EGM circular
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) Proposed Appointment of Internal Control Auditor
(II) Proposed Appointment of New Non-Executive Director
(III) Proposed Adjustment of Exercise Price of Stock Appreciation Rights
and
Supplemental Notice of Extraordinary General Meeting
A letter from the Board is set out on pages 2 to 5 of this circular.
A supplemental notice convening the first extraordinary general meeting of the Company for the year 2012 to be held at 9:30 a.m. on Friday, 20 January 2012 at The Conference Room 2811, Air China Building, 36 Xiaoyun Road, Chaoyang District, Beijing, PRC, is set out on pages I-1 to I-2 of this circular. Whether or not you are able to attend the EGM, you are requested to complete and return the accompanying revised 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 EGM or any adjournment thereof. Completion and return of the revised form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment should you so wish.
5 January 2012
Page
Definitions................................................................................................................. 1
Letter from the Board.................................................................................................. 2
Appendix I - Supplemental Notice of Extraordinary General Meeting......................... I-1
In this circular, the following expressions have the following meanings, unless the context requires otherwise:
"Board" the board of Directors
"Company" Air China Limited, a company incorporated in the People's Republic of China, 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
"Director(s)" the director(s) of the Company
"EGM" the first extraordinary general meeting of the Company for the year 2012 to be held at 9:30 a.m. on Friday, 20 January 2012 at The Conference Room 2811, Air China Building, 36 Xiaoyun Road, Chaoyang District, Beijing, PRC for the Shareholders to consider and approve the resolutions set out in the supplemental notice of the EGM
"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
"SASAC" State-owned Assets Supervision and Administration Commission of the State Council, PRC
"Shareholder(s)" registered holder(s) of the shares of the Company
"Stock Appreciation Rights the revised measures on management of the stock appreciation rights in
Management Measures" respect of the Company, which was approved at the 2010 annual general
meeting of the Company on 26 May 2011. Please refer to the circular of
the Company dated 11 April 2011 for details.
"Stock Exchange" The Stock Exchange of Hong Kong Limited
AIR CHINA LIMITED
(a joint stock limited company incorporated in the People's Republic of China with limited liability)
(Stock Code: 00753)
Directors: Registered Address:
Non-Executive Directors: 9th Floor, Blue Sky Mansion
Kong Dong (Chairman) 28 Tianzhu Road, Zone A
Wang Yinxiang (Vice Chairman) Tianzhu Airport Industrial Zone
Cao Jianxiong Shunyi District
Sun Yude Beijing, PRC
Christopher Dale Pratt
Ian Sai Cheung Shiu Principal Place of
Business in Hong Kong:
Executive Directors: 5th Floor, CNAC House
Cai Jianjiang 12 Tung Fai Road
Fan Cheng Hong Kong International Airport
Hong Kong
Independent Non-Executive Directors:
Fu Yang
Li Shuang
Han Fangming
Yang Yuzhong
5 January 2012
To the Shareholders
Dear Sir or Madam,
(I) Proposed Appointment of Internal Control Auditor
(II) Proposed Appointment of New Non-Executive Director
(III) Proposed Adjustment of Exercise Price of Stock Appreciation Rights
and
Supplemental Notice of Extraordinary General Meeting
1. INTRODUCTION
It is proposed that at the EGM, resolutions will be proposed to (i) appoint Ernst & Young Hua Ming Certified Public Accountants as the Company's internal control auditor for the year 2011 to review the effectiveness of the Company's internal control for the year 2011 and to issue the internal control audit report, and authorise the management of the Company to determine their corresponding
remunerations for the year 2011; (ii) appoint Mr. Wang Changshun as a new non-executive Director; and (iii) approve the reduction of the exercise price of the stock appreciation rights under the first issue of the stock appreciation rights programme of the Company by HK$0.27 from HK$5.97 to HK$5.70. The supplemental notice of EGM is set out on pages I-1 to I-2 of this circular.
2. PROPOSED APPOINTMENT OF INTERNAL CONTROL AUDITOR
Pursuant to "The Basic Standard for Enterprise Internal Control" and "Implementation Guidelines for Enterprise Internal Control" jointly issued by Ministry of Finance of the PRC, China Securities Regulatory Commission, National Audit Office of the PRC, China Banking Regulatory Commission and China Insurance Regulatory Commission, a company listed both in the PRC and overseas shall disclose an internal control self-evaluation report and a corresponding internal control audit report in relation to its financial report from an accounting firm when disclosing its annual financial report from the year 2011 going forward. In light of the abovementioned requirement, on 6 December 2011, the Board approved the appointment of Ernst & Young Hua Ming Certified Public Accountants as the Company's internal control auditor for the year 2011 and the authorisation to the management of the Company to determine their corresponding remunerations for the year 2011.
3. PROPOSED APPOINTMENT OF NEW NON-EXECUTIVE DIRECTOR
Reference is made to the announcement of the Company dated 28 December 2011, where Mr. Kong Dong has rendered his resignations from his positions as chairman and a non-executive director of the Company due to retirement effective upon the approval of the appointment of new non-executive Director. On 28 December 2011, the Board resolved to propose that Mr. Wang Changshun be appointed as a new non-executive Director. An ordinary resolution to consider and approve the appointment of Mr. Wang Changshun will be proposed at the EGM.
Mr. Wang Changshun, aged 54, graduated from University of Science and Technology of China with a Ph.D. degree in Management Science and Engineering. Mr. Wang was ever Secretary of Communist Party Committee and Deputy Director of Xin Jiang Regional Administration (新疆管理局) and served as Deputy General Manager, a Member of the Standing Committee to the Communist Party Committee and Secretary of Communist Party Committee of Xinjiang Airlines (新疆航空公司). From October 2000 to September 2002, Mr. Wang worked as General Manager, Deputy Chairman of the Board and Deputy Secretary of Communist Party Committee of China Southern Airlines Company Limited. Mr. Wang served as Deputy General Manager and a Member of Communist Party Committee of China Southern Air Holding Company and General Manager, Deputy Chairman of the Board and Deputy Secretary of Communist Party Committee of China Southern Airlines Company Limited from September 2002 to August 2004. Mr. Wang became Deputy Director and a Member of Communist Party Committee of Civil Aviation Administration of China ("CAAC") from August 2004 to March 2008. Mr. Wang served as a Member of Communist Party Committee and Deputy Director of CAAC and Secretary of Communist Party Committee of the department directly administered by
CAAC and Chairman of National Labor Union of Civil Aviation (全國民航工會) from March 2008 to October 2011. Mr. Wang has served as General Manager and Deputy Secretary of Communist Party Committee of China National Aviation Holding Company since October 2011.
Save as disclosed above, Mr. Wang has not held any other directorships in public companies the securities of which are listed in any securities market in Hong Kong or overseas or taken up a position in any affiliated companies of the Company over the past three years. Mr. Wang does not have any relationship with any other directors, senior management, substantial shareholders or controlling shareholder of the Company.
As at the date of this circular, Mr. Wang does not have any equity interest in the Company within the meaning of Part XV of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong). There is no information to be disclosed on items from (h) to (v) in Rule 13.51(2) of the Listing Rules, and there are no other matters that need to be brought to the attention of the Shareholders in respect of the proposed appointment of Mr. Wang.
Mr. Wang will enter into a service contract with the Company and will not receive any remuneration from the Company during his tenure. The term of Mr. Wang's office shall commence on the date of approval by the Shareholders of his appointment and shall end on the expiry of the term of the current session of the Board.
4. PROPOSED ADJUSTMENT OF EXERCISE PRICE OF STOCK APPRECIATION RIGHTS
At 2010 annual general meeting of the Company on 26 May 2011, Shareholders approved the resumption of the first issue of the stock appreciation rights programme of the Company in accordance with the Stock Appreciation Rights Management Measures and the implementation plan of the first issue of the stock appreciation rights programme. The exercise price of stock appreciation rights under the first issue of the stock appreciation rights programme of the Company was accordingly adjusted from the original HK$2.98 to HK$5.97, being the closing price on the date of grant of such rights. The Company has distributed cash dividends accumulated to HK$0.27 per share to its Shareholders since the date of grant of the stock appreciation rights. According to the related documents of SASAC and the provisions of the Stock Appreciation Rights Management Measures, the Company may adjust the exercise price of the granted but unexercised stock appreciation rights, subject to the approvals from the Board and the general meeting of Shareholders and reporting to SASAC for filing.
Given that the exercise price directly affects the realised interest of the holders of stock appreciation right and that the related provisions of both SASAC and the Company allow to adjust the exercise price under the circumstances of cash dividends distribution, on 28 December 2011, the Board approved the reduction of the exercise price of the stock appreciation rights under the first issue of the stock appreciation rights programme of the Company by HK$0.27 from HK$5.97 to HK$5.70.
5. 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 EGM.
6. EGM
The Company will convene its first extraordinary general meeting for the year 2012 at The Conference Room 2811, Air China Building, 36 Xiaoyun Road, Chaoyang District, Beijing, PRC at 9:30 a.m. on Friday, 20 January 2012. In accordance with the Listing Rules, a notice of EGM, a form of proxy (the "Original Proxy Form") and an attendance notice have been dispatched to the Shareholders on Wednesday, 7 December 2011 and a supplemental notice of EGM and a revised form of proxy (the "Revised Proxy Form") have been dispatched to the Shareholders on Friday, 6 January 2012. The supplemental notice of EGM is reproduced on pages I-1 to I-2 of this circular. The Original Proxy Form is superseded by the Revised Proxy Form.
Whether or not you intend to attend the EGM, you are requested to complete and return the Revised Proxy Form in accordance with the instruction printed thereon. Completion and return of the Revised Proxy Form will not preclude you from attending and voting in person at the EGM 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.
By order of the Board
Kong Dong
Chairman
Beijing, the PRC
EXTRAORDINARY GENERAL MEETING
AIR CHINA LIMITED
(a joint stock limited company incorporated in the People's Republic of China with limited liability)
(Stock Code: 00753)
SUPPLEMENTAL NOTICE OF EXTRAORDINARY GENERAL MEETING
Reference is made to the notice of the extraordinary general meeting of Air China Limited (the "Company") dated 6 December 2011 (the "Former EGM Notice") which sets out the ordinary resolution to be considered by shareholders at the first extraordinary general meeting to be held at the Conference Room 2811, Air China Building, 36 Xiaoyun Road, Chaoyang District, Beijing, PRC at 9:30 a.m. on Friday, 20 January 2012 (the "EGM").
SUPPLEMENTAL NOTICE IS HEREBY GIVEN that the EGM, which will be held as originally scheduled, will consider and, if thought fit, pass the following by way of ordinary resolutions and special resolution including the resolution set out in the Former EGM Notice:
ORDINARY RESOLUTIONS:
1. To consider and approve the appointment of Ernst & Young Hua Ming Certified Public Accountants as the Company's internal control auditor for the year 2011 to review the effectiveness of the Company's internal control for the year 2011 and to issue the internal control audit report, and the authorisation to the management of the Company to determine their corresponding remunerations for the year 2011.
2. To consider and approve the proposed appointment of Mr. Wang Changshun as a new non-executive director of the Company.
SPECIAL RESOLUTION:
3. To consider and approve the reduction of the exercise price of the stock appreciation rights under the first issue of the stock appreciation rights programme of the Company by HK$0.27 from HK$5.97 to HK$5.70, given that the Company has distributed cash dividends accumulated to HK$0.27 per share to its shareholder since the date of grant of such rights.
By Order of the Board Air China Limited Chairman
Kong Dong
Beijing, the PRC, 5 January 2012
Notes:
(1) A revised proxy form is enclosed with this notice. The form of proxy of the Company dated 6 December 2011 (the "Original Proxy Form") is superseded by this revised proxy form.
(2) Please refer to the Former EGM Notice for details in respect of the eligibility for attending the EGM, proxy, registration procedures, closure of register of members and other relevant matters.
(3) Please refer to the notice of attendance of the EGM of the Company dated 6 December 2011 in respect of the timing and address for attending the EGM and other relevant matters.
As at the date of this notice, the directors of the Company are Mr. Kong Dong, 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*, Mr. Han Fangming* and Mr. Yang Yuzhong*.
* Independent non-executive director of the Company
This information is provided by RNS
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