Rules of Audit and risk management Commitee

RNS Number : 5624A

Air China Ld

02 April 2012

 



Air ChinA Limited

Working rules of the Audit and risk management Committee of the Board of directors

Chapter 1    General Principles

Article 1	In order to improve the decision-making function of the board of directors (the "Board") of Air China Limited (the "Company"), enhance the effective supervision over the management by the Board and maintain a sound corporate governance structure, the Audit and Risk Management Committee of the Board (the "Audit and Risk Management Committee") is established. These Working Rules of the Committee (the "Working Rules") are made in accordance with the Company Law of the People's Republic of China, and with reference to the Rules for the Governance of Listed Companies issued by China Securities Regulatory Commission, the Articles of Association of the Company (the "AOA") and other relevant rules and regulations.
Article 2	As a special operating committee of the Board established by the Board in accordance with the shareholders' resolution in a general meeting, the Audit and Risk Management Committee is responsible for the communication between, supervision over and inspection of the internal and external auditors of the Company.

Chapter 2    Composition

Article 3	The Audit and Risk Management Committee shall consist of three to five members, including at least one independent director who is a duly qualified professional or has suitable skills in accounting or financial management. The majority of the Audit and Risk Management Committee members must be independent directors.
Article 4	The Audit and Risk Management Committee members shall be appointed by the Board upon nomination by the chairman, more than half of the independent directors, or more than one-third of the directors.
Article 5	The Audit and Risk Management Committee shall have one chairman (the "Chairman"), who shall be an independent director elected by and among the Audit and Risk Management Committee members. The Chairman shall preside over the work of the Audit and Risk Management Committee.
Article 6	The Audit and Risk Management Committee member shall have a term equal to the term of a director of the Company and may be re-elected upon expiration of such term. Any member of the Committee shall automatically lose his or her membership at the Committee if he or she ceases to be a director of the Company. The vacancy shall be filled by the Board in accordance with Articles 3 to 5 herein.

Chapter 3    Powers and responsibilities

Article 7

The Audit and Risk Management Committee shall have the powers and authorities to:

(1)	make recommendations on the engagement or change of the external auditor, carry out appropriate review and evaluation and submit opinions in writing to the Board in respect of the change or reappointment of the accounting firm for the annual audit;

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(2)	review and supervise the internal audit system of the Company and its implementation, and review the powers and responsibilities of the internal auditor and the appointment and dismissal of the person in charge of the internal audit department of the Company;
(3)	oversee the communication between the internal audit and the external audit;
(4)	monitor the Company's financial information and its disclosure;
(5)	review the internal control system and risk management system of the Company, assess the effectiveness of the rules and specifications for risk investment (including but not limited to investment in any financial derivative instrument), and review the strategy and scheme of the Company for such investment;
(6)	listen to the work report of the person in charge of the audit in the Company;
(7)	listen to the Company's report on any fraudulent behaviours and their reporting;
(8)	address other matters entrusted to the Committee by the Board.

Article 8	The Audit and Risk Management Committee shall report to the Board. The motions raised by the Audit and Risk Management Committee shall be submitted for the Board's review and approval. The Audit and Risk Management Committee shall cooperate with the audit activity of the board of supervisors.
Article 9	The secretarial department of the Board shall actively assist in and create necessary conditions for the discharge of its duties by the Audit and Risk Management Committee, such as providing information and relevant materials and coordinating the communication with the accounting firm.

Chapter 4    rules for Annual reporting

Article 10	The Audit and Risk Management Committee shall, at the end of each fiscal year, but before the start of the annual audit, agree with the chartered accounting firm engaged for the annual audit on a timetable for auditing the financial statements of the Company.
	The Audit and Risk Management Committee shall urge the accounting firm to submit its audit report within the agreed timetable, and record how and for how many times the Committee has done so, and the results, in a written note, which shall be signed by the relevant person in charge.
Article 11	The Audit and Risk Management Committee shall, before the chartered accountant is engaged to audit the annual report of the Company (the "Annual Financial Report Auditor") commences its auditing assignment, review and form its opinion in writing on the financial report prepared by the Company.
	The Audit and Risk Management Committee shall, after the Annual Financial Report Auditor commences its auditing assignment, communicate with the Annual Financial Report Auditor. After the preliminary audit opinion is issued by the Annual Financial Report Auditor, review the financial report of the Company and form its opinion in writing.

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Article 12	The Audit and Risk Management Committee shall vote and reach a decision on the annual financial report, and submit the decision to the Board for review and approval. The Committee shall also submit to the Board a summary report on the audit work done by the accounting firm, and its decision on the renewal of the engagement of the existing auditor or the engagement of a new auditor for the new financial year.
	The documents relating to the audit of the annual report of the Company (as considered and reviewed by the Audit and Risk Management Committee) shall be disclosed in the annual report of the Company.

Chapter 4    Procedural rules

Article 13	The Audit and Risk Management Committee may hold regular or ad hoc meetings. Regular meetings shall be held at least twice a year and once every half year. Ad hoc meetings may be held when so requested by two or more members of the Audit and Risk Management Committee. The secretarial department of the Board shall inform all Committee members seven days before the meeting, which notification period may be waived upon agreement of all Committee members. The meeting shall be chaired by the Chairman, or if the Chairman is unable to attend the meeting, by an independent non- executive director authorised by the Chairman.
Article 14	The quorum of the meeting is two-thirds of the Audit and Risk Management Committee members. Each member present shall have one vote. The resolution of the meeting must be passed by a majority of the members present before such resolution becomes effective. In the event of a tie, the Chairman shall have the right to an extra vote.
Article 15	Votes at a meeting of the Audit and Risk Management Committee can be taken by a show of hands or casting of ballots. Ad hoc meetings may also be held by correspondence.
Article 16	The Audit and Risk Management Committee may, if necessary, invite directors, supervisors or senior management members of the Company to attend its meetings.
Article 17	The Audit and Risk Management Committee may, if necessary, engage an agency to provide professional opinion in its decision-making process and any reasonable cost shall be borne by the Company.
Article 18	The procedure and methods of voting of, and resolutions passed by, the meeting of the Audit and Risk Management Committee must comply with the relevant laws and regulations, AOA and Working Rules.
Article 19	The Audit and Risk Management Committee shall prepare minutes of its meetings, which shall be signed by the Committee members who have attended the meeting and shall be kept by the board secretary.
Article 20	The resolutions passed by, and the results of voting conducted at, the Audit and Risk Management Committee meetings shall be reported in writing to the Board.
Article 21	Members attending a Committee meeting shall keep any matter discussed at the meeting confidential, and shall not disclose any related information unless authorised.

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Chapter 5    Supplementary Provisions

Article 22	The Working Rules are made by the Board and shall come into effect upon approval of the Board.
Article 23	Any matter not provided herein shall be dealt with in accordance with the relevant laws and regulations and AOA. In the event of any inconsistency between the Working Rules and any laws or regulations or the AOA, as duly amended from time to time, such laws or regulations or the AOA shall prevail. In such situation, an amendment shall be made to the Working Rules immediately and submitted to the Board for review and approval.
Article 24	The Board reserves the power to amend and interpret the Working Rules.

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