TIDMAIRC
RNS Number : 9342U
Air China Ld
30 October 2017
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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
Contents
GENERAL PROVISIONS . . . . . . . . . .
1 . . . . . . . . . . . . . . . . . . . .
CHAPTER : . 1
2 THE COMPANY'S OBJECTIVES AND SCOPE OF BUSINESS
CHAPTER : . . . . 3
3 SHARES AND REGISTERED CAPITAL . . . . .
CHAPTER : . . . . . . . . . . . . . . . 4
4 REDUCTION OF CAPITAL AND REPURCHASE OF
CHAPTER : SHARES . . . . 8
5 FINANCIAL ASSISTANCE FOR THE ACQUISITION
CHAPTER : OF SHARES . 11
6 SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS
CHAPTER : . . 12
7 SHAREHOLDERS' RIGHTS AND OBLIGATIONS .
CHAPTER : . . . . . . . . . . . . 19
8 SHAREHOLDERS' GENERAL MEETINGS . . . .
CHAPTER : . . . . . . . . . . . . . . 23
SPECIAL PROCEDURES FOR VOTING BY A CLASS
OF SHAREHOLDERS . . . . . . . . . . . .
9 . . . . . . . . . . . . . . . . . . . .
CHAPTER : . . . 38
10 THE PARTY COMMITTEE . . . . . . . . . .
CHAPTER : . . . . . . . . . . . . . . . . . . . 41
BOARD OF DIRECTORS . . . . . . . . . .
11 . . . . . . . . . . . . . . . . . . . .
CHAPTER : . 42
12 INDEPENT DIRECTORS . . . . . . . . .
CHAPTER : . . . . . . . . . . . . . . . . . . . 53
13 SECRETARY OF THE BOARD OF DIRECTORS . .
CHAPTER : . . . . . . . . . . . . 57
PRESIDENT . . . . . . . . . . . . . . .
14 . . . . . . . . . . . . . . . . . . . .
CHAPTER : . . . . . 59
15 SUPERVISORY COMMITTEE . . . . . . . . .
CHAPTER : . . . . . . . . . . . . . . . . . . 60
THE QUALIFICATIONS AND DUTIES OF THE DIRECTORS,
SUPERVISORS, PRESIDENT, VICE PRESIDENTS
AND
16 OTHER SENIOR OFFICERS OF THE COMPANY .
CHAPTER : . . . . . . . . . . 64
FINANCIAL AND ACCOUNTING SYSTEMS, PROFIT
17 DISTRIBUTION AND AUDIT . . . . . . . .
CHAPTER : . . . . . . . . . . . . . . . . . . 73
18 APPOINTMENT OF ACCOUNTANCY FIRM . . . .
CHAPTER : . . . . . . . . . . . . . 80
19 MERGER AND DEMERGER OF THE COMPANY . .
CHAPTER : . . . . . . . . . . . 83
20 DISSOLUTION AND LIQUIDATION . . . . . .
CHAPTER : . . . . . . . . . . . . . . . . . 85
PROCEDURES FOR AMMENT OF THE COMPANY'S
21 ARTICLES OF ASSOCIATION . . . . . . . .
CHAPTER : . . . . . . . . . . . . . . . . . 87
22 NOTICES AND PUBLIC ANNOUNCEMENTS . . .
CHAPTER : . . . . . . . . . . . . . 89
DISPUTE RESOLUTION . . . . . . . . . .
23 . . . . . . . . . . . . . . . . . . . .
CHAPTER : . 90
SUPPLEMENTARY . . . . . . . . . . . . .
24 . . . . . . . . . . . . . . . . . . . .
CHAPTER : . . 91
- i -
Notes: For the purpose of the marginal notes contained in the
Articles of Association, Co Law means the amended Company Law came
into force on 1 January 2006; the Securities Law means the amended
Securities Law came into force on 1 January 2006; MP means the
Mandatory Provisions in the Articles of Association of Companies
Listed Overseas (Zheng Wei Fa [1994] No. 21) jointly promulgated by
the former State Securities Commission and the former State
Restructuring Commission (SRC); LR means the Rules Governing the
Listing of Securities on the Stock Exchange of Hong Kong Limited;
Hong Kong Clearing House Advices means the Advices of Hong Kong
Clearing House promulgated by Hong Kong Securities Clearing Company
Limited; Zheng Jian Hai Han means the Letter of Opinion on the
Supplementary Amendment to Articles of Association of Companies
Listed in Hong Kong promulgated by the Overseas Listing Division of
the CSRC and the Production System Department of the State
Commission for Restructuring the Economic System (Zheng Jian Hai
Han [1995] No. 1); Opinion means the Opinion on Further Promoting
the Standardized Operations and Deepening the Reform of Overseas
Listed Companies (Guo Jing Mao Qi Gai [1999] No. 230) jointly
promulgated by State Economic and Trade Commission and China
Securities Regulatory Commission; and Guidance means the Guidance
on the Articles of Association of Listed Companies (CSRC
Announcement [2016] No. 23); CG Standards mean the Standards on
Corporate Governance for Listed Companies (Zheng Jian Fa [2002] No.
1); GM Rules means Rules Governing Shareholders' General Meeting of
Listed Companies (CSRC Announcement [2016] No. 22); Public
Shareholders means Certain Provisions Concerning Strengthening the
Protection of the Interests of Public Shareholders (Zheng Jian Fa
[2004] No. 118); Guiding Advice means the Guiding Advice on
Establishing Independent Directorship in Listed Companies (Zheng
Jian Fa [2001] No. 102); Security Notice means the Notice
Regulating the Provision of Security by Listed Companies to Third
Parties (Zheng Jian Fa [2005] No. 120); Revising Certain Provisions
on Cash Dividends means the Decision on Revising Certain Provisions
on Cash Dividends by Listed Companies (CSRC Decree No. 57); Notice
Regarding Cash Dividends Distribution means Notice Regarding
Further Implementation of Cash Dividends Distribution of Listed
Companies (Zheng Jian Fa [2012] No. 37); Regulatory Guidance No. 3
means Regulatory Guidance No. 3 of Listed Companies - Cash
Dividends Distribution of Listed Companies (CSRC Announcement
[2013] No., all of which are promulgated by the China Securities
Regulatory Commission; and Notice of Accelerating the Inclusion of
General Provisions into the Articles of Association of Central
Level State-Owned Enterprises for Party Building means the document
(Guo Zi Dang Wei Dang Jian [2017] No. 1) issued by the Party
Committee of State-owned Assets Supervision and Administration
Commission of the State Council on 3 January 2017.
ARTICLES OF ASSOCIATION OF AIR CHINA LIMITED
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 State
Council's Special Regulations Regarding the Issue of Shares
Overseas and the Listing of Shares Overseas by Companies Limited by
Shares (the "Special Regulations") 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 Company and China National Aviation Corporation (Group)
Limited (registered in Hong Kong Special Administration
Region).
Article 2 The Company's registered Chinese name:
The Company's English name: AIR CHINA LIMITED The Company's
abbreviated Chinese name:
The Company's abbreviated English name: AIR CHINA
Article 3 The Company's address: Blue Sky Building, 28 Tianzhu
Road, Airport Industrial Zone, 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 Special Regulations and the Mandatory Provisions for Articles
of Association of Companies Listing Overseas (the "Mandatory
Provisions"), the Guidance on the Articles of Association of Listed
Companies (the "Guidance"), the Standards on Corporate Governance
for Listed Companies (the "CG Standards") 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").
These Articles of Association shall take effect after being
adopted by a special resolution at the Company's general meeting
and upon approval of the companies approving department authorized
by the State Council. After these Articles of Association come into
effect, the Original Articles of Association shall be superseded by
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.
Subject to Article 23 of these Articles of Association, 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 actions referred to in the preceding paragraph include court
proceedings and arbitration proceedings.
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 law, the Company shall not act as
a capital contributor which assumes joint and several liabilities
of the enterprises it invested in.
Article 10 Subject to compliance with PRC laws and regulations,
the Company shall have the right to raise funds or to obtain loans,
including (but not limited to) issuing company bonds, and have the
right to charge or pledge its assets.
Article 11 According to the Constitution of the Communist Party
of China, the Company shall establish an organization of the
Communist Party of China. The Party committee shall perform the
core leading and political functions, control the directions,
manage the situation and ensure the implementation. The Company
shall set up the working organs of the Party, which shall be
equipped with sufficient personnel to handle Party affairs and
provided with sufficient funds to operate the Party
organization.
CHAPTER 2 : THE COMPANY'S OBJECTIVES AND SCOPE OF BUSINESS
Article 12 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 13 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; onboard duty free items, retail of goods
onboard and underwriting the aviation accident insurance; hotel,
catering services and hotel management; undertaking exhibitions;
conference services; business services; property management;
design, production, agency and publish of advertisement; technology
training; lease of self-owned property; lease of aircraft, engines
and aged mechanical parts; sale of consumer products, handicrafts,
souvenirs; import and export businesses. (The projects, which are
subject to approval in accordance with the laws, shall be operated
only after receiving approval from relevant administrative
authorities.)
Article 14 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 15 There shall, at all times, be ordinary shares in the
Company. Subject to the approval of the companies approving
department authorized by the State Council, the Company may,
according to its requirements, create different classes of
shares.
Article 16 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 17 Subject to the approval of the authority in charge of
securities of the State Council, the Company may issue shares to
Domestic Investors and Foreign Investors.
"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 18 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 19 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 20 Upon the approval of the companies approving
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:
Name of Promoters
Number of
Shares Subscribed
Method of Capital Contribution
Date of Capital Contribution
China National Aviation Holding Company
5,054,276,915 A capital contribution of
RMB560,782,100 was made in cash and a contribution 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 businesses
9 September 2004
China National Aviation Corporation (Group) Limited
1,445,723,085 A capital contribution of
RMB2,005,866,000 was made in form of equity interest
9 September 2004
Article 21 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.
The share capital structure of the Company after the issue and
sale referred to in the previous paragraph shall be as follows: the
Company has a total of 9,433,210,909 ordinary shares in issue, of
which China National Aviation Holding Company holds 4,826,195,989
Domestic Shares, representing approximately 51.16% of the Company's
total share capital; China National Aviation Corporation (Group)
Limited holds 1,380,482,920 Foreign Shares, representing
approximately 14.64% of the Company's total share capital; other
holders of the H Shares hold 3,226,532,000 shares, representing
approximately 34.20% of the Company's total share capital.
Upon completion of the offering of the H Shares set forth above
and subject to the approval in form of a special resolution adopted
at the shareholders' general meeting, the general meeting for
holders of the domestic shares and the general meeting for holders
of the foreign shares, the Company has issued 1,639,000,000 A
shares in 2006. China National Aviation Holding Company, a
shareholder of the Company, also increased its shareholding in the
Company to a total amount of 122,870,578 shares pursuant to its
undertakings made to China Securities Regulatory Commission (the
"CSRC"). The share capital structure of the Company after the said
capital increase and the said increase in shareholding of the
shareholder shall be as follows:
the Company has a total of 11,072,210,909 ordinary shares in
issue, of which China National Aviation Holding Company holds
4,949,066,567 A Shares, representing approximately 44.70% of the
Company's total share capital; China National Aviation Corporation
(Group) Limited holds 1,380,482,920 A Shares, representing
approximately 12.47% of the Company's total share capital; other
holders of A Shares hold 1,516,129,422 shares, representing
approximately 13.69% of the Company's total share capital; holders
of H Shares hold 3,226,532,000 shares, representing approximately
29.14% of the Company's total share capital.
Upon the completion of the issuance of A shares and subject to
the approval after verification by competent examination and
approval departments authorized by the State Council, 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,
as approved by the approving authority authorised by the State
Council, 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, as approved by the approving authority
authorised by the State Council, the Company has issued 192,796,331
new A Shares to China National Aviation Holding Company, 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, as approved by the approving authority authorised by the
State Council, the Company has issued 1,440,064,181 A Shares on a
non-public issue basis in the year of 2017.
The present share capital structure of the Company is as
follows: the Company has a total of 14,524,815,185 ordinary shares
in issue, of which 9,962,131,821 shares are held by holders of A
Shares, representing approximately 68.59% of the Company's total
share capital, and 4,562,683,364 shares are held by holders of H
Shares, representing approximately 31.41% of the Company's total
share capital.
Article 22 The Company's board of directors may take all
necessary action for the issuance of Overseas-Listed Foreign Shares
and A Shares after proposals for issuance of the same have been
approved by the securities authority of the State Council.
The Company may implement its proposal to issue Overseas-Listed
Foreign Shares and A Shares pursuant to the preceding paragraph
within fifteen (15) months from the date of approval by the
CSRC.
Article 23 Where the total number of shares stated in the
proposal for the issuance of shares includes Overseas-Listed
Foreign Shares and A Shares, such shares shall be fully subscribed
for at their respective offerings. If the shares cannot be fully
subscribed for all at once due to special circumstances, the shares
may, subject to the approval of the securities authority of the
State Council, be issued in separate tranches.
Article 24 The registered capital of the Company is RMB14,524,815,185.
Article 25 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 CSRC.
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 26 Except as provided for by other provisions of law and
administrative regulations, shares of the Company may be freely
transferred without any lien attached.
CHAPTER 4 : REDUCTION OF CAPITAL AND REPURCHASE OF SHARES
Article 27 According to the provisions of the Articles of
Association, the Company may reduce its registered capital.
Article 28 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 29 The Company may, in accordance with the procedures
set out in the Company's Articles of Association and with the
approval of the relevant governing authority of the State,
repurchase its issued shares under the following circumstances:
(1) cancellation of shares for the purposes of reducing its capital;
(2) merging with another company that holds shares in the Company;
(3) granting shares as an incentive to the employees of the Company;
(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) other circumstances permitted by laws and administrative regulations.
The Company's repurchase of its issued shares shall comply with
the provisions of Article 30 to Article 33 of these Articles of
Association.
Article 30 The Company may repurchase shares in one of the
following ways, with the approval of the relevant governing
authority of the State:
(1) by making a general offer for the repurchase of shares to
all its shareholders on a pro rata basis;
(2) by repurchasing shares through public dealing on a stock exchange;
(3) by repurchasing shares outside of the stock exchange by means of an agreement;
(4) by any other mean which is permitted by law and
administrative regulations and by the authority in charge of
securities of the State Council.
Article 31 The Company must obtain the prior approval of the
shareholders in a general meeting, in accordance with the Articles
of Association of the Company, before it may repurchase shares
outside of the stock exchange by means of an agreement. The Company
may, by obtaining the prior approval of the shareholders in a
general meeting (in the same manner), release, vary or waive its
rights under an agreement which has been entered into in the manner
set out above.
An agreement for the repurchase of shares referred to in the
preceding paragraph includes (but is not limited to) an agreement
to become liable to repurchase shares or an agreement to have the
right to repurchase shares.
The Company may not assign an agreement for the repurchase of
its shares or any right contained in such an agreement.
Article 32 Shares which have been lawfully repurchased by the
Company shall be cancelled or transferred within the period
prescribed by law, administrative regulation and the relevant
Listing Rules, and, in the case of cancellation of shares, the
Company shall apply to the original companies registration
authority for registration of the change in its registered
capital.
The aggregate par value of the cancelled shares shall be
deducted from the Company's registered share capital.
Article 33 Unless the Company is in the course of liquidation,
it must comply with the following provisions in relation to
repurchase of its issued shares:
(1) where the Company repurchases shares at par value, payment
shall be made out of the book balance of distributable profits of
the Company or out of proceeds of a new issue of shares made for
that purpose;
(2) where the Company repurchases shares of the Company at a
premium to its par value, payment up to the par value may be made
out of the book balance of distributable profits of the Company or
out of the proceeds of a new issue of shares made for that purpose.
Payment of the portion in excess of the par value shall be effected
as follows:
(i) if the shares being repurchased were issued at par value,
payment shall be made out of the book balance of distributable
profits of the Company;
(ii) if the shares being repurchased were issued at a premium to
its par value, payment shall be made out of the book balance of
distributable profits of the Company or out of the proceeds of a
new issue of shares made for that purpose, provided that the amount
paid out of the proceeds of the new issue shall not exceed the
aggregate amount of premiums received by the Company on the issue
of the shares repurchased nor shall it exceed the book value of the
Company's capital common reserve fund account (including the
premiums on the new issue) at the time of the repurchase;
(3) the Company shall make the following payments out of the Company's distributable profits:
(i) payment for the acquisition of the right to repurchase its own shares;
(ii) payment for variation of any contract for the repurchase of its shares;
(iii) payment for the release of its obligation(s) under the
contract for the repurchase of its shares;
(4) after the Company's registered capital has been reduced by
the aggregate par value of the cancelled shares in accordance with
the relevant provisions, the amount deducted from the distributable
profits of the Company for payment of the par value of shares which
have been repurchased shall be transferred to the Company's capital
common reserve fund account.
CHAPTER 5 : FINANCIAL ASSISTANCE FOR THE ACQUISITION OF
SHARES
Article 34 The Company or its subsidiaries shall not, at any
time, provide any form of financial assistance to a person who is
acquiring or is proposing to acquire shares in the Company. This
includes any person who directly or indirectly incurs any
obligations as a result of the acquisition of shares in the Company
(the "Obligor").
The Company or its subsidiaries shall not, at any time, provide
any form of financial assistance to the Obligor for the purposes of
reducing or discharging the obligations assumed by such
Obligor.
This Article shall not apply to the circumstances specified in
Article 36 of these Articles of Association.
Article 35 For the purposes of this Chapter, "financial
assistance" includes (without limitation) the following:
(1) gift;
(2) guarantee (including the assumption of liability by the
guarantor or the provision of assets by the guarantor to secure the
performance of obligations by the Obligor), indemnity (other than
indemnity in respect of the Company's own default) or release or
waiver of any rights;
(3) provision of loan, or any other agreement under which the
obligations of the Company are to be fulfilled before the
obligations of another party, or the change in parties to, or the
assignment of rights under, such loan or agreement;
(4) any other form of financial assistance given by the Company
when the Company is insolvent or has no net assets or when its net
assets would thereby be reduced to a material extent.
For the purposes of this Chapter, "assumption of obligations"
includes the assumption of obligations by way of contract or by way
of arrangement (irrespective of whether such contract or
arrangement is enforceable or not and irrespective of whether such
obligation is to be borne solely by the Obligor or jointly with
other persons) or by any other means which results in a change in
his financial position.
Article 36 The following actions shall not be deemed to be
activities prohibited by Article 34 of these Articles of
Association:
(1) the provision of financial assistance by the Company where
the financial assistance is given in the interests of the Company,
and the principal purpose of which is not for the acquisition of
shares in the Company, or the giving of the financial assistance is
an incidental part of some larger purpose of the Company;
(2) the lawful distribution of the Company's assets by way of dividend;
(3) the allotment of bonus shares as dividends;
(4) a reduction of registered capital, a repurchase of shares of
the Company or a reorganisation of the share capital structure of
the Company effected in accordance with the Articles of
Association;
(5) the lending of money by the Company within its scope of
business and in the ordinary course of its business, where the
lending of money is part of the scope of business of the Company
(provided that the net assets of the Company are not thereby
reduced or that, to the extent that the assets are thereby reduced,
the financial assistance is provided out of distributable profits
of the Company);
(6) contributions made by the Company to employee share
ownership schemes (provided that the net assets of the Company are
not thereby reduced or that, to the extent that the assets are
thereby reduced, the financial assistance is provided out of
distributable profits of the Company).
CHAPTER 6 : SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS
Article 37 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, Special Regulations and the stock exchange(s) on which the
Company's shares are listed.
Article 38 Share certificates of the Company may be assigned,
given as a gift, inherited or charged in accordance with relevant
provisions of laws, administrative regulations and these Articles
of Association.
For assignment and transfer of share certificates, relevant
registration shall be carried out with the share registration
institution authorized by the Company.
Article 39 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.
Article 40 The Company shall not accept any pledge being created
over its own shares.
Article 41 During their terms of office, directors, supervisors,
president, vice presidents and other senior officers shall report
periodically to the Company their shareholdings in the Company and
the change of such shareholdings. The transfer of shares by such
personnel shall be conducted in accordance with the law,
regulations and/or relevant provisions of the Listing Rules.
Article 42 Should the Company's directors, supervisors,
president, vice president, other senior management personnel and
shareholders holding more than 5% of the Company's shares sell
their shares in the Company within 6 months from the date of
purchase of the same, or repurchase the Company's shares within 6
months from the date of selling the same, the profits derived from
such activities shall be vested in the Company. The Company's Board
of Directors shall recover from the aforementioned parties the
gains derived therefrom, except that the six-month time limit with
respect to the sale of such shares shall not apply to any holding
5% or more of the shares of the Company by any securities company
as a result of its purchase of remaining shares sold under an
underwriting obligation.
Should the Company's Board of Directors not comply with the
provision set forth in the preceding paragraph 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 forth in the first paragraph and act accordingly, the
responsible Directors shall assume joint liability in accordance
with the law.
Article 43 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 44 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 45 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 46 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 47 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); and
(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 two months starting from the date of
formal application for transfer of shares.
Article 48 No change may be made in the register of shareholders
as a result of a transfer of shares within thirty (30) days prior
to the date of a shareholders' general meeting or within five (5)
days before the record date for the Company's distribution of
dividends. The aforementioned regulation applies to holders of H
Shares.
Article 49 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 50 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 51 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.
Article 52 Where the Company has issued a replacement share
certificate pursuant to the Articles of Association and a bona fide
purchaser acquires or becomes the registered owner of such shares,
his name (title) shall not be removed from the register of
shareholders.
Article 53 The Company shall not be liable for any damages
sustained by any person by reason of the cancellation of the
original share certificate or the issuance of the replacement share
certificate unless the claimant is able to prove that the Company
has acted in a fraudulent manner.
CHAPTER 7 : SHAREHOLDERS' RIGHTS AND OBLIGATIONS
Article 54 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 55 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 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, subject to payment of a reasonable fee:
(a) all parts of the register of shareholders;
(b) personal particulars of each of the Company's directors,
supervisors, president, vice presidents and other senior officers,
including:
(aa) present and former name and alias;
(bb) principal address (place of residence); (cc)
nationality;
(dd) primary and all other part-time occupations and duties;
(ee) identification documents and the numbers thereof;
(c) report on the state of the Company's share capital;
(d) reports showing the aggregate par value, quantity, highest
and lowest price paid in respect of each class of shares
repurchased by the Company since the end of the last accounting
year and the aggregate amount paid by the Company for this
purpose;
(e) minutes of shareholders' general meetings;
(f) 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) the right to file the proceedings with, and bring its claim
against a third party which has impaired the benefits of the
Company or infringed the lawful interests of the shareholders
before, a People's Court in accordance with the Company law or
other laws and administrative regulations;
(9) other rights conferred by laws, administrative regulations,
departmental rules and regulations and the Articles of Association
of the Company.
Article 56 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 57 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 58 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 59 In addition to the obligations imposed by laws and
administrative regulations or required by the listing rules of the
stock exchange on which the Company's shares are listed, a
controlling shareholder shall not exercise his voting rights in
respect of the following matters in a manner prejudicial to the
interests of all or part of the shareholders of the Company:
(1) to relieve a director or supervisor of his duty to act
honestly in the best interests of the Company;
(2) to approve the expropriation by a director or supervisor
(for his own benefit or for the benefit of another person) of the
Company's assets in any way, including (but not limited to)
opportunities which are beneficial to the Company;
(3) to approve the expropriation by a director or supervisor
(for his own benefit or for the benefit of another person) of the
individual rights of other shareholders, including (but not limited
to) rights to distributions and voting rights, save pursuant to a
restructuring which has been submitted for approval by the
shareholders in a general meeting in accordance with the Articles
of Association.
Article 60 For the purpose of the foregoing Article, a
"controlling shareholder" means a person who satisfies any one of
the following conditions:
(1) a person who, acting alone or in concert with others, has
the power to elect more than half of the board of directors;
(2) a person who, acting alone or in concert with others, has
the power to exercise or to control the exercise of 30% or more of
the voting rights in the Company;
(3) a person who, acting alone or in concert with others, holds
30% or more of the issued and outstanding shares of the
Company;
(4) a person who, acting alone or in concert with others, has de
facto control of the Company in any other way.
CHAPTER 8 : SHAREHOLDERS' GENERAL MEETINGS
Article 61 The shareholders' general meeting is the organ of
authority of the Company and shall exercise its functions and
powers in accordance with law.
Article 62 The shareholders' general meeting shall have the
following functions and powers:
(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 and Articles of Association;
(15) to consider and approve the variation of use of proceeds;
(16) to consider the shares incentive program;
(17) to decide on other matters which, according to law,
administrative regulation, departmental rules and regulations or
the Articles of Association, need to be approved by shareholders in
general meetings;
Article 63 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 reaches or exceeds 50% of
the most recent audited net assets;
(2) guarantees to be provided in favour of an entity which is
subject to a gearing ratio of over 70%;
(3) any single guarantee with an amount which exceeds 10% of the
most recent audited net asset value of the Company;
(4) guarantees to be provided in favour of any shareholder,
person who exercises effective control over the Company and its
affiliates;
(5) any guarantee provided by the Company in favour of third
parties with the total amount of the guarantee reaches or exceeds
30% of the most recent audited total assets;
(6) 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 64 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 one- half (1/2) (exclusive of
one-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 65 The Company shall not, without the prior approval of
shareholders in a general meeting, enter into any contract with any
person (other than a director, supervisor, president, vice
presidents and other senior officers) pursuant to which such person
shall be responsible for the management and administration of the
whole or any substantial part of the Company's business.
Article 66 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 six 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 shall facilitate the shareholders participating in
the shareholders' general meetings through all practicable manners
and means and priority shall be given to modern information
technological means such as voting platform through internet,
provided that the legality and effectiveness of the shareholders'
general meeting are ensured. Shareholders are deemed to be present
in the shareholders' general meetings through the aforesaid
means.
The Company shall convene an extraordinary general meeting
within two 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 67 When the Company convenes a shareholders' general
meeting, written notice of the meeting shall be given forty-five
(45) days before the date of the meeting to notify all of the
shareholders whose names appear on the share register of the
matters to be considered and the date and place of the meeting. A
shareholder who intends to attend the meeting shall deliver to the
Company his written reply concerning his attendance at such meeting
twenty (20) days before the date of the meeting.
However, the conversing of a shareholders' general meeting shall
not be subject to the above notice period requirements of all of
the promoter shareholders shall have agreed in writing.
Article 68 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 69 The Company shall, based on the written replies which
it receives from the shareholders twenty (20) days before the date
of the shareholders' general meeting, calculate the number of
voting shares represented by the shareholders who intend to attend
the meeting. If the number of voting shares represented by the
shareholders who intend to attend the meeting amount to more than
one- half of the Company's total voting shares, the Company may
hold the meeting; if not, then the Company shall, within five (5)
days, further notify the shareholders by way of public announcement
the matters to be considered at, and the place and date for, the
meeting. The Company may then hold the meeting after publication of
such announcement.
Article 70 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 67
and Article 68 of the Articles of Association or proposals which do
not conform with the requirements contained in Article 71 of the
Articles of Association shall not be voted and resolved at the
shareholders' general meetings.
Article 71 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 72 A notice of a meeting of the shareholders of the
Company shall satisfy the following criteria:
(1) be in writing;
(2) specify the place, date and time of the meeting;
(3) state the matters to be discussed at the meeting;
(4) provide such information and explanation as are necessary
for the shareholders to make an informed decision on the proposals
put before them. Without limiting the generality of the foregoing
principle, where a proposal is made to amalgamate the Company with
another, to repurchase the shares of the Company, to reorganise its
share capital, or to restructure the Company in any other way, the
terms of the proposed transaction must be provided in detail
together with copies of the proposed agreement, if any, and the
cause and effect of such proposal must be properly explained;
(5) contain a disclosure of the nature and extent, if any, of
the material interests of any director, supervisor, president, vice
presidents and other senior officers in the proposed transaction
and the effect which the proposed transaction will have on them in
their capacity as shareholders insofar as it is different from the
effect on the interests of shareholders of the same class;
(6) contain the full text of any special resolution to be proposed at the meeting;
(7) contain a conspicuous statement that a shareholder entitled
to attend and vote at such meeting is entitled to appoint one (1)
or more proxies to attend and vote at such meeting on his behalf
and that a proxy need not be a shareholder;
(8) specify the time and place for lodging proxy forms for the relevant meeting.
Article 73 Notice of shareholders' general meeting shall be
served on the shareholders (whether or not such shareholder is
entitled to vote at the meeting), by personal delivery or by
prepaid mail to the address of the shareholder as shown in the
register of shareholders.
For the holders of A shares, notice of the meetings may be
issued by way of public announcement. Such public announcement
shall be published in one (1) or more national newspapers
designated by the securities authority of the State Council within
the interval of forty-five (45) days to fifty (50) days before the
date of the meeting; after the publication of such announcement,
all holders of A shares shall be deemed to have received the notice
of the relevant shareholders' meeting.
For holders of Overseas-Listed Foreign Shares, subject to
compliance with the laws and regulations and the relevant listing
rules of the jurisdictions where the shares of the Company are
listed, the notice of shareholders' general meeting may also be
issued by other means as specified in Article 231 herein.
Article 74 The accidental omission to give notice of a meeting
to, or the failure to receive the notice of a meeting by, any
person entitled to receive such notice shall not invalidate the
meeting and the resolutions adopted thereat.
Article 75 Any shareholder who is entitled to attend and vote at
a general meeting of the Company shall be entitled to appoint one
(1) or more persons (whether such person is a shareholder or not)
as his proxies to attend and vote on his behalf, and a proxy so
appointed shall be entitled to exercise the following rights
pursuant to the authorization from that shareholder:
(1) the shareholders' right to speak at the meeting;
(2) the right to demand or join in demanding a poll;
(3) unless otherwise required by the applicable listing rules or
other securities laws and regulations, the right to vote by hand or
on a poll, but a proxy of a shareholder who has appointed more than
one (1) proxy may only vote on a poll.
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
or at any class 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 the right on behalf of the recognized clearing
house (or its attorney) as if he is an individual shareholder of
the Company.
Article 76 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 77 The instrument appointing a voting proxy and, if such
instrument is signed by a person under a power of attorney or other
authority on behalf of the appointor, a notary certified copy of
that power of attorney or other authority shall 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, not less than
twenty-four (24) hours before the time for holding the meeting at
which the proxy propose to vote or the time appointed for the
passing of the resolution.
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 78 Any form issued to a shareholder by the directors for
use by such shareholder for the appointment of a proxy to attend
and vote at meetings of the Company shall be such as to enable the
shareholder to freely instruct the proxy to vote in favour of or
against the motions and provide shareholders with opportunities of
instructing the proxy to vote on each individual matter to be voted
on at the meeting. Such a form shall contain a statement that, in
the absence of specific instructions from the shareholder, the
proxy may vote as he thinks fit.
Article 79 A vote given in accordance with the terms of a proxy
shall be valid notwithstanding the death or loss of capacity of the
appointor or revocation of the proxy or the authority under which
the proxy was executed, or the transfer of the shares in respect of
which the proxy is given, provided that the Company did not receive
any written notice in respect of such matters before the
commencement of the relevant meeting.
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 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. 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 82 The Company's board of directors, independent
directors and shareholders who have satisfied certain conditions
(which are determined based on such standards as promulgated from
time to time by the relevant competent authorities) may publicly
solicit the voting rights from shareholders at a shareholders'
general meeting. In soliciting voting rights of shareholders,
information such as specific voting intention shall be sufficiently
disclosed to the shareholders from whom voting rights are being
solicited. Consideration or de facto consideration for solicitation
of voting rights is prohibited. The Company may not propose any
minimum shareholding restriction on the solicitation of voting
rights. Any person who publicly solicits voting rights from the
shareholders of the Company 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 83 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 one- half (exclusive of one-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 84 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 111
and election of supervisors in Article 150 of these Articles of
Association in connection with the adoption of the cumulative
voting system for election of directors, 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.
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.
Article 85 At any shareholders' general meeting, a resolution
shall be decided on a show of hands unless a poll is demanded:
(1) by the chairman of the meeting;
(2) by at least two (2) shareholders present in person or by proxy entitled to vote thereat;
(3) by one (1) or more shareholders (including proxies)
representing 10% or more of the shares (held solely or in
combination) carrying the right to vote at the meeting, before or
after a vote is carried out by a show of hands.
Unless otherwise required by the applicable listing rules or
other securities laws and regulations or a poll is demanded, a
declaration by the chairman that a resolution has been passed on a
show of hands and the record of such in the minutes of the meeting
shall be conclusive evidence of the fact that such resolution has
been passed without proof of the number or proportion of votes in
favour of or against such resolution.
The demand for a poll may be withdrawn by the person who demands
the same.
Article 86 A poll demanded on the election of the chairman of
the meeting, or on a question of adjournment of the meeting, shall
be taken forthwith. Unless the applicable listing rules or other
securities laws and regulations require otherwise, a poll demanded
on any other question shall be taken at such time as the chairman
of the meeting directs, and any business other than that upon which
a poll has been demanded may be proceeded with, pending the taking
of the poll. The result of the poll shall be deemed to be a
resolution of the meeting at which the poll was demanded.
Article 87 On a poll taken at a meeting, a shareholder
(including a proxy) entitled to two
(2) or more votes need not cast all his votes in the same
way.
Article 88 In the case of an equality of votes, whether on a
show of hands or on a poll, the chairman of the meeting at which
the show of hands takes place or at which the poll is demanded
shall have a casting vote.
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, 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, departmental rules and 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 following procedures shall be adopted should the
independent directors, the supervisory committee, shareholders who
separately or jointly hold voting shares in excess of 10% request
for convening of an extraordinary general meeting or class
meeting:
(1) The said directors, supervisory committee and shareholders
shall sign a copy, or several copies, of written request in the
same form and substance, and request the board of directors to
convene an extraordinary general meeting or a class meeting, with
clearly stated topics for discussion at the meeting. Within 10 days
of receiving the written request, the board of directors shall
reply in writing on whether or not they agree to convene an
extraordinary general meeting.
(2) Should the board of directors agree to convene an
extraordinary general meeting or a class meeting, a notice for
convening such meeting shall be issued within 5 days after the
board of directors has adopted a 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 an
extraordinary general meeting or a class 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 an
extraordinary general meeting or a class 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 shareholders' general meeting as far as
practicable.
(5) Should the board of directors not agree to convene an
extraordinary general meeting or a class 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 an extraordinary
general meeting or a class meeting. Should the supervisory
committee agree to convene an extraordinary general meeting
or a class meeting, it shall issue a notice for convening a
shareholder's general meeting or a class meeting within 5 days of
receiving 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 shareholders' general meetings or a class
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. (Prior to the announcement of the
resolutions adopted at the shareholders' general 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 meetings shall be identical to those employed by the board of
directors for convening a shareholders' general meeting as far as
practicable.
Should the supervisory committee or the shareholders convene and
hold a meeting pursuant to the rules above, they shall inform the
board of directors in writing, and submit their applications to the
relevant supervisory departments in accordance with the applicable
rules. 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.
The costs incurred shall be deducted from the amount owed by the
Company to such directors who have committed negligence of
duties.
Article 93 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 the director jointly elected by more than half of the
number of Directors is unable 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
person presiding over 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 person presiding the shareholders'
general meeting such that the meeting may be continued.
Article 94 The chairman of the meeting shall be responsible for
determining whether a resolution has been passed. His decision,
which shall be final and conclusive, shall be announced at the
meeting and recorded in the minute book. 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 95 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 96 If votes are counted at a shareholders' general
meeting, the result of the count shall be recorded in the minute
book.
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 minutes of the meeting. The record and minutes of
the meeting shall be in Chinese. Such record and minutes,
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 97 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 : SPECIAL PROCEDURES FOR VOTING BY A CLASS OF
SHAREHOLDERS
Article 98 Those shareholders who hold different classes of
shares are class shareholders.
Class shareholders shall enjoy rights and assume obligations in
accordance with laws, administrative regulations and the Articles
of Association.
Article 99 Rights conferred on any class of shareholders may not
be varied or abrogated save with the approval of a special
resolution of shareholders in a general meeting and by holders of
shares of that class at a separate meeting convened in accordance
with Article 101 to Article 105 of these Articles of
Association.
Article 100 The following circumstances shall be deemed to be
variation or abrogation of the rights attaching to a particular
class of shares:
(1) to increase or decrease the number of shares of that class,
or to increase or decrease the number of shares of a class having
voting or equity rights or privileges equal or superior to those of
shares of that class;
(2) to exchange all or part of the shares of that class for
shares of another class or to exchange or to create a right to
exchange all or part of the shares of another class for shares of
that class;
(3) to remove or reduce rights to accrued dividends or rights to
cumulative dividends attached to shares of that class;
(4) to reduce or remove preferential rights attached to shares
of that class to receive dividends or to the distribution of assets
in the event that the Company is liquidated;
(5) to add, remove or reduce conversion privileges, options,
voting rights, transfer or pre-emptive rights, or rights to acquire
securities of the Company attached to shares of that class;
(6) to remove or reduce rights to receive payment payable by the
Company in particular currencies attached to shares of that
class;
(7) to create a new class of shares having voting or equity
rights or privileges equal or superior to those of the shares of
that class;
(8) to restrict the transfer or ownership of shares of that
class or to increase the types of restrictions attaching
thereto;
(9) to allot and issue rights to subscribe for, or to convert
the existing shares into, shares in the Company of that class or
another class;
(10) to increase the rights or privileges of shares of another class;
(11) to restructure the Company in such a way so as to result in
the disproportionate distribution of obligations between the
various classes of shareholders;
(12) to vary or abrogate the provisions of this Chapter.
Article 101 Shareholders of the affected class, whether or not
otherwise having the right to vote at shareholders' general
meetings, have the right to vote at class meetings in respect of
matters concerning sub-paragraphs (2) to (8), (11) and (12) of the
preceding article, but interested shareholder(s) shall not be
entitled to vote at such class meetings.
"(An) interested shareholder(s)", as such term is used in the
preceding paragraph, means:
(1) in the case of a repurchase of shares by way of a general
offer to all shareholders of the Company or by way of public
dealing on a stock exchange pursuant to Article 30, a "controlling
shareholder" within the meaning of Article 60;
(2) in the case of a repurchase of shares by an off-market
agreement pursuant to Article 30, a holder of the shares to which
the proposed agreement relates;
(3) in the case of a restructuring of the Company, a shareholder
who assumes a relatively lower proportion of obligation than the
obligations imposed on shareholders of that class under the
proposed restructuring or who has an interest in the proposed
restructuring different from the general interests of the
shareholders of that class.
Article 102 Resolutions of a class of shareholders shall be
passed by votes representing more than two-thirds of the voting
rights of shareholders of that class represented at the relevant
meeting who, according to Article 101 of these Articles of
Association, are entitled to vote thereat.
Where any shareholder is, under the applicable rules governing
the listing of securities as amended from time to time, required to
abstain from voting in connection with any particular resolution at
a particular class meeting, or is restricted to vote only for or
only against any particular resolution at a particular class
meeting, any vote cast by or on behalf of such shareholder in
contravention of such requirement or restriction shall not be
counted.
Article 103 Written notice of a class meeting shall be given to
all shareholders who are registered as holders of that class in the
register of shareholders forty-five (45) days before the date of
the class meeting. Such notice shall give such shareholders notice
of the matters to be considered at such meeting, the date and the
place of the class meeting. A shareholder who intends to attend the
class meeting shall deliver his written reply in respect thereof to
the Company twenty (20) days before the date of the class
meeting.
If the shareholders who intend to attend such class meeting
represent more than half of the total number of shares of that
class which have the right to vote at such meeting, the Company may
hold the class meeting; if not, the Company shall within five (5)
days give the shareholders further notice of the matters to be
considered, the date and the place of the class meeting by way of
public announcement. The Company may then hold the class meeting
after such public announcement has been made.
The quorum of any class meeting (except for the adjournment),
which is proposed to vary the rights of the above-mentioned class
of shareholders, shall at least be one third of the total issued
shares of the above-mentioned class.
Article 104 Notice of class meetings need only be served on
shareholders entitled to vote thereat.
Class meetings shall be conducted in a manner which is as
similar as possible to that of shareholders' general meetings. The
provisions of the Articles of Association relating to the manner
for the conduct of shareholders' general meetings are also
applicable to class meetings.
Article 105 Apart from the holders of other classes of shares,
the holders of the A Shares and holders of Overseas-Listed Foreign
Shares shall be deemed to be holders of different classes of
shares. Holders of Overseas-Listed Foreign Shares shall be deemed
to be holders of the same class of shares.
The special procedures for approval by a class of shareholders
shall not apply in the following circumstances:
(1) where the Company issues, upon the approval by special
resolution of its shareholders in a general meeting, either
separately or concurrently once every twelve (12) months, not more
than 20% of each of its existing issued A Shares and
Overseas-Listed Foreign Shares; or
(2) where the Company's plan to issue A Shares and
Overseas-Listed Foreign Shares at the time of its establishment is
carried out within fifteen (15) months from the date of approval of
the authority in charge of securities under the State Council.
CHAPTER 10 : THE PARTY COMMITTEE
Article 106 The Company shall establish the Party committee. The
Party committee is comprised of one secretary and several other
members. The positions of Chairman and the secretary of the Party
committee shall be assumed by the same person in principle, and a
full-time deputy secretary of the Party committee shall be
appointed to take charge of the Party building work. Eligible
members of the Party committee are entitled to be admitted to the
board of directors, the supervisory committee, and the management
through legal procedures, and eligible Party members from the board
of directors, the supervisory committee, and the management are
entitled to be admitted to the Party committee in accordance with
relevant rules and procedures. Meanwhile, a discipline inspection
committee shall be established in accordance with appropriate
requirements.
Article 107 The Party committee of the Company shall perform its
duties by the internal laws and regulations of the Party such as
the Constitution of the Communist Party of China.
(1) To guarantee and supervise the Company's implementation of
policies and guidelines of the Party and the State, implement major
strategic decisions of the Central Committee of the Party and the
State Council, as well as make deployment for the relevant material
works of the Party committee of the State-owned Assets Supervision
and Administration Commission of the State Council and the superior
Party organisation.
(2) To adhere to the principle of the Party exercising
leadership over cadres, the selection of management by the board of
directors, and the exercise of power as regards the right of
cadres' appointment by the management in accordance with laws. The
Party committee shall deliberate and give opinions on the
candidates nominated by the board of directors or the
general manager, or recommend nominees to the board of directors
or the general manager. The Party committee of the Company,
together with the board of directors, shall observe the proposed
candidates and give opinions collectively.
(3) To study and discuss the Company's material matters on its
reform, development and stability, as well as major issues relating
to the Company's operation and management and to the interests of
the staff, and propose opinions and suggestions thereon.
(4) To assume full responsibility for enforcing the strict
discipline of the Party. Leading the Company's ideological and
political work, the front unification work, building of spiritual
civilization as well as building of corporate culture, and lead
mass organizations such as the labour union and the Communist Youth
League. Playing a leading role in the construction of the Party's
working style and a clean and honest government, and support the
discipline inspection committee in fulfilling its responsibility of
supervision in practice.
CHAPTER 11 : BOARD OF DIRECTORS
Article 108 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 (meaning directors
who are independent from the Company's shareholders and do not hold
offices within the Company). 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.
Article 109 Directors (excluding the employee representative
director) shall be elected 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 three (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 six (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.
The executive directors shall handle matters as authorized by
the board of directors.
If a director is a natural person, he or she may not be required
to hold shares in the Company.
Article 110 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 law, regulations and/or the
relevant 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 of directors 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 111 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 112 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 three (3) years, which term is
renewable upon re-election.
Article 113 The board of directors shall make inquiries with the
Party committee before making decisions on major issues of the
Company.
Article 114 The board of directors is responsible to the
shareholders' general meeting and shall exercise the following
duties and powers:
(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,
administrative regulations 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 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 and determine their
remunerations; and to appoint or dismiss, with reference to the
nomination by the president, the vice presidents, chief accountant,
chief pilot and other senior officers and determine their
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; and
(17) to exercise any other powers conferred by the shareholders
in general meetings and these Articles of Associations.
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 sub-paragraphs (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 115 Upon authorization by the board of directors, the
Chairman may exercise part of the functions and powers of the board
of directors when the board of directors is not in session. Issues
involving material interests of the Company shall be subject to
collective decision by the board of directors.
Article 116 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 four (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 117 Unless otherwise provided for in the laws,
regulations and/or the relevant 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 118 The board of directors may establish the strategy
and investment committee, the audit and risk management committee,
the nomination and remuneration 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 119 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 convene Chairman's office meeting;
(5) 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 120 Meetings of the board of directors shall be held at
least twice 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 general meeting 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 121 The notice of board meeting shall be issued via the
following methods:
(1) For regular 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 120 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 122 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 121 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 meeting or
postpone the discussion of certain matters on the agenda of the
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.
Any regular or ad hoc meeting of the board of directors may be
held by way of telephone conferencing or similar communication
equipment so long as all directors participating in the meeting can
clearly hear and communicate with each other. All such directors
shall be deemed to be present in person at the meeting.
Article 123 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 120 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. In the case of
equal division of votes, the Chairman of the board of directors is
entitled to a casting vote.
Article 124 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 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.
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 an alternate director to attend board meetings on their
behalf. The board of directors shall propose at the shareholders'
general meeting for the removal of such directors.
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 125 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 or by facsimile. 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, such resolution shall take
effect as a board resolution, without having to hold a board
meeting.
Article 126 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. The minutes shall be kept for a period of not less than
10 years.
Article 127 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 board resolution shall have no legal effect.
If a resolution of the board of directors violates the laws,
administrative regulations or the Company's Articles of
Association, 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 128 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 129 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 having less than the minimum
required proportion of independent directors as required by the
relevant regulatory authority, 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 12 : INDEPENT DIRECTORS
Article 130 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.
(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 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 law, regulations 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 law, regulations and/or the relevant
listing rules contain the relevant provisions, the written
materials concerning the nominee set out in sub- paragraphs (1) and
(2) of this Article shall be publicly announced together with the
resolutions of the board of directors 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 sub-paragraphs (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 law, regulations
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
qualified 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 131 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 laws,
administrative regulations and other relevant regulations;
(2) he or she conforms with independence required by the
relevant laws, administrative regulations, department rules and
regulations 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 five (5) years experience
in law, economics or other working experience necessary for
performing duties of an independent director;
(5) he or she shall fulfil other conditions as provided for in these Articles of Association.
Article 132 Independent directors shall have independence.
Unless otherwise required by the relevant laws, administrative
regulations 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 who have satisfied the conditions stated in the
above three sub- paragraphs within the most recent year;
(5) persons who provide financial, legal and consultation
services and otherwise to the Company or its subsidiaries;
(6) persons who are determined by the authority in charge of
securities to be unqualified to act as independent directors.
Article 133 If an independent director fails to attend three
consecutive board meetings in person, the board of directors shall
propose at the shareholders' general meeting that such independent
director should be removed. Except for circumstances described
above, the circumstances as provided for in the third paragraph of
Article 124 of these Articles of Association and those set out in
the Company Law that a person is unqualified to act as a director,
an independent director shall not be removed without cause from his
office before the expiration of his term of office. Where an
independent director is removed from office prior to the expiration
of his/her term of office, the Company shall make special
disclosure in relation thereto. The removed independent director
may make a public statement if he believes that he has been
improperly removed from his office.
Article 134 Apart from such powers as conferred on a director
under the Company Law and other relevant laws and regulations and
the Articles of Association, an independent director shall also
have the following special functions and powers:
(1) with respect to the material connected transactions (as
determined based on the standards promulgated from time to time by
the competent regulatory departments) and the appointment or
removal of an accounting firm that are subject to be considered at
a shareholders' general meeting in accordance with the laws,
regulations and/or the relevant listing rules, if the applicable
law, regulations and/or relevant listing rules contain the relevant
provisions, the transactions and appointment and removal set out
above shall be endorsed by not less than one-half (1/2) of the
independent directors before submitting to the board of directors
for discussion. None of the resolution reached by the board of
directors with respect to the connected transactions entered into
by the Company shall become effective unless such resolution is
signed by the independent directors. Prior to making a judgment,
the independent directors may appoint an intermediary to issue an
independent financial adviser's report as a basis of their
judgment.
(2) He or she may give recommendations to the board of directors
as to the engagement, or termination of the engagement, of an
accounting firm;
(3) He or she may propose to the board of directors to convene
an extraordinary general meeting;
(4) He or she may propose to convene a board meeting;
(5) He or she may engage external auditors or advisers independently;
(6) He or she may solicit votes from shareholders prior to the shareholders' general meeting;
(7) He or she may directly report the relevant issues to the
shareholders' general meeting, the authority in charge of
securities of the State Council and other relevant departments.
An independent director shall obtain the consent from not less
than one-half (1/2) of all independent directors for exercising
their functions and powers in the case of exercising his/her
functions as described in sub-paragraphs (2), (3), (4), (6) and (7)
of this Article set out above, and the unanimous consent from all
independent directors in the case of exercising his/her functions
as described in sub-paragraph (5) of this Article as set out
above.
Article 135 Apart from the duties set forth above, independent
directors shall also express their independent opinion on the
following major matters to the board of directors or at a
shareholders' general meeting:
(1) nomination or removal of directors;
(2) appointment or removal of senior officers;
(3) the remuneration of directors and senior officers;
(4) matters which the independent directors believe may impair
the rights and interests of minority shareholders;
(5) material financial transactions between the Company and its
shareholders, de facto controlling person or their affiliates;
(6) profit distribution plan proposed to the board of directors
of the Company for their review and consideration;
(7) failure of the board of directors of the Company to produce
proposal in connection with profit distribution in cash;
(8) other matters provided for by the applicable laws and
regulations, departmental rules or the articles of association of
the Company.
Independent directors shall give one of the following opinions
in relation to the above matters: agree; qualified opinion and
reasons therefore; oppose and reasons therefore; unable to form an
opinion and the impediments to doing so.
Article 136 Independent directors shall submit an annual working
report to the shareholders' general meeting to give an account of
the performance of their duties.
CHAPTER 13 : SECRETARY OF THE BOARD OF DIRECTORS
Article 137 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 138 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 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;
(2) 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;
(3) responsible for the organization and coordination of
information disclosure, coordinate the relationship with investors
and enhance transparency of the Company;
(4) participate in arranging of financing through capital markets;
(5) deal with intermediaries, regulatory authorities and media,
maintain good public relations work;
(6) execute other tasks assigned by the board of directors or
the chairman of the board of directors.
Article 139 A director or other senior management personnel of
the Company may also act as the secretary of the board of
directors. The certified public accounting firm which has been
appointed by the Company to act as its auditors shall not 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 140 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 14 : PRESIDENT
Article 141 The Company shall have a president who shall be
appointed or dismissed by the board of directors.
The Company shall have several vice president, one chief
financial officer and one chief pilot who shall assist the
president. The vice presidents, chief financial officer and chief
pilot shall be nominated by the president and appointed or
dismissed by the board of the directors.
Article 142 The term of office for a president shall be three
years and is renewable if re- appointed.
Article 143 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 and chief pilot 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 144 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 145 In performing their duties and powers, the
president, vice presidents, chief accountant, chief pilot and other
senior officers shall act honestly and diligently in accordance
with laws, administrative regulations and the Articles of
Association.
CHAPTER 15 : SUPERVISORY COMMITTEE
Article 146 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 147 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. Each
supervisor shall serve for a term of three (3) years, which term is
renewable upon re-election and re-appointment.
The election or removal of the chairman of the supervisory
committee shall be determined by the affirmative votes of
two-thirds or more of the members of the supervisory committee.
The chairman of the supervisory committee shall organise the
implementation of the duties of the supervisory committee.
Article 148 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 149 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 150 The cumulative voting method may 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 151 The directors, president, vice presidents and other
senior management of the Company shall not act concurrently as
supervisors.
Article 152 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 153 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 154 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 ad hoc board meeting;
(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 155 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 156 Resolutions of the supervisory committee shall be
passed by the affirmative vote of two-thirds or more of all of its
members.
Article 157 The supervisory committee shall take minutes of the
resolutions at the meetings. Supervisor 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 158 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 159 A supervisor shall carry out his duties honestly and
faithfully in accordance with laws, administrative regulations and
the Articles of Association.
CHAPTER 16 : THE QUALIFICATIONS AND DUTIES OF
THE DIRECTORS, SUPERVISORS, PRESIDENT, VICE PRESIDENTS AND OTHER
SENIOR OFFICERS OF THE COMPANY
Article 160 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
five years have elapsed since the sentence was served, or a person
who has been deprived of his political rights and not more than
five 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 three 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 three 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 five 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 161 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 believes that such director is acting on
behalf of the Company or the board of directors.
Article 162 The validity of an act carried out by a director,
the president, vice presidents, financial controller or other
senior officers of the Company on behalf of the Company as against
a bona fide third party, shall not be affected by any irregularity
in his office, election or any defect in his qualification.
Article 163 In addition to the obligations imposed by laws,
administrative regulations or the listing rules of the stock
exchange on which shares of the Company are listed, each of the
Company's directors, supervisors, president, vice presidents and
other senior officers owes a duty to each shareholder, in the
exercise of the functions and powers entrusted to him by the
Company:
(1) not to cause the Company to exceed the scope of business
stipulated in its business licence;
(2) to act honestly and in the best interests of the Company;
(3) not to deprive the Company of its assets property in any
way, including (but not limited to) any opportunities which benefit
the Company;
(4) not to deprive shareholders of the individual rights of,
including (but not limited to) rights to distribution and voting
rights, save and except pursuant to a restructuring of the Company
which has been submitted to the shareholders for approval in
accordance with the Articles of Association.
Article 164 Each of the Company's directors, supervisors,
president, vice presidents and other senior officers owes a duty,
in the exercise of his powers or in the discharge of his duties, to
exercise the care, diligence and skill that a reasonably prudent
person would exercise in comparable circumstances, including but
not limited to compliance with the standards of the professional
ethnics and code of conduct formulated by the Company.
Article 165 Each of the Company's directors, supervisors,
president, vice presidents and other senior officers shall exercise
his powers or perform his duties in accordance with the fiduciary
principle; and shall not put himself in a position where his duty
and his interest may conflict. This principle includes (without
limitation) discharging the following obligations:
(1) to act honestly in the best interests of the Company;
(2) to act within the scope of his powers and not to exceed such powers;
(3) to exercise the discretion vested in him personally and not
to allow himself to act under the control of another and, unless
and to the extent permitted by laws, administrative regulations or
with the informed consent of shareholders given in a general
meeting, not to delegate the exercise of his discretion;
(4) to treat shareholders of the same class equally and to treat
shareholders of different classes fairly;
(5) unless otherwise provided for in the Articles of Association
or except with the informed consent of the shareholders given in a
general meeting, not to enter into any contract, transaction or
arrangement with the Company;
(6) not to use the Company's property for his own benefit,
without the informed consent of the shareholders given in a general
meeting;
(7) not to exploit his position to accept bribes or other
illegal income or misappropriate the Company's property in any way,
including (but not limited to) opportunities which benefit the
Company;
(8) not to accept commissions in connection with the Company's
transactions, without the informed consent of the shareholders
given in a general meeting;
(9) to comply with the Company's Articles of Association, to
perform his official duties faithfully, to protect the Company's
interests and not to exploit his position and power in the Company
to advance his own interests;
(10) not to compete with the Company in any way, save with the
informed consent of the shareholders given in a general
meeting;
(11) not to misappropriate the Company's funds, not to use the
Company's assets to set up deposit accounts in his own name or in
any other name, and not to lend the funds of the Company to other
party or to use the assets of the Company to guarantee the debts of
a third party unless with the full knowledge and consent of the
shareholders given at a shareholders' general meetings or of the
board of directors;
(12) not to release any confidential information which he has
obtained during his term of office, without the informed consent of
the shareholders in a general meeting; nor shall he use such
information otherwise than for the Company's benefit, save that
disclosure of such information to the court or other governmental
authorities is permitted if:
(i) disclosure is required by the law;
(ii) in the public interests;
(iii) in the interests of the relevant director, supervisor,
president, vice presidents or other senior officer.
Gains derived by the directors, the president, the vice
president and other senior management personnel in violation of
this Article shall be vested in the Company. The said officers
shall be liable for damages should their actions cause losses to
the Company.
Article 166 Should the directors, the supervisors, the
president, the vice president and other senior management personnel
be requested to attend a shareholders' general meeting as
non-voting attendees, such directors, supervisors, 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 167 Each director, supervisor, president, vice
presidents and other senior officer of the Company shall not direct
the following persons or institutions ("associates") to act in a
manner which he is prohibited from so acting:
(1) the spouse or minor child of the director, supervisor,
president, vice presidents or other senior officer;
(2) the trustee of the director, supervisor, president, vice
presidents or other senior officer or of any person described in
sub-paragraph (1) above;
(3) the partner of that director, supervisor, president, vice
presidents or other senior officer or any person referred to in
sub-paragraphs (1) and (2) of this Article;
(4) a company in which that director, supervisor, president,
vice presidents or other senior officer, whether alone or jointly
with any person referred to in sub-paragraphs (l), (2) and (3) of
this Article and other directors, supervisors, president and other
senior officers, has de facto controlling interest;
(5) the directors, supervisors, president, vice presidents and
other senior officers of a company which is being controlled in the
manner set out in sub- paragraph (4) above.
Article 168 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 169 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 170 Subject to Article 59 hereof, a director,
supervisor, president, vice president or other senior officer of
the Company may be relieved of liability for specific breaches of
his duty with the informed consent of the shareholders given at a
general meeting.
Article 171 Where a director, supervisor, president, vice
president or other senior officer of the Company is in any way,
directly or indirectly, materially interested in a contract,
transaction or arrangement or proposed contract, transaction or
arrangement with the Company, (other than his contract of service
with the Company), he shall declare the nature and extent of his
interests to the board of directors at the earliest opportunity,
whether or not the contract, transaction or arrangement or proposal
therefore is otherwise subject to the approval of the board of
directors.
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.
Unless an interested director, supervisor, president, vice
president or other senior officer discloses his interests in
accordance with the first sub-paragraph of this Article and he is
not counted as part of the quorum and refrains from voting, such
transaction is voidable at the instance of the Company except as
against a bona fide party thereto who does not have notice of the
breach of duty by the interested director, supervisor, president,
vice president or other senior officer.
A director, supervisor, president, vice president or other
senior officer of the Company is deemed to be interested in a
contract, transaction or arrangement in which his associate is
interested.
Article 172 Where a director, supervisor, president, vice
president or other senior officer of the Company gives to the board
of directors a notice in writing stating that, by reason of the
facts specified in the notice, he is interested in contracts,
transactions or arrangements which may subsequently be made by the
Company, that notice shall be deemed for the purposes of the
preceding Article to be a sufficient declaration of his interests,
so far as the content stated in such notice is concerned, provided
that such notice shall have been given before the date on which the
question of entering into the relevant contract, transaction or
arrangement is first taken into consideration by the Company.
Article 173 The Company shall not pay taxes for or on behalf of
a director, supervisor, president, vice president or other senior
officer in any manner.
Article 174 The Company shall not directly or indirectly make a
loan to or provide any guarantee in connection with the making of a
loan to a director, supervisor, president, vice president or other
senior officer of the Company or of the Company's holding company
or any of their respective associates.
The foregoing prohibition shall not apply to the following
circumstances:
(1) the provision by the Company of a loan or a guarantee in
connection with the making of a loan to its subsidiary:
(2) the provision by the Company of a loan or a guarantee in
connection with the making of a loan or any other funds available
to any of its directors, supervisors, president, vice presidents
and other senior officers to meet expenditure incurred or to be
incurred by him for the purposes of the Company or for the purpose
of enabling him to perform his duties properly, in accordance with
the terms of a service contract approved by the shareholders in a
general meeting;
(3) if the ordinary course of business of the Company includes
the lending of money or the giving of guarantees, the Company may
make a loan to or provide a guarantee in connection with the making
of a loan to any of the relevant director, supervisor, president,
vice president and any other senior officer or his or her
respective associates in the ordinary course of its business on
normal commercial terms.
Article 175 Any person who receives funds from a loan which has
been made by the Company acting in breach of the preceding Article
shall, irrespective of the terms of the loan, forthwith repay such
funds.
Article 176 A guarantee for the repayment of a loan which has
been provided by the Company acting in breach of Article 174(1) of
these Articles of Association shall not be enforceable against the
Company, save in respect of the following circumstances:
(1) the guarantee was provided in connection with a loan which
was made to an associate of any of the director, supervisor,
president, vice president and any other senior officer of the
Company or of the Company's holding company and the lender of such
funds did not know of the relevant circumstances at the time of the
making of the loan; or
(2) the collateral which has been provided by the Company has
already been lawfully disposed of by the lender to a bona fide
purchaser.
Article 177 For the purposes of the foregoing provisions of this
Chapter, a "guarantee" includes an undertaking or property provided
to secure the obligor's performance of his obligations.
Article 178 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, administrative regulations and the
Articles of Association by such director, supervisor, president,
vice president and other senior officer of the Company.
Article 179 In addition to any rights and remedies provided by
the laws and administrative regulations, where a director,
supervisor, president, vice president or other senior officer of
the Company breaches the duties which he owes to the Company, the
Company has a right:
(1) to demand such director, supervisor, president, vice
president or other senior officer to compensate it for losses
sustained by the Company as a result of such breach;
(2) to rescind any contract or transaction which has been
entered into between the Company and such director, supervisor,
president vice president or other senior officer or between the
Company and a third party (where such third party knows or should
have known that such director, supervisor, president, vice
president and other senior officer representing the Company has
breached his duties owed to the Company);
(3) to demand such director, supervisor, president, vice
president or other senior officer to account for profits made as
result of the breach of his duties;
(4) to recover any monies which should have been received by the
Company and which were received by such director, supervisor,
president, vice president or other senior officer instead,
including (without limitation) commissions; and
(5) to demand repayment of interest earned or which may have
been earned by such director, supervisor, president, vice president
or other senior officer on monies that should have been paid to the
Company.
Article 180 The Company shall, with the prior approval of
shareholders in a general meeting, enter into a contract in writing
with a director or supervisor wherein his emoluments are
stipulated. The aforesaid emoluments include:
(1) emoluments in respect of his service as director, supervisor
or senior officer of the Company;
(2) emoluments in respect of his service as director, supervisor
or senior officer of any subsidiary of the Company;
(3) emoluments in respect of the provision of other services in
connection with the management of the affairs of the Company and
any of its subsidiaries;
(4) payment by way of compensation for loss of office, or in
connection with his retirement from office.
No proceedings may be brought by a director or supervisor
against the Company for anything due to him in respect of the
matters mentioned in this Article except pursuant to the contract
mentioned above.
Article 181 The contract concerning the emoluments between the
Company and its directors or supervisors should provide that in the
event of a takeover of the Company, the Company's directors and
supervisors shall, subject to the prior approval of shareholders in
a general meeting, have the right to receive compensation or other
payment in respect of his loss of office or retirement. For the
purposes of this paragraph, a takeover of the Company includes any
of the following:
(1) an offer made by any person to the general body of shareholders;
(2) an offer made by any person with a view to the offeror
becoming a "controlling shareholder" within the meaning of Article
60 hereof.
If the relevant director or supervisor does not comply with this
Article, any sum so received by him shall belong to those persons
who have sold their shares as a result of such offer. The expenses
incurred in distributing such sum on a pro rata basis amongst such
persons shall be borne by the relevant director or supervisor and
shall not be paid out of such sum.
CHAPTER 17 : FINANCIAL AND ACCOUNTING SYSTEMS, PROFIT
DISTRIBUTION AND AUDIT
Article 182 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 183 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 184 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 185 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 231 herein.
Article 186 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 187 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 188 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 three (3) months of each fiscal year; the
interim financial report shall be published within sixty (60) days
after the expiration of the first six (6) months of each fiscal
year; the third quarterly financial report shall be published
within thirty (30) days after the expiration of the first nine (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 189 The Company's financial reports shall be prepared
pursuant to the relevant laws, administrative regulations and
departmental rules and regulations.
Article 190 The Company shall not keep accounts other than those
required by law.
Article 191 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 192 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 193 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 194 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 195 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 196 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 197 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 198 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
196, 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 64 and subparagraph (17) of the first
paragraph of Article
114 of these Articles of Association, the board of directors may
decide to distribute interim or special dividends.
Article 199 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 two (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 200 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 201 Unless otherwise provided for in relevant laws and
administrative regulations, 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 202 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 203 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 204 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 205 The Company's internal audit system and the
responsibility of the auditing personnel shall become effective
after the approval of the board of directors. The person in charge
of the audit shall be accountable to the board of directors and
shall report to the board of directors.
CHAPTER 18 : APPOINTMENT OF ACCOUNTANCY FIRM
Article 206 The Company shall appoint an independent firm of
accountants which is qualified under the relevant regulations of
the State to audit the Company's annual report. Such firm of
accountants shall also review the Company's other financial
reports, verify the net assets and carry out other businesses such
as the relevant consultation services.
The first auditors of the Company may be appointed before the
first annual general meeting of the Company at the inaugural
meeting. Auditors so appointed shall hold office until the
conclusion of the first annual general meeting.
If the inaugural meeting does not exercise the powers under the
preceding paragraph, those powers shall be exercised by the board
of directors.
Article 207 The accounting firm appointed by the Company shall
hold office for one 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 208 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 shareholders' general meetings and to
receive all notices of, and other communications relating to, any
shareholders' general meeting which any shareholder is entitled to
receive, and to speak at any shareholders' general meeting in
relation to matters concerning its role as the Company's accounting
firm.
Article 209 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. Any other accounting firm which has been appointed
by the Company may continue to act during the period during which a
vacancy arises.
Article 210 The shareholders in a general meeting may by
ordinary resolution remove the Company's accounting firms before
the expiration of its term of office, irrespective of the
provisions in the contract between the Company and the Company's
accountant firm. However, the accounting firm's right to claim for
damages which arise from its removal shall not be affected
thereby.
Article 211 The remuneration of an accounting firm or the manner
in which such firm is to be remunerated shall be determined 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 212 The Company's appointment, removal or
non-reappointment of an accounting firm shall be resolved by the
shareholders in a general meeting, and shall file such resolutions
with the authority in charge of securities of the State Council for
record.
Where a general meeting of shareholders is proposed to resolve
to appoint an accounting firm other than an incumbent accounting
firm to fill a casual vacancy of an accountant, or to reappoint as
the accountant a retiring accounting firm that was appointed by the
board of directors to fill a casual vacancy, or to dismiss an
accounting firm before the expiration of its term of office, the
following provisions shall apply:
(1) A copy of the appointment or removal proposal shall be sent
(before notice of meeting is given to the shareholders) to the
accounting firm proposed to be appointed or proposing to leave its
post or the firm which has left its post in the relevant fiscal
year (leaving includes leaving by removal, resignation and
retirement).
(2) If the accounting firm leaving its post makes
representations in writing and requests the Company to give the
shareholders notice of such representations, the Company shall
(unless the representations have been received too late) take the
following measures:
(a) in the notice of the shareholders' meeting, state the fact
of the representations having been made; and
(b) attach a copy of the representations to the notice and
deliver it to the shareholders in the manner stipulated in the
Company's Articles of Association.
(3) If the Company fails to send out the accounting firm's
representations in the manner set out in sub-paragraph (2) above,
such accounting firm may require that the representations be read
out at the meeting.
(4) An accounting firm which is leaving its post shall be
entitled to attend the following shareholders' general
meetings:
(a) the general meeting at which its term of office would otherwise have expired;
(b) the general meeting at which it is proposed to fill the vacancy caused by its removal; and
(c) the general meeting which convened as a result of its
resignation, and to receive all notices of, and other
communications relating to, any such meeting, and to speak at any
such meeting which concerns it as former auditor of the
Company.
Article 213 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.
An accounting firm may resign its office by depositing at the
Company's legal address a resignation notice which shall become
effective on the date of such deposit or on such later date as may
be stipulated in such notice. Such notice shall contain the
following statements:
(1) a statement to the effect that there are no circumstances
connected with its resignation which it considers should be brought
to the notice of the shareholders or creditors of the Company;
or
(2) a statement of any such circumstances.
The Company shall, within fourteen (14) days after receipt of
the notice referred to in the preceding paragraph, serve a copy of
the notice to the competent governing authority. If the notice
contains the statement under the preceding sub- paragraph (2), a
copy of such statement shall be made available at the Company for
shareholders' inspection. The Company shall also send a copy of
such statement by prepaid mail to each holder of Overseas-Listed
Foreign Shares at the address registered in the register of
shareholders. Notwithstanding the above, 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 notice may also be served to the holders of
Overseas-Listed Foreign Shares by other means as specified in
Article 231 herein.
Where the accounting firm's notice of resignation contains a
statement in respect of the above, it may require the board of
directors to convene a shareholders' extraordinary general meeting
for the purpose of receiving an explanation of the circumstances
connected with its resignation.
CHAPTER 19 : MERGER AND DEMERGER OF THE COMPANY
Article 214 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 215 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.
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 216 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 217 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 20 : DISSOLUTION AND LIQUIDATION
Article 218 The Company shall be dissolved and liquidated upon
the occurrence of any of the following events:
(1) a resolution for dissolution is passed by shareholders at a general meeting;
(2) dissolution is necessary due to a merger or demerger of the Company;
(3) the Company is legally declared insolvent due to its failure
to repay debts as they become due; and
(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 219 A liquidation committee shall be set up within
fifteen (15) days of the Company being dissolved pursuant to
sub-paragraphs (1), (3), (4) and (5) of the preceding Article, and
the composition of the liquidation committee of the Company shall
be determined by an ordinary resolution of shareholders in a
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 220 Where the board of directors proposes to liquidate
the Company for any reason other than the Company's declaration of
its own insolvency, the board shall include a statement in its
notice convening a shareholders' general meeting to consider the
proposal to the effect that, after making full inquiry into the
affairs of the Company, the board of directors is of the opinion
that the Company will be able to pay its debts in full within
twelve (12) months from the commencement of the liquidation.
Upon the passing of the resolution by the shareholders in a
general meeting for the liquidation of the Company, all functions
and powers of the board of directors shall cease.
The liquidation committee shall act in accordance with the
instructions of the shareholders' general meeting to make a report
at least once every year to the shareholders' general meeting on
the committee's income and expenses, the business of the Company
and the progress of the liquidation; and to present a final report
to the shareholders' general meeting on completion of the
liquidation.
Article 221 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. The liquidation committee shall not
make repayment to creditors during the claims declaration
period.
Article 222 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 223 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 224 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 225 Following the completion of the liquidation, the
liquidation committee shall prepare a liquidation report, a
statement of income and expenses received and made during the
liquidation period and a financial report, which shall be verified
by a Chinese registered accountant and submitted to the
shareholders' general meeting or the relevant governing authority
for confirmation.
The liquidation committee shall, within thirty (30) days after
such confirmation, submit the documents referred to in the
preceding paragraph to the companies registration authority and
apply for cancellation of registration of the Company, and publish
a public announcement relating to the termination of the
Company.
CHAPTER 21 : PROCEDURES FOR AMMENT OF THE COMPANY'S ARTICLES OF
ASSOCIATION
Article 226 The Company may amend its Articles of Association in
accordance with the requirements of laws, administrative
regulations and the Articles of Association.
Article 227 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 228 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 the shareholders in
general meeting, it is determined to amend the Articles of
Association.
Article 229 Amendment of the Articles of Association which
involve the contents of the Mandatory Provisions of Overseas-Listed
Companies' Articles of Association shall become effective upon
receipt of approvals from the companies approving department
authorized by the State Council.
Article 230 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 and administrative
regulations.
CHAPTER 22 : NOTICES AND PUBLIC ANNOUNCEMENTS
Article 231 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 auditors' 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 232 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 233 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 23 : DISPUTE RESOLUTION
Article 234 The Company shall abide by the following principles
for dispute resolution:
(1) Whenever any disputes or claims arise between: holders of
the Overseas- Listed Foreign Shares and the Company; holders of the
Overseas-Listed Foreign Shares and the Company's directors,
supervisors, president, vice presidents or other senior officers;
or holders of the Overseas-Listed Foreign Shares and holders of
other shares, in respect of any rights or obligations arising from
these Articles of Association, the Company Law or any rights or
obligations conferred or imposed by the Company Law and other
relevant laws and administrative regulations concerning the affairs
of the Company, such disputes or claims shall be referred by the
relevant parties to arbitration.
Where a dispute or claim of rights referred to in the preceding
paragraph is referred to arbitration, the entire claim or dispute
must be referred to arbitration, and all persons who have a cause
of action based on the same facts giving rise to the dispute or
claim or whose participation is necessary for the resolution of
such dispute or claim, shall, where such
person is the Company, the Company's shareholders, directors,
supervisors, president, vice presidents or other senior officers of
the Company, comply with the arbitration. Disputes in respect of
the definition of shareholders and disputes in relation to the
register of shareholders need not be resolved by arbitration.
(2) A claimant may elect for arbitration to be carried out at
either the China International Economic and Trade Arbitration
Commission in accordance with its Rules or the Hong Kong
International Arbitration Centre in accordance with its Securities
Arbitration Rules. Once a claimant refers a dispute or claim to
arbitration, the other party must submit to the arbitral body
elected by the claimant.
If a claimant elects for arbitration to be carried out at Hong
Kong International Arbitration Centre, any party to the dispute or
claim may apply for a hearing to take place in Shenzhen in
accordance with the Securities Arbitration Rules of the Hong Kong
International Arbitration Centre.
(3) If any disputes or claims of rights are settled by way of
arbitration in accordance with sub-paragraph (1) of this Article,
the laws of the PRC shall apply, save as otherwise provided in the
laws and administrative regulations.
(4) The award of an arbitral body shall be final and conclusive and binding on all parties.
CHAPTER 24 : SUPPLEMENTARY
Article 235 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 236 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 237 In these Articles of Association, reference to
"accounting firm" shall have the same meaning as "auditor".
Article 238 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",
"beyond" and "exceed" are exclusive terms.
This information is provided by RNS
The company news service from the London Stock Exchange
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