TIDMAIRC
RNS Number : 9117Z
Air China Ld
26 May 2021
The English translation of the articles of association of Air
China Limited (the "Articles") is for reference only. In the event
of discrepancy between the English translation and the Chinese
version of the Articles, the Chinese version shall prevail.
ARTICLES OF ASSOCIATION OF
AIR CHINA LIMITED
Adopted by the first extraordinary general meeting on 30 September 2004
Approved by the State-owned Assets Supervision and Administration Commission
of the State Council on 12 October 2004
Adopted by the 2004 annual shareholder's general meeting on 30 May 2005
Approved by the State-Owned Assets Supervision and Administration Commission
of the State Council on 14 March 2006
Adopted by the 2006 first extraordinary general meeting on 28 March
2006 Approved by the State-Owned Assets Supervision and Administration
Commission of the State Council on 5 June 2006
Adopted by the 2005 annual shareholder's general meeting on 12 June
2006 Approved by the State-Owned Assets Supervision and Administration
Commission of the State Council on 28 December 2006
Adopted by the 2006 first extraordinary general meeting on 28 March
2006 Adopted by the 2006 third extraordinary general meeting on 28 December
2006 Approved by the State-Owned Assets Supervision and Administration
Commission of the State Council on 1 June 2007
Adopted by the 2006 annual shareholders' general meeting on 30 May 2007
Approved by the State-Owned Assets Supervision and Administration Commission
of the State Council on 7 August 2007
Adopted by the 2007 annual shareholders' general meeting on 30 May 2008
Approved by the State-Owned Assets Supervision and Administration Commission
of the State Council on 4 March 2009
Adopted by the 2008 annual shareholders' general meeting on 10 June
2009 Approved by the State-Owned Assets Supervision and Administration
Commission of the State Council on 19 October 2009
Adopted by the 2010 first extraordinary general meeting on 29 April
2010 Approved by the State-Owned Assets Supervision and
Administration Commission of the State Council on 26 January 2011
Adopted by the 2012 second extraordinary general meeting on 26 June
2012 Adopted by the 2012 third extraordinary general meeting on 20 December
2012 Approved by the State-Owned Assets Supervision and
Administration Commission of the State Council on 3 May 2013
Adopted by the 2015 first extraordinary general meeting on 22 December
2015
Adopted by the 2016 first extraordinary general meeting on 26 January
2016
Adopted by the 2017 first extraordinary general meeting on 23 January
2017
Adopted by the 2017 second extraordinary general meeting on 30 March
2017
Adopted by the 2017 third extraordinary general meeting on 27 October
2017
Adopted by the 2018 first extraordinary general meeting on 19 October
2018
Adopted by the 2020 annual shareholders' general meeting on 25 May 2021
Contents
GENERAL PROVISIONS . . . . . . . . . . . . . . . . .
CHAPTER 1 : . . . . . . . . . . . . . . 1
CHAPTER 2 : THE COMPANY'S OBJECTIVES AND SCOPE OF BUSINESS . . . 3
.
CHAPTER 3 : SHARES AND REGISTERED CAPITAL . . . . . . . . . . . 4
. . . . . . . . .
CHAPTER 4 : REDUCTION OF CAPITAL AND REPURCHASE OF SHARES . . . 8
.
CHAPTER 5 : FINANCIAL ASSISTANCE FOR THE ACQUISITION OF SHARES . 11
CHAPTER 6 : SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS . . 13
CHAPTER 7 : SHAREHOLDERS' RIGHTS AND OBLIGATIONS . . . . . . . . 19
. . . . .
CHAPTER 8 : SHAREHOLDERS' GENERAL MEETINGS . . . . . . . . . . . 23
. . . . . . .
CHAPTER 9 : SPECIAL PROCEDURES FOR VOTING BY A CLASS OF SHAREHOLDERS
. . . . . . . . . . . . . . . . . . . . . . . . . . . 39
. . . . . . . .
10 THE PARTY COMMITTEE . . . . . . . . . . . . . . . .
CHAPTER : . . . . . . . . .. . . . 42
11 BOARD OF DIRECTORS . . . . . . . . . . . . . . . . .
CHAPTER : . . . . . . . . . . . . . . 43
12 INDEPENT DIRECTORS . . . . . . . . . . . . . . .
CHAPTER : . . . . . . . . .. . . . 54
13 SECRETARY OF THE BOARD OF DIRECTORS . . . . . . . .
CHAPTER : . . . . . . 58
14 PRESIDENT . . . . . . . . . . . . . . . . . . . . .
CHAPTER : . . . . . . . . . . . . .. . . . . . 60
15 SUPERVISORY COMMITTEE . . . . . . . . . . . . . . .
CHAPTER : . . . . . . . . . . . . 61
THE QUALIFICATIONS AND DUTIES OF THE DIRECTORS, SUPERVISORS,
PRESIDENT, VICE PRESIDENTS AND
16 OTHER SENIOR OFFICERS OF THE COMPANY . . . . . . . .
CHAPTER : . .. 65
FINANCIAL AND ACCOUNTING SYSTEMS, PROFIT DISTRIBUTION
17 AND AUDIT . . . . . . . . . . . . . . . . . . . . . .
CHAPTER : . . . . 74
18 APPOINTMENT OF ACCOUNTANCY FIRM . . . . . . . . . .
CHAPTER : . . . . . . . 81
19 MERGER AND DEMERGER OF THE COMPANY . . . . . . . . .
CHAPTER : . . . . 84
20 DISSOLUTION AND LIQUIDATION . . . . . . . . . . . .
CHAPTER : . . . . . . . . . . . 86
PROCEDURES FOR AMMENT OF THE COMPANY'S ARTICLES OF
21 ASSOCIATION . . . . . . . . . . . . . . . . . . . . .
CHAPTER : . . . . 88
22 NOTICES AND PUBLIC ANNOUNCEMENTS . . . . . . . . . .
CHAPTER : . . . . . . 90
23 DISPUTE RESOLUTION . . . . . . . . . . . . . . . . .
CHAPTER : . . . . . . . . . . . . . . 91
24 SUPPLEMENTARY . . . . . . . . . . . . . . . . . . .
CHAPTER : . . . . . . . . . . . . . . . . 92
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 Corporation Limited 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: Basement 1 - 101 9th Floor, Building
1, 30 Tianzhu Road, Shunyi District, Beijing, China
Article 4 The Company's legal representative is the Chairman of
the board of directors of the Company.
Article 5 The Company is a joint stock limited company which has
perpetual existence.
The liability of a shareholder is limited to the value
of the shares held by him, while the Company assumes
liabilities to the extent of its entire assets.
The Company is an independent corporate legal person,
governed by, and existing under the protection of, the
laws and regulations of the People's Republic of China.
Article 6 In accordance with the provisions of the Company Law,
the 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; on-board duty
free items, on-board retail of goods and underwriting
the aviation accident insurance; import and export businesses;
hotel management; undertaking exhibitions; conference
services; property management; design, production, agency
and publish of advertisement; technology training; lease
of self-owned property; rental of machinery and equipment;
accommodation; catering services; sales of handicrafts
and souvenirs; wholesale of agriculture, forestry, animal
husbandry and fishery products, wholesale of food, beverages
and tobacco
products, wholesale of textiles, clothing and household
goods, wholesale of culture, sporting goods and equipment,
wholesale of mineral products, building materials and
chemical products, wholesale of machinery and equipment,
hardware and electronic products, general retail, special
retail of food, beverage and tobacco products, special
retail of textiles, clothing and daily necessities,
special retail of cultural and sporting goods and equipment,
sales of automobiles, motorcycles, spare parts and fuels
and other types of energy resources, special retail
of household appliances and electronics, special retail
of hardware, furniture and interior decoration materials,
and Internet retailing. (Catering services, accommodation
and other projects subject to approval in accordance
with the law shall be operated with the approval of
relevant authorities to the extent authorized by the
approval.)
Article 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:
Number of
Name of Promoters Shares Method of Capital Date of Capital
Subscribed Contribution Contribution
China National 5,054,276,915 A capital contribution 9 September
Aviation Holding of RMB560,782,100 was 2004
Corporation made in cash and a
Limited 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
Number of
Name of Promoters Shares Subscribed Method of Capital Contribution Date of Capital
Contribution
China National 1,445,723,085 A capital contribution 9 September
Aviation Corporation of RMB2,005,866,000 2004
(Group) Limited was made in form of
equity interest
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 Corporation Limited 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 Corporation
Limited, 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 Corporation
Limited 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 Corporation Limited, a shareholder
of the Company, on a non-public issue basis in the year
of 2013.
Upon the completion of the aforesaid non-public issue
of A Shares, 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:
(6) cancellation of shares for the purposes of reducing
its capital;
(7) merging with another company that holds shares in
the Company;
(8) granting shares as an incentive to the employees
of the Company;
(9) 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;
(10) 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 ethics 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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
STRBBGDUDGDDGBL
(END) Dow Jones Newswires
May 26, 2021 07:06 ET (11:06 GMT)
Air China Ld (LSE:AIRC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Air China Ld (LSE:AIRC)
Historical Stock Chart
From Apr 2023 to Apr 2024
