COSCO SHIPPING Development Co., Ltd. - AGM Information 2016

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 a stockbroker and other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in China Shipping Container Lines Company Limited, you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

This circular does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of China Shipping Container Lines Company Limited.

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

(Stock code: 02866)

RE-APPOINTMENT OF PRC AUDITOR, INTERNAL CONTROL AUDITOR AND INTERNATIONAL AUDITOR FOR THE YEAR 2016 CONTINUING CONNECTED TRANSACTIONS AND MAJOR TRANSACTIONS – REVISION OF ANNUAL CAPS FOR CONTINUING CONNECTED TRANSACTIONS PROPOSED APPOINTMENT OF DIRECTORS PROPOSED APPOINTMENT OF SUPERVISORS PROVISION OF GUARANTEES FOR WHOLLY-OWNED SUBSIDIARIES AND RELEVANT AUTHORIZATION TO THE BOARD GRANT OF GENERAL MANDATE TO ISSUE A SHARES AND/OR H SHARES APPLICATION FOR REGISTERING MID-TERM NOTES AND SUPER SHORT-TERM FINANCING BILLS NOTICE OF 2015 ANNUAL GENERAL MEETING AND SUPPLEMENTAL NOTICE OF 2015 ANNUAL GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

A notice and a supplemental notice convening the AGM of China Shipping Container Lines Company Limited to be held at 1:00 p.m. on Thursday, 30 June 2016 at Holiday Inn Shanghai Jinxiu, No. 399 Jinzun Road, Pudong New Area, Shanghai, the PRC are set out on pages 78 to 84 of this circular.

If you intend to appoint a proxy to attend the AGM, you are required to complete and return the proxy forms in accordance with the instructions printed thereon. For holder of H Shares, the proxy forms should be returned to Computershare Hong Kong Investor Services Limited by hand or by post not less than 24 hours before the time appointed for holding the AGM or any adjourned meeting thereof.

Completion and return of the proxy forms will not preclude you from attending and voting in person at the AGM or at any adjourned meeting should you so wish, but in such event the instrument appointing a proxy shall be deemed to be revoked.

If you intend to attend the AGM in person or by proxy, you are required to complete and return the reply slip to Directorate Secretary Office of the Company not later than 20 days before the date of the AGM, i.e. no later than Friday, 10 June 2016.

The Company is a registered non-Hong Kong company as defined in the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) and it is registered under its Chinese name and under the English name “China Shipping Container Lines Company Limited”.

10 June 2016

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . .	30
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER . . . . . . . . . . . . . . . .	32
APPENDIX I – 2015 WORK REPORT OF INDEPENDENT DIRECTORS. .	48
APPENDIX II – FINANCIAL INFORMATION OF THE GROUP . . . . . . . . .	62
APPENDIX III – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .	65
APPENDIX IV – BIOGRAPHIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	72
NOTICE OF AGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	78
SUPPLEMENTAL NOTICE OF AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	81

– i –

DEFINITIONS

In this circular, unless the contents otherwise requires, the following expressions have the following meanings:

“ AGM ”
the forthcoming annual general meeting of the Company to be convened at Holiday Inn Shanghai Jinxiu, No. 399 Jinzun Road, Pudong New Area, Shanghai, the PRC on Thursday, 30 June 2016 at 1:00 p.m.
“ Articles of Association ”
the articles of association of the Company, as revised and amended from time to time
“ associate ” has the meaning ascribed thereto under the Listing Rules
“ Board ” the board of directors of the Company
“ CBRC ” China Banking Regulatory Commission (中國銀行業監督管理委員會)
“ China COSCO Shipping ” China COSCO Shipping Corporation Limited (中國遠洋海運集團有限公司), a PRC state-owned enterprise and the indirect controlling shareholder of the Company, having an approximately 39.02% shareholding interest in the Company through China Shipping as at the Latest Practicable Date
“ China Shipping ” China Shipping (Group) Company (中國海運(集團)總公司), a PRC state-owned enterprise and the controlling shareholder of the Company, together with its subsidiaries having an approximately 39.02% shareholding interest in the Company as at the Latest Practicable Date
“ China Shipping Group ”

China Shipping and its subsidiaries (excluding the Group)

“ Company ”
China Shipping Container Lines Company Limited (中海集裝箱運輸股份有限公司), a joint stock limited company incorporated in the PRC, of which 3,751,000,000 H shares are listed on the Stock Exchange and 7,932,125,000 A shares are listed on the Shanghai Stock Exchange
“ CSCL HK ”
China Shipping Container Lines (Hong Kong) Co., Ltd. (中海集裝箱運輸(香港)有限公司), a limited liability company incorporated in Hong Kong, which is whollyowned by the Company as at the Latest Practicable Date

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DEFINITIONS

“ CS Finance Company ”
China Shipping Finance Company Limited (中海集團財務有限公司), a limited liability company incorporated in the PRC, owned as to 65%, 5%, 25% and 5% by the Company, China Shipping, China Shipping Development Company Limited and China Shipping Haisheng Co., Ltd. (中海(海南)海盛船務股份有限公司) as at the Latest Practicable Date, which is a connected subsidiary of the Company
“ CS Investment ”
China Shipping Investment Co., Ltd. (中海集團投資有限公司), a limited liability company incorporated in the PRC, which is a wholly-owned subsidiary acquired through the Restructuring by the Company as at the Latest Practicable Date
“ CS Leasing ”
China Shipping Leasing Co., Ltd. (中海集團租賃有限公司), a limited liability company incorporated in the PRC, which is a wholly-owned subsidiary acquired through the Restructuring by the Company as at the Latest Practicable Date
“ Director(s) ” the director(s) of the Company
“ Existing Annual Caps ”
the annual caps for the following continuing connected transactions contemplated under the Financial Services Framework Agreement for the year ending 31 December 2016 previously approved by the Board and/or the Independent Shareholders in respect of: (i) maximum daily balance of deposits (including accrued interest and handling fee) to be placed by the Group with CS Finance Company; (ii) maximum daily outstanding balance of loans (including accrued interest and handling fee) to be granted by CS Finance Company to the Group; and (iii) settlement services to be provided by CS Finance Company to the Group, which are RMB6.5 billion, RMB6.5 billion and US$180 million, respectively
“ Financial Services Framework Agreement ”
the financial services framework agreement dated 31 December 2009 entered into between the Company and China Shipping, pursuant to which China Shipping shall procure CS Finance Company to provide the Group with a range of financial services including (i) deposit services; (ii) loan services; (iii) settlement services; and (iv) other financial services as approved by CBRC

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DEFINITIONS

“ General Mandate ”
the proposed general mandate to issue A shares and/or H shares of the Company, details of which are set out in this circular
“ Group ” the Company and its subsidiaries
“ Hong Kong ”

the Hong Kong Special Administrative Region of the PRC

“ Independent Board Committee ”
a committee of the Board comprising all the independent non-executive Directors, namely, Ms. Zhang Nan, Mr. Guan Yimin, Mr. Shi Xin, Ms. Hai Chi Yuet and Mr. Graeme Jack
“ Independent Director(s)” or the independent non-executive director(s) of the Company “Independent Non-executive Director(s) ”
“ Independent Financial Adviser ”
Messis Capital Limited, a licensed corporation to carry on Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO, being the independent financial adviser to the Company in respect of the Proposed Transactions and the Revised Annual Caps
“ Independent Shareholders ”
the shareholders of the Company except the China Shipping Group and its associates who are legally and/or beneficially interested in the shares of the Company
“ Latest Practicable Date ”
7 June 2016, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular
“ Listing Rules ” the Rules Governing the Listing of Securities on the Stock Exchange
“ Model Code ” the Model Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix 10 to the Listing Rules
“ PBC ” People’s Bank of China (中國人民銀行)
“ percentage ratio ”
has the meaning ascribed thereto under the Listing Rules

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DEFINITIONS

“ PRC ”
“ Proposed Authorization ”
“ Proposed Transactions ”
“ Restructuring ”
“ Revised Annual Cap(s) ”
“ RMB ”
“ SFO ”

the People’s Republic of China which for the purposes of this circular excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

the proposed authorization for the Board to approve the provision of guarantees for CSCL HK and CS Leasing, details of which are set out in this circular

the continuing connected transactions contemplated under the Financial Services Framework Agreement in respect of the (i) deposit services; (ii) loan services; and (iii) settlement services

a series of inter-conditional transactions under the proposed material assets restructuring plan which was approved at the extraordinary general meeting of the Company at 1 February 2016, mainly involving the Company and China COSCO Holdings Company Limited, including transactions contemplated under (1) the equity acquisition agreements; (2) the equity sales agreements; and (3) the assets lease framework agreement. For more details, please refer to the circular of the Company dated 31 December 2015
the annual caps for the following continuing connected transactions contemplated under the Financial Services Framework Agreement for the year ending 31 December 2016 in respect of: (i) maximum daily balance of deposits (including accrued interest and handling fee) to be placed by the Group with CS Finance Company; (ii) maximum daily outstanding balance of loans (including accrued interest and handling fee) to be granted by CS Finance Company to the Group; and (iii) settlement services to be provided by CS Finance Company to the Group, as adjusted by the Board on 13 May 2016 subject to the approval of the Independent Shareholders, which are RMB9 billion, RMB9 billion and US$800 million, respectively
Renminbi, the lawful currency of the PRC

the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) as amended and supplemented from time to time

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DEFINITIONS

“ Shareholder(s) ” the shareholder(s) of the Company “ Stock Exchange ” The Stock Exchange of Hong Kong Limited “ subsidiary ” has the meaning ascribed thereto under the Listing Rules “ Supervisor(s) ” the supervisor(s) of the Company “ Supervisory Committee ” the supervisory committee of the Company “ US dollars ” or “ US$ ” United States dollars, the lawful currency of the United States of America “ % ” per cent

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LETTER FROM THE BOARD

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

(Stock code: 02866)

Executive Directors: Ms. Sun Yueying Mr. Huang Xiaowen Mr. Wang Daxiong Mr. Liu Chong

Non-executive Directors: Mr. Ding Nong Mr. Yu Zenggang Mr. Yang Jigui Mr. Han Jun Mr. Chen Jihong

Independent non-executive Directors: Ms. Zhang Nan Mr. Guan Yimin Mr. Shi Xin Ms. Hai Chi Yuet Mr. Graeme Jack

Legal address in the PRC: Room A - 538 International Trade Center China (Shanghai) Pilot Free Trade Zone Shanghai PRC

Principal place of business in the PRC: Maritime Research Building 628 Minsheng Road Pudong New Area Shanghai The PRC

Principal place of business in Hong Kong: 31/F, Tower 2 Kowloon Commerce Centre 51 Kwai Cheong Road, Kwai Chung New Territories, Hong Kong

10 June 2016

To the Shareholders Dear Sir or Madam,

2015 REPORT OF THE BOARD 2015 REPORT OF THE SUPERVISORY COMMITTEE 2015 WORK REPORT OF INDEPENDENT DIRECTORS 2015 FINANCIAL STATEMENTS AND AUDITORS’ REPORT 2015 ANNUAL REPORT 2015 PROFIT DISTRIBUTION PLAN REMUNERATION OF DIRECTORS AND SUPERVISORS FOR THE YEAR 2016 RE-APPOINTMENT OF PRC AUDITOR, INTERNAL CONTROL AUDITOR AND INTERNATIONAL AUDITOR FOR THE YEAR 2016 CONTINUING CONNECTED TRANSACTIONS AND MAJOR TRANSACTIONS – REVISION OF ANNUAL CAPS FOR CONTINUING CONNECTED TRANSACTIONS PROPOSED APPOINTMENT OF DIRECTORS PROPOSED APPOINTMENT OF SUPERVISORS PROVISION OF GUARANTEES FOR WHOLLY-OWNED SUBSIDIARIES AND RELEVANT AUTHORIZATION TO THE BOARD GRANT OF GENERAL MANDATE TO ISSUE A SHARES AND/OR H SHARES APPLICATION FOR REGISTERING MID-TERM NOTES AND SUPER SHORT-TERM FINANCING BILLS NOTICE OF 2015 ANNUAL GENERAL MEETING AND SUPPLEMENTAL NOTICE OF 2015 ANNUAL GENERAL MEETING

* The Company is a registered non-Hong Kong company as defined in the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) and it is registered under its Chinese name and under the English name “China Shipping Container Lines Company Limited”.

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LETTER FROM THE BOARD

INTRODUCTION

The purpose of this circular is to provide you with information regarding the resolutions to be proposed at the AGM. This circular together with the notice and supplemental notice of AGM contain all information reasonably necessary to enable the Shareholders to make informed decisions as to whether to vote for or against the resolutions to be proposed at the AGM.

At the AGM, ordinary resolutions will be proposed to approve, among others, (i) the report of the Board of the Company for the year 2015; (ii) the report of the Supervisory Committee of the Company for the year 2015; (iii) the work report of the Independent Directors of the Company for the year 2015; (iv) the financial statements and the auditors’ report of the Company for the year 2015; (v) the annual report of the Company for the year 2015; (vi) the profit distribution plan of the Company for the year 2015; (vii) the remuneration of the Directors and the Supervisors for the year 2016; (viii) the re-appointment of the PRC auditor, internal control auditor and international auditor of the Company for the year 2016; (ix) the revision of annual caps for the continuing connected transactions under the Financial Services Framework Agreement; (x) proposed appointment of non-independent Directors (including executive Directors and non-executive Directors); (xi) proposed appointment of the Independent Non-Executive Directors; and (xii) proposed appointment of Supervisors.

At the AGM, special resolutions will be proposed to approve (i) the provision of guarantees for wholly-owned subsidiaries of the Company and relevant authorization to the Board; (ii) the grant of general mandate to issue A shares and/or H shares of the Company; and (iii) application for registering mid-term notes and super short-term financing bills.

ORDINARY RESOLUTIONS

1. 2015 REPORT OF THE BOARD

An ordinary resolution will be proposed at the AGM to approve the report of the Board of the Company for the year ended 31 December 2015. The full text of the aforesaid report of the Board is set out in the annual report of the Company which has been despatched on 30 April 2016.

The 2015 report of the Board was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval.

2. 2015 REPORT OF THE SUPERVISORY COMMITTEE

An ordinary resolution will be proposed at the AGM to approve the report of the Supervisory Committee of the Company for the year ended 31 December 2015. The full text of the aforesaid report of the Supervisory Committee is set out in the annual report of the Company which has been despatched on 30 April 2016.

The 2015 report of the Supervisory Committee was considered and approved by the Supervisory Committee on 30 March 2016 and is hereby proposed at the AGM for consideration and approval.

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LETTER FROM THE BOARD

3. 2015 WORK REPORT OF INDEPENDENT DIRECTORS

An ordinary resolution will be proposed at the AGM to approve the work report of the Independent Directors of the Company for the year ended 31 December 2015. The full text of the aforesaid report of the Independent Directors is set out in Appendix I of this circular.

The 2015 work report of the Independent Directors was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval.

4. 2015 FINANCIAL STATEMENTS AND AUDITORS’ REPORT

An ordinary resolution will be proposed at the AGM to approve the audited financial statements and the auditors’ report of the Company and its subsidiaries for the year ended 31 December 2015. The full text of the aforesaid financial statements and auditors’ report is set out in the annual report of the Company which has been despatched on 30 April 2016.

The 2015 financial statements and auditors’ report was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval.

5. 2015 ANNUAL REPORT

An ordinary resolution will be proposed at the AGM to approve the annual report of the Company for the year ended 31 December 2015. The aforesaid annual report has been despatched and also published on the website of the Stock Exchange (http://www.hkexnews.hk) and the website of the Company (http://www.cscl.com.cn) on 30 April 2016.

The 2015 annual report was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval.

6. 2015 PROFIT DISTRIBUTION PLAN

An ordinary resolution will be proposed at the AGM to approve the proposed profit distribution plan of the Company for the year ended 31 December 2015 in accordance with the Articles of Association.

The accumulated loss calculated under PRC accounting standards of the Company and the Group as at 31 December 2015 was RMB2,374 million and RMB6,919 million, respectively. It was proposed that no profit distribution would be made and no capitalization of capital common reserve fund would be made for the year 2015.

The 2015 profit distribution plan was considered and approved by the Board on 30 March 2016 and is hereby proposed at the AGM for consideration and approval.

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LETTER FROM THE BOARD

7. REMUNERATION OF DIRECTORS AND SUPERVISORS FOR THE YEAR 2016

An ordinary resolution will be proposed at the AGM to approve the remuneration of the Directors and the Supervisors of the Company for the year 2016, details of which are as follows:

(1) Directors and Supervisors appointed by Shareholders will not receive remuneration from the Company.
(2) Directors and employee Supervisors who are employed as management or nonmanagement personnel of the Company receive remuneration after the remuneration proposal of their post has been approved, and receive no additional remuneration as a Director or employee Supervisor.
(3) The remuneration standard with regard to domestic Independent Directors and Supervisors of the Company is RMB150,000 per year (before tax). Mr. Shi Xin, an Independent Director, and Mr. Shen Kangchen, an independent Supervisor, will not receive remuneration from the Company at their personal request. The remuneration standard with regard to foreign Independent Directors of the Company is RMB300,000 per year (before tax).

The aforesaid resolution was considered and approved by the Board on 20 April 2016 and is hereby proposed at the AGM for consideration and approval.

8. RE-APPOINTMENT OF PRC AUDITOR, INTERNAL CONTROL AUDITOR AND INTERNATIONAL AUDITOR FOR THE YEAR 2016

Ordinary resolutions will be proposed at the AGM to approve:

(a) To re-appoint Baker Tilly China Certified Public Accountants as the Company’s PRC auditor for the year of 2016, and to authorise the audit committee of the Board to determine its remuneration.
(b) To re-appoint Baker Tilly China Certified Public Accountants as the Company’s internal control auditor for the year of 2016, and to authorise the audit committee of the Board to determine its remuneration.
(c) To re-appoint Ernst & Young, Hong Kong Certified Public Accountants as the Company’s international auditor for the year of 2016, and to authorise the audit committee of the Board to determine its remuneration.

The aforesaid resolutions were considered and approved by the Board on 30 March 2016 and are hereby proposed at the AGM for consideration and approval.

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LETTER FROM THE BOARD

9. REVISION OF ANNUAL CAPS FOR THE CONTINUING CONNECTED TRANSACTIONS UNDER THE FINANCIAL SERVICES FRAMEWORK AGREEMENT

A. Introduction

References are made to the Company’s announcements dated 6 November 2015, 22 December 2015 and 13 May 2016 and circular to the Shareholders dated 4 December 2015.

Owing to the reasons set out below, the Directors believe that the Existing Annual Caps will not be sufficient for the Group’s current requirements and therefore propose to revise the Existing Annual Caps to RMB9 billion, RMB9 billion and US$800 million for the year ending 31 December 2016, respectively, subject to the approval of the Independent Shareholders by way of ordinary resolutions at the AGM.

B. Summary of the Financial Services Framework Agreement

As previously disclosed, on 31 December 2009, the Company entered into the Financial Services Framework Agreement with China Shipping, pursuant to which China Shipping shall procure CS Finance Company to provide the Group with a range of financial services including (i) deposit services; (ii) loan services; (iii) settlement services; and (iv) other financial services as approved by CBRC. As at the Latest Practicable Date, save for the deposit, loan and settlement services as disclosed below, CS Finance Company has not provided any other financial services to the Group. If the Group and CS Finance Company enter into any other financial services in the future, the Company will comply with the applicable requirements under the Listing Rules (including without limitation, reporting, announcement, annual review and independent shareholders’ approval requirements).

The principal terms of the Financial Services Framework Agreement are summarised below.

(1) General Terms

The Financial Services Framework Agreement requires in general terms that:

(a) the quality of such products and services to be provided should be satisfactory to the recipient;
(b) the price at which such products and services are to be provided must be fair and reasonable; and
(c) the terms and conditions on which such products and services are to be provided should be no less favourable to the Group than those offered from or to (as appropriate) the relevant connected persons, their subsidiaries and/or associates to or from (as appropriate) independent third parties; and offered from or to (as appropriate) independent third parties to or from (as appropriate) the Group.

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LETTER FROM THE BOARD

(2) Price Determination

Under the Financial Services Framework Agreement, CS Finance Company shall accept deposits from the Group at interest rates not lower, and thus no less favourable, than (a) the lower limit of the relevant rates stipulated by PBC for the same type of deposits; (b) the interest rates offered by any independent third parties for the same type of deposits; or (c) the interest rates at which CS Finance Company accepts from any independent third parties for the same type of deposits.

Under the Financial Services Framework Agreement, CS Finance Company shall provide loan to the Group at interest rates not higher, and thus no less favourable, than (a) the relevant rates stipulated by PBC for the same type of loan; (b) the interest rates offered by any independent third parties for the same type of loan; or (c) the interest rates at which CS Finance Company provides to any independent third parties with the same credit rating for the same type of loan.

Under the Financial Services Framework Agreement, the fees charged by CS Finance Company for the provision of settlement services to the Group shall not be higher, and thus no less favourable, than (a) the upper limit (if applicable) of the fees stipulated by PBC to be charged for the same type of services; (b) the fees charged by any independent third party for the same type of services; or (c) the fees charged by CS Finance Company for the same type of services on any independent third party with the same credit rating.

(3) Term and Termination

The initial term of the Financial Services Framework Agreement is three years, with effect from 31 December 2009. Upon the expiry of such initial term, such agreement shall automatically extend for further terms of three years (subject to compliance of the Listing Rules), unless any relevant party gives to the other party(ies) a written notice of termination at least three months prior to such expiry date. During the term of the Financial Services Framework Agreement, termination of any implementation agreement described below may be effected from time to time by any one of the parties to the relevant implementation agreement providing at least a three months’ written notice of termination to the other party(ies).

(4) Implementation Agreements

It is expected that from time to time and as required, individual implementation agreements may be entered into between the Group, China Shipping, and CS Finance Company, and their respective subsidiaries and/or associates, as appropriate. Each implementation agreement will set out the specific products and services requested by the relevant party and any detailed technical and other specifications which may be relevant to those products or services. The implementation agreements may only contain provisions which are in all material respects consistent with the binding principles,

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LETTER FROM THE BOARD

guidelines, terms and conditions in accordance with which such products and services are required to be provided as contained in the Financial Services Framework Agreement. As the implementation agreements are simply further elaborations on the provision of the products and services as contemplated by the Financial Services Framework Agreement, they do not constitute new categories of continuing connected transactions under Chapter 14A of the Listing Rules.

For each of the implementation agreements in respect of the deposit services to be provided to the Group as contemplated under this agreement, such deposit services are provided in accordance with the following pricing principles: (a) the domestic RMB deposits shall be taken at a price based on the benchmark interest rate stipulated by PBC or at the prime rate (the floating upward) within the floating range allowed by such stipulation; and (b) the foreign and domestic US dollars deposits shall be taken at a price based on the prevailing market rates which should be obtained by making inquiries of various banks so that the price determined is not lower than the highest one quoted by such banks.

For each of the implementation agreements in respect of the loan services to be provided to the Group as contemplated under this agreement, such loan services are provided in accordance with the following pricing principles: (a) the domestic RMB loans shall be provided at a price based on the benchmark interest rates stipulated by the PBC or at the prime interest rate (the floating downward) within the floating range allowed by such stipulation; and (b) the foreign and domestic US dollars loans shall be provided at a price based on the prevailing market rates which should be obtained by making inquiries of various banks so that the price determined is not higher than the lowest one quoted by such banks.

For each of the implementation agreements in respect of the settlement services to be provided to the Group as contemplated under this agreement, the settlement services are provided in accordance with the prevailing market rates which should be obtained by making inquiries of various banks to ensure the price is more favorable than those offered by other banks.

(5) Internal Control Procedures

Before entering into any implementation agreements, the Company will implement the following procedures to ensure the terms offered by the relevant connected parties are no less favourable than those available from independent third parties:

(i) the relevant executives of the finance department of the Company will review contemporaneous prices and other relevant terms offered by at least two commercial banks, all being independent third parties, operating at the same or nearby area before the commencement of the relevant transaction, and ensure the terms offered by the relevant connected persons are fair and reasonable and comparable to those offered by independent third parties. In the case where the offers made by independent third parties are more favourable to the Company, the Company may take up those offers; and

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LETTER FROM THE BOARD

(ii) the supervision department of the Company will periodically review and inspect the process of the relevant continuing connected transactions.

By implementing the above procedures, the Directors consider that the Company has established sufficient internal control measures to ensure the pricing basis of each continuing connected transaction will be on market terms and on normal commercial terms and will be fair and reasonable to the Company and the Shareholders as a whole.

The finance department of the Company will also collect statistics of each continuing connected transaction on a quarterly basis to ensure the annual caps approved by the Independent Shareholders are not exceeded.

C. Historical Figures, Existing Annual Caps and Revised Annual Caps

The following table sets out the historical figures, existing annual caps and revised annual caps of continuing connected transactions under the Financial Services Framework Agreement:

					(RMB’000)
Transactions under the		Historical figures	for 2013, 2014,		Proposed
Financial Services Framework		2015 and three	months ended	Existing annual	revised annual
Agreement		31 March 2016		caps for 2016	caps for 2016
(1)	maximum daily balance of	3,741,887	(2013)	6,500,000	9,000,000
	deposits (including accrued	4,194,975	(2014)
	interest and handling fee)	4,783,426	(2015)
	to be placed by the Group	5,306,903	(three months
	with CS Finance Company		ended 31 March
			2016, unaudited)
(2)	maximum daily	364,000	(2013)	6,500,000	9,000,000
	outstanding balance of	1,211,900	(2014)
	loans (including accrued	22,500	(2015)
	interest and handling fee)	2,000,000	(three months
	to be granted by CS		ended 31 March
	Finance Company to the		2016, unaudited)
	Group
					(US$’000)
(3)	settlement services to be	7,240	(2013)	180,000	800,000
	provided by CS Finance	82,309	(2014)
	Company to the Group	30,198	(2015)
		179,999	(three months
			ended 31 March
			2016, unaudited)

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LETTER FROM THE BOARD

The duly approved annual caps for 2016 were worked out by reference to the historical amounts set out above, as well as the market conditions and the Group’s needs at that time.

Given that the acquisitions of relevant companies contemplated under the Restructuring have been gradually completed, and considering the historical business relations between such acquired companies and CS Finance Company and their future demands, the Directors believe that the Existing Annual Caps will not be sufficient for the Group’s current requirements and therefore propose to revise the Existing Annual Caps to RMB9 billion, RMB9 billion and US$800 million for the year ending 31 December 2016, respectively. In arriving at such Revised Annual Caps, the Directors have considered the following factors:

(1) In respect of deposit services:

Considering:

(i) that following the completion of acquiring relevant companies under the Restructuring, various business operations of the Company maintain stable development, and the Group’s maximum daily balance of deposits with CS Finance Company was approximately RMB5,307 million as at 31 March 2016;
(ii) that up to the Latest Practicable Date, the Group’s maximum daily balance of deposits with CS Finance Company reached approximately RMB6.4 billion, and the total amount of deposits of the Group within the PRC reached approximately RMB8.5 billion (including the portion exceeding the approved annual cap which is deposited with external banks). The Group may consider to deposit such excess portion (including part of the share acquisition consideration for China Bohai Bank Co., Ltd. (total consideration amounting to approximately RMB5,448 million) and capital contribution for COSCO Finance Co., Ltd. (total contribution amounting to approximately RMB614 million) with CS Finance Company in future provided that the terms provided by CS Finance Company are favourable than that of external banks; and

(iii) the Group’s future business development requirements,

it is proposed to revise the annual cap in respect of deposit services to RMB9 billion.

(2) In respect of loan services:

Considering:

(i) the existing loans in an aggregate amount of RMB2 billion and the credit granted by CS Finance Company to the Group;
(ii) the Group’s structure of assets and liabilities (the Group has loans in a total amount of approximately RMB1 billion to RMB2 billion from external banks that will be due or prepaid within 2016 and are proposed to be replaced by more favourable loans to be granted by CS Finance Company);

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LETTER FROM THE BOARD

(iii) the strong demand for fund by the Company’s newly acquired CS Leasing and CS Investment (of which, CS Leasing expects to require loans in a total amount of approximately RMB2 billion to RMB3 billion to be provided by CS Finance Company for developing its finance lease business; CS Investment expects to require loans in a total amount of approximately RMB1 billion to RMB2 billion to be provided by CS Finance Company for developing its investment business); and
(iv) that the Company’s business focus will transform to integrated financial services mainly comprised of diversified leasing businesses pursuant to the Restructuring, meanwhile the Company’s debt to asset ratio may increase and it may require certain working capital loans for replenishment and transition during normal operation turnover and borrowings and repayments,

it is proposed to revise the annual cap in respect of loan services to RMB9 billion.

(3) In respect of settlement services:

Considering (i) the existing foreign exchange settlement amount of US$350 million of the Company for the first quarter of 2016 (including the portion exceeding the approved annual cap which is settled via external banks); and (ii) the estimated foreign exchange settlement amount of US$400 million by Shanghai Universal Logistics Equipment Co., Ltd. (a subsidiary of the Company’s newly acquired CS Investment under the Restructuring), and also taken into account the Company’s historical settlement requirements, it is proposed to revise the annual cap in respect of settlement services to US$800 million.

D. Reasons for and Benefits of Transactions

It is common for large corporate group in the PRC to set up and maintain a finance company to provide treasury services to the group members as this improves centralized management and utilisation efficiency of group funds, and assists group members in reducing financing costs and investment risks. CS Finance Company was set up as a non-bank financial institution in 2009 pursuant to the approval granted by CBRC under the Administrative Measures for Enterprises Group Finance Companies to provide financial services to the China Shipping Group and the Group. CS Finance Company has obtained all approvals, permits and licenses necessary for its operations, and is operating under the routine supervision and regulation of regulatory authorities including PBC and CBRC.

The Board has checked the continuing validity of the licence of CS Finance Company and looked at various key financial ratios of CS Finance Company including capital adequacy ratio and self-owned fixed assets to total capital ratio when assessing CS Finance Company’s capability for the provision of the financial services. Such key financial ratios reviewed by the Board are all better than the standard stipulated by CBRC for finance companies. Besides, China Shipping has undertaken to CBRC that it will increase the capital of CS Finance

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LETTER FROM THE BOARD

Company in case CS Finance Company has difficulty in payment. As such, the Board believes that CS Finance Company has the financial capability in providing the deposits, loan and settlement services under the Financial Services Framework Agreement, and the credit risk involved in the underlying transactions is low.

The terms and conditions of deposit services, loan services, settlement services and other financial services provided by CS Finance Company under the Financial Services Framework Agreement are generally more favourable to the Group than those provided by independent third parties, or those provided by CS Finance Company to independent third parties.

Furthermore, the Group is not restricted under the Financial Services Framework Agreement to approach, and in fact may choose, any bank or financial institution to satisfy its financial service needs. Its criteria in making the choice could be made on costs and quality of services. Therefore, the Group may, but is not obliged to, continue to use CS Finance Company’s deposit services, loan services, settlement services and other financial services if the service quality provided is competitive. Having such flexibility afforded under the Financial Services Framework Agreement, the Group is able to better manage its current capital and cashflow position.

In addition, it is also expected that CS Finance Company will mainly provide more efficient deposit services, loan services and settlement services to the Group, as compared to independent third-party banks. As CS Finance Company is familiar with the Group’s business, it is able to provide funds required by the Group in a more efficient and timely way. In view of the Group’s business restructuring and transformation and its strong demand for fund, the Group hopes to obtain financial assistance from China Shipping via CS Finance Company, which may help broaden the Group’s financing channels and lower its financing costs.

E. Implications under the Listing Rules

China Shipping is the controlling shareholder of the Company. China Shipping Group and its associates together hold more than 10% equity interest in CS Finance Company as at the Latest Practicable Date. Therefore, CS Finance Company constitutes a connected subsidiary of the Company and the transactions under the Financial Services Framework Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As the applicable percentage ratios for the proposed Revised Annual Caps in respect of the deposit services and settlement services are expected to be more than 25% but less than 75%, such proposed Revised Annual Caps are subject to the reporting, announcement, annual review and independent shareholders’ approval requirements for continuing connected transactions under Chapter 14A of the Listing Rules.

The proposed Revised Annual Cap in respect of the deposit services also constitutes major transactions of the Company under Rule 14.06(3) of the Listing Rules and are subject to the relevant major transaction requirements under Chapter 14 of the Listing Rules.

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LETTER FROM THE BOARD

In respect of the provision of loan services under the Financial Services Framework Agreement, pursuant to Rule 14A.90 of the Listing Rules, such transactions are exempt from all reporting, announcement, annual review and independent shareholders’ approval requirements. However, as the Company is required by the applicable PRC laws and regulations to seek the approval of the Shareholders with respect to such services, relevant resolution will be proposed to the Shareholders for voting at the AGM.

F. General Information

The Company is in the process of major asset restructuring. After the completion of such restructuring, the Group will be principally engaged in integrated financial services with diversified leasing businesses such as vessel leasing, container leasing and non-shipping finance leasing as core.

China Shipping is a large shipping conglomerate involved in import and export business, trading, coastal and ocean cargo transportation, dry bulk cargo transportation, supply of food for vessels, management of docks and other services in relation to the above, and operates in different regions of the PRC and across the world.

CS Finance Company is principally engaged in deposit, loan, settlement and other related financial services.

G. Opinions of the Board

Ms. Sun Yueying, Mr. Huang Xiaowen, Mr. Wang Daxiong, Mr. Liu Chong, Mr. Ding Nong, Mr. Yu Zenggang, Mr. Yang Jigui, Mr. Han Jun and Mr. Chen Jihong, all being Directors, hold directorship(s) or act as senior management in China Shipping Group and its associates, have therefore abstained from voting on the relevant board resolutions approving the Revised Annual Caps.

The Directors (including the Independent Non-executive Directors) consider that the terms of the Financial Services Framework Agreement are fair and reasonable, on normal commercial terms or on terms no less favourable than those available to or from independent third parties, and are entered into on a continuing and regular basis in the ordinary and usual course of business of the Company, thus the continuing connected transactions under the Financial Services Framework Agreement and the Revised Annual Caps are fair and reasonable and in the best interest of the Company and the Shareholders as a whole.

An Independent Board Committee has been formed to advise the Independent Shareholders in respect of the Revised Annual Caps. An Independent Financial Adviser has been appointed to advise the Independent Board Committee in respect of the Proposed Transactions and the Revised Annual Caps.

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LETTER FROM THE BOARD

10. PROPOSED APPOINTMENT OF NON-INDEPENDENT DIRECTORS (INCLUDING EXECUTIVE DIRECTORS AND NON-EXECUTIVE DIRECTORS)

As the term of office of the fourth session of the Board will be expired in June 2016, the Board proposed to elect the following candidates as non-independent Directors (including executive Directors and non-executive Directors) of the fifth session of the Board:

(a) re-elect Ms. Sun Yueying as an executive Director of the fifth session of the Board
(b) re-elect Mr. Wang Daxiong as an executive Director of the fifth session of the Board
(c) re-elect Mr. Liu Chong as an executive Director of the fifth session of the Board
(d) appoint Mr. Xu Hui as an executive Director of the fifth session of the Board
(e) re-elect Mr. Yang Jigui as a non-executive Director of the fifth session of the Board
(f) appoint Mr. Feng Boming as a non-executive Director of the fifth session of the Board
(g) appoint Mr. Huang Jian as a non-executive Director of the fifth session of the Board

Please refer to Appendix IV of this circular for the biographical details of the proposed Directors of the fifth session of the Board. Save as disclosed herein, the above mentioned Director candidates have not held any other positions in the Company and/or its subsidiaries. Save as disclosed herein, so far as the Directors are aware, the above mentioned Director candidates have not held any directorship in any other publicly listed companies in Hong Kong or overseas in the last three years. Save as disclosed herein, the above mentioned Director candidates do not have other major appointment and professional qualifications, nor do they have any relationship with any directors, senior management, substantial or controlling shareholders of the Company, nor do they have any interests in the shares of the Company within the meaning of Part XV of the SFO.

Each of the above mentioned Director candidates will enter into a service contract respectively with the Company for a term of service of three years commencing on the date when their respective appointment is approved by the Shareholders at the AGM. Pursuant to such proposed service contract, executive Directors will not receive any remuneration from the Company as the Directors, and non-executive Directors will not receive any remuneration from the Company.

Save as disclosed herein, there are no other matters relating to the above mentioned Director candidates that need to be brought to the attention of the Shareholders and there is no information which is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Listing Rules.

The aforesaid resolutions were considered and approved by the Board on 7 June 2016 and are hereby proposed at the AGM for consideration and approval.

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LETTER FROM THE BOARD

11. PROPOSED APPOINTMENT OF INDEPENDENT NON-EXECUTIVE DIRECTORS

As the term of office of the fourth session of the Board will be expired in June 2016, the Board proposed to elect the following candidates as Independent Non-Executive Directors of the fifth session of the Board:

(a) appoint Mr. Cai Hongping as an independent non-executive Director Of the fifth session of the Board
(b) appoint Mr. Tsang Hing Lun as an independent non-executive Director of the fifth session of the Board
(c) re-elect Ms. Hai Chi Yuet as an independent non-executive Director of the fifth session of the Board
(d) re-elect Mr. Graeme Jack as an independent non-executive Director of the fifth session of the Board

Each of the above mentioned Director candidates will enter into a service contract respectively with the Company for a term of service of three years commencing on the date when their respective appointment is approved by the Shareholders at the AGM. Pursuant to such proposed service contract, remuneration of Independent Non-Executive Directors will be determined in accordance with the remuneration standards with regards to domestic or foreign independent non-executive Director of the Company.

The aforesaid resolutions were considered and approved by the Board on 7 June 2016 and are hereby proposed at the AGM for consideration and approval.

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LETTER FROM THE BOARD

12. PROPOSED APPOINTMENT OF SUPERVISORS

As the term of office of the fourth session of the Supervisory Committee will be expired in June 2016, the Supervisory Committee proposed to elect the following candidates as Supervisors of the fifth session of the Supervisory Committee:

(a) re-elect Mr. Ye Hongjun as a shareholder representative Supervisor of the fifth session of the Supervisory Committee
(b) appoint Mr. Hao Wenyi as a shareholder representative Supervisor of the fifth session of the Supervisory Committee
(c) appoint Mr. Gu Xu as an independent Supervisor of the fifth session of the Supervisory Committee
(d) appoint Ms. Zhang Weihua as an independent Supervisor of the fifth session of the Supervisory Committee

The two employee representative Supervisors of the fifth session of the Supervisory Committee shall be elected democratically by the meeting of the employee representatives of the Company and is not subject to Shareholders’ approval.

Please refer to Appendix IV of this circular for the biographical details of the proposed Supervisors of the fifth session of the Supervisory Committee. Save as disclosed herein, the above mentioned Supervisor candidates have not held any other positions in the Company and/or its subsidiaries. Save as disclosed herein, so far as the Directors are aware, the above mentioned Supervisor candidates have not held any directorship in any other publicly listed companies in Hong Kong or overseas in the last three years. Save as disclosed herein, the above mentioned Supervisor candidates do not have other major appointment and professional qualifications, nor do they have any relationship with any directors, senior management, substantial or controlling shareholders of the Company, nor do they have any interests in the shares of the Company within the meaning of Part XV of the SFO.

Each of the above mentioned Supervisor candidates will enter into a service contract respectively with the Company for a term of service of three years commencing on the date when their respective appointment is approved by the Shareholders at the AGM. Pursuant to such proposed service contract, shareholder representative Supervisors will not receive any remuneration from the Company, and remuneration of independent Supervisors will be determined in accordance with the remuneration standards with regards to domestic or foreign independent Supervisor of the Company.

Save as disclosed herein, there are no other matters relating to the above mentioned Supervisor candidates that need to be brought to the attention of the Shareholders and there is no information which is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Listing Rules.

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LETTER FROM THE BOARD

The aforesaid resolutions were considered and approved by the Supervisory Committee on 7 June 2016 and are hereby proposed at the AGM for consideration and approval.

SPECIAL RESOLUTIONS

1. PROVISION OF GUARANTEES FOR WHOLLY-OWNED SUBSIDIARIES OF THE COMPANY AND RELEVANT AUTHORIZATION TO THE BOARD

A. Summary of the Guarantees

The Board intends to propose a special resolution at the AGM to approve (i) the provision of guarantee for CSCL HK (a wholly-owned subsidiary of the Company) by the Company in the amount not exceeding US$2,500 million or its equivalent in RMB in terms of the guarantee incurred, (ii) the provision of guarantee for CS Leasing (a wholly-owned subsidiary of the Company) by the Company in the amount not exceeding RMB6,000 million in terms of the balance of the guarantee, and (iii) the provision of guarantee for CS Leasing (a wholly-owned subsidiary of the Company) by CS Investment (a wholly-owned subsidiary of the Company) in the amount not exceeding RMB4,000 million in terms of the balance of the guarantee, all during the period of 1 July 2016 to 30 June 2017, and the authorization to the Board to consider and approve each guarantee within the approved cap. Details are as follows:

(1) Provision of guarantees by the Company for CSCL HK and CS Leasing and by CS Investment for CS Leasing shall include the situations where:
(i) the debt to asset ratio of CSCL HK or the debt to asset ratio of CS Leasing exceeds 70%, respectively;
(ii) the amount of a single guarantee exceeds 10% of the latest audited net assets of the Company;
(iii) the total amount of external guarantees provided by the Company and its subsidiaries exceeds 50% of the latest audited net assets of the Company;
(iv) the accumulated amount of guarantees provided by the Company exceeds 30% of the latest audited total assets of the Company, when aggregated with the amount of guarantees incurred in the preceding 12 consecutive months; or
(v) the accumulated amount of guarantees provided by the Company exceeds 50% of the latest audited net assets of the Company and the absolute amount of guarantees exceeds RMB50 million, when aggregated with the amount of guarantees incurred in the preceding 12 consecutive months.
(2) It shall be tabled at the AGM to authorize the Board to consider and approve the matters in relation to each guarantee within the approved cap, including but not limited to the manner, type, term and amount of the guarantees. Apart from obtaining the approval of more than one-half of all the Directors, approval by more than two-thirds of the Directors present at the relevant meeting of the Board when considering matters in relation to such guarantees shall also be obtained.

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LETTER FROM THE BOARD

(3) At the time of actual implementation, the Company will perform in accordance with the guarantee agreement to be entered into and comply with the relevant disclosure obligation.

B. Basic Information of the Entity to be Guaranteed

(1) CSCL HK, as one of the entities to be guaranteed in relation to the Proposed Authorization, is a wholly-owned subsidiary of the Company. Its basic information is as follows:

Registered address: 31/F, Tower 2, Kowloon Commerce Centre, No. 51 Kwai Cheong Road, Kwai Chung, New Territories, Hong Kong Legal representative: Zhao Hongzhou Registered capital: US$1,627.6 million and HKD1 million Scope of business: International container transportation

As at 31 December 2015 (audited figures), CSCL HK’s total assets were US$5.421 billion (equivalent to RMB35.212 billion), net assets were US$834 million (equivalent to RMB5.417 billion), total liabilities were US$4.587 billion (equivalent to RMB29.794 billion), total current liabilities were US$1.936 billion (equivalent to RMB12.575 billion), total bank borrowings were US$4.277 billion (equivalent to RMB27.781 billion) and debt to asset ratio was 84.6%. Operating revenue for the year of 2015 was US$2.981 billion (equivalent to RMB19.363 billion) and net profit was US$-227 million (equivalent to RMB-1.474 billion).

(2) CS Leasing, as one of the entities to be guaranteed in relation to the Proposed Authorization, is a wholly-owned subsidiary of the Company. Its basic information is as follows:

Registered address: Room 3E, No. 450 Fu Shan Road, China (Shanghai) Pilot Free Trade Zone, Shanghai, the PRC Legal representative: Liu Chong Registered capital: RMB1,500 million Scope of business: Finance leasing and leasing, purchasing leasing assets from vendors abroad, salvage value disposal and maintenance of the leasing assets, lease transaction consultation and guarantee, commerce consultation (excluding brokerage), investment management and financial management consultation (not permitted to act as bookkeeping agency)

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LETTER FROM THE BOARD

As at 31 December 2015 (audited figures), CS Leasing’s total assets were RMB5.180 billion, net assets were RMB1.590 billion, total liabilities were RMB3.589 billion, total current liabilities were RMB2.260 billion, total bank borrowings were RMB1.056 billion and debt to asset ratio was 69.2%. Operating revenue for the year of 2015 was RMB224 million and net profit was RMB79 million.

C. Opinions of the Board

The Board is of the view that the aforementioned matters in relation to provision of guarantees is in line with the operational development needs of the Company. Both entities to be guaranteed are wholly-owned subsidiaries of the Company, the guarantee-related risks can be effectively controlled and prevented and the interest of the Company will not therefore be impaired.

D. Shareholders’ Approval

Pursuant to the relevant requirements of the Shanghai Stock Exchange and the Articles of Association, the proposed provision of guarantees and the Proposed Authorization shall be subject to the approval of the Shareholders.

E. The Accumulated Amount of Guarantees and the Amount of Overdue Guarantees of the Company

As at 28 April 2016, the accumulated amount of the balance of external guarantees provided by the Company and its controlled subsidiaries was US$1.769 billion and RMB2.96 billion (CS Investment has provided guarantee for CS Leasing in the amount of RMB2.96 billion in terms of the balance of the guarantee before the completion of the transfer of equity interests of CS Investment and CS Leasing in relation to the Restructuring), representing 25.41% of the Company’s total assets and 65.17% of the Company’s net assets as per its latest audited financial statements; and the accumulated amount of the balance of guarantees provided by the Company for its controlled subsidiaries was US$1.769 billion (equivalent to RMB11.49 billion), representing 20.2% of the Company’s total assets and 51.82% of the Company’s net assets as per its latest audited financial statements. Amount of overdue guarantees was nil.

The aforesaid resolution was considered and approved by the Board on 28 April 2016 and is hereby proposed at the AGM for consideration and approval.

2. GRANT OF GENERAL MANDATE TO ISSUE A SHARES AND/OR H SHARES OF THE COMPANY

The Board intends to propose a special resolution at the AGM to grant an unconditional General Mandate to the Board to, subject to market condition and the needs of the Company, separately or concurrently issue, allot and deal with new shares not exceeding 20% of the respective total number of A shares and/or H shares in issue as at the date of the passing of such resolution.

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LETTER FROM THE BOARD

Details of the content and validity of the General Mandate to be granted by the AGM are as follows:

A. The General Mandate

Details of the General Mandate include but not limited to:

(1) Granting of an unconditional general mandate to the Board to, subject to market condition and the needs of the Company, separately or concurrently issue, allot and deal with the A shares and/or H shares of the Company.
(2) The total number of the A shares and/or H shares to be separately or concurrently allotted by the Board shall not exceed:
(i) 20% of the existing A shares in issue at the date of the passing of this resolution at the AGM; and/or
(ii) 20% of the existing H shares in issue at the date of the passing of this resolution at the AGM.
(3) The Board be authorised to formulate and implement detailed issuance plan, including but not limited to the class of new shares to be issued, pricing mechanism and/or issuance price (including price range), number of shares to be issued, allottees and use of proceeds, timing of issuance, period of issuance and whether to allot shares to existing shareholders.
(4) The Board be authorised to engage the services of professional advisers for share issuance related matters, and to approve and execute all acts, deeds, documents or other matters necessary, appropriate or required for share issuance; approve and execute, on behalf of the Company, agreements related to the share issuance, including but not limited to placing or underwriting agreement and engagement agreements of professional advisers.
(5) The Board be authorised to approve and execute, on behalf of the Company, statutory documents in relation to share issuance to be submitted to regulatory authorities, to carry out approval procedures required by regulatory authorities, and to complete all necessary filings, registrations and records with the relevant governmental authorities and/or stock exchanges.
(6) The Board be authorised to amend, as required by regulatory authorities within or outside the PRC, agreements and statutory documents referred to in items no. (4) and (5) above.
(7) The Board be authorised to increase the registered capital of the Company after share issuance, and to make corresponding amendments to the Articles of Association relating to share capital and shareholding structure, etc., and the management be authorised to carry out the relevant procedures.

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LETTER FROM THE BOARD

(8) The Board be authorised, subject to acquiring the authorisation under the aforementioned items no. (1)-(7), to delegate the chairman of the Board or other senior management to, collectively or individually, deal with all the work relating to the shares issuance under the General Mandate.

B. Validity of the General Mandate

The General Mandate stays valid from the passing of this resolution as a special resolution at the AGM until whichever is the earliest of:

(1) the conclusion of the annual general meeting for the year 2016 of the Company;
(2) the ending of the 12-month period following the passing of this resolution as a special resolution at the AGM; or
(3) the revocation or variation of the authorisation given to the Board under this resolution by passing a special resolution of the Company in a general meeting.

Provided the Board has, during the validity term of the authorisation, executed necessary files or fulfilled necessary procedures while such files or procedures may have to be performed or exercised, or will be completed after the expiry of the authorisation, the term of the authorisation shall be extended correspondingly.

The Board’s exercise of the power granted under the aforementioned General Mandate is subject to the compliance with the Company Law of the PRC, the Securities Law of the PRC and the Listing Rules (as amended from time to time) and all the requisite approvals from the relevant authorities.

The aforesaid resolution was considered and approved by the Board on 13 May 2016 and is hereby proposed at the AGM for consideration and approval.

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LETTER FROM THE BOARD

3. APPLICATION FOR REGISTERING MID-TERM NOTES AND SUPER SHORTTERM FINANCING BILLS

With a view to expanding sources of funding, optimizing debt financing structure and reducing finance costs, and subject to compliance with laws, regulations, rules, normative documents and requirements of regulatory authorities, the Company intends to apply to National Association of Financial Market Institutional Investors for registering mid-term notes of not exceeding RMB5.0 billion and super short-term financing bills of not exceeding RMB10.0 billion. The details are as follows:

(a) The Company intends to apply to National Association of Financial Market Institutional Investors for registering mid-term notes of not exceeding RMB5.0 billion on a one-off or multiple tranche basis with terms of no longer than 10 years.
(b) The Company intends to apply to National Association of Financial Market Institutional Investors for registering super short-term financing bills of not exceeding RMB10.0 billion, with terms of no longer than 270 days and a validity period specified in the acceptance notice of registration issued by National Association of Financial Market Institutional Investors in respect of super shortterm financing bills (to be issued in tranches on a rolling basis).

The mid-term notes and the super short-term financing bills are intended to be used for repayment of bank loans, optimizing debt financing structure and/or replenish the liquidity for the needs of daily production and operation of the Company.

To enhance the efficiency of registration and issuance of mid-term notes and super short-term financing bills, the Board also proposes to the AGM to grant authorization to the Board, the managing Director or the chief accountant to handle the matters in relation to the mid-term notes and super short-term financing bills such as registration, issuance, existence and payment of principal and interests, including without limitation:

(i) to determine terms and conditions for issuance of mid-term notes and super short-term financing bills, including without limitation details about issue amount, interest rate or calculation method, timing of issue, maturity term, rating, security, whether it will be issued in tranches and number of tranches, terms of buy-back and redemptions, underwriting, use of proceeds and all matters in relation to the issuance;
(ii) to take all necessary and ancillary actions and steps in relation to the issuance of mid-term notes and super short-term financing bills, including without limitation engagement of intermediaries, completing the filing and registration procedures of mid-term notes and super short-term financing bills on behalf of the Company, executing all necessary legal documents required for registration and filing of mid-term notes and super short-term financing bills, and dealing with procedures in relation to listing and registration of mid-term notes and super short-term financing bills;

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LETTER FROM THE BOARD

(iii) in case there is any change in policies or market conditions, to make adjustments to matters in relation to detailed plan of mid-term notes and super short-term financing bills according to opinions from the responsible departments, save for those requiring re-approval at the general meeting of the Company pursuant to relevant laws, regulations and articles of association of the Company;
(iv) to perform obligation of information disclosure;
(v) to deal with other matters related to mid-term notes and super short-term financing bills but not specified above.

The validity period for application for registration and issuance of mid-term notes and super short-term financing bills shall commence from the approval date at the AGM and expires on the date which is 24 months from obtaining the acceptance notice of registration issued by National Association of Financial Market Institutional Investors in respect of mid-term notes and super short-term financing bills.

The aforesaid resolutions were considered and approved by the Board on 7 June 2016 and are hereby proposed at the AGM for consideration and approval.

THE AGM

The AGM of the Company will be held at 1:00 p.m. on Thursday, 30 June 2016 at Holiday Inn Shanghai Jinxiu, No. 399 Jinzun Road, Pudong New Area, Shanghai, the PRC for the Shareholders to consider and, if thought fit, approve the aforesaid resolutions.

China Shipping is the controlling Shareholder of the Company. Pursuant to Rule 14A.70(12) of the Listing Rules, where independent shareholders’ approval is required with regard to a connected transaction, any shareholder with a material interest in such transaction will not vote on such transaction. Accordingly, the China Shipping Group and its associates shall at the AGM abstain from voting on the Revised Annual Caps, which must be taken by way of poll as required under the Listing Rules except where the chairman of the AGM, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. As at the Latest Practicable Date, the China Shipping Group and its associates controlled or were entitled to exercise control over the voting rights in respect of 4,458,195,175 A shares and 100,944,000 H shares in the Company, representing approximately 39.02% of the entire issued share capital of the Company. To the extent that the Company is aware having made all reasonable enquiries, as at the Latest Practicable Date:

(i) there was no voting trust or other agreement or arrangement or understanding entered into by or binding upon the China Shipping Group;
(ii) the China Shipping Group were not subject to any obligation or entitlement whereby they had or might have temporarily or permanently passed control over the exercise of the voting right in respect of their shares in the Company to a third party, whether generally or on a case-by-case basis; and

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(iii) it was not expected that there would be any discrepancy between the China Shipping Group’s beneficial shareholding interest in the Company and the number of shares in the Company in respect of which they would control or would be entitled to exercise control over the voting right at the AGM.

As far as the Directors are aware, other than the China Shipping Group and its associates, no other Shareholder has a material interest in the Revised Annual Caps and has to abstain from voting at the AGM on such resolutions.

The Independent Board Committee has been established to advise the Independent Shareholders on the Revised Annual Caps. The Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the Proposed Transactions and the Revised Annual Caps. The letter from the Independent Board Committee and its recommendations to the Independent Shareholders is set out on pages 30 to 31 of this circular, and the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders is set out on pages 32 to 47 of this circular.

The original proxy form and a reply slip were despatched to the Shareholders on 16 May 2016 for use at the AGM, and the supplemental proxy form has been despatched to the Shareholders on 10 June 2016. The supplemental proxy form is for the purpose of the supplemental resolutions as set out in the supplemental notice of the AGM dated 10 June 2016 and only serves as a supplement to the original proxy form for the AGM.

The supplemental proxy form will not affect the validity of any proxy form duly completed and delivered by you in respect of the resolutions set out in the Notice of the AGM dated 16 May 2016. If you have validly appointed a proxy to attend and act for you at the AGM but do not duly complete and deliver the supplemental proxy form, your proxy will be entitled to vote at the discretion on the ordinary resolutions 10(a) to 10(g), 11(a) to 11(d) and 12(a) to 12(d) and the special resolutions 3(a) to 3(c) set out in the supplemental notice of the AGM dated 10 June 2016. If you do not duly complete and deliver the original proxy form for the AGM but have duly completed and delivered the supplemental proxy form and validly appointed a proxy to attend and act for you at the AGM, your proxy will be entitled to vote at the discretion on all the resolutions set out in the Notice of the AGM dated 16 May 2016. If the proxy being appointed to attend the AGM under the supplemental proxy form is different from the proxy appointed under the original proxy form and both proxies attended the AGM, the proxy validly appointed under the original proxy form shall be designated to vote at the AGM.

RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee which is set out on pages 30 to 31 of this circular, and the letter from the Independent Financial Adviser which is set out on pages 32 to 47 of this circular.

Having taken into account the advice of the Independent Financial Adviser, the Independent Board Committee considers that the terms of the continuing connected transactions under the Financial Services Framework Agreement and the Revised Annual Caps

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are fair and reasonable, on normal commercial terms or on terms no less favourable than those available to or from independent third parties, and are entered into on a continuing and regular basis in the ordinary and usual course of business of the Company, and that they are in the best interest of the Company and the Shareholders as a whole. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the ordinary resolutions in respect of the Revised Annual Caps to be proposed at the AGM.

The Board (including the Independent Non-executive Directors) considers that other resolutions above are in the best interest of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders should vote in favour of such resolutions at the AGM. Unless otherwise indicated in this circular, none of the Directors should abstain from voting on such resolutions.

By order of the Board of China Shipping Container Lines Company Limited Sun Yueying Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock code: 02866)

10 June 2016

To the Independent Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS UNDER THE FINANCIAL SERVICES FRAMEWORK AGREEMENT AND THE REVISED ANNUAL CAPS

We refer to the circular dated 10 June 2016 (the “ Circular ”) to the shareholders of China Shipping Container Lines Company Limited (the “ Company ”) of which this letter forms part. Unless otherwise specified, terms defined in the Circular shall have the same meanings when used in this letter.

We have been appointed as members of the Independent Board Committee, which has been established to advise the Independent Shareholders in respect of:

(i) the continuing connected transactions under the Financial Services Framework Agreement; and
(ii) the Revised Annual Caps.

((i) and (ii) collectively, the “ Proposed Transactions ”), details of which are set out in the letter from the Board contained in the Circular. None of us has a material interest in the Proposed Transactions.

China Shipping is the controlling Shareholder. China Shipping Group and its associates together hold more than 10% equity interest in CS Finance Company. Therefore, CS Finance Company constitutes a connected subsidiary of the Company under the Listing Rules. The Proposed Transactions entered into between the Company and CS Finance Company constitute continuing connected transactions of the Company.

* The Company is a registered non-Hong Kong company as defined in the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) and it is registered under its Chinese name and under the English name “China Shipping Container Lines Company Limited”.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

In respect of the Proposed Transactions, the highest applicable percentage ratio is expected to be more than 25% but less than 75% under the Listing Rules. Therefore, the Proposed Transactions are subject to the Independent Shareholders’ approval as required under Chapter 14A of the Listing Rules.

Messis Capital Limited has been appointed as the independent financial adviser to advise us in respect of the Proposed Transactions. We wish to draw your attention to the letter of advice from Messis Capital Limited set out on pages 32 to 47 of the Circular.

As members of the Independent Board Committee, we have discussed with the management of the Company in relation to the Proposed Transactions, and the basis upon which the terms of such Proposed Transactions have been determined and the said annual caps have been calculated. We have also taken into account the principal factors and reasons considered by Messis Capital Limited in forming its opinion in relation to the Proposed Transactions, and have discussed with Messis Capital Limited its letter of advice.

On the basis of the above, we consider, and agree with the view of Messis Capital Limited, that the terms of the Proposed Transactions are fair and reasonable, on normal commercial terms or on terms no less favourable than those available to or from independent third parties, and are entered into on a continuing and regular basis in the ordinary and usual course of business of the Company, and that they are in the best interest of the Company and its Shareholders as a whole.

Accordingly, we recommend you to vote in favour of the ordinary resolution in respect of the Proposed Transactions to be proposed at the AGM.

Yours faithfully, Ms. Zhang Nan, Mr. Guan Yimin, Mr. Shi Xin, Ms. Hai Chi Yuet and Mr. Graeme Jack

Independent Board Committee

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of the letter from Messis Capital Limited, the Independent Financial Adviser, for the purpose of inclusion in this circular, to the Independent Board Committee and the Independent Shareholders in respect of the Proposed Transactions and the Revised Annual Caps.

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10 June 2016

To: The Independent Board Committee and the Independent Shareholders of China Shipping Container Lines Company Limited

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS AND MAJOR TRANSACTIONS – REVISION OF ANNUAL CAPS FOR CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Proposed Transactions and the Revised Annual Caps under the Financial Services Framework Agreement for the year ending 31 December 2016, details of which are set out in the letter from the Board (the “ Letter from the Board ”) contained in the circular of the Company to the Shareholders dated 10 June 2016 (the “ Circular ”), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as defined in the Circular unless the context otherwise requires.

References are made to the Company’s announcements dated 6 November 2015, 22 December 2015 and 13 May 2016 and circular to the Shareholders dated 4 December 2015. On 31 December 2009, the Company entered into the Financial Services Framework Agreement with China Shipping, pursuant to which China Shipping shall procure CS Finance Company to provide the Group with a range of financial services including (i) deposit services; (ii) loan services; (iii) settlement services; and (iv) other financial services as approved by CBRC. As set out in the Letter from the Board, the Directors believe that the Existing Annual Caps will not be sufficient for the Group’s current requirements and therefore propose to revise the Existing Annual Caps in respect of the (i) deposit services; (ii) loan services; and (iii) settlement services to RMB9 billion, RMB9 billion and US$800 million for the year ending 31 December 2016, respectively.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Company held 65% shareholding interest at CS Finance Company as at the Latest Practicable Date and therefore CS Finance Company is a subsidiary of the Company. China Shipping is the controlling shareholder of the Company. China Shipping Group and its associates together held more than 10% equity interest in CS Finance Company as at the Latest Practicable Date. Therefore, CS Finance Company constitutes a connected subsidiary of the Company and the transactions under the Financial Services Framework Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. In respect of the provision of deposit services and settlement services under the Financial Services Framework Agreement, the applicable percentage ratios for the proposed Revised Annual Caps are expected to be more than 25% but less than 75%. Therefore, the respective proposed annual caps for the year ending 31 December 2016, are subject to the reporting, announcement, annual review and independent shareholders’ approval requirements for continuing connected transactions under Chapter 14A of the Listing Rules. The proposed Revised Annual Cap in respect of the provision of deposit services under the Financial Services Framework Agreement also constitute major transactions of the Company under Rule 14.06(3) of the Listing Rules and are subject to the relevant major transaction requirements under Chapter 14 of the Listing Rules. In respect of the provision of loan services under the Financial Services Framework Agreement, pursuant to Rule 14A.90 of the Listing Rules, such transactions are exempt from all reporting, announcement, annual review and independent shareholders’ approval requirements. However, as the Company is required by the applicable PRC laws and regulations to seek the approval of the Shareholders with respect to such services, relevant resolution will be proposed to the Shareholders for voting at the AGM.

The Independent Board Committee comprising all independent non-executive Directors, namely, Ms. Zhang Nan, Mr. Guan Yimin, Mr. Shi Xin, Ms. Hai Chi Yuet and Mr. Graeme Jack, has been established to advise the Independent Shareholders in respect of the Proposed Transactions and the Revised Annual Caps. We, Messis Capital Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

As at the Latest Practicable Date, we did not have any relationship with or interest in the Company and any other parties that could reasonably be regarded as relevant to our independence. Apart from normal professional fees payable to us in connection with this appointment as the Independent Financial Adviser, no arrangement exists whereby we will receive any fees or benefits from the Company. During the past two years, we were appointed as an independent financial adviser for the Company for two occasions regarding certain continuing connected transactions of the Company, details of which are set out in its announcement dated 30 October 2015 and its circular dated 4 December 2015. Notwithstanding the above, we are independent from the Company pursuant to Rule 13.84 of the Listing Rules.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

BASIS OF OUR ADVICE AND RECOMMENDATIONS

In arriving at our recommendations, we have relied on the statements, information and representations contained in the Circular and the information and representations provided to us by the management of the Company. We have assumed that all information and representations contained or referred to in the Circular and all information and representations which have been provided by the management of the Company are true and accurate at the time they were made and will continue to be accurate as at the date of the despatch of the Circular. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the management of the Company.

The Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, opinions expressed by them in the Circular have been arrived at after due and careful consideration and there are no other material facts not contained in the Circular, the omission of which would make any such statement made by them that contained in the Circular misleading in all material respects. We consider that we have been provided with sufficient information on which to form a reasonable basis for our opinion. We have no reason to suspect that any relevant information has been withheld, nor are we aware of any material facts or circumstances which would render the information provided and representations made to us untrue, inaccurate or misleading. We consider that we have performed all the necessary steps to enable us to reach an informed view and to justify our reliance on the information provided so as to provide a reasonable basis for our opinion. We have not, however, carried out any independent verification of the information provided by the management of the Company, nor have we conducted an independent investigation into the business and affairs of the Group and any parties to the Financial Services Framework Agreement.

This letter is issued for the information of the Independent Board Committee and the Independent Shareholders solely in connection with their consideration of the Proposed Transactions and the Revised Annual Caps under the Financial Services Framework Agreement for the year ending 31 December 2016. Except for its inclusion in the Circular, this letter is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes, without our prior written consent.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendations to the Independent Board Committee and the Independent Shareholders, we have considered the following principal factors and reasons:

1. Background information

1.1 Background of the Proposed Transactions

On 31 December 2009, the Company entered into the Financial Services Framework Agreement with China Shipping, pursuant to which China Shipping shall procure CS Finance Company to provide the Group with a range of financial services including

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(i) deposit services; (ii) loan services; (iii) settlement services; and (iv) other financial services as approved by CBRC. The Proposed Transactions comprise of the transactions in respect of (i) maximum daily balance of deposits (including accrued interest and handling fee) to be placed by the Group with CS Finance Company; (ii) maximum daily outstanding balance of loans (including accrued interest and handling fee) to be granted by CS Finance Company to the Group; and (iii) the settlement services to be provided by CS Finance Company to the Group. Further background information in relation to the Proposed Transactions is set out in the Company’s announcements dated 8 October 2009, 15 December 2009, 20 September 2012, 6 November 2015, 22 December 2015 and 13 May 2016 and circulars dated 29 October 2009, 12 November 2012 and 4 December 2015.

The initial term of the Financial Services Framework Agreement was three years, with effect from 31 December 2009. Upon the expiry of such initial term, the Financial Services Framework Agreement shall automatically extend for further terms of three years (subject to compliance of the Listing Rules), unless any relevant party gives to the other party(ies) a written notice of termination at least three months prior to such expiry date. As advised by the Directors, the existing term of the Financial Services Framework Agreement will be expired by 31 December 2018.

1.2 Background information of the Group

As detailed in the Company’s circular dated 31 December 2015, the Group is undergoing the Restructuring through a series of inter-conditional transactions under the proposed material assets restructuring plan. After the completion of the Restructuring, the Group will gradually shift into a comprehensive financial service platform focusing on the shipping industry with leasing business as its core business and has decided to strategically suspend the port operation business for a period of two years after the completion of its disposal of its 49% equity interests in China Shipping Ports Development Co., Ltd.. The resolutions in relation to the Restructuring were approved at the extraordinary general meeting of the Company on 1 February 2016. According to the Company’s announcement dated 1 June 2016, the Company is in the progress of completing the procedures in relation to the material asset restructuring.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The table below sets out the key financial information of the Group for the two years ended 31 December 2015 as extracted from the Company’s annual report for the year ended 31 December 2015 (the “ Annual Report ”).

	For the year	ended/As at	ended/As at
	31 December
	2015		2014
	(Audited)		(Audited)
	(RMB million)	(RMB million)
Revenue	31,834		36,077
(Loss)/profit for the year attributable to
owners of parent	(2,950)		1,044
Cash and cash equivalent	11,001		9,356
Long-term and short-term borrowings	28,365		22,154
Total assets	56,877		53,541
Total liabilities	34,640		28,664
Net assets	22,237		24,877

The revenue of the Group decreased by approximately RMB4.3 billion from approximately RMB36.1 billion for the year ended 31 December 2014 to approximately RMB31.8 billion for the year ended 31 December 2015, representing a decrease of approximately 11.9%. According to the Annual Report, the decrease in revenue was primarily as a result of a combination of influence of (i) decrease in cargo volume of international trade lanes primarily due to significant slowdown in global economic recovery and weakened demand for container transports and decrease in cargo volume of domestic trade lanes primarily due to limited shipping space utilisation rate and tendency of saturation of domestic market which in turn restrained market growth; and (ii) decrease in freight rates primarily due to a slowdown in global economic growth, a sluggish international shipping market and an imbalance in supply and demand in 2015, which led to substantial drop in overall freight rate.

According to the Annual Report, for the year ended 31 December 2015, the Group’s net cash generated from operating activities and new bank loan amounted to approximately RMB0.7 billion and approximately RMB13.8 billion, respectively. Besides, as shown in the table above, the Group’s cash and cash equivalent amounted to approximately RMB9.4 billion and RMB11.0 billion as at 31 December 2014 and 31 December 2015, representing approximately 17.5% and 19.3% of the Group’s total assets, respectively. The long-term and short-term borrowings of the Group amounted to approximately RMB22.2 billion and RMB28.4 billion as at 31 December 2014 and 31 December 2015, respectively, represented a majority of the Group’s total liabilities. Most of the revenue of the Company is settled in USD. In addition, as advised by the Directors, the Group has regular needs for payment and receipts in foreign currencies. Therefore, financial services including deposit, loan and settlement services are essential in the Group’s operation.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1.3 Background information of China Shipping

China Shipping is the controlling shareholder of the Company. As set out in the Letter from the Board, China Shipping is a large shipping conglomerate involved in import and export business, trading, coastal and ocean cargo transportation, dry bulk cargo transportation, supply of food for vessels, management of docks and other services in relation to the above, and operates in different regions of the PRC and across the world. According to the Company’s announcement dated 13 May 2016, for the year ended and as at 31 December 2015, the audited consolidated financial information of China Shipping is as follows: total assets, equity attributable to shareholders, total operating income and profit attributable to shareholders were RMB232,159 million, RMB59,464 million, RMB79,941 million and RMB1,420 million, respectively, and its debt to asset ratio was 60.97%.

1.4 Background information of CS Finance Company

CS Finance Company is a limited liability company incorporated in the PRC, owned as to 65%, 5%, 25% and 5% by the Company, China Shipping, China Shipping Development Company Limited and China Shipping Haisheng Co., Ltd. (中海(海南)海盛船務股份有限公司) as at the Latest Practicable Date and a non-banking financial institution with a financial licence issued by the CBRC.

CS Finance Company is principally engaged in the provision of deposit, loan, settlement and other related financial services. According to the information provided by the Company, CS Finance Company recorded a revenue of approximately RMB342 million and net profit of approximately RMB208 million for the year ended 31 December 2015 and net assets of approximately RMB1,149 million as at 31 December 2015.

As advised by the Directors, CS Finance Company is governed by the Administrative Measures for Enterprises Group Finance Companies (企業集團財務公司管理辦法) (the “ Administrative Measures ”). Financial institutions governed under the Administrative Measures are required to submit their financial statements and audited report to the CBRC annually and comply with certain financial ratio requirements as set out in the Administrative Measures from time to time.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The table below sets out the key financial ratio requirements of the Administrative Measures and the respective financial ratios of CS Finance Company as at 31 December 2014 and 31 December 2015 as provided by the management of the Company:

		Financial ratio of CS Finance	Financial ratio of CS Finance
Financial ratio	Requirements	Company
		As at	As at
		31 December	31 December
		2014	2015
		(%)	(%)
Capital adequacy ratio	Not less	16.73	19.14
	than 10%
Inter-financial institution	Not more	0	0
borrowing balances to total	than 100%
capital ratio
Total amount of outstanding	Not more	0	0
guarantees to total capital	than 100%
ratio
Self-owned fixed assets to	Not more	0.30	0.19
total capital ratio	than 20%

As shown in the table above, we noted that CS Finance Company complied with the relevant financial ratio requirements as set out in the Administrative Measures as at 31 December 2014 and 31 December 2015. In particular, (i) the capital adequacy ratios of CS Finance Company were higher than the minimum required ratio of 10%; (ii) CS Finance Company recorded no inter-financial institution borrowing and outstanding guarantees as at 31 December 2014 and 2015 and therefore had little exposures on contingent liabilities; and (iii) the self-owned fixed assets to total capital ratios were far below the required limit of 20%.

Based on the above, having considered that (i) it is the principal business of CS Finance Company to provide financial services including the deposits, loan and settlement services; (ii) CS Finance Company is a licensed financial institution and governed by the CBRC under the Administrative Measures; and (iii) CS Finance Company complied with relevant financial ratio requirements of the Administrative Measures and had demonstrated healthy financial positions as at 31 December 2014 and 2015, we concur with the Directors’ view that CS Finance Company is one of the eligible financial institutions for the provision of financial services (including deposit, loan and settlement services) to the Group.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

2. Reasons for and benefits of the Proposed Transactions

As set out in the Letter from the Board, it is common for large corporate group in the PRC to set up and maintain a finance company to provide treasury services to the group members as this improves centralised management and utilisation efficiency of group funds, and assists group members in reducing financing costs and investment risks. CS Finance Company was set up as a non-bank financial institution in 2009 pursuant to the approval granted by CBRC under the Administrative Measures to provide financial services to the China Shipping Group and the Group. CS Finance Company has obtained all approvals, permits and licenses necessary for its operations, and is operating under the routine supervision and regulation of regulatory authorities including PBC and CBRC. The Board has checked the continuing validity of the licence of CS Finance Company and looked at various key financial ratios of CS Finance Company including capital adequacy ratio and self-owned fixed assets to total capital ratio when assessing CS Finance Company’s capability for the provision of the financial services. Such key financial ratios reviewed by the Board are all better than the standard stipulated by CBRC for finance companies. Besides, China Shipping has undertaken to CBRC that it will increase the capital of CS Finance Company in case CS Finance Company has difficulty in payment. As such, the Board believes that CS Finance Company has the financial capability in providing the deposits, loan and settlement services under the Financial Services Framework Agreement, and the credit risk involved in the underlying transactions is low.

As further set out in the Letter from the Board, the Group will benefit from the Proposed Transactions as follows:

The terms and conditions of deposit services, loan services and settlement services provided by CS Finance Company under the Financial Services Framework Agreement are generally more favourable to the Group than those provided by independent third parties, or those provided by CS Finance Company to independent third parties.

Furthermore, the Group is not restricted under the Financial Services Framework Agreement to approach, and in fact may choose, any bank or financial institution to satisfy its financial service needs. Its criteria in making the choice could be made on costs and quality of services. Therefore, the Group may, but is not obliged to, continue to use CS Finance Company’s deposit services, loan services, settlement services if the service quality provided is competitive. Having such flexibility afforded under the Financial Services Framework Agreement, the Group is able to better manage its current capital and cashflow position.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Apart from the above, as advised by the Directors, given the strong financial background of China Shipping and its undertaking to the CBRC to increase the capital of CS Finance Company if CS Finance Company has difficulty in payment, the Directors are of the view that the Group’s interest is sufficiently safeguarded should the Group make deposits with CS Finance Company pursuant to the terms of the Financial Services Framework Agreement.

In view of the above, in particular, (i) the Group can generally enjoy more favourable terms (in particular the interest rates under the deposit services and the loan services and the fees charged under the settlement services); (ii) the Group can enjoy flexibility to satisfy its financial service needs as the Group is not obliged to engage CS Finance Company to provide the deposit services, the loan services nor the settlement services under the Financial Services Framework Agreement, such that the Group can select the appropriate providers for deposit, loan and settlement services as and when the Directors consider fit; (iii) CS Finance Company is expected to provide more efficient deposit, loan and settlement services to the Group as compared to independent third-party banks as it is familiar with the Group’s business; (iv) the Company can share the profit of CS Finance Company through its 65% shareholding interest at CS Finance Company; and (v) the interests of the Group can be sufficiently safeguarded with the undertaking given by China Shipping, we concur with the view of the Directors that the entering into of the Proposed Transactions contemplated under the Financial Services Framework Agreement is in the interest of the Company and its shareholders as a whole.

3. Principal terms of the Proposed Transactions

Deposit services

For each of the implementation agreements in respect of the deposit services to be provided to the Group as contemplated under the Financial Services Framework Agreement, such deposit services are provided in accordance with the following pricing principles: (a) the domestic RMB deposits shall be taken at a price based on the benchmark interest rate stipulated by PBC or at the prime rate (the floating upward) within the floating range allowed by such stipulation; and (b) the foreign and domestic US dollars deposits shall be taken at a price based on the prevailing market rates which should be obtained by making inquiries of various banks so that the price determined is not lower than the highest one quoted by such banks.

Loan services

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

For each of the implementation agreements in respect of the loan services to be provided to the Group as contemplated under the Financial Services Framework Agreement, such loan services are provided in accordance with the following pricing principles: (a) the domestic RMB loans shall be provided at a price based on the benchmark interest rates stipulated by the PBC or at the prime interest rate (the floating downward) within the floating range allowed by such stipulation; and (b) the foreign and domestic US dollars loans shall be provided at a price based on the prevailing market rates which should be obtained by making inquiries of various banks so that the price determined is not higher than the lowest one quoted by such banks.

Settlement services

For each of the implementation agreements in respect of the settlement services to be provided to the Group as contemplated under the Financial Services Framework Agreement, the settlement services are provided in accordance with the prevailing market rates which should be obtained by making inquiries of various banks to ensure the price is more favourable than those offered by other banks.

Having considered the above, in particular that (i) the interest rates to be enjoyed from the deposit services and the loan services and the fees charged for the settlement services under the Financial Services Framework Agreement will be no less favourable than those offered by any independent third parties for the same type of deposits, loans or settlement services; and (ii) the Group has its discretion to use the deposit services, loan services and the settlement services, we are of the view that the Proposed Transactions contemplated under the Financial Services Framework Agreement are on normal commercial terms, fair and reasonable so far as the Company and the Independent Shareholders are concerned.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. Revised Annual Caps

Set out below are the (i) historical figures for the years ended 31 December 2013, 2014 and 2015 and the three months ended 31 March 2016; (ii) the existing annual caps for the year ended 31 December 2016; and (iii) the Revised Annual Caps for the Proposed Transactions (“ Table A ”):

				Proposed
			Existing annual	revised annual
	Historical	figures	caps for 2016	caps for 2016
Deposit services:	(RMB’000)		(RMB’000)	(RMB’000)
Maximum daily balance of	3,741,887	(2013)	6,500,000	9,000,000
deposits (including accrued	4,194,975	(2014)		(“Proposed
interest and handling fee) to	4,783,426	(2015)		Deposit Cap”)
be placed by the Group with	5,306,903	(three months
CS Finance Company		ended 31 March
		2016, unaudited)
Loan services:	(RMB’000)		(RMB’000)	(RMB’000)
Maximum daily outstanding	364,000	(2013)	6,500,000	9,000,000
balance of loans (including	1,211,900	(2014)		(“Proposed
accrued interest and handling	22,500	(2015)		Loan Cap”)
fee) to be granted by CS	2,000,000	(three months
Finance Company to the		ended 31 March
Group		2016, unaudited)
Settlement services:	(US$’000)		(US$’000)	(US$’000)
Settlement services to be	7,240	(2013)	180,000	800,000
provided by CS Finance	82,309	(2014)		(“Proposed
Company to the Group	30,198	(2015)		Settlement
	179,999	(three months		Cap”)
		ended 31 March
		2016, unaudited)

Deposit services

As set out in the Letter from the Board, considering (i) that following the completion of acquiring relevant companies under the Restructuring, various business operations of the Company maintain stable development, and the Group’s maximum daily balance of deposits with CS Finance Company was approximately RMB5.3 billion as at 31 March 2016; (ii) that up to the Latest Practicable Date, the Group’s maximum daily balance of deposits with CS Finance Company reached approximately RMB6.4 billion, and the total amount of deposits of the Group within the PRC reached approximately RMB8.5 billion (including the portion

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

exceeding the approved annual cap which is deposited with external banks). The Group may consider to deposit such excess portion (including part of the share acquisition consideration for China Bohai Bank Co., Ltd. (total consideration amounting to approximately RMB5,448 million) and capital contribution for COSCO Finance Co., Ltd. (total contribution amounting to approximately RMB614 million) with CS Finance Company in future provided that the terms provided by CS Finance Company are favourable than that of external banks; and (iii) the Group’s future business development requirements, it is proposed to revise the annual cap in respect of deposit services to RMB9 billion.

According to the Company’s circular dated 31 December 2015, we noted that (i) the total consideration for the acquisition of China Bohai Bank Co., Ltd. is approximately RMB5,448 million and the Company will pay the consideration within 180 days upon all conditions precedent to the relevant acquisition agreement being met in such manners satisfactory to all parties to the agreement; and (ii) the capital increase in COSCO Finance Co., Ltd. to be made by the Company amounted to approximately RMB614 million and such amount of capital contribution will be paid within 180 days upon all conditions precedent to the relevant capital increase agreement being met in such manners satisfactory to all parties to the agreement. According to the Company’s announcement dated 1 June 2016, the acquisition of China Bohai Bank Co., Ltd. and capital increase in COSCO Finance Co., Ltd. have yet to be completed pending the relevant approvals from the competent authorities.

We also noted that as at 31 December 2014 and 31 December 2015, the cash and cash equivalent position of the Group were approximately RMB9.4 billion and RMB11.0 billion, respectively.

Having considered that, in particular, (i) the Company’s need for deposit services for the share acquisition consideration for China Bohai Bank Co., Ltd. and capital contribution for COSCO Finance Co., Ltd.; (ii) the total consideration for the acquisition of China Bohai Bank Co., Ltd. was approximately RMB5,448 million and capital increase in COSCO Finance Co., Ltd. to be made by the Company was approximately RMB614 million; (iii) the maximum daily balance of deposits (including accrued interest and handling fee) placed by the Group with CS Finance Company during the three years ended 31 December 2015 and the three months ended 31 March 2016 was approximately RMB5.3 billion; (iv) up to the Latest Practicable Date, the Group’s maximum daily balance of deposits with CS Finance Company reached approximately RMB6.4 billion, and the total amount of deposits of the Group within the PRC reached approximately RMB8.5 billion (including the portion exceeding the approved annual cap which is deposited with external banks); and (v) the Group’s cash and cash equivalent positions as at 31 December 2014 and 30 June 2015 are above the Proposed Deposit Cap, we consider that the Proposed Deposit Cap is fair and reasonable so far as the Independent Shareholders are concerned.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Loan services

As set out in the Letter from the Board, considering (i) the existing loans in an aggregate amount of RMB2 billion and the credit granted by CS Finance Company to the Group; (ii) the Group’s structure of assets and liabilities (the Group has loans in a total amount of approximately RMB1 billion to RMB2 billion from external banks that will be due or prepaid within 2016 and are proposed to be replaced by more favourable loans to be granted by CS Finance Company); (iii) the strong demand for fund by the Company’s newly acquired CS Leasing and CS Investment (of which, CS Leasing expects to require loans in a total amount of approximately RMB2 billion to RMB3 billion to be provided by CS Finance Company for developing its finance lease business; CS Investment expects to require loans in a total amount of approximately RMB1 billion to RMB2 billion to be provided by CS Finance Company for developing its investment business); and (iv) that the Company’s business focus will transform to integrated financial services mainly comprised of diversified leasing business pursuant to the Restructuring, meanwhile the Company’s debt to asset ratio may increase and it may require certain working capital loans for replenishment and transition during normal operation turnover and borrowings and repayments, it is proposed to revise the annual cap in respect of loan services to RMB9 billion.

We noted that as at 31 December 2014 and 31 December 2015, the Group’s long-term and short-term borrowings amounted to approximately RMB22.2 billion and RMB28.4 billion, respectively.

According to the Company’s circular dated 31 December 2015, we also noted that (i) the acquisition of 100% equity interest in CS Leasing and CS Investment form part of the Restructuring; (ii) CS Leasing is principally engaged in providing financing to customers for a wide array of assets under finance lease arrangements and operating lease arrangements. Finance leasing is CS Leasing’s core business, including direct leasing and sale and leaseback, and primarily involves the logistics, healthcare, education and energy industries. CS Leasing’s main sources of capital are borrowings from other members of the CS Group and bank borrowings; (iii) CS Investment is principally engaged in the container manufacturing business as well as the financial equity investment business and related services. CS Investment owns manufacturing facilities for standard dry cargo containers in Guangzhou, Lianyungang and Jinzhou, with an aggregate annual production capacity of 450,000TEU and makes equity investments in the insurance brokerage, banking, funds and other industries through securities investments, trusts, asset management schemes and other financial instruments; and (iv) after the completion of the Restructuring, the Group will gradually shift into a comprehensive financial service platform focusing on the shipping industry with leasing business as its core business.

Although the maximum daily outstanding balance of loans (including accrued interest and handling fee) granted by CS Finance Company to the Group during the three years ended 31 December 2015 and the three months ended 31 March 2016 of RMB2 billion only represents approximately 22.2% of the Proposed Loan Cap, having considered that, in particular, (i) the Group’s long-term and short-term borrowings as at 31 December 2014 and 31 December 2015

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

are well above the Proposed Loan Cap; (ii) the principal business of CS Leasing and CS Investment, the two newly acquired subsidiaries of the Company, are the provision of financing business, container manufacturing business as well as the financial equity investment business which are capital intensive by nature; and (iii) after the completion of the Restructuring, the Group will gradually shift into a comprehensive financial service platform focusing on the shipping industry with leasing business as its core business, we consider that the Proposed Loan Cap is fair and reasonable so far as the Independent Shareholders are concerned.

Settlement services

As set out in the Letter from the Board, considering (i) the existing foreign exchange settlement amount of US$350 million of the Company for the first quarter of 2016 (including the portion exceeding the approved annual cap which is settled via external banks); and (ii) the estimated foreign exchange settlement amount of US$400 million by Shanghai Universal Logistics Equipment Co., Ltd. (a subsidiary of the Company’s newly acquired CS Investment under the Restructuring), and also taken into account the Company’s historical settlement requirements, it is proposed to revise the annual cap in respect of settlement services to US$800 million.

As shown in Table A, for the three months ended 31 March 2016, CS Finance Company provided settlement services to the Group for an aggregate amount of approximately US$179,999,000. The annualised amount of such 3-month historical figures would be US$719,996,000, representing approximately 90.0% of the Proposed Settlement Cap.

Further, as mentioned above, the Group had a total foreign exchange settlement amount of US$350 million for the three months ended 31 March 2016. Such settlement amount comprise of settlement services provided by CS Finance Company and external banks. The annualised amount of such 3-month historical figures would be US$1,400 million, representing approximately 175.0% of the Proposed Settlement Cap.

According to the Company’s circular dated 31 December 2015, we also noted that Shanghai Universal Logistics Equipment Co., Ltd. is principally engaged in research and development of logistics equipment, investments in industries, international trading of logistics equipment, import and export of cargos and technologies, and their related consultation services (business operations of which are subject to approval by the relevant government authorities according to the law).

Having considered that, in particular, (i) over 99.9% of the existing annual cap for settlement services was utilised in the first quarter of 2016; (ii) the Group’s foreign exchange settlement amount settled through CS Finance Company for the three months ended 31 March 2016, when annualised, represents approximately 90.0% of the Proposed Settlement Cap; and (iii) the Group’s total foreign exchange settlement amount for the three months ended 31 March 2016, when annualised, represents approximately 175.0% of the Proposed Settlement Cap, we consider that the Proposed Settlement Cap is fair and reasonable so far as the Independent Shareholders are concerned.

– 45 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

5. Internal control procedures of the Company

As set out in the Letter from the Board, before entering into any implementation agreements, the Company will implement the following procedures to ensure the terms offered by the relevant connected parties are no less favourable than those available from independent third parties:

(i) the relevant executives of the finance department of the Company will review contemporaneous prices and other relevant terms offered by at least two commercial banks, all being independent third parties, operating at the same or nearby area before the commencement of the relevant transaction, and ensure the terms offered by the relevant connected persons are fair and reasonable and comparable to those offered by independent third parties. In the case where the offers made by independent third parties are more favourable to the Company, the Company may take up those offers; and
(ii) the supervision department of the Company will periodically review and inspect the process of the relevant continuing connected transactions.

The finance department of the Company will also collect statistics of each of the Proposed Transactions on a quarterly basis to ensure the annual caps approved by the Independent Shareholders or as announced are not exceeded.

Having considered the Company’s internal control procedures, in particular that (i) a variety of personnel in the finance department and the supervision department of the Company will be involved in the review process to ensure the terms offered by the relevant connected persons are fair and reasonable and comparable to those offered by independent third parties and the annual caps approved by the Independent Shareholders or as announced are not exceeded; and (ii) the terms offered by at least two independent third parties operating at the same or nearby area will be compared with the terms offered by the relevant connected persons, we concur with the Directors’ view that the Company’s internal control procedures are adequate to ensure that the individual transactions of the Proposed Transactions will be conducted within the Financial Services Framework Agreement.

RECOMMENDATION

Having taken into account the above-mentioned principal factors and reasons, in particular:

background of the Proposed Transactions, the Group, China Shipping and CS Finance Company as set out under the section headed “1. Background information”;
the reasons for and benefits of the entering into the Proposed Transactions as set out under the section headed “2. Reasons for and benefits of the Proposed Transactions”;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

the principal terms of the Proposed Transaction as set out under the section headed “3. Principal terms of the Proposed Transactions”;
the basis for determining the Proposed Deposit Cap, the Proposed Loan Cap and the Proposed Settlement Cap as set out under the section headed “4. Revised Annual Caps”; and
the internal control procedures of the Company as set out under the section headed “5. Internal control procedures of the Company”,

we consider that the entering into of the Proposed Transactions under the Financial Services Framework Agreement is in the ordinary and usual course of business of the Group and in the interests of the Company and its shareholders as a whole. We are also of the view that the terms of the Proposed Transactions under the Financial Services Framework Agreement (including the Revised Annual Caps) are normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, we recommend the Independent Shareholders, as well as the Independent Board Committee to recommend the Independent Shareholders, to vote in favour of the resolution to be proposed at the AGM to approve the Proposed Transactions contemplated under the Financial Services Framework Agreement (including the Revised Annual Caps).

Yours faithfully, For and on behalf of Messis Capital Limited Vincent Cheung Executive Director

Mr. Vincent Cheung is a licensed person registered with the Securities and Futures Commission and regarded as a responsible officer of Messis Capital Limited to carry out type 6 (advising on corporate finance) regulated activities under the SFO and has over 8 years of experience in corporate finance industry.

– 47 –

APPENDIX I 2015 WORK REPORT OF INDEPENDENT DIRECTORS

China Shipping Container Lines Company Limited 2015 Work Report of Independent Directors

According to the laws and regulations including the Company Law of the PRC (“Company Law”), Securities Law of the PRC (“Securities Law”), Guiding Opinions on the Establishment of Independent Directors System in Listed Companies and the relevant provisions of the Articles of Association and the Work System for Independent Directors, and under the Guidelines on the Format of Work Report of Independent Directors issued by the Shanghai Stock Exchange, we, as the Independent Directors of China Shipping Container Lines Company Limited (the “Company” or “CS Container”), have prepared the 2015 Work Report of Independent Directors as follows.

I. BASIC INFORMATION ABOUT INDEPENDENT DIRECTORS

(1) Personal working experience, professional background and part-time engagement

The personal working experience, professional background and part-time engagement of Ms. Zhang Nan, Ms. Hai Chi Yuet, Mr. Guan Yimin, Mr. Shi Xin and Mr. Graeme Allan Jack, all of whom are current Independent Directors of the Company, are as follows:

1. Ms. Zhang Nan ( 張楠 )

Ms. Zhang currently serves as an Independent Non-executive Director. Ms. Zhang began her career in March 1969. She has served as the deputy secretary and secretary of the Communist Youth League, and the deputy director of political office in the Second Chemical Factory of Beijing Yanhua Corporation. She was the director of the office of the political department of Beijing Yanhua Corporation, the deputy director of the office of Beijing Electronics & Instrument Industrial Bureau Device Company, and the deputy director of the professional department on electronic devices and deputy director of the office of Beijing Computer Industry Corporation. She served as the deputy director of audit and compliance division of Beijing Electronic Industry Office, the deputy director of the research office of the State Council Production Office and the State Council Economics and Trade Office. She was the director of the division of economic law and regulations, the deputy director of the economic research center, the deputy director of the enterprise supervision bureau, and the director of the economics officer training center of the State Economic and Trade Commission. She served as the director of the economics officer training center and a supervisor (bureau class) of the supervisory board for large state-owned enterprises of the State-owned Assets Supervision and Administration Commission. She is currently a researcher of China Center for Comparative Politics and Economics and a special invited member of the scientific management committee and the enterprise risk management specialist committee of Sinohydro Corporation, an independent director of Rising Nonferrous Metals Share Co., Limited. Ms. Zhang graduated from the Party School of the Central Committee with a major in economic management and the Chinese Academy of Social Sciences with a major in economic law, and is a senior economist. She was appointed as an Independent Non-executive Director of the Company in June 2010.

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APPENDIX I 2015 WORK REPORT OF INDEPENDENT DIRECTORS

2. Ms. Hai Chi Yuet ( 奚治月 )

Ms. Hai has more than 30 years of working experience in the shipping logistics industry. From December 2012 to now, she has served as the advisor to Hutchison Port Holdings Trust (“HPH Trust”). Ms. Hai served as the managing director of COSCO-HIT Terminals (Hong Kong) Limited, the managing director of Yantian International Container Terminals Limited, and the chief executive officer of HPH Trust. Ms. Hai also participates in public service organizations, including serving as a member of the Election Committee for the Chief Executive of Hong Kong Special Administrative Region, Transport Subsector. She also served as a member of Hong Kong Port Development Advisory Group and the president of Shenzhen Ports Association. Ms. Hai was awarded as Shenzhen Honorable Citizen in 2011. Ms. Hai graduated from York University, Toronto, Canada and the University of Hong Kong, obtaining a bachelor’s degree in business administration and a master’s degree in Buddhism studies respectively. She was appointed as an Independent Non-executive Director of the Company in May 2015.

3. Mr. Guan Yimin ( 管一民 )

Mr. Guan currently serves as an Independent Non-executive Director. He is currently an independent director of Shanghai International Port (Group) Co., Ltd. and an external supervisor of Shanghai Fosun Pharmaceutical (Group) Co., Ltd. Mr. Guan began his career in January 1983. He taught in the accounting faculty of Shanghai University of Finance and Economics, and served as deputy dean and standing deputy dean of the institute of adult education of Shanghai University of Finance and Economics. He was a professor of Shanghai University of Finance and Economics and Shanghai National Accounting Institute. Mr. Guan graduated from the accounting faculty of Shanghai University of Finance and Economics, and was appointed as an Independent Nonexecutive Director of the Company in June 2013. He is entitled to receive special subsidies granted by the State Council of China.

4. Mr. Shi Xin ( 施欣 )

Mr. Shi currently serves as an Independent Non-executive Director. He is currently a doctoral tutor and professor in the major of transport and communications planning and management of Shanghai Maritime University, and also a deputy director of maritime management committee of China Institute of Navigation. He has extensive experience in the research of transport and communications planning and management. He has participated in research projects such as construction of Shanghai International Shipping Center, development of modern shipping service industry, and management of the transport and communications industry. He has been awarded several provincial science and technology advancement awards and policy-making consultation achievement awards. With extensive working experience in enterprise management and consultation, Mr. Shi has also participated in the management consultation work for many well-known shipping and logistics enterprises. Mr. Shi is a leading lecturer and guiding lecturer of EMBA and MBA courses. He graduated from Shanghai Jiao Tong University, majoring in management engineering, and received a doctorate degree. He was appointed as an Independent Non-executive Director of the Company in June 2013.

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APPENDIX I 2015 WORK REPORT OF INDEPENDENT DIRECTORS

5. Mr. Graeme Allan Jack

Mr. Graeme Allan Jack, aged 65, has served as an Independent Non-executive Director of the Company since June 2015. He has extensive experience in finance and auditing. He is also an independent non-executive director of Hutchison Port Holdings Trust and The Greenbrier Companies Inc., and an independent trustee for the group retire plan of CK Hutchinson Holdings Limited. He retired from PricewaterhouseCoopers as a partner in 2006. He holds a bachelor’s degree in commerce and is a fellow member of the Hong Kong Society of Accountants and an associate member of The Institute of Chartered Accountants in Australia and New Zealand.

(2) Explanation on circumstances that may affect independence

We, as Independent Directors of the Company, do not hold any position in the Company other than Independent Directors, nor any position in the substantial Shareholders of the Company, and do not have any other relationship with the Company or the substantial Shareholders of the Company that could otherwise materially interfere with the exercise of our independent and objective judgment.

II. PERFORMANCE OF DUTIES OF INDEPENDENT DIRECTORS DURING THE YEAR

(1) Attendance of meetings

1. Audit Committee of the Board

	Number of	Number of	Number of	Number of
	attendance	meeting(s)	meeting(s)	meeting(s)	Number of
Name of	required for	attended in	attended by	attended by	meeting(s)
Director	the year	person	telecommunication	proxy	absent
Guan Yimin	7	6	4	1	0
Zhang Nan	7	7	7	0	0

Note: Mr. Guan Yimin and Ms. Zhang Nan were members of the audit committee of the fourth session of the Board, which was chaired by Mr. Guan Yimin.

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APPENDIX I 2015 WORK REPORT OF INDEPENDENT DIRECTORS

2. Nomination Committee of the Board

	Number of	Number of	Number of	Number of
	attendance	meeting(s)	meeting(s)	meeting(s)	Number of
Name of	required for	attended in	attended by	attended by	meeting(s)
Director	the year	person	telecommunication	proxy	absent
Zhang Nan	4	4	4	0	0
Hai Chi Yuet	2	2	2	0	0
Shi Xin	4	4	4	0	0
Teo Siong Seng	2	2	2	0	0

Note: Ms. Zhang Nan, Ms. Hai Chi Yuet, and Mr. Shi Xin were members of the nomination committee of the fourth session of the Board, which was chaired by Ms. Zhang Nan. Mr. Teo Siong Seng resigned as Independent Non-executive Director and a member of the nomination committee with effect from 8 May 2015.

3. Investment Strategy Committee of the Board

	Number of	Number of	Number of	Number of
	attendance	meeting(s)	meeting(s)	meeting(s)	Number of
Name of	required for	attended in	attended by	attended by	meeting(s)
Director	the year	person	telecommunication	proxy	absent
Zhang Nan	1	1	0	0	0
Hai Chi Yuet	1	1	0	0	0
Shi Xin	1	1	0	0	0

Note: Ms. Zhang Nan, Ms. Hai Chi Yuet and Mr. Shi Xin were members of the investment strategy committee of the fourth session of the Board.

4. Remuneration Committee of the Board

	Number of	Number of	Number of	Number of
	attendance	meeting(s)	meeting(s)	meeting(s)	Number of
Name of	required for	attended in	attended by	attended by	meeting(s)
Director	the year	person	telecommunication	proxy	absent
Shi Xin	2	2	2	0	0
Chen Lishen	2	2	2	0	0
Hai Chi Yuet	0	0	0	0	0

Note: Mr. Chen Lishen and Mr. Shi Xin were members of the remuneration committee of the fourth session of the Board. Mr. Chen Lishen resigned as Independent Non-Executive Director and chairman of the remuneration committee with effect from 26 June 2015. Mr. Shi Xin is the current chairman of the remuneration committee.

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APPENDIX I 2015 WORK REPORT OF INDEPENDENT DIRECTORS

5. Board of Directors

						Had not
	Number of	Number of	Number of	Number of		attended in
	attendance	meeting(s)	meeting(s)	meeting(s)	Number of	person for two
Name of	required for	attended in	attended by	attended by	meeting(s)	consecutive
Director	the year	person	telecommunication	proxy	absent	times
Zhang Nan	15	14	12	1	0	No
Teo Siong Seng	15	13	12	2	0	No
Chen Lishen	15	14	12	1	0	No
Guan Yimin	15	15	12	0	0	No
Shi Xin	15	15	12	0	0	No
Hai Chi Yuet	12	12	9	0	0	No
Graeme Jack	11	11	9	0	0	No

Note: Mr. Teo Siong Seng and Mr. Chen Lishen resigned as Independent Non-Executive Directors of the Company with effect from 8 May 2015 and 26 June 2015, respectively.

In addition to the aforementioned Board meetings and Board committee meetings, Independent Directors had attended the 2014 annual general meeting and the first and second extraordinary general meetings of 2015, during which Independent Directors considered the resolutions proposed at those meetings with all Shareholders (including minority Shareholders), engaged in interactive communications, and responded to relevant issues of the Shareholders’ concern.

(2) Voting on proposals at the Board meetings and the Board committee meetings

The Company reports the daily operation and production to us on a regular basis. Before the Board meetings and Board committee meetings were held, we reviewed all materials and actively studied the situations for decision-making and communicated with other relevant staff. We considered every proposal conscientiously, making independent judgments and giving reasonable advices in meetings held by ways of telecommunication and on-site meetings. We give independent opinions relating to the proposals in accordance with the relevant requirements under the listing rules of Hong Kong Stock Exchange and Shanghai Stock Exchange. Based on sufficient communication with the Company, we voted for all resolutions proposed at the Board meetings and Board committee meetings of the Company.

(3) Support given by the Company to the Independent Directors

The Company has provided full support and all convenience as possible for our work as well as the investigations and surveys conducted by us as the Independent Directors.

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APPENDIX I 2015 WORK REPORT OF INDEPENDENT DIRECTORS

(4) On-site investigations and surveys conducted by Independent Non-executive Directors

During the reporting period, we arranged special on-site investigations and surveys on our corporate headquarters, controlling subsidiaries and relevant regional markets.

In April 2015, Ms. Zhang Nan, Mr. Chen Lishen and Mr. Guan Yimin, being Independent Directors, visited China Shipping (Korea) Holdings Co., Limited and local agencies to conduct investigations and surveys which included market share, volume of marine freight forwarding business and marketing. We have deepened communication and discussion as to the issues of cargo source structure and major customers relating to the operation in Korea segment. The investigation and survey achieved good results that are in line with our expectation.
In October 2015, Ms. Zhang Nan, Mr. Guan Yimin, Mr. Shi Xin and Ms. Hai Chi Yuet, being Independent Directors, conducted investigations and surveys on our corporate headquarters, China Shipping Container Lines Shanghai Co., Ltd., a wholly owned subsidiary of the Company, and China Shipping Container Lines Zhejiang Company Limited, a subsidiary of the Company. Our Independent Directors and Supervisors conducted a special research on our corporate headquarters’ internal control, with the intention of understanding the coverage of risk management and implementation steps, the differences in the risk management as compared with that in the past, the current progress and future work focus from the management teams of the Company. The management teams of the two subsidiaries made specific reports on their marketing, operating management, financial management, internal control and other subjects, and conducted communication and discussion as to the aforementioned issues. The Independent Directors have deepened understanding of business management characteristics and market positions. The Independent Directors expressed their expectations in respect of further actions to be taken by the companies to improve the procedures of internal control and presented relevant opinions and advices.

Following the aforementioned investigations and surveys, the Independent Directors have obtained a more comprehensive and direct understanding of the business management, internal control and relevant regional markets of the corporate headquarters and the subsidiaries, which enabled them to better perform their duties.

III. IMPORTANT CONCERNS OF INDEPENDENT DIRECTORS FOR THE YEAR

(1) Connected transactions

The Resolution regarding Disposal of Chassis by CSCL (HK) and CSCL (Asia) was passed at the thirty-fourth meeting of the Board of the Company. Our independent opinion on the resolution was as follows: CSCL (HK) and CSCL (Asia) disposed the chassis to a connected party of the Company at a price higher than the appraised value determined by an independent third party valuation agency. The transaction price was fair and reasonable, not prejudicial to the interest of the Company and unconnected shareholders, and in compliance with the principles of fairness, impartiality and openness.

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APPENDIX I 2015 WORK REPORT OF INDEPENDENT DIRECTORS

During the reporting period, in order to ensure the smooth operation of its daily business, the Company and China Shipping (Group) Company (hereinafter referred to as “China Shipping”) entered into a series of master connected transaction agreements, pursuant to which China Shipping and its subsidiaries (collectively referred to as the “China Shipping Group”) will provide (or mutually provide) a series of operating services for the Company and its subsidiaries (collectively referred to as the “Group”). Since China Shipping is the largest shareholder of the Company, the abovementioned services constitute continuing connected transactions of the Group and China Shipping Group within the ordinary course of their businesses. In this regard, we expressed our independent opinion on such connected transactions: the new connected transactions were entered into based on historical transactions or prediction made according to the transaction agreements already executed and in adherence to the principles of fairness, impartiality and openness, and are in the interest of the Company and the Shareholders as a whole. We approved the annual cap for such connected transactions for 2016 and agreed that the Company entered into the relevant master service agreements with China Shipping (Group) Company based on business categories and proposed the transactions contemplated under the Financial Service Framework Agreement at the general meeting for consideration and review.

The Resolution regarding Major Asset Purchase and Sale and Connected Transaction (hereinafter referred to as the “Transaction”) was considered and reviewed at the fortieth meeting of the fourth session of the Board. We, as the current Independent Directors, took part in the fortieth meeting of the fourth session of the Board held on 11 December 2015 and reviewed relevant documents relating to the Transaction, with a strong sense of responsibility. We expressed our independent opinion on the Transaction based on our independent judgment, and agreed to the Board’s overall arrangement for the Transaction of the Company.

(2) External guarantees and appropriation of funds

We believe the Company was able to strictly adhere to the requirements of relevant laws and regulations, and external guarantees have underwent consideration and approval process and information disclosure, and there were no instances where it was discovered that the Company provided illegal guarantees for controlling Shareholders and other associates. The flow of funds between the Company and the de-facto controller was based on normal production and operation, and there was no instance where it was discovered that the controlling Shareholder and other associates had appropriated the funds of the Company.

(3) Use of proceeds

The proceeds from fund raising have been used up before 2013.

(4) Nomination and remuneration of senior management

In 2015, no nomination was made in respect of senior management of the Company.

We believe the 2015 remuneration proposal for the senior management of the Company has been formulated based on the industry, as well as the Company’s scale and actual business conditions, and the actual work of its senior management, and does not impair the interests of

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APPENDIX I 2015 WORK REPORT OF INDEPENDENT DIRECTORS

either the Company or its Shareholders. The review process for such proposal was in compliance with relevant laws and regulations, including the Company Law, as well as the Articles of Associations. The 2015 remuneration proposal for the senior management of the Company was accepted and submitted for consideration at the Company’s Board meeting and AGM according to applicable approval authority level.

(5) Results forecast and preliminary results disclosure

In accordance with the relevant regulations under the listing rules of the Shanghai Stock Exchange, and after consideration and unanimous approval by the Board, the Company issued the 2015 negative profit alert announcement on 22 January 2016. The Company did not issue preliminary results highlight for 2015.

(6) Appointment of accounting firms

Baker Tilly China was the PRC auditor and internal control auditor of the Company in 2015, and Ernst & Young was the international auditor of the Company in 2015, both of which carried out their responsibilities and duties according to law. After consideration and approval by the Board, the Company proposed to appoint the aforementioned two accounting firms to provide domestic and international auditing and internal control auditing services for the Company in 2016. We agree with such appointment and have agreed to submit these resolutions to the general meeting of the Company for consideration.

(7) Profit distribution

According to the “Notice Regarding Further Implementation of Cash Dividends Distribution of Listed Companies” promulgated by the CSRC (Zheng Jian Fa (2012) No.37) and the actual conditions of the Company, the Company amended the Articles of Association and further regulated the cash dividend policy of the Company, which was implemented after being approved at the general meeting of the Company held on 5 December 2012.

As the accumulated retained earnings of the parent and consolidated accumulated retained earnings of the Company and its subsidiaries as at 31 December 2015 according to domestic accounting standards were negative, after consideration of relevant regulatory policies and the Articles of Association, it was proposed that no profit distribution would be made and no capitalization of capital common reserve fund would be made for the year of 2015. We agree with the 2015 annual profit distribution plan, and we believe the plan complies with the relevant regulations of the Company Law and the Articles of Association.

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APPENDIX I 2015 WORK REPORT OF INDEPENDENT DIRECTORS

(8) Performance of undertakings by the Company and Shareholders

The Company made the following undertakings at the time of the IPO and the major asset restructuring[(1)] , respectively:

Background of Type of undertaking undertaking

The undertaking

party Details of undertaking

Is there a deadline for Date of undertaking performing the and the valid period undertakings?

Undertakings Maintaining China Shipping The assets, staff, finance, entities and business of each related with the independence Group of China Shipping Group and CS Container shall be major asset of the listed independent from each other: restructuring company

Independence of Asset

China Shipping Group has undertaken that CS Container shall have complete and sole ownership of all of its assets, and that the assets of each of China Shipping Group and CS Container shall be completely separated and managed by each of China Shipping Group and CS Container independently. China Shipping Group has undertaken that China Shipping Group and companies under its control shall not appropriate the funds and assets of CS Container.

The undertakings were No made on 11 December 2015, and shall remain effective as long as the relationship of actual control between China Shipping Group and CS Container exists.

2. Independent of Staff

China Shipping Group has undertaken that CS Container shall have independent and complete management systems of labour, human resources and wages, and that these systems shall be absolutely independent from those of China Shipping Group. China Shipping Group shall propose candidates for senior management personnel such as directors, supervisors and managers in accordance with statutory procedures, without interfering decisions regarding exercise of powers by the board and general meeting of CS Container in relation to appointment and removal of staff. General managers, deputy general managers, finance controllers, secretary to the Board and other senior management personnel shall solely work for CS Container and be entitled to remunerations paid by CS Container. They shall not work at China Shipping Group and companies under its control and/or be entitled to any remuneration paid by these companies.

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APPENDIX I 2015 WORK REPORT OF INDEPENDENT DIRECTORS

Background of Type of undertaking undertaking

The undertaking party

Details of undertaking

Is there a deadline for Date of undertaking performing the and the valid period undertakings?

3. Independence of Finance

China Shipping Group has undertaken that CS Container shall have independent finance functions and independent finance auditing systems; CS Container shall have standardized and independent financial accounting systems; CS Container shall maintain its independent bank account and shall not share any account with China Shipping Group and companies under its control; the finance staff of CS Container shall not work at China Shipping Group and companies under its control; CS Container shall pay tax as an independent entity; CS Container shall make independent financial decisions and China Shipping Group shall not interfere with usage of funds by CS Container.

4. Independence of Entities

China Shipping Group has undertaken that CS Container shall maintain a sound structure of corporate governance as a joint stock limited company and an independent and complete organizational structure; the general meetings, board meetings, independent directors, supervisory committee and general managers of CS Container shall exercise their powers independently in accordance with the laws, regulations and the Articles of Association of CS Container.

5. Independence of Business

China Shipping Group has undertaken that CS Container shall have an independent business management system, independent assets, staff and qualifications, as well as capabilities required for independent operation of business, and the capability of independent operation in the market for sustainable operation. Other than exercising shareholders’ rights in accordance with the laws, China Shipping Group shall not interfere with the normal course of business of the Company.

The undertaking shall be effective as long as the relationship of actual control between China Shipping Group and CS Container exists.

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APPENDIX I 2015 WORK REPORT OF INDEPENDENT DIRECTORS

						Is there a
						deadline for
Background of	Type of	The undertaking			Date of undertaking	performing the
undertaking	undertaking	party	Details of undertaking		and the valid period	undertakings?
Undertakings	Avoiding	China Shipping	1.	Following the completion of the major asset	The undertakings were	No
related with the	competition in	Group		restructuring, China Shipping Group shall not	made on 11
major asset	same industry			directly or indirectly engage in business activities	December 2015, and
restructuring				that compete or may compete with the businesses	shall remain valid
				that CS Container engages in, including but not	as long as China
				limited to wholly-owned business, joint ventures,	Shipping Group is
				cooperation enterprises and associates.	the controlling
					shareholder of CS
			2.	For any product to be produced or any business to	Container, with
				be engaged by wholly owned companies,	effect from 1
				subsidiaries or shareholding companies that	February 2016.
				compete or may compete with CS Container, China
				Shipping Group has undertaken that it shall transfer
				its contribution or shares in such enterprises upon
				CS Container’s request, and shall ensure that CS
				Container or its wholly owned subsidiaries will
				have the first right of refusal to the said
				contribution or shares in accordance with laws and
				regulations. China Shipping Group shall also use
				best endeavours to ensure that the prices of such
				transactions are fair and reasonable and determined
				by independent third parties on the basis of normal
				practice of business transactions.
			3.	For any breach of the above undertakings on the
				part of China Shipping Group or companies
				controlled by it that results in impairment to
				interests of CS Container and its other
				shareholders, China Shipping Group shall
				indemnify the loss in accordance with the laws.

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APPENDIX I 2015 WORK REPORT OF INDEPENDENT DIRECTORS

						Is there a
						deadline for
Background of	Type of	The undertaking			Date of undertaking	performing the
undertaking	undertaking	party	Details of undertaking		and the valid period	undertakings?
Undertakings	Reducing	China Shipping	1.	China Shipping Group and other companies under	The undertakings were	No
related with the	connected	Group		its control shall avoid or reduce connected	made on 11
major asset	transactions			transactions with CS Container as much as	December 2015, and
restructuring				possible. For those unavoidable or necessary	shall remain valid
				connected transactions, China Shipping Group has	as long as China
				undertaken that it shall enter into agreements in	Shipping Group is
				accordance with the laws and on the principles of	the controlling
				equality, fairness and open at the market, and shall	shareholder of CS
				complete statutory procedures in accordance with	Container, with
				laws and regulations, governing documents and the	effect from 1
				Articles of Associations of CS Container. China	February 2016.
				Shipping Group has further undertaken that it shall
				ensure that all connected transactions are fair and in
				compliance with the laws, and that it shall not cause
				harm to the legal interests of CS Container and its
				other shareholders through connected transactions,
				and shall make disclosure of information in a
				timely matter in accordance with relevant laws and
				regulations and governing documents.

2.	China Shipping Group shall exercise the rights of
	shareholders in accordance with the Company Law
	and other laws and regulations as well as the
	relevant requirements as stipulated in Articles of
	Association of CS Container; it shall abstain from
	voting in respect of any resolution proposed at the
	general meeting of CS Container in relation to
	connected transactions with China Shipping Group
	and other companies under its control.

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APPENDIX I 2015 WORK REPORT OF INDEPENDENT DIRECTORS

					Is there a
					deadline for
Background of	Type of	The undertaking		Date of undertaking	performing the
undertaking	undertaking	party	Details of undertaking	and the valid period	undertakings?
IPO-related	Addressing	The Company or	On 29 August 2007, China Shipping made an	The undertaking was	No
undertakings	competitions in	shareholders	undertaking of non-competition to CS Container, by	made on 29 August
	same industry	holding more	which: 1. China Shipping shall adopt effective steps to	2007, and shall
		than 5% equity	ensure that it will not, and procure its subsidiaries to	remain valid for a
		interests	adopt effective steps to ensure that they will not, engage	long term.
			in any business that may compete with the container
			transportation business and the related business which
			CS Container and its subsidiaries engage in, or have
			rights or interests in such business; where China
			Shipping or its subsidiaries are offered any business
			opportunity related to container transportation business
			and the related business that CS Container engages or
			will engage in the future, China Shipping shall and shall
			procure its subsidiaries to transfer CS Container or its
			subsidiaries such business opportunities without
			consideration and CS Container or its subsidiaries shall
			have the first rights of refusals to such business
			opportunities. 2. China Shipping (Group) Company
			agreed to indemnify CS Container and/or its
			subsidiaries all losses, damages and expenses incurred
			as a result of any breach of this undertaking by China
			Shipping and/or its subsidiaries.

Note: Major assets restructuring: At the first extraordinary general meeting of the Company in 2016 held on 1 February 2016, the relevant resolution with respect to major asset restructuring, along with the Report in relation to Major Asset Disposal and Major Asset Acquisition and Connected Transactions of China Shipping Container Lines Company Limited (the “Restructuring Report”)(for details, please refer to the Restructuring Report announced by the Company on the website of Shanghai Stock Exchange(www.sse.com.cn) on 25 December 2015) was considered and approved.

In our opinion, the undertakings above have been strictly executed.

(9) Implementation of information disclosure

During the reporting period, the Company was able to disclose information in an “open, fair, and just” manner according to the requirements of relevant laws and regulations, and was not criticized or penalized by regulatory authorities.

(10) Implementation of internal control

For the implementation of internal control, please refer to the “2015 Internal Control Evaluation Report” considered and passed by the Board and the “2015 Internal Control Audit Report” of the Company issued by Baker Tilley China.

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APPENDIX I 2015 WORK REPORT OF INDEPENDENT DIRECTORS

(11) Operations of the Board and its special committees

The Board has set up four special committees, namely the investment strategy committee, nomination committee, remuneration committee and audit committee, which considered issues according to their respective specialized fields. The operations of the Board and its special committees were normalized and they carried out their duties according to law. For operating details, please refer to the 2015 annual report of the Company.

(12) Other issues which the Independent Directors think the Company should improve

The Company operated according to relevant laws and regulations as well as regulatory requirements for listed companies, and there are currently no issues which need improvement.

IV. OVERALL ASSESSMENT

As Independent Directors of the Company, we strictly adhered to the requirements of laws and regulations, including the Company Law, Securities Law, Guiding Opinions on the Establishment of Independent Directors System in Listed Companies, the Articles of Association and Working System of Independent Directors, and carried out our duties according to the principles of objectiveness, fairness and independence. We also participated in the decision making of material events of the Company, and remained diligent, fully realizing the purpose of Independent Directors, safeguarding the interests of the Company and Shareholders (especially minority Shareholders) as a whole.

In 2016, we will continue to be prudent, diligent and faithful and be responsible to the Company and all Shareholders. We will constantly study and enhance our professional skills and decision making capabilities, and carry out our duties and obligations as Independent Directors in a faithful and effective manner so as to better protect the statutory interests of the Company and minority Shareholders.

Independent Directors of China Shipping Container Lines Company Limited Zhang Nan, Hai Chi Yuet, Guan Yimin, Shi Xin, Graeme Jack

30 March 2016

– 61 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

1. THREE-YEAR FINANCIAL INFORMATION OF THE GROUP

The Company is required to set out in this circular the information for the last three financial years with respect to the profits and losses, financial record and position, set out as a comparative table and the latest published audited balance sheet together with the notes on the annual accounts for the last financial year for the Group.

The audited consolidated financial statements of the Company for the years ended 31 December 2013, 2014 and 2015 together with the relevant notes to the financial statements of the Company can be found on pages 74 to 189 of the annual report of the Company for the year ended 31 December 2013, pages 83 to 203 of the annual report of the Company for the year ended 31 December 2014 and pages 102 to 201 of the annual report of the Company for the year ended 31 December 2015. Please also see below the hyperlinks to the said annual reports:

http://www.hkexnews.hk/listedco/listconews/SEHK/2014/0429/LTN20140429324.pdf

http://www.hkexnews.hk/listedco/listconews/SEHK/2015/0429/LTN20150429201.pdf

http://www.hkexnews.hk/listedco/listconews/SEHK/2016/0429/LTN20160429559.pdf

The audited consolidated financial statements of Dong Fang International Investment Limited, Florens Container Holdings Limited, Helen Insurance Brokers Limited, China Shipping Nauticgreen Holdings Company Limited, CS Leasing (from 29 August 2013 (date of incorporation)), CS Investment, CS Finance Company and Long Hon our Investments Limited, all of which have been acquired by the Group since 31 December 2015, for the years ended 31 December 2012, 2013 and 2014 and the nine months ended 30 September 2015 together with the relevant notes to the financial statements, can be found on pages I-A-1 to I-I-28 of the circular of the Company dated 31 December 2015. Please also see below the hyperlink to the said circular:

http://www.hkexnews.hk/listedco/listconews/SEHK/2015/1230/LTN20151230611.pdf

2. STATEMENT OF INDEBTEDNESS

Debt Securities and Term Loans

As at the close of business of 30 April 2016, save as disclosed in respect of the borrowings and indebtedness of the Group below, the Group has no debt securities issued or outstanding, or authorised or otherwise created but unissued, and no term loans, distinguishing between guaranteed, unguaranteed, secured (whether the security is provided by the Company or by independent third parties) or unsecured.

Borrowings and Indebtedness

As at the close of business of 30 April 2016, being the latest practicable date for the purpose of this statement of indebtedness prior to the printing of this circular, the Group has outstanding borrowings and indebtedness of approximately RMB73,624 million, comprising secured bank loans of approximately RMB17,239 million, unsecured bank loans of approximately RMB56,385 million, and RMB bonds of approximately RMB1,800 million.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

Contingent Liabilities

As at the close of business of 30 April 2016, the Group has no material contingent liability or guarantees.

Mortgage and Charges

As at the close of business of 30 April 2016, the Group’s general banking facilities and the above outstanding secured borrowings were secured by the Group’s property, plant and equipment and certain bank deposits.

Save as aforesaid or as otherwise mentioned herein and apart from intra-group liabilities, the Group did not have any outstanding mortgages, charges, debentures, loan capital, debt securities, bank loans and overdrafts or other similar borrowings or indebtedness, liabilities under acceptance (other than normal trade bills) or acceptance credits or hire purchase commitments, guarantees or other material contingent liabilities as at the close of business on 30 April 2016.

3. WORKING CAPITAL

Taking into account the terms of the transactions in respect of the deposit services provided to the Group under the Financial Services Framework Agreement and the financial resources available to the Group, including the internally generated funds and the available banking facilities, the Directors are of the opinion that the Group has sufficient working capital for its present requirements, that is for at least the next 12 months from the date of this circular.

4. FINANCIAL AND TRADING PROSPECTS

At present, China’s economy is entering into a new norm. China’s central government has successively promulgated a series of strategies and policies, such as “one belt one road”, “the Yangtze River Economic Belt”, “Manufacturing Equipment Going Out” and “International Capacity Cooperation”, as an effort to accelerate domestic economic restructuring and promote the structural reform at the supply side, which has created significant opportunities for the development of China’s enterprises as well as for the globalization efforts of the shipping companies. In addition, while China’s ship-building capacity has secured a world-leading position, its shipping finance industry is still in the early stage of development with great market potential, hence national and local policies encourage the development of shipping finance business. The Company will take good advantage of the opportunities arising from China’s initiatives to accelerate development of its finance leasing and financial leasing industries, and set up an integrated financial services platform on the basis of its shipping business, leveraging on its deep understanding and experience in the shipping industry accrued over decades. In the future, the Company will define clear business development strategies for all its business lines. As a shipping finance platform, the Company is to integrate premium resources and take advantage of the Group’s numerous strengths, such as its background, to realize integration of its shipping and finance business, and promote the finance business with its shipping business as well as the operating efficiency and profit growth.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

5. MATERIAL ADVERSE CHANGE

The Directors confirm that there has been no material adverse change in the financial or trading position of the Group since 31 December 2015, being the date to which the latest published audited accounts of the Company have been made up.

6. EFFECT ON THE EARNINGS AND ASSET AND LIABILITIES OF THE GROUP

In respect of the Financial Services Framework Agreement, (1) deposits to be placed by the Group through the deposit services will generate interest income for the Company; (2) loans to be obtained by the Group through the loan services will result in an increase in the scale of assets and liabilities of the Company; and (3) the settlement services to be used by the Group will not have any significant effect on the earnings and assets and liabilities of the Group.

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GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. INTERESTS AND SHORT POSITIONS OF DIRECTORS, SUPERVISORS AND CHIEF EXECUTIVES IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at the Latest Practicable Date, none of the Directors, Supervisors or chief executive(s) of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO which was required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which any such Directors, Supervisors or chief executive(s) is taken or deemed to have under such provisions of the SFO) or which was required to be entered in the register required to be kept by the Company pursuant to Section 352 of the SFO or which was otherwise required to be notified to the Company and the Stock Exchange pursuant to the Model Code adopted by the Company.

3. POSITIONS HELD BY DIRECTORS AND SUPERVISORS OF THE COMPANY IN SUBSTANTIAL SHAREHOLDER(S)

As at the Latest Practicable Date:

(a) Sun Yueying, an executive Director, is also the chief accountant and member of the Party leadership group of China COSCO Shipping;
(b) Huang Xiaowen, an executive Director, is also the deputy general manager and member of the Party leadership group of China COSCO Shipping;
(c) Ding Nong, a non-executive Director, is also the deputy general manager and member of the Party leadership group of China COSCO Shipping;
(d) Yu Zenggang, a non-executive Director, is also the deputy general manager and member of the Party leadership group of China COSCO Shipping;
(e) Yang Jigui, a non-executive Director, is also the deputy chief accountant of China COSCO Shipping;
(f) Han Jun, a non-executive Director, is also the general manager assistant of China COSCO Shipping; and
(g) Ye Hongjun, a Supervisor, is also the chief legal adviser of China COSCO Shipping.

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GENERAL INFORMATION

APPENDIX III

Save as disclosed above, none of the Directors or Supervisors of the Company was, as at the Latest Practicable Date, a director or employee of a company which had an interest or short position in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors or Supervisors of the Company had any existing or proposed service contract with any member of the Group which would not expire or was not determinable by the Group within one year without payment of compensation (other than statutory compensation).

5. DIRECTORS’ AND SUPERVISORS’ INTERESTS

As at the Latest Practicable Date:

(a) none of the Directors or Supervisors had any direct or indirect interest in any assets which had been, since 31 December 2015 (being the date to which the latest published audited accounts of the Company were made up) acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group; and
(b) none of the Directors or Supervisors was materially interested in any contract or arrangement subsisting as at the Latest Practicable Date and which was significant in relation to the business of the Group.

6. NO MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2015 (being the date to which the latest published audited accounts of the Company were made up).

7. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors and any of their associate(s) had interest in a business which competes or may compete with the business of the Group, or may have any conflicts of interest with the Group pursuant to Rule 8.10 of the Listing Rules.

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GENERAL INFORMATION

APPENDIX III

8. CONSENT OF EXPERT

(a) The Independent Financial Adviser, which is a licensed corporation to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO, has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and reference to its name in the form and context in which they respectively appear.
(b) As at the Latest Practicable Date, the Independent Financial Adviser neither had any shareholding in any member of the Group nor had any right (whether legally enforceable or not) to subscribe for or nominate persons to subscribe for any securities in any member of the Group.
(c) As at the Latest Practicable Date, the Independent Financial Adviser did not have any direct or indirect interest in any assets which had been, since 31 December 2015 (being the date to which the latest published audited accounts of the Company were made up) acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

9. LITIGATION

As at the Latest Practicable Date, no litigation or claims of material importance was known to the Directors to be pending or threatened against any member of the Group.

10. MATERIAL CONTRACTS

Save for the following material contracts, the Group has not entered into any material contract (not being contracts entered into in the ordinary course of business of the Group) within the two years immediately preceding the date of this circular:

(a) an equity acquisition agreement dated 11 December 2015 entered into between CSCL HK and China Shipping (Hong Kong) Holdings Co., Limited (“ CS Hong Kong ”), pursuant to which CSCL HK agreed to purchase and CS Hong Kong agreed to sell the entire equity interests in Dong Fang International Investment Limited in the aggregate consideration of RMB2,969.2275 million (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);
(b) an equity acquisition agreement dated 11 December 2015 entered into between CSCL HK and COSCO Pacific Limited (“ COSCO Pacific ”), pursuant to which CSCL HK agreed to purchase and COSCO Pacific agreed to sell the entire equity interests in Florens Container Holdings Limited in the aggregate consideration of RMB7,784.4833 million minus applicable pre-closing dividend (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);

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GENERAL INFORMATION

APPENDIX III

(c) an equity acquisition agreement dated 11 December 2015 entered into between CSCL HK and CS Hong Kong, pursuant to which CSCL HK agreed to purchase and CS Hong Kong agreed to sell the entire equity interests in each of Helen Insurance Brokers Limited and China Shipping Nauticgreen Holdings Company Limited in the aggregate consideration of RMB1,699.6956 million (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);
(d) an equity acquisition agreement dated 11 December 2015 entered into between the Company and China Shipping, pursuant to which the Company agreed to purchase and China Shipping agreed to sell the entire equity interests in CS Leasing in the aggregate consideration of RMB1,995.6070 million (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);
(e) an equity acquisition agreement dated 11 December 2015 entered into among the Company, China Shipping, Shanghai Shipping (Group) Company (“ CS Shanghai ”) and Guangzhou Maritime Transport (Group) Co., Ltd. (“ CS Guangzhou ”), pursuant to which the Company agreed to purchase and China Shipping, CS Shanghai and CS Guangzhou agreed to sell the entire equity interests in CS Investment in the aggregate consideration of RMB3,458.4549 million (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);
(f) an equity acquisition agreement dated 11 December 2015 entered into among the Company, China Shipping and CS Guangzhou, pursuant to which the Company agreed to purchase and China Shipping and CS Guangzhou agreed to sell 40% equity interests in CS Finance Company in the aggregate consideration of RMB510.9866 million (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);
(g) a capital increase agreement dated 11 December 2015 entered into among the Company, China Ocean Shipping (Group) Company (“ COSCO Company ”) and several other parties, pursuant to which the Company agreed to make a capital increase in the amount of RMB614.2674 million, among which around RMB340 million will be contributed to the registered capital of COSCO Finance Co., Ltd. (“ COSCO Finance ”) and the remaining shall be used as capital reserve for the future development of COSCO Finance (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);
(h) an equity acquisition agreement dated 11 December 2015 entered into between CSCL HK and China COSCO (Hong Kong) Limited (“ COSCO HK ”), pursuant to which CSCL HK agreed to purchase and COSCO HK agreed to sell the entire equity interests in Long Honour Investments Limited in the aggregate consideration of RMB2,770.9726 million (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);

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GENERAL INFORMATION

APPENDIX III

(i) an equity acquisition agreement dated 11 December 2015 entered into between the Company and COSCO Company, pursuant to which the Company agreed to purchase and COSCO Company agreed to sell 13.67% equity interests in China Bohai Bank Co., Ltd. in the aggregate consideration of RMB5,448.0480 million (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);
(j) an equity sales agreement dated 11 December 2015 entered into among the Company, CS Hong Kong and COSCO Pacific, pursuant to which the Company and CS Hong Kong agreed to sell and COSCO Pacific agreed to acquire the entire equity interests in China Shipping Ports Development Co., Ltd. in the aggregate consideration of RMB7,632.4553 million minus applicable adjustment amounts (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);
(k) an equity sales agreement dated 11 December 2015 entered into between CSCL HK and COSCO Container Lines (Hong Kong) Co., Limited (“ COSCO Container HK ”), pursuant to which CSCL HK agreed to sell and COSCO Container HK agreed to acquire the entire equity interests in China Shipping Container Lines Agency (Hong Kong) Co., Limited in the aggregate consideration of RMB35.6706 million (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);
(l) an equity sales agreement dated 11 December 2015 entered into between CSCL HK and Shanghai Pan Asia Shipping Company Limited (“ Pan Asia Shipping ”), pursuant to which CSCL HK agreed to sell and Pan Asia Shipping agreed to acquire the entire equity interests in Universal Shipping (Asia) Company Limited in the aggregate consideration of RMB124.2913 million (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);
(m) an equity sales agreement dated 11 December 2015 entered into between the Company and COSCO Container Lines Co., Ltd. (“ COSCO Container ”), pursuant to which the Company agreed to sell and COSCO Container agreed to acquire 51% equity interests in Golden Sea Shipping Pte. Ltd. (“ Golden Sea ”) in the aggregate consideration of RMB71.0360 million (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);
(n) an equity sales agreement dated 11 December 2015 entered into between CSCL HK and China Shipping Regional Holdings Pte. Ltd. (“ CS Regional ”), pursuant to which CSCL HK agreed to sell and CS Regional agreed to acquire 91% equity interests in China Shipping (Singapore) Petroleum Pte. Ltd. in the aggregate consideration of RMB30.6975 million (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);

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GENERAL INFORMATION

APPENDIX III

(o) an equity sales agreement dated 11 December 2015 entered into between the Company and CS Regional, pursuant to which the Company agreed to sell and CS Regional agreed to acquire 9% equity interests in Golden Sea in the aggregate consideration of RMB12.5358 million (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015);
(p) an equity sales agreement dated 11 December 2015 entered into between the Company and China COSCO Holdings Company Limited (“ China COSCO ”), pursuant to which the Company agreed to sell and China COSCO agreed to acquire equity interests in several onshore agency and other related business companies in the aggregate consideration of RMB885.6734 million (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015); and
(q) an equity sales agreement dated 11 December 2015 entered into among CSCL HK, Pan Asia Shipping and COSCO Container, pursuant to which CSCL HK agreed to sell and COSCO Container agreed to acquire the entire equity interests in China Shipping Container Lines Agency (Shenzhen) Co., Ltd. in the aggregate consideration of RMB15.1741 million, and CSCL HK agreed to sell and Pan Asia Shipping agreed to acquire the entire equity interests in Universal Logistics (Shenzhen) Co., Ltd. in the aggregate consideration of RMB9.0516 million (Note: details of the agreement were disclosed in the Company’s circular dated 31 December 2015).

11. MISCELLANEOUS

(a) The joint company secretaries of the Company are Mr. Yu Zhen (“ Mr. Yu ”) and Ms. Ng Sau Mei (“ Ms. Ng ”). Mr. Yu is a certified public accountant (CPA) of the PRC and a mid level accountant. Ms. Ng is an associate member of the Hong Kong Institute of Chartered Secretaries and the Institute of Chartered Secretaries and Administrators in United Kingdom.
(b) The legal address in the PRC of the Company is Room A-538, International Trade Center, China (Shanghai) Pilot Free Trade Zone, Shanghai, the PRC and the principal place of business in the PRC of the Company is Maritime Research Building, 628 Minsheng Road, Pudong New Area, Shanghai, the PRC. The Hong Kong H Share registrar and transfer office of the Company is Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.
(c) The English text of this circular shall prevail over their respective Chinese text in case of inconsistency.

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GENERAL INFORMATION

APPENDIX III

12. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the principal place of business of the Company in Hong Kong at 31/F, Tower 2, Kowloon Commerce Centre, 51 Kwai Cheong Road, Kwai Chung, New Territories, Hong Kong from the date of this circular up to 30 June 2016 (both days inclusive):

(a) the Financial Services Framework Agreement;
(b) the letter of advice dated 10 June 2016 from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, the text of which is set out on pages 32 to 47 of this circular;
(c) the written consent issued by the Independent Financial Adviser to the Company as referred to in the paragraph headed “Consent of Expert” in this Appendix;
(d) the letter of recommendation dated 10 June 2016 from the Independent Board Committee to the Independent Shareholders, the text of which is set out on pages 30 to 31 of this circular;
(e) the annual reports of the Company for the two years ended 31 December 2014 and 2015;
(f) the articles of association of the Company;
(g) the material contracts referred to in the paragraph headed “Material Contracts” in this Appendix; and
(h) this circular.

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BIOGRAPHIES

APPENDIX IV

Ms. Sun Yueying (孫月英)

Born in 1958, has served as the chairman of the Board and an executive director of the Company since May 2016. She currently also serves as the chief accountant and a member of the Party leadership group of China COSCO Shipping Corporation Limited. Ms. Sun has served as the chief accountant of China Ocean Shipping (Group) Company since 2000, and is currently the chairman of the board of directors of each of COSCO Finance Company Limited, COSCO Container Lines Japan Co., Ltd. (“ COSCO Japan ”) and COSCO International Ship Trading Company Limited. She also serves as a director of each of China COSCO Holdings Company Limited (“ China COSCO ”, listed on the Stock Exchange under the stock code of 1919 and on Shanghai Stock Exchange under the stock code of 601919) and China Merchants Bank Co., Ltd. (listed on the Stock Exchange under the stock code of 3968 and on Shanghai Stock Exchange under the stock code of 600036). Ms. Sun assumed various positions such as the deputy director of the finance department of Tianjin Ocean Shipping Company Limited, head of the general office and finance manager of COSCO Japan, the deputy general manager and the general manager of the finance and capital division and the deputy chief accountant of China Ocean Shipping (Group) Company, and the director of China Merchants Securities Co., Ltd. (listed on Shanghai Stock Exchange under the stock code of 600999). Ms. Sun has over 30 years’ experience in the shipping industry and has extensive experience in finance, fund management, financial management and capital operation. Ms. Sun graduated from Shanghai Maritime University majoring in shipping finance and accounting and obtained an EMBA degree from the University of International Business and Economics. She is also a certified public accountant and a senior accountant.

Mr. Wang Daxiong (王大雄)

Born in 1960, has served as an executive director and the chief executive officer of the Company since May 2016. Mr. Wang has served as the chairman of the board of directors of COSCO Shipping Financial Holding Co., Ltd. (formerly known as China Shipping (Hong Kong) Holdings Co., Ltd.) since February 2014. He served as the deputy general manager and a member of the Party leadership group of China Shipping from May 2010 to February 2014, as a non-executive director of the Company from February 2004 to June 2014, as the vice president, chief accountant and a member of the Party leadership group of China Shipping from February 2001 to May 2010, and as the chief accountant and a member of the Party leadership group of China Shipping from January 1998 to February 2001. Prior to that, he worked as section chief, director and chief accountant of the finance division of Guangzhou Maritime Bureau. Mr. Wang began his career in the shipping industry in 1983 after he graduated from Shanghai Maritime University majoring in shipping finance. Mr. Wang holds an EMBA degree from Shanghai University of Finance and Economics and is a senior accountant.

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BIOGRAPHIES

APPENDIX IV

Mr. Liu Chong (劉沖)

Born in 1970, has served as an executive director of the Company since May 2016 and as the general manager of the Company since March 2016. Mr. Liu currently serves as a director of China International Marine Containers (Group) Co., Ltd. (listed on the Stock Exchange under the stock code of 2039 and on Shenzhen Stock Exchange under the stock code of 000039), and a supervisor of China Merchants Securities Co., Ltd. (listed on Shanghai Stock Exchange under the stock code of 600999). He has served as the general manager of China Shipping Investment Co., Ltd. since April 2013, and the general manager of China Shipping Leasing Co., Ltd. since August 2014. Mr. Liu served as the financial controller and deputy general manager of China Shipping Logistics Co., Ltd., the chief accountant of China Shipping Haisheng Co., Ltd., the head of capital management division of China Shipping and the chief accountant of the Company. Mr. Liu graduated from Sun Yat-sen University majoring in economics, and is a certified public accountant and a senior accountant.

Mr. Xu Hui (徐輝)

Born in 1962, has served as a deputy general manager and secretary of the Party committee of the Company since April 2016. Mr. Xu started his career in the shipping industry in 1982, and served as a non-executive director of the Company from October 2005 to June 2013. He served consecutively as chief engineer, assistant to general manager and directive chief engineer of Shanghai Maritime Bureau Oil Tanker Company (上海海運局油輪公司), a deputy director of the technology department of Shanghai Haixing Shipping Company Limited (上海海興輪船股份有限公司), director of the technology department of Shanghai Shipping (Group) Company (“ SSGC ”), a deputy general manager and a member of the Party committee of China Shipping Development Company Limited Oil Tanker Company (中海發展股份有限公司油輪公司), a deputy general manager, a member of the Party committee, general manager and secretary of the Party committee of SSGC, general manager and secretary of the Party committee of Sinopec Suppliers Co., Ltd.. Mr. Xu also served as a deputy general manager and secretary of the Party committee of China Shipping Tanker Company Limited from August 2015 to March 2016. Mr. Xu graduated from Jimei Navigation College, majoring in marine mechanical management. He is a senior political scientist and chief engineer.

Mr. Yang Jigui (楊吉貴)

Born in 1966, has served as a non-executive director of the Company since December 2015. He is currently the deputy chief accountant of China COSCO Shipping Corporation Limited, a director of China Shipping Haisheng Co., Ltd and a non-executive director of China Everbright Bank Company Limited (listed on the Stock Exchange under the stock code of 6818 and on Shanghai Stock Exchange under the stock code of 601818). Mr. Yang served successively as manager of finance department of Guangzhou Maritime Transport (Group) Co., Ltd. (“ Guangzhou Maritime Transport ”) Shenzhen Shipping Branch, chief accountant of Supply and Trade Division of Guangzhou Maritime Transport, head of finance department of China Shipping Supply and Trade Co., Ltd, deputy director of planning and finance department of China Shipping, general manger of finance department of China Shipping, general manager

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BIOGRAPHIES

APPENDIX IV

of planning and finance department of China Shipping, general manager assistant and general manager of finance department of China Shipping since March 2014 and deputy chief accountant and general manager of finance department since July 2015. Mr. Yang graduated from Shanghai Maritime University (上海海運學院) majoring in financial accounting and Tsinghua University majoring in business administration. He has a bachelor degree and a master degree and is a senior accountant.

Mr. Feng Boming (馮波鳴)

Born in 1969,is currently general manager of the strategic and corporate management department of China COSCO Shipping Corporation Limited, a director of China COSCO Shipping Bulk Shipping Co., Ltd. (中遠海運散貨運輸有限公司) and a director of Piraeus Port Authority S.A. Mr. Feng served as deputy chief of the commercial section of the liner division and manager of the insurance claim settlement business of COSCO Container Lines Co., Ltd. (“ COSCO Container ”) and manager of the commercial section of the ministry of trade protection of COSCO Container. He has been general manager of COSCO (Cayman) Mercury Co. Ltd., general manager of the management and administration department of China COSCO (listed on the Stock Exchange under the stock code of 1919 and on Shanghai Stock Exchange under the stock code of 601919) in Hong Kong and general manager of the administration department of COSCO Container Lines (Hong Kong) Co., Limited since October 2005, general manager of the Wuhan branch/COSCO Freight Wuhan (武漢中貨)/COSCO Logistics Wuhan (武漢中遠物流) of COSCO Container China branch since January 2012, and director of the strategic management implementation office of the China Ocean Shipping (Group) Company/China COSCO since August 2015. Mr. Feng graduated from Wuhan University of Water Transportation Engineering majoring in transportation management engineering, and from University of Hong Kong majoring in business administration. He has been granted with a bachelor’s degree and a master’s degree.

Mr. Huang Jian (黃堅)

Born in 1969, has served as the deputy general manager (in charge) of the capital operation department of China COSCO Shipping Corporation Limited since January 2016. Mr. Huang has served as a director of China Merchants Securities Co., Ltd. (listed on Shanghai Stock Exchange under the stock code of 600999) since August 2012. From October 2010 to February 2012, he was the chief financial officer of COSCO Americas, Inc.; from September 2004 to October 2010, general manager of the finance department of COSCO Americas, Inc.; from July 1996 to September 2004, manager of the treasury department of the finance division of China Ocean Shipping (Group) Company; from July 1993 to July 1996, an employee of the finance division of Shenzhen Ocean Shipping Co., Ltd.; from August 1992 to July 1993, an employee of the finance division of China Ocean Shipping (Group) Company; and from February 2012 to January 2016, deputy general manager of the finance division of China Ocean Shipping (Group) Company. Mr. Huang graduated from Beijing College of Finance and Commerce (北京財貿學院) with a bachelor’s degree in 1992, and was granted with a master’s degree in business administration from Beijing Institute of Technology in 2002. Mr. Huang has an accountant title.

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BIOGRAPHIES

APPENDIX IV

Mr. Cai Hong Ping (蔡洪平)

Born in 1954, a Hong Kong citizen, graduated from Fudan University in Shanghai with a bachelor’s degree in journalism. He is now chairman of AGIC Capital. He served in the Industrial and Transport Management Committee of Shanghai Municipal Government and Sinopec Shanghai Petrochemical Company Limited (“ Sinopec Shanghai ”, listed on the Stock Exchange under the stock code of 338, on Shanghai Stock Exchange under the stock code of 600688 and on New York Stock Exchange under the stock code of SHI) from 1987 to 1991, during when he participated in the whole process of the listing of the first batch of H shares of Sinopec Shanghai in Hong Kong and the United States. From 1992 to 1996, he was a member of the Steering Group for Overseas Listing of Chinese Enterprises under the State Commission for Restructuring the Economic System under the State Council and chairman of the Joint Conference of Secretaries to the Board of China H Shares Companies. He served as general manager of the Investment Banking Asia Division of Peregrine Investments in from 1996 to 1997 and joint director of the Investment Banking Asia Division of BNP Paribas Peregrine from 1997 to 2006. He was chairman of the Investment Banking Asia Division of UBS from 2006 to 2010 and executive chairman of Investment Banking Asia Pacific at Deutsche Bank from 2010 to 2015. Mr. Cai served as the independent director of Minmetals Development Co., Ltd. from April 2015 to December 2015 (listed on Shanghai Stock Exchange under the stock code of 600058).

Mr. TSANG Hing Lun (曾慶麟)

Born in 1949,is an independent non-executive director and chairman of the audit committee of Sino-Ocean Land Holdings Limited (a company listed on the Stock Exchange, stock code: 3377) and Sinotrans Shipping Limited (a company listed on the Stock Exchange, stock code: 0368) and an independent non-executive director and chairman of the remuneration and nomination committee of Nexteer Automotive Group Limited (a company listed on the Stock Exchange, stock code: 1316). He is also chairman of Global Commercial Management Co., Ltd. (全球商業管理有限公司), a member of Hong Kong Independent Non-Executive Director Association (HKINEDA), an honorary award receiver and a member of the International Private Board Meeting, Hong Kong Branch. Mr. Tsang had served as a senior manager in a number of companies listed in Hong Kong and Singapore. He served in Hang Seng Bank Limited (a company listed on the Stock Exchange, stock code: 0011) from 1973 to 1990, during which he was assistant general manager of the planning and development division for the last five years. He also served as an executive director of the Stock Exchange from January 1993 to October 1993, a deputy general manager of China Construction Bank Corporation (a company listed on Shanghai Stock Exchange, stock code: 601939 and the Stock Exchange, stock code: 0939), Hong Kong Branch from December 1995 to April 1998. Mr. TSANG was an independent non-executive director and chairman of the audit committee of China Rongsheng Heavy Industries Group Holdings Limited (now known as “China Huarong Energy Company Limited”, a company listed on the Stock Exchange, stock code: 1101) from October 2010 to May 2014, an independent non-executive director and chairman of the audit committee of Beijing Media Corporation Limited (a company listed on the Stock Exchange, stock code: 1000) from November 2004 to May 2013 and an independent non-executive

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APPENDIX IV

BIOGRAPHIES

director of First China Financial Network Holdings Limited (a company listed on the Stock Exchange, stock code: 8123) from June 2005 to January 2011. Mr. TSANG became a senior fellow of the Association of Chartered Certified Accountants (UK) in November 1982, a senior fellow of The Hong Kong Institute of Certified Public Accountants in September 1989 and a fellow member of the Hong Kong Institute of Directors in July 2001, he was qualified as a certified financial planner by Guangdong Occupational Skill Testing Authority in July 2006 and qualified as an internationally recognised financial planner in October 2007 by The Institute of Financial Planners of Hong Kong Limited. Mr. TSANG received his bachelor degree (First Class Honours) in business administration from the Chinese University of Hong Kong in June 1973.

Ms. Hai Chi Yuet (奚治月)

Born in 1954, has served as an independent non-executive director of the Company since May 2015. She has more than 30 years of working experience in shipping logistics industry. From December 2012 to now, she has served as the advisor to Hutchison Port Holdings Trust (“ HPH Trust ”). Ms. Hai served as the managing director of COSCO-HIT Terminals (Hong Kong) Limited, the managing director of Yantian International Container Terminals Limited, and the chief executive officer of HPH Trust. Ms. Hai also participates in public service organizations, including being the member of the Election Committee for the Chief Executive of Hong Kong Special Administrative Region, Transport Subsector. She also served as the member of Hong Kong Port Development Advisory Group and the president of Shenzhen Ports Association. In 2011, Ms. Hai was awarded as Shenzhen Honorable Citizen. Ms. Hai graduated from York University, Toronto, Canada and the University of Hong Kong, obtaining a bachelor’s degree in business administration and a master’s degree in Buddhism studies respectively.

Mr. Graeme Jack

Born in 1950, has served as an independent non-executive Director of the Company since June 2015. He has extensive experience in finance and auditing. He is also an independent non-executive director of HPH Trust and The Greenbrier Companies Inc. (listed on New York Stock Exchange under the stock code of GBX), and an independent trustee for the group retire plan of CK Hutchinson Holdings Limited. He retired from PricewaterhouseCoopers as a partner in 2006. He holds a bachelor degree in commerce and is a fellow member of the Hong Kong Society of Accountants and an associate member of The Institute of Chartered Accountants in Australia and New Zealand.

Mr. Ye Hongjun (葉紅軍)

Born in 1963, currently serves as a supervisor of the Company. Mr. Ye is currently the chief legal consultant of China COSCO Shipping Corporation Limited. He worked in Beijing Communications Management Institute for Executives, and served in the PRC Ministry of Transport (“ MOC ”) and has held the posts including a servant without fixed position, deputy department head, department head and the deputy section chief of the Legal Section, the deputy

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APPENDIX IV

BIOGRAPHIES

section chief of the Price Regulatory Section of the Water Transport Department and the section chief of the Regulation Section of the Water Transport Department. He served as the assistant to the head of the Maritime Safety Administration of the MOC, and the director of the Domestic Shipping Management Division of the Waterway Transportation Bureau of the MOT. He has served as the chief law consultant of China Shipping since April 2012. Mr. Ye received a master’s degree in law from Fudan University. Mr. Ye joined the Company in June 2013.

Mr. Hao Wenyi (郝文義)

Born in 1962, has served as the minister of supervision and auditing department of China COSCO Shipping Corporation Limited since January 2016. Mr. Hao was the minister office director of general supervision office of supervision department under the CPC Central Commission for Discipline Inspection and served as minister of supervision and auditing of China Shipping from January 2013 to January 2016. Mr. Hao graduated from Beijing Administrative College (北京市委黨校) with a master’s degree, majoring in economics. Mr. Hao is a senior political scientist.

Mr. Gu Xu (顧旭)

Born in 1964, has over 20 years of experience in the financial and securities industry as well as extensive experience in corporate financial management. He led and participated in the restructuring, issue and listing of Shanghai Phoenix Bicycle Co., Ltd., Hero (Gold Pen) Co. Ltd. (英雄(金筆)股份有限公司) and Shanghai Lujiazui Finance & Trade Zone Development Co., Ltd. (A shares and B shares) and succeeded in leading several corporate mergers and acquisitions and reorganizations. He has accumulated theoretical and practical experience in respect of corporate financial and accounting management, assets management, investment management, disposal of distressed assets and management of financial information systems. He is currently the president of Shanghai Dongsheng Investment Management Co., Ltd. (上海東晟投資管理有限公司), an independent director of Suzhou Financial Leasing Co., Ltd. and the general manager of Henan Zhongyuan Lianchuang Investment Funds Management Company (河南中原聯創基金管理公司).

Ms. Zhang Weihua (張衛華)

Born in 1961, graduated from the Faculty of Business of University of Southern Queensland with a master’s degree in business administration. Ms. Zhang once served as the compliance director of China Merchants Securities Co., Ltd. (listed on Shanghai Stock Exchange under the stock code of 600999) and chairman of the supervisory committee of China Merchants Fund Management Co., Ltd. Ms. Zhang also served as chief auditor, assistant to the president, general manager of the audit department of China Merchants Securities Co., Ltd. and assistant to general manager of the securities department in the head office of China Merchants Bank consecutively. She is now a senior adviser of China Merchants Securities Co., Ltd.

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NOTICE OF AGM

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

(Stock code: 02866)

NOTICE OF 2015 ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the annual general meeting for the year 2015 (the “ AGM ”) of China Shipping Container Lines Company Limited (the “ Company ”) will be held at 2:00 p.m. on Thursday, 30 June 2016 at Holiday Inn Shanghai Jinxiu, No. 399 Jinzun Road, Pudong New Area, Shanghai, the People’s Republic of China (the “ PRC ”) to consider and, if thought fit, pass the following resolutions. Unless otherwise specified, terms defined in the announcement of the Company dated 13 May 2016 in relation to revision of annual caps for continuing connected transactions shall have the same meanings when used in this notice.

ORDINARY RESOLUTIONS

To consider and approve the report of the board (the “ Board ”) of directors (the “ Directors ”) of the Company for the year ended 31 December 2015.
To consider and approve the report of the supervisory committee of the Company for the year ended 31 December 2015.
To consider and approve the work report of independent non-executive Directors for the year ended 31 December 2015.
To consider and approve the audited financial statements and the auditors’ report of the Company and its subsidiaries for the year ended 31 December 2015.
To consider and approve the annual report of the Company for the year ended 31 December 2015 prepared in accordance with the requirements of the jurisdiction where its shares are listed.
To consider and approve the proposed profit distribution plan of the Company for the year ended 31 December 2015.
To consider and determine the remuneration of the Directors and the supervisors of the Company for the year 2016.
8(a). To re-appoint Baker Tilly China Certified Public Accountants as the Company’s PRC auditor for the year of 2016, and to authorise the audit committee of the Board to determine its remuneration.

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NOTICE OF AGM

8(b). To re-appoint Baker Tilly China Certified Public Accountants as the Company’s internal control auditor for the year of 2016, and to authorise the audit committee of the Board to determine its remuneration.
8(c). To re-appoint Ernst & Young, Hong Kong Certified Public Accountants as the Company’s international auditor for the year of 2016, and to authorise the audit committee of the Board to determine its remuneration.
9(a). To approve the revision of annual cap for the continuing connected transactions under the Financial Services Framework Agreement in respect of maximum daily outstanding balance of deposits (including accrued interest and handling fee) to be placed by the Group with CS Finance Company for the year 2016.
9(b). To approve the revision of annual cap for the continuing connected transactions under the Financial Services Framework Agreement in respect of maximum daily outstanding balance of loans (including accrued interest and handling fee) to be granted by CS Finance Company to the Group for the year 2016.
9(c). To approve the revision of annual cap for the continuing connected transactions under the Financial Services Framework Agreement in respect of settlement services to be provided by CS Finance Company to the Group for the year 2016.

SPECIAL RESOLUTIONS

To approve the provision of guarantees for wholly-owned subsidiaries of the Company and relevant authorization to the Board.
To approve the grant of general mandate to issue A shares and/or H shares of the Company.

By Order of the Board

China Shipping Container Lines Company Limited Yu Zhen

Joint Company Secretary

Shanghai, the PRC 16 May 2016

* The Company is a registered non-Hong Kong company as defined in the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) and it is registered under its Chinese name and under the English name “China Shipping Container Lines Company Limited”.

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NOTICE OF AGM

Notes:

A. For the purpose of holding the AGM, the register of H shares members of the Company (“ Register of Members ”) will be closed from Tuesday, 31 May 2016 to, Monday, 30 June 2016 (both days inclusive), during which period no transfer of H shares of the Company will be registered. Holders of H shares whose names appear on the Register of Members at the close of business on Monday, 30 May 2016 are entitled to attend and vote at the AGM.

In order to attend the AGM, holders of the Company’s H shares shall lodge all transfer documents together with the relevant share certificates to Computershare Hong Kong Investor Services Limited, the Company’s H share registrar (“ Computershare ”), not later than 4:30 p.m. on Monday, 30 May 2016.

The address of Computershare is as follows: Shops 1712-1716, 17th Floor Hopewell Centre 183 Queen’s Road East Wanchai, Hong Kong

B. Holders of H shares, who intend to attend the AGM, must complete the reply slips and return them to the Directorate Secretary Office of the Company not later than 20 days before the date of the AGM, i.e. no later than Friday, 10 June 2016.

The address of the Directorate Secretary Office of the Company is as follows:

22nd Floor, Maritime Research Building 628 Minsheng Road Pudong New Area Shanghai 200135 the People’s Republic of China Tel: (8621) 6596 7333 Fax: (8621) 6596 6813

C. The record date and arrangements in respect of the holders of the Company’s A shares who are entitled to attend the AGM will be determined and announced separately in the PRC by the Company.
D. Each holder of H shares who has the right to attend and vote at the AGM is entitled to appoint in writing one or more proxies, whether a Shareholder or not, to attend and vote on his behalf at the AGM.
E. The instrument appointing a proxy must be in writing under the hand of the appointer or his attorney duly authorised in writing. If that instrument is signed by an attorney of the appointer, the power of attorney authorising that attorney to sign, or other documents of authorisation, must be notarially certified.
F. To be valid, for holders of H shares, the form of proxy, and if the form of proxy is signed by a person under a power of attorney or other authority on behalf of the appointer, a notarially certified copy of that power of attorney or other authority, must be delivered to Computershare at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not less than 24 hours before the time for holding the AGM or any adjournment thereof in order for such documents to be valid.
G. If a proxy attends the AGM on behalf of a Shareholder, he/she should produce his/her identity card and the form of proxy signed by the Shareholder or his/her legal representative or his/her duly authorised attorney, and specify the date of its issuance. If a legal person Shareholder appoints its corporate representative to attend the AGM, such representative should produce his/her identity card and the notarised copy of the resolution passed by the Board or other authorities or other notarised copy of the licence issued by such legal person Shareholder.
H. Pursuant to the Listing Rules, any vote of Shareholders at a general meeting must be taken by way of poll except where the chairman of the meeting, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. As such, each of the resolutions set out in the notice of the AGM will be voted on by poll. Results of the poll voting will be published on the website of the Stock Exchange at www.hkexnews.hk after the AGM.
I. The AGM is estimated to last for half a day. Shareholders who attend the AGM in person or by proxy shall bear their own transportation and accommodation expenses.

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SUPPLEMENTAL NOTICE OF AGM

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

(Stock code: 02866)

SUPPLEMENTAL NOTICE OF 2015 ANNUAL GENERAL MEETING

Reference is made to the notice (the “ Notice ”) of annual general meeting (the “ AGM ”) for the year 2015 of China Shipping Container Lines Company Limited (the “ Company ”) dated 16 May 2016, which sets out the time and venue of the AGM and contains the resolutions to be tabled before the AGM for shareholders’ approval. Unless otherwise specified, terms defined in the circular of the Company dated 10 June 2016 shall have the same meanings when used in this notice.

The AGM was initially scheduled to be held at 2:00 p.m. on Thursday, 30 June 2016 at Holiday Inn Shanghai Jinxiu, No. 399 Jinzun Road, Pudong New Area, Shanghai, the People’s Republic of China (the “ PRC ”) as set out in the Notice.

The Board hereby announces that the AGM is re-scheduled to be held at 1:00 p.m. on Thursday, 30 June 2016 . Save for the change of time of the AGM, all information and contents set out in the Notice remain unchanged.

SUPPLEMENTAL NOTICE IS HEREBY GIVEN that the following resolutions will be considered and, if thought fit, passed at the AGM, in addition to the resolutions set out in the Notice:

ORDINARY RESOLUTIONS

To approve the appointment of the following non-independent Directors (including executive Directors and non-executive Directors):
10(a). To approve the appointment of Ms. Sun Yueying as an executive Director of the fifth session of the Board.
10(b). To approve the appointment of Mr. Wang Daxiong as an executive Director of the fifth session of the Board.
10(c). To approve the appointment of Mr. Liu Chong as an executive Director of the fifth session of the Board.

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SUPPLEMENTAL NOTICE OF AGM

10(d). To approve the appointment of Mr. Xu Hui as an executive Director of the fifth session of the Board.
10(e). To approve the appointment of Mr. Yang Jigui as a non-executive Director of the fifth session of the Board.
10(f). To approve the appointment of Mr. Feng Boming as a non-executive Director of the fifth session of the Board.
10(g). To approve the appointment of Mr. Huang Jian as a non-executive Director of the fifth session of the Board.
To approve the appointment of the following independent non-executive Directors:
11(a). To approve the appointment of Mr. Cai Hongping as an independent nonexecutive Director of the fifth session of the Board.
11(b). To approve the appointment of Mr. Tsang Hing Lun as an independent non-executive Director of the fifth session of the Board.
11(c). To approve the appointment of Ms. Hai Chi Yuet as an independent non-executive Director of the fifth session of the Board.
11(d). To approve the appointment of Mr. Graeme Jack as an independent non-executive Director of the fifth session of the Board.
To approve the appointment of the following Supervisors:
12(a). To approve the appointment of Mr. Ye Hongjun as a shareholder representative Supervisor of the fifth session of the Supervisory Committee.
12(b). To approve the appointment of Mr. Hao Wenyi as a shareholder representative Supervisor of the fifth session of the Supervisory Committee.
12(c). To approve the appointment of Mr. Gu Xu as an independent Supervisor of the fifth session of the Supervisory Committee.
12(d). To approve the appointment of Ms. Zhang Weihua as an independent Supervisor of the fifth session of the Supervisory Committee.

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SUPPLEMENTAL NOTICE OF AGM

SPECIAL RESOLUTIONS

3(a). To approve the application for registering mid-term notes of not exceeding RMB5.0 billion.
3(b). To approve the application for registering super short-term financing bills of not exceeding RMB10.0 billion.
3(c). To approve the grant of authorization to the Board, the managing Director or the chief accountant to handle the matters in relation to the mid-term notes and super short-term financing bills such as registration, issuance, existence and payment of principal and interests.

By Order of the Board China Shipping Container Lines Company Limited Yu Zhen

Joint Company Secretary

Shanghai, the PRC 10 June 2016

The Company is a registered non-Hong Kong company as defined in the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) and it is registered under its Chinese name and under the English name “China Shipping Container Lines Company Limited”.

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SUPPLEMENTAL NOTICE OF AGM

Notes:

A. For the purpose of holding the AGM, the register of H shares members of the Company (“ Register of Members ”) has been closed from Tuesday, 31 May 2016 to, Monday, 30 June 2016 (both days inclusive), during which period no transfer of H shares of the Company will be registered. Holders of H shares whose names appear on the Register of Members at the close of business on Monday, 30 May 2016 are entitled to attend and vote at the AGM.

The address of Computershare is as follows: Shops 1712-1716, 17th Floor Hopewell Centre 183 Queen’s Road East Wanchai, Hong Kong

B. Holders of H shares, who intend to attend the AGM, must complete the reply slips and return them to the Directorate Secretary Office of the Company not later than 20 days before the date of the AGM, i.e. no later than Friday, 10 June 2016.

The address of the Directorate Secretary Office of the Company is as follows:

22nd Floor, Maritime Research Building 628 Minsheng Road Pudong New Area Shanghai 200135 the People’s Republic of China Tel: (8621) 6596 7333 Fax: (8621) 6596 6813

C. The record date and arrangements in respect of the holders of the Company’s A shares who are entitled to attend the AGM will be determined and announced separately in the PRC by the Company.
D. Each holder of H shares who has the right to attend and vote at the AGM is entitled to appoint in writing one or more proxies, whether a Shareholder or not, to attend and vote on his behalf at the AGM.
E. The instrument appointing a proxy must be in writing under the hand of the appointer or his attorney duly authorised in writing. If that instrument is signed by an attorney of the appointer, the power of attorney authorising that attorney to sign, or other documents of authorisation, must be notarially certified.
F. To be valid, for holders of H shares, the form of proxy, and if the form of proxy is signed by a person under a power of attorney or other authority on behalf of the appointer, a notarially certified copy of that power of attorney or other authority, must be delivered to Computershare at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not less than 24 hours before the time for holding the AGM or any adjournment thereof in order for such documents to be valid.
G. If a proxy attends the AGM on behalf of a Shareholder, he/she should produce his/her identity card and the form of proxy signed by the Shareholder or his/her legal representative or his/her duly authorised attorney, and specify the date of its issuance. If a legal person Shareholder appoints its corporate representative to attend the AGM, such representative should produce his/her identity card and the notarised copy of the resolution passed by the Board or other authorities or other notarised copy of the licence issued by such legal person Shareholder.
H. Pursuant to the Listing Rules, any vote of Shareholders at a general meeting must be taken by way of poll except where the chairman of the meeting, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. As such, each of the resolutions set out in the notice of the AGM will be voted on by poll. Results of the poll voting will be published on the website of the Stock Exchange at www.hkexnews.hk after the AGM.
I. The AGM is estimated to last for half a day. Shareholders who attend the AGM in person or by proxy shall bear their own transportation and accommodation expenses.
J. A supplemental proxy form containing the ordinary resolutions numbered 10(a) to 10(g), 11(a) to 11(d) and 12(a) to 12(d) and the special resolutions numbered 3(a) to 3(c) mentioned above has been distributed on 10 June 2016. The original proxy form distributed by the Company on 16 May 2016 will remain valid and effective to the fullest extent applicable if correctly completed and lodged with the Company’s H share registrar.

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AI assistant

COSCO SHIPPING Development Co., Ltd. — AGM Information 2016

50782_rns_2016-06-08_d33ad564-bb38-4698-957b-2620876a7d80.pdf

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

(Stock code: 02866)

INTRODUCTION

ORDINARY RESOLUTIONS

1. 2015 REPORT OF THE BOARD

2. 2015 REPORT OF THE SUPERVISORY COMMITTEE

3. 2015 WORK REPORT OF INDEPENDENT DIRECTORS

4. 2015 FINANCIAL STATEMENTS AND AUDITORS’ REPORT

5. 2015 ANNUAL REPORT

6. 2015 PROFIT DISTRIBUTION PLAN

7. REMUNERATION OF DIRECTORS AND SUPERVISORS FOR THE YEAR 2016

8. RE-APPOINTMENT OF PRC AUDITOR, INTERNAL CONTROL AUDITOR AND INTERNATIONAL AUDITOR FOR THE YEAR 2016

A. Introduction

B. Summary of the Financial Services Framework Agreement

(1) General Terms

(2) Price Determination

(3) Term and Termination

(4) Implementation Agreements

LETTER FROM THE BOARD

(5) Internal Control Procedures

C. Historical Figures, Existing Annual Caps and Revised Annual Caps

LETTER FROM THE BOARD

(1) In respect of deposit services:

(2) In respect of loan services:

(3) In respect of settlement services:

D. Reasons for and Benefits of Transactions

LETTER FROM THE BOARD

E. Implications under the Listing Rules

F. General Information

G. Opinions of the Board

10. PROPOSED APPOINTMENT OF NON-INDEPENDENT DIRECTORS (INCLUDING EXECUTIVE DIRECTORS AND NON-EXECUTIVE DIRECTORS)

11. PROPOSED APPOINTMENT OF INDEPENDENT NON-EXECUTIVE DIRECTORS

12. PROPOSED APPOINTMENT OF SUPERVISORS

SPECIAL RESOLUTIONS

1. PROVISION OF GUARANTEES FOR WHOLLY-OWNED SUBSIDIARIES OF THE COMPANY AND RELEVANT AUTHORIZATION TO THE BOARD

A. Summary of the Guarantees

B. Basic Information of the Entity to be Guaranteed

C. Opinions of the Board

D. Shareholders’ Approval

E. The Accumulated Amount of Guarantees and the Amount of Overdue Guarantees of the Company

2. GRANT OF GENERAL MANDATE TO ISSUE A SHARES AND/OR H SHARES OF THE COMPANY

A. The General Mandate

B. Validity of the General Mandate

3. APPLICATION FOR REGISTERING MID-TERM NOTES AND SUPER SHORTTERM FINANCING BILLS

THE AGM

RECOMMENDATION

LETTER FROM THE BOARD

By order of the Board of China Shipping Container Lines Company Limited Sun Yueying Chairman

CONTINUING CONNECTED TRANSACTIONS UNDER THE FINANCIAL SERVICES FRAMEWORK AGREEMENT AND THE REVISED ANNUAL CAPS

CONTINUING CONNECTED TRANSACTIONS AND MAJOR TRANSACTIONS – REVISION OF ANNUAL CAPS FOR CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

BASIS OF OUR ADVICE AND RECOMMENDATIONS

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background information

1.1 Background of the Proposed Transactions

1.2 Background information of the Group

1.3 Background information of China Shipping

1.4 Background information of CS Finance Company

2. Reasons for and benefits of the Proposed Transactions

3. Principal terms of the Proposed Transactions

Deposit services

Loan services

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Settlement services

4. Revised Annual Caps

Deposit services

Loan services

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Settlement services

5. Internal control procedures of the Company

RECOMMENDATION

China Shipping Container Lines Company Limited 2015 Work Report of Independent Directors

COSCO SHIPPING Development Co., Ltd. AGM Information 2016