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Transcription

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed
securities dealer, bank manager, solicitor, professional accountant or other professional adviser.
If you have sold or transferred all your shares in Bank of China Limited (中國銀行股份有限公司) (the “Bank”), you
should at once hand this circular and the enclosed proxy form and reply slip to the purchaser or transferee or to the bank or
licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or
transferee.
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the
contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability
whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.
中國銀行股份有限公司
BANK OF CHINA LIMITED
(a joint stock company incorporated in the People’s Republic of China with limited liability)
(Stock Code: 3988 and 4601 (Preference Shares))
ANNUAL GENERAL MEETING
A notice convening the Annual General Meeting of Bank of China Limited to be held at Four Seasons Hotel Hong Kong,
8 Finance Street, Central, Hong Kong, China and at Bank of China Head Office Building, No. 1 Fuxingmen Nei Dajie,
Beijing, China at 9:30 a.m. on Wednesday, 17 June 2015 (registration will begin at 8:30 a.m.) is set out in pages 5 to 7 of
this circular.
Whether or not you are able to attend the Annual General Meeting, you are advised to read the notice of Annual General
Meeting and to complete and return the enclosed proxy form in accordance with the instructions printed thereon. For H-Share
Holders, the proxy form should be returned to the Bank’s H Share Registrar, Computershare Hong Kong Investor Services
Limited in person or by post as soon as possible but in any event not less than 24 hours before the time stipulated for
convening the Annual General Meeting or any adjourned meeting thereof. Completion and return of the proxy form will not
preclude you from attending and voting at the Annual General Meeting or at any adjourned meeting if you so wish.
If you intend to attend the Annual General Meeting in person or by proxy, you are required to complete and return the reply
slip to the Bank’s Board Secretariat or to Computershare Hong Kong Investor Services Limited on or before Wednesday, 27
May 2015.
The English and Chinese versions of this circular and the accompanying form of proxy and reply slip are available on the
Bank’s website at www.boc.cn and the website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk. You
may access the aforesaid documents by clicking “Investor Relations” on the homepage of the Bank’s website or browsing
through the website of Hong Kong Exchanges and Clearing Limited.
30 April 2015
CONTENTS
Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
NOTICE OF ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
APPENDIX I
BUSINESS OF THE ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ATTACHMENT A
2014 WORK REPORT OF THE BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ATTACHMENT B
2014 WORK REPORT OF THE BOARD OF SUPERVISORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ATTACHMENT C
2014 ANNUAL FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ATTACHMENT D
SCHEME ON THE AUTHORIZATION TO THE BOARD
OF DIRECTORS GRANTED BY THE SHAREHOLDERS’ MEETING . . . . . . . . . . . . . . . . . . . . . 26
APPENDIX II
2014 REPORT ON CONNECTED TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
APPENDIX III
2014 DUTY REPORT OF INDEPENDENT DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
—i—
DEFINITIONS
In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:
“A Shares”
Domestic shares with nominal value of RMB1.00 each in the share capital
of the Bank which are listed on the Shanghai Stock Exchange (stock code:
601988)
“A-Share Holder(s)”
Holder(s) of A Shares
“AGM” or “Annual General Meeting”
The annual general meeting of the Bank to be held at Four Seasons Hotel
Hong Kong, 8 Finance Street, Central, Hong Kong, China and at Bank of
China Head Office Building, No. 1 Fuxingmen Nei Dajie, Beijing, China at 9:30
a.m. on Wednesday, 17 June 2015 (registration will begin at 8:30 a.m.)
“Articles of Association”
Articles of association of the Bank amended at the 2013 Annual General
Meeting of the Bank held on 12 June 2014 and approved by the CBRC in
August 2014
“Bank” or “Bank of China”
Bank of China Limited (中國銀行股份有限公司), a joint stock limited company
incorporated in the PRC, the H Shares and A Shares of which are listed on the
Hong Kong Stock Exchange and the Shanghai Stock Exchange, respectively
“Board” or “Board of Directors”
The Board of Directors of the Bank
“Board of Supervisors”
The Board of Supervisors of the Bank
“CBRC”
China Banking Regulatory Commission
“Company Law”
The Company Law of the PRC (as amended from time to time)
“CSRC”
China Securities Regulatory Commission
“Director(s)”
The Director(s) of the Bank
“Executive Director(s)”
The Executive Director(s) of the Bank
“External Supervisor(s)”
The External Supervisor(s) of the Bank
“Group” or “BOC Group”
The Bank and its subsidiaries
“Huijin”
Central Huijin Investment Ltd. (the Bank’s controlling shareholder)
“H Shares”
Overseas listed foreign shares with nominal value of RMB1.00 each in the
share capital of the Bank which are listed on the Hong Kong Stock Exchange
and traded in Hong Kong dollars (stock code: 3988)
“H-Share Holder(s)”
Holder(s) of H Shares
“Hong Kong”
The Hong Kong Special Administrative Region of the PRC
“Hong Kong Dollar”
Hong Kong dollar, the lawful currency of Hong Kong
“Hong Kong Listing Rules”
The Rules Governing the Listing of Securities on the Stock Exchange of Hong
Kong Limited (as amended from time to time)
—1—
DEFINITIONS
“Hong Kong Stock Exchange”
The Stock Exchange of Hong Kong Limited
“Independent Non-executive Director(s)” or
“Independent Director(s)”
The Independent Non-executive Director(s) of the Bank
“Non-executive Director(s)”
The Non-executive Director(s) of the Bank
“PRC”
The People’s Republic of China
“Preference Shares”
Preference shares with nominal value of RMB100 each in the preference share
capital of the Bank
“Preference Shareholders”
Holder(s) of Preference Shares
“RMB”
Renminbi, the lawful currency of the PRC
“Supervisor(s)”
The Supervisor(s) of the Bank
—2—
LETTER FROM THE BOARD
Board of Directors:
Mr. Tian Guoli (Chairman)
Mr. Chen Siqing
Mr. Li Zaohang
* Ms. Sun Zhijun
* Mr. Zhang Xiangdong
* Mr. Zhang Qi
* Mr. Wang Yong
* Mr. Wang Wei
* Mr. Liu Xianghui
** Mr. Chow Man Yiu, Paul
** Mr. Jackson Tai
** Mr. Nout Wellink
** Mr. Lu Zhengfei
** Mr. Leung Cheuk Yan
Registered Office:
No. 1 Fuxingmen Nei Dajie
Beijing 100818
PRC
Place of Business in Hong Kong:
8th Floor
Bank of China Tower
1 Garden Road
Hong Kong
* Non-Executive Directors
** Independent Non-executive Directors
30 April 2015
Dear H-Share Holders,
1.INTRODUCTION
On behalf of the Board of Directors, I invite you to attend the AGM to be held at Four Seasons Hotel Hong Kong, 8
Finance Street, Central, Hong Kong, China and at Bank of China Head Office Building, No. 1 Fuxingmen Nei Dajie,
Beijing, China at 9:30 a.m. on Wednesday, 17 June 2015 (registration will begin at 8:30 a.m.).
The purpose of this circular is to provide you with all the information reasonably necessary to enable you to make an
informed decision on whether to vote for or against the proposed resolutions at the AGM.
2.
BUSINESS TO BE CONSIDERED AT THE AGM
The items of business to be considered at the AGM are described in detail in the notice of AGM set out in pages 5
to 7 of this circular. At the AGM, ordinary resolutions will be proposed to approve (i) 2014 Work Report of the Board
of Directors; (ii) 2014 Work Report of the Board of Supervisors; (iii) 2014 Annual Financial Statements; (iv) 2014 Profit
Distribution Plan; (v) 2015 Annual Budget for Fixed Assets Investment; (vi) the Appointment of Ernst & Young Hua
Ming as the Bank’s External Auditor for 2015; (vii) the Election of Directors of the Bank; (viii) the Election of External
Supervisor of the Bank; (ix) Scheme on the Authorization to the Board of Directors Granted by the Shareholders’
Meeting.
—3—
LETTER FROM THE BOARD
In order to enable you to have a better understanding of the resolutions to be proposed at the AGM and to make an
informed decision thereof, we have provided in this circular detailed background information, including the relevant
information and explanation, to the resolutions to be proposed at the AGM (see Appendix I).
Pursuant to the relevant regulatory requirements, the annual report on connected transactions and the annual duty
report of independent directors are matters to be reported to the Annual General Meeting but not for shareholders’
approval. The 2014 Report on Connected Transactions and the 2014 Duty Report of Independent Directors of the Bank
are set out in Appendix II and Appendix III to this circular for shareholders’ information.
3.
THE AGM
The proxy form and the reply slip of the AGM are also enclosed herewith.
If you intend to appoint a proxy to attend the AGM, you are required to complete and return the enclosed proxy form in
accordance with the instructions printed thereon as soon as possible. For H-Share Holders, the proxy form should be
returned to the Bank’s H Share Registrar, Computershare Hong Kong Investor Services Limited in person or by post
as soon as possible but in any event not less than 24 hours before the time stipulated for convening the AGM or any
adjourned meeting thereof. Completion and return of the proxy form will not preclude you from attending and voting at
the AGM or at any adjourned meeting if you so wish.
If you intend to attend the AGM in person or by proxy, you are required to complete and return the reply slip to the
Bank’s Board Secretariat or to Computershare Hong Kong Investor Services Limited on or before Wednesday, 27 May
2015.
The Bank’s Board Secretariat is located at Bank of China Head Office Building, No. 1 Fuxingmen Nei Dajie, Beijing
100818, the PRC (Telephone: (8610) 6659 4572, Fax: (8610) 6659 4579, E-mail: [email protected]). The Bank’s H
Share Registrar, Computershare Hong Kong Investor Services Limited, is located at 17M Floor, Hopewell Centre, 183
Queen’s Road East, Wan Chai, Hong Kong (Telephone: (852) 2862 8555).
4.
VOTING BY POLL
Pursuant to the Hong Kong Listing Rules, each of the resolutions set out in the Notice of AGM will be voted on by
poll. Results of the poll voting will be published on the Bank’s website at www.boc.cn and the website of Hong Kong
Exchanges and Clearing Limited at www.hkexnews.hk after the AGM.
5.RECOMMENDATION
The Board of Directors considers that the proposed resolutions set out in the Notice of AGM are in the interests of the
Bank and its shareholders as a whole. Accordingly, the Board of Directors recommends the shareholders to vote in
favour of the proposed resolutions.
Yours faithfully,
By order of the Board
Bank of China Limited
Tian Guoli
Chairman
—4—
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting (“AGM” or “Annual General Meeting”) of Bank of China
Limited (the “Bank”) will be held at Four Seasons Hotel Hong Kong, 8 Finance Street, Central, Hong Kong, China and at
Bank of China Head Office Building, No. 1 Fuxingmen Nei Dajie, Beijing, China at 9:30 a.m. on Wednesday, 17 June 2015
(registration will begin at 8:30 a.m.) for the purpose of considering and approving the following resolutions:
ORDINARY RESOLUTIONS
1.
To consider and approve the 2014 Work Report of the Board of Directors
2.
To consider and approve the 2014 Work Report of the Board of Supervisors
3.
To consider and approve the 2014 Annual Financial Statements
4.
To consider and approve the 2014 Profit Distribution Plan
5.
To consider and approve the 2015 Annual Budget for Fixed Assets Investment
6.
To consider and approve the Appointment of Ernst & Young Hua Ming as the Bank’s External Auditor for 2015
7.
To consider and approve the Re-election of Mr. Nout Wellink as Independent Non-executive Director of the Bank
8.
To consider and approve the Election of Mr. Li Jucai as Non-executive Director of the Bank
9.
To consider and approve the Election of Mr. Chen Yuhua as External Supervisor of the Bank
10. To consider and approve the Scheme on the Authorization to the Board of Directors Granted by the Shareholders’
Meeting
By Order of the Board
Bank of China Limited
Yeung Cheung Ying
Company Secretary
30 April 2015
As at the date of this notice, the Directors of the Bank are: Tian Guoli, Chen Siqing, Li Zaohang, Sun Zhijun*, Zhang
Xiangdong*, Zhang Qi*, Wang Yong*, Wang Wei*, Liu Xianghui*, Chow Man Yiu, Paul#, Jackson Tai#, Nout Wellink#, Lu
Zhengfei# and Leung Cheuk Yan#
* Non-executive Directors
#
Independent Non-executive Directors
—5—
Notes:
1.
Details of the above resolutions are set out in Appendix I of this circular. Additional information of the 2014 Work Report
of the Board of Directors, the 2014 Work Report of the Board of Supervisors, the 2014 Annual Financial Statements
and the Scheme on the Authorization to the Board of Directors Granted by the Shareholders’ Meeting are set out in
Attachment A, Attachment B, Attachment C and Attachment D of the circular of 2014 Annual General Meeting of the
Bank, respectively.
2.
Pursuant to the relevant regulatory requirements, the annual report on connected transactions and the annual duty
report of independent directors are reporting matters to Annual General Meeting but not for shareholders’ approval. The
2014 Report on Connected Transactions and the 2014 Duty Report of Independent Directors of the Bank are set out in
Appendix II and Appendix III of this circular for shareholders’ information.
3.
The Board of Directors has recommended a final dividend of RMB0.19 per share (before tax) for the year
ended 31 December 2014 and, if such proposed dividend distribution set out in Resolution No. 4 is approved
by the shareholders, the final dividend will be distributed to those shareholders whose names appear on the
register of shareholders of the Bank on Thursday, 2 July 2015.
As stipulated by the Notice on Issues relating to Enterprise Income Tax Withholding over Dividends
Distributable to Their H-Share Holders Who are Overseas Non-resident Enterprise by Chinese Resident
Enterprises (Guoshuihan [2008] No. 897) published by State Administration of Taxation, PRC, when Chinese
resident enterprises distribute annual dividends for 2008 onwards to H-Share Holders who are overseas
non-resident enterprises, the enterprise income tax shall be withheld at a uniform rate of 10%. Under
current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect
of dividends paid by the Bank.
In accordance with the relevant PRC tax regulations, the dividend received by overseas resident individual
shareholders from the stocks issued by domestic non-foreign investment enterprises in Hong Kong
is subject to the payment of individual income tax, which shall be withheld by the withholding agents.
However, overseas resident individual shareholders of the stocks issued by domestic non-foreign
investment enterprises in Hong Kong are entitled to the relevant preferential tax treatment pursuant to the
provisions in the tax agreements signed between the countries in which they are residents and China, or
the tax arrangements between the Chinese mainland and Hong Kong and Macau. Accordingly, the Bank will
withhold 10% of the dividend to be distributed to the individual H-Share Holders as individual income tax
unless otherwise specified by the relevant tax regulations and tax agreements.
The tax and tax relief of Shanghai-Hong Kong Stock Connect shall comply with the Notice on the Relevant
Taxation Policy regarding the Pilot Programme that Links the Stock Markets in Shanghai and Hong Kong
issued jointly by the Ministry of Finance of the PRC, the State Administration of Taxation of PRC and the
CSRC.
The H-Share register of shareholders of the Bank will be closed from Monday, 29 June 2015 to Thursday, 2
July 2015 (both days inclusive) for the purpose of determining the list of shareholders entitled to the final
dividend. For such entitlements, H-Share Holders who have not registered the related transfer documents
are required to lodge them, together with the relevant share certificates, with the H Share Registrar of the
Bank, Computershare Hong Kong Investor Services Limited, at Shops 1712–1716, 17 Floor, Hopewell Centre,
183 Queen’s Road East, Wan Chai, Hong Kong at or before 4:30 p.m. on Friday, 26 June 2015. The exdividend date of the Bank’s Shares will be on Thursday, 25 June 2015.
4.
Pursuant to the Hong Kong Listing Rules, each of the resolutions set out in the Notice of AGM will be voted on by
poll. Results of the poll voting will be published on the Bank’s website at www.boc.cn and the website of Hong Kong
Exchanges and Clearing Limited at www.hkexnews.hk after the AGM.
5.
Any shareholder entitled to attend and vote at the AGM convened by the above notice is entitled to appoint one or more
proxies to attend and vote instead of him/her. A proxy need not be a shareholder of the Bank.
—6—
6.
In order to be valid, the instrument appointing a proxy together with the power of attorney or other authority, if any,
under which it is signed, or a notarially certified copy of such power of attorney or authority, must be completed and
deposited at the H Share Registrar of the Bank, Computershare Hong Kong Investor Services Limited, at least 24 hours
before the AGM or any adjourned meeting thereof. Computershare Hong Kong Investor Services Limited is located at
17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong. Completion and return of a proxy form
will not preclude a shareholder from attending and voting at the AGM or any adjourned meeting thereof should he/she
so wish.
7.
The H-Share register of shareholders of the Bank will be closed, for the purpose of determining
shareholders’ entitlement to attend the AGM, from Monday, 18 May 2015 to Wednesday, 17 June 2015 (both
days inclusive), during which period no transfer of shares will be registered. In order to attend the Annual
General Meeting, all share transfers, accompanied by the relevant share certificates, must be lodged for
registration with the Bank’s H Share Registrar, Computershare Hong Kong Investor Services Limited at
Shops 1712–1716, 17 Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong, not later than
4:30 p.m. on Friday, 15 May 2015. H-Share Holders who are registered with Computershare Hong Kong
Investor Services Limited on or before the aforementioned date are entitled to attend the Annual General
Meeting.
8.
In case of joint shareholdings, the vote of the senior joint shareholder who tenders a vote, whether in person or by
proxy, will be accepted to the exclusion of the votes of the other joint shareholder(s) and for this purpose seniority will
be determined by the order in which the names stand in the register of shareholders of the Bank in respect of the joint
shareholding.
9.
Shareholders who intend to attend the Annual General Meeting in person or by proxy should return the reply slip for
the Annual General Meeting to the Board Secretariat of the Bank or the Bank’s H Share Registrar, Computershare
Hong Kong Investor Services Limited, by hand, by post, by fax or by e-mail on or before Wednesday, 27 May 2015.
The address of the Bank’s Board Secretariat is Bank of China Head Office Building, No. 1 Fuxingmen Nei Dajie, Beijing
100818, PRC (Telephone: (8610) 6659 4572, Fax: (8610) 6659 4579, E-mail: [email protected]). Computershare
Hong Kong Investor Services Limited is located at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai,
Hong Kong (Telephone: (852) 2862 8555).
10.
According to the Articles of Association and the circumstances of this Annual General Meeting, resolutions proposed at
this Annual General Meeting are not required to be reviewed and approved by the Preference Shareholders. Therefore,
the Preference Shareholders will not attend this Annual General Meeting.
11.
Shareholders who attend the meeting in person or by proxy shall bear their own traveling, dining and accommodation
expenses. Shareholders or their proxies shall produce their identity documents when attending the AGM.
—7—
APPENDIX I
1.
BUSINESS OF THE ANNUAL GENERAL MEETING
THE 2014 WORK REPORT OF THE BOARD OF DIRECTORS
According to the relevant regulatory requirements and the provisions of Articles of Association, the “2014 Work Report
of the Board of Directors” was considered and approved by the Board on 25 March 2015.
Details of the above work report of the Board are set out in Attachment A to this circular.
2.
THE 2014 WORK REPORT OF THE BOARD OF SUPERVISORS
In accordance with the relevant regulatory requirements and the provisions of the Articles of Association, the “2014
Work Report of the Board of Supervisors” was considered and approved by the Board of Supervisors on 25 March
2015.
Details of the above work report of the Board of Supervisors are set out in Attachment B to this circular.
3.
THE 2014 ANNUAL FINANCIAL STATEMENTS
In accordance with International Financial Reporting Standards, in 2014, the Group achieved an after tax profit for the
year of 2014 RMB177.198 billion, and a profit attributable to equity holders of the Bank of RMB169.595 billion, an
increase of 8.22% and 8.08% respectively compared with the prior year. Earnings per share increased by RMB0.05
to RMB0.61. The Group’s return on average total assets (ROA) was 1.22%, a decrease of 0.01 percentage point
compared with the prior year. Return on average equity (ROE) was 17.28%, a decrease of 0.76 percentage point
compared with the prior year. The Group’s common equity tier 1 capital adequacy ratio was 10.61%, tier 1 capital
adequacy ratio was 11.35%, and its capital adequacy ratio was 13.87%.
In 2014, the Group earned a net interest income of RMB321.102 billion, an increase of RMB37.517 billion or 13.23%
compared with the prior year. The Group’s net interest margin increased by 1 basis point to 2.25% compared with the
prior year. The Group reported non-interest income of RMB135.226 billion, an increase of RMB11.302 billion or 9.12%
compared with the prior year. Non-interest income represented 29.63% of operating income, among which the net fee
and commission income reached RMB91.240 billion, an increase of 11.14% compared with the prior year. The Group
recorded operating expenses of RMB177.788 billion, an increase of RMB5.474 billion or 3.18% compared with the
prior year. The Group’s cost to income ratio (calculated under domestic regulations) was 28.57%, decreasing by 2.04
percentage points year on year. The Group’s impairment losses on assets totaled RMB48.381 billion, representing
a year-on-year increase of 105.79%. The Group incurred income tax expense of RMB54.280 billion, an increase of
10.69% compared with the prior year.
As at 31 December 2014, the Group’s total assets reached RMB15,251.382 billion, an increase of 9.93% compared
with the prior year-end, among which the Group’s net loans and advances to customers amounted to RMB8,294.744
billion, an increase of 11.49%; and the Group’s total liabilities amounted to RMB14,067.954 billion, an increase of
8.95% compared with the prior year-end. The Group’s deposits from customers amounted to RMB10,885.223 billion,
an increase of 7.80%,and the Group’s total equity was RMB1,183.428 billion, an increase of 23.08% compared to the
prior year-end.
Please refer to the Group’s “Consolidated Income Statement”, “Consolidated Statement of Comprehensive Income”,
“Consolidated Statement of Financial Position”, and “Consolidated Statement of Changes in Equity” prepared in
accordance with the International Financial Reporting Standards as set out in Attachment C. All of the above
statements are excerpted from the audited financial statements of the Group for the year 2014 prepared in accordance
with the International Financial Reporting Standards. The complete 2014 audited financial statements are available on
the Bank’s website at www.boc.cn and the website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk.
—8—
APPENDIX I
4.
THE 2014 PROFIT DISTRIBUTION PLAN
According to the audited results for 2014 and relevant laws and regulations, the Profit Distribution Plan of the Bank for
the year 2014 is proposed as follows:
5.
(1)
Appropriation to statutory surplus reserve of RMB15.888 billion.
(2)
Appropriation to general and regulatory reserves of RMB14.897 billion.
(3)
No appropriation shall be made to the discretionary reserve.
(4)
Considering the bank’s business performance, financial position, and the capital requirements for future
development of the Bank, it is proposed to distribute RMB0.19 per share (before tax) as dividend to A-share
Holders and H-share Holders whose names appear on the register of shareholders of the Bank as at the close of
market on Thursday, 2 July 2015.
(5)
The Bank is not proposing any capitalization of capital reserve into share capital for this profit distribution.
(6)
The 2014 final dividend of the Bank will be denominated and declared in RMB and be paid in RMB or equivalent
amount in Hong Kong Dollars. The dividend paid in Hong Kong Dollars will be converted from RMB based on
the average exchange rate prevailing one week before Wednesday, 17 June 2015 (such day inclusive), being the
date for holding the Annual General Meeting, as announced by the People’s Bank of China.
THE 2015 ANNUAL BUDGET FOR FIXED ASSETS INVESTMENT
In 2015, the Bank will make the fixed asset investment in conformity with the Group development strategy as the
guideline, carry out the provisions of the CPC Central Committee regarding rigorous thriftiness, reasonably arrange the
total size and structure of fixed assets, strive to balance input and output, long-term benefits and short-term benefits,
and continuously enhance the support of resource allocation for business development. Besides assuring normal safe
operation, the Bank will mainly fund the strategic investment demands such as smart outlet, system integration and
overseas channel expansion. In the full year, the Bank will earmark a total fixed asset investment budget of RMB20.35
billion, as detailed in the table below:
Items
(Unit: RMB100 million)
Group
Domestic
Institutions
Overseas
Institutions
Budget 2015
Budget 2015
Budget 2015
56.1
53.4
61
33
44
40.6
49.1
28.3
12.1
12.8
11.9
4.7
203.5
162
41.5
Construction of premises
of comprehensive business
Channel construction
IT equipment
Comprehensive operation device and vehicle
Total
—9—
APPENDIX I
6.
THE APPOINTMENT OF ERNST & YOUNG HUA MING AS THE BANK’S EXTERNAL AUDITOR FOR 2015
The Board of Directors proposed to engage Ernst & Young Hua Ming LLP as the Bank’s domestic auditor and
external auditor on internal control for 2015 where it will offer auditing service on the Bank’s financial statements in
accordance with China Accounting Standards as well as internal control auditing service, and to engage Ernst & Young
as the Bank’s international auditor for 2015 where it will offer auditing service on the Bank’s financial statements in
accordance with International Financial Reporting Standards, with an aggregate fee of RMB158.23 million for 2015
which includes the financial statement audit fee of RMB142.48 million and the internal control audit fee of RMB15.75
million.
7.
ELECTION OF DIRECTORS OF THE BANK
The term of office of independent non-executive director Mr. Nout Wellink is to expire on the date of the 2014 Annual
General Meeting. According to the Articles of Association of the Bank, directors shall be elected by the shareholders’
meeting and serve a term of office of three years. A director may serve consecutive terms if re-elected upon the
expiration of his/her term.
Mr. Wellink has served as the Bank’s Independent Non-executive Director since October 2012. He also serves as
the Chairman of the Risk Policy Committee and a member of the Strategic Development Committee and the Audit
Committee. Pursuant to relevant provisions of applicable laws and regulations, and the Articles of Association of
the Bank, he participated in the decision-making on material matters submitted by the management to the Board of
Directors and its special committees for consider and approval. He has performed the duty of a director in a prudent,
earnest, diligent and faithful manner.
Based on Mr. Nout Wellink’s willingness to be re-elected as Director and upon the approval by the Board of Directors
of the Bank on 25 March 2015, it is suggested by the Board of Directors that Mr. Nout Wellink be re-elected as
Independent Non-executive Director of the Bank. His term of office will be three years which will commence from the
date of approval by the shareholder’s meeting and end on the date of the Bank’s Annual General Meeting to be held in
2018.
Upon the approval by the Board of Directors of the Bank through written resolution on 21 April 2015, it is proposed
by the Board of Directors that Mr. Li Jucai be elected as Non-executive Director of the Bank. The term of office of Mr.
Li Jucai will be three years which will commence from the date of approval by the CBRC and end on the date of the
Bank’s Annual General Meeting to be held in 2018.
The biographical details of Mr. Nout Wellink and Mr. Li Jucai are set out below respectively:
Mr. Nout Wellink has been the Independent Director of the Bank since October 2012. He served as a member of the
Executive Board of the Dutch Central Bank (“DNB”) for almost 30 years, the last 14 years as its President. He retired
from DNB on 1 July 2011. DNB is since 1999 an integral part of the European System of Central Banks, but at the
same time the national prudential supervisor of pension funds and insurance companies. Since the establishment of the
European Monetary Union, Mr. Wellink served as a member of the Governing Council of the European Central Bank.
Starting from 1997, Mr. Wellink served as a member of the Board of Directors of the Bank for International Settlements,
which he chaired from 2002 to 2006. From 2006 to 2011, he also chaired the Basel Committee on Banking
Supervision. From 1997 to 2011, Mr. Wellink was a member of the Group of Ten Central Bank Governors and Governor
of the International Monetary Fund. Prior to his appointment in 1982 as an executive director of DNB, Mr. Wellink held
several posts in the Dutch Ministry of Finance, including as the Treasurer General from 1977 to 1982. After studying
Dutch law at Leyden University from 1961 to 1968 with a Master’s degree obtained, Mr. Wellink obtained a Doctor’s
degree in economics at the Rotterdam Erasmus University in 1975. In 2008 he received an honorary doctorate from
Tilburg University. From 1988 to 1998, Mr. Wellink was an Extraordinary Professor at the Free University in Amsterdam.
Mr. Wellink is currently Chairman of the Supervisory Board of the Leyden University, Chairman of the Public Interest
Committee of PricewaterhouseCoopers Accountants N.V., and member of the Systemic Risk Council and member
of the Advisory Board of MNI Connect. Mr. Wellink had many secondary functions in the past, including member of
the supervisory board of a bank and other enterprises on behalf of the Dutch authorities, Chairman of the Board of
Supervisors of the Netherlands Open Air Museum, member and treasurer of the Royal Picture Gallery Mauritshuis and
the Westeinde Hospital in The Hague. He was awarded a Knighthood in the Order of the Netherlands Lion in 1980 and
is since 2011 Commander of the Order of Orange-Nassau.
— 10 —
APPENDIX I
Mr. LI Jucai was born in May 1964. Mr. LI has served as Party Committee Member and Secretary of Party Discipline
Committee of the Information Network Center under the Ministry of Finance from December 2014 till now. He acted as
the specialized Deputy Secretary of Party Committee of the Information Network Center under the Ministry of Finance
from April 2010 to December 2014. From November 1996 to April 2010, he had successively been the Deputy Head
of the Science Division of the Culture, Education and Administration Department, Division Head of the Investment
Evaluation Center, Director of Administration Office & Head of the Administrative Division of the Information Network
Center under the Ministry of Finance. Mr. LI majored in Finance in China Northeast University of Finance and Economics
and graduated with a Bachelor’s degree in 1986.
Currently, the remuneration of the Bank’s directors are as follows: (i) The remuneration of Non-Executive Directors
(excluding Independent Non-Executive Directors) are not paid by the Bank. (ii) The pre-tax remuneration of Independent
Non-executive Directors of the Bank as approved by the shareholders’ meeting of the Bank are set out as follows:
basic remuneration of RMB200,000 per year, an additional duty allowance of RMB200,000 per year will be paid to
the chairman of the Risk Policy Committee or the chairman of the Audit Committee; and an additional duty allowance
of RMB100,000 per year will be paid to the chairman of other special committees. Additional duty allowance of
RMB50,000 per year will be paid to the persons being members of special committees. The remuneration of an
Independent Non-executive Director who holds positions concurrently in several committees will be calculated in an
accumulative manner.
As far as the Directors of the Bank are aware and save as disclosed above, the aforementioned candidates for
directors did not hold any directorship in other public companies, the securities of which are listed on any securities
market in Chinese mainland, Hong Kong or overseas in the last three years, nor do they have any relationship with
any Director, senior management or substantial or controlling shareholder of the Bank. As at the date of this circular,
the aforementioned candidates for directors do not have any interests in the shares of the Bank or its associated
companies according to Part XV of the Hong Kong Securities and Futures Ordinance (including but not limited to
shares, and Preference Shares of the Bank). Save as disclosed above, none of the candidates for directors assume any
other post in the Bank or subsidiaries of the Bank.
Save as disclosed above, there is no other information in relation to the appointment of the aforementioned candidates
for directors that needs to be disclosed pursuant to any of the requirements set out in Rule 13.51(2)(h) to (v) of the
Hong Kong Listing Rules, nor are there any other matters that need to be brought to the attention of the shareholders
of the Bank. The aforementioned candidates for directors have not been penalized by the CSRC or other relevant
departments or stock exchanges.
The re-election of Mr. Nout Wellink as Independent Non-executive Director of the Bank is conditional upon the nonobjection clearance of the Shanghai Stock Exchange. The Bank has received the confirmation in writing from Mr. Nout
Wellink with regard to his independence, which have been submitted to relevant regulator.
8.
ELECTION OF MR. CHEN YUHUA AS EXTERNAL SUPERVISOR OF THE BANK
Ms. Bao Guoming resigned from the post of External Supervisor of the Bank on 31 December 2014. Therefore,
the Bank needs to select a new external supervisor. According to the Articles of Association of the Bank, external
supervisor shall be elected by the shareholders’ meeting and serve a term of office of three years. An external
supervisor may serve consecutive terms if re-elected upon the expiration of his/her term but may not serve more than
two consecutive terms.
Based on his willingness to be elected as External Supervisor and upon the approval by the Board of Supervisors of
the Bank on 25 March 2015, it is proposed by the Board of Supervisors that Mr. Chen Yuhua be elected as External
Supervisor of the Bank. His terms of office will be three years which will commence from the date of approval by the
shareholders’ meeting and end on the date of the Bank’s Annual General Meeting in 2018.
The biographic details of Mr. Chen Yuhua are as follows: Mr. Chen Yuhua, born in 1953, 62 years old, with a Master’s
degree, had successively worked for China Construction Bank, China Cinda Trust & Investment Co., Ltd. and China
Cinda Asset Management Co., Ltd. Mr. Chen served as Vice President of China Cinda Asset Management Co., Ltd.
from December 2008 to August 2013. Mr. Chen served as Chairman of Cinda Investment Co., Ltd. from April 2004 to
December 2008. Mr. Chen served as Head of the Equity Department of China Cinda Asset Management Co., Ltd. and
General Manager of Cinda Investment Co., Ltd from March 2000 to April 2004. Mr. Chen served as President of China
Cinda Trust & Investment Co., Ltd from December 1996 to March 2000. Mr. Chen served as Deputy General Manager
of the Personnel Department and Deputy General Manager of the Personnel & Training Department of CCB Head
— 11 —
APPENDIX I
Office from April 1994 to December 1996. Mr. Chen served as Division Head of the Construction Economy Department
of CCB Head Office and General Manager of CCB Real Estate Consulting Corporation from March 1992 to March
1994. Mr. Chen served as Deputy Head of the Construction Economy Division, Deputy Head of the Real Estate Credit
Department and Head of a direct sub-branch of CCB Sichuan Branch from August 1986 to March 1992. Mr. Chen
graduated from Zhongnan University of Finance and Economics in 1986 and received a Master’s degree in Economics.
Mr. Chen Yuhua does not hold any position with the Bank or any of its subsidiaries.
The pre-tax remuneration of the External Supervisors of the Bank as approved by the shareholders’ meeting of the
Bank are set out as follows: basic remuneration of RMB180,000 per year, an additional duty allowance of RMB80,000
per year will be paid to the chairman of the Duty Performance and Due Diligence Supervision Committee or the Finance
and Internal Control Supervision Committee; and an additional duty allowance of RMB40,000 per year will be paid to
External Supervisors being members of special committees. The remuneration of an External Supervisor who holds
positions concurrently in several committees will be calculated in an accumulative manner.
As far as the Supervisors of the Bank are aware and save as disclosed above, the aforementioned candidate for
Supervisor did not hold any directorship or supervisor position in other public companies, the securities of which are
listed on any securities market in Chinese mainland, Hong Kong or overseas in the last three years, nor does he have
any relationship with any Director, Supervisor, senior management or substantial or controlling shareholder of the
Bank. As at the date of this notice, the aforementioned candidate for Supervisor does not have any interests in the
shares of the Bank or its associated companies within the meaning of Part XV of the Hong Kong Securities and Futures
Ordinance (including but not limited to the shares and preference shares of the Bank).
As far as the Supervisors of the Bank are aware, from April 1998 to around February 1999, the Securities Business
Department of China Cinda Trust & Investment Co., Ltd. (“Cinda Trust”) purchased a large number of shares in
an A-share listed company, but failed to report such purchases to such listed company and the relevant regulatory
authorities and failed to make any public announcements. In addition, Cinda Trust used various stock accounts to
engage in transactions with similar prices and in opposite directions in order to create a huge increase in the share
price, thus making illegal profits. The aforementioned behavior of Cinda Trust violated the relevant PRC regulatory
requirements, which resulted in Mr. Chen Yuhua, as the then legal representative of Cinda Trust, being issued a
warning by the CSRC in June 2000.
The Board of Supervisors of the Bank are aware of the aforementioned events. After consideration of relevant factors,
including (i) the broad banking and finance experience through his positions at China Construction Bank, China Cinda
Trust & Investment Co., Ltd., and China Cinda Asset Management Co., Ltd., Mr. Chen will be able to assist the Board
of Supervisors of the Bank in further performing its supervisory role by taking up the position as an External Supervisor
of the Bank, (ii) Mr. Chen has confirmed that he did not directly participate in or validate the transactions relevant to
the abovementioned events and did not directly give any relevant instructions, and (iii) the Board of Supervisors of the
Bank understands that there is no other action which has ever been taken against Mr. Chen by the CSRC apart from
the warning, the Board of Supervisors of the Bank is therefore reasonably satisfied that Mr. Chen has proven that he
possesses the appropriate qualification and experience necessary for becoming an External Supervisor of the Bank.
Save as disclosed above, there is no other information in relation to the appointment of the aforementioned candidate
for Supervisor that needs to be disclosed pursuant to any of the requirements set out in Rule 13.51(2)(h) to (v) of the
Hong Kong Listing Rules, nor are there any other matters that need to be brought to the attention of the shareholders of
the Bank. Save as disclosed above, the aforementioned candidate for Supervisor has not been penalized by the CSRC
or other relevant departments or stock exchanges.
9.
SCHEME ON THE AUTHORIZATION TO THE BOARD OF DIRECTORS GRANTED BY THE SHAREHOLDERS’
MEETING
In order to further clarify the delegation of authority from the Shareholders’ Meeting to the Board of Directors and
improve the management of delegated authority, the Bank has formulated the Scheme on the Authorization to the
Board of Directors Granted by the Shareholders’ Meeting (the “Scheme”) based on summarization of valid delegations
adopted by the Shareholders’ Meeting and set forth in rules and regulations approved by the Shareholders’ Meeting
since the joint-stock reform of the Bank, incorporating additions and adjustments to some of the existing delegations
and clarifying procedural requirements for changes in delegations and inspection of their implementation.
Details of the above Scheme on the Authorization to the Board of Directors Granted by the Shareholders’ Meeting are
set out in Attachment D to this circular.
— 12 —
ATTACHMENT A
2014 WORK REPORT OF THE BOARD OF DIRECTORS
In 2014, China’s economy entered a new normal and its comprehensive deepening reform came to a tough period. The
Board of Directors of Bank of China Limited (“the Bank” hereinafter) carefully examined the situation and made decisions
scientifically. In earnest compliance with macro-economic and financial policies and the latest regulatory requirements home
and abroad, the Bank gave full play to its advantages of internationalized and diversified operations, expedited business
transformation, innovated in financial services, reinforced risk control and management, and enhanced the effectiveness of
corporate governance, in a bid to promote steady and healthy business development and thereby moving a step towards the
strategic goal of “Serving Society, Delivering Excellence”.
The audit results show that the Bank generated a net profit of RMB177.2 billion in 2014, an increase of 8.22% over the
previous year; net profit attributable to the equity holders of the Bank reached RMB169.6billion, an increase of 8.08%;
earnings per share was RMB0.61, an increase of RMB0.05; return on assets was 1.22%, down 0.01 percentage points; asset
quality remained stable in the year, while non-performing loan ratio was controlled at a relatively low level.
The Board of Directors performed its duties diligently and implemented resolutions of the shareholders’ general meetings
earnestly. In 2014, the Board convened 3 shareholders’ meetings, where 19 proposals were reviewed and approved and two
reports were debriefed. The Board held 21 meetings onsite or by circulation of written proposals, reviewed and approved 72
proposals and debriefed 12 reports. A report on the Board’s major work in 2014 runs as follows:
I.
Strengthen Strategic Management and Give Strategies a Steering Role
In 2014, facing the economic and financial trend under the new normal, the Board of Directors of the Bank stepped
up analyses on business environment, paid constant attention to opportunities and challenges brought by major state
strategies such as “One Belt and One Road”, RMB internationalization, building of free trade zones, advanced the
implementation of development strategies, innovated in capital management mentalities and continuously reinforced its
role in strategic management.
i.
Enhance supervision and guidance on implementation of strategies to ensure realization of the strategic goal
The Board of Directors reviewed and approved the Strategic Development Plan of Bank of China for 2013–2016
in 2013 and continued to supervise its implementation in 2014. Efforts were made to review annual business
plan and financial budget, inspect the fulfillment of the broke-down strategic goal specified in the annual plan,
and strengthen monitoring and evaluation of budgetary implementation. Based on the strategic plan and in
consideration of actual conditions of different areas and different institutions, the management broke down
and refined the strategic goal and developed measures for implementation thereof so as to ensure effective
transmission and substantial implementation of strategies. The Board of Directors continuously enhanced its role
in strategic management, pushed forward deepening of the Bank’s transformation and upgrading, continuously
propelled innovation and gave full play to synergy within the Group, in an effort to actualize the strategic goal of
“Serving Society, Delivering Excellence”.
ii.
Enhance innovation of capital instruments and support the Group’s major strategies
In 2014, BOC became the only financial institution in emerging economies that had been selected as a
G-SIFI (global systemically important financial institution) for four years in a row. Facing stricter international
and domestic regulatory requirements, the Board of Directors placed greater emphasis on refinement of risk
governance, stepped up innovation of capital instruments, reviewed and approved the Proposal on General
Mandate for Issuing New Shares, the Proposal on Plan of Domestic Non-public Offering of Preference Shares
and the Proposal on Plan of Overseas Non-public Offering of Preference Shares. Seizing favorable policy and
market opportunities and fully tapping into the domestic and international markets, the Bank successfully issued
USD6.5 billion preference shares overseas, and RMB32 billion preference shares at home and tier-2 bonds
at home and abroad, setting several records of market issuance, broadening capital financing channels and
propelling China’s innovation of financial instruments. Our successful issuance of preference shares further
enhanced the Bank’s sustainable development ability and thereby ensuring continuous, stable and healthy
development of business.
— 13 —
ATTACHMENT A
iii.
Serve the national strategies and support the real economy
In face of the changing economic and financial situations at home and in the international community, the Bank’s
Board of Directors, centering on the national strategies, kept constant attention to the development trend of
the Bank’s businesses. Fully capitalizing on its advantages of highly internationalized and diversified operations,
the Bank actively supported major state strategies like “One Belt and One Road”, RMB internationalization and
building of free trade zones through providing a full range of financial services for them. The Board of Directors
also supported the management to streamline the credit structure, properly allocate credit resources towards key
fields and key industries of China’s economy, and provide more support to “going global” enterprises and SMEs,
thereby enhancing the Bank’s ability to serve the real economy and support national economic transformation
and upgrading.
iv.
Assume social responsibilities and present the image of an international premier bank
On the precondition of complying with regulatory requirements and taking the interests of all relevant parties into
consideration, the Board of Directors of the Bank gave the management full backing to serve, contribute to and
reward society. In 2014, to fulfill its social responsibilities, the Bank actively organized and launched initiatives
of poverty alleviation, promotion of education, science, culture and arts, ecological environment protection
etc., presenting a reliable and responsible corporate image to our shareholders, employees, customers and
the society. As a G-SIB, the Bank has been committed to becoming the best bank and the “server” of the
global economy; as a world corporate citizen and a G-SIFI, the Bank, bearing a strong sense of duty, assumed
due responsibilities as an international premier bank, proactively adapted itself to the international regulatory
reform and tried to be the “stabilizer” of the global financial industry. The Bank was granted the “Most Socially
Responsible Financial Institution”, “Best People’s Livelihood Financial Award in Social Responsibilities”,
“Outstanding Enterprise in Social Responsibilities”, “Most Socially Responsible Listed Enterprise”, “Top 100
Listed State-owned Enterprises by Corporate Social Responsibility”, “Best Socially Responsible Bank in Asia”
and “Enterprise with Best Sense of Social Responsibility”.
II.
Continuously Improve Corporate Governance and Upgrade the Bank’s Image on the Capital Markets
The Bank has been continuously pursuing excellent corporate governance and striving to improve its overall
governance. In 2014, the Bank’s efforts in corporate governance were highly recognized by the capital markets and
different sectors in the society. It received the Hong Kong “Corporate Governance Excellence Award”, “Gold Prize of
Round Table — Excellent Board Award” and “Most Creative Board Secretary Award” from the magazine Directors &
Boards, “Excellent Board of Directors” from Dongshiju.com, and was once again selected into “CCTV Finance 50 —
Leading Governance Index” of China Central Television.
i.
Clearly define the boundary of power and responsibility and continuously improve corporate governance
To further clarify boundaries of power and responsibility of the shareholders’ meeting, board of directors, board
of supervisors and senior management and refine authorization management, the Board of Directors of the Bank
reviewed and approved the Scheme on the Authorization to the Board of Directors Granted by the Shareholders’
Meeting, which shall take force upon approval by the shareholders’ meeting, and the Board of Directors will
conduct regular self-examination, analysis and assessment on the implementation of the Scheme. Authorization
plans, as a core constituent of the Bank’s authorization management system and underlying documents of its
corporate governance system, clearly define boundaries of duty and responsibility of the shareholders’ meeting,
the Board of Directors and the management for the purpose of improving the Bank’s corporate governance.
— 14 —
ATTACHMENT A
ii.
Innovate in practice of corporate governance to pursue excellence
The Board of Directors focused on encouraging innovative practice of corporate governance and substantially
protected the right of medium and minority shareholders to know, to participate and to vote. The Annual
General Meeting was held simultaneously in Beijing and Hong Kong via video conferencing, so that shareholders
of both the Chinese Mainland and Hong Kong could attend the meeting, and A-Share Holders could vote
online, substantially protecting rights and interests of medium and minority shareholders. The Board’s working
mechanism, information disclosure mechanism and stakeholder mechanism were continuously improved; works
of the Board were made more constructive and transparent to fulfill duties to shareholders, customers, staff,
society and other stakeholders.
iii.
Deepen forward-looking explorations and strengthen governance of the Group
In terms of governance of the Group, the Board of Directors attached great importance to internal control and
risk management, continuously enhanced the Group’s ability of overall risk management and deepened forwardlooking explorations in corporate governance to uplift the Group’s compliant operation. Besides, it continued to
keep track of the latest development of corporate governance theories and practice of international and domestic
companies, and advanced corporate governance efforts with reference to advanced practice of G-SIFIs in pursuit
of higher standards.
III.
Improve Risk Management System and Strengthen Internal Control and External Audit
The Board of Directors of the Bank attached great importance to the construction of the risk management system,
continuously advanced the building of a longstanding internal control mechanism for the Group, regularly listened to
and reviewed reports given by the senior management on operation management, risk management, case governance,
internal control system building and appraisal, and substantially assumed the duties of improving the risk management
system and keeping effective internal control, ensuring the comprehensive implementation and full actualization of the
Bank’s development strategy and operation targets.
i.
Improve risk management mechanism and comprehensive risk management
As China’s economic growth slowed down, all sorts of hidden risks emerged in 2014. Facing changes in the
domestic and foreign economic and financial situations and adjustment to China’s macro policies, the Bank’s
Board of Directors, with emphasis on control of substantial risks, kept a constant eye on heated topics and
proposed valuable opinions and suggestions on further improving the Bank’s risk governance mechanism and
strengthening risk prevention and control. The Bank continued to enhance non-performing asset recovery and
disposal, innovate in disposal modes, and improve disposal efficiency and accountability mechanism. The Board
of Directors stuck to the risk floor, controlled risk cost and took final responsibility for risk management.
ii.
Strengthen management of internal control & compliance and continuously refine the internal control system
The Bank’s Board of Directors paid close attention to changes in the domestic and foreign economic and
financial situations and timely learned the Group’s overall internal control status. It regularly debriefed and
reviewed reports of the management on internal control-related work, internal audit and inspection and evaluation
of internal control efforts, guided improvement of internal control management and gave internal audit an
active role in promoting the Bank’s risk management and internal control. The Board also timely solicited for
external auditors’ proposals on works related to internal control, risk event control and prevention etc., and
fully capitalized on the independence, objectivity and professionalism of external audit. Moreover, it guided and
urged the senior management to continuously refine the internal control system, step up the building of the case
prevention and control system and utilize internal control supervision and external audit as important guarantees
for effective implementation of strategies and healthy operation of businesses.
— 15 —
ATTACHMENT A
iii.
Improve connected transaction management mechanism and enhance connected transaction management
capability
In 2014, the Bank’s Board of Directors further stepped up guidance on the management of connected
transactions, resulting in an improvement in the Bank’s management of connected transactions. With constant
attention to the construction of the connected transaction monitoring system and transactions with key relatedparty customers, the Board of Directors proposed opinions and suggestions on information disclosure and data
analyses of connected transactions. The management was urged to strengthen the management of related
parties and increase the completeness and effectiveness of the Bank’s name list of related parties. Through
continuously improving the connected transaction management system, the Bank effectively prevented and
controlled risks of connected transactions and ensured legality and compliance of connected transactions
conducted.
IV.
Deepen efforts in information disclosure and continuously reinforce investor relations management
The Board of Directors attached great importance to information disclosure and investor relations management,
disclosed the Bank’s major decisions, operation management and business development to the capital markets, and
kept improving the Bank’s transparency and reputation in the market.
In 2014, the Bank’s investor relations and information disclosure were continuously and widely recognized by the
markets. The Bank was honored the “Golden Tripod Award” by Securities Daily, the “Best Shareholder Returns
Award” and the “Excellent Board Secretary in Investor Relations Maintenance” in the Chinese Securities Journal Cup
and “Top100HK” jointly presented by www.QQ.com, Finet Group Limited and Hong Kong Economic Journal. The
Bank’s 2013 Annual Report received “Silver Award” in the League of American Communications Professionals annual
report competition, and the annual report was selected into the “Top 100 Annual Reports in Asia Pacific” and won the
“Most Innovative Award in Asia Pacific”. Besides, it was granted Silver Award in Cover Photo/Design & Written Text,
Bronze Award in Traditional Annual Report and Honors in Chairman’s Letter and Financial Data in the Annual Report
Competition (ARC).
i.
Step up exploration in information disclosure to substantially protect the investors’ right to know
In 2014, the Bank, on the principles of authenticity, accuracy, completeness, timeliness and fairness when
preparing and disclosing regular and interim reports, tried to make information disclosure more pertinent,
effective and transparent so as to substantially protect the investors’ right to know. Steered by the strategic goal
of “Serving Society, Delivering Excellence”, the Bank made active explorations and efforts in voluntary information
disclosure, trying to provide more abundant and comprehensive information for investors. Simultaneous
disclosure in the Chinese Mainland and Hong Kong was stepped up, and many market-leading best practices
were tried out to ensure equal access to information of investors from the Chinese Mainland and Hong Kong.
In 2014, the Bank released 55 official announcements in the A share market and 115 announcements in the
H-share market. We ensured authentic, accurate, complete and timely disclosure of all relevant matters to the
capital market and investors according to the regulators’ requirements.
— 16 —
ATTACHMENT A
ii.
Optimize the information disclosure process and improve the compliance thereof
The Board of Directors highly valued the building of legal and compliant information disclosure culture. In 2014,
the Bank conducted systematic sorting and revision of the Administrative Measures for Information Disclosure
of Bank of China Limited, continuously increasing the efficiency and quality of the information disclosure working
mechanism. The Administrative Measures for Regular Reporting of Bank of China Limited was developed and
implemented to further regulate the regular reporting workflow and disclosure quality. The Rules Governing
Persons with Knowledge of Inside Information of Bank of China Limited and relevant supervisory rules were
strictly implemented; people with knowledge of inside information were registered and progress of major matters
was put on file; self-inspection was conducted earnestly to eradicate insider transactions. The accountability of
responsible heads for information disclosure and the mechanism of messengers were further spread throughout
the Group, and Group-wide Internet-based training for messengers was launched to popularize information
disclosure compliance culture. Administration of information disclosure was made more proactive, better
planned and more forward-looking, and information disclosure management ability and compliance were further
improved.
iii.
Strengthen communication with investors and safeguard the brand image on the market
In 2014, the Bank successfully hosted road shows for 2013 annual business performance release, 2014
interim business performance release and the senior management. Besides, an interim business performance
presentation conference was held for investors in the SSE (Shanghai Stock Exchange) hall to introduce the
Bank’s strategies and business progress to investors from the Chinese Mainland, Hong Kong, Europe, North
America and other countries and regions, as well as collect market concerns and feedbacks, which was highly
welcomed by investors. In 2014, the Bank made greater efforts in communication with and active presentation
to the market through actively participating in large-scale investment symposiums and exploring investors in
emerging areas to expand its coverage of investors. It carefully received visiting investors and analysts and
promoted the Bank’s differentiated competitive edges. Moreover, the Bank continuously explored and refined
new channels for investor relations maintenance, updated contents of the investor relations-dedicated webpage
of the BOC portal, gave timely and specific replies to investors through multiple channels such as investor hotline,
email, “SSE e Interaction” Internet platform, and made active attempts to enrich communication channels such
as micro-blog and WeChat.
V.
Perform Duties Scientifically and Forge a Sound and Efficient Board of Directors
In 2014, the Board of Directors strictly observed laws, regulations and the Articles of Association of the Bank, and
diligently and faithfully performed their duties; attended meetings in time and expressed their opinions and suggestions
actively; safeguarded interests of the Bank and its shareholders, accepted supervision by all shareholders, the Board of
Supervisors and external regulators consciously, and showed high sense of responsibility and professionalism.
i.
Directors faithfully and diligently performed duties and continuously enhanced capability of performing duties
When the Board of Directors was not in session, directors made surveys in a cost-effective manner in typical
domestic and overseas branches for 30 person-times with focus on local government financing vehicles, selfempowering mechanism, business expansion in free trade zones and other topics that the Board was concerned
about, according to the work needs of the Board and the annual survey plan. The survey results were timely fed
back to the senior management in the form of survey report.
— 17 —
ATTACHMENT A
In 2014, the Board of Directors continued to attach great importance to continuous professionalism development
of directors through actively putting directors on training sessions. The Bank’s directors, in complete compliance
with the Corporate Governance Code A.6.5 of the Stock Exchange of Hong Kong and regulatory requirements
of the Chinese Mainland, took an active part in special training sessions on China’s macro-economic and
financial trends, Internet finance and innovative development of banks, anti-money laundering etc. The Bank
made special presentations on its operation conditions to the newly appointed directors in 2014. In addition, the
directors were also dedicated to self-promotion through compiling and publishing professional articles, attending
forums, participating in symposiums, giving public lectures, conducting field studies on the Bank’s domestic and
overseas branches etc.
D&O insurance (Directors and Officers Liability Insurance) for directors was renewed in 2014 to protect directors
from possible claims for compensation when legally performing their duties and thereby encouraging them to fully
fulfill their responsibilities.
ii.
Give play to the role of special committees to support the Board’s scientific and efficient decision-making
In 2014, the special committees under the Board of Directors continued to fully utilize their professional
advantages and earnestly performed their duties. Meeting plans were developed for the special committees and
emphasis was placed on making works of the special committees better planned. According to their respective
responsibilities and positioning, the special committees gained an in-depth understanding of the Bank’s business
operation, carefully studied and discussed all proposals, held a total of 30 meetings on strategic development,
internal control, the Group’s risks, connected transaction management and other issues of the Board’s concerns,
and played a substantial role in supporting decision making and supervision of execution, thereby powerfully
backing up scientific and efficient decision making of the Board of Directors.
Looking into 2015, the world economy will show an upturn and Chinese economy will be right in the new
normal. The Board of Directors will seize important strategic opportunities brought by the state economic
development, unswervingly step up planning on implementation of the Bank’s development strategy, adapt itself
to new normal, study new mentalities, show new behavioral patterns, continuously enhance the construction of
corporate governance mechanism and improve its decision making and operational management to propel the
development of Bank of China under the new normal.
It is hereby reported.
Board of Directors of Bank of China Limited
— 18 —
ATTACHMENT B 2014 WORK REPORT OF THE BOARD OF SUPERVISORS
2014 WORK REPORT OF THE BOARD OF SUPERVISORS
I.
Meetings of the Board of Supervisors
In 2014, the Bank convened five on-site meetings of the Board of Supervisors on 28 January, 26 March, 24 April,
19 August and 30 October, respectively, and two meetings of the Board of Supervisors via written resolutions. At
these meetings, the Board of Supervisors reviewed and approved 18 proposals on the Bank’s periodic reports, 2013
profit distribution plan, 2013 internal control self-assessment report, 2013 work report of the Board of Supervisors,
2014 work plan of the Board of Supervisors, evaluation opinions on the duty performance of directors and senior
management members for 2013, and nomination of candidates for external supervisors of the Bank, and so on.
The attendance rate of each supervisor of the meetings of the Board of Supervisors in 2014 is given below:
Number of meetings attended/Number of
meetings convened during term of office
Supervisor
Incumbent Supervisors
LI Jun
7/7
WANG Xueqiang
7/7
LIU Wanming
6/7
DENG Zhiying
7/7
LIU Xiaozhong
7/7
XIANG Xi
6/7
MEI Xingbao
6/7
Former Supervisor
BAO Guoming
6/7
In 2014, the Duty Performance and Due Diligence Supervision Committee of the Board of Supervisors held one
meeting, at which it reviewed and approved the proposal on evaluation opinions on the duty performance of directors
and senior management members for 2013, as well as other proposals. The Finance and Internal Control Supervision
Committee of the Board of Supervisors held four meetings, at which it reviewed and approved the Bank’s periodic
reports, 2013 profit distribution plan, 2013 internal control self-assessment report and other proposals.
II.
Performance of Supervision and Inspection by the Board of Supervisors
In 2014, focusing on the Bank’s central tasks, the Board of Supervisors earnestly conducted supervision of duty
performance, finances, risk management and internal control in line with the provisions of the Company Law, relevant
regulatory requirements and the Articles of Association. The Board of Supervisors continuously enhanced the efficiency
and effectiveness of its supervision of the Bank’s corporate governance, strategy implementation, operational
management, risk management and internal control in alignment with prevailing economic growth trends, thus
effectively safeguarding the interests of shareholders and the Bank.
Carry out supervision and evaluation on the duty performance of directors and senior management members. In line
with regulatory requirements, the Board of Supervisors attended meetings of the Board of Directors and its special
committees as well as the senior management as non-voting attendees, so as to stay abreast of the duty performance
of directors and senior management members and the decision-making and implementation of major matters regarding
the development strategies and operational management of the Bank. It produced a comprehensive monthly analysis
and evaluation on duty performance and major tasks with reference to the priorities of the Bank and the speeches and
responses of directors and senior management members, minutes, supervisory circulars as well as internal and external
auditor’s reports and approached relevant parties on issues deserving special attention. In addition to carrying out day-
— 19 —
to-day supervision, the Board of Supervisors formulated the annual evaluation plan for duty performance and diligently
organised annual duty performance interviews with directors and senior management members. It also exchanged
views on major and problematic issues, put forward suggestions, objectively and fairly evaluated the duty performance
of the Board of Directors, the senior management and their members, and developed opinions to support the annual
evaluation of duty performance, so as to urge directors and senior management members to perform their duties
with diligence. According to the supervisory requirement, the Board of Supervisors reviewed and formulated the 2014
assessment result on the performance of duties of the directors, supervisors and senior management members of the
bank that the directors, supervisors and senior management members were competent.
Strengthen supervision on finance, internal control and risks, promote legal and compliant operations and safeguard
the risk bottom line. The Board of Supervisors collected and summarised financial, risk and internal control information
by attending meetings of the Board of Directors and its special committees. It tracked progress of major tasks and
performed in-depth research and analysis in order to further improve its effectiveness regarding of supervision on
finance, risks and internal control.
First, it enhanced day-to-day supervision of finance, internal control and risks. It dynamically tracked the
implementation progress of the 2014 business plan and the financial budget as well as the monthly financial and risk
data of the Bank. It regularly summarised and analysed supervisory opinions, significant issues found in internal and
external audits and their remediation progress, followed up on the compliance with the CARPALs, and continuously
tracked the implementation progress and effect of results risk and internal control work. Strictly adhering to the
bottom line of zero systemic and regional risks, it paid close attention to industrial and regional credit risk, anti-money
laundering management and other key issues, strengthened communications with departments, alerted relevant parties
in a timely manner and avoided systematic or regional risks.
Second, it supervised the preparation and audit of financial reports. It met regularly with the Accounting and
Information Department, the Financial Management Department, the Credit Management Department, the Audit
Department and relevant business departments and external auditors regarding specific topics. It heard four reports on
the preparation and audit of financial reports, made appropriate proposals on strengthening the risk management of the
Bank’s trade finance business, risk investigation and controls over key industries, regions and areas, receiving positive
responses from the relevant departments.
Third, it reinforced the supervision of rectifications made in response to issues raised by the regulators. It
carefully reviewed the rectification reports submitted to the regulators following onsite regulatory inspections, including
those international development strategies, duty performance of internal audit and the liability business of the Bank, in
order to ensure that directives from the regulators were well implemented.
Conduct special surveys on major issues and contribute to delivering excellence. The Board of Supervisors continued
to conduct special surveys as an important means of performing its duties. To support the strategic goal of “Serving
Society, Delivering Excellence” with a focus on substantive business development and operational management against
the backdrop of China’s “new normal” economic conditions, the survey team of the Board of Supervisors conducted
field surveys in many branches and subsidiaries, addressing such topics as credit collateral management, credit risk
management, efforts to support “Going Global” enterprises and online banking. It heard explanations from outlets
and staff at various levels regarding overall conditions, existing problems and suggestions, which were, collated for
subsequent discussion. To ensure effective supervision across the Bank, it performed in-depth analysis of potential
problems with regard to risk management, internal control and restrictions on business development. In addition, it
exchanged opinions with relevant departments and branches regarding major problems identified by its surveys and
followed up with relevant corrective actions, resulting in more favorable subsequent survey feedback. Supervisors
fully leveraged their respective areas of expertise. They led surveys and actively offered advice and suggestions to
the meetings of the Board of Directors and the senior management, greatly supporting the Bank’s efforts to deliver
excellence.
— 20 —
Improve its incentive and restraint mechanism to strengthen self-building. The Board of Supervisors made its first
evaluation of the duty performance of supervisors in line with regulatory requirements and improved the related
incentive and restraint mechanism for duty performance of supervisors. It also adjusted the terms of office for
supervisors and completed the re-election of two external supervisors. Training programs on AML were conducted
using a case study approach to enhance the qualifications and capabilities of the supervisors. The Board of Supervisors
Office earnestly played a significant role in assisting and supporting and made greater achievements.
The work of the Board of Supervisors was well recognised and supported by the Board of Directors and the senior
management in 2014. The Board of Supervisors fully realised its role as an effective check and balance within the
Bank’s structure, which further enhanced the Bank’s corporate governance capacity.
During the reporting period, the Board of Supervisors raised no objections to such matters under its supervision,
including the Bank’s operational and legal compliance, financial position, use of capital raised, purchase and sale of
assets, connected transactions and internal control.
Board of Supervisors of Bank of China Limited
— 21 —
ATTACHMENT C
2014 ANNUAL FINANCIAL STATEMENTS
The statements below are prepared in accordance with the International Financial Reporting Standards.
Note: All of the below statements are excerpted from the audited financial statements of the Group for the year 2014 prepared
in accordance with the International Financial Reporting Standards. The complete 2014 audited financial statements are
available on the Bank’s website at www.boc.cn and the website of Hong Kong Exchanges and Clearing Limited at www.
hkexnews.hk.
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2014 (Amount in millions of Renminbi, unless otherwise stated)
Year ended 31 December
2014
2013
Interest income
Interest expense
602,680
(281,578)
518,995
(235,410)
Net interest income
321,102
283,585
Fee and commission income
Fee and commission expense
98,538
(7,298)
88,585
(6,493)
Net fee and commission income
91,240
82,092
Net trading gains
Net gains on financial investments
Other operating income
11,099
1,795
31,092
7,183
594
34,055
Operating income
456,328
407,509
Operating expenses
Impairment losses on assets
(177,788)
(48,381)
(172,314)
(23,510)
Operating profit
Share of results of associates and joint ventures
230,159
1,319
211,685
1,092
Profit before income tax
Income tax expense
231,478
(54,280)
212,777
(49,036)
Profit for the year
177,198
163,741
Attributable to:
Equity holders of the Bank
Non-controlling interests
169,595
7,603
156,911
6,830
177,198
163,741
0.61
0.58
0.56
0.54
Earnings per share for profit attributable to equity holders of the Bank during the year
(Expressed in RMB per ordinary share)
— Basic
— Diluted
— 22 —
ATTACHMENT C
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 December
2014
2013
177,198
163,741
Items that will not be reclassified to profit or loss
Actuarial (losses)/gains on defined benefit plans
Other
(233)
5
121
—
Subtotal
(228)
121
Profit for the year
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Fair value gains/(losses) on available for sale financial assets
Share of other comprehensive income of associates and
joint ventures accounted for using the equity method
Exchange differences from the translation of foreign operations
Other
8,430
(7,041)
256
(2,759)
471
(35)
(5,160)
300
Subtotal
6,398
(11,936)
Other comprehensive income for the year, net of tax
6,170
(11,815)
Total comprehensive income for the year
183,368
151,926
Total comprehensive income attributable to:
Equity holders of the Bank
175,165
8,203
147,503
4,423
183,368
151,926
— 23 —
ATTACHMENT C
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2014 (Amount in millions of Renminbi, unless otherwise stated)
As at 31 December
2014
2013
(Restated)
813,054
2,306,088
402,280
76,517
194,531
104,528
47,967
8,294,744
2,605,847
750,685
1,424,463
430,699
14,379
172,197
18,653
25,043
175,554
702,584
2,132,001
512,888
82,069
193,208
75,200
40,823
7,439,742
2,328,431
701,196
1,210,531
416,704
13,368
158,968
20,271
22,928
151,818
15,251,382
13,874,299
Due to banks and other financial institutions
Due to central banks
Bank notes in circulation
Placements from banks and other financial institutions
Derivative financial liabilities
Due to customers
— at amortised cost
— at fair value
Bonds issued
Other borrowings
Current tax liabilities
Retirement benefit obligations
Deferred income tax liabilities
Other liabilities
1,780,247
348,271
76,607
225,330
40,734
10,885,223
10,567,736
317,487
278,045
30,447
41,636
4,566
4,287
352,561
1,551,624
200,939
82,212
339,265
36,212
10,097,786
9,941,288
156,498
224,704
29,570
40,031
4,815
3,385
302,279
Total liabilities
14,067,954
12,912,822
288,731
71,745
130,797
(25)
(13,671)
96,105
159,341
407,836
279,365
—
115,369
(28)
(19,241)
80,225
144,450
323,776
1,140,859
923,916
42,569
37,561
1,183,428
961,477
15,251,382
13,874,299
ASSETS
Cash and due from banks and other financial institutions
Balances with central banks
Placements with and loans to banks and other financial institutions
Government certificates of indebtedness for bank notes issued
Precious metals
Financial assets at fair value through profit or loss
Derivative financial assets
Loans and advances to customers, net
Financial investments
— Available for sale
— Held to maturity
— Loans and receivables
Investment in associates and joint ventures
Property and equipment
Investment properties
Deferred income tax assets
Other assets
Total assets
LIABILITIES
EQUITY
Capital and reserves attributable to equity holders of the Bank
Share capital
Other equity instruments
Capital reserve
Treasury shares
Other comprehensive income
Statutory reserves
General and regulatory reserves
Undistributed profits
Total equity
Total equity and liabilities
— 24 —
ATTACHMENT C
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the Bank
As at 1 January 2014 (Restated)
Statutory
reserves
General and
regulatory
reserves
Undistributed
profits
Treasury
shares
Noncontrolling
interests
Total
(19,241)
80,225
144,450
323,776
(28)
37,561
961,477
—
5,570
—
—
169,595
—
8,203
183,368
—
17,974
—
—
—
—
—
—
27,340
—
71,745
—
—
—
—
—
—
—
71,745
—
—
—
—
15,888
—
(15,888)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
14,897
—
—
(14,897)
(54,755)
—
—
—
3
—
(3,234)
—
—
(57,989)
3
—
—
—
—
—
—
—
—
39
39
—
—
—
—
(2,546)
—
—
—
—
(8)
—
(6)
—
5
—
—
—
—
(2,546)
(9)
288,731
71,745
130,797
(13,671)
96,105
159,341
407,836
(25)
42,569
1,183,428
Other equity
Instruments
279,365
—
115,369
—
—
9,366
Total comprehensive income
Conversion of convertible bonds
Capital injection by other equity
instruments holders
Appropriation to statutory
reserves
Appropriation to general
and regulatory reserves
Dividends
Net change in treasury shares
Ordinary shares injection by
non-controlling shareholders
Equity component of convertible
bonds
Other
As at 31 December 2014
Other
Capital comprehensive
reserve
income
Share
capital
Attributable to equity holders of the Bank (Restated)
As at 1 January 2013
Total comprehensive income
Conversion of convertible bonds
Appropriation to statutory reserves
Appropriation to general and regulatory reserves
Dividends
Net change in treasury shares
Ordinary shares injection by non-controlling
shareholders
Equity component of convertible bonds
Other
As at 31 December 2013
Share
capital
Other
Capital comprehensive
reserve
income
279,147
114,984
—
Statutory
reserves
General and
regulatory
reserves
Undistributed
profits
Treasury
shares
Noncontrolling
interests
Total
(9,833)
65,362
131,909
243,123
(15)
36,865
861,542
—
(9,408)
—
—
156,911
—
4,423
151,926
218
—
—
—
—
449
—
—
—
—
—
—
—
—
—
—
14,863
—
—
—
—
—
12,545
—
—
—
(14,863)
(12,545)
(48,851)
—
—
—
—
—
(13)
—
—
—
(3,908)
—
667
—
—
(52,759)
(13)
—
—
—
—
(64)
—
—
—
—
—
—
—
—
—
(4)
—
—
1
—
—
—
181
—
—
181
(64)
(3)
279,365
115,369
(19,241)
80,225
144,450
323,776
(28)
37,561
961,477
— 25 —
ATTACHMENT D
OF DIRECTORS GRANTED BY THE SHAREHOLDERS’ MEETING
SCHEME ON THE AUTHORIZATION TO THE BOARD OF DIRECTORS GRANTED
BY THE SHAREHOLDERS’ MEETING
Chapter I General Provisions
Article 1 In order to safeguard the effective operation of the corporate governance mechanism of the Bank of China Limited
(the “Bank”), clarify the division of functions between the Shareholders’ Meeting and the Board of Directors, optimize the
system of delegations, improve corporate governance and promote reasonable decision making, this Scheme is formulated in
accordance with the Company Law of the People’s Republic of China, other relevant laws and regulations and the Articles of
Association of Bank of China Limited (“Articles of Association”).
Article 2 The Bank’s system of delegations include delegations from the Shareholders’ Meeting to the Board of Directors,
delegations from the Board of Directors to President, delegations from President to Head Office roles and branches and their
sub-delegations as well as other delegations. This Scheme is a fundamental part of the Bank’s system of delegations.
Article 3 A complete system of delegations is an important way of regulating the activities of corporate governance bodies
and ensuring the compliance, efficiency and reasonable decisions of the corporate governance mechanism of the Bank. The
Bank will optimize this Scheme on an ongoing basis to improve its system of delegations.
Article 4 Delegation of authority under this Scheme is subject to the following principles:
(1)
Compliance. Delegation of authority from the Shareholders’ Meeting to the Board of Directors shall conform to laws,
regulations, requirements of supervisory authorities and listing rules of stock exchanges where the Bank is listed with
respect to the approval authority of the Shareholders’ Meeting and the board of directors. The use of delegations to the
Board of Directors under this Scheme shall conform to listing rules of stock exchanges where the Bank is listed with
respect to the approval authority of the Shareholders’ Meeting or requirements of regulatory authorities.
(2)
Efficiency. Increasing the efficiency of decision making is the basic function of delegations. Delegations under this
Scheme shall fully reflect actual conditions of the Bank, match with the duties and functions of the Shareholders’
Meeting and the Board of Directors, meet work needs and improve work efficiency.
(3)
Supervision. The Bank shall strengthen supervision and inspection of the implementation of delegations and ensure the
compliance and effective use of delegated authority by means of self-examination, assessment and reporting.
(4)
Dynamicity. The Bank shall dynamically review and update this Scheme where necessary to pursue its continuous
optimization.
(5)
Soundness. Any revision of this Scheme shall follow the principles of soundness and prudence, build on adequate
consideration and assessment and ensure delegations are reasonably steady.
Article 5 The exercise of delegated authority under this Scheme is part of the Board of Directors’ functions and powers,
which are prescribed in laws, regulations and the Articles of Association.
Chapter II Roles and Responsibilities
Article 6 In the Bank’s system of delegations, the Shareholders’ Meeting is responsible for reviewing and approving the
scheme for delegation of authority from the Shareholders’ Meeting to the Board of Directors and relevant revisions and
regularly hearing the report on exercise of delegated authority of the Board of Directors.
Article 7 The Board of Directors is responsible for exercising delegated authority from the Shareholders’ Meeting, selfexamining and assessing the exercise of delegated authority as required by the Shareholders’ Meeting and reporting regularly
to the Shareholders’ Meeting.
— 26 —
ATTACHMENT D
Article 8 The Board of Directors may sub-delegate its delegated authority under this Scheme to the President and regularly
examine the exercise of sub-delegations.
Article 9 The Board of Supervisors shall conduct supervision in accordance with laws, regulations, Articles of Association of
the Bank and this Scheme.
Chapter III Scope of Delegated Authority
Section A Organizational Setup
Article 10 The establishment or cancellation of corporate entities or branches or adjustments to the internal organizational
structure of the Bank shall be approved by the Board of Directors.
Article 11 The merger or split-up of corporate entities established by the Bank shall be approved by the Board of Directors.
Article 12 The foregoing delegated authority, if involving any investment limit, shall be considered authority for the approval
of equity investment under this Scheme.
Section B Equity Investment, Merger, Acquisition and Disposal
Article 13 Unless otherwise required by the regulatory authorities, any increase or decrease in the capital of corporate
entities established by the Bank in the ordinary course of business shall be approved by the Board of Directors.
Article 14 An equity investment or M&A project in an amount of no more than 2% of net assets shall be approved by the
Board of Directors by a two-thirds vote. (A project in an amount of no more than 1% of net assets shall be approved by the
Strategic Development Committee.)
Article 15 The disposal of any equity investment in an amount of no more than 2% of net assets shall be approved by
the Board of Directors. (Any disposal in an amount of no more than 0.5% of net assets shall be approved by the Strategic
Development Committee.)
Article 16 Any debt-for-equity (debt investment intended at purchase for future conversion to equity) shall be considered
equity investment for the purposes of delegating approval authority.
Section C Asset Investment and Disposal
Article 17 Credit facilities shall be approved by the Board of Directors in full.
Article 18 Any purchase of credit assets shall be approved by the Board of Directors in full.
Article 19 Any disposal of credit assets shall be approved by the Board of Directors in full. Disposal of credit assets includes
but is not limited to reduction or exemption of principal and interest, repossession of assets and asset transfer and other new
disposal methods that may be permitted by future national policies or regulatory rules.
Article 20 The investment in a fixed asset (either real property or non-real property) in an amount of no more than RMB5
billion shall be approved by the Board of Directors by a two-thirds vote.
Article 21 The Board of Directors is delegated the authority to approve the disposal of a single fixed asset with a net book
value of no more than RMB4 billion, provided that the aggregate net book value of the asset and other fixed assets already
disposed of in the preceding four months as at the time of disposing of the asset does not exceed 33% of the latest audited
net value of fixed assets of the Bank.
— 27 —
ATTACHMENT D
Article 22 In principle, the land use right is included in the corresponding property investment amount; an investment
requiring separate purchase of the land use right shall be considered fixed asset (real property) investment for the purposes of
delegating approval authority.
Article 23 Any investment covered by the budget for IT electronic equipment shall be considered as fixed asset (non-real
property) investment for the purposes of delegating approval authority. Unbudgeted IT electronic equipment investments shall
be approved by the Board of Directors.
Section D Write-off of Assets
Article 24 The write-off of a bad credit asset with a principal value of no more than RMB2.5 billion shall be approved by the
Board of Directors.
Article 25 The write-off of a bad equity asset project with a principal value of no more than RMB1 billion shall be approved
by the Board of Directors.
Article 26 The write-off of a single fixed asset loss of no more than RMB4 billion (including obsolescence, reported loss and
inventory shortage of fixed asset) shall be approved by the Board of Directors.
Section E Bond Investment and Disposal
Article 27 Any investment in China’s government bonds, bonds issued by Chinese government agencies, bonds issued by
China’s local governments, bonds issued by sovereign and regional governments rated at the investment grade and above,
bonds issued by international financial organizations, notes issued by the People’s Bank of China, bonds issued by policy
banks and bonds issued by China Development Bank shall be approved by the Board of Directors.
Article 28 If the aggregate balance of investments in bonds, other than the foregoing bonds, issued by the same issuer does
not exceed 10% of net assets, such investments and their disposals shall be approved by the Board of Directors.
Section F Other Investments, Disposals and Write-off
Article 29 The investment in any other non-credit asset with a value of no more than RMB2.5 billion shall be approved by the
Board of Directors.
Article 30 The disposal of other non-credit assets shall be approved by the Board of Directors in full.
Article 31 The write-off of any other non-credit asset with a value of no more than RMB2 billion shall be approved by the
Board of Directors.
Article 32 The investment, disposal and write-off of investment properties are subject to rules governing the investment,
disposal and write-off of other non-credit assets.
Section G Related-party Transactions
Article 33 The Board of Directors is delegated the authority to approve related party transactions, except for the following
related party transactions subject to approval by the Shareholders’ Meeting:
(1)
Any related party transaction that accounts for at least 5% of the absolute value of net assets;
(2)
Any guarantee provided for a related party beyond the scope of normal banking businesses; and
— 28 —
ATTACHMENT D
(3)
Related party transactions subject to the approval of relevant independent shareholders, including:
(i)
Non-financial-assistance related party transactions not priced at fair value;
(ii)
Non-financial-assistance transactions conducted with related parties at the listed corporation level, priced at fair
value and with percentage ratios reaching or exceeding 5%;
(iii)
Financial-assistance related party transactions conducted by banking institutions, not priced at fair value and with
percentage ratios reaching or exceeding 5%;
(iv)
Financial-assistance transactions conducted between non-banking institutions and related parties at the listed
corporation level, priced at fair value and with percentage ratios reaching or exceeding 5%; and
(v)
Financial-assistance related party transactions conducted by non-banking institutions and not priced at fair value.
Financial assistance transactions as mentioned above include but are not limited to credit facilities, loans, indemnity and
guarantees.
Section H Outbound Donations
Article 34 The annual total amount of outbound donations of no more than RMB25 million plus 0.03% of annual net profit (or
RMB80 million in total, whichever is lower) and any single outbound donation of no more than RMB8 million shall be approved
by the Board of Directors.
Article 35 Any financial assistance for an area hit by any major emergency that exceeds the above limits shall be approved
by the Board of Directors by a two-thirds vote.
Section I Provision of Collateral and Other Non-Commercial-Banking Security Instruments
Article 36 Any provision of collateral or other non-commercial banking security instrument for an external party in an amount
of no more than RMB2 billion shall be approved by the Board of Directors.
Article 37 Any provision of collateral or other non-commercial banking security instruments for shareholders or actual
controller of the Bank shall be approved by the Shareholders’ Meeting.
Section J Other Operation and Management Matters
Article 38 Delegations to the Board of Directors with respect to other operation and management matters shall be in
accordance with relevant national laws and regulations, listing rules of stock exchanges where the Bank is listed, regulatory
rules and the Articles of Association.
Section K Sub-delegation
Article 39 The Board of Directors may sub-delegate all or part of the above delegated authority where appropriate, except
the authority to approve “Provision of Collateral and Other Non-Commercial-Banking Security Instruments or specified by
laws, regulations, listing rules of stock exchanges where the Bank is listed, requirements of regulatory authorities and the
Articles of Association”.
— 29 —
ATTACHMENT D
Chapter IV Management of Delegations
Section A Alteration of this Scheme
Article 40 The Bank will review the Scheme periodically to judge whether or not it is necessary to change it.
Article 41 Delegations to the Board of Directors shall be altered if any of the following circumstances takes place during the
term of this Scheme:
(1)
The adjustments to relevant laws regulations, ordinance, normative documents or listing rules of stock exchanges
where the Bank is listed affect the exercise of delegated authority;
(2)
Adjustments to valid internal policies and procedures of the Bank affect the exercise of delegated authority;
(3)
Any major changes in operating conditions, strategic development plan or market environment of the Bank require
alteration of delegated authority; or
(4)
The Board of Directors commits gross negligence or material breach of authority or otherwise materially violates this
Scheme.
The aforesaid material excess of power means the Board of Directors exercises the authority that it is forbidden to exercise
as stated in this Scheme or exceeds the granted authorities, which causes a serious consequence. The aforesaid material
breach of duty means the breach of duty by the Board of Directors has posed or is likely to pose a material operating risk or
loss for the Bank.
Article 42 This Scheme can be changed according to actual conditions of the Bank to the extent permitted by laws,
regulations, ordinances, normative documents, listing rules of stock exchanges where the Bank is listed, Articles of
Association and other valid internal governance policies and procedures of the Bank.
Article 43 Any alteration of this Scheme shall be proposed to the Shareholders’ Meeting for deliberation and approval. The
proposing person or organization shall have such right to submit proposals to the Shareholders’ Meeting as granted by the
Articles of Association and the Procedural Rules for the Shareholders’ Meeting of Bank of China Limited.
Article 44 Alteration of this Scheme includes supplementing or modifying all or part of this Scheme and terminating all or part
of delegated authority under this Scheme.
Section B Inspection of Scheme Implementation
Article 45 The Board of Directors shall self-examine, analyze and assess the implementation of this Scheme and report the
implementation status to the Shareholders’ Meeting.
Article 46 Any institution, department or person violating this Scheme will be disciplined in accordance with the internal
governance policies and procedures of the Bank.
Chapter V Supplementary Provisions
Article 47 This Scheme shall enter into force upon approval by the Shareholders’ Meeting and remain in force for an
initial term of one year. This Scheme shall be automatically extended for additional periods of one year unless and until the
Shareholders’ Meeting resolves to change this Scheme.
Article 48 Delegation matters of the Bank covered by this Scheme shall be governed by this Scheme on and after its
effective date.
— 30 —
ATTACHMENT D
Article 49 Any expenditures relating to an investment under this Scheme, either in phases or batches or not, shall be
deemed one investment project whose total amount shall be approved once in the aggregate.
Article 50 All amounts in this Scheme are denominated in Renminbi.
Article 51 In this Scheme, “below” and “more than” exclude the numbers following them, while “no more than”, “at least”
and “up to” include the numbers following them.
Article 52 In this Scheme, “net assets” and “total assets” refer to net assets and total assets stated in the latest audited
consolidated financial statements of the Bank.
Article 53 In this Scheme, “percentage ratios” mean: (i) asset ratio, which is the ratio of the total value of assets involved in a
transaction to the total value of assets stated in the latest annual/interim report of the Bank; (ii) profit ratio, which is the ratio of
the profit attributable to assets involved in a transaction to the latest audited annual profit of the Bank; (iii) income ratio, which
is the ratio of the income attributable to assets involved in relevant transaction to the latest audited annual income of the
Bank; (iv) consideration ratio, which is the ratio of the consideration involved in a transaction to the total market capitalization
of the Bank. The total market capitalization is that calculated based on the average closing price of the Bank’s securities for
the five working days including and immediately preceding the date of transaction; and (v) stock ratio, which is the ratio of
the nominal value of the capital stock issued as consideration by the Bank to the nominal value of the issued capital stock of
the Bank prior to relevant transaction. This ratio does not include the value of relevant debt capital (including any preference
shares).
Article 54 The power to interpret this Scheme shall rest with the Shareholders’ Meeting.
— 31 —
APPENDIX II
2014 REPORT ON CONNECTED TRANSACTIONS
In 2014, the Bank continued to implement laws, regulations and regulatory provisions, improved the connected transactions
management system, optimized the connected transactions monitoring system, implemented process and delicacy
management of connected transactions, made every effort to improve connected transactions management, and ensured
compliance of connected transactions. According to the Administrative Measures for Connected Transactions between
Commercial Banks and Their Insiders or Shareholders published by China Banking Regulatory Commission (hereinafter
referred to as “CBRC Rules”) and the Preparation Rules for Information Disclosure by Companies Offering Securities to the
Public No. 26 — Special Provisions on Information Disclosure of Commercial Banks published by CSRC, the report on the
Bank’s connected transactions in 2014 is hereby given as follows:
I.
Work of the Connected Transactions Control Committee
The Connected Transactions Control Committee held three meetings, at which it mainly reviewed and approved
the report on connected transactions in 2013 of the Bank, report on the Measures of Bank of China Limited for
Administration of Connected Transactions (2014) (hereinafter referred to as the “Administrative Measures”), report
on requesting the confirmation of connected party list of the Bank and schedule of connected transaction control
committee meetings in 2015. It also reviewed the special report on fund occupied by controlling shareholders and
other related parties in 2013, statement of the Bank’s connected transactions in 2013, report on latest amendments to
connected transaction rules and report on the Implementation Rules for the Management of Connected Transactions of
Bank of China Limited (2014) (hereinafter referred to as the “Implementation Procedures”).
During the reporting period, the Connected Transactions Control Committee paid constant attention to the
development of connected transactions monitoring system and transactions of key connected customers and
committee members put forward constructive suggestions on information disclosure and data analysis concerning
connected transactions.
II.
Connected transactions management
i.
Timely revised the connected transactions management system to fulfill regulatory requirements
In order to adapt to the latest revision of the Hong Kong Listing Rules and to optimize internal management
of connected transactions, the Bank revised the Administrative Measures and the Implementation Procedures
based on comprehensive assessment and demonstration. The revision mainly includes: First, the Bank adjusted
the scope of connected parties and excluded the directors, supervisors, CEOs, major shareholders and their
associates of insignificant subsidiaries. It also adjusted the scope of insiders according to changes in the
internal organizational structure; second, the Bank fine-tuned the connected party management mechanism and
included the monitoring mechanism for insignificant subsidiaries as part of the connected party management in
order to determine the scope of connected parties on the subsidiary level; third, the Bank adjusted the scope
of connected transactions with a third party so that the connected transactions with a third party would cover
all the circumstances described by the regulatory authorities; and fourth, the Bank made some adjustments to
the internal management structure, adjusting the functional departments of connected party management and
cancelling the requirements for submitting connected party transaction reports in a manual manner every six
months.
— 32 —
APPENDIX II
ii.
Optimized the connected transactions monitoring system and improved the technical level of connected
transactions management
The Bank continued to increase investment in system development based on the investment in the connected
transactions monitoring system from 2012 to 2013 and initiated the upgrade of the connected transactions
monitoring system in 2014. The project will be rolled out in two stages. The first stage was successfully
launched at the end of 2014. In respect of connected party management, the system enhanced the function
of automatically labeling connected parties, enabled the institutions within the Group to make inquiry of the
connected party list and provided relevant information for overseas branches and subsidiaries to meet the
regulatory requirements of the local areas and the banking sector for connected transactions supervision;
in respect of connected transactions monitoring, the system added the function of collecting the data of
personal and corporate loans, further enhanced the function of automatic alert about continuous connected
transactions, realized automatic collection of its data for the domestic CBRC database related to the Statement
on Transactions with Largest 20 Connected Parties, unified data interfaces and increased the types of connected
party transaction statements. The second stage will be launched in 2015, which will increase the types of
connected transactions for automatic data collection and the types of data to be collected and further optimize
functions such as maintenance of the connected party list, review of connected transactions and formulation of
statistics from the data.
iii.
Standardized the management of connected parties to lay a solid foundation for connected transactions
management
The Bank continued to implement the connected party management mechanism with real-time and annual
updates and appointed a lead department to supervise the connected party management departments to update
the connected parties in a real-time manner. The connected party management departments urged the person
who is obliged to make the connected party declaration to perform the obligation to improve the timeliness and
effectiveness of connected party information. Considering the revision of the scope of connected parties in the
Hong Kong Listing Rules that had a significant impact on the Bank, the Bank organized the whole group to
carry out a test on the insignificant subsidiaries to determine the scope of connected parties on the affiliate level
under the Hong Kong Listing Rules and issued the Notice on Carrying out the Latest Regulatory Requirements
of Hong Kong Exchange and Clearing Limited for Connected Transactions. It also made arrangements to delete
connected parties at the first available opportunity to reduce its cost of connected transactions management.
iv.
Reinforced the daily monitoring of connected transactions to ensure compliance of connected transactions
The Bank strictly followed the Administrative Measures and the Implementation Procedures in identifying
connected transactions, monitoring single and continuous connected transactions, reporting, reviewing and
supplementing the record of connected transactions and met the requirements of the laws, regulations and
regulatory authorities for the pricing of connected transactions, prohibition of specific connected transactions
and review and approval and disclosure of connected transactions. Considering the internal audit in 2013, the
Bank issued the Notice on Carrying out the Rectification of the Special Audit on Connected Transactions in
2013, requiring the whole bank to screen connected party customers every month and report the changes,
report connected transactions in advance according to the review standard for single connected transactions,
supplement the record of the transactions in the system every month according to the prescribed scope,
and organize self-inspections on connected transactions. The Bank provided continuous and well-targeted
professional trainings and transfer trainings for connected party transaction managers to further enhance
the compliance awareness of the institutions at all levels and improve the Group’s connected transactions
management.
To conclude, the Bank’s connected transactions management mechanisms delivered stable performance and all
the connected transactions were carried out in compliance with the laws and regulations in 2014, which ensured
the interests of all the shareholders and the Bank’s overall interests as well.
— 33 —
APPENDIX II
III.
Connected transactions
i.
Connected parties
By December 31 2014, the Bank had 1,717 connected parties including 876 connected natural persons,
representing a decrease of 2,649 compared with the same period of 2013 and accounting for 51% of all the
connected parties; the Bank had 841 connected legal persons or other organizations, representing a decrease
of 965 compared with the same period of 2013 and accounting for 49% of all the connected parties. Specifically,
the Bank had 766 connected parties under CBRC Rules, 199 connected parties under the Rules Governing the
Listing of Stocks on Shanghai Stock Exchange (hereinafter referred to as “Listing Rules of Shanghai Stock
Exchange”) and 1,057 connected parties under the Hong Kong Listing Rules.
ii.
Connected transactions
In 2014, the Bank’s connected transactions were determined according to the general business principle,
the terms and conditions of the transactions were fair and reasonable and ensured the interests of all the
shareholders and the Bank’s overall interests as well.
1.
Connected transactions under CBRC Rules
In 2014, the Bank had no material connected transactions, and had no connected transactions of asset
transfer and rendering of services.
In respect of credit transactions, the Bank strictly followed CBRC’s requirements for prohibiting providing
unsecured loans to connected parties, prohibiting providing guarantee for the financing of connected
parties and prohibiting accepting its own equity as pledge to provide loans, and all the supervision
indicators met CBRC’s regulatory requirements. As at December 31 2014, the net balance of the Bank’s
loans to connected parties was RMB77,618,000, accounting for 0.0056% of its net capital; specifically,
the net amount of loans to the largest connected party was RMB9,734,200, accounting for 0.0007% of
its net capital. The Bank’s loans to connected parties were priced with reference to the market price of a
third party and all the loans were Pass loans. As at December 31 2014, the Bank’s credit balance with the
connected parties accounted for 0.0009% of the Bank’s total credit balance.
2.
Connected transactions under the Listing Rules of Shanghai Stock Exchange
In 2014, the Bank had no connected transactions that shall be disclosed timely and submitted to the
Board of Directors and the Shareholders’ Meeting for review. In respect of transactions with connected
natural persons, the Bank carried out transactions with the Head Office’s directors, supervisors and
senior executives and their relatives, and the transactions were mostly deposits, wealth management
and loans. As at December 31 2014, the balance of the Bank’s loans to connected natural persons
was RMB16,350,200. In respect of transactions with connected legal persons, the Bank carried out
transactions with the other companies where the Bank’s independent directors work as independent
directors, and the transactions were mostly deposits, wealth management and loans.
3.
Connected transactions under Hong Kong Listing Rules
In 2014, the Bank carried out a series of connected transactions with its connected parties, and all the
transactions can be exempted from the requirement for reporting, annual review, announcement and
approval by independent shareholders pursuant to the Hong Kong Listing Rules. In respect of transactions
with connected natural persons, the Bank carried out transactions with the connected parties on the
subsidiary level and the transactions were mostly deposits, wealth management and loans. In respect of
transactions with connected legal persons, the Bank carried out transactions with the major shareholders
and their associate on the subsidiary level and the transactions were mostly deposits, treasury operations
and loans.
Board of Directors of Bank of China Limited
— 34 —
APPENDIX III
2014 DUTY REPORT OF INDEPENDENT DIRECTORS
In accordance with relevant provisions and requirements of the Company Law, the Guidelines for Introducing Independent
Directors to the Board of Directors of Listed Companies, the Code on Corporate Governance Practices of Hong Kong Listing
Rules as well as other laws and regulations applicable to the Bank, Articles of Association of the Bank and the Work Rules
of the Independent Directors of Bank of China Limited and the inherent requirements of sound corporate governance on
Independent Directors, the Bank’s independent directors discharged their duties with care and diligence, played an active role
in protecting the legitimate rights and interests of the Bank and its shareholders, including minority shareholders, promoted
the implementation of strategic development plans and contributed to the Bank’s development in 2014. The 2014 duty
performance report of independent directors is reported as follows:
I.
Basic Information of Independent Directors
The Board of Directors of the Bank is rationally structured and diversified. Currently, the Board of Directors comprises
fourteen members. Besides the Chairman, there are two executive directors, six non-executive directors and five
independent directors. The number of independent directors exceeds one-third of the total number of directors.
The number of directors complies with the quorum requirement specified in the Articles of Association and relevant
regulatory requirements. The independent directors serve as the Chairmen of the Audit Committee, Risk Policy
Committee, Personnel and Remuneration Committee and Connected Transactions Control Committee, respectively.
Major working experiences, professional backgrounds, and full-time or part-time employment by other institutions of
independent directors are as follows:
CHOW Man Yiu, Paul, Independent Director of the Bank since October 2010. Mr. CHOW was an executive director
and Chief Executive of Hong Kong Exchanges and Clearing Limited from April 2003 to January 2010. Hong Kong
Exchanges and Clearing Limited is listed on the Main Board of The Stock Exchange of Hong Kong Limited. Mr. CHOW
currently serves as the Chairman of Hong Kong Cyberport Management Company Limited and an independent nonexecutive director of China Mobile Limited and an independent non-executive director of Julius Baer Group Ltd. and
Bank Julius Baer Co. Ltd. Mr. CHOW also serves as a member of Advisory Committee on Innovation and Technology
of the Government of the Hong Kong Special Administrative Region (“HKSAR Government”) and a member of Asian
Advisory Committee of AustralianSuper Pty. Ltd. Mr. CHOW served as the Chief Executive, Asia Pacific Region (exJapan) of HSBC Asset Management (Hong Kong) Limited from 1997 to 2003. From 1992 to 1997 and 2003 to January
2010, Mr. CHOW was a member of the Standing Committee on Company Law Reform of the HKSAR Government.
Mr. CHOW also served as Director of the World Federation of Exchanges from 2003 to January 2010 and became
Chairman of its Working Committee in 2007 and 2008 and then its Vice-chairman in 2009. From 2001 to 2007, he was
a member of the Advisory Committee of the Hong Kong Securities and Futures Commission. Mr. CHOW graduated
from the University of Hong Kong with a Bachelor’s degree in Science (Engineering) in 1970. He obtained a Diploma in
Management Studies and an MBA in 1979 and 1982, respectively, from the University of Hong Kong. He also obtained
a Diploma in Finance (Distinction) from the Chinese University of Hong Kong in 1987, and was conferred the Doctor
of Social Science, honoris causa by the Open University of Hong Kong in 2010. He was awarded the title of Justice of
the Peace, the Silver Bauhinia Star and the Gold Bauhinia Star by the HKSAR Government in 2003, 2005 and 2010,
respectively. Mr. CHOW is a Distinguished Fellow of the Hong Kong Computer Society, an Honorary University Fellow of
the University of Hong Kong, an Honorary Fellow of the Hong Kong University of Science and Technology, a Fellow of
the Hong Kong Institute of Chartered Secretaries, a Fellow of the Institute of Chartered Secretaries and Administrators,
an Honorary Fellow of Hong Kong Securities and Investment Institute and a Certified General Accountant (Honorary) of
the Canadian Certified General Accountants Association of Hong Kong.
Jackson TAI, Independent Director of the Bank since March 2011. Mr. TAI has over 40 years of experience in the
banking industry. He held various key positions in DBS Group Holdings Limited (“DBS Group”) and DBS Bank Limited
(“DBS Bank”) including Vice Chairman and Chief Executive Officer of DBS Group and DBS Bank from 2002 to 2007,
President and Chief Operating Officer of DBS Group and DBS Bank from 2001 to 2002, and Chief Financial Officer
of DBS Bank from 1999 to 2001. He was also Director of DBS Bank (China) Limited from 2007 to 2008. Prior to
that, he was with J.P. Morgan & Co. Incorporated from 1974 to 1999. He was Managing Director in the Investment
Banking Division and held senior management positions in New York, Tokyo and San Francisco. He currently serves
— 35 —
APPENDIX III
as a director of a number of companies listed in New York and Singapore, including Director of Eli Lilly and Company
since 2013, Director of Royal Philips NV since 2011, and Director of MasterCard Incorporated since 2008. Mr. TAI is a
director of privately-held VaporStream since 2012, and is also a director of privately held Russell Reynolds Associates
since 2013. Previously, Mr. TAI was a director of Singapore Airlines from 2011 to 2014, NYSE Euronext from 2010
to 2013, ING Group NV from 2008 to 2010, and CapitaLand from 2001 to 2010. Mr. TAI is also currently a member
of the Asia-Pacific Advisory Board of Harvard Business School, trustee of Rensselaer Polytechnic Institute, director
of the Metropolitan Opera in New York, and a member of the Committee of 100. Mr. TAI graduated from Rensselaer
Polytechnic Institute with a Bachelor of Science degree in 1972, and from Harvard University with a Masters of
Business Administration degree in 1974.
Nout WELLINK, Independent Director of the Bank since October 2012. Mr. WELLINK served as a member of the
Executive Board of the Dutch Central Bank (“DNB”) for almost 30 years, the last 14 years as its President. He retired
from DNB on 1 July 2011. DNB is since 1999 an integral part of the European System of Central Banks, but at the
same time the national prudential supervisor of pension funds and insurance companies. Since the establishment of
the European Monetary Union, Mr. WELLINK served as a member of the Governing Council of the European Central
Bank. Starting from 1997, Mr. WELLINK served as a member of the Board of Directors of the Bank for International
Settlements, which he chaired from 2002 to 2006. From 2006 to 2011, he also chaired the Basel Committee on
Banking Supervision. From 1997 to 2011, Mr. WELLINK was a member of the Group of Ten Central Bank Governors
and Governor of the International Monetary Fund. Prior to his appointment in 1982 as an executive director of DNB,
Mr. WELLINK held several posts in the Dutch Ministry of Finance, including as the Treasurer General from 1977 to
1982. After studying Dutch law at Leyden University from 1961 to 1968 with a Master’s degree obtained, Mr. WELLINK
obtained a doctor’s degree in economics at the Rotterdam Erasmus University in 1975. In 2008 he received an
honorary doctorate from Tilburg University. From 1988 to 1998, Mr. WELLINK was an Extraordinary Professor at the
Free University in Amsterdam. Mr. WELLINK is currently Chairman of the Supervisory Board of the Leyden University,
and Chairman of the Public Interest Committee of PricewaterhouseCoopers Accountants N.V., and member of the
Systemic Risk Council and Member of the Advisory board of MNI Connect. Mr. WELLINK had many secondary
functions in the past, including member of the supervisory board of a bank and other enterprises on behalf of the Dutch
authorities, Chairman of the Board of Supervisors of the Netherlands Open Air Museum, member and treasurer of the
Royal Picture Gallery Mauritshuis and the Westeinde Hospital in The Hague. He was awarded a Knighthood in the Order
of the Netherlands Lion in 1980 and is since 2011 Commander of the Order of Orange-Nassau.
LU Zhengfei, Independent Director of the Bank since July 2013. Mr. LU Zhengfei currently serves as the distinguished
professor of Cheung Kong Scholar of the Accounting Department of Guanghua School of Management, Peking
University. He served as the head of the Accounting Department of the School of Business, Nanjing University between
1994 and 1999, and the head of the Accounting Department of Guanghua School of Management, Peking University
between 2001 and 2007, and Associate Dean of Guanghua School of Management, Peking University between
2007 and 2014. Mr. LU also currently serves as a consulting expert of the China Accounting Standards Committee
of the Ministry of Finance, an executive director of the Accounting Society of China and Deputy Director of Financial
Management Committee, an editorial board member of Accounting Research and Audit Research, and a member of the
Disciplinary Committee of the Chinese Institute of Certified Public Accountants. In 2001, he was elected as a member
of “The Hundred People Project of Beijing New Century Social Science Theoretical Talent”. In 2005, he was elected
to the “New Century Excellent Talent Support Plan” of the Ministry of Education, PRC. In 2013, he was elected to the
“Renowned Expert Training Project” (first batch) of the Ministry of Finance. In 2014, he was elected as distinguished
professor of Cheung Kong Scholar of the Ministry of Education, PRC. He currently serves as an independent nonexecutive director or an independent supervisor of a number of companies listed on the Hong Kong Stock Exchange,
including: Independent Non-executive Director of Sinotrans Ltd. since September 2004, Independent Non-executive
Director of Sino Biopharmaceutical Ltd. since November 2005, Independent Non-executive Director of China National
Materials Co., Ltd. since December 2009, and Independent Supervisor of PICC Property and Casualty Co., Ltd.
(“PICC P&C”) since January 2011. He was an independent non-executive director of PICC P&C from February 2004
to December 2010. Mr. LU graduated from Renmin University of China in 1988 with a Master’s degree in Economics
(Accounting), and received his Doctor’s degree in Economics (Management) from Nanjing University in 1996.
— 36 —
APPENDIX III
LEUNG Cheuk Yan, Independent Director of the Bank since September 2013. He is a former partner of Baker &
McKenzie, which he joined in July 1987 and from which he retired in June 2011. During 2009 and 2010, he served as a
part-time member of the Central Policy Unit of The Hong Kong Special Administrative Region Government. Mr. LEUNG
has been an independent non-executive director of MMG Limited, which is listed on The Stock Exchange of Hong Kong
Limited, since July 2012. Mr. LEUNG graduated from The Chinese University of Hong Kong with a Bachelor of Social
Science degree (First Class Honours) in 1976, obtained a Master of Philosophy degree from The University of Oxford
in 1981 and completed his legal study at The College of Law in England in 1982. He was admitted to practice as a
solicitor in Hong Kong in 1985, in England and Wales in 1988, in the Australian Capital Territory in 1989 and in Victoria,
Australia in 1991. He is a Senior Associate Member of St. Antony’s College, Oxford.
As stipulated in relevant domestic regulatory requirements and Rule 3.13 of the Hong Kong Listing Rules, the Bank
has received the annual confirmation in writing from each independent director with regard to his/her independence.
Based on these confirmations and relevant information in possession of the Board of Directors, the Bank confirms their
independent status.
II.
Annual Duty Performance of Independent Directors
1.
Attendance of Shareholders’ meetings, Board meetings and special committee meetings
In 2014, the Bank convened three shareholders’ meetings, including the first extraordinary general meeting on
25 March, the Annual General Meeting on 12 June, and the second extraordinary general meeting on 4 August
with 100% attendance of independent directors. The Bank convened 21 Board meetings, including nine on-site
meetings of the Board of Directors on 28 January, 26 March, 24 April, 13 May, 12 June, 30 June, 19 August, 30
October and 18 December, respectively and twelve meetings of the Board of Directors via written resolutions,
and the attendance rate of independent directors reached 100%. In 2014, the Bank convened thirty special
committee meetings. The attendance of independent directors at the shareholders’ meetings, Board meetings
and special committee meetings is given below:
Special Committees of the Board of Directors
Independent Directors
CHOW Man Yiu, Paul
Jackson TAI
Nout WELLINK
LU Zhengfei
LEUNG Cheuk Yan
Shareholders’
Meeting
Board of
Directors
Strategic
Development
Committee
3/3
3/3
3/3
3/3
3/3
21/21
21/21
21/21
21/21
21/21
—
10/10
10/10
—
—
Audit
Committee
6/6
6/6
6/6
6/6
6/6
Risk Policy
Committee
Personnel and
Remuneration
Committee
Connected
Transactions
Control
Committee
5/5
5/5
5/5
—
—
6/6
—
—
6/6
6/6
3/3
3/3
—
3/3
3/3
Note: Number of meetings attended in person/Number of meetings convened during term of office
2.
Convening of Shareholders’ Meetings
On 25 March 2014, the Bank held its 2014 First Extraordinary General Meeting in Beijing. This meeting
considered and approved the proposal on the election of Mr. CHEN Siqing as Executive Director of the Bank.
On 12 June 2014, the Bank held its 2013 Annual General Meeting in Beijing and Hong Kong by way of
video conference. Online voting for A-Share Holders was available. This meeting considered and approved
16 proposals including the 2013 work report of the Board of Directors, 2013 work report of the Board of
Supervisors, 2013 annual financial statements, the profit distribution plan for 2013, the 2014 annual budget
for fixed assets investment, the proposal regarding the appointment of Ernst & Young Hua Ming as the Bank’s
external auditor for 2014, the proposal regarding the Capital Management Plan of Bank of China for 2013–
2016, the proposal regarding the election of directors of the Bank, the proposal regarding the re-election of
external supervisors of the Bank, the remuneration plan for the Chairman of the Board of Directors, executive
directors, Chairman of the Board of Supervisors and shareholder supervisors of 2012, the proposal regarding
— 37 —
APPENDIX III
the amendments to the Articles of Association of the Bank, the proposal regarding the general mandate to issue
new shares, the proposal regarding the non-public issuance of domestic preference shares of the Bank, the
proposal regarding the non-public issuance of offshore preference shares of the Bank, the proposal regarding
the formulation of the Shareholder Return Plan for 2014 to 2016 and the proposal regarding dilution of current
returns and remedial measures upon the issuance of preference shares. The meeting also heard the 2013 report
on connected transactions and 2013 duty report of independent directors. Special resolutions comprised the
proposal regarding amendments to the Articles of Association of the Bank, the proposal regarding the general
mandate to issue new shares, the proposal regarding the non-public issuance of domestic preference shares of
the Bank and the proposal regarding the non-public issuance of offshore preference shares of the Bank.
On 4 August 2014, the Bank held its 2014 Second Extraordinary General Meeting in Beijing. This meeting
considered and approved the proposal on the election of Mr. WANG Wei as Non-executive Director of the Bank
and the remuneration distribution plan for Chairman of the Board of Directors, executive directors, the Chairman
of the Board of Supervisors and shareholder supervisors of 2013.
3.
Convening of the Board Meetings
In 2014, in accordance with the Articles of Association of the Bank, the Procedural Rules of the Board of
Directors of Bank of China Limited and the Work Rules of Independent Directors of Bank of China, independent
directors attended the Board meetings, reviewed proposals, actively took part in discussions, sought
clarifications and additional answers, put forward professional recommendations and expressed opinions
independently in a professional, objective, and responsible manner.
In 2014, the Bank convened nine on-site meetings of the Board of Directors on 28 January, 26 March, 24 April,
13 May, 12 June, 30 June, 19 August, 30 October and 18 December, respectively. At these meetings, the
Board of Directors reviewed and approved 60 proposals related to the Bank’s regular reports, the nomination
of candidates for directorships, changes in composition of special committees under the Board of Directors,
the issuance of preference shares, the 2013 corporate social responsibility report, the 2013 internal control selfassessment report, business plan and financial budget for 2015, among others. It also heard 12 reports related
to the Bank’s consolidated management, CBRC’s approval of the Bank’s plans to implement advanced capital
management approaches and other matters.
In 2014, the Bank convened twelve meetings of the Board of Directors via written resolutions. At these meetings,
the Board of Directors approved the proposals related to the Announcement regarding the Enforcement of
Undertakings by Shareholders of Bank of China Limited and the Announcement regarding the Surveillance Credit
Rating Results on the Convertible Bonds, among others.
4.
Convening of Meetings of the Special Committees of the Board of Directors
The Strategic Development Committee held six on-site meetings and four meetings by written resolution in 2014.
At these meetings, it mainly approved the proposal on profit distribution plan for 2013, the proposal regarding
the issuance of preference shares of the Bank, the proposal on early redemption of convertible bonds of the
Bank, among others. In response to changes in international and domestic economic and financial situations,
the Strategic Development Committee stepped up its analysis of the operating environment, paid constant
attention to opportunities and challenges arising from interest and exchange rate liberalisation, deposit insurance
scheme and other major policies on the Bank, and put forward many important comments and recommendations
regarding the implementation of the Bank’s strategic development plans and the improvement of its capital
management and strategic risk management, thus providing strong support to the scientific decision-making of
the Board of Directors.
The Audit Committee held six meetings in 2014. It mainly reviewed the Bank’s quarterly, interim and annual
financial reports, the annual internal control assessment report, the three-year internal audit development plan,
working priorities for 2015 and the proposal requesting the Annual General Meeting to approve the appointment
and audit fee of the external auditor for 2015. It also reviewed and approved the 2014 work plan and financial
— 38 —
APPENDIX III
budget for internal audit. In addition, it heard the report on the staged work of the internal audit function in 2013
and 2014, report on internal control progress in 2014, report on data quality, IT data security and fraud cases,
report on the internal control audit progress of external auditors and report on the audit plan and independence
compliance of external auditors in 2015.
Moreover, in response to changes in domestic and foreign economic trends, the Audit Committee paid close
attention to the Bank’s achievements in business performance improvement and cost-effectiveness control and
put forward many important opinions and suggestions regarding the improvement of the corporate governance
mechanism and internal control measures.
The Risk Policy Committee held five meetings in 2014, at which it mainly reviewed and approved the liquidity risk
management policy, contingency plan, stress test scenario setting, procedures and results, country risk limits
and market risk limits. The committee also regularly reviewed the Group risk reports and the consolidated risk
management reports.
In addition, the committee paid constant attention to critical risk issues, such as the Bank’s loans to certain
industries, in response to changes in overseas and domestic economic and financial conditions and adjustments
of the government’s macro policies. The committee members offered important opinions and recommendations
regarding the improvement of the Bank’s risk governance mechanism and the effective prevention and control of
risks, including credit risk, market risk, operational risk, legal and compliance risk, liquidity risk.
The Personnel and Remuneration Committee held five on-site meetings and one meeting by written resolution
in 2014. At these meetings, the committee mainly approved proposals on the performance evaluation and
remuneration distribution plan for the Chairman, executive directors and senior management members for 2013,
the implementation plan for performance evaluation of the Chairman, the President, the Chairman of the Board
of Supervisors and other senior management members in 2014, proposal for nomination of Mr. CHEN Siqing as
the President, executive director, Vice Chairman and member of the Strategic Development Committee of the
Board of Directors of the Bank, proposals for the nomination of Mr. ZHANG Jinliang, Mr. REN Deqi as the Vice
Presidents, appointment of non-executive directors and Chief Audit Officer, proposal on adjustment of members
of the committees of the Board of Directors, proposal on re-appointment of the company secretary of the Bank
and proposal on Performance Evaluation Procedure of Bank of China Limited for the Chairman, the President
and Other Senior Management Members (2014). The committee also reviewed the remuneration distribution plan
for the Chairman of the Board of Supervisors and shareholder supervisors in 2013. The committee put forward
important opinions and recommendations on further improving the Bank’s performance evaluation management
in line with regulatory requirements.
The Connected Transactions Control Committee held three meetings in 2014, at which it mainly reviewed and
approved the report on connected transactions in 2013 of the Bank, report on the Measures of Bank of China
Limited for Administration of Connected Transactions (2014), report on requesting the confirmation of connected
party list of the Bank and meeting schedule of the Connected Transactions Control Committee in 2015. It also
reviewed the special report on fund occupied by controlling shareholders and other related parties in 2013,
statement of the Bank’s connected transactions in 2013, report on latest amendments to connected transaction
rules and report on the Implementation Rules for the Management of Connected Transactions of Bank of China
Limited (2014). During the reporting period, the Connected Transactions Control Committee paid constant
attention to the development of connected transactions monitoring system and transactions of key connected
customers and committee members put forward constructive suggestions on information disclosure and data
analysis concerning connected transactions.
In 2014, the independent directors did not raise any objection to the resolutions of the Board of Directors or its
special committees and put forward constructive recommendations on the Bank’s financial budget, asset quality
management, consolidated management, capital replenishment, etc. These recommendations were adopted and
diligently implemented by the Bank.
— 39 —
APPENDIX III
5.
On-site Research
In 2014, independent directors paid great attention to the affairs of the Bank, kept updated of the Bank’s
business development, the implementation of strategies of the Board, and conducted on-site research at the
Bank’s domestic and overseas branches and institutions. Independent directors visited the branches and
institutions including the Shanghai RMB Trading Unit, Shanghai branch, Guangdong branch, Xiamen branch,
New York branch and Singapore branch, had in-depth communication with the local management, and put
forward suggestions for the business development and risk management. All five independent directors
participated in the on-site research with a total number of 11 per person visits.
6.
Support to the Work of Independent Directors by the Bank
In 2014, the Bank enhanced communication between the Board of Directors and the management, organized
pre-communication meetings and communication meetings, which improved independent directors’
understanding of the Bank’s business and management, and ensured higher efficiency of the deliberation of the
Board.
In 2014, the Bank continued to provide information support to independent directors, submitted nine reports
on the work of the management, and thirty-two Board communications to directors. In addition, the Bank also
provided relevant information to directors in a timely manner on major issues of concern to directors such as the
operation and management of the Bank, regulatory policies, business development.
In 2014, the Board of Directors paid significant attention to enhancing directors’ expertise, with a special focus
on arranging relevant trainings. All directors of the Bank fully observed Rule A.6.5 of the Corporate Governance
Code as well as PRC regulatory requirements, actively participating in specialised training including sessions on
Chinese macroeconomic and financial conditions, internet finance, innovative development in banking and antimoney laundering. The Bank also gave special presentations and trainings to the newly-appointed directors in
2014 regarding its business operations and directors’ responsibilities. The Bank’s directors have also taken it
upon themselves to enhance their professional skills in various ways, including writing and publishing professional
articles, attending forums and seminars and giving public lectures, and conducting on-site research exercises at
the Bank’s domestic and overseas branches.
III.
Major Matters of Attention to Independent Directors
1.
Connected Transactions
The Independent Directors of the Bank paid great attention to connected transactions management. The Bank
enhanced the management of its connected transactions and insider transactions. Following external regulatory
requirements, it revised its internal management rules on connected transactions. It updated databases of the
Group’s connected parties and solidified the basis for connected transactions management. It also optimised its
connected transactions monitoring system and enhanced the quality and efficiency of its connected transactions
management.
2.
Guarantee Business of the Bank and Capital Occupation
Pursuant to the provisions and requirements set forth in the circular (ZhengJianFa [2003] No.56) issued by CSRC,
and according to the principles of justice, fairness and objectivity, the Independent Directors of the Bank have
provided the following information regarding the Bank’s guarantee business: The guarantee business is one of
the Bank’s ordinary business activities. It has been approved by PBOC and CBRC and does not fall within the
scope of guarantees as defined in the Circular on Regulating Guarantee Businesses of Listed Companies. The
Bank has formulated specific management measures, operational processes and approval procedures in light of
the risks of the guarantee business and carried out this business accordingly. The Bank’s guarantee business
principally comprises letters of guarantee. As at 31 December 2014, the outstanding amount of letters of
guarantee issued by the Bank was RMB1,148.535 billion.
— 40 —
APPENDIX III
3.
Capital Management and Use of Raised Funds
All proceeds raised from initial public offerings, issuances of subordinated bonds and Convertible Bonds, rights
issue of A Shares and H Shares, issuance of tier 2 capital bonds and issuances of Offshore Preference Shares
and Domestic Preference Shares have been used to replenish the Bank’s capital and increase the level of capital
adequacy.
4.
Nomination and Remuneration of Senior Management Members
The Board of Directors and the Personnel and Remuneration Committee of the Bank reviewed and approved
the Proposal on the Nomination of Mr. Chen Siqing as Candidate for Executive Director of the Bank and it
was approved at the 2014 First Extraordianry General Meeting. The Board of Directors and the Personnel and
Remuneration Committee of the Bank also reviewed and approved the Proposal on Election of Mr. Chen Siqing
as the Vice Chairman of the Bank, the Proposal on Appointment of Mr. Chen Siqing as Member of the Strategic
Development Committee of the Board of Directors of the Bank, the Proposal on Appointment of Mr. Zhang
Jinliang as Executive Vice President of the Bank, the Proposal on the Appointment of Mr. Ren Deqi as Executive
Vice President of the Bank, and the Proposal on the Appointment of Mr. Xiao Wei as Chief Audit Officer of the
Bank.
The Board of Directors and the Personnel and Remuneration Committee of the Bank reviewed and approved the
2013 Remuneration Distribution Plans for the Chairman of the Board of Directors, Executive Directors, and the
Senior Management Members.
5.
Performance Results Forecast and Results Briefing
In 2014, the independent directors of the Bank reviewed relevant result reports with a focus on the authenticity,
accuracy and completeness of the reports, thus ensuring that there were no false recordings, misleading
statements, or significant omissions. The Bank published relevant result reports in a timely manner in accordance
with the provisions of the Shanghai Stock Exchange and the Hong Kong Stock Exchange.
6.
Appointment or Change of the Accountant
Upon approval by the 2013 Annual General Meeting, Ernst & Young Hua Ming LLP was reappointed as the
Bank’s domestic auditor and internal control auditor for 2014 and Ernst & Young was reappointed as the Bank’s
international auditor for 2014.
At the forthcoming 2014 Annual General Meeting, the Board of Directors will tender a resolution for review and
approval regarding the proposal on engaging Ernst & Young Hua Ming LLP as the Bank’s domestic auditor and
internal control auditor for 2015, providing audit services on its financial statements and internal control pursuant
to CAS; and engaging Ernst & Young as the Bank’s international auditor for 2015, providing financial statements
audit services pursuant to IFRS.
7.
Cash Dividend and Investors’ Return
In 2013, the Bank amended the Articles of Association related to the cash dividend. This amendment clarified the
Bank’s profit distribution principles, policy and adjustment procedures, the consideration process of the profit
distribution plan and other matters. The amendment stated that the Bank shall adopt cash dividend as the priority
form of profit distribution. Except under special circumstances, the Bank shall adopt cash as the form of dividend
distribution where there is profit in that year and the accumulated undistributed profit is positive, and that the
cash distribution of the dividend shall not be less than 10% of the profit after tax attributable to the ordinary
shareholders of the Bank. The amendment also stated that the Bank shall offer online voting to shareholders
when considering amendments to profit distribution policy and profit distribution plan.
— 41 —
APPENDIX III
In 2014, the Bank formulated the Shareholder Return Plan for 2014 to 2016 to specify the basic principles,
shareholder return plan and decision-making and supervisory mechanisms regarding the formulation,
implementation and amendment of the shareholder return of the Bank.
The procedure to formulate the aforementioned profit distribution policy was compliant, transparent and
complete. The criterion and ratio of the dividend are explicit and clear. The independent directors fully expressed
their opinions and the legitimate rights and interests of minority shareholders were fully respected and protected.
The procedure was in line with the provisions of the Articles of Association and other rules and regulations.
The profit distribution plan of ordinary shares of the Bank has been approved by the shareholders’ meeting.
In 2014, the Bank distributed dividends of ordinary shares for 2013 in strict compliance with the Articles of
Association, its dividend distribution policy and the shareholders’ meeting resolution on profit distribution.
8.
Anti-money Laundering
Independent Directors take the matter of anti-money laundering seriously. During the year, the Independent
Directors asked the Bank’s Legal and Compliance Department and the External Auditors to separately prepare
extensive assessment of the Bank’s anti-money laundering resources and capabilities. The Bank closely tracked
and studied international trends and changes in sanction compliance requirements of related countries and
regions, made timely assessments of risks and adjusted its business policies. It improved the functions of its
anti-money laundering system by upgrading the domestic system and promoting its application among overseas
institutions.
9.
Implementation of the Commitment of the Company and Shareholders
Independent Directors attached great importance to the implementation of the commitment of the Company
and Shareholders. Huijin made a “non-competing commitment” when the Bank launched its IPO to the effect
that, so long as Huijin continues to hold any of the Bank’s shares or is deemed to be a controlling shareholder
or a connected person of a controlling shareholder in accordance with the laws or listing rules of PRC, or of the
place where the Bank’s shares are listed, it will not engage or participate in any competing commercial banking
activities, including but not limited to extending loans, taking deposits and providing settlement, or providing
fund custodian, bank card and currency exchange services. However, Huijin may, through its investments in
other commercial banks, undertake or participate in certain competing businesses. In that regard, Huijin has
undertaken that it will: (i) treat its investment in commercial banks on an equal footing and not take advantage of
its status as a holder of the Bank’s shares or take advantage of the information obtained by virtue of such status
to make decisions or judgments against the Bank and in favour of other commercial banks; and (ii) exercise its
shareholder’s rights in the Bank’s best interests. During the reporting period, there was no breach of material
undertakings by Huijin.
10.
Implementation of Information Disclosure
In 2014, the Bank prepared and disclosed its regular and provisional reports in strict adherence to the principles
of truthfulness, accuracy, completeness, timeliness and fairness. It continuously enhanced the pertinence,
effectiveness and transparency of information disclosure in order to guarantee investors’ access to relevant
information. The Bank, guided by its strategic goal of “Serving Society, Delivering Excellence”, actively explored
and endeavoured in initiative information disclosure to provide more comprehensive information to investors. The
Bank pioneered numerous market-leading best practices, ensuring that the investors in the Chinese mainland
and Hong Kong are provided equal opportunity to access relevant information.
The Bank further improved the efficiency and quality of its information disclosure working mechanisms. It
closely tracked changes in the laws and regulatory rules, and revised the Information Disclosure Management
Measures of Bank of China Limited accordingly. The Bank formulated and implemented the Regular Report Work
Management Measures of Bank of China Limited to further strengthen the work procedures and quality control
of its regular reports. During the reporting period, no material disclosure error in the Bank’s regular reports
— 42 —
APPENDIX III
was found. The Bank strictly carried out the Rules Governing Persons with Knowledge of Inside Information of
Bank of China Limited and other relevant regulatory rules. It completed the registration of the insiders, kept the
memorandum on the progresses of significant events on record, and launched self-inspections to strictly prohibit
the insider trading. The Bank further reinforced the principal responsibility system and information correspondent
mechanism at the Group level and organised online training for information correspondents, so as to foster
a strong compliance culture of information disclosure. The Bank earnestly studied and actively coordinated
the information disclosure affairs in several financing projects during the reporting period, making innovative
disclosure arrangements and thus setting successful examples for the market. The Bank paid close attention to
relevant regulatory rules and requirements, revised the information disclosure work procedures and developed
case studies to improve the initiation, planning and long-term perspective of its management work, and thus
enhanced its information disclosure management ability and compliance level.
11.
Implementation of Internal Control
In 2014, independent directors paid great attention to the implementation of internal control, and reviewed the
internal control assessment report. The Bank performed self-assessment on internal control in line with the Basic
Standard for Enterprise Internal Control and its supporting guidelines. No material deficiencies were identified in
the internal control systems of the Bank, including both financial and non-financial reports. Ernst & Young Hua
Ming LLP, as the Bank’s external auditor for internal control, audited the effectiveness of the Bank’s internal
controls over financial reporting and issued a standard unqualified opinion. The 2014 Internal Control Assessment
Report of Bank of China Limited and the Auditor’s Report on Internal Control issued by Ernst & Young Hua Ming
LLP have been published on the websites of SSE, HKEx and the Bank.
12.
Operation of the Board of Directors and Special Committees
The Strategic Development Committee, the Audit Committee, the Risk Policy Committee, the Personnel and
Remuneration Committee, and the Connected Transactions Control Committee are set under the Board of
Directors of the Bank, and responsible for assisting the Board of Directors in performing duties from different
perspectives. The convening of the Board meetings and special committee meetings was in compliance with
legal, regulatory, and the Bank’s own guidelines, procedures, and major operational matters have gone through
relevant approval procedures, and were legal and effective. The Board of Directors and special committees
earnestly performed duties, improved their understanding of business operation, studied and reviewed matters
within their respective duties.
IV.
Comprehensive Assessment and Suggestions
In 2014, independent directors fulfilled their duties in good faith and diligently to safeguard the interests of the Bank and
its shareholders, including the interests of minority shareholders.
In 2015, independent directors will continue to perform their duties prudently, diligently and honestly, in line with
applicable laws and regulations, the Articles of Association of the Bank and the inherent requirements of sound
corporate governance on independent directors in order to safeguard the legitimate rights and interests of the Bank and
its shareholders, including the interests of minority shareholders and make greater contribution to the Bank.
Independent Directors of Bank of China Limited
Chow Man Yiu, Paul, Jackson Tai, Nout Wellink, Lu Zhengfei, Leung Cheuk Yan
— 43 —

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