Exhibit 1.1
ARTICLES OF ASSOCIATION
OF
PETROCHINA COMPANY LIMITED
ARTICLES OF ASSOCIATION
OF PETROCHINA COMPANY LIMITED
Chapter 1 General Provisions......................................................................... 1
Chapter 2 The Company's Objectives and Scope of Business............................................. 2
Chapter 3 Shares and Registered Capital.............................................................. 3
Chapter 4 Reduction of Capital and Redemption of Shares.............................................. 6
Chapter 5 Financial Assistance for Acquisition of Shares............................................. 8
Chapter 6 Share Certificates and Register of Shareholders............................................ 9
Chapter 7 Shareholders' Rights and Obligations....................................................... 14
Chapter 8 Shareholders' General Meetings............................................................. 17
Chapter 9 Special Procedures for Voting by a Class of Shareholders................................... 25
Chapter 10 Board of Directors......................................................................... 27
Chapter 11 Secretary of the Board of Directors........................................................ 31
Chapter 12 General Manager............................................................................ 32
Chapter 13 Supervisory Committee...................................................................... 33
Chapter 14 Qualifications and Duties of the Directors, Supervisors, General Manager, Senior
Deputy General Managers, Deputy General Managers and Other Senior Officers of the Company.. 35
Chapter 15 Financial and Accounting Systems and Profit Distribution................................... 42
Chapter 16 Appointment of Auditors.................................................................... 45
Chapter 17 Insurance.................................................................................. 49
Chapter 18 Labour and Personnel Management Systems.................................................... 49
Chapter 19 Trade Unions............................................................................... 49
Chapter 20 Merger and Division of the Company......................................................... 49
Chapter 21 Dissolution and Liquidation................................................................ 50
Chapter 22 Procedures for Amendment of the Company's Articles of Association.......................... 53
Chapter 23 Dispute Resolution......................................................................... 54
Chapter 24 Notices ................................................................................... 55
Chapter 25 Supplementary ............................................................................. 56
ARTICLES OF ASSOCIATION OF
PETROCHINA COMPANY LIMITED
(Approved by Shareholders' Special Resolutions on 3 December 1999
Amended by Shareholders' Special Resolutions on 10 March 2000
Amended by Resolutions of the Fifth Meeting of the First Board of Directors
on 30 May 2000
Amended by Shareholders' Special Resolutions on 8 June 2001)
CHAPTER 1: GENERAL PROVISIONS
Article 1. The Company is a joint stock limited company established in MP1
accordance with the Company Law of the People's Republic of
China (the Company Law), Securities Law of the People's
Republic of China, State Council's Special Regulations
Regarding the Issue of Shares Overseas and the Listing of
Shares Overseas by Companies Limited by Shares (the Special
Regulations) and other relevant laws and regulations of the
State.
The Company was established by way of promotion with the
approval of the State Economic and Trade Commission of the
People's Republic of China on 25 October 1999, as evidenced
by approval document Guo Jing Mao Qi Gai [1999] no. 1024 of
1999. It is registered with and has obtained a business
licence from the State Administration Bureau of Industry and
Commerce on 5 November 1999. The Company's business licence
number is: 1000001003252.
The promoter of the Company is: China National Petroleum
Corporation.
Article 2. The Company's registered Chinese name: MP2
The Company's registered English name: PetroChina Company
Limited.
Article 3. The Company's address : 16 Ande Road MP3
Dongcheng District
Beijing
China
Telephone number : 010-84886270
Facsimile number : 010-84886260
Postal code : 100011
Article 4. The Company's legal representative is the Chairman of the MP4
board of directors of the Company.
Article 5. The Company is a joint stock limited company which has MP5
perpetual existence.
Article 6. The Company's Articles of Association shall take effect from MP6
the date of
1
establishment of the Company.
From the date on which the Company's Articles of Association
come into effect, the Company's Articles of Association
constitute the legally binding document regulating the
Company's organisation and activities, and the rights and
obligations between the Company and each shareholder and
among the shareholders inter se.
Article 7. The Company's Articles of Association are binding on the MP7
Company and its shareholders, directors, supervisors,
general manager, senior deputy general managers, deputy
general managers, financial controller and other senior
officers of the Company; all of whom may, according to the
Company's Articles of Association, assert rights in respect
of the affairs of the Company.
A shareholder may take action against the Company pursuant
to the Company's Articles of Association, and vice versa. A
shareholder may also take action against another
shareholder, the directors, supervisors, general manager,
senior deputy general managers, deputy general managers,
financial controller and other senior officers of the
Company pursuant to the Company's Articles of Association.
The actions referred to in the preceding paragraph include
court proceedings and arbitration proceedings.
Article 8. The Company may invest in other limited liability companies MP8
or joint stock limited companies. The Company's liabilities
to an invested company shall be limited to the amount of its
capital contribution to the invested company.
Upon approval of the companies approving department
authorised by the State Council, the Company may, according
to its operating and management needs, operate as a holding
company as prescribed in clause 2 of Article 12 of the
Company Law.
CHAPTER 2: THE COMPANY'S OBJECTIVES AND
SCOPE OF BUSINESS
Article 9. The Company's objectives are: MP9
To comply with the rules of the market; To continue to
explore the modes of business operation which are suitable
for the Company; To fully utilise every resource of the
Company; To place emphasis on the training of its employees
and technological development; To provide the society with
products which are competitive; To use its best endeavours
to maximise its profits.
Article 10. The Company's scope of business shall be consistent with MP10
and subject to the
2
scope of business approved by the authority responsible for
the registration of the Company.
The Company's scope of business includes: the exploration,
production and sale of onshore oil and natural gas; the
production and sale of refined, petrochemical and chemical
products; the operation of oil and natural gas pipelines;
the research and development for oil exploration and
production technology and petrochemical technology; the sale
of materials, equipment and machines necessary for
production and construction of oil and gas, petrochemicals
and pipelines (except those items required to be
specifically authorized by the State); the import and export
of crude oil and refined oil; the operation of, or to act as
agent in, the import and export of various commodities and
technologies (except the commodities or technologies which
are required to be operated by companies designated by the
State or are prohibited to import or export), the operation
of processing with imported materials and the "Three Types
of Processing plus Compensation Trade"; the operation of
contra trade and transit trade; the operation of the oil
exploration, development and production business under the
overseas co-operation contracts of which China National
Petroleum Corporation has assigned its interests.
The Company may, according to the demand and supply in the
domestic and international markets, the Company's ability to
develop, and the requirements of the Company's business,
adjust its scope of business in accordance with the laws .
Subject to and compliance with laws and administrative
regulations of the People's Republic of China ("PRC"), the
Company has the power to raise and borrow money, which power
includes (without limitation) the borrowing of money, the
issue of debentures, the charging or mortgaging of part or
whole of the Company's interests and to provide guarantees
or mortgages for the debts of third parties (including,
without limitation, the subsidiaries or associated companies
of the Company) in all types of circumstances.
CHAPTER 3: SHARES AND REGISTERED CAPITAL
Article 11. There must, at all times, be ordinary shares in the Company. MP11
Subject to the approval of the companies approving
department authorised by the State Council, the Company may,
according to its requirements, create different classes of
shares.
Article 12. The shares issued by the Company shall each have a par value MP12
of Renminbi one yuan. "Renminbi" means the legal currency of
the PRC.
Article 13. Subject to the approval of the securities authority of the MP13
State Counsel, the Company may issue shares to Domestic
Investors and Foreign Investors.
3
"Foreign Investors" mean those investors who subscribe for
the Company's shares and who are located in foreign
countries and in the regions of Hong Kong, Macau and Taiwan.
"Domestic Investors" mean those investors who subscribe for
the Company's shares and who are located within the
territory of the PRC.
Article 14. Shares which the Company issues to Domestic Investors for MP14,
subscription in Renminbi shall be referred to as App.3
"Domestic-Invested Shares". Shares which the Company issues 9
to Foreign Investors for subscription in foreign currencies
shall be referred to as "Foreign-Invested Shares".
Foreign-Invested Shares which are listed overseas are called
"Overseas-Listed Foreign-Invested Shares". "Foreign
currencies" mean the legal currencies of countries or
districts outside the PRC which are recognised by the
foreign exchange authority of the State and which can be
used to pay the share price to the Company.
Domestic-Invested Shares issued by the Company shall be
referred to as "A Shares". Overseas-Listed Foreign-Invested
Shares issued by the Company and which are listed in Hong
Kong shall be referred to as "H Shares". H Shares as shares
which have been admitted for listing on The Stock Exchange
of Hong Kong Limited (the "Stock Exchange"), the par value
of which is denominated in Renminbi and which are subscribed
for and traded in Hong Kong dollars. H Shares can also be
listed on a stock exchange in the United States in the form
of American Depository Receipts.
Article 15. Subject to the approval of the companies approving
department authorised by the State Council, the Company may
issue a total of 200,000 million ordinary shares, of which
160,000 million ordinary shares, representing 80% of the
total number of ordinary shares which may be issued by the
Company, were issued to the promoter of the Company at the
time when the Company was established.
Article 16. The Company shall issue 15,824,176,000 common shares after
its incorporation. The promoter shall sell 1,758,242,000
shares of the Company held by it. After the issuance and
sale of the shares as described above, the share capital
structure of the Company comprises 175,824,176,000 common
shares, of which 158,241,758,000 common shares, which
represent 90% of the Company's share capital, are held by
the promoter of the Company, China National Petroleum
Corporation in the form of state-owned shares;
17,582,418,000 shares, which represent 10% of the Company's
share capital are held by the H shares shareholders.
MP16,
App.3
9
Article 17. The Company's board of directors may take all necessary MP17
action for the
4
issuance of Overseas-Listed Foreign-Invested Shares and
Domestic-Invested Shares after proposals for issuance of the
same have been approved by the securities authority of the
State Counsel.
The Company may implement its proposal to issue
Overseas-Listed Foreign-Invested Shares and
Domestic-Invested Shares pursuant to the preceding paragraph
within fifteen (15) months from the date of approval by the
securities authority of the State Counsel.
Article 18. Where the total number of shares stated in the proposal for MP18
the issuance of shares include Overseas-Listed
Foreign-Invested Shares and Domestic-Invested Shares, such
shares should be fully subscribed for at their respective
offerings. If the shares cannot be fully subscribed for all
at once due to special circumstances, the shares may,
subject to the approval of the securities authority of the
State Counsel, be issued in separate branches.
Article 19. The registered capital of the Company shall be RMB MP19
175,824,176,000. If the issued shares are redeemed or new
shares are issued, the registered capital of the Company
shall be adjusted accordingly, and put on file with the
companies approving department authorised by the State
Council and the securities regulatory authority of the State
Counsel.
Article 20. The Company may, based on its operating and development MP20
needs, authorise the increase of its capital pursuant to the
Company's Articles of Association.
The Company may increase its capital in the following ways:
(1) by offering new shares for subscription by
unspecified investors;
(2) by issuing new shares to its existing shareholders;
(3) by allotting bonus shares to its existing
shareholders;
(4) by any other means which is permitted by law and
administrative regulation.
After the Company's increase of share capital by means of
the issuance of new shares has been approved in accordance
with the provisions of the Company's Articles of
Association, the issuance thereof should be made in
accordance with the procedures set out in the relevant laws
and administrative regulations.
Article 21. Unless otherwise stipulated in the relevant laws or MP21,
administrative regulations, shares in the Company shall be App.3
freely transferable and are not subject to any lien. 1(2)
Domestic-Invested Shares and Overseas-Listed
Foreign-Invested Shares
5
shall be purchased, sold, donated, inherited and mortgaged
in accordance with the Chinese laws and the Company's
Articles of Association. The transfer and transmission of
the shares shall be registered in accordance with the
relevant regulations.
The Company has the power to sell the shares of a
shareholder who is untraceable, if
(a) during a period of 12 years at least three years
dividends in respect of the shares in question have become
payable and no dividend during that period has been claimed;
and
(b) on expiry of the 12 years the issuer gives notice of its
intention to sell the shares by way of an advertisement
approved by the securities authority of the State Counsel,
and notifies the securities authority of the State Counsel
and other relevant overseas securities regulatory committee
of such intention.
CHAPTER 4: REDUCTION OF CAPITAL AND
REPURCHASE OF SHARES
Article 22. According to the provisions of the Company's Articles of MP22
Association, the Company may reduce its registered capital.
Article 23. The Company must prepare a balance sheet and an inventory of MP23,
assets when it reduces its registered capital. App.3
7(1)
The Company shall notify its creditors within ten (10) days
of the date of the Company's resolution for reduction of
capital and shall publish an announcement in a newspaper at
least three (3) times within thirty (30) days of the date of
such resolution. A creditor has the right within thirty (30)
days of receipt of the notice from the Company or, in the
case of a creditor who does not receive such notice, within
ninety (90) days of the date of the first public
announcement, to require the Company to repay its debts or
to provide a corresponding guarantee for such debt.
The Company's registered capital may not, after the
reduction in capital, be less than the minimum amount
prescribed by law.
Article 24. The Company may, in accordance with the procedures set out MP24
in the Company's Articles of Association and with the
approval of the relevant governing authority of the State,
repurchase its issued shares under the following
circumstances:
(1) cancellation of shares for the purposes of reducing its
capital;
(2) merging with another company that holds shares in the
Company;
6
(3) other circumstances permitted by laws and administrative
regulations.
Article 25. The Company may repurchase shares in one of the following MP25
ways, with the approval of the relevant governing authority
of the State:
(1) by making a general offer for the repurchase of shares
to all its shareholders on a pro rata basis;
(2) by repurchasing shares through public dealing on a stock
exchange;
(3) by repurchasing shares outside of the stock exchange by
means of an off-market agreement.
Article 26. The Company must obtain the prior approval of the MP26
shareholders in a general meeting (in the manner stipulated
in the Company's Articles of Association) before it can
repurchase shares outside of the stock exchange by means of
an off-market agreement. The Company may, by obtaining the
prior approval of the shareholders in a general meeting (in
the same manner), release, vary or waive its rights under an
agreement which has been so entered into.
An agreement for the repurchase shares referred to in the
preceding paragraph includes (without limitation) an
agreement to become liable to repurchase shares or an
agreement to have the right to repurchase shares.
The Company may not assign an agreement for the repurchase
of its shares or any right contained in such an agreement.
Article 27. Shares which have been legally repurchased by the Company MP27
shall be cancelled within the period prescribed by law and
administrative regulation, and the Company shall apply to
the original companies registration authority for
registration of the change in its registered capital and
make a public announcement.
The aggregate par value of the cancelled shares shall be
deducted from the Company's registered share capital.
Article 28. Unless the Company is in the course of liquidation, it must MP28
comply with the following provisions in relation to
repurchase of its issued shares:
(1) where the Company repurchases shares at par value,
payment shall be made out of book surplus distributable
profits of the Company or out of proceeds of a new issue of
shares made for that purpose;
(2) where the Company repurchases shares of the Company at a
premium to its par value, payment up to the par value may be
made out of
7
the book surplus distributable profits of the Company or out
of the proceeds of a new issue of shares made for that
purpose. Payment of the portion in excess of the par value
shall be effected as follows:
(i) if the shares being repurchased were issued at
par value, payment shall be made out of the book surplus
distributable profits of the Company;
(ii) if the shares being repurchased were issued
at a premium to its par value, payment shall be made out of
the book surplus distributable profits of the Company or out
of the proceeds of a new issue of shares made for that
purpose, provided that the amount paid out of the proceeds
of the new issue shall not exceed the aggregate amount of
premiums received by the Company on the issue of the shares
repurchased nor shall it exceed the book value of the
Company's capital common reserve fund account (including the
premiums on the new issue) at the time of the repurchase;
(3) the Company shall make the following payments out of the
Company's distributable profits:
(i) payment for the acquisition of the right to
repurchase its own shares;
(ii) payment for variation of any contract for the
repurchase of its shares;
(iii) payment for the release of its obligation(s)
under any contract for the repurchase of shares;
(4) after the Company's registered capital has been reduced
by the aggregate par value of the cancelled shares in
accordance with the relevant provisions, the amount deducted
from the distributable profits of the Company for payment of
the par value of shares which have been repurchased shall be
transferred to the Company's capital common reserve fund
account.
CHAPTER 5: FINANCIAL ASSISTANCE FOR
ACQUISITION OF SHARES
Article 29. The Company and its subsidiaries shall not, at any time, MP29
provide any form of financial assistance to a person who is
acquiring or is proposing to acquire shares in the Company.
This includes any person who directly or indirectly incurs
any obligations as a result of the acquisition of shares in
the Company (the "Obligor").
The Company and its subsidiaries shall not, at any time,
provide any form of financial assistance to the Obligor for
the purposes of reducing or
8
discharging the obligations assumed by such person.
This Article shall not apply to the circumstances specified
in Article 31 of this Chapter.
Article 30. For the purposes of this Chapter, "financial assistance"
includes (without limitation) the following:
(1) gift;
(2) guarantee (including the assumption of liability by the
guarantor or the provision of assets by the guarantor to
secure the performance of obligations by the Obligor),
compensation (other than compensation in respect of the
Company's own default) or release or waiver of any rights;
(3) provision of loan or any other agreement under which the
obligations of the Company are to be fulfilled before the
obligations of another party, or the change in parties to,
or the assignment of rights under, such loan or agreement;
(4) any other form of financial assistance given by the
Company when the Company is insolvent or has no net assets
or when its net assets would thereby be reduced to a
material extent.
For the purposes of this Chapter, "assumption of
obligations" includes the assumption of obligations by way
of contract or by way of arrangement (irrespective of
whether such contract or arrangement is enforceable or not
and irrespective of whether such obligation is to be borne
solely by the Obligor or jointly with other persons) or by
any other means which results in a change in his financial
position.
Article 31. The following actions shall not be deemed to be activities MP31
prohibited by Article 29 of this Chapter:
(1) the provision of financial assistance by the Company
where the financial assistance is given in good faith in the
interests of the Company, and the principal purpose of which
is not for the acquisition of shares in the Company, or the
giving of the financial assistance is an incidental part of
some larger purpose of the Company;
(2) the lawful distribution of the Company's assets by way
of dividend;
(3) the allotment of bonus shares as dividends;
(4) a reduction of registered capital, a repurchase of
shares of the Company or a reorganisation of the share
capital structure of the Company effected in accordance with
the Company's Articles of Association;
9
(5) the lending of money by the Company within its scope of
business and in the ordinary course of its business, where
the lending of money is part of the scope of business of the
Company (provided that the net assets of the Company are not
thereby reduced or that, to the extent that the assets are
thereby reduced, the financial assistance is provided out of
distributable profits);
(6) contributions made by the Company to the employee share
ownership schemes (provided that the net assets of the
Company are not thereby reduced or that, to the extent that
the assets are thereby reduced, the financial assistance is
provided out of distributable profits).
CHAPTER 6: SHARE CERTIFICATES AND
REGISTER OF SHAREHOLDERS
Article 32. Share certificates of the Company shall be in registered MP32
form.
The share certificate of the Company shall, aside from
matters required by the Company Law and the Special
Regulations, also contain other matters required to be
stated therein by the stock exchange(s) on which the
Company's shares are listed.
Article 33. Share certificates of the Company shall be signed by the MP33,
Chairman of the Company's board of directors. Where the C.1 Zheng
stock exchange(s) on which the Company's shares are listed Jian Hai
require other senior officer(s) of the Company to sign on Han [1995]
the share certificates, the share certificates shall also be No. 1
signed by such senior officer(s). The share certificates App.3
shall take effect after being sealed or imprinted with the 2(1)
seal of the Company. The share certificate shall only be
sealed with the Company's seal under the authorisation of
the board of directors. The signatures of the Chairman of
the board of directors or other senior officer(s) of the
Company may be printed in mechanical form.
Article 34. The Company shall keep a register of shareholders which MP34
shall contain the following particulars:
(1) the name (title) and address (residence), the occupation
or nature of each shareholder;
(2) the class and quantity of shares held by each
shareholder;
(3) the amount paid-up on or agreed to be paid-up on the
shares held by each shareholder;
(4) the share certificate number(s) of the shares held by
each shareholder;
10
(5) the date on which each person was entered in the
register as a shareholder;
(6) the date on which any shareholder ceased to be a
shareholder.
Unless there is evidence to the contrary, the register of
shareholders shall be sufficient evidence of the
shareholders' shareholdings in the Company.
Article 35. The Company may, in accordance with the mutual understanding MP35,
and agreements made between the securities authority of the C.2 Zheng
State Counsel and overseas securities regulatory Jian Hai
organisations, maintain the register of shareholders of Han [1997]
Overseas-Listed Foreign-Invested Shares overseas and appoint No. 1
overseas agent(s) to manage such register of shareholders. App.13
The original register of shareholders for holders of H Pt.D
Shares shall be maintained in Hong Kong. 1(b)
A duplicate register of shareholders for the holders of
Overseas-Listed Foreign-Invested Shares shall be maintained
at the Company's residence. The appointed overseas agent(s)
shall ensure consistency between the original and the
duplicate register of shareholders at all times.
If there is any inconsistency between the original and the
duplicate register of shareholders for the holders of
Overseas-Listed Foreign-Invested Shares, the original
register of shareholders shall prevail.
Article 36. The Company shall have a complete register of shareholders MP36
which shall comprise the following parts:
(1) the register of shareholders which is maintained at the
Company's residence (other than those share registers which
are described in sub-paragraphs (2) and (3) of this
Article);
(2) the register of shareholders in respect of the holders
of Overseas-Listed Foreign-Invested Shares of the Company
which is maintained in the same place as the overseas stock
exchange on which the shares are listed; and
(3) the register of shareholders which are maintained in
such other place as the board of directors may consider
necessary for the purposes of the listing of the Company's
shares.
Article 37. Different parts of the register of shareholders shall not MP37
overlap. No transfer of any shares registered in any part of
the register shall, during the continuance of that
registration, be registered in any other part of the
register.
Amendments or rectification of the register of shareholders
shall be made in accordance with the laws of the place where
the register of shareholders
11
is maintained.
Article 38. All Overseas-Listed Foreign-Invested Shares shall be C.12
transferred by instrument in writing in any usual or common Zheng Jian
form or any other form which the directors may approve. The Hai Han
instrument of transfer of any share may be executed by hand [1995] No. 1
without seal. If the shareholder is the recognised clearing
house or its nominee defined by the Securities and Futures
(Clearing Houses) Ordinance (Hong Kong Law Chapter 420), the
share transfer form may be executed by hand or in
mechanically-printed form.
All Overseas-Listed Foreign-Invested Shares listed in Hong
Kong which have been fully paid-up may be freely transferred
in accordance with the Company's Articles of Association.
However, unless such transfer complies with the following
requirements, the board of directors may refuse to recognise
any instrument of transfer and would not need to provide any
reason therefor:
(1) a fee of HK$2.50 per instrument of transfer or such App.3
higher amount as the board of directors may from time to 1(1)
time require but lesser than the amount agreed from time to
time by the Listing Rules of the Stock Exchange has been
paid to the Company for registration of the instrument of
transfer and other documents relating to or which will
affect the right of ownership of the shares;
(2) the instrument of transfer only relates to
Foreign-Listed Foreign-Invested Shares listed in Hong Kong;
(3) the stamp duty which is chargeable on the instrument of
transfer has already been paid;
(4) the relevant share certificate(s) and any other evidence
which the board of directors may reasonably require to show
that the transferor has the right to transfer the shares
have been provided;
(5) if it is intended that the shares be transferred to App.3
joint owners, the maximum number of joint owners shall 1(3)
not be more than four (4);
(6) the Company does not have any lien on the relevant App.3
shares. 1(2)
If the Company refuses to register any transfer of shares,
the Company shall within two (2) months of formal
application for the transfer provide the transferor and
transferee with a notice of refusal to register such
transfer.
The directors, supervisors, general manager, senior deputy
general managers, deputy general managers, financial
controller and other senior officers of the Company shall
report the number of shares which they hold
12
in the Company and may not transfer such shares during their
term of office.
Article 39. No change may be made in the register of shareholders as a MP38
result of a transfer of shares within thirty (30) days prior
to the date of a shareholders' general meeting or within
five (5) days before the record date for the Company's
distribution of dividends.
Article 40. When the Company needs to determine the rights attaching to MP39
shares in the Company for the purposes of convening a
shareholders' meeting, for dividend distribution, for
liquidation or for any other purpose, the board of directors
shall decide on a date for the determination of rights
attaching to shares in the Company. The shareholders of the
Company shall be such persons who appear in the register of
shareholders at the close of such determination date.
Article 41. Any person aggrieved and claiming to be entitled to have his MP40
name (title) entered in or removed from the register of
shareholders may apply to a court of competent jurisdiction
for rectification of the register.
Article 42. Any person who is a registered shareholder or who claims to MP41,
be entitled to have his name (title) entered in the register App.3
of shareholders in respect of shares in the Company may, if 7 (1)
his share certificate (the "original certificate") relating
to the shares is lost, apply to the Company for a
replacement share certificate in respect of such shares (the
"Relevant Shares").
Application by a holder of Domestic-Invested Shares, who has
lost his share certificate, for a replacement share
certificate shall be dealt with in accordance with Article
150 of the Company Law.
Application by a holder of Overseas-Listed Foreign Shares,
who has lost his share certificate, for a replacement share
certificate may be dealt with in accordance with the law of
the place where the original register of shareholders of
holders of Overseas-Listed Foreign-Invested Shares is
maintained, the rules of the stock exchange or other
relevant regulations.
The issue of a replacement share certificate to a holder of
H Shares, who has lost his share certificate, shall comply
with the following requirements:
(1) The applicant shall submit an application to the Company
in a prescribed form accompanied by a notarial certificate
or a statutory declaration (i) stating the grounds upon
which the application is made and the circumstances and
evidence of the loss; and (ii) declaring that no other
person is entitled to have his name entered in the register
of shareholders in respect of the Relevant Shares.
(2) The Company has not received any declaration made by any
person other than the applicant declaring that his name
shall be entered into the
13
register of shareholders in respect of such shares before it
decides to issue a replacement share certificate to the
applicant.
(3) The Company shall, if it intends to issue a replacement
share certificate, publish a notice of its intention to do
so at least once every thirty (30) days within a period of
ninety (90) consecutive days in such newspapers as may be
prescribed by the board of directors.
(4) The Company shall, prior to publication of its intention
to issue a replacement share certificate, deliver to the
stock exchange on which its shares are listed, a copy of the
notice to be published and may publish the notice upon
receipt of confirmation from such stock exchange that the
notice has been exhibited in the premises of the stock
exchange. Such notice shall be exhibited in the premises of
the stock exchange for a period of ninety (90) days.
In the case of an application which is made without the
consent of the registered holder of the Relevant Shares, the
Company shall deliver by mail to such registered shareholder
a copy of the notice to be published.
(5) If, by the expiration of the 90-day period referred to
in paragraphs (3) and (4) of this Article, the Company has
not have received any challenge from any person in respect
of the issuance of the replacement share certificate, it may
issue a replacement share certificate to the applicant
pursuant to his application.
(6) Where the Company issues a replacement share certificate
pursuant to this Article, it shall forthwith cancel the
original share certificate and document the cancellation of
the original share certificate and issuance of a replacement
share certificate in the register of shareholders
accordingly.
(7) All expenses relating to the cancellation of an original
share certificate and the issuance of a replacement share
certificate shall be borne by the applicant and the Company
is entitled to refuse to take any action until reasonable
security is provided by the applicant therefor.
Article 43. Where the Company issues a replacement share certificate MP42
pursuant to the Company's Articles of Association and a bona
fide purchaser acquires or becomes the registered owner of
such shares, his name (title) shall not be removed from the
register of shareholders.
Article 44. The Company shall not be liable for any damages sustained by MP43
any person by reason of the cancellation of the original
share certificate or the issuance of the replacement share
certificate unless the claimant is able to prove that the
Company has acted in a deceitful manner.
14
CHAPTER 7: SHAREHOLDERS' RIGHTS AND
OBLIGATIONS
Article 45. A shareholder of the Company is a person who lawfully holds MP44,
shares in the Company and whose name (title) is entered in App.3
the register of shareholders. 9
A shareholder shall enjoy rights and assume obligations
according to the class and amount of shares held by him;
shareholders who hold shares of the same class shall enjoy
the same rights and assume the same obligations.
In the case of the joint shareholders, if one of the joint
shareholders is deceased, only the other existing
shareholders of the joint shareholders shall be deemed as
the persons who have the ownership of the relevant shares.
But the board of directors has the power to require them to
provide a certificate of death as necessary for the purpose
of modifying the register of shareholders, or any of the
joint shareholders of the shares, only the joint
shareholders ranking first in the register of shareholders
have the right to accept certificates of the relevant
shares, receive notices of the Company, attend and vote at
shareholders' general meetings of the Company. Any notice
which is delivered to the shareholder shall be considered as
all the joint shareholders of the relevant shares who have
been delivered.
Article 46. The ordinary shareholders of the Company shall enjoy the MP45
following rights:
(1) the right to receive dividends and other distributions
in proportion to the number of shares held;
(2) the right to attend or appoint a proxy to attend
shareholders' general meetings and to vote thereat;
(3) the right of supervisory management over the Company's
business operations and the right to present proposals or to
raise queries;
(4) the right to transfer shares in accordance with laws,
administrative regulations and provisions of the Company's
Articles of Association;
(5) the right to obtain relevant information in accordance
with the provisions of the Company's Articles of
Association, including:
(i) the right to obtain a copy of the Company's
Articles of Association, subject to payment of costs;
(ii) the right to inspect and copy, subject to
payment of a reasonable fee:
(a) all parts of the register of
shareholders;
(b) personal particulars of each of the
Company's directors, supervisors, general manager, senior
deputy general managers,
15
deputy general managers, financial controller and other
senior officers, including:
(aa) present and former name and alias;
(bb) principal address (place of
residence);
(cc) nationality;
(dd) primary and all other part-time
occupations and duties;
(ee) identification documents and the
numbers thereof;
(c) report on the state of the Company's share
capital;
(d) reports showing the aggregate par value,
quantity, highest and lowest price paid in respect of each
class of shares repurchased by the Company since the end of
the last accounting year and the aggregate amount paid by
the Company for this purpose;
(e) minutes of shareholders' general meetings;
(6) in the event of the termination or liquidation of the
Company, the right to participate in the distribution of
surplus assets of the Company in accordance with the number
of shares held;
(7) other rights conferred by laws, administrative
regulations and the Company's Articles of Association.
Article 47. The ordinary shareholders of the Company shall assume the MP46
following obligations:
(1) to comply with the Company's Articles of Association;
(2) to pay subscription monies according to the number of
shares subscribed and the method of subscription;
(3) other obligations imposed by laws, administrative
regulations and the Company's Articles of Association.
Shareholders are not liable to make any further contribution
to the share capital other than according to the terms which
were agreed by the subscriber of the relevant shares at the
time of subscription.
Article 48. In addition to the obligations imposed by laws and MP47
administrative regulations or required by the listing rules
of the stock exchange on which
16
the Company's shares are listed, a controlling shareholder
(as such term is defined in the following Article) shall not
exercise his voting rights in respect of the following
matters in a manner prejudicial to the interests of all or
part of the shareholders of the Company:
(1) to relieve a director or supervisor of his duty to act
honestly in the best interests of the Company;
(2) to approve the expropriation by a director or supervisor
(for his own benefit or for the benefit of another person)
of the Company's assets in any way, including (without
limitation) opportunities which are beneficial to the
Company;
(3) to approve the expropriation by a director or supervisor
(for his own benefit or for the benefit of another person)
of the individual rights of other shareholders, including
(without limitation) rights to distributions and voting
rights (save pursuant to a restructuring which has been
submitted for approval by the shareholders in a general
meeting in accordance with the Company's Articles of
Association).
Article 49. For the purpose of the foregoing Article, a "controlling MP48
shareholder" means a person who satisfies any one of the
following conditions:
(1) a person who, acting alone or in concert with others,
has the power to elect more than half of the board of
directors;
(2) a person who, acting alone or in concert with others,
has the power to exercise or to control the exercise of 30%
or more of the voting rights in the Company;
(3) a person who, acting alone or in concert with others,
holds 30% or more of the issued and outstanding shares of
the Company;
(4) a person who, acting alone or in concert with others,
has de facto control of the Company in any other way.
CHAPTER 8: SHAREHOLDERS' GENERAL
MEETINGS
Article 50. The shareholders' general meeting is the organ of authority MP49
of the Company and shall exercise its functions and powers
in accordance with law.
Article 51. The shareholders' general meeting shall have the following MP50
functions and powers:
(1) to decide on the Company's operational policies and
investment plans;
17
(2) to elect and replace directors and to decide on matters
relating to the remuneration of directors;
(3) to elect and replace supervisors who represent the
shareholders and to decide on matters relating to the
remuneration of supervisors;
(4) to examine and approve the board of directors' reports;
(5) to examine and approve the supervisory committee's
reports;
(6) to examine and approve the Company's proposed annual
preliminary and final financial budgets;
(7) to examine and approve the Company's profit distribution
plans and loss recovery plans;
(8) to decide on the increase or reduction of the Company's
registered capital;
(9) to decide on matters such as merger, division,
dissolution and liquidation of the Company;
(10) to decide on the issue of debentures by the Company;
(11) to decide on the appointment, dismissal and
non-reappointment of the accountants of the Company;
(12) to amend the Company's Articles of Association;
(13) to consider motions raised by shareholders who
represent 5% or more of the total number of voting shares
of the Company;
(14) to decide on other matters which, according to law,
administrative regulation or the Company's Articles of
Association, need to be approved by shareholders in general
meetings;
(15) matters which the shareholders in a general meeting may
authorise the board of directors to carry out on its behalf
or which they may sub-delegate to the board of directors.
Article 52. The Company shall not, without the prior approval of MP51
shareholders in a general meeting, enter into any contract
with any person (other than a director, supervisor, general
manager, senior deputy general manager, deputy general
manager, financial controller or other senior officer)
pursuant to which such person shall be responsible for the
management and administration of the whole or any
substantial part of the Company's business.
18
Article 53. Shareholders' general meetings are divided into annual MP52
general meetings and extraordinary general meetings.
Shareholders' general meetings shall be convened by the
board of directors. Annual general meetings are held once
every year and within six (6) months from the end of the
preceding financial year.
The board of directors shall convene an extraordinary
general meeting within two (2) months of the occurrence of
any one of the following events:
(1) where the number of directors is less than the number
stipulated in the Company Law or two-thirds of the number
specified in the Company's Articles of Association;
(2) where the unrecovered losses of the Company amount to
one-third of the total amount of its share capital;
(3) where shareholder(s) holding 10% or more of the
Company's issued and outstanding voting shares request(s) in
writing for the convening of an extraordinary general
meeting;
(4) whenever the board of directors deems necessary or the
supervisory committee so requests.
Article 54. When the Company convenes a shareholders' general meeting, MP53
written notice of the meeting shall be given forty-five (45)
days before the date of the meeting to notify all of the
shareholders whose names appear in the share register of the
matters to be considered and the date and place of the
meeting. A shareholder who intends to attend the meeting
shall deliver to the Company his written reply concerning
his attendance at such meeting twenty (20) days before the
date of the meeting.
Article 55. When the Company convenes a shareholders' annual general MP54
meeting, shareholder(s) holding 5% or more of the total
voting shares of the Company shall have the right to propose
new motions in writing, and the Company shall place such
proposed motions on the agenda for such annual general
meeting if they are matters falling within the functions and
powers of shareholders in general meetings.
Article 56. The Company shall, based on the written replies which it MP55
receives from the shareholders twenty (20) days before the
date of the shareholders' general meeting, calculate the
number of voting shares represented by the shareholders who
intend to attend the meeting. If the number of voting shares
represented by the shareholders who intend to attend the
meeting amount to more than one-half of the Company's total
voting shares, the Company may hold the meeting; if not,
then the Company shall, within five (5) days, notify the
shareholders by way of public announcement the matters to be
considered at, and the place and date for, the meeting. The
19
Company may then hold the meeting after publication of such
announcement.
A shareholders' extraordinary general meeting shall not
decide on any matter not stated in the notice for the
meeting.
Article 57. A notice of a meeting of the shareholders of the Company MP56
shall satisfy the following criterion:
(1) be in writing;
(2) specify the place, date and time of the meeting;
(3) state the matters to be discussed at the meeting;
(4) provide such information and explanation as are
necessary for the shareholders to make an informed decision
on the proposals put before them. Without limiting the
generality of the foregoing, where a proposal is made to
amalgamate the Company with another, to repurchase the
shares of the Company, to reorganise its share capital, or
to restructure the Company in any other way, the terms of
the proposed transaction must be provided in detail together
with copies of the proposed agreement, if any, and the cause
and effect of such proposal must be properly explained;
(5) contain a disclosure of the nature and extent, if any,
of the material interests of any director, supervisor,
general manager, senior deputy general manager, deputy
general manager, financial controller or other senior
officer in the proposed transaction and the effect which the
proposed transaction will have on them in their capacity as
shareholders in so far as it is different from the effect on
the interests of shareholders of the same class;
(6) contain the full text of any special resolution to be
proposed at the meeting;
(7) contain a conspicuous statement that a shareholder
entitled to attend and vote at such meeting is entitled to
appoint one (1) or more proxies to attend and vote at such
meeting on his behalf and that a proxy need not be a
shareholder;
(8) specify the time and place for lodging proxy forms for
the relevant meeting.
Article 58. Notice of shareholders' general meetings shall be served on MP57,
each shareholder (whether or not such shareholder is App.3
entitled to vote at the meeting), by personal delivery or 7 (1) & 7 (3)
prepaid airmail to the address of the shareholder as shown
in the register of shareholders. For the holders of
Domestic-Invested Shares, notice of the meetings may
also be issued by
20
way of public announcement.
The public announcement referred to in the preceding
paragraph shall be published in one (1) or more national
newspapers designated by the securities authority of the
State Counsel within the interval of forty-five (45) days to
fifty (50) days before the date of the meeting; after the
publication of such announcement, the holders of
Domestic-Invested Shares shall be deemed to have received
the notice of the relevant shareholders' general meeting.
Such public announcement shall be published in Chinese and
English in accordance with Article 182.
Article 59. The accidental omission to give notice of a meeting to, or MP58
the failure to receive the notice of a meeting by, any
person entitled to receive such notice shall not invalidate
the meeting and the resolutions adopted thereat.
Article 60. Any shareholder who is entitled to attend and vote at a MP59
general meeting of the Company shall be entitled to appoint
one (1) or more persons (whether such person is a
shareholder or not) as his proxies to attend and vote on his
behalf, and a proxy so appointed shall be entitled to
exercise the following rights pursuant to the authorisation
from that shareholder:
(1) the shareholders' right to speak at the meeting;
(2) the right to demand or join in demanding a poll;
(3) the right to vote by hand or on a poll, but a proxy of a
shareholder who has appointed more than one (1) proxy may
only vote on a poll.
If the shareholder is the recognized clearing house defined
by the Securities and Futures (Clearing Houses) Ordinance
(Hong Kong Law Chapter 420), such shareholder is entitled to
appoint one or more persons as his proxies to attend on his
behalf at a general meeting or at any class meeting, but, if
one or more persons have such authority, the letter of
authorization shall contain the number and class of the
shares in connection with such authorization. Such person
can exercise the right on behalf of the recognized clearing
house (or its attorney) as if he is the individual
shareholder of the Company.
Article 61. The instrument appointing a proxy shall be in writing under MP60
the hand of the appointor or his attorney duly authorised in
writing, or if the appointor is a legal entity, either under
seal or under the hand of a director or a duly authorised
attorney. The letter of authorization shall contain the
number of the shares to be represented by the attorney. If
several persons are authorized as the attorney of the
shareholder, the letter of authorization shall specify the
number of the shares to be represented by each attorney.
Article 62. The instrument appointing a voting proxy and, if such MP61
instrument is signed by a person under a power of attorney
or other authority on behalf of the
21
appointor, a notarially certified copy of that power of
attorney or other authority shall be deposited at the
residence of the Company or at such other place as is
specified for that purpose in the notice convening the
meeting, not less than twenty-four (24) hours before the
time for holding the meeting at which the proxy propose to
vote or the time appointed for the passing of the
resolution.
If the appointor is a legal person, its legal representative
or such person as is authorised by resolution of its board
of directors or other governing body may attend any meeting
of shareholders of the Company as a representative of the
appointor.
Article 63. Any form issued to a shareholder by the directors for use by MP62
such shareholder for the appointment of a proxy to attend
and vote at meetings of the Company shall be such as to
enable the shareholder to freely instruct the proxy to vote
in favour of or against the motions, such instructions being
given in respect of each individual matter to be voted on at
the meeting. Such a form shall contain a statement that, in
the absence of specific instructions from the shareholder,
the proxy may vote as he thinks fit.
The Company has the right to request a proxy who attends a
shareholders' meeting to provide evidence of his or its
identity.
If a shareholder which is a legal person appoints its legal
representative to attend a meeting on its behalf, the
Company has the right to request such legal representative
to produce evidence of his or its identity and a notarially
certified copy of the resolutions of such shareholder's
board of directors in respect of the appointment of the
proxy or the power of attorney executed by such other
organisation which has the capacity to appoint the proxy.
Article 64. A vote given in accordance with the terms of a proxy shall MP63
be valid notwithstanding the death or loss of capacity of
the appointor or revocation of the proxy or the authority
under which the proxy was executed, or the transfer of the
shares in respect of which the proxy is given, provided that
the Company did not receive any written notice in respect of
such matters before the commencement of the relevant
meeting.
Article 65. Resolutions of shareholders' general meetings shall be MP64
divided into ordinary resolutions and special resolutions.
An ordinary resolution must be passed by votes representing
more than one-half of the voting rights represented by the
shareholders (including proxies) present at the meeting.
A special resolution must be passed by votes representing
more than two-thirds of the voting rights represented by the
shareholders (including
22
proxies) present at the meeting.
Article 66. A shareholder (including a proxy), when voting at a MP65
shareholders' general meeting, may exercise such voting
rights as are attached to the number of voting shares which
he represents. Each share shall have one (1) vote.
Article 67. At any shareholders' general meeting, a resolution shall be MP66
decided on a show of hands unless a poll is demanded:
(1) by the chairman of the meeting;
(2) by at least two (2) shareholders present in person or by
proxy entitled to vote thereat;
(3) by one (1) or more shareholders present in person or by
proxy and representing 10 % or more of all shares carrying
the right to vote at the meeting, before or after a vote is
carried out by a show of hands.
Unless a poll is demanded, a declaration by the chairman
that a resolution has been passed on a show of hands and the
record of such in the minutes of the meeting shall be
conclusive evidence of the fact that such resolution has
been passed. There is no need to provide evidence of the
number or proportion of votes in favour of or against such
resolution.
The demand for a poll may be withdrawn by the person who
demands the same.
Article 68. A poll demanded on the election of the chairman of the MP67
meeting, or on a question of adjournment of the meeting,
shall be taken forthwith. A poll demanded on any other
question shall be taken at such time as the chairman of the
meeting directs, and any business other than that upon which
a poll has been demanded may be proceeded with, pending the
taking of the poll. The result of the poll shall be deemed
to be a resolution of the meeting at which the poll was
demanded.
Article 69. On a poll taken at a meeting, a shareholder (including a MP68
proxy) entitled to two (2) or more votes need not cast all
his votes in the same way.
Article 70. In the case of an equality of votes, whether on a show of MP69
hands or on a poll, the chairman of the meeting at which the
show of hands takes place or at which the poll is demanded
shall be have a casting vote.
Article 71. The following matters shall be resolved by an ordinary MP70
resolution at a shareholders' general meeting:
(1) work reports of the board of directors and the
supervisory committee;
23
(2) profit distribution plans and loss recovery plans
formulated by the board of directors;
(3) removal of members of the board of directors and members App.3
of the supervisory committee, their remuneration and manner 4 (3)
of payment;
(4) annual preliminary and final budgets, balance sheets and
profit and loss accounts and other financial statements of
the Company;
(5) matters other than those which are required by the laws
and administrative regulations or by the Company's Articles
of Association to be adopted by special resolution.
Article 72. The following matters shall be resolved by a special MP71
resolution at a shareholders' general meeting:
(1) the increase or reduction in share capital and the issue
of shares of any class, warrants and other similar
securities;
(2) the issue of debentures of the Company;
(3) the division, merger, dissolution and liquidation of the
Company;
(4) amendment of the Company's Articles of Association;
(5) any other matters considered by the shareholders in
general meeting, and resolved by way of an ordinary
resolution, to be of a nature which may have a material
impact on the Company and should be adopted by a special
resolution.
Article 73. Shareholders who request for the convening of an MP72
extraordinary general meeting or a class meeting shall
comply with the following procedures:
(1) Two (2) or more shareholders holding in aggregate 10 %
or more of the shares carrying the right to vote at the
meeting sought to be held shall sign one (1) or more
counterpart requisitions stating the object of the meeting
and requiring the board of directors to convene a
shareholders' extraordinary general meeting or a class
meeting thereof. The board of directors shall as soon as
possible proceed to convene the extraordinary general
meeting of shareholders or a class meeting thereof after
receipt of such requisition(s). The amount of shareholdings
referred to above shall be calculated as at the date of
deposit of the requisition(s).
(2) If the board of directors fails to issue a notice of
such a meeting within thirty (30) days from the date of
receipt of the requisition(s), the requisitionists may
themselves convene such a meeting (in a manner as similar as
possible to the manner in which shareholders' meetings are
convened by the board of directors) within four (4) months
from the date of
24
receipt of the requisition(s) by the board of directors.
Any reasonable expenses incurred by the requisitionists by
reason of failure by the board of directors to duly convene
a meeting shall be repaid to the requisitionists by the
Company and any sum so repaid shall be set-off against sums
owed by the Company to the defaulting directors.
Article 74. The Chairman of the board of directors shall convene and MP73
chair every shareholders' general meeting. If the Chairman
is unable to attend the meeting for any reason, the
vice-chairman of the board of directors shall convene and
chair the meeting. If both the Chairman and vice-chairman of
the board of directors are unable to attend the meeting,
then the board of directors may designate a director to
convene and chair the meeting. If no chairman of the meeting
has been so designated, shareholders present shall choose
one (1) person to act as the chairman of the meeting. If for
any reason, the shareholders shall fail to elect a chairman,
then the shareholder (including a proxy) holding the largest
number of shares carrying the right to vote thereat shall be
the chairman of the meeting.
Article 75. The chairman of the meeting shall be responsible for MP74
determining whether a resolution has been passed. His
decision, which shall be final and conclusive, shall be
announced at the meeting and recorded in the minute book.
Article 76. If the chairman of the meeting has any doubt as to the MP75
result of a resolution which has been put to vote at a
shareholders' meeting, he may have the votes counted. If the
chairman of the meeting has not counted the votes, any
shareholder who is present in person or by proxy and who
objects to the result announced by the chairman of the
meeting may, immediately after the declaration of the
result, demand that the votes be counted and the chairman of
the meeting shall have the votes counted immediately.
Article 77. If votes are counted at a shareholders' general meeting, the MP76
result of the count shall be recorded in the minute book.
Article 78. The minutes, shareholders' attendance lists and proxy forms MP76
shall be kept at the Company's place of residence.
Article 79. Copies of the minutes of proceedings of any shareholders' MP77
meeting shall, during business hours of the Company, be open
for inspection by any shareholder without charge. If a
shareholder requests for a copy of such minutes from the
Company, the Company shall send a copy of such minutes to
him within seven (7) days after receipt of reasonable fees
therefor.
25
CHAPTER 9: SPECIAL PROCEDURES FOR VOTING
BY A CLASS OF SHAREHOLDERS
Article 80. Those shareholders who hold different classes of shares are MP78
class shareholders.
Class shareholders shall enjoy rights and assume obligations
in accordance with laws, administrative regulations and the
Company's Articles of Association.
Article 81. Rights conferred on any class of shareholders ("class MP79
rights") may not be varied or abrogated save with the
approval of a special resolution of shareholders in a
general meeting and by holders of shares of that class at a
separate meeting conducted in accordance with Articles 83 to
87.
Article 82. The following circumstances shall be deemed to be variation MP80
or abrogation of the rights attaching to a particular class
of shares:
(1) to increase or decrease the number of shares of that
class, or to increase or decrease the number of shares of a
class having voting or equity rights or privileges equal or
superior to those of shares of that class;
(2) to exchange all or part of the shares of that class for
shares of another class or to exchange or to create a right
to exchange all or part of the shares of another class for
shares of that class;
(3) to remove or reduce rights to accrued dividends or
rights to cumulative dividends attached to shares of that
class;
(4) to reduce or remove preferential rights attached to
shares of that class to receive dividends or to the
distribution of assets in the event that the Company is
liquidated;
(5) to add, remove or reduce conversion privileges, options,
voting rights, transfer or pre-emptive rights, or rights to
acquire securities of the Company attached to shares of that
class;
(6) to remove or reduce rights to receive payment payable by
the Company in particular currencies attached to shares of
that class;
(7) to create a new class of shares having voting or equity
rights or privileges equal or superior to those of the
shares of that class;
(8) to restrict the transfer or ownership of shares of that
class or to increase the types of restrictions attaching
thereto;
(9) to allot and issue rights to subscribe for, or to
convert the existing shares into, shares in the Company of
that class or another class;
26
(10) to increase the rights or privileges of shares of
another class;
(11) to restructure the Company in such a way so as to
result in the disproportionate distribution of obligations
between the various classes of shareholders;
(12) to vary or abrogate the provisions of this Chapter.
Article 83. Shareholders of the affected class, whether or not otherwise MP81
having the right to vote at shareholders' general meetings,
have the right to vote at class meetings in respect of
matters concerning sub-paragraphs (2) to (8), (11) and (12)
of Article 82, but interested shareholder(s) shall not be
entitled to vote at such class meetings.
"(An) interested shareholder(s)", as such term is used in
the preceding paragraph, means:
(1) in the case of a repurchase of shares by way of a
general offer to all shareholders of the Company or by way
of public dealing on a stock exchange pursuant to Article
25, a "controlling shareholder" within the meaning of
Article 49;
(2) in the case of a repurchase of shares by an off-market
agreement pursuant to Article 25, a holder of the shares to
which the proposed agreement relates;
(3) in the case of a restructuring of the Company, a
shareholder who assumes a relatively lower proportion of
obligation than the obligations imposed on shareholders of
that class under the proposed restructuring or who has an
interest in the proposed restructuring different from the
general interests of the shareholders of that class.
Article 84. Resolutions of a class of shareholders shall be passed by MP82
votes representing more than two-thirds of the voting rights
of shareholders of that class represented at the relevant
meeting who, according to Article 83, are entitled to vote
thereat.
Article 85. Written notice of a class meeting shall be given to all MP83
shareholders who are registered as holders of that class in
the register of shareholders forty-five (45) days before the
date of the class meeting. Such notice shall give such
shareholders notice of the matters to be considered at such
meeting, the date and the place of the class meeting. A
shareholder who intends to attend the class meeting shall
deliver his written reply in respect thereof to the Company
twenty (20) days before the date of the class meeting.
If the shareholders who intend to attend such class meeting
represent more than half of the total number of shares of
that class which have the right to
27
vote at such meeting, the Company may hold the class
meeting; if not, the Company shall within five (5) days give
the shareholders further notice of the matters to be
considered, the date and the place of the class meeting by
way of public announcement. The Company may then hold the
class meeting after such public announcement has been made.
Article 86. Notice of class meetings need only be served on shareholders MP84
entitled to vote thereat.
Class meetings shall be conducted in a manner which is as
similar as possible to that of shareholders' general
meetings. The provisions of the Company's Articles of
Association relating to the manner for the conduct of
shareholders' general meetings are also applicable to class
meetings.
Article 87. Apart from the holders of other classes of shares, the App. 13
holders of the Domestic-Invested Shares and holders of Pt. D 1(f)
Overseas-Listed Foreign-Invested Shares shall be deemed to
be holders of different classes of shares.
The special procedures for approval by a class of MP85
shareholders shall not apply in the following circumstances: C.3 Zheng
Jian Hai
Han [1995]
No. 3
(1) where the Company issues, upon the approval by special App.13 Pt.D
resolution of its shareholders in a general meeting, either 1f(i)
separately or concurrently once every twelve (12) months,
not more than 20% of each of its existing issued
Domestic-Invested Shares and Overseas-Listed
Foreign-Invested Shares; or
(2) where the Company's plan to issue Domestic-Invested App.13 Pt.D
Shares and Overseas-Listed Foreign-Invested Shares at the 1f(ii)
time of its establishment is carried out within fifteen (15)
months from the date of approval of the securities authority
of the State Counsel.
CHAPTER 10: BOARD OF DIRECTORS
Article 88. The Company shall have a board of directors. The board of MP86
directors shall consist of thirteen (13) directors. The
board of directors shall have one (1) Chairman, two (2)
Vice-chairman(s) and twelve (10) directors, of which three
(3) independent (non-executive) directors.
The board of directors shall have nine (9) outside
directors, who shall not hold office within the Company.
Article 89. Directors shall be elected at the shareholders' general MP87,
meeting each for a term of three (3) years. At the expiry of C.4 Zheng
a director's term, the term is Jian Hai
28
renewable upon re-election. Han [1995]
No. 1
App.3
A written notice of the intention to propose a person for 4(3)-4(5)
election as a director and a notice in writing by that
person indicating his acceptance of such election shall have
been given to the Company seven (7) days before the date of
such shareholders' general meeting.
The Chairman and the Vice-chairman shall be elected and
removed by more than one-half of all of the members of the
board of directors. The term of office of each of the
Chairman and the Vice-chairman is three (3) years, which
term is renewable upon re-election.
Subject to compliance with all relevant laws and
administrative regulations, the shareholders' general
meeting may by ordinary resolution remove any director
before the expiration of his term of office. However, the
director's right to claim for damages which arises out from
his removal shall not be affected thereby.
The Directors shall not be required to hold qualifying
shares.
Article 90. The board of directors is accountable to the shareholders in MP88
general meeting and exercises the following functions and
powers:
(1) to be responsible for the convening of the shareholders'
general meeting and to report on its work to the
shareholders in general meetings;
(2) to implement the resolutions passed by the shareholders
in general meetings;
(3) to determine the Company's business plans and investment
proposals;
(4) to formulate the Company's annual preliminary and final
financial budgets;
(5) to formulate the Company's profit distribution proposal
and loss recovery proposal;
(6) to formulate proposals for the increase or reduction of
the Company's registered capital and for the issuance of the
Company's debentures;
(7) to draw up plans for the merger, division or dissolution
of the Company;
(8) to decide on the Company's internal management
structure;
(9) to appoint or remove the Company's general manager and
to appoint
29
or remove the senior deputy general managers, deputy general
managers and other senior officers (including the financial
controller(s) of the Company) and, based on the
recommendations of the general manager, to decide on their
remuneration;
(10) to formulate the Company's basic management system;
(11) to formulate proposals for any amendment of the
Company's Articles of Association;
(12) to exercise any other powers conferred by the
shareholders in general meetings.
Other than the board of directors' resolutions in respect of
the matters specified in sub-paragraphs (6), (7) and (11) of
this Article which shall be passed by the affirmative vote
of more than two-thirds of all the directors, the board of
directors' resolutions in respect of all other matters may
be passed by the affirmative vote of a simple majority of
the directors.
Article 91. The board of directors shall not, without the prior approval MP89
of shareholders in a general meeting, dispose or agree to
dispose of any fixed assets of the Company where the
aggregate of the amount or value of the consideration for
the proposed disposition, and the amount or value of the
consideration for any such disposition of any fixed assets
of the Company that has been completed in the period of four
(4) months immediately preceding the proposed disposition,
exceeds 33 % of the value of the Company's fixed assets as
shown in the latest balance sheet which was tabled at a
shareholders' general meeting.
For the purposes of this Article, "disposition" includes an
act involving the transfer of an interest in assets but does
not include the usage of fixed assets for the provision of
security.
The validity of a disposition by the Company shall not be
affected by any breach of the first paragraph of this
Article.
Article 92. The Chairman of the board of directors shall exercise the MP90
following powers:
(1) to preside over shareholders' general meetings and to
convene and preside over meetings of the board of directors;
(2) to check on the implementation of resolutions passed by
the board of directors at directors' meetings;
(3) to sign the securities certificates issued by the
Company;
(4) to exercise other powers conferred by the board of
directors.
30
When the Chairman is unable to exercise his powers, such
powers shall be exercised by the Vice-chairman who has been
designated by the Chairman to exercise such powers on his
behalf.
Article 93. Meetings of the board of directors shall be held at least MP91
twice every year and shall be convened by the Chairman of
the board of directors. All of the directors should be
notified about the meeting ten (10) days beforehand. Where
there is an urgent matter, an extraordinary meeting of the
board of directors may be held if it is so requested by more
than one-third of the directors, the Chairman of the board
of directors or the Company's general manager.
Article 94. Notice of meetings and extraordinary meetings of the board MP92
of directors shall be delivered in person, by facsimile, by
express delivery service or by registered mail. The time
limit for the delivery of such notice such be at least ten
(10) days before the meeting.
Article 95. Notice of a meeting shall be deemed to have been given to
any director who attends the meeting without protesting
against, before or at its commencement, any lack of notice.
Article 96. Any regular or extraordinary meeting of the board of
directors may be held by way of telephone conferencing or
similar communication equipment so long as all directors
participating in the meeting can clearly hear and
communicate with each other. All such directors shall be
deemed to be present in person at the meeting.
Article 97. Meetings of the board of directors shall be held only if MP93,
more than half of the directors (including any alternate App.3
director appointed pursuant to Article 98 of the Company's 4(1)
Articles of Association) are present.
Each director shall have one (1) vote. Unless otherwise
provided for in the Company's Articles of Association, a
resolution of the board of directors must be passed by more
than half of all of the directors of the Company. A
resolution of the board of directors relating to connected
transactions shall be signed by independent (non-executive)
directors before coming into effect.
Where there is an equality of votes cast both for and
against a resolution, the Chairman of the board of directors
shall have a casting vote.
If a director is interested in a matter to be discussed at a
board of directors' meeting, such director shall excuse
himself from such meeting, shall not have any voting rights
in respect thereof and shall not be counted as part of the
quorum of such board of directors' meeting.
Article 98. Directors shall attend the meetings of the board of MP94
directors in person. Where a director is unable to attend a
meeting for any reason, he may by a
31
written power of attorney appoint another director to attend
the meeting on his behalf. The power of attorney shall set
out the scope of the authorisation.
A Director appointed as a representative of another director
to attend the meeting shall exercise the rights of a
director within the scope of authority conferred by the
appointing director. Where a director is unable to attend a
meeting of the board of directors and has not appointed a
representative to attend the meeting on his behalf, he shall
be deemed to have waived his right to vote at the meeting.
Article 99. In respect of any matter which needs to be determined by the
board of directors at an extraordinary meeting of the board
of directors and where the board of directors has already
sent out written notice of matters to be decided at such
meeting and the number of directors who have signified their
consent thereto reaches the amount set out in Article 97, a
valid resolution shall be deemed to be passed and there is
no need to hold a board of directors' meeting.
Article 100. The board of directors shall keep minutes of resolutions MP95
passed at meetings of the board of directors. The minutes
shall be signed by the directors present at the meeting and
the person who recorded the minutes. The directors shall be
liable for the resolutions of the board of directors. If a
resolution of the board of directors violates the laws,
administrative regulations or the Company's Articles of
Association and the Company suffers serious losses as a
result thereof, the directors who participated in the
passing of such resolution are liable to compensate the
Company therefor. However, if it can be proven that a
director expressly objected to the resolution when the
resolution was voted on, and that such objection was
recorded in the minutes of the meeting, such director may be
released from such liability.
CHAPTER 11: SECRETARY OF THE BOARD
OF DIRECTORS
Article 101. The Company shall have one (1) secretary of the board of MP96
directors. The secretary shall be a senior officer of the
Company.
Article 102. The secretary of the Company's board of directors shall be a MP97
natural person who has the requisite professional knowledge
and experience, and shall be appointed by the board of
directors. His primary responsibilities are to ensure that:
(1) the Company has complete organisational documents and
records;
(2) the Company prepares and delivers, in accordance with
law, those reports and documents required by competent
authorities entitled thereto;
32
(3) the Company's registers of shareholders are properly
maintained, and that persons entitled to receive the
Company's records and documents are furnished therewith
without delay.
Article 103. A director or other senior officer of the Company may also MP98
act as the secretary of the board of directors. The
certified public accountancy firm which has been appointed
by the Company to act as its auditors shall not act as the
secretary of the board of directors.
Where the office of secretary is held concurrently by a
director, and an act is required to be done by a director
and a secretary separately, the person who holds the office
of director and secretary may not perform the act in a dual
capacity.
CHAPTER 12: GENERAL MANAGER
Article 104. The Company shall have a general manager, senior deputy MP99
general managers, deputy general managers, financial
controller. The general manager proposed by the Chairman of
the board of directors shall be appointed or dismissed by
the board of directors. Senior deputy general managers,
deputy general managers and financial controller proposed by
the general manager shall be appointed or dismissed by the
board of the directors. A member of the board of directors
may act concurrently as the general manager, senior deputy
general managers, deputy general managers, financial
controller or other senior officers.
Article 105. The general manager shall be accountable to the board of MP100
directors and shall exercise the following functions and
powers:
(1) to be in charge of the Company's production, operation
and management and to organise the implementation of the
resolutions of the board of directors;
(2) to organise the implementation of the Company's annual
business plan and investment proposal;
(3) to draft plans for the establishment of the Company's
internal management structure;
(4) to draft the Company's basic management system;
(5) to formulate concrete rules and regulations for the
Company;
(6) to propose the appointment or dismissal by the board of
directors of the Company's senior deputy general managers,
deputy general managers, financial controller and other
senior officers;
33
(7) to appoint or dismiss management personnel other than
those required to be appointed or dismissed by the board of
directors;
(8) other powers conferred by the Company's Articles of
Association and the board of directors.
Article 106. The general manager shall attend meetings of the board of MP101
directors. The general manager, who is not a director, does
not have any voting rights at board meetings.
Article 107. The general manager and senior deputy general managers, MP102
deputy general managers and financial controller performing
their functions and powers, shall act honestly and
diligently and in accordance with laws, administrative
regulations and the Company's Articles of Association.
CHAPTER 13: SUPERVISORY COMMITTEE
Article 108. The Company shall have a supervisory committee. MP103
Article 109. The supervisory committee shall compose of seven (7) MP104,
supervisors. One of the members of the supervisory C.5
committee shall act as the chairman. Each supervisor shall Zheng
serve for a term of three (3) years, which term is renewable Jian
upon re-election and re-appointment. Hai
Han
The election or removal of the chairman of the supervisory [1995]
committee shall be determined by two-thirds or more of the No. 1
members of the supervisory committee. App.13
Pt.D
The chairman shall serve for a term of three (3) years, 1(d)(i)
which term is renewable upon re-election and re-appointment.
Article 110. The supervisory committee shall comprise of four (6) MP105
supervisors who shall represent the shareholders, and who
shall be elected or removed by the shareholders in general
meetings, and one (1) supervisor who shall represent the
employees of the Company and who shall be elected or removed
democratically thereby.
Article 111. The directors, general manager, senior deputy general MP106
managers, deputy general managers and financial controller
shall not act concurrently as supervisors.
Article 112. Meetings of the supervisory committee shall be held at least MP107
once every year, and shall be convened by the chairman of
the supervisory committee.
Article 113. The supervisory committee shall be accountable to the MP108
shareholders in a general meeting and shall exercise the
following functions and powers in
34
accordance with law:
(1) to review the Company's financial position;
(2) to supervise the directors, general manager, senior
deputy general managers, deputy general managers, financial
controller and other senior officers to ensure that they do
not act in contravention of any law, regulation or the
Company's Articles of Association;
(3) to demand any director, general manager, senior deputy
general manager, deputy general manager, financial
controller or any other senior officer who acts in a manner
which is harmful to the Company's interest to rectify such
behaviour;
(4) to check the financial information such as the
financial report, business report and plans for distribution
of profits to be submitted by the board of directors to the
shareholders' general meetings and to authorise, in the
Company's name, publicly certified and practising
accountants to assist in the re-examination of such
information should any doubt arise in respect thereof;
(5) to propose to convene a shareholders' extraordinary
general meeting;
(6) to represent the Company in negotiations with or in
bringing actions against a director;
(7) other functions and powers specified in the Company's
Articles of Association.
Supervisors shall attend meetings of the board of directors.
Article 114. Meetings of the supervisory committee shall be held only if MP109,
three (3) or more supervisors are present. Resolutions of C.6
the supervisory committee shall be passed by the affirmative Zheng
vote of more than two-thirds of all of its members. Jian
Hai Han
[1995]
No. 1
App.13
Pt.D
1(d)(ii)
Article 115. All reasonable fees incurred in respect of the employment of MP110
professionals (such as, lawyers, certified public
accountants or practising auditors) which are required by
the supervisory committee in the exercise of its functions
and powers shall be borne by the Company.
Article 116. A supervisor shall carry out his duties honestly and MP111
faithfully in accordance with laws, administrative
regulations and the Company's Articles of Association.
35
CHAPTER 14: THE QUALIFICATIONS AND DUTIES OF THE DIRECTORS,
SUPERVISORS, GENERAL MANAGER, SENIOR DEPUTY GENERAL MANAGERS, DEPUTY
GENERAL MANAGERS,
FINANCIAL CONTROLLER AND OTHER SENIOR OFFICERS OF
THE COMPANY
Article 117. A person may not serve as a director, supervisor, general MP112
manager, senior deputy general manager, deputy general manager,
financial controller or any other senior officer of the Company
if any of the following circumstances apply:
(1) a person who does not have or who has limited capacity
for civil conduct;
(2) a person who has been sentenced for corruption, bribery,
infringement of property or misappropriation of property or
other crimes which destroy the social economic order, where
less than a term of five (5) years has lapsed since the
sentence was served, or a person who has been deprived of his
political rights and not more than five (5) years have lapsed
since the sentence was served;
(3) a person who is a former director, factory manager or
manager of a company or enterprise which has been dissolved or
put into liquidation as a result of mismanagement and who was
personally liable for the winding up of such company or
enterprise, where less than three (3) years have elapsed since
the date of completion of the insolvent liquidation of the
company or enterprise;
(4) a person who is a former legal representative of a
company or enterprise the business licence of which was revoked
due to violation of law and who are personally liable therefor,
where less than three (3) years have elapsed since the date of
the revocation of the business licence;
(5) a person who has a relatively large amount of debts which
have become overdue;
(6) a person who is currently under investigation by judicial
organs for violation of criminal law;
(7) a person who, according to laws and administrative
regulations, cannot act as a leader of an enterprise;
(8) a person other than a natural person;
(9) a person who has been convicted by the competent
authority for violation of relevant securities regulations and
such conviction involves a finding that such person has acted
fraudulently or dishonestly, where not
36
more than five (5) years have lapsed from the date of such
conviction.
Article 118. The validity of an act carried out by a director, general MP113
manager, senior deputy general manager, deputy general
manager, financial controller or other senior officer of the
Company on its behalf shall, as against a bona fide third
party, shall not be affected by any irregularity in his
office, election or any defect in his qualification.
Article 119. In addition to the obligations imposed by laws, MP114
administrative regulations or the listing rules of the stock
exchange on which shares of the Company are listed, each of
the Company's directors, supervisors, general manager,
senior deputy general managers, deputy general managers and
other senior officers owes a duty to each shareholder, in
the exercise of the functions and powers of the Company
entrusted to him:
(1) not to cause the Company to exceed the scope of
business stipulated in its business licence;
(2) to act honestly and in the best interests of the
Company;
(3) not to expropriate the Company's property in any way,
including (without limitation) usurpation of opportunities
which benefit the Company;
(4) not to expropriate the individual rights of
shareholders, including (without limitation) rights to
distribution and voting rights, save and except pursuant to
a restructuring of the Company which has been submitted to
the shareholders for approval in accordance with the
Company's Articles of Association.
Article 120. Each of the Company's directors, supervisors, general MP115
manager, senior deputy general managers, deputy general
managers, financial controller and other senior officers
owes a duty, in the exercise of his powers and in the
discharge of his duties, to exercise the care, diligence and
skill that a reasonably prudent person would exercise in
comparable circumstances.
Article 121. Each of the Company's directors, supervisors, general MP116
manager, senior deputy general managers, deputy general
managers, financial controller and other senior officers
shall exercise his powers or perform his duties in
accordance with the fiduciary principle; and shall not put
himself in a position where his duty and his interest may
conflict. This principle includes (without limitation)
discharging the following obligations:
(1) to act honestly in the best interests of the Company;
(2) to act within the scope of his powers and not to
exceed such powers;
37
(3) to exercise the discretion vested in him personally
and not to allow himself to act under the control of another
and, unless and to the extent permitted by laws,
administrative regulations or with the informed consent of
shareholders given in a general meeting, not to delegate the
exercise of his discretion;
(4) to treat shareholders of the same class equally and to
treat shareholders of different classes fairly;
(5) unless otherwise provided for in the Company's
Articles of Association or except with the informed consent
of the shareholders given in a general meeting, not to enter
into any contract, transaction or arrangement with the
Company;
(6) not to use the Company's property for his own benefit,
without the informed consent of the shareholders given in a
general meeting;
(7) not to exploit his position to accept bribes or other
illegal income or expropriate the Company's property in any
way, including (without limitation) opportunities which
benefit the Company;
(8) not to accept commissions in connection with the
Company's transactions, without the informed consent of the
shareholders given in a general meeting;
(9) to comply with the Company's Articles of Association,
to perform his official duties faithfully, to protect the
Company's interests and not to exploit his position and
power in the Company to advance his own interests;
(10) not to compete with the Company in any way, save with
the informed consent of the shareholders given in a general
meeting;
(11) not to misappropriate the Company's funds or to lend
such funds to any other person, not to use the Company's
assets to set up deposit accounts in his own name or in the
any other name or to use such assets to guarantee the debts
of a shareholder of the Company or any other personal
liabilities;
(12) not to release any confidential information which he
has obtained during his term of office, without the informed
consent of the shareholders in a general meeting; nor shall
he use such information otherwise than for the Company's
benefit, save that disclosure of such information to the
court or other governmental authorities is permitted if:
38
(i) disclosure is made under compulsion of law;
(ii) public interests so warrants;
(iii) the interests of the relevant director,
supervisor, general manager, senior deputy general manager,
deputy general manager or other senior officer so requires.
Article 122. Each director, supervisor, general manager, deputy general MP117
manager, financial controller and other senior officer of
the Company shall not direct the following persons or
institutions ("associates") to act in a manner which he is
prohibited from so acting:
(1) the spouse or minor child of the director, supervisor,
general manager, senior deputy general manager, deputy
general manager, financial controller or other senior
officer;
(2) the trustee of the director, supervisor, general
manager, senior deputy general manager, deputy general
manager, financial controller or other senior officer or of
any person described in sub-paragraph (1) above;
(3) the partner of that director, supervisor, general
manager, senior deputy general manager, deputy general
manager, financial controller or other senior officer or any
person referred to in sub-paragraphs (1) and (2) of this
Article;
(4) a company in which that director, supervisor, general
manager, senior deputy general manager, deputy general
manager, financial controller or other senior officer,
whether alone or jointly with one (1) or more of the persons
referred to in sub-paragraphs (l), (2) and (3) of this
Article and other directors, supervisors, general manager,
senior deputy general managers, deputy general managers,
financial controller and other senior officers, has de facto
controlling interest;
(5) the directors, supervisors, general manager, senior
deputy general managers, deputy general managers and other
senior officers of a company which is being controlled in
the manner set out in sub-paragraph (4) above.
Article 123. The fiduciary duties of the directors, supervisors, general MP118
manager, senior deputy general managers, deputy general
managers, financial controller and other senior officers of
the Company do not necessarily cease with the termination of
their tenure. The duty of confidentiality in respect of
trade secrets of the Company survives the termination of
their tenure. Other duties may continue for such period as
the principle of fairness may require depending on the
amount of time which has lapsed between the termination and
the act concerned and the circumstances and the terms under
which the relationship between the relevant director,
supervisor, general manager,
39
senior deputy general manager, deputy general manager and the
senior officer on the on hand and the Company on the other
hand was terminated.
Article 124. Subject to Article 48, a director, supervisor, general MP119
manager, senior deputy general manager, deputy general
manager, financial controller or other senior officer of the
Company may be relieved of liability for specific breaches
of his duty with the informed consent of the shareholders
given at a general meeting.
Article 125. Where a director, supervisor, general manager, senior deputy MP120
general manager, deputy general manager, financial
controller or other senior officer of the Company is in any
way, directly or indirectly, materially interested in a
contract, transaction or arrangement or proposed contract,
transaction or arrangement with the Company, (other than his
contract of service with the Company), he shall declare the
nature and extent of his interests to the board of directors
at the earliest opportunity, whether or not the contract,
transaction or arrangement or proposal therefor is otherwise
subject to the approval of the board of directors.
Unless the interested director, supervisor, general manager,
senior deputy general manager, deputy general manager,
financial controller or other senior officer discloses his
interests in accordance with the preceding sub-paragraph of
this Article and the contract, transaction or arrangement is
approved by the board of directors at a meeting in which the
interested director, supervisor, general manager, senior
deputy general manager, deputy general manager or other
senior officer is not counted as part of the quorum and
refrains from voting, a contract, transaction or arrangement
in which that director, supervisor, general manager, deputy
general manager or other senior officer is materially
interested is voidable at the instance of the Company except
as against a bona fide party thereto who does not have
notice of the breach of duty by the interested director,
supervisor, general manager, deputy general manager,
financial controller or other senior officer.
For the purposes of this Article, a director, supervisor, general
manager, Senior deputy general manager, deputy general manager
financial controller or other senior officer of the Company is
deemed to be interested in a contract, transaction or arrangement
in which his associate is interested.
Article 126. Where a director, supervisor, general manager, senior deputy MP121
general manager, deputy general manager, financial
controller or other senior officer of the Company gives to
the board of directors a notice in writing stating that, by
reason of the facts specified in the notice, he is
interested in contracts, transactions or arrangements which
may subsequently be made by the Company, that notice shall
be deemed for the purposes of the preceding Article to be a
sufficient declaration of his interests, so far as the
content stated in such notice is concerned, provided that
such notice shall
40
have been given before the date on which the question of
entering into the relevant contract, transaction or
arrangement is first taken into consideration by the Company.
Article 127. The Company shall not pay taxes for or on behalf of a MP122
director, supervisor, general manager, senior deputy general
manager, deputy general manager, financial controller or
other senior officer in any manner.
Article 128. The Company shall not directly or indirectly make a loan to MP123
or provide any guarantee in connection with the making of a
loan to a director, supervisor, general manager, deputy
general manager, financial controller or other senior
officer of the Company or of the Company's holding company
or any of their respective associates.
The foregoing prohibition shall not apply to the following
circumstances:
(1) the provision by the Company of a loan or a guarantee
in connection with the making of a loan to its subsidiary:
(2) the provision by the Company of a loan or a guarantee
in connection with the making of a loan or any other funds
available to any of its directors, supervisors, general
manager, senior deputy general managers, deputy general
managers, financial controller and other senior officers to
meet expenditure incurred or to be incurred by him for the
purposes of the Company or for the purpose of enabling him
to perform his duties properly, in accordance with the terms
of a service contract approved by the shareholders in a
general meeting;
(3) if the ordinary course of business of the Company
includes the lending of money or the giving of guarantees,
the Company may make a loan to or provide a guarantee in
connection with the making of a loan to any of the relevant
directors, supervisors, general manager, senior deputy
general managers, deputy general managers, financial
controller and other senior officers or their respective
associates in the ordinary course of its business on normal
commercial terms.
Article 129. Any person who receives funds from a loan which has been MP124
made by the Company acting in breach of the preceding
Article shall, irrespective of the terms of the loan,
forthwith repay such funds.
Article 130. A guarantee for the repayment of a loan which has been MP125
provided by the Company acting in breach of Article 128(1)
shall not be enforceable against the Company, save in
respect of the following circumstances:
(1) the guarantee was provided in connection with a loan
which was made to an associate of any of the directors,
supervisors, general manager, senior deputy general
managers, deputy general managers, financial controller and
other senior officers of the Company or of the Company's
41
holding company and the lender of such funds did not know of
the relevant circumstances at the time of the making of the
loan; or
(2) the collateral which has been provided by the Company
has already been lawfully disposed of by the lender to a
bona fide purchaser.
Article 131. For the purposes of the foregoing provisions of this MP126
Chapter, a "guarantee" includes an undertaking or property
provided to secure the obligor's performance of his
obligations.
Article 132. In addition to any rights and remedies provided by the laws MP127
and administrative regulations, where a director,
supervisor, general manager, senior deputy general manager,
deputy general manager, financial controller or other senior
officer of the Company breaches the duties which he owes to
the Company, the Company has a right:
(1) to demand such director, supervisor, general manager,
senior deputy general manager, deputy general manager ,
financial controller or other senior officer to compensate
it for losses sustained by the Company as a result of such
breach;
(2) to rescind any contract or transaction which has been
entered into between the Company and such director,
supervisor, general manager, senior deputy general manager,
deputy general manager, financial controller or other senior
officer or between the Company and a third party (where such
third party knows or should have known that such director,
supervisor, general manager, deputy general manager or other
senior officer representing the Company has breached his
duties owed to the Company);
(3) to demand such director, supervisor, general manager,
senior deputy general manager, deputy general manager or
other senior officer to account for profits made as result
of the breach of his duties;
(4) to recover any monies which should have been received
by the Company and which were received by such director,
supervisor, general manager, senior deputy general manager,
deputy general manager, financial controller or other senior
officer instead, including (without limitation) commissions;
and
(5) to demand repayment of interest earned or which may
have been earned by such director, supervisor, general
manager, senior deputy general manager, deputy general
manager, financial controller or other senior officer on
monies that should have been paid to the Company.
Article 133. The Company shall, with the prior approval of shareholders MP128
in a general meeting, enter into a contract in writing with
a director or supervisor wherein his emoluments are
stipulated. The aforesaid emoluments include:
42
(1) emoluments in respect of his service as director,
supervisor or senior officer of the Company;
(2) emoluments in respect of his service as director,
supervisor or senior officer of any subsidiary of the
Company;
(3) emoluments in respect of the provision of other
services in connection with the management of the affairs of
the Company and any of its subsidiaries;
(4) payment by way of compensation for loss of office, or
as consideration for or in connection with his retirement
from office.
No proceedings may be brought by a director or supervisor
against the Company for anything due to him in respect of
the matters mentioned in this Article except pursuant to the
contract mentioned above.
Article 134. The contract concerning the emoluments between the Company MP129
and its directors or supervisors should provide that in the
event that the Company is acquired, the Company's directors
and supervisors shall, subject to the prior approval of
shareholders in a general meeting, have the right to receive
compensation or other payment in respect of his loss of
office or retirement. For the purposes of this paragraph,
the acquisition of the Company includes any of the following:
(1) an offer made by any person to the general body of
shareholders;
(2) an offer made by any person with a view to the offeror
becoming a "controlling shareholder" within the meaning of
Article 49.
If the relevant director or supervisor does not comply with
this Article, any sum so received by him shall belong to
those persons who have sold their shares as a result of such
offer. The expenses incurred in distributing such sum on a
pro rata basis amongst such persons shall be borne by the
relevant director or supervisor and shall not be paid out of
such sum.
CHAPTER 15: FINANCIAL AND ACCOUNTING
SYSTEMS AND PROFIT DISTRIBUTION
Article 135. The Company shall establish its financial and accounting MP130
systems in accordance with laws, administrative regulations
and PRC accounting standards formulated by the finance
regulatory department of the State Council.
Article 136. At the end of each fiscal year, the Company shall prepare a MP131
financial report which shall be examined and verified in a
manner prescribed by law.
43
Article 137. The board of directors of the Company shall place before the MP132
shareholders at every annual general meeting such financial
reports which the relevant laws, administrative regulations
and directives promulgated by competent regional and central
governmental authorities require the Company to prepare.
Article 138. The Company's financial reports shall be made available for MP133,
shareholders' inspection at the Company twenty (20) days C.7
before the date of every shareholders' annual general Zheng
meeting. Each shareholder shall be entitled to obtain a Jian
copy of the financial reports referred to in this Chapter. Hai
Han
[1995]
No. 1
App.3
5
The Company shall deliver or send to each shareholder of
Overseas-Listed Foreign-Invested Shares by prepaid mail at
the address registered in the register of shareholders the
said reports not later than twenty-one (21) days before the
date of every annual general meeting of the shareholders.
Article 139. The financial statements of the Company shall, in addition MP134
to being prepared in accordance with PRC accounting
standards and regulations, be prepared in accordance with
either international accounting standards, or that of the
place outside the PRC where the Company's shares are
listed. If there is any material difference between the
financial statements prepared respectively in accordance
with the two accounting standards, such difference shall be
stated in the financial statements. In distributing its
after-tax profits, the lower of the two amounts shown in the
financial statements shall be adopted.
Article 140. Any interim results or financial information published or MP135
disclosed by the Company must also be prepared and presented
in accordance with PRC accounting standards and regulations,
and also in accordance with either international accounting
standards or that of the place overseas where the Company's
shares are listed.
Article 141. The Company shall publish its financial reports twice every MP136
fiscal year, that is, the interim financial report shall be
published within sixty (60) days after the expiration of the
first six (6) months of each fiscal year; the annual
financial report shall be published within one hundred and
twenty (120) days after the expiration of each fiscal year.
Article 142. The Company shall not keep accounts other than those MP137
required by law.
Article 143. The Company's after-tax profit shall be allocated in
accordance with the following order:
(1) compensation of losses;
(2) allocation of ten percent of its after-tax profit to
the statutory
44
common reserve fund;
(3) allocation of five percent to ten percent of its
after-tax to the statutory common welfare fund;
(4) allocation to the discretionary common reserve fund
upon approval by resolution of the shareholders' general
meeting;
(5) payment of dividends in respect of ordinary shares.
The Company shall not allocate dividends or carry out other
allocations in the form of bonuses, before the Company has
compensated for its losses and made allocations to the
statutory common reserve fund and the statutory common
welfare fund.
Article 144. Capital common reserve fund includes the following items: MP138
(1) premium on shares issued at a premium price;
(2) any other income designated for the capital common
reserve fund by the regulations of the finance regulatory
department of the State Council.
Article 145. The common reserve fund of the Company shall be applied for
the following purposes:
(1) to compensate losses;
(2) to expand the Company's production and operation;
(3) to convert the common reserve fund into capital in
order to increase its capital. The Company may convert its
common reserve fund into capital with the approval of
shareholders in a general meeting. When such conversion
takes place, the Company shall either distribute new shares
in proportion to the existing shareholders' number of
shares, or increase the par value of each share, provided,
however, that when the statutory common reserve fund is
converted to capital, the balance of the statutory common
reserve fund may not fall below 25 % of the registered
capital.
Article 146. The Company's statutory common welfare fund is used for the
collective welfare of the Company's employees.
Article 147. Dividend shall be paid twice a year. The final dividends
of the Company shall be decided by the shareholders by way
of an ordinary resolution. The shareholders may by way of an
ordinary resolution authorize the board of directors to
decide the interim dividends.
Article 148. The Company may distribute dividends in the form of: MP139
45
(1) cash;
(2) shares.
If the shareholder does not receive the dividends within six
years after the day of the public announcement of
declaration of dividends according to the articles of
association, such shareholder shall be deemed to lose the
right to claim such dividends.
Article 149. The Company shall calculate, declare and pay dividends and
other amounts which are payable to holders of
Domestic-Invested Shares in Renminbi. The Company shall
calculate and declare dividends and other payments which are
payable to holders of Overseas-Listed Foreign-Invested
Shares in Renminbi, and shall pay such amounts in the local
currency of the place in which such Overseas-Listed
Foreign-Invested Shares are listed (if such shares are
listed in more than one place, then the currency of the
principal place on which such shares are listed as
determined by the board of directors).
Article 150. The Company shall pay dividends and other amounts to holders
of Foreign-Invested Shares in accordance with the relevant
foreign exchange control regulations of the State. If there
is no applicable regulation, the applicable exchange rate
shall be the average closing rate for the relevant foreign
currency announced by the Peoples' Bank of China during the
week prior to the announcement of payment of dividend and
other amounts.
Article 151. The Company shall appoint receiving agents for holders of MP140,
the Overseas-Listed Foreign-Invested Shares. Such receiving C.8
agents shall receive dividends which have been declared by Zheng
the Company and all other amounts which the Company should Jian
pay to holders of Overseas-Listed Foreign-Invested Shares on Hai
such shareholders' behalf. Han
[1995]
The receiving agents appointed by the Company shall meet the No. 1
relevant requirements of the laws of the place at which the App.13
stock exchange on which the Company's shares are listed or Pt.D
the relevant regulations of such stock exchange. 1(c)
The receiving agents appointed for holders of
Overseas-Listed Foreign-Invested Shares listed in Hong Kong
shall each be a company registered as a trust company under
the Trustee Ordinance of Hong Kong.
CHAPTER 16: APPOINTMENT OF AUDITORS
Article 152. The Company shall appoint an independent firm of accountants MP141
which is qualified under the relevant regulations of the
State to audit the Company's annual report and review the
Company's other financial reports.
46
The first auditors of the Company may be appointed before
the first annual general meeting of the Company at the
inaugural meeting. Auditors so appointed shall hold office
until the conclusion of the first annual general meeting.
If the inaugural meeting does not exercise the powers under
the preceding paragraph, those powers shall be exercised by
the board of directors.
Article 153. The auditors appointed by the Company shall hold office from MP142
the conclusion of the annual general meeting of shareholders
at which they were appointed until the conclusion of the
next annual general meeting of shareholders.
Article 154. The auditors appointed by the Company shall enjoy the MP143
following rights:
(1) a right to review to the books, records and vouchers
of the Company at any time, the right to require the
directors, general manager, senior deputy general managers,
deputy general managers and other senior officers of the
Company to supply relevant information and explanations;
(2) a right to require the Company to take all reasonable
steps to obtain from its subsidiaries such information and
explanation as are necessary for the discharge of its duties;
(3) a right to attend shareholders' general meetings and
to receive all notices of, and other communications relating
to, any shareholders' general meeting which any shareholder
is entitled to receive, and to speak at any shareholders'
general meeting in relation to matters concerning its role
as the Company's accountancy firm.
Article 155. If there is a vacancy in the position of auditor of the MP144
Company, the board of directors may appoint an accountancy
firm to fill such vacancy before the convening of the
shareholders' general meeting. Any other accountancy firm
which has been appointed by the Company may continue to act
during the period during which a vacancy arises.
Article 156. The shareholders in a general meeting may by ordinary MP145
resolution remove the Company's auditors before the
expiration of its term of office, irrespective of the
provisions in the contract between the Company and the
Company's auditors. However, the accountancy firm's right
to claim for damages which arise from its removal shall not
be affected thereby.
Article 157. The remuneration of an accountancy firm or the manner in MP146
which such firm is to be remunerated shall be determined by
the shareholders in a general meeting. The remuneration of
an accountancy firm appointed by the board of directors
shall be determined by the board of directors.
47
Article 158. The Company's appointment, removal or non-reappointment of MP147,
an accountancy firm shall be resolved by the shareholders in C.9
a general meeting. Such resolution shall be filed with the Zheng
securities authority of the State Counsel. Jian
Hai
Where a resolution at a general meeting of shareholders is Han
passed to appoint as auditor a person other than an [1995]
incumbent auditor, to fill a casual vacancy in the office of No. 1
auditor, to reappoint as auditor a retiring auditor who was App.13
appointed by the board of directors to fill a casual vacancy Pt.D
or to remove an auditor before the expiration of his term of 1(e)(i)
office, the following provisions shall apply:
(1) A copy of the appointment or removal proposal shall be
sent (before notice of meeting is given to the shareholders)
to the firm proposed to be appointed or proposing to leave
its post or the firm which has left its post in the relevant
fiscal year (leaving includes leaving by removal,
resignation and retirement).
(2) If the auditor leaving its post makes representations
in writing and requests the Company to give the shareholders
notice of such representations, the Company shall (unless
the representations have been received too late) take the
following measures:
(a) in any notice of the resolution given to
shareholders, state the fact of the representations having
been made; and
(b) attach a copy of the representations to the
notice and deliver it to the shareholders in the manner
stipulated in the Company's Articles of Association.
(3) If the Company fails to send out the auditor's
representations in the manner set out in sub-paragraph (2)
above, such auditor may (in addition to his right to be
heard) require that the representations be read out at the
meeting.
(4) An auditor which is leaving its post shall be entitled
to attend the following shareholders' general meetings:
(a) the general meeting at which its term of office
would otherwise have expired;
(b) the general meeting at which it is proposed to
fill the vacancy caused by its removal; and
(c) the general meeting which convened as a result
of its resignation,
and to receive all notices of, and other communications
relating to, any
48
such meeting, and to speak at any such meeting which
it attends on any part of the business of the
meeting which concerns it as former auditor of the
Company.
Article 159. Prior notice should be given to the accountancy firm if the MP148,
Company decides to remove such accountancy firm or not to C.10
renew the appointment thereof. Such accountancy firm shall Zheng
be entitled to make representations at the shareholders' Jian
general meeting. Where the accountancy firm resigns from Hai
its position as the Company's auditors, it shall make clear Han
to the shareholders in a general meeting whether there has [1995]
been any impropriety on the part of the Company. No. 1
App.13
Pt.D
1(e)(ii)-
(e)(iv)
An accountancy firm may resign its office by depositing at
the Company's legal address a resignation notice which shall
become effective on the date of such deposit or on such
later date as may be stipulated in such notice. Such notice
shall contain the following statements:
(1) a statement to the effect that there are no
circumstances connected with its resignation which it
considers should be brought to the notice of the
shareholders or creditors of the Company; or
(2) a statement of any such circumstances.
Where a notice is deposited under the preceding
sub-paragraph, the Company shall within fourteen (14) days
send a copy of the notice to the relevant governing
authority. If the notice contains a statement under the
preceding sub-paragraph (2), a copy of such statement shall
be placed at the Company for shareholders' inspection. The
Company should also send a copy of such statement by prepaid
mail to every shareholder of Overseas-Listed Foreign Shares
at the address registered in the register of shareholders.
Where the auditor's notice of resignation contains a
statement in respect of the above, it may require the board
of directors to convene a shareholders' extraordinary
general meeting for the purpose of receiving an explanation
of the circumstances connected with its resignation.
CHAPTER 17: INSURANCE
Article 160. The different types or items of the Company's insurance
shall be decided at a meeting of the board of directors in
accordance with the relevant insurance law in China.
49
CHAPTER 18: LABOUR AND PERSONNEL
MANAGEMENT SYSTEMS
Article 161. The Company may at its discretion employ and dismiss
employees based on the business development needs of the
Company and in accordance with the requirements of the laws
and administrative regulations of the State.
Article 162. The Company may formulate its labour and payroll systems and
payment methods in accordance with the relevant laws and
regulations of the State , the Company's Articles of
Association and the economical benefits of the Company.
Article 163. The Company shall endeavour to improve its employee benefits
and to continually improve the working environment and
living standards of its employees.
Article 164. The Company shall provide medical, retirement and
unemployment insurance for its employees and put in place a
labour insurance system, in accordance with the relevant
laws and regulations of the State.
CHAPTER 19: TRADE UNIONS
Article 165. The Company's employees may form trade unions, carry on
trade union activities and protect their legal rights. The
Company shall provide the necessary conditions for such
activities.
CHAPTER 20: MERGER AND DIVISION OF THE
COMPANY
Article 166. In the event of the merger or division of the Company, a MP149
plan shall be presented by the Company's board of directors
and shall be approved in accordance with the procedures
stipulated in the Company's Articles of Association. The
Company shall then go through the relevant approval
process. A shareholder who objects to the plan of merger or
division shall have the right to demand the Company or the
shareholders who consent to the plan of merger or division
to acquire such dissenting shareholders' shareholding at a
fair price. The contents of the resolution of merger or
division of the Company shall constitute special documents
which shall be available for inspection by the shareholders
of the Company.
Such special documents shall be sent by mail to holders of
Overseas-Listed Foreign-Invested Shares.
Article 167. The merger of the Company may take the form of either merger MP150,
by absorption or merger by the establishment of a new App.3
company. 7(1)
In the event of a merger, the merging parties shall execute
a merger agreement and prepare a balance sheet and an
inventory of assets. The Company shall notify its creditors
within ten (10) days of the date of the
50
Company's merger resolution and shall publish a
public notice in a newspaper at least three (3)
times within thirty (30) days of the date of the
Company's merger resolution.
At the time of merger, rights in relation to debtors and
indebtedness of each of the merged parties shall be assumed
by the company which survives the merger or the newly
established company.
Article 168. Where there is a division of the Company, its assets shall MP151,
be divided up accordingly. App.3
7(1)
In the event of division of the Company, the parties to such
division shall execute a division agreement and prepare a
balance sheet and an inventory of assets. The Company shall
notify its creditors within ten (10) days of the date of the
Company's division resolution and shall publish a public
notice in a newspaper at least three (3) times within thirty
(30) days of the date of the Company's division resolution.
Debts of the Company prior to division shall be assumed by
the companies which exist after the division in accordance
with the agreement of the parties.
Article 169. The Company shall, in accordance with law, apply for change MP152
in its registration with the companies registration
authority where a change in any item in its registration
arises as a result of any merger or division. Where the
Company is dissolved, the Company shall apply for
cancellation of its registration in accordance with law.
Where a new company is established, the Company shall apply
for registration thereof in accordance with law.
CHAPTER 21: DISSOLUTION AND LIQUIDATION
Article 170. The Company shall be dissolved and liquidated upon the MP153
occurrence of any of the following events:
(1) a resolution for dissolution is passed by shareholders
at a general meeting;
(2) dissolution is necessary due to a merger or division
of the Company;
(3) the Company is legally declared insolvent due to its
failure to repay debts as they become due; and
(4) the Company is ordered to close down because of its
violation of laws and administrative regulations.
Article 171. A liquidation committee shall be set up within fifteen (15) MP154
days of the
51
Company being dissolved pursuant to sub-paragraph (1) of the
preceding Article, and the composition of the liquidation
committee of the Company shall be determined by an ordinary
resolution of shareholders in a general meeting.
Where the Company is dissolved under sub-paragraph (3) of
the preceding Article, the People's Court shall in
accordance with the provisions of relevant laws organise the
shareholders, relevant organisations and relevant
professional personnel to establish a liquidation committee
to carry out the liquidation.
Where the Company is dissolved under sub-paragraph (4) of
the preceding Article, the relevant governing authorities
shall organise the shareholders, relevant organisations and
professional personnel to establish a liquidation committee
to carry out the liquidation.
Article 172. Where the board of directors proposes to liquidate the MP155
Company for any reason other than the Company's declaration
of its own insolvency, the board shall include a statement
in its notice convening a shareholders' general meeting to
consider the proposal to the effect that, after making full
inquiry into the affairs of the Company, the board of
directors is of the opinion that the Company will be able to
pay its debts in full within twelve (12) months from the
commencement of the liquidation.
Upon the passing of the resolution by the shareholders in a
general meeting for the liquidation of the Company, all
functions and powers of the board of directors shall cease.
The liquidation committee shall act in accordance with the
instructions of the shareholders' general meeting to make a
report at least once every year to the shareholders' general
meeting on the committee's income and expenses, the business
of the Company and the progress of the liquidation; and to
present a final report to the shareholders' general meeting
on completion of the liquidation.
Article 173. The liquidation committee shall, within ten (10) days of its MP156,
establishment, send notices to creditors and shall, within App.3
sixty (60) days of its establishment, publish a public 7(1)
announcement in a newspaper at least three (3) times.
A creditor shall, within thirty (30) days of receipt of the
notice, or for creditors who have not personally received
such notice, within ninety (90) days of the date of the
first public announcement, report its rights to the
liquidation committee. When reporting his rights, the
creditor shall provide an explanation of matters which are
relevant thereto and shall provide evidential material in
respect thereof. The liquidation committee shall register
the creditor's rights.
52
Article 174. During the liquidation period, the liquidation committee MP157
shall exercise the following functions and powers:
(1) to sort out the Company's assets and prepare a balance
sheet and an inventory of assets respectively;
(2) to send notify the creditors or to publish public
announcements;
(3) to dispose of and liquidate any unfinished businesses
of the Company;
(4) to pay all outstanding taxes;
(5) to settle claims and debts;
(6) to deal with the surplus assets remaining after the
Company's debts have been repaid;
(7) to represent the Company in any civil proceedings.
Article 175. After it has sorted out the Company's assets and after it MP158
has prepared the balance sheet and an inventory of assets,
the liquidation committee shall formulate a liquidation plan
and present it to a shareholders' general meeting or to the
relevant governing authority for confirmation.
The company's assets shall be distributed in accordance with
law or regulation. If there is no applicable law, such
distribution shall be carried out in accordance with a fair
and reasonable procedure determined by the liquidation
committee.
Any surplus assets of the Company remaining after its debts
have been repaid in accordance with the provisions of the
preceding paragraph shall be distributed to its shareholders
according to the class of shares and the proportion of
shares held.
During the liquidation period, the Company shall not
commence any new business activities.
Article 176. If after putting the Company's assets in order and preparing MP159
a balance sheet and an inventory of assets in connection
with the liquidation of the Company, the liquidation
committee discovers that the Company's assets are
insufficient to repay the Company's debts in full, the
liquidation committee shall immediately apply to the
People's Court for a declaration of insolvency.
After a Company is declared insolvent by a ruling of the
People's Court, the liquidation committee shall transfer all
matters arising from the liquidation to the People's Court.
53
Article 177. Following the completion of the liquidation, the liquidation MP160
committee shall prepare a liquidation report, a statement of
income and expenses received and made during the liquidation
period and a financial report, which shall be verified by a
Chinese registered accountant and submitted to the
shareholders' general meeting or the relevant governing
authority for confirmation.
The liquidation committee shall, within thirty (30) days
after such confirmation, submit the documents referred to in
the preceding paragraph to the companies registration
authority and apply for cancellation of registration of the
Company, and publish a public announcement relating to the
termination of the Company.
CHAPTER 22: PROCEDURES FOR AMENDMENT
OF THE COMPANY'S ARTICLES OF ASSOCIATION
Article 178. The Company may amend its Articles of Association in MP161
accordance with the requirements of laws, administrative
regulations and the Company's Articles of Association.
Article 179. The Company's Articles of Association shall be amended in
the following manner:
(1) The Directors shall propose the manner in which the
Company's Article of Association shall be amended;
(2) The foregoing proposal shall be furnished to the
shareholders in writing and a shareholders' meeting shall be
convened;
(3) The amendments shall be approved by votes representing
more than two-thirds of the voting rights represented by the
shareholders present at the meeting.
Article 180. Amendment of the Company's Articles of Association which MP162
involve the contents of the Mandatory Provisions of
Overseas-Listed Companies' Articles of Association (signed
by the Securities Committee of the State Council and the
Economic Reform Committee of the State on 27 August 1994)
("Mandatory Provisions") shall become effective upon receipt
of approvals from the securities authority of the State
Counsel and the companies approving department authorised by
the State Council. If there is any change relating to the
registered particulars of the Company, application shall be
made for change in registration in accordance with law.
54
CHAPTER 23: DISPUTE RESOLUTION
Article 181. The Company shall abide by the following principles for MP163
dispute resolution:
(1) Whenever any disputes or claims arise between:
holders of the Overseas-Listed Foreign-Invested Shares and
the Company; holders of the Overseas-Listed
Foreign-Invested Shares and the Company's directors,
supervisors, general manager, senior deputy general
managers, deputy general managers, financial controller or
other senior officers; or holders of the Overseas-Listed
Foreign-Invested Shares and holders of
Domestic-Invested Shares, in respect of any rights or
obligations arising from these Articles of Association, the
Company Law or any rights or obligations conferred or
imposed by the Company Law and special regulations
(including other relevant laws) or any other relevant laws
and administrative regulations concerning the affairs of
the Company, such disputes or claims shall be referred by
the relevant parties to arbitration.
Where a dispute or claim of rights referred to in the C.11
preceding paragraph is referred to arbitration, the entire Zheng
claim or dispute must be referred to arbitration, and all Jian
persons who have a cause of action based on the same facts Hai
giving rise to the dispute or claim or whose participation Han
is necessary for the resolution of such dispute or claim, [1995]
shall, where such person is the Company, the Company's No. 1
shareholders, directors, supervisors, general manager,
senior deputy general managers, deputy general managers,
financial controller or other senior officers of the
Company, comply with the arbitration.
Disputes in respect of the definition of shareholders
and disputes in relation to the register of shareholders
need not be resolved by arbitration.
(2) A claimant may elect for arbitration to be carried out
at either the China International Economic and Trade
Arbitration Commission in accordance with its Rules or the
Hong Kong International Arbitration Centre in accordance
with its Securities Arbitration Rules. Once a claimant
refers a dispute or claim to arbitration, the other party
must submit to the arbitral body elected by the claimant.
If a claimant elects for arbitration to be carried out
at Hong Kong International Arbitration Centre, any party to
the dispute or claim may apply for a hearing to take place
in Shenzhen in accordance with the Securities Arbitration
Rules of the Hong Kong International Arbitration Centre.
(3) If any disputes or claims of rights are settled by way
of arbitration in accordance with sub-paragraph (1) of this
Article, the laws of the PRC shall apply, save as otherwise
provided in the laws and administrative regulations.
(4) The award of an arbitral body shall be final and
conclusive and
55
binding on all parties.
CHAPTER 24: NOTICE
Article 182. Unless otherwise provided, the Company shall, where it is
making a public announcement in the prescribed or approved
manner, issue or deliver any notice or announcement in at
least one (1) national newspaper which has been appointed by
the securities authority of the State Counsel. And, where
possible, to publish such notice or announcement in English
and in Chinese on the same day in a major Chinese and a
major English newspaper in Hong Kong respectively.
Article 183. Unless otherwise provided in these Articles of Association,
notices, information or written statement issued by the
Company to holders of Overseas-listed shares shall be
personally delivered to the registered address of each of
such shareholders, or sent by mail to each of such
shareholders.
Notices to be issued to holders of Domestic-invested shares
shall have to be released in any one or more newspapers
appointed by the securities authority of the State Council,
all holders of Domestic-invested shares shall be deemed to
have received such notices once they are published.
Article 184. All notices which are to be sent by mail shall be clearly
addressed, postage pre-paid, and shall be put in envelopes
before being posted by mail. Such letters of notice shall
be deemed to have been received by shareholders five (5)
days after the date of despatch.
Article 185. Any notices, document, information or written statement
from the shareholders or directors to the Company shall be
delivered personally or sent by registered mail to the
legal address of the Company.
Article 186. Shareholders or directors of the Company who want to prove
that certain notices, documents, information or written
statements have been sent to the Company shall provide
evidential materials showing that such notices, documents,
information or written statements have been sent to the
Company by normal methods within designated times, and that
the mailing address is correct and the postage is fully
paid.
CHAPTER 25: SUPPLEMENTARY
Article 187. In these Articles of Association, references to "accountancy MP165
firm" shall have the same meaning as "auditors".
Article 188. The Company's Articles of Association are written in Chinese
and English. Both text shall be equally valid. If there is
any discrepancy between the two versions, the Chinese
version of the Articles of Association shall prevail.
56