal of
the Company:
(1) The dividends distribution plan of the Company shall be drawn up by the
management of the Company and submitted to the board of directors and the
supervisory committee of the Company for consideration. The board of directors
shall thoroughly discuss the rationality of the dividends distribution plan
and the independent Directors shall explicitly express their opinions. A
special resolution formulated by the board of directors shall be submitted to
the Shareholders' general meeting for consideration. The board of directors
will also fully listen to the opinions of minority Shareholders.
(2) When formulating specific plan for distribution of cash dividends by the
Company, the board of directors shall study and identify with caution the
timing, conditions and minimum proportion, conditions for adjustment and
requirements for decision-making procedures involved in implementing the
distribution of cash dividends, etc. Independent Directors shall explicitly
express their opinions thereon. Independent
Directors may collect opinions from minority shareholders for putting forward
a profit distribution proposal which can be directly submitted to the board of
directors for consideration.
(3) Where the Company does not distribute cash dividends under the special
circumstances as prescribed in the foregoing Article 179, the board of
directors shall explain the specific reasons for not distributing cash
dividends, the exact purpose for the retained profit and the estimated
investment return. Such explanation, along with the opinions expressed by the
independent directors, shall be submitted to the shareholders' general meeting
for consideration and be disclosed on the designated
media of the Company.
Subject to Article 56 and subparagraph (20) of the first paragraph of Article
105 of these Articles of Association, the board of directors may decide to
distribute interim or special dividends.
Article 182 After the resolution of profit distribution has been adopted by the
shareholders at a general meeting, the board of directors of the Company is
required to complete the distribution of dividends (or shares) within 2 months
following
the meeting.
In case of the Shareholders' illegal occupation of company funds, the Company
shall deduct the cash dividends distributed to such Shareholders, in order to
repay the Shareholders' funds occupied.
Article 183 The Company shall declare and pay cash dividends and other amounts which are
payable to holders of A Shares in Renminbi. The Company shall calculate and
declare cash dividends and other payments which are payable to holders of
Foreign Shares in Renminbi, and shall pay such amounts in the local currency
of the jurisdiction where Overseas-Listed Foreign Shares are listed (in case
there are more than one jurisdictions of listing, such amounts shall be paid
in the local currency of the jurisdiction which the board determines as the
main listing place of the Company). The foreign exchange required by the
Company to pay cash dividends and other amounts to holders of Overseas-Listed
Foreign Shares shall be obtained in accordance with the relevant foreign
exchange administrative regulations of the State.
Article 184 Unless otherwise provided for in relevant laws, regulations and other
regulatory documents, where cash dividends and other amounts are to be paid in
Hong Kong dollars, the applicable exchange rate shall be the average closing
rate for the relevant foreign currency announced by the Peoples' Bank of China
during the week prior to the announcement of payment of dividend and other
amounts.
Article 185 When distributing dividends to its shareholders, the Company shall withhold
and pay on behalf of its shareholders the taxes levied on the dividends in
accordance with the provisions of the PRC tax law.
Article 186 The Company shall appoint receiving agents for holders of the Overseas-Listed
Foreign Shares. Such receiving agents shall receive dividends which have been
declared by the Company and all other amounts which the Company should
pay to holders of Overseas-Listed Foreign Shares on such shareholders' behalf.
The receiving agents appointed by the Company shall meet the relevant
requirements of the laws of the place at which the stock exchange on which the
Company's shares are listed or the relevant regulations of such stock
exchange.
The receiving agents appointed for holders of Overseas-Listed Foreign Shares
listed in Hong Kong shall each be a company registered as a trust company
under the Trustee Ordinance of Hong Kong.
Article 187 The Company shall establish an internal audit system by employing professional
auditing personnel, who shall conduct internal audit and supervision on the
income and expenses and economic activities of the Company.
Article 188 The Company's basic systems for internal audit and internal control assessment
shall become effective after the approval of the board of directors. The
establishment of the internal audit institution of the Company and the person
in charge, who shall be accountable to the board of directors and shall report
to the board of directors, are determined by the board of directors.
CHAPTER 17: APPOINTMENT OF ACCOUNTANCY FIRM
Article 189 The Company shall engage accountants' firms that complies with the
requirements of the Securities Law and the listing rules of the jurisdictions
where the shares of the Company are listed, to perform the tasks of auditing
accounting statements, verifying the net assets and other relevant consulting
services.
Article 190 The accounting firm appointed by the Company shall hold office for 1 year from
the conclusion of the annual general meeting of shareholders at which they
were appointed until the conclusion of the next annual general meeting of
shareholders. The appointment thereof may be renewed at expiry.
Article 191 The accounting firm appointed by the Company shall enjoy the following rights:
(1) a right to review to the books, records and vouchers of the Company at
any time, the right to require the directors, president, vice presidents and
other senior officers of the Company to supply relevant information and
explanations;
(2) a right to require the Company to take all reasonable steps to obtain
from its subsidiaries such information and explanation as are necessary for
the discharge of its duties;
(3) a right to attend and speak at any shareholders' general meeting
in relation to matters concerning its role as the Company's accounting firm.
Article 192 If there is a vacancy in the position of accountant of the Company, the board
of directors may appoint an accounting firm to fill such vacancy before the
convening of the shareholders' general meeting.
Article 193 The shareholders in a general meeting shall have the power to remove the
Company's accounting firm by ordinary resolution before the expiration of its
term of office.
Article 194 The remuneration of an accounting firm or the manner in which such firm is to
be remunerated shall be determined by way of an ordinary resolution by the
shareholders in a general meeting. The remuneration of an accounting firm
appointed by the board of directors shall be determined by the board of
directors.
Article 195 Notice should be given ten (10) days in advance to the accounting firm if the
Company decides to remove such accounting firm or not to renew the appointment
thereof. Such accounting firm shall be entitled to make representations at the
shareholders' general meeting. Where the accounting firm resigns from its
position, it shall make clear to the shareholders in a general meeting whether
there has been any impropriety on the part of the
Company.
CHAPTER 18: MERGER AND DEMERGER OF THE COMPANY
Article 196 The Company may conduct merger or demerger in accordance with the law.
In the event of the merger or demerger of the Company, the Company shall
adopt necessary measures to protect the legal rights and
interests of shareholders who object to the merger or demerger of the Company.
A shareholder who objects to the plan of merger or demerger shall have the
right to demand the Company or the shareholders who consent to the plan of
merger or demerger to acquire such dissenting shareholders' shareholding at a
fair price.
The contents of the resolution of merger or demerger of the Company shall
constitute special documents which shall be available for inspection by the
shareholders of the Company. Such special documents shall be sent by mail to
holders of Overseas-Listed Foreign Shares.
Article 197 The merger of the Company may take the form of either merger by absorption or
merger by the establishment of a new company.
In the event of a merger, the merging parties shall execute a merger agreement
and prepare a balance sheet and an inventory of assets. The Company shall
notify its creditors within ten (10) days of the date of the Company's merger
resolution and shall publish a public notice in a newspaper within thirty (30)
days of the date of the Company's merger resolution.
A creditor has the right, within thirty (30) days upon receipt of the notice,
or for those who have not received the notice, within forty-five (45) days
from the date of the public announcement, to demand the Company to repay its
debts or provide a corresponding guarantee for such debt.
Upon the merger, rights in relation to debtors and indebtedness of each of the
merged parties shall be assumed by the company which survives the merger or
the newly established company.
Article 198 Where there is a demerger of the Company, its assets shall be divided up
accordingly.
In the event of demerger of the Company, the parties to such demerger shall
execute a demerger agreement and prepare a balance sheet and an inventory of
assets. The Company shall notify its creditors within ten (10) days of the
date of the Company's division resolution and shall publish a public notice in
a newspaper at least three (3) times within thirty (30) days of the date of
the Company's demerger resolution.
Debts of the Company prior to demerger shall be assumed by the companies which
exist after the division on a joint and several basis except to the extent
that prior to demerger, the Company has otherwise reached
a written
agreement with its creditors in respect of the settlement of debts.
Article 199 The Company shall, in accordance with law, apply for change in its
registration with the companies registration authority where a change in any
item in its registration arises as a result of any merger or division. Where
the Company is dissolved, the Company shall apply for cancellation of its
registration in accordance with law. Where a new company is established, the
Company shall apply for registration thereof in accordance with law.
CHAPTER 19: DISSOLUTION AND LIQUIDATION
Article 200 The Company shall be dissolved upon the following reasons:
(1) the term of operation of the Company prescribed in these Articles
of Association has expired, or other causes for dissolution as stipulated in
these Articles of Association occur;
(2) a resolution for dissolution is passed by shareholders at a
general meeting;
(3) dissolution is necessary due to a merger or demerger of the
Company;
(4) the company has its business licence revoked, or is ordered to
close up or to have its business cancelled in accordance with the law; or
(5) If a company has encountered serious difficulties in its operations and
management and the company's continued existence may materially harm the
interests of the shareholders, and if the same fails to be resolved by any
other means, shareholders holding ten percent or more of the aggregate voting
rights of the Company may request a People's Court to
dissolve the Company.
Article 201 Under the circumstances described in sub-paragraph (1) of Article 200 in these
Articles of Association, the Company may continue to exist
through amendment of these Articles of Association.
Amendment of these Articles of Association in accordance with the above
paragraph shall be passed by no less than two-thirds of the voting rights held
by the shareholders present at the general meeting.
Article 202 A liquidation committee shall be set up within fifteen (15) days commencing
from the date on which the events being the grounds for dissolution occurred,
in order to start liquidation process where the Company is dissolved pursuant
to sub-paragraphs (1), (2), (4) and (5) of Article 200 in these Articles of
Association. The members of the liquidation committee shall be composed of
persons decided by directors or decided at shareholders' general meeting. If
the Company fails to set up the liquidation committee within the time limit,
the creditors may apply to the People's Court for appointment of relevant
persons to form a liquidation committee and carry out liquidation.
Article 203 The liquidation committee shall, within ten (10) days of its establishment,
send notices to creditors and shall, within sixty (60) days of its
establishment, publish a public announcement in a newspaper. Creditors should,
within thirty
(30) days upon receipt of the notice, or for those who have not received the
notice, within forty-five (45) days from the date of the public announcement,
declare their claims to the liquidation committee.
When declaring claims, creditors shall state relevant particulars of their
claims and provide supporting materials. The liquidation committee shall
register the claims.
The liquidation committee shall not make repayment to creditors during the
claims declaration period.
Article 204 During the liquidation period, the liquidation committee shall exercise the
following functions and powers:
(1) to sort out the Company's assets and prepare a balance sheet and
an inventory of assets respectively;
(2) to notify the creditors or to publish public announcements;
(3) to dispose of and liquidate any unfinished businesses of the
Company;
(4) to pay all outstanding taxes and taxes incurred during the
liquidation process;
(5) to settle claims and debts;
(6) to deal with the surplus assets remaining after the Company's
debts have been repaid;
(7) to represent the Company in any civil proceedings.
Article 205 After it has sorted out the Company's assets and after it has prepared the
balance sheet and an inventory of assets, the liquidation committee shall
formulate a liquidation plan and present it to a shareholders' general meeting
or to the relevant governing authority for confirmation.
After the payment of liquidation expenses with priority, the Company's assets
shall be distributed in accordance with the following sequence: (i) salaries;
(ii) social insurance premiums and statutory compensation payments; (iii)
outstanding taxes; (iv) bank loans, and company bonds and other debts of the
Company.
Any surplus assets of the Company remaining after payment referred to in the
preceding paragraph shall be distributed to its shareholders according to the
class of shares and the proportion of shares held in the following sequence:
(1) In the case of preferential shares, distribution shall be made to
holders of such preferential shares according to the par value thereof; if the
surplus assets are not sufficient to repay the amount of preferential shares
in full, the distribution shall be made to holders of such shares in
proportion to their respective shareholdings.
(2) In the case of ordinary shares, distribution shall be made to
holders of such shares in proportion to their respective shareholdings.
During the liquidation period, the Company shall not commence any business
activities that are not related to liquidation.
Article 206 If after putting the Company's assets in order and preparing a balance sheet
and an inventory of assets in connection with the liquidation of the Company,
the liquidation committee discovers that the Company's assets are insufficient
to repay the Company's debts in full, the liquidation committee shall
immediately apply to the People's Court for a declaration of insolvency.
After a Company is declared insolvent by a ruling of the People's Court, the
liquidation committee shall transfer all matters arising from the liquidation
to the People's Court.
Article 207 Following the completion of the liquidation, the liquidation committee shall
prepare a liquidation report and submit it to the shareholders' general
meeting or the relevant governing authority for confirmation and to the
companies registration authority to apply for cancellation of registration and
announce the termination of the Company.
CHAPTER 20: PROCEDURES FOR AMENDMENT OF THE COMPANY'S ARTICLES OF ASSOCIATION
Article 208 The Company may amend its Articles of Association in accordance with the
requirements of laws, regulations, other regulatory documents and the Articles
of Association.
Article 209 The amendment to the Articles of Association shall be handled in accordance
with the following procedures:
(1) The board of directors shall adopt a resolution therefor in accordance
with these Articles of Association and formulate the proposal for the
amendment of the Articles of Association; or the shareholders shall propose
the proposal for the amendment of the Articles of Association;
(2) The shareholders shall be notified of the amendment proposal and a
shareholders' general meeting shall be convened to reach a resolution;
(3) Content of the amendment to the Articles of Association shall be
adopted by special resolutions.
Article 210 The Company shall amend these Articles of Association under any of the
following circumstances:
(1) following the amendments to the Company Law or other relevant laws or
administrative regulations, the matters provided for in these Articles of
Association conflict with the requirements of the amended laws or
administrative regulations;
(2) following the change in the state of the Company's affairs, its conditions
become inconsistent with matters provided for in these Articles of
Association;
(3) following a resolution passed at a shareholders' general meeting,
it is determined to amend the Articles of Association.
Article 211 Where amendments of the Articles of Association involve the registered
particulars of the Company, procedures for alteration of registration shall be
handled in accordance with the law. Matters on amendment to the Articles of
Association shall be publicly disclosed if so required by laws, regulations
and the listing rules and regulatory authorities of the jurisdictions where
the shares of the Company are listed.
CHAPTER 21: NOTICES AND PUBLIC ANNOUNCEMENTS
Article 212 The Company's notices (for the purpose of this chapter, the term "Notice"
shall include the notice of any meetings, corporate communications or other
written materials issued by the Company to its shareholders) may be delivered
by the following means: (1) by designated person; (2) by mail; (3) by way of
public announcement; (4) by other means as recognised by the securities
regulatory authority and stock exchange in the jurisdictions where the shares
of the Company are listed or by other means as provided in Articles of
Association.
The Company's notices delivered by way of public announcement shall be
published in the newspapers designated by the securities regulatory authority
and stock exchange of the jurisdictions where the shares of the Company are
listed (if any) and/or in other designated media (including websites).
As for the methods in which the corporate communications are provided and/or
distributed by the Company to holders of Overseas-Listed Foreign Shares as
required by Hong Kong Listing Rules, the corporate communications may, subject
to compliance with the laws and regulations and the relevant listing rules of
the jurisdictions where the shares of the Company are listed, also be sent or
provided by the Company to the holders of Overseas-Listed Foreign Shares by
any electronic means or by publishing such corporate communications on the
Company's website, instead of sending such corporate communications by
personal delivery or by prepaid postage mail to the holders of Overseas-Listed
Foreign Shares.
The term "Corporate Communication" refers to any document issued or to be
issued by the Company to the holders of its securities for their information
or action, including but not limited to:
(1) the directors' report, annual accounts of the Company together with the
accounting firm's report and, where applicable, the summary of its financial
report;
(2) the interim report and, where applicable, the summary of its
interim report;
(3) the notice of meeting;
(4) the listing document;
(5) the circular; and
(6) the proxy form.
Article 213 If the notice of the Company is given in person, the recipient shall sign (or
seal) on the return receipt and the date of signing the return receipt by the
recipient shall be deemed to be the date of delivery.
If a notice of the Company is made by public announcement, the date of service
shall be the date on which the first announcement is published. If the
corporate communication is made or provided at the Company's website to
holders of Overseas-Listed Foreign Shares, such corporate communication shall
be deemed to be made and served at the later of: (1) the date on which a
notice notifying that the corporate communication has already been published
on the Company's website is issued to holders of Overseas-Listed Foreign
Shares pursuant to the Hong Kong Listing Rules; or (2) the date on which the
corporate communication is first published on the Company's website (in the
event that corporate communication is published on the website subsequent to
the issuance of the said notice).
Article 214 Where a notice is sent by post, the notice shall be put into a clearly
addressed and prepaid postage envelope. Such notice shall be deemed to have
been issued on the date on which the envelope containing the notice has been
delivered to the post office and served on the third working day commencing
from the date of issue.
CHAPTER 22: SUPPLEMENTARY
Article 215 The formulation and amendment of these Articles of Association shall come into
force after being passed by a special resolution at a shareholders' general
meeting.
Article 216 The matters not covered in these Articles of Association shall be dealt with
in accordance with relevant laws, administrative regulations, rules and the
listing rules and the securities regulatory requirements of the jurisdictions
where the shares of the Company are listed, in conjunction with the actual
circumstances of the Company. In the event that these Articles of Association
is in conflict with the newly promulgated relevant laws, administrative
regulations, rules or the listing rules and the securities regulatory
requirements of the jurisdictions where the shares of the Company are listed,
such newly promulgated laws, administrative regulations, rules or the listing
rules and the securities regulatory requirements of the jurisdictions where
the shares of the Company are listed shall prevail.
Article 217 These Articles of Association are written in Chinese and English. If there is
any discrepancy between the Chinese version and the English version, the
Chinese version shall prevail.
Article 218 The board of directors of the Company shall be responsible
for the
interpretation of these Articles of Association, and the shareholders in
general meeting shall have the right to amend the Articles of Association.
Article 219 In these Articles of Association, reference to "accounting firm" shall have
the same meaning as "auditor" in Hong Kong Listing Rules.
Article 220 For the purpose of these Articles of Association, the terms "not less than",
"within", "not more than" are all inclusive terms and the terms "more than
half", "less than", "exceed", "beyond", "below" and "above" are exclusive
terms.
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