TIDMAIRC
RNS Number : 9877J
Air China Ld
03 May 2022
Hong Kong Exchanges and Clearing Limited and The Stock Exchange
of Hong Kong Limited take no responsibility for the contents of
this notice, make no representation as to its accuracy or
completeness and expressly disclaim any liability whatsoever for
any loss howsoever arising from or in reliance upon the whole or
any part of the contents of this notice.
AIR CHINA LIMITED
(a joint stock limited company incorporated in the People's
Republic of China with limited liability)
(Stock Code: 00753)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that an annual general meeting (the
"AGM") of Air China Limited (the "Company") for the year ended 31
December 2021 will be held at 11:00 a.m. on Wednesday, 25 May 2022
at The Conference Room C713, No. 30, Tianzhu Road, Airport
Industrial Zone, Shunyi District, Beijing, the PRC to consider and,
if thought fit, to pass the following resolutions.
ORDINARY RESOLUTIONS
1. To consider and approve the 2021 work report of the board of
directors (the "Board") of the Company (full text of which is set
out in Appendix I of this notice).
2. To consider and approve the 2021 work report of the
supervisory committee of the Company (full text of which is set out
in Appendix II of this notice).
3. To consider and approve the audited consolidated financial
statements of the Company for the year 2021 prepared under the PRC
Accounting Standards and the International Financial Reporting
Standards.
4. To consider and approve the profit distribution proposal for the year 2021.
5. To consider and approve the re-appointment of Deloitte Touche
Tohmatsu as the Company's international auditor for the year 2022
and Deloitte Touche Tohmatsu Certified Public Accountants LLP as
the Company's domestic auditor and internal control auditor for the
year 2022, and to authorize the Audit and Risk Management Committee
(the Supervision Committee) to determine their remunerations for
the year 2022.
SPECIAL RESOLUTION
6. To consider and approve the issue of debt financing
instruments (including, but not limited to, ultra-short-term
commercial papers, short-term commercial papers, mid-term notes,
corporate bonds, domestic non-public targeted debt financing
instruments, overseas debt financing instruments and overseas
bonds/notes denominated in RMB or foreign currencies) within the
cap amount of bond issuance stipulated in the applicable laws in
one or multiple tranche(s) (the "Issuance"), the details of which
are set out in Appendix III of this notice, and generally and
unconditionally authorise the Board to deal with the followings in
accordance with the specific needs of the Company and other market
conditions:
(i) to determine the issuer, issue size, type, specific
instruments, detailed terms, conditions and other matters relating
to the Issuance (including, but not limited to, the issue size,
actual principal amount, currency, issue price, interest rate or
mechanism for determining the interest rate, issue place, issue
timing, term, whether or not to issue in multiple tranches and
number of tranches, whether or not to set put-back or redemption
terms, credit rating, guarantee, repayment term, detailed
fund-raising arrangements within the scope of use approved by the
shareholders' meeting, detailed placing arrangements, underwriting
arrangements and all other matters relating to the issuance);
(ii) to carry out all necessary and ancillary actions and
procedures relating to the Issuance (including, but not limited to,
engage underwriters, lawyers, auditors, rating agencies, financial
advisers and other intermediary institutions, handle all approval,
registration and filing procedures with the relevant regulatory
authorities in connection with the Issuance on behalf of the
Company, execute all necessary legal documents, select bonds
trustee manager for the Issuance, formulate rules for the
bondholders' meeting and handle any other matters relating to the
issuance and trading);
(iii) to approve and confirm any action or procedure relating to
the Issuance as mentioned above already taken by the Company;
(iv) to make adjustments to the relevant matters such as the
specific proposals for the Issuance in accordance with the comments
from the regulatory authorities or the prevailing market conditions
within the authority granted at the general meeting of the Company,
except where voting at a general meeting of the Company is required
by any relevant laws and regulations and the Articles of
Association of Air China Limited;
(v) to determine and handle all relevant matters relating to the
listing of the issued debt financing instruments upon the
completion of the issuance;
(vi) in the case of issuance of corporate debt financing
instruments, during the term of the corporate debt financing
instruments, to determine not to distribute dividends to the
shareholders to safeguard repayment of debts as required under the
relevant laws and regulations in the event that the Company expects
to, or does fail to pay the principal and interests as they fall
due;
(vii) to approve, execute and dispatch any announcements or
circulars relating to the Issuance and make any related disclosure
in accordance with the listing rules of the relevant jurisdictions
where the shares of the Company are listed;
(viii) to authorize the Board to delegate the authorizations set
forth in items (i) to (vi) above to the president and/or the
general accountant of the Company upon obtaining the authorization
at the general meeting; and
(ix) to authorize the Board to delegate the authorization set
forth in item (vii) above to the secretary of the Board of the
Company upon obtaining the authorization at the general
meeting.
By order of the Board Air China Limited Song Zhiyong
Chairman
Beijing, PRC, 5 May 2022
As at the date of this notice, the directors of the Company are
Mr. Song Zhiyong, Mr. Ma Chongxian, Mr. Feng Gang, Mr. Patrick
Healy, Mr. Li Fushen*, Mr. He Yun*, Mr. Xu Junxin* and Ms. Winnie
Tam Wan-chi*.
* Independent non-executive director of the Company Notes:
1. Closure of register of members
Holders of H shares of the Company are advised that the H share
register of members of the Company will be closed from Wednesday,
18 May 2022 to Wednesday, 25 May 2022 (both days inclusive), during
which time no transfer of shares will be effected and registered.
In order to qualify for attendance and voting at the AGM, holders
of H shares shall lodge all instruments of transfer with the
Company's H share registrar in Hong Kong, Computershare Hong Kong
Investor Services Limited, at Shops 1712- 1716, 17/F, Hopewell
Centre, 183 Queen's Road East, Wanchai, Hong Kong, by 4:30 p.m. on
Tuesday, 17 May 2022.
H shareholders whose names appear on the register of members of
the Company at the close of business on Tuesday, 17 May 2022 are
entitled to attend and vote at the AGM.
2. Proxy
Every shareholder who has the right to attend and vote at the
AGM is entitled to appoint one or more proxies, whether or not they
are members of the Company, to attend and vote on his/her behalf at
the AGM.
A proxy shall be appointed by an instrument in writing. Such
instrument shall be signed by the appointor or his attorney duly
authorized in writing. If the appointor is a legal person, then the
instrument shall be signed under a legal person's seal or signed by
its director or an attorney duly authorized in writing. The
instrument appointing the proxy for holders of H shares shall be
deposited at the Company's H share registrar not less than 24 hours
before the time specified for the holding of the AGM (or any
adjournment thereof). If the instrument appointing the proxy is
signed by a person authorized by the appointer, the power of
attorney or other document of authority under which the instrument
is signed shall be notarized. The notarized power of attorney or
other document of authority shall be deposited together and at the
same time with the instrument appointing the proxy at the Company's
H share registrar.
3. Profit distribution proposal for the year 2021
Regarding resolution No. 4, the Company recorded a net loss
attributable to the owner of the parent company in 2021 based on
the audited financial statements prepared in accordance with the
CASs and the IFRSs. As considered and approved by the 2nd meeting
of the sixth session of the Board of the Company, the Company
proposed not to make profit distribution for the year of 2021.
4. Important notice in relation to pandemic prevention and control
In the event that the containment of COVID-19 pandemic is still
ongoing at the time of the AGM, in order to cooperate with the
prevention and control of the pandemic so as to safeguard the
health and safety of the shareholders and the participants of the
meeting, at the same time ensuring that the shareholders may
exercise their respective shareholders' rights, the Company
recommends H share shareholders and their proxies intending to
attend the AGM to vote by completing and submitting the proxy form,
i.e. to indicate how you wish your votes to be casted in the proxy
form, and appoint the Chairman of the AGM as your proxy to vote on
your behalf on site.
In case H share shareholders or their proxies choose to attend
the meeting in person by then, they must comply with the policies
and requirements of Beijing regarding the containment of COVID-19
pandemic. On the way to, from and at the venue of the AGM, please
adopt proper personal preventive measures. Upon arrival at the
venue of the AGM, please follow the arrangement and guidance of the
staff and cooperate with the pandemic prevention and control
requirements including, among others, attendee registration and
wearing of masks. Please provide the proof of negative nucleic acid
test results within 48 hours and comply with the temperature
checking procedures, and take the initiative to scan and present
the "Beijing Health Kit" green code.
5. Other businesses
(i) The AGM is expected to last for no more than a half of a
working day. Shareholders and their proxies attending the meeting
shall be responsible for their own traveling and accommodation
expenses.
(ii) The address of Computershare Hong Kong Investor Services Limited is:
17M Floor
Hopewell Centre 183 Queen's Road East Wanchai
Hong Kong
Tel No.: (852)28628628
Fax No.: (852)28650990
APPIX I 2021 WORK REPORT OF THE BOARD OF DIRECTORS
Air China Limited
2021 Work Report of The Board of Directors
In 2021, Air China Limited ("Air China" or "the Company"), under
the strong leadership of the Communist Party of China (CPC) Central
Committee with Comrade Xi Jinping as the core, resolutely
implemented the decisions and arrangements of the CPC Central
Committee and the State Council, implemented the requirements of
regulatory authorities, calmly responded to the complex and
evolving challenges in the occasions, maintained the strategic
focus, held on to the bottom line of safe development, consolidated
the achievements of pandemic prevention and control and made new
significant progress and remarkable results in all work. The Board
of Directors of the Company implemented the "two-consistency
(consistently adhere to the Party's leadership over State-owned
enterprises; consistently develop a modern enterprise system as the
direction of the reform of State- owned enterprises)", strived to
build a corporate governance mechanism of "legal rights and
responsibilities, transparent rights and responsibilities,
coordinated operation and effective control and balance", and gave
full play to the functions of "developing strategies, making
decisions and preventing risks", so as to effectively promote the
high-quality development of the Company and the implementation of
the strategy of building a world-class aviation group. The work of
the Board of Directors is hereby reported as follows:
I. FURTHER STRENGTHEN THE PARTY'S LEADERSHIP WHILE IMPROVING CORPORATE GOVERNANCE
Focusing on the implementation of the philosophy of the
important speech delivered by the General Secretary Xi Jinping at
the National Conference on Party Building in State-owned
Enterprises, the Board of Directors of Air China implemented the
important instructions and requirements of "two-consistency", and
assumed the role of further strengthening the Party's leadership in
improving corporate governance as a major political task, so as to
effectively strengthen the leading role of the Party Committee.
(1) Give play to the leading role of the Party Committee. The
Board of Directors revised the Articles of Association and the
checklist of the rights and responsibilities for major matters of
corporate governance entities, defined the leadership role of the
Party Committee in "setting the right direction, keeping in mind
the big picture and promoting implementation", imposed
responsibilities and authority, operation mechanism, basic
safeguard and other important matters of the Party organization,
and integrated the Party's leadership into each link of corporate
governance to realize institutionalization, standardization and
procedure.
(2) Improve the system and mechanism of leadership of the Party
Committee. The Board of Directors defined the rights,
responsibilities and working methods of the Party Committee in
decision-making, implementation and supervision, implemented the
leadership system of "two-way entry and cross appointment", and
realized the "several responsibilities on one shoulder" mode of the
Secretary of Party Committee. In this mode, the President serves as
the Deputy Secretary and joins the Board of Directors, and the
full-time Deputy Secretary joins the Board of Directors.
(3) Define the scope and boundary of the responsibilities of the
Party Committee and the Board of Directors. The Board of Directors
improved the checklist of the rights and responsibilities for
material matters, defined the scope and boundary of the rights and
responsibilities of the Party Committee, the Board of Directors and
the management, and clarified the material matters "decided" by the
Party Committee and material operation and management matters
"discussed" by it. It also specified that material operation and
management matters shall be decided by the Board of Directors and
the management upon the pre-research and discussion of the Party
Committee and in accordance with the regulations. In 2021, the
Board of Directors deliberated and approved 41 proposals, of which
19 were pre-researched and discussed by the Party Committee.
II. STRENGTHEN THE DEVELOPMENT OF CORPORATE GOVERNANCE SYSTEM
AND IMPROVE THE LEVEL AND ABILITY OF CORPORATE GOVERNANCE
Focusing on speeding up the improvement of the modern corporate
system with Chinese characteristics, the Board of Directors
earnestly implemented the three-year action plan for the reform of
State-owned enterprises. The corporate governance system and the
ability and level of corporate governance has been continuously
improved by improving the rules and regulations of the Board of
Directors, defining the functional orientation of the Board of
Directors and putting the functions and powers of the Board of
Directors in place.
(1) Improve the checklist of the rights and responsibilities for
material matters and establish a full-level corporate governance
system. The Board of Directors improved the checklist of rights and
responsibilities for material matters, and defined the boundaries
of the rights and responsibilities of the Party Committee, the
Board of Directors and the management. There are 132 items on the
agenda of the Party Committee in 26 aspects (70 material matters
decided by the Party Committee in 9 aspects and 62 preliminary
matters of the Party Committee in 17 aspects), 68 items on the
agenda of the Board of Directors and 89 items on the agenda of the
President's Office Meeting. The Board of Directors also improved
the checklist of significant events of secondary and tertiary
subsidiaries, and realized the corporate governance system of
horizontal to border, vertically top-down and full level
coverage.
(2) Improve the Articles of Association and other rules and
regulations, and enhance the corporate governance system. The Board
of Directors systematically improved the Articles of Association
and other relevant systems in accordance with the latest laws and
regulations, the requirements of State-owned assets regulation and
securities regulation, as well as the revised checklist of the
rights and responsibilities for material matters. It revised the
Articles of Association, Rules and Procedures of Party Committee,
Rules and Procedures of Shareholders Meeting, Rules and Procedures
of Board Meeting, Rules and Procedures of General Manager's Office
Meeting, Working System of the Secretary to the Board of Directors,
and Administrative Measures for Authorization of the Board of
Directors. At the same time, as required by Hong Kong Stock
Exchange, the Working Rules of the Strategy and Investment
Committee of the Board of Directors were revised to specify the
environmental, social and governance (ESG) responsibilities of the
Board of Directors.
(3) Define the functional orientation of the Board of Directors
and effectively play the role of "strategy development, decision
making and risk prevention". The Articles of Association was
revised to specify that the Board of Directors is the
decision-making body of business operation, and shoulders the
responsibilities of strategy development, decision making and risk
prevention. Firstly, in terms of "strategy development", it is
defined that the Board of Directors should establish and improve
the closed-loop management system for the research, preparation,
implementation and evaluation of strategic planning, focusing on
the medium and long-term planning and special planning of the
Company. Secondly, in terms of "decision making", it is defined
that the Board of Directors shall make decisions on major business
and management matters of the Company in accordance with the legal
procedures and the Articles of Association, focus on the annual
business plan, major investment and financing activities, annual
financial budget and final accounts, and important reform plans,
etc., and supervise the efficient performance of the managers on
implementation. Thirdly, in terms of "risk prevention", it is
defined that the Board of Directors shall improve the Company's
risk management system, internal control system, compliance
management system and accountability system for incompliant
operation and investment, so as to effectively identify, assess and
prevent major risks.
(4) Focus on six responsibilities and carry out the functions
and powers of the Board of Directors. According to the three-year
action plan for the reform of State-owned enterprises, the
Implementation Plan for Performing the Functions and Powers of the
Board of Directors of Air China Limited was formulated, focusing on
six major functions and powers, namely medium and long-term
development decision power, the power to recruit and employ
managers, the power to assess the performance of managers, the
power to manage the remuneration of managers, the power to manage
the payroll distribution of employees, and the power to manage
material financial matters. At the same time, a work checklist was
developed to specify the responsible departments and their work
responsibilities, and specify the work objectives and schedules of
completion. In 2021, the Board of Directors reviewed and approved
the Company's "14th Five-Year" Development Plan, 2021 Investment
Plan, Administrative Measures for Performance Appraisal and
Remuneration of Managers, authorized the President and managers to
sign the Post Appointment Agreement and Responsibility Statement
for Annual and Term Business Performance Appraisal, 2020
Performance Appraisal and Annual Remuneration Standard Scheme for
Managers and Administrative Measures for External Donations. The
functions and powers of the Board of Directors have thus been
effectively implemented.
(5) Standardize the authorization of the Board of Directors and
improve the efficiency of operating decision. According to the
three-year action plan for the reform of State-owned enterprises,
the Administrative Measures for Authorization of the Board of
Directors of Air China Limited was formulated. It defined the basic
principles of authorizations adhering to legal compliance, equal
authority with corresponding responsibility and controllable risks,
standardized the authorization procedures, authorization
responsibilities and supervision and management mechanism, and
determined the basic scope and checklist of negative authorization.
For the decision-making matters authorized by the Board of
Directors to the Chairman and President, it is specified that the
Chairman and President shall hold special meetings and the
President's office meetings respectively for collective research
and discussion, and regularly report the authorized matters to the
Board of Directors for assessment with respect to the result of
exercise of authority and authorization adjustment. According to
the needs of work, the authorization checklist was formulated to
authorize "the medium-term adjustment of annual financial and
investment plan within a certain range, the donation and
sponsorship of a certain amount, the movement and use of large
amount of funds within the budget, and the application, fund
movement and use of projects which are beyond the budget".
(6) Enhance the establishment of the boards of directors of
subsidiaries at all levels to achieve standardized and efficient
operation. On the basis of further consolidating the achievements
in establishment of the Board of Directors, the Board of Directors
strived to promote the standardized formation of the boards of
directors of subsidiaries at all levels. First of all, the
"formation responsibility" was performed. Secondly, the working
system of the boards of directors of subsidiaries was formulated
and standardized. Thirdly, the pattern with external directors as
the majority was realized. Fourthly, the development of talent pool
of external directors was promoted. Based on the principle of
appropriate personnel and person-job alignment, the Board of
Directors sought to establish a talent pool of external directors
and allocate external directors in a scientific and reasonable way
taking into account of the actual situation of the investment
enterprise.
(7) Improve the service guarantee system for the duty
performance of independent directors. Firstly, the Working System
for Duty Performance Guarantee of External Directors was formulated
to enhance the duty performance guarantee, improve the information
communication mechanism and standardize the system of meetings and
work guarantee mechanism. Secondly, the Working System of the
Secretary to the Board of Directors was revised and improved to
further define the positioning and responsibilities of the
Secretary to the Board of Directors and the role of the Board of
Directors' Office. It emphasized the service support of the
Secretary to the Board of Directors and the Board of Directors'
Office for the duty performance of the Board of Directors and its
members. Thirdly, the special report meeting mechanism of the
Secretary to the Board of Directors was strengthened. Before the
Board of Directors and its special committee, the Secretary to the
Board of Directors organized to report to the independent directors
the proposal deliberation. Fourthly, the inspection and research
system of directors was improved. In 2021, the Board of Directors
organized two domestic investigations and completed the inspection
and investigation on, among others, Chengdu Tianfu International
Airport, Air China Base and Inner Mongolia Airlines. Fifthly, the
training requirements were put in place. The Board of Directors
organized the Chairman, General Manager, internal directors,
independent directors and supervisors to participate in training
programs held by State-owned Assets Supervision and Administration
Commission (SASAC), China Securities Regulatory Commission (CSRC),
Beijing Securities Regulatory Bureau and China Association for
Public Companies.
III. STANDARDIZE THE OPERATION OF THE BOARD OF DIRECTORS AND GIVE FULL PLAY TO ITS FUNCTIONS
(1) Ensure the lawful and compliant operation of the Board of
Directors. Firstly, the planning of meetings was strengthened. At
the beginning of the year, the annual meeting plan was formulated
according to the actual work, securities regulation and State-owned
assets supervision requirements to ensure that the research and
decision-making of the Board of Directors would be well planned and
compliant. The Board of Directors held 11 meetings in 2021.
Secondly, the compliance review of proposals was enhanced. The
Board of Directors regularly issued the notice of solicitation for
board meeting proposals, standardized the whole-process management
of proposal generation, submission, review and feedback so as to
improve the quality of proposals. Thirdly, the preliminary research
procedure was put in place. In accordance with the checklist of the
rights and responsibilities for material matters and the rules and
procedures of the board meeting, the Party Committee's
pre-deliberation procedures for material operation and management
matters was strictly performed. Fourthly, an effective pre-meeting
and in-meeting communication and discussion mechanism was formed.
The Board of Directors communicated with external directors about
the board meeting agenda in advance and informed the Party
Committee of the deliberation in the form of special debriefing of
the Secretary to the Board of Directors. Fifthly, the post-meeting
implementation of the resolutions mechanism was strengthened. The
implementation of the resolutions were further followed up and
supervised with feedbacks. During the year, the Board of Directors
adopted 41 resolutions. Except for the long-term matters such as
the "14th Five- Year Plan" and aircraft introduction, the
implementation of other resolutions was basically completed.
Sixthly, the Board of Directors adhered to the principle of more
than half of directors attending the board meetings and more than
half of external directors attending the board meetings, upheld the
decision-making mechanism of the board meeting on "collective
review and consideration, independent voting and individual
accountability" and the democratic decision-making system of
"one-case-one-discussion, one-man-one- vote and
one-case-one-decision". Seventhly, the quality and level of
decision-making was continuously improved. The Board of Directors
held meetings in strict accordance with the Articles of Association
and the Rules and Procedures of Board Meeting in the form of on-
site meeting and telecommunication with rigorous and standardized
procedures. Directors of the Company are diligent to attend
meetings in person as much as possible, fully discuss the matters
for decision-making and express their opinions objectively.
(2) Realize effective communication and coordinated operation
among governance bodies of the Company. The connection between the
Board of Directors and the Party Committee, the Supervisory
Committee, the management and other corporate governance bodies was
smooth and effective, and the external information disclosure is
true, accurate and complete. Firstly, in terms of the connection
between the Board of Directors and the Party Committee, 19 material
operation or management matters were decided by the Board of
Directors according to the regulations after the preliminary
research and discussion by the Party Committee. Secondly, in terms
of the connection between the Board of Directors and the
shareholders meeting, three shareholders meetings were convened in
accordance with the law, and 17 proposals submitted to shareholders
meetings were considered and approved. In addition, investor
relations were improved to maintain communication with domestic and
foreign shareholders or potential investors via multiple channels
to form a benign interaction. Thirdly, in terms of the connection
between the Board of Directors and the Supervisory Committee, the
Board of Directors consciously accepted the supervision by the
Supervisory Committee, supported and cooperated with the
Supervisory Committee to carry out internal control assessment and
testing and the integration of internal control, risk and
compliance. Members of the Supervisory Committee attended board
meetings and expressed their opinions on the financial statements,
internal control evaluation, related- party transactions and other
matters considered by board meetings. Fourthly, in terms of the
connection between the
Board of Directors and the management, the Board of Directors
supported the management to exercise power and perform their duties
according to law and improve decision-making efficiency, and
deliberated on 27 proposals submitted by the President's office
meetings.
(3) Maximize the strategic leading role of the Board of
Directors. Firstly, the working mechanism of strategic guidance by
the Board of Directors was established. The Chairman is responsible
for organizing and carrying out strategic research and presiding
over the strategy seminar attended by members of the Board of
Directors and management. External directors have an in-depth
understanding of the Company's situation by participating in the
Company's strategy seminars, work meetings and research and
investigation of the Company. They communicated and exchanged
opinions regarding the macroeconomic situation, industry
development trend and corporate strategies. They also participated
in the research and preparation of the Company's "14th Five-Year
Plan" and served as the director of the external review committee.
Secondly, medium and long-term development plans were
scientifically designed and prepared. The Board of Directors
actively organized the formulation of the overall scheme and
implementation scheme for plan preparation to identify the
development orientation, business philosophy, control mode and
business model. Combined with the analysis on internal and external
development environment and benchmarking analysis, the Board of
Directors focused on "one goal, four strategic directions, five
capabilities and eight key areas", and formulated the "14th
Five-Year Plan". Thirdly, the comprehensive deepening reform of
enterprises was pushed forward. The Board of Directors organized
the implementation of the three-year action plan for deepening
reform, which defined the guidance ideology, basic principles,
reform objectives and primary tasks of the three-year action of
reform. The Company pushed ahead to accelerate the three-year
action of reform, and completed key tasks such as the reform of
senior management contract and tenure system and the reform of
remuneration system.
(4) Improve the scientific decision-making level of the Board of
Directors. Firstly, members of special committees were allocated in
a scientific and compliant manner. In accordance with the work
standards, the Audit and Risk Management Committee and the
Nomination and Remuneration Committee are developed with the
majority of external directors serving as the committee director.
The Audit and Risk Management Committee is entirely composed of
independent directors. Both directors of the Strategy and
Investment Committee and the Aviation Safety Committee are acted by
the Chairman. Secondly, special committees of the Board of
Directors were functioned fully to provide decision- making support
for the Board of Directors. During the year, each special committee
under the Board of Directors held 22 meetings and generated 30
written proposals which were submitted to the Board of Directors
for consideration, providing advice and recommendations for the
decision-making of the Board of Directors. Thirdly, the positive
role of external directors was played. External directors were
provided with information on the Company, capital market and civil
aviation industry through daily, weekly, monthly, quarterly and
annual reports, so that a fixed information exchange mechanism was
formed. The Chairman and General Manager communicated regularly
with external directors to analyze the international and domestic
aviation situation, safety production, economic benefits, pandemic
situation and other contents. They listened to the opinions and
recommendations from external directors on the corporate
development, and effectively communicated with external directors
on medium and long-term development plan, impact of COVID-19
pandemic, economic benefits and cash flow security, etc. The
management and the relevant departments were instructed to study
and implement the opinions and recommendations put forward by
external directors in communication or research report, and give
feedback in time. Independent directors were invited to participate
in strategy seminars, annual and interim work meetings of the
Company, and listened to the reports of managers on the
implementation of strategic planning, deepening reform, production
and operation, financial benefits, risk management, pandemic
prevention and control, etc. Fourthly, the support of the relevant
functional departments was elevated. A joint working group
mechanism was established, including the Planning and Development
Department and the Deeping Reform Office to connect the Strategic
Investment Committee, the Finance Department, the Audit Department
and the Legal Department to connect the Audit Risk Committee, the
Human Resources Department and the Party Committee Work Department
to connect the Management Personnel Training and Compensation
Committee, and the Aviation Safety Management Department and the
Operation Control Center to connect the Aviation Safety Management
Committee. The former departments reported to the latter committees
regularly to provide support and guarantee for duty performance of
special committee. Fifthly, the decision-making of the Board of
Directors was as follows. During the year, the Board of Directors
considered and approved various major matters such as the
introduction and phase-out of aircraft, establishment of
organizations, related transactions, and the tenure system and
contracting of the management.
(5) Enhance the risk prevention and control ability of the Board
of Directors. Firstly, the work system was established. The Board
of Directors paid more attention to "risk prevention" and promoted
the development of risk management, internal control, compliance
management and accountability system for incompliant investment.
Under the work system, the Board of Directors shall strengthen the
management on major matters such as internal audit and consider the
basic internal audit system, audit plan and major audit reports.
The Chairman was in charge of audit as the first person responsible
for internal audit. The functions of risk prevention and control
and supervision were further strengthened by adding a Supervision
Committee under the Board of Directors co- operating with the Audit
and Risk Management Committee. Secondly, the building of legal risk
control and compliance system was strengthened. The Board of
Directors accelerated the development of the new pattern of "Air
China under the Rule of Law", and strengthened the development of
the organization system under the rule of law. It also improved the
general counsel system and the legal risk control and compliance
management system and mechanism, promoted its coverage of all
areas, links, levels and whole processes of corporate operation and
management, and made every effort to improve the standardized basic
management ability. The defense line for legal compliance risk was
moved forward to timely prevent and eliminate risks. It strived to
make the Company a model of central enterprises under the rule of
law with perfect governance, legal operation, standardized
management, law-compliance and integrity. Thirdly, the internal
control and audit supervision were strengthened. The Board of
Directors reviewed the Company's annual internal control assessment
plan and internal control audit plan, made use of the internal
control assessment and audit results and procured the Company to
rectify internal control defects. The Board of Directors regularly
listened to the internal audit reports, approved the Company's
annual internal audit plan and strengthened the management and
guidance on internal audit planning, annual tasks, audit quality,
problem rectification, team building and other important matters.
Fourthly, the role of the Audit and Risk Management Committee was
fully played. During the year, the Audit and Risk Management
Committee held 8 meetings to consider and approve 13 proposals and
listened to 13 special reports, especially the audit rectification
problems, internal control rectification and risk management
reports of the audit office. In this way, it comprehensively
understood and mastered the Company's current situation, existing
problems and control measures in risk and compliance management.
Fifthly, the special self-inspection on corporate governance was
conducted in a serious manner. In accordance with the CSRC's
requirements for special self-inspection on the listed companies'
governance, the Company carried out self-inspection on corporate
governance for the years from 2018 to 2020, and promoted the
implementation of special actions such as self- inspection,
self-correction, rectification and improvement. The self-inspection
results show that the Company meets the relevant regulatory
requirements. Based on its good governance practice, the Company
was nominated by Beijing Securities Regulatory Bureau as the "Best
Practice of Corporate Governance".
(6) Push forward the re-election of the Board of Directors. The
re-election of the Board of Directors was carried out in accordance
with the Articles of Association. The re-election schedule and
action plan were formulated to perform the review and inspection
procedures of candidates, exchange review, preliminary research by
Party Group, the procedures of the Nomination and Remuneration
Committee, Board of Directors and shareholders' meeting in
accordance with the regulations. The Company actively explored and
made attempts in the establishment of the Board of Directors, such
as the personnel structure of the new Board of Directors, the
functions and setting of special committees, and strengthening the
control and binding on the Board of Directors. According to the
provisions of the Shanghai Stock Exchange that the term of office
of independent directors shall not exceed 6 years, the independent
directors who are familiar with the national macroeconomic
policies, the background of the reform of State-owned assets and
state- owned enterprises and have financial, legal and other
expertise were reasonably adjusted and allocated. The new Board
of Directors will be composed of 9 directors with the majority of
external directors, including 1 Chairman and 1 Vice Chairman, 1
full-time Deputy Secretary and Director, 1 Employee-representative
Director, 4 independent directors and 1 Director of Equity
Interest.
Board of Directors
Air China Limited
APPIX II 2021 WORK REPORT OF THE SUPERVISORY COMMITTEE
Air China Limited
2021 Work Report of The Supervisory Committee
In 2021, Air China Limited ("Air China" or "the Company"), under
the strong leadership of the Communist Party of China (CPC) Central
Committee with Comrade Xi Jinping as the core, resolutely
implemented the decisions and arrangements of the CPC Central
Committee and the State Council, calmly responded to the complex
and evolving challenges in situation, maintained the strategic
focus, held on to the bottom line of safe development, consolidated
the achievements of pandemic prevention and control, and made new
significant progress and remarkable results in all work. The
Supervisory Committee of the Company, based on its functions and
positioning, faithfully and diligently performed their duties,
supervised and inspected the performance of duties by directors and
senior management staff, the Company's finance, the establishment
of internal control system, the decision-making procedures of the
Board of Directors and the Company's operation and management
activities in strict accordance with the Company Law, the
Securities Law and other laws and regulations and the Articles of
Association. The Supervisory Committee played its supervisory role
and safeguarded the interests of the Company and its shareholders
and the legitimate rights and interests of employees. The work of
the Supervisory Committee is hereby reported as follows:
I. PERFORM THE SUPERVISORY AND INSPECTION DUTIES OF THE SUPERVISORY COMMITTEE
(1) Perform its duties according to law and play the supervisory
role. Firstly, the Supervisory Committee attended 3 general
meetings of shareholders, 6 on-site meetings of the Board of
Directors and important special sessions of the Company throughout
the year to fully understand the Company's production and operation
and material operation and management matters, and focus on the
supervision of meeting convening procedures and decision-making
procedures. Secondly, the Supervisory Committee attended the
Company's annual working meeting, interim working meeting and
labour representatives' congress. The Supervisory Committee
carefully reviewed the work report of the management, the duty
performance reports of directors and senior management staff of the
Company, and timely monitored the duty performance of directors and
senior management staff based on the audit inspection and
assessment results.
(2) Effectively strengthen financial supervision. In view of the
basic responsibilities of supervisors, the Supervisory Committee
regularly listened to the special reports of the Financial
Department and the annual audit accountant, reviewed the Company's
annual, interim and quarterly financial reports, and supervised the
Company's financial operation and report preparation, audit and
disclosure procedures, to ensure that the financial report
information disclosed by the Company was true, accurate and
complete.
(3) Promote the development of the internal control system. The
Supervisory Committee implemented the Company's requirements for
legal compliance, quality improvement and efficiency increase,
further strengthened the development of the Company's internal
control system and the implementation of internal control
assessment and rectification. While carefully reviewing the
internal control implementation plan and assessment report, the
Supervisory Committee also listened to the special reports of the
Company's functional departments, supervised the internal control
assessment and rectification, carefully inspected the rectification
results and improved the level of internal control management.
(4) Strengthen coordinated supervision. The Supervisory
Committee strengthened communication with the Audit Committee and
independent directors, constantly innovated the supervision
mechanism and methods, and realized coordinated supervision and
sharing of resources. Oriented to preventing and eliminating major
risks, the Supervisory Committee worked together with the Company's
internal audit, compliance, discipline inspection and other
supervisory departments to promote the risk control and supervision
system of pre-warning, in-process control and post-tracking of
accountability. In 2021, the Supervisory Committee, the Audit and
Risk Management Committee and independent directors jointly
listened to the special reports such as internal control
assessment, audit inspection and rectification and special
self-inspection of listed companies' governance, carried out two
joint on-site investigations and researches and exploited their
respective expertise to unleash the synergistic effect of
coordinated supervision.
(5) Improve the ability to perform duties. Members of the
Supervisory Committee actively participated in the special training
for the chairman of the Supervisory Committee and directors and
supervisors of listed companies organized by China Association for
Public Companies and Beijing Regulatory Bureau of China Securities
Regulatory Commission (CSRC). They also carefully studied the duty
performance requirements of directors, supervisors and senior
management staff in the New Securities Law, and kept abreast of the
latest securities regulatory policies and situation, the
standardized operation of listed companies and the practice of
Supervisory Committee, so as to strengthen the sense of
responsibility for performing duties in accordance with laws and
regulations, and improve the ability to perform duties and the
decision-making level.
II. FOCUS ON LEGAL COMPLIANCE AND IMPROVE THE QUALITY OF DECISION- MAKING AND SUPERVISION
(1) Perform the duties of supervisors. The Supervisory Committee
faithfully and diligently performed its duties within the scope of
its functions and powers. Based on the principles of collective
review and consideration, independent voting and individual
accountability, it organized and held 7 meetings of the Supervisory
Committee during the year, and made decisions on and supervised 13
major issues such as the annual financial plan, investment plan,
financial report, management and use of raised funds, internal
control evaluation report and internal control audit report,
framework agreements on continuing related-party transactions
between the Company and CNAHC Group and between the Company and Air
China Cargo, as well as the annual transaction ceiling, in
accordance with its functions and powers.
(2) Support the management to exercise their powers and perform
their duties. The Supervisory Committee always expressed its
opinions from the perspective of safeguarding the interests of the
Company and its shareholders and the legitimate rights and
interests of employees. It supported the management in both
pandemic prevention and control and in production and operation,
accelerated the accomplishment of the three-year action mission for
the reform of the Company and the implementation of the Company's
material projects, and effectively promoted the managers to perform
the duties of pursuing operation results, implementing the
requirements and strengthening the management.
(3) Promote and improve the corporate governance system.
Focusing on speeding up the improvement of the modern corporate
system with Chinese characteristics, the Supervisory Committee took
the initiative to strengthen coordination and communication with
the Party Committee, the Board of Directors, the management and
other corporate governance bodies, promoted the revision of
corporate governance systems such as the Articles of Association,
the Rules and Procedures of Shareholders Meeting and prepared the
checklist of the rights and responsibilities for material matters
of the Company, and defined the rights and responsibilities of all
governance bodies. The Supervisory Committee promoted and improved
the checklist of significant events of secondary and tertiary
subsidiaries to be decided by Air China, and realized the corporate
governance system of horizontal to border, vertically top-down and
full level coverage.
III. EXPRESS SPECIAL OPINIONS BASED ON THE INDEPENCE PRINCIPLE
(1) Independent opinions on the lawful and compliant operation
of the Company. During the Reporting Period, the Supervisory
Committee attended important meetings of the Board of Directors and
the Company, carried out investigations and inspections, listened
to the special reports and fully exercised its power of inspection
and supervision. The Supervisory Committee held that the Company
operated in accordance with the Company Law and the Articles of
Association, and its decision-making procedures were legal and
effective. No directors or senior managers of the Company have been
identified to violate laws and regulations or the Company's
Articles of Association or damage the interests of the Company or
the legitimate rights and interests of employees when performing
their duties.
(2) Independent opinions on the Company's financial status.
During the Reporting Period, the Supervisory Committee reviewed the
Company's annual report, interim report and Q1 and Q3 reports
(including financial statements). It considered that the financial
data contained in the above reports truly, accurately and
completely reflected the Company's financial status and operating
results, and concurred with the standard unqualified audit opinion
issued by Deloitte on the financial statements.
(3) Independent opinions on the Company's related-party
transactions. During the Reporting Period, the Supervisory
Committee reviewed the continuing related-party transactions
between the Company and CNAHC Group, and the adjustment of annual
caps for related- party transactions of the contracting operation
income of bellyhold cargo services between the Company and Air
China Cargo. It considered that the continuing related-party
transactions of the Company were normal business transactions, with
fair and reasonable pricing and transaction contents in line with
business practices and the arm's length principle, and were not
detrimental to the interests of minority shareholders and the
Company. Related directors and shareholders abstained from voting
during the review and consideration of the Board of Directors and
the shareholders meeting according to the legal and compliant
review and consideration procedure.
(4) Review and independent opinions on the self-assessment
report of internal control. During the Reporting Period, the
Supervisory Committee reviewed the Company's internal control
assessment report and internal control audit report, paid attention
to and supervised the development of the Company's internal control
system and internal control rectification. It considered that the
Company's internal control mechanism was continuously improved and
its risk control ability was continuously improved. The
self-assessment report on the Company's internal control issued by
the Board of Directors reflected the actual situation of internal
control in an objective and true manner.
(5) Supervision on the insider management system. During the
Reporting Period, the Supervisory Committee supervised the
implementation of the registration management system for the
Company's insider information parties. No directors, senior
management and relevant insider parties of the Company have been
found to trade shares prior to disclosure of substantially
sensitive information affecting the Company's share price, and no
investigation and rectification was made by regulatory
authorities.
(6) Independent opinions on the deposit and actual use of the
proceeds. During the Reporting Period, the Supervisory Committee
reviewed the special report on the deposit and actual use of
proceeds from A share issuance in 2020 and the audit report issued
by Deloitte. It considered that the Company had truly, accurately
and completely disclosed the relevant information on the deposit
and use of the proceeds, there were no violations in the management
and use of the raised funds, and the proceeds had been used for the
specified purposes.
Supervisory Committee
Air China Limited
APPENDIX III GENERAL MANDATE TO ISSUE DEBT FINANCING INSTRUMENTS
1. BACKGROUND
Given the general mandate to issue debt financing instruments
granted by Shareholders at the last annual general meeting of the
Company will lapse at the conclusion of the AGM, a special
resolution will be proposed at the AGM to grant a general mandate
to the Board to issue the debt financing instruments (the "Debt
Financing Instrument Issue Mandate"). The debt financing
instruments include but are not limited to ultra-short-term
commercial papers, short- term commercial papers, mid-term notes,
corporate bonds, domestic non-public targeted debt financing
instruments, offshore non-public debt financing instruments and
offshore bonds/notes denominated in RMB or foreign currencies
("Debt Financing Instruments").
2. PARTICULARS OF DEBT FINANCING INSTRUMENTS
Particulars regarding the proposed issuance of the Debt
Financing Instruments are as follows:
(i)Issuer: the Company and/or its controlled or wholly-owned
subsidiary, and the specific issuer shall be determined by the
Board of the Company according to the needs of issuance
(ii) Placing arrangement: no preferential placement to the
shareholders of the
Company
(iii) Issue size: subject to that the balance of the outstanding
Debt Financing Instruments of the Issuance shall be within the
permissible size prescribed by the relevant laws and regulations
and specified by regulatory authorities, and the specific issue
size shall be determined by the Board of the Company according to
the capital requirement and the market conditions
(iv) Term and type: not more than 15 years for one single-term
instrument or a portfolio of instruments with various terms, and
the specific term composition and the issue size of instruments
with various terms shall be determined by the Board of the Company
according to the relevant regulations and market conditions
(v) Use of proceeds: the proceeds to be raised from the issuance
are intended
to be applied towards meeting the demand of the Company's
production and operations, adjusting its debt structure,
replenishing its working capital and/or funding its project
investments, among others, and the specific use of proceeds shall
be determined by the Board of the Company according to the capital
requirement
(vi) Term of validity of the
authorization:
from the date of the passing of the resolution at the AGM to the
date of the annual general
meeting of the Company for the year 2022
If the Board of the Company (including its authorized person)
has resolved to issue within the valid term of the mandate, it
shall be deemed as an extension to the term of the mandate granted
to the Board (including its authorized person) in respect of such
issue on the general meeting, provided that there is no conflict
between the mandate renewed by the Board (including its authorized
person) on the general meeting after the expiry of the mandate and
the mandate granted to the Board (including its authorized person)
in respect of such issue.
3. AUTHORIZATION TO THE BOARD
It is proposed to the shareholders at the AGM to authorize the
Board, generally and unconditionally, to deal with the following in
accordance with the specific needs of the Company and other market
conditions:
(i) to determine the issuer, issue size, type, specific
instruments, detailed terms, conditions and other matters relating
to the Issuance (including, but not limited to, the issue size,
actual principal amount, currency, issue price, interest rate or
mechanism for determining the interest rate, issue place, issue
timing, term, whether or not to issue in multiple tranches and
number of tranches, whether or not to set put-back or redemption
terms, credit rating, guarantee, repayment term, detailed
fund-raising arrangements within the scope of use approved by the
shareholders' meeting, detailed placing arrangements, underwriting
arrangements and all other matters relating to the Issuance);
(ii) to carry out all necessary and ancillary actions and
procedures relating to the Issuance (including, but not limited to,
engage underwriters, lawyers, auditors, rating agencies, financial
advisers and other intermediary institutions, handle all approval,
registration and filing procedures with the relevant regulatory
authorities in connection with the Issuance on behalf of the
Company, execute all necessary legal documents, select bonds
trustee manager for the Issuance, formulate rules for the
bondholders' meeting and handle any other matters relating to the
issuance and trading);
(iii) to approve and confirm any action or procedure relating to
the Issuance as mentioned above already taken by the Company;
(iv) to make adjustments to the relevant matters such as the
specific proposals for the Issuance in accordance with the comments
from the regulatory authorities or the prevailing market conditions
within the authority granted at the general meeting of the Company,
except where voting at a general meeting of the Company is required
by any relevant laws and regulations and the Articles of
Association of Air China Limited;
(v) to determine and handle all relevant matters relating to the
listing of the issued Debt Financing Instruments upon the
completion of the issuance;
(vi) in the case of issuance of corporate debt financing
instruments, during the term of the corporate debt financing
instruments, to determine not to distribute dividends to the
shareholders to safeguard repayment of debts as required under the
relevant laws and regulations in the event that the Company expects
to, or does fail to pay the principal and interests as they fall
due;
(vii) to approve, execute and dispatch any announcements or
circulars relating to the Issuance and make any related disclosure
in accordance with the listing rules of the relevant jurisdictions
where the shares of the Company are listed;
(viii) to authorize the Board to delegate the authorizations set
forth in items (i) to (vi) above to the president and/or the
general accountant of the Company upon obtaining the authorization
at the general meeting; and
(ix) to authorize the Board to delegate the authorization set
forth in item (vii) above to the secretary of the Board of the
Company upon obtaining the authorization at the general
meeting.
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END
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