REG - Air China Ld - Profit Warning

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

中國國際航空股份有限公司

AIR CHINA LIMITED

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 00753)

Profit Warning

This announcement is made by Air China Limited (the "Company") pursuant to Rule 13.09 and Rule 13.10B of The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong).

I.       ESTIMATED RESULTS FOR THE PERIOD

(I)      Results Estimation Period

1 January 2025 to 31 December 2025.

(II)    Estimated Results

1.       According to the preliminary estimation by the finance department of the Company, the Company is expected to record a loss for the year of 2025. It is expected that the net loss attributable to equity holders of the Company would be approximately RMB1.3 billion to RMB1.9 billion, and the net loss attributable to equity holders of the Company after deducting non-recurring profit or loss would be approximately RMB1.9 billion to RMB2.7 billion.

2.       The estimated results have not been audited by certified accountants.

II.      RESULTS FOR THE CORRESPONDING PERIOD OF THE PREVIOUS YEAR

(I)      Total loss: RMB1.605 billion.

Net loss attributable to equity holders of the Company: RMB0.237 billion.

Net loss attributable to equity holders of the Company after deducting non-recurring profit or loss: RMB2.540 billion.

(II)    Earnings per share: RMB-0.01.

III.    MAJOR REASONS FOR THE ESTIMATED LOSS FOR THE PERIOD

In 2025, China's economy maintained overall stability with positive momentum, and the aviation industry continued its steady growth. The Company seized market opportunities and proactively responded to the new normal of industry development, deepening efforts to enhance quality and efficiency. The Company continuously optimized production organization, tapped into the potential of available aircraft resources to ensure effective capacity allocation, dynamically monitored market flows and balanced volume and pricing strategies to stabilize yield quality. The Company comprehensively strengthened cost control, reinforced a culture of prudent spending and reduced overall cost levels. Through dedicated efforts to boost production, strengthen operation and sustain growth, the Company's overall operational performance demonstrated increased investment, higher revenue and lower costs, consolidating a momentum of continuous improvement in operational quality. In strict compliance with the PRC Accounting Standards for Business Enterprises, the Company reassessed the carrying amount of deferred tax assets as of the balance sheet date and reversed a portion accordingly. The net profit attributable to shareholders of the Company is expected to record a loss for 2025.

IV.    RISK ALERT

There are no uncertainties which will affect the accuracy of the estimated results of the Company.

V.      OTHER INFORMATION

The above estimated results are only a preliminary estimation, and the detailed and accurate financial figures will be disclosed in the audited annual report of 2025 which will be formally published by the Company. Investors are reminded to pay attention to the investment risks.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

By Order of the Board

Air China Limited

Xiao Feng

Company Secretary

Beijing, the PRC, 30 January 2026

​

As at the date of this announcement, the directors of the Company are Mr. Liu Tiexiang, Mr. Wang Mingyuan, Mr. Cui Xiaofeng, Mr. Patrick Healy, Mr. Xiao Peng, Mr. Xu Niansha*, Mr. He Yun*, Ms. Winnie Tam Wan-chi* and Mr. Gao Chunlei*.

*    Independent non-executive director of the Company

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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

中國國際航空股份有限公司

AIR CHINA LIMITED

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 00753)

ANNOUNCEMENT ON KEY OPERATING DATA OF DECEMBER 2025

The enclosed announcement (the "SSE Announcement") was published by Air China Limited ("Air China") on the Shanghai Stock Exchange on 15 January 2026, which contains combined operating data for December 2025 for Air China and its subsidiaries (collectively, the "Group"). This announcement enclosing the SSE Announcement is made by Air China pursuant to Rules 13.09 and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

The data in the enclosed SSE Announcement was calculated based on the internal statistics of the Group, which may differ from the data disclosed in the relative periodic reports. Investors are hereby reminded of the risks which may result from inappropriate reliance upon or utilization of the information given above.

By Order of the Board

Air China Limited

Xiao Feng

Company Secretary

Beijing, the PRC, 15 January 2026

As at the date of this announcement, the directors of the Company are Mr. Liu Tiexiang, Mr. Wang Mingyuan, Mr. Cui Xiaofeng, Mr. Patrick Healy, Mr. Xiao Peng, Mr. Xu Niansha*, Mr. He Yun*, Ms. Winnie Tam Wan-chi* and Mr. Gao Chunlei*.

* Independent non-executive director of the Company

SSE ANNOUNCEMENT

The SSE Announcement is written in Chinese, with no official English translation. The English translation is provided solely for reference only. In case of any discrepancy between the two versions, the Chinese version shall prevail. The full version of the SSE Announcement is as follows:

AIR CHINA LIMITED

ANNOUNCEMENT ON KEY OPERATING DATA OF DECEMBER 2025

In December 2025, Air China Limited (the "Company") and its subsidiaries (the "Group") recorded a year-on-year increase in combined passenger traffic (measured by revenue passenger kilometers (the "RPK")). Passenger capacity (measured by available seat kilometers (the "ASK")) recorded a year- on-year increase of 4.0%, and passenger traffic recorded a year-on-year increase of 10.0%. Among which, for domestic routes, passenger capacity increased by 4.2% year on year, and passenger traffic increased by 10.6% year on year. For international routes, passenger capacity increased by 4.1% year on year, and passenger traffic increased by 9.1% year on year. For regional routes, passenger capacity decreased by 0.7% year on year, and passenger traffic recorded an increase of 4.1% year on year. The passenger load factor was 82.2%, representing an increase of 4.5 percentage points as compared to the same period last year. Among which, the passenger load factor for domestic routes increased by 4.9 percentage points year on year, the passenger load factor for international routes increased by 3.6 percentage points year on year, and the passenger load factor for regional routes increased by 3.4 percentage points year on year.

In terms of cargo operations, cargo capacity (measured by available freight tonne kilometers (the "AFTK")) decreased by 1.9% year on year. Cargo and mail traffic (measured by revenue freight tonne kilometers (the "RFTK")) increased by 5.3% year on year. The cargo load factor was 39.2%, representing a year-on-year increase of 2.7 percentage points.

Starting from 30 December 2025, the Company added the Chengdu Tianfu - Almaty route (two flights a week).

In December 2025, the Group introduced six A320 series aircraft and two C919 aircraft. At the end of December 2025, the Group operated a fleet of 964 aircraft, including 418 self-owned aircraft, 252 aircraft under finance lease and 294 aircraft under operating lease.

The following table sets forth key operating data of December 2025:

Notes:

1.       Change is expressed in percentage in terms of "Capacity" and "Traffic", and is expressed in percentage points in terms of "Load Factor"

2.       "ATK(s)" refers to the number of tonnes of capacity available for transportation multiplied by the kilometers flown

3.       "ASK(s)" refers to the number of seats available for sale multiplied by the kilometers flown

4.       "AFTK(s)" refers to the number of tonnes of capacity available for the carriage of cargo and mail multiplied by the kilometers flown

5.       "RTK(s)" refers to the revenue load (passenger and cargo) in tonnes multiplied by the kilometers flown

6.       "RPK(s)" refers to the number of revenue passengers carried multiplied by the kilometers flown

7.       "RFTK(s)" refers to the revenue cargo and mail load in tonnes multiplied by the kilometers flown

8.       "Passenger Load Factor" refers to revenue passenger kilometers expressed as a percentage of available seat kilometers

9.       "Cargo and Mail Load Factor" refers to revenue freight tonne kilometers expressed as a percentage of available freight tonne kilometers

10.     "Overall Load Factor" refers to RTKs expressed as a percentage of available tonne kilometers

The key operating data above was calculated based on the internal statistics of the Group, which may differ from the data disclosed in the relative periodic reports. Investors are hereby reminded of the risks which may result from inappropriate reliance upon or utilization of the information given above.

Board of Directors of Air China Limited

Beijing, the PRC, 15 January 2026

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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

中國國際航空股份有限公司

AIR CHINA LIMITED

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 00753)

This announcement is made pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Hong Kong Listing Rules").

References are made to the announcements dated 30 October 2025 and 16 December 2025 and the circular dated 28 November 2025 (the "Circular") of Air China Limited (the "Company") in relation to, among other things, the issuance of A Shares to specific investors. Unless otherwise specified herein, capitalized terms used in this announcement shall have the same meanings as those defined in the Circular.

The Company recently received the "Notice on Acceptance of the Application for Securities Issuance by Air China Limited, a Company Listed on the Main Board of the Shanghai Stock Exchange" (Shang Zheng Shang Shen (Refinancing) [2026] No. 5) 《(  關於受理中國國際航空股份有限公司滬市主板上市公司發行證券申請的通知》 （上證上審（再融資）[2026]5號） ) issued by the Shanghai Stock Exchange.

The Shanghai Stock Exchange checked the prospectus and related application documents submitted by the Company pertaining to the securities issuance by companies listed on the Main Board of the Shanghai Stock Exchange in accordance with relevant requirements, and considered that the application documents were complete and in compliance with the statutory form, and decided to accept and process the application in accordance with the law.

The Issuance of A Shares to Specific Investors remains subject to the review and approval by the Shanghai Stock Exchange and the registration with the CSRC and other procedures, and may be implemented after obtaining the consent of the CSRC for registration. There is uncertainty as to whether the review and approval by the Shanghai Stock Exchange and the consent of the CSRC for registration can be obtained as well as regarding the corresponding timelines. The Company will, in accordance with the progress, timely fulfill its information disclosure obligations in strict compliance with the provisions and requirements of the laws and regulations in relation to the issuance of A shares to specific investors by listed companies.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

By Order of the Board

 Air China Limited

 Xiao Feng

Company Secretary

Beijing, the PRC, 8 January 2026

As at the date of this announcement, the directors of the Company are Mr. Liu Tiexiang, Mr. Wang Mingyuan, Mr. Cui Xiaofeng, Mr. Patrick Healy, Mr. Xiao Peng, Mr. Xu Niansha*, Mr. He Yun*, Ms. Winnie Tam Wan-chi* and Mr. Gao Chunlei*.

* Independent non-executive director of the Company

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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

中國國際航空股份有限公司

AIR CHINA LIMITED

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 00753)

VOLUNTARY ANNOUNCEMENT

SALE OF CERTAIN CATHAY PACIFIC SHARES

HELD BY THE COMPANY

This announcement is made by Air China Limited (the "Company", together with its subsidiaries, the "Group") on a voluntary basis.

On 5 January 2026 (after trading hours), the Company, Easerich Investments Inc. ("Easerich"), a wholly-owned subsidiary of the Company, entered into a share placing agreement (the "Placing Agreement") with Morgan Stanley & Co. International PLC (the "Placing Agent"), pursuant to which Easerich has agreed to sell, and the Placing Agent has agreed to place 108,080,000 shares of Cathay Pacific Airways Limited ("Cathay Pacific") (the "Cathay Pacific Shares") held by Easerich at the price of HK$12.22 per share, representing approximately 1.61% of the total issued shares of Cathay Pacific as at the date of this announcement (the "Sale of Shares"). Completion of the Sale of Shares is expected to take place on the second business day after the day on which all the conditions set out in the Placing Agreement having been fulfilled or waived by the Placing Agent, but in any event no later than 8 January 2026 or such other date as Easerich and the Placing Agent may agree in writing (the "Closing Date"). To the best of the Company's knowledge, the Placing Agent, each of the placees and their respective ultimate beneficial owners are third parties independent of the Company and its connected persons. Based on calculations by the finance department of the Company, the profit before tax from the Sale of Shares is estimated to be approximately RMB182 million (excluding the impact of transaction fees, other comprehensive income, value-added tax and surcharges, with the exchange rate for Hong Kong Dollar to Renminbi is calculated at 1:0.90141), which is subject to finalization in the Company's audited financial statements.

As at the date of this announcement, the Company holds 1,930,516,334 Cathay Pacific Shares through its wholly-owned subsidiaries, representing approximately 28.72% of the total issued Cathay Pacific Shares. Immediately upon completion of the  Sale of Shares, the  Company will hold 1,822,436,334 Cathay Pacific Shares through its wholly-owned subsidiaries, representing approximately 27.11% of the total issued Cathay Pacific Shares assuming that there is no other change in the number of issued Cathay Pacific Shares.

Pursuant to the Placing Agreement, Easerich and the Company undertake that, from the date of the Placing Agreement until and including the date being 180 days after the Closing Date, they will not (without the prior written consent of the Placing Agent, such consent not to be unreasonably withheld or delayed) and will procure their affiliates not to, directly or indirectly sell, transfer, or otherwise dispose of any Cathay Pacific Shares or related interests, nor agree or announce any intention to enter into or effect any such transactions, nor enter into any transaction having a similar effect, except for the Sale of Shares and any intra group transfers by Easerich and/or the Company where the transferee agrees to be bound by the terms of such lock-up obligations.

The Sale of Shares does not constitute a notifiable transaction under Chapter 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") nor a connected transaction under Chapter 14A of the Listing Rules, and will also not have any material adverse effect on the Company's future financial position and operating results. Following the completion of the Sale of Shares, the Company's shareholding in Cathay Pacific will continue to be maintained at an appropriate level. The Company remains an important strategic shareholder of Cathay Pacific and continues to be optimistic about Cathay Pacific's development prospects, and its support for Cathay Pacific remains unchanged.

By Order of the Board

Air China Limited

Xiao Feng

Company Secretary

Beijing, the PRC, 6 January 2026

As at the date of this announcement, the directors of the Company are Mr. Liu Tiexiang, Mr. Wang Mingyuan, Mr. Cui Xiaofeng, Mr. Patrick Healy, Mr. Xiao Peng, Mr. Xu Niansha*, Mr. He Yun*, Ms. Winnie Tam Wan-chi* and Mr. Gao Chunlei*.

* Independent non-executive director of the Company

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中國國際航空股份有限公司

AIR CHINA LIMITED

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 00753)

Working Rules of the Remuneration and Appraisal Committee of the Board of Directors

(Amended on 30 December 2025) Chapter 1    General Principles

Article 1 In order to further develop and improve the remuneration and appraisal management system for the directors and senior management members of Air China Limited (the "Company") and to optimize the corporate governance structure of the Company, the Remuneration and Appraisal Committee (the "Committee") of the Board of Directors (the "Board") is established and these working rules (the "Working Rules") are made in accordance with the Company Law of the People's Republic of China and with reference to the Code of Corporate Governance for Listed Companies issued by China Securities Regulatory Commission, the listing regulatory rules of the jurisdictions in which the shares of the Company are listed such as the Rules Governing the Listing of Stocks on Shanghai Stock Exchange and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the Articles of Association of Air China Limited (the "AOA") and other relevant rules and regulations.

Article 2  As a dedicated committee established under the Board, the Committee provides advice and recommendations for the decision-making of the Board and is accountable to the Board.

Chapter 2     Composition

Article 3  The Committee shall consist of three to seven directors, with more than half of them being independent directors.

Article 4 The composition of the Committee and adjustment thereof shall be proposed by the chairman of the Board after consultation with the relevant directors, and shall take effect after being approved by the Board.

Article 5 The Committee shall have one chairman (the "Chairman"), who shall be an independent director of the Company and appointed by the Board. The Chairman shall preside over the work of the Committee.

Article 6 The members of the Committee shall have a term equal to the term of a director of the Company and may be re-elected upon expiration of such term. Any member of the Committee shall automatically lose his or her membership at the Committee if he or she ceases to be a director of the Company. The vacancy shall be filled by the Board in accordance with Articles 3 to 5 herein.

Chapter 3 Powers and Responsibilities

Article 7  The Committee shall have the powers and authorities to:

(1)     be responsible for formulating appraisal standards for and conducting appraisal of directors and senior management members, formulating and reviewing the remuneration determination mechanisms, decision-making procedures and other remuneration policies and proposals of directors and senior management members;

(2)     formulate or amend the shares incentive schemes and employee share ownership plans, entitlements granted to incentive recipients, exercise conditions and the fulfillment thereof;

(3)     make recommendations to the Board regarding the arrangement of share ownership plans for directors and senior management members in relation to a proposed spin-off of a subsidiary;

(4)     review and approve compensation payable to executive directors and senior management of the Company for loss or termination of their office or appointment to ensure that it is consistent with contractual terms and is otherwise fair and reasonable;

(5)     review and approve compensation arrangements relating to dismissal or removal of directors for misconduct to ensure that such arrangements are consistent with contractual terms and are otherwise fair and appropriate;

(6)     study the Company's total payroll budget and settlement, employee income distribution, corporate annuity and other remuneration and benefits policies and proposals;

(7)     other matters stipulated by laws, administrative regulations, regulatory authorities, the listing rules of the stock exchange(s) where the Company is listed and the AOA, and those authorized by the Board.

Article 8 Remuneration plans for directors of the Company proposed by the Committee shall be approved by the Board and submitted to the shareholders' meeting for approval before they can be implemented. The remuneration distribution proposal for senior management members of the Company shall be submitted to the Board for approval.

Article 9 The Committee shall be accountable to the Board and resolutions adopted by the Committee shall be submitted to the Board for its consideration. The Board has the right to veto any remuneration plan or proposal that is detrimental to the interests of the shareholders.

Article 10  If the Board has not adopted or fully adopted the recommendations of the Committee, it shall state the opinions of the Committee and the specific reasons for not adopting in the resolutions of the Board, and disclose such matter.

Chapter 4     Procedural Rules

Article 11 The Committee shall convene a meeting in accordance with the practical needs of the Company. The meeting shall be convened and chaired by the Chairman, or if the Chairman is unable to attend the meeting, by an independent director member designated by the Chairman.

Article 12 The meeting notice shall be issued 5 days before the date of the meeting, and the aforesaid advance notice period may be waived by the unanimous consent of all Committee members. Meeting papers shall be sent 3 days before the date of the meeting.

Article 13 The quorum of a meeting of the Committee shall be two-thirds of all Committee members. Each member present shall have one vote. The resolution of the meeting must be passed by more than half of all the members before such resolution becomes effective.

Article 14 The Committee's meetings may be held in the form of, including but not limited to, physical meetings, teleconference such as video meetings and conference call meetings, combination of physical meeting and teleconference, or by way of written resolutions. The Committee members should attend the meetings in person and express whether they vote in favor of, against or abstain from voting for the matters to be decided in such meetings. Should any Committee member be unable to attend the meeting in person, he or she may deliver a proxy letter in writing duly signed by such Committee member, appointing another Committee member to attend the meeting and to express opinions on his or her behalf. The proxy letter should clearly state the extent of authorization and its time limit. A member who cannot attend in person shall authorize another member to attend on his or her behalf.

Article 15 The secretary to the Board shall be responsible for organizing and coordinating the work between the Committee and other relevant departments. The secretary to the Board shall be present at the meetings of the Committee.

The Committee may, if necessary, invite directors and senior management members of the Company to attend its meetings.

Article 16  The Committee shall establish a joint working group, comprising the senior management of the Company and/or the person in charge of the relevant functional departments, to provide support to the Committee. The Committee may, if necessary, engage experts or intermediary institutions to provide professional opinions in its decision-making process and any reasonable cost arising therefrom shall be borne by the Company.

Article 17  A Committee member concerned shall abstain from considering any matter in which he or she has a personal interest in a Committee meeting.

Article 18  The procedures for holding meetings, the methods of voting and any resolution adopted at the meetings by the Committee shall comply with the relevant laws and regulations, the AOA and the Working Rules.

Article 19  The Committee shall prepare meeting minutes of its meetings, which shall be signed by the Committee members who have attended the meeting and shall be kept by the office of the Board.

Article 20 The resolutions passed by, and the results of voting conducted at, the Committee meetings shall be reported in writing to the Board.

Article 21 The members attending a Committee meeting shall keep any matter discussed at the meeting confidential and shall not disclose any related information unless authorised.

Chapter 5     Supplementary Provisions

Article 22 The Working Rules are formulated by the Board and shall come into effect upon approval of the Board.

Article 23 In case of any matters not provided herein or conflicts with the provisions of the laws, administrative regulations, other relevant regulatory documents, the relevant regulations of the stock exchange(s) where the Company is listed or the AOA promulgated after the Working Rules come into effect, such provisions of the laws, administrative regulations, other relevant regulatory documents, the relevant regulations of the stock exchange(s) where the Company is listed or the AOA shall prevail.

Article 24  The Board reserves the right to amend and interpret the Working Rules.

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中國國際航空股份有限公司

AIR CHINA LIMITED

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 00753)

Working Rules of the Audit and Risk Management Committee

(the Supervision Committee) of the Board of Directors

(Amended on 30 December 2025)

Chapter 1   General Principles

Article 1              In order to improve the decision-making function of the board of directors (the "Board") of Air China Limited (the "Company"), enhance the effective supervision over the management by the Board and improve the corporate governance structure, the Company established the Audit and Risk Management Committee (the Supervision Committee) of the Board of Directors (hereinafter referred to as the "Committee") and these working rules in accordance with the Company Law of the People's Republic of China and with reference to the Code of Corporate Governance for Listed Companies issued by the China Securities Regulatory Commission and the listing regulatory rules of the jurisdictions in which the shares of the Company are listed such as the Rules Governing the Listing of Stocks on Shanghai Stock Exchange, the Self-regulatory Guidelines for the Companies Listed on the Shanghai Stock Exchange No. 1 - Standardized Operation (the "Standardized Operation Guidelines"), and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Hong Kong Listing Rules"), the Articles of Association of Air China Limited (the "AOA") and other relevant rules and regulations.

Article 2               As a dedicated committee established under the Board, the Committee provides advice and recommendations for the decision-making of the Board and is accountable to the Board.

Members of the Committee shall ensure that they dedicate sufficient time and energy to dutifully perform their duties and responsibilities. The Company shall provide the necessary working conditions for the Committee. When the Committee performs its duties and responsibilities, the Company's management and the relevant departments should cooperate with the Committee.

Chapter 2    Composition

Article 3               The Committee shall consist of three to five directors who are not senior management of the Company, with more than half of them being independent directors. The Committee shall include at least one independent director who has adequate expertise in accounting or relevant financial management. The members of the Committee shall have adequate professional knowledge and business experience to perform the Committee's responsibilities.

Article 4                  The composition of the Committee and adjustment thereof shall be proposed by the chairman of the Board after consultation with the relevant directors, and shall take effect after being approved by the Board.

Article 5             The Committee shall have one chairman (the "Chairman"), who shall be an accounting professional and an independent director appointed by the Board. The Chairman shall preside over the work of the Committee.

Article 6                  Members of the Committee shall have a term equal to the term of a director of the Company and may be re-elected upon expiration of such term. Any member of the Committee shall automatically cease to be a member of the Committee from the time he or she ceases to be a director. The vacancy shall be filled by the Board in accordance with Articles 3 to 5 herein.

Where the resignation of a member of the Committee results in the number of Committee members falling below the minimum quorum, or results in the Committee lacking a member with accounting expertise, the original member shall continue to perform his or her duties before a new member takes office.

The Board shall regularly assess the independence of the Committee members and their performance of their duties and responsibilities. The Board may replace any unsuitable Committee members as it deems necessary.

The Company shall provide trainings to the Committee members to equip them with adequate professional skills in the areas of laws, accounting and corporate regulations that are necessary to perform their duties in a timely manner.

Chapter 3    Powers and Responsibilities

Article 7                  The Committee shall have the powers and authorities to:

(1)     Be responsible for the appointment and removal, supervision and assessment of works related to external audit.

1.      Making recommendations to the Board on the appointment, reappointment and removal of the external audit firm, approving the remuneration and engagement terms of the external audit firm pursuant to the relevant authorizations and handling any matters related to its resignation or dismissal;

2.      Reviewing and overseeing the external audit firm's independence and objectivity and the effectiveness of the audit procedures in accordance with the applicable standards, and supervising and assessing whether the external audit firm dutifully performs its duties and responsibilities;

3.      Formulating policies regarding the provision of non-audit services by the external audit firm and ensuring their implementation. Assessing and monitoring the independence and objectivity of the external audit firm when providing non-audit services;

4.      Discussing with the external audit firm the nature, scope and disclosure responsibilities of the audit prior to the commencement of the audit work; discussing and communicating about the audit scope, audit plan, audit methodology and major issues discovered during the audit;

5.      Reviewing the audit-related notes submitted to the management by the external audit firm, any material queries raised by the auditors to the management regarding accounting records, financial accounts and control systems, as well as the management's responses; and ensuring that the Board provides a timely response to the issues raised in the audit-related notes submitted to the management by the certified public accountants for the annual audit;

6.      Supervising and urging the external audit firm to act with integrity and due diligence, strictly comply with business rules and industry self-regulatory standards, and rigorously implement internal control system.

(2)     Guide, supervise and assess the internal audit work of the Company, and coordinate internal and external audit works.

1.      Guiding and supervising the establishment and implementation of the internal audit system;

2.      Reviewing the annual internal audit work plan and key audit tasks of the Company, and supervising and urging the implementation of the internal audit plan of the Company;

3.      Guiding the effective operation of the internal audit department. The internal audit department shall report its work to the Committee, and various audit reports, the rectification plan and rectification progress of audit issues submitted by the internal audit department to the management shall be submitted to the Committee concurrently;

4.      Reviewing the internal audit reports, assessing the internal audit outcomes and supervising the rectification of material issues;

5.      Reporting to the Board on the progress and quality of internal audit and major issues identified;

6.      Making recommendations to the Board on the appointment or dismissal of the Company's financial officer and the person in charge of the internal audit department;

7.      Supervising the internal audit department to carry out inspection at least once every six months on the implementation of significant company matters, such as the use of proceeds of the Company, provision of guarantees, connected transactions, securities investment and derivatives transactions, provision of financial assistance, purchase or sale of assets and external investments, large-scale capital transaction and the transactions involving directors, senior management, controlling shareholders and de facto controller and their respective associates, and preparing an inspection report and submitting it to the Committee;

8.      Based on the internal audit reports and relevant materials submitted by the internal audit department, the Committee shall issue assessment opinions in writing in respect of the effectiveness of the Company's internal controls and report to the Board. In the event that the Committee considers that there are material deficiencies or material risks in the Company's internal controls, the Board shall promptly report and disclose such information to the stock exchange(s) where the Company is listed;

9.      Being responsible for coordinating communication among the Company's management, the internal audit department, other related departments and the external audit firm, ensuring that the internal audit is adequately resourced and has appropriate standing within the Company, and reviewing the effectiveness of internal audits.

(3)     Monitor the Company's financial information and disclosures.

1.      Reviewing the Company's financial reports and financial information in periodic reports, and providing opinions on the truthfulness, accuracy and completeness of the reports;

2.      Reviewing the Company's financial and accounting policies, with a focus on material accounting and auditing issues in the Company's financial reports, including adjustments for material accounting errors, changes in major accounting policies and estimates, matters involving significant accounting judgments, and issues leading to audit reports with non-standard opinions;

3.      Focusing particularly on any potential fraud, fraudulent conducts and false statements relating to the financial reporting;

4.      Regarding financial reporting issues, urging the relevant responsible departments within the Company to formulate rectification measures and rectification timelines, conduct follow-up reviews, and monitor the implementation of the corrective actions;

5.      Members of the Committee shall convene meetings with the external auditing firm at least twice a year.

(4)     Guide, supervise and assess works related to risk management, internal control and compliance management.

1.      Examining the compliance with relevant laws, regulations and rules, providing guidance in reviewing the establishment of the Company's risk management system, internal control system, compliance management system and accountability mechanism for non-compliant operations and investments, and ensuring that the management has established an effective monitoring and control system;

2.      Assessing the effectiveness and implementation of the Company's financial control as well as its risk management, internal control, compliance management, and accountability mechanisms for non-compliant operations and investments along with their related systems. Evaluating the effectiveness of the Company's risk investment (including but not limited to financial derivatives) management rules and operational procedures, and reviewing the Company's risk investment strategies and plans;

3.      Reviewing the internal control audit plans and audit reports issued by the internal control audit firm and communicating with the internal control audit firm regarding identified issues and any improvement plan in response to it;

4.      Proactively or as delegated by the Board, reviewing significant findings related to risk management and internal control matters and the management's responses to these findings;

5.      Where the Company is found to have major internal control deficiencies or is determined to engage in financial fraud, misappropriation of funds, improper guarantees, or similar issues, the Committee shall urge the Company to properly carry out follow-up corrective actions and internal accountability measures, urge the Company to formulate rectification plans and corrective measures and complete the rectifications within a specified timeframe.

(5)     Exercise the functions and powers of a supervisory committee as stipulated in the Company Law, including but not limited to:

1.      Inspecting the Company's finances;

2.      Supervising the conduct of the directors and senior management in performing their duties;

3.      Requiring the directors and senior management to rectify actions detrimental to the Company's interests;

4.      Proposing the convening of an extraordinary Board meeting;

5.      Proposing the convening of an extraordinary shareholders' meeting, and convening and presiding over the shareholders' meeting when the Board fails to perform its duties in relation to the convening and presiding over the shareholders' meeting as required by the laws;

6.      Submitting proposals to the shareholders' meeting;

7.      Exercising other functions and powers of a supervisory committee.

(6)     Other relevant work.

1.      Reviewing the implementation of Board resolutions and the exercise of Board authorizations, conducting post-investment project evaluations in accordance with regulations and provide suggestions to the Board;

2.      Supervising the rectification of issues identified through internal and external audits, state-owned assets supervision, special inspections and other oversight activities, and promoting the application of the findings;

3.      Being responsible for overseeing and managing the Company's connected transactions; reviewing major connected transactions of the Company and providing written opinions to the Board for its deliberation;

4.      During its supervision and inspection, if the Committee identifies any emergency situations where the Company's operations may jeopardize the safety of its assets, result in asset loss, infringe upon shareholders' rights, or involve significant financial irregularities or major financial risks, it shall promptly report these matters to the Board and the relevant higher competent authorities;

5.      Establishing and reviewing the whistleblowing policies and systems, enabling employees and other stakeholders to raise concerns confidentially and anonymously to the Committee regarding any potential improper matters related to the Company. Ensuring appropriate arrangements are in place for the Company to conduct fair and independent investigations into such matters and to take appropriate actions;

6.      Preparing and disclosing the Committee's annual work performance, mainly including the performance of its duties and the exercise of its functions and powers, as well as the convening of its meetings.

(7)     Other matters stipulated by laws, administrative regulations, regulatory authorities, the listing rules of the stock exchange(s) where the Company is listed and the AOA, and those authorized by the Board and other matters as required by the laws and regulations as well as the relevant regulations of the stock exchange(s) where the Company is listed.

Article 8                  Resolutions adopted by the Committee shall be submitted to the Board for its consideration. The Committee shall identify and make recommendations on any matters where any improvement is required.

The following matters shall be submitted to the Board for consideration after the approval of more than half of all the members of the Committee:

(1)     disclosure of financial information and internal control assessment report in the financial accounting report and periodic report;

(2)     appointment or dismissal of the accounting firm undertaking the auditing business of the Company;

(3)     appointment or dismissal of the chief financial officer of the Company;

(4)     change of accounting policies, accounting estimates or correction of material accounting errors for reasons other than changes in accounting standards;

(5)     other matters as stipulated by laws, regulations, the regulatory rules of the jurisdictions in which the shares of Company are listed and the AOA.

Article 9                  The relevant functional departments of the Company shall actively provide support and create necessary conditions for the discharge of its duties by the Committee, such as providing information and relevant materials and coordinating the communication with the accounting firm.

Chapter 4  Rules for Annual Financial Reporting

Article 10                The Committee shall, at the end of each fiscal year, but before the start of the annual audit, agree with the accounting firm engaged for the annual audit on a timetable for auditing the financial statements of the Company.

The Committee shall urge the accounting firm to submit its audit report within the agreed timetable, and record how and for how many times the Committee has done so, and the results, in a written note, which shall be signed by the relevant person in charge.

Article 11                The Committee shall, before the commencement of the audit work by the certified accountants engaged for the annual financial report audit, review and form its opinion in writing on the financial accounting statements prepared by the Company.

The Committee shall, after the certified accountants for the annual audit commences its auditing assignment, strengthen communication with such certified accountants for the annual audit on material issues identified during the auditing process. After the preliminary audit opinion is issued by such certified accountants for the annual audit, the Committee shall review the financial accounting statements of the Company and the audit opinion again to form a written opinion.

Article 12                The Committee shall vote on the annual financial report, and submit it to the Board for consideration after the approval by more than half of all the members. The Committee shall also submit to the Board a summary report on the audit work done by the accounting firm of this year, and its decision on the renewal of the engagement of the existing accounting firm or the engagement of a new accounting firm for the new year.

The documents relating to the audit of the annual financial report of the Company (as considered and reviewed by the Committee) shall be disclosed in the annual report of the Company.

Chapter 5   Procedural Rules and Safeguards

Article 13                The Committee may hold regular or ad hoc meetings. The Committee meeting shall be called and presided by the Chairman, or if the Chairman is unable or unwilling to perform such duties, a member who is an independent director shall be appointed to perform such duties on his or her behalf. Regular meetings shall be held at least four times a year. Ad hoc meetings may be held when so requested by more than two members of the Committee or when the Chairman deems it to be necessary.

The Committee shall hold a meeting at least once a year to communicate with the external auditor without the presence of the management of the Company. The secretary of the Board may attend the meeting in a non-voting capacity.

The meeting notice shall be issued 5 days before the date of the meeting, and the aforesaid advance notice period may be waived by the unanimous consent of all Committee members. Meeting papers shall be sent 3 days before the date of the meeting.

Article 14                The quorum of a meeting of the Committee shall be two-thirds of all Committee members. Each member present shall have one vote. The resolution of the meeting must be passed by more than half of all the members before such resolution becomes effective.

Should a committee member have any conflict of interest with respect to any matters to be decided at a meeting of the Committee, he or she shall abstain. If a valid deliberation opinion cannot be formed due to the abstention of the Committee member(s), the relevant matter shall be submitted to the Board directly for its consideration.

Article 15                The Committee's meetings may be held in the form of, including but not limited to, physical meetings, teleconferences such as video meetings and conference call meetings, combination of physical meeting and teleconference, or by way of written resolutions. The Committee members should attend the meetings in person and express whether they vote in favor of, against or abstain from voting for the matters to be decided. Should any Committee member be unable to attend the meeting in person, he or she may deliver a proxy letter in writing duly signed by such Committee member, appointing another Committee member to attend the meeting and to express opinions on his or her behalf. The proxy letter should clearly state the extent of authorization and its time limit.

Article 16                The secretary of the Board shall be responsible for organizing and coordinating the work between the Committee and all relevant departments. The secretary of the Board shall be present at meetings of the Committee.

Should the Committee deem it necessary, the directors and senior management of the Company may be invited to attend the meeting, and representatives of the external auditor, internal auditors, financial officers, legal counsels and other relevant personnel may also be invited to attend the meeting and provide necessary information. The Committee may carry out its work through various methods, including receiving work reports from members of the management, attending relevant meetings of the Company, reviewing financial and accounting information and information related to members of the management and employees, making special inquiries on major issues, and organizing special supervision and inspection.

Article 17                The procedures for holding, methods of voting of, and resolutions passed by the meeting of the Committee must comply with the relevant laws and regulations, the AOA and these working rules.

Article 18                The Committee shall prepare minutes of its meetings, which shall be signed by the Committee members who have attended the meeting and shall be kept by the office of the Board.

Article 19                The resolutions passed by, the results of voting conducted and the opinions studied at, the Committee meetings shall be reported in writing to the Board.

Article 20                Members attending a Committee meeting shall keep any matter discussed at the meeting confidential, and shall not disclose any related information unless duly authorized for such disclosure.

Article 21                The Committee shall establish a joint working group, comprising the senior management of the Company and heads of functional departments such as audit, finance and legal affairs, to provide support and safeguards for its work.

As the lead support department, the audit department conducts internal audits and internal control evaluations and other related tasks in accordance with relevant national laws and regulations as well as the Company's relevant policies. It regularly reports to the Committee and completes other tasks assigned by the Committee. The finance department handles budgeting, accounting, fund management, taxation and other work in accordance with relevant regulations, and reports to the Committee. The legal department conducts legal, internal control, risk management, compliance and other work in accordance with relevant regulations, and reports to the Committee. The Board office assists the secretary of the Board with routine liaison and meeting organization for the Committee. Other relevant units and departments provide support to the work of the Committee as required by their respective responsibilities.

If necessary, the Committee may independently engage experts, accounting firms and other intermediary institutions to provide professional support for the performance of its duties, with the related expenses borne by the Company.

Chapter 6    Miscellaneous

Article 22                These working rules are formulated by the Board and shall become effective upon the approval of the Board.

Article 23                In case of any matters not provided herein or conflicts with the provisions of the laws, administrative regulations, other relevant regulatory documents, the relevant regulations of the stock exchange(s) where the Company is listed or the AOA promulgated after these working rules come into effect, such provisions of the laws, administrative regulations, other relevant regulatory documents, the relevant regulations of the stock exchange(s) where the Company is listed or the AOA shall prevail.

Article 24                The Board reserves the rights to amend and interpret these working rules.

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