Notice of AGM
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt as to any aspect of this circular, you should consult a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.
If you have sold or transferred all your shares of Air China Limited, you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or the transferee.
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.
Air China Limited
(a joint stock limited company incorporated in the People's Republic of China with limited liability)
(Stock Code: 00753)
(I) General Mandate to Issue Shares
(II) Proposed Payment of Final Dividends
and
Notice of Annual General Meeting
A letter from the Board is set out on pages 2 to 4 of this circular.
A notice convening the annual general meeting of the Company to be held at 10:00 a.m. on Thursday, 24 May 2012 at The Conference Room, 29/F, Air China Building, 36 Xiaoyun Road, Chaoyang District, Beijing, PRC, is set out on pages II-1 to II-4 of this circular. Whether or not you are able to attend the AGM, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon as soon as possible but in any event not less than 24 hours before the time appointed for convening the AGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the AGM or any adjournment should you so wish.
10 April 2012
CONTENTS
Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Appendix I - 2011 Duty Report of The Independent Non-Executive
Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Appendix II - Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
- i -
DEFINITIONS
In this circular, the following expressions have the following meanings, unless the context requires otherwise:
"A Shares" ordinary shares in the share capital of the Company with a nominal value of RMB1.00 each, which are subscribed for and traded in RMB on the Shanghai Stock Exchange
"AGM" the 2011 annual general meeting of the Company to be held at 10:00 a.m. on Thursday, 24 May 2012 at The Conference Room, 29/F, Air China Building, 36 Xiaoyun Road, Chaoyang District, Beijing, PRC for the Shareholders to consider and approve the resolutions set out in the notice of the annual general meeting
"Articles of Association" the articles of association of the Company
"Board" the board of directors of the Company
"Company" Air China Limited, a company incorporated in the PRC, whose H Shares are listed on the Stock Exchange as its primary listing venue and on the Official List of the UK Listing Authority as its secondary listing venue, and whose A Shares are listed on the Shanghai Stock Exchange
"CSRC" China Securities Regulatory Commission of the PRC
"Director(s)" the director(s) of the Company
"H Shares" overseas listed foreign shares of RMB1.00 each in the share capital of the Company
"Listing Rules" The Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited
"PRC" the People's Republic of China, excluding, for the purpose of this circular only, Hong Kong, Macau and Taiwan
"Shareholder(s)" registered holder(s) of the shares of the Company
"Stock Exchange" The Stock Exchange of Hong Kong Limited
- 1 -
LETTER FROM THE BOARD
Air China Limited
(a joint stock limited company incorporated in the People's Republic of China with limited liability)
(Stock Code: 00753)
Directors:
Non-Executive Directors: Wang Changshun (Chairman) Wang Yinxiang
Cao Jianxiong
Sun Yude
Christopher Dale Pratt
Sai Cheung Shiu, Ian
Executive Directors:
Cai Jianjiang (President)
Fan Cheng
Independent Non-Executive Directors:
Fu Yang
Li Shuang
Han Fangming
Yang Yuzhong
Registered Address:
9th Floor, Blue Sky Mansion
28 Tianzhu Road, Zone A Tianzhu Airport Industrial Zone Shunyi District
Beijing, PRC
Principal Place of
Business in Hong Kong:
5th Floor, CNAC House
12 Tung Fai Road
Hong Kong International Airport
Hong Kong
10 April 2012
To the Shareholders
Dear Sir or Madam,
(I) General Mandate to Issue Shares
(II) Proposed Payment of Final Dividends and
Notice of Annual General Meeting
1. INTRODUCTION
It is proposed that at the annual general meeting of the Company to be held on Thursday, 24 May 2012, the notice of which is set out on pages II-1 to II-4 of this circular, resolutions will be proposed to, among others, (i) give general mandates to the Directors to issue shares and increase registered capital; and (ii) approve the proposed payment of final dividends for the year ended 31 December 2011. The notice of AGM is set out on pages II-1 to II-4 of this circular.
- 2 -
LETTER FROM THE BOARD
2. GENERAL MANDATE TO ISSUE SHARES
In order to ensure flexibility and to give discretion to the Directors in the event that it becomes desirable to issue any shares, a special resolution will be proposed at the AGM to give an unconditional general mandate to the Directors during the Relevant Period (as defined in the accompanying notice of AGM), to separately or concurrently, allot, issue, and deal with additional A Shares and H Shares of the Company and to make or grant offers, agreements or options in respect thereof, with an aggregate nominal value of not exceeding 20% of the aggregate nominal amount of each of the existing A Shares and H Shares of the Company in issue as at the date of the relevant resolution to be proposed and passed at the AGM (the "General Mandate"). The General Mandate will lapse at the conclusion of the Relevant Period (as defined in Resolution 6 set out in accompanying notice of AGM). The Company shall obtain the approval of the CSRC and other relevant authorities for any issue of new shares under the General Mandate.
A separate special resolution will be proposed at the AGM to give a conditional general mandate to the Directors to increase the registered capital of the Company to reflect the issuance of shares authorised under the General Mandate, and to make such appropriate and necessary amendments to the Articles of Association as they think fit to reflect such increase in the registered capital of the Company and to take any other action and complete any formality required to effect such increase of the registered capital of the Company.
3. PROPOSED PAYMENT OF FINAL DIVIDENDS
Reference is made to the results announcement of the Company dated 27 March 2012 in respect of the recommended payment of a final dividend of RMB0.1180 (including tax) per share for the year ended 31 December 2011.
Based on the 2011 profit distribution plan of the Company, the Company will appropriate 10% of the balance of the net profit of the Company of the year 2011 as set out in the financial statements prepared under the PRC Accounting Standards into the discretionary surplus reserve and distribute a cash dividend of RMB1,521,000,000, or RMB0.1180 (including tax) per share based on the total number of 12,891,954,673 shares of the Company, for the year 2011.
A further announcement regarding the book closure period and further information relating to the payment of final dividends will be made by the Company in due course.
4. RECOMMENDATION
The Directors consider that the proposed resolutions above are fair and reasonable so far as the Shareholders are concerned and accordingly recommend the Shareholders to consider the proposed resolutions above and to vote in favour of such resolutions which will be proposed at the AGM.
5. DUTY REPORT OF THE INDEPENDENT NON-EXECUTIVE DIRECTORS
At the AGM, the Shareholders will be presented with the duty report of the independent non-executive Directors of the Company for the year 2011, the full text of which is set in Appendix I to this circular.
- 3 -
LETTER FROM THE BOARD
6. AGM
The Company will convene the AGM at The Conference Room, 29/F, Air China Building, 36 Xiaoyun Road, Chaoyang District, Beijing, PRC at 10:00 a.m. on Thursday, 24 May 2012. A notice of AGM, a form of proxy and an attendance notice will be dispatched to the Shareholders in accordance with the Listing Rules on Tuesday, 10 April 2012. The notice of AGM is reproduced on pages II-1 to II-4 of this circular.
Whether or not you intend to attend the AGM, you are requested to complete and return the form of proxy in accordance with the instruction printed thereon. If you intend to attend the AGM, you are required to complete and return the notice of attendance to the Company's H share registrar, Computershare Hong Kong Investor Services Limited on or before Friday, 4
May 2012.
Completion and return of the form(s) of proxy will not preclude you from attending and voting in person at the meetings or at any adjournment should you so wish and completion and return of the notice of attendance do not affect the right of a shareholder to attend the respective meeting.
7. GENERAL INFORMATION
The Company will close its register of members and suspend the registration of transfer of shares from Tuesday, 24 April 2012 to Thursday, 24 May 2012 (both days inclusive) in order to determine the shareholders list of the Company who will be entitled to attend and vote at the AGM.
Shareholders of the Company whose names appear on the register of members of the Company on the close of business of Monday, 23 April 2012 may attend the AGM after completing the registration procedures. In order to qualify for attendance at the AGM, instruments of transfer accompanied by share certificates and other appropriate documents must be lodged with the Company's H share registrar, Computershare Hong Kong Investor Services Limited, by 4:30 p.m. on Monday, 23 April 2012.
Shareholders who intend to attend the AGM have to deliver the notice of attendance to the Company's H share registrar, Computershare Hong Kong Investor Services Limited in person or by post or fax on or before Friday, 4 May 2012.
By order of the Board
Wang Changshun
Chairman
Beijing, the PRC
- 4 -
APPENDIX I 2011 DUTY REPORT OF THE INDEPENDENT NON-EXECUTIVE DIRECTORS
DUTY REPORT OF THE INDEPENDENT NON-EXECUTIVE DIRECTORS FOR THE YEAR 2011
Dear Shareholders:
Being the independent non-executive Directors of Air China Limited, we have diligently carried out our duties and functions, and have provided objective opinions as independent non-executive directors in strict compliance with the "Company Law", the "Securities Law", the "Guidelines on the Establishment of Independent Directorship of Listed Companies", the "Code of Corporate Governance for Listed Companies", and other laws and regulations including the listing rules of both the domestic and overseas listing venues of the Company, as well as the relevant requirements of the "Articles of Association" and the "Work Procedures of Independent Non-executive Directors" of the Company, thereby protecting the overall interests of the Company as well as the legitimate interests of all shareholders, especially those of its minority shareholders. Our performance of duties and functions in 2011 is now reported as follows:
I. Basic information of independent non-executive Directors
The Board is comprised of twelve Directors, of whom four are independent non-executive Directors, representing one-third of the members of the Board, thus satisfying the relevant requirements set forth by the Code of Corporate Governance for Listed Companies. Our four independent non-executive Directors are all professionals who specialize in various fields such as PRC laws and financial accounting, thus having the competence and experience required for the business development of the Company. In accordance with the requirements of the Listing Rules, we have confirmed our independent status with the Stock Exchange, and such disclosure is made in the annual report 2011 of the Company.
The Board has established four specialized committees, namely, the Audit and Risk Management Committee, the Management Training and Remuneration Committee, the Strategy and Investment Committee and the Aviation Safety Committee. Among these, the chairmen of the Audit and Risk Management Committee and the Management Training and Remuneration Committee are held by independent non-executive Directors, with the majority of the committee members being independent non-executive Directors. Each of the specialized committee has carried out its duties and functions in strict compliance with the requirements of the "Code of Corporate Governance for Listed Companies" and the rules of procedures for specialized committees of the Company.
In February 2011, Mr. Jia Kang, an independent non-executive Director, tendered his resignation to the Board due to changes in the policy of the Ministry of Finance. At the 2010 annual general meeting of the Company held on 26 May 2011, Mr. Yang Yuzhong was selected as an independent non-executive Director of the third session of the Board, replacing Mr. Jia Kang as independent non-executive Director.
- I-1 -
APPENDIX I 2011 DUTY REPORT OF THE INDEPENDENT NON-EXECUTIVE DIRECTORS
II. Attendance of independent non-executive Directors in meetings
In 2011, the Company convened 15 Board meetings, with the attendance rate of each independent non-executive Director as shown below:
|
Name
|
Number of
Attendance
Required
|
Attendance inPerson
|
Attendance via
Telecommunications
|
Attendance via
Proxy
|
Absence
|
Objections
Raised
|
|
JiaKang
|
8
|
5
|
5
|
3
|
0
|
None
|
|
FuYang
|
15
|
14
|
10
|
1
|
0
|
None
|
|
LiShuang
|
15
|
15
|
10
|
0
|
0
|
None
|
|
HanFangming
|
15
|
14
|
10
|
1
|
0
|
None
|
|
YangYuzhong
|
7
|
7
|
5
|
0
|
0
|
None
|
In addition, by attending important meetings of the Company and receiving special reports and information delivered by the Company, we developed an in-depth understanding of the Company's business and financial operations. We also made various recommendations on areas such as corporate strategic development, risk management and standard operations. In view of the above, we have demonstrated our professional strength and played an active role in the decision-making process of the Board and the standardized operations of the Company.
III. Independent opinions of independent non-executive Directors
- I-2 -
APPENDIX I 2011 DUTY REPORT OF THE INDEPENDENT NON-EXECUTIVE DIRECTORS
Opinion on the Execution of Connected Transactions of the Company for the Year 2011", "Independent Opinion and Special Explanations on the Guarantees in favour of External Parties as of 31 December 2011", "Independent Opinion on the Appointments of the Company's Internal and External Auditors for the Year 2012", "Independent Opinion on the Company providing Entrustment Loans to its controlling subsidiary, Air China Cargo Co., Ltd", "Independent Opinion on the Execution of Framework Agreement for Connected Transactions between the Company and Air China Cargo Co., Ltd and Annual Caps of the said Transactions for years 2011 to 2013", and "Independent Opinion on the Adjustment of the Annual Caps for Connected Transactions between the Company and China National Aviation Media & Advertising Company". We have testified the above matters of the Company and expressed our support, and did not discover any conduct prejudicial to the interests of the Company or its minority shareholders. Our independent and objective opinions are conducive to the orderly development of the Company's operations and management.
IV. Independent non-executive Directors' supervisory role in the preparation of annual reports
We have strictly complied with the requirements in relation to independent directors with respect to annual reports set out by regulatory authorities as well as those set out in the "Work Procedures of Independent Non-executive Directors". At the annual work conference of the Company, the senior management of the Company gave us accounts on important matters such as those relating to the Company's operations and financial status for the year 2011, and various work plans and strategies for the year 2012. Prior to the commencement of the audit work by the auditors of the Company on 31 January 2012, we have communicated with the auditors in respect of matters such as the composition of the audit team, audit plan, risk assessment, risks and fraud testing and evaluation methods, and major audit issues for the current year. On 15 March 2012, we reviewed the Company's annual financial statements after the issue of the preliminary audit opinions by the auditors thereon. On 26 March 2012, we reviewed the Company's 2011 annual financial statements and other relevant resolutions. In addition, in order to ensure the truthfulness, accuracy and completeness of the Company's annual report, the independent non-executive Directors and the Audit and Risk Management Committee of the Board cooperated closely with each other, and communicated thoroughly with the auditors and the management of the Company in respect of the audit of annual report and other relevant matters.
In 2012, we will continue to faithfully carry out our duties and functions as independent non-executive directors with professional attitude and diligence, and will strive to have more in-depth understanding of the Company's business operations and financial position, enhance communication and cooperation with the Board, the supervisory committee and the management of the Company, provide support to the Board to facilitate more effective decision-making, ensure the objectiveness, fairness and regulated operation of the Board, and protect the overall interests of the Company and the legitimate interests of the minority investors.
Independent non-executive Directors: Jia Kang (resigned in May 2011), Fu Yang, Li Shuang, Han Fangming and Yang Yuzhong
27 March 2012
- I-3 -
APPENDIX II NOTICE OF ANNUAL GENERAL MEETING
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 ("AGM") of Air China Limited (the "Company") for the year ended 31 December 2011 will be held at 10:00 a.m. on Thursday, 24 May 2012 at The Conference Room, 29/F, Air China Building, 36 Xiaoyun Road, Chaoyang District, Beijing, PRC for the following purposes:
1. To consider and approve the report of the board of directors (the "Board") of the Company for the year 2011;
2. To consider and approve the report of the supervisory committee of the Company for the year 2011;
3. To consider and approve the audited consolidated financial statements of the Company for the year 2011 prepared under the PRC Accounting Standards and the International Financial Reporting Standards;
4. To consider and approve the profit distribution proposal and the dividends distribution proposal for the year 2011 as recommended by the Board (including approving the appropriation of 10% of the balance of the net profit of the Company of the year 2011 as set out in the financial statements prepared under the PRC Accounting Standards into the discretionary surplus reserve of the Company and the distribution of a cash dividend of RMB1,521,000,000, or RMB0.1180 (including tax) per share based on the total number of 12,891,954,673 shares of the Company, for the year 2011) and to authorise the Board to implement such proposals;
5. To consider and approve the reappointment of Ernst & Young as the Company's international auditors and Ernst & Young Hua Ming CPAs Limited Company as the Company's domestic auditors for the year ending 31 December 2012 and to authorise the management of the Company to determine their
remunerations for the year 2012;
- II-1 -
APPENDIX II NOTICE OF ANNUAL GENERAL MEETING
To consider and approve the following resolutions as special resolutions (items 6 and 7):
6. "THAT the authorisation of the Board of the Company to allot, issue and deal with additional shares of the Company be and is hereby approved.
(1) subject to paragraph (3) of this resolution, the exercise by the Board of the Company during the Relevant Period (as defined in paragraph (4) of this resolution) of all the powers of the Company to allot, issue and deal with additional A Shares and/or H Shares of the Company (hereinafter referred to as "Shares") and to make or grant offers, agreements and options which might require the exercise of such powers be and is hereby generally and unconditionally approved;
(2) this approval shall authorise the Board of the Company during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period;
(3) the amount of additional A Shares and H Shares (as the case may be) allotted, issued and dealt with or agreed conditionally or unconditionally to be allotted, issued and dealt with either separately or concurrently by the Board of the Company pursuant to the approval in paragraph (1) of this resolution shall not exceed 20% of each of the Company's existing A Shares and H Shares (as the case may be) in issue at the date of passing this resolution; and
(4) for the purpose of this resolution:
"Relevant Period" means the period from the passing of this resolution until the earlier of:
(a) the conclusion of the next annual general meeting of the Company;
(b) the expiration of the 12 months period following the passing of this resolution; and
(c) the revocation or variation of the authority given to the Board of the Company under this resolution by a special resolution of the Company's shareholders in general meetings."
- II-2 -
APPENDIX II NOTICE OF ANNUAL GENERAL MEETING
7. "THAT the Board of the Company be and is hereby authorised to increase the registered capital of the Company to reflect the issue of Shares authorised under special resolution 6, and to make such appropriate and necessary amendments to the Articles of Association of the Company as they think fit to reflect such increases in the registered capital of the Company and to take any other action and complete any formality required to effect such increase of the registered capital of the Company."
By order of the Board Air China Limited Wang Changshun Chairman of the Board
Beijing, PRC, 10 April 2012
As at the date of this announcement, the directors of the Company are Mr. Wang Changshun, Ms. Wang Yinxiang, Mr. Cao Jianxiong, Mr. Sun Yude, Mr. Christopher Dale Pratt, Mr. Ian Sai Cheung Shiu, Mr. Cai Jianjiang, Mr. Fan Cheng, Mr. Fu Yang*, Mr. Li Shuang* and Mr. Han Fangming* and Mr. Yang Yuzhong*.
* Independent non-executive director of the Company
Notes:
1. Closure of Register of Members and Eligibility for Attending the AGM
Holders of H Shares of the Company are advised that the register of members of the Company will close from Tuesday, 24 April 2012 to Thursday, 24 May 2012 (both days inclusive), during which time no transfer of H Shares of the Company will be effected and registered. In order to qualify for attendance at the AGM, instruments of transfer accompanied by share certificates and other appropriate documents must be lodged with the Company's H Share registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17/F., Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong, by 4:30 p.m. on Monday, 23 April 2012.
Shareholders of the Company whose names appear on the register of members of the Company on the close of business on Monday, 23 April 2012 are entitled to attend the AGM.
2. Notice of attendance
H Share shareholders who intend to attend the AGM should complete and lodge the accompanying notice of attendance and return it to the Company's H Share registrar on or before Friday, 4 May 2012. The notice of attendance may be delivered by hand, by post or by fax to the Company's H Share registrar Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong. Completion and return of the notice of attendance do not affect the right of a shareholder to attend the AGM. However, the failure to return the notice of attendance may result in an adjournment of the AGM, if the number of shares carrying the right to vote represented by the shareholders proposing to attend the AGM by the notice of attendance does not reach more than half of the total number of shares of the Company carrying the right to vote at the AGM.
- II-3 -
APPENDIX II NOTICE OF ANNUAL GENERAL MEETING
3. 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 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 authorised in writing. If the appointer 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 authorised in writing. The instrument appointing the proxy shall be deposited at the Company's H Share registrar for holders of H Shares not less than 24 hours before the time appointed for the holding of the AGM. If the instrument appointing the proxy is signed by a person authorised by the appointer, the power of attorney or other document of authority under which the instrument is signed shall be notarised. The notarised 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.
4. Other businesses
(i) The AGM is expected to last for two hours. 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) 2862 8628
Fax No.: (852) 2865 0990
- II-4 -
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