THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountants or other professional adviser.

If you have sold or transferred all your shares in China COSCO Holdings 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 the transfer was effected for transmission to the purchaser and 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.

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**中國遠洋控股股份有限公司 China COSCO Holdings Company Limited[*]**

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

(Stock code: 1919)

DISCLOSEABLE TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

CERTAIN CONTINUING CONNECTED TRANSACTIONS MASTER AGREEMENTS BY COSCO PACIFIC LIMITED

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

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Asia Investment Management Limited

A letter from the Board is set out on pages 5 to 17 of this circular. A letter from the Independent Board Committee is set out on pages 18 to 19 of this circular. A letter from the Independent Financial Adviser is set out on pages 20 to 41 of this circular. A notice convening the EGM to be held at Function Room, 47th Floor, COSCO Tower, 183 Queen’s Road Central, Hong Kong and Conference Center, Ocean Plaza, 158 Fuxingmennei Avenue, Xicheng District, Beijing, the PRC at 10:00 a.m. on Wednesday, 19 December 2012 is set out on pages 47 to 49 of this circular.

Whether or not you intend to attend the EGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed on it. The proxy form should be returned to the Hong Kong H share registrar of the Company, Computershare Hong Kong Investor Services Limited at Shops 1806-1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 24 hours before the time appointed for the EGM or any adjournment of it. If you intend to attend the EGM in person or by proxy, you are required to complete and return the enclosed reply slip to the Hong Kong H share registrar of the Company, Computershare Hong Kong Investor Services Limited at Shops 1806-1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong on or before Thursday, 29 November 2012.

Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment of it should you so wish.

* The Company is registered as a non-Hong Kong company under Part XI of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) under its Chinese name “ 中國遠洋控股股份有限公司 ” and its English name “China COSCO Holdings Company Limited”.

2 November 2012

Pages	Pages
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Discloseable transaction and continuing connected transactions . . . . . . . . . . . . . . . . . . .	6
EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . . . . . .	18
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER . . . . . . . . . . . . . . . . . . . . .	20
APPENDIX — GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	42
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . .	47

— i —

DEFINITIONS

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

“Agreements”

the Finance Leasing Master Agreement and the APM Shipping Services Master Agreement

“APM”
A.P. Moller — Maersk A/S, a company incorporated in Denmark with limited liability
“APM Shipping Services Master Agreement”

the agreement dated 30 October 2012 between COSCO Ports, PCT and the Line in relation to the provision of shipping related services for a term from 1 January 2013 to 31 December 2015

“Board”
board of Directors
“Company”

China COSCO Holdings Company Limited (中國遠洋控股股份有限公司), a joint stock limited company incorporated in the PRC with limited liability, the H shares of which are listed on the Main Board of the Stock Exchange (Stock code: 1919) and the A shares of which are listed on the Shanghai Stock Exchange (Stock code: 601919)

“Continuing Connected Transactions”

transactions under the Agreements

“COSCO”

China Ocean Shipping (Group) Company (中國遠洋運輸(集團)總公司), a Chinese State-owned enterprise, the controlling shareholder of the Company owning an aggregate of 52.80% of the total registered capital of the Company as at the date of this announcement

“COSCO Group” COSCO and its subsidiaries (excluding the Group)
“COSCO Pacific” COSCO Pacific Limited, a company incorporated in Bermuda with limited liability whose shares are listed on the Main Board of the Stock Exchange (Stock code: 1199) and a subsidiary of the Company
“COSCO Pacific Group” COSCO Pacific and its subsidiaries
“COSCO Ports” COSCO Ports (Holdings) Limited (中遠碼頭控股有限公司), a company established in the British Virgin Islands and a wholly-owned subsidiary of COSCO Pacific
“COSCO Ports Group” COSCO Ports and its subsidiaries
“Directors” directors of the Company

— 1 —

DEFINITIONS

“EGM” extraordinary general meeting of the Company to be convened for the purpose of considering and if thought fit approving each of the Finance Leasing Master Agreement and the APM Shipping Services Master Agreement and their respective proposed annual caps, by the Independent Shareholders, the notice of which is set out on pages 47 to 49 of this circular

“Finance Leasing” the provision of finance leasing on any Leasing Equipment by any member of the Florens Capital Management Group to any member of the COSCO Ports Group pursuant to the Finance Leasing Master Agreement and such other related services as may be agreed between the relevant member of the Florens Capital Management Group and the relevant member of the COSCO Ports Group
“Finance Leasing Agreement” the separate written contract(s) to be entered into between the Lessor and Lessee pursuant to the Finance Leasing Master Agreement in respect of the Finance Leasing required by such Lessee in such form and on such terms to be negotiated on an arm’s length basis and agreed between the relevant parties from time to time
“Finance Leasing Master Agreement”
the agreement dated 30 October 2012 between COSCO Ports and Florens Capital Management in relation to the provision of finance leasing for a term from 1 January 2013 to 31 December 2015
“Florens Capital Management” Florens Capital Management Company Limited, a limited liability company incorporated in Hong Kong and a non wholly-owned subsidiary of COSCO Pacific
“Florens Capital Management Group”

Florens Capital Management and its subsidiary(ies)

“Group”
the Company and its subsidiaries
“Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China
“Independent Board Committee” an independent committee of the Board comprising Mr. TEO Siong Seng, Mr. KWONG Che Keung, Gordon and Mr. Peter Guy BOWIE, all being independent non-executive Directors

— 2 —

DEFINITIONS

“Independent Financial Adviser”
Asia Investment Management Limited, a corporation licensed to conduct type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO, the independent financial adviser of the Company to advise the Independent Board Committee and the Independent Shareholders on the terms of the Finance Leasing Master Agreement and the APM Shipping Services Master Agreement and the respective proposed annual caps for such transactions for each of the three years ending 31 December 2015
“Independent Shareholders”
the Shareholders who are not prohibited from voting under the Listing Rules to approve the relevant transaction at a general meeting of the Company
“Latest Practicable Date”
31 October 2012, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information for inclusion herein
“Leasing Equipment”
any machinery, equipment or other property related to shipping and the operation of terminal to be leased to the members of the COSCO Ports Group by the members of the Florens Capital Management Group or to be sold by the members of the COSCO Ports Group to, and then leased back from, members of the Florens Capital Management Group
“Lessee”
means any member of COSCO Ports Group which obtains the Finance Leasing under a Finance Leasing Agreement
“Lessor” means any member of Florens Capital Management Group which provides the Finance Leasing under a Finance Leasing Agreement
“Line” entities trading under the names of Maersk Line, Safmarine, MCC or any other future names with majority ownership by APM
“Listing Rules” Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
“PBOC” the People’s Bank of China, the central bank of the PRC
“PCT” Piraeus Container Terminal S.A., a company established in Greece and a wholly-owned subsidiary of COSCO Pacific
“Plangreat” Plangreat Limited, a company established in the British Virgin Islands and a wholly-owned subsidiary of COSCO Pacific

— 3 —

DEFINITIONS

“PRC”	the People’s Republic of China
“Shareholder(s)”	shareholder(s) of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the laws
	of Hong Kong)
“HKD”	Hong Kong dollars, the lawful currency of Hong Kong
“RMB”	Renminbi, the lawful currency of the PRC
“USD”	U.S. dollars, the lawful currency of the United States of
	America

For the purposes of this circular, the exchange rates of HKD1 = RMB0.82 and USD1 =HKD7.755 have been used, where applicable, for purpose of illustration only and do not constitute a representation that any amount has been, could have been or may be exchanged at any particular rate on the date or dates in question or any other date.

— 4 —

LETTER FROM THE BOARD

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**中國遠洋控股股份有限公司 China COSCO Holdings Company Limited[*]**

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

(Stock code: 1919)

Directors:

Mr. WEI Jiafu [2] (Chairman) Mr. MA Zehua [1] (Vice Chairman) Mr. LI Yunpeng [2] Mr. SUN Yueying [2] Mr. SUN Jiakang [1] Mr. XU Minjie [1] Mr. JIANG Lijun [1] (President) Mr. TEO Siong Seng [3] Dr. FAN HSU Lai Tai, Rita [3] Mr. KWONG Che Keung, Gordon [3] Mr. Peter Guy BOWIE [3]

Registered Office: 3rd Floor, No.1 Tongda Square Tianjin Port Free Trade Zone Tianjin 300461, the PRC

Head office and principal place

of business in Hong Kong:

49th Floor COSCO Tower 183 Queen’s Road Central Hong Kong

1 Executive Director

2 Non-executive Director

3 Independent Non-executive Director

2 November 2012

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

CERTAIN CONTINUING CONNECTED TRANSACTIONS MASTER AGREEMENTS BY COSCO PACIFIC LIMITED

INTRODUCTION

Reference is made to the announcement of the Company dated 30 October 2012 in relation to the Continuing Connected Transactions.

* The Company is registered as a non-Hong Kong company under Part XI of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) under its Chinese name “ 中國遠洋控股股份有限公司 ” and its English name “China COSCO Holdings Company Limited”.

— 5 —

LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things, further details of the Continuing Connected Transactions and the respective proposed annual caps for such transactions for each of the three years ending 31 December 2015; a letter from the Independent Board Committee with its recommendation to the Independent Shareholders regarding the Finance Leasing Master Agreement and the APM Shipping Services Master Agreement and their respective proposed annual caps; a letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders; and a notice of the EGM.

DISCLOSEABLE TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

The COSCO Pacific Group, subsidiaries of the Company, has been carrying on certain transactions pursuant to a number of existing master agreements which constitute continuing connected transactions of COSCO Pacific, and in turn of the Company, under Chapter 14A of the Listing Rules. The existing master agreements will expire on 31 December 2012 and it is expected that COSCO Pacific Group will continue to enter into transactions of a nature similar to the transactions under the existing master agreements from time to time thereafter.

The COSCO Pacific Group has also carried on transactions with Florens Capital Management Group in relation to the provision of finance leasing from time to time which constitute continuing connected transactions of COSCO Pacific, and in turn of the Company, under Chapter 14A of the Listing Rules, and separate agreements have been entered into in respect of such transactions. It is expected that the COSCO Pacific Group will continue to enter into transactions of a similar nature from time to time.

A. THE DISCLOSEABLE AND CONTINUING CONNECTED TRANSACTION

On 30 October 2012, COSCO Ports entered into the Finance Leasing Master Agreement with Florens Capital Management which constitutes a discloseable and continuing connected transaction of the Company, the principal terms of which are summarized as follows:

Finance Leasing Master Agreement

Date:	30 October 2012
Parties:	COSCO Ports
	Florens Capital Management
Duration:	1 January 2013 to 31 December 2015
Condition:	Conditional upon the approval of the Independent Shareholders and the
	independent shareholders of COSCO Pacific

If the above condition is not fulfilled on or before 31 December 2012 (or such later date as COSCO Ports may notify Florens Capital Management which shall be no later than 31 January 2013), then unless the parties agree in writing to extend the period for the fulfillment of such condition, the Finance Leasing Master Agreement shall lapse.

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LETTER FROM THE BOARD

Nature of transaction:

Terms and fees:

Provision of the Finance Leasing by the relevant members of the Florens Capital Management Group to members of the COSCO Ports Group, upon reasonable requests of members of the COSCO Ports Group. With respect to each Finance Leasing, the relevant Lessor and Lessee will enter into separate written contract(s) subject to the provisions of the Finance Leasing Master Agreement.

(a) Lease method

The lease method includes sale and leaseback pursuant to which the Lessor shall purchase from the Lessee the Leasing Equipment which will be leased back to the Lessee by the Lessor; finance leasing arrangement involving the execution of an entrusted purchase agreement for the intended purchase of Leasing Equipment by the Lessee and the subsequent provision of finance lease services to the Lessee and the making of lease payments to the Lessor; and finance lease arrangement involving the leasing of Leasing Equipment acquired by the Lessor to the Lessee as per the requirements of the Lessee.

(b) Lease period

The lease period for each Finance Leasing will be determined taking into account, inter alia, the useful life of the relevant Leasing Equipment (Note 1) , the financial needs of the Lessee and the funding availability of the Lessor, which in general should not exceed the useful life of such Leasing Equipment.

(c) Lease payments and interest rate

The lease payments charged by the Lessor will include the purchase price or the value of the Leasing Equipment (Note 2) and interest thereon charged on terms no less favourable to the Lessee than those offered by independent third parties and at a rate determined by reference to the benchmark lending rates published by PBOC from time to time (Notes 3 and 7) , or, if no such rate is available, by reference to, among other factors, the rate charged by the other major financial institutions for the same or similar types of services.

(d) Pre-lease interests

In the event that the purchase price of the Leasing Equipment is paid by the Lessor before commencement of the lease period, pre-lease interests on the purchase price may be charged by the Lessor and payable by the Lessee for the period from the date of payment of the purchase price by the Lessor to the date immediately before commencement of the lease period. Pre-lease interests (if charged) will be charged on terms no less favourable to the Lessee than those offered by independent third parties and at a rate determined by reference to the benchmark lending rates published by PBOC from time to time, or if no such rate is available, by reference to, among other factors, the rate charged by the other major financial institutions for the same or similar types of services.

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LETTER FROM THE BOARD

(e) Handling fee

An one-off non-refundable handling fee may be charged on terms no less favourable to the Lessee than those offered by independent third parties by the Lessor and payable by the Lessee when the Finance Leasing Agreement is entered into and at a rate determined by reference to, among others, the rate charged by the other major financial institutions in relation to finance leasing of the same or similar types of assets, or if available, the applicable rates published by PBOC for this kind of services from time to time, and will be set out in the relevant Finance Leasing Agreement (Notes 4 and 7) .

(f) Title and remedies

The legal title and all rights of the Leasing Equipment shall vest in the Lessor throughout the lease period.

In the event that the Lessee fails to make any lease payment or fulfill any obligations under the relevant Finance Leasing Agreement and without prejudice to any rights of the Lessor under the relevant law, the Lessor could take the following steps:

To demand full repayment of all outstanding lease payments;
To recover the relevant Leasing Equipment and to claim all damages arising from the Lessee; and/or
To take necessary legal actions according to the relevant Finance Leasing Agreement.

(g) Purchase option

Subject to the Lessee having duly and satisfactorily performed all its obligations under, and upon the expiry of the lease period under the Finance Leasing Agreement, the Lessee shall have an option to purchase the relevant Leasing Equipment at a price charged on terms no less favourable to the Lessee than those offered by independent third parties (Note 5) and at a rate determined by reference to, among other factors, the methodology and market practice for determining such price by the other major financial institutions in relation to finance leasing of the same or similar types of assets, or if available, the applicable rates published by PBOC for this kind of service from time to time (Notes 6 and 7) , which will be agreed between the Lessor and the Lessee at the time of entering into, and will be set out in, the Finance Leasing Agreement.

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LETTER FROM THE BOARD

(h) General

The transactions shall be conducted on normal commercial terms. The total consideration payable by the relevant members of the COSCO Ports Group for the provision of the Finance Leasing by members of the Florens Capital Management Group shall be at rates no less favourable to the relevant members of the COSCO Ports Group than those available from other independent third party for the relevant Finance Leasing.

Notes (which are for illustration purpose only and do not form part of the Finance Leasing Master Agreement):

The useful life of the Leasing Equipment will be assessed by reference to the Group’s assets management policy, industry practice, the past experience in using the Leasing Equipment and information obtained from internal engineering department staff who has technical knowledge on the use of the Leasing Equipment.
In respect of the Finance Leasing involving sale and leaseback, the basis of determining the value of the Leasing Equipment is the fair market value of such Leasing Equipment and the Lessor will also make reference to the net carrying amount of such Leasing Equipment and ensure that the amount to be leased will not exceed the lower of the fair market value and the net carrying amount of the Leasing Equipment in any event.

In respect of the Finance Leasing involving entrusted purchase, the lease amount will be determined based on the total purchase cost of the relevant Leasing Equipment and subject to the negotiation between the Lessor and the Lessee. The Lessor will also take into account other factors including the risk profile of the Lessee and the type of the Leasing Equipment in determining the appropriate lease amount.

The existing interest rate for RMB loans published by PBOC are as follows:
(i) 5.60% for loans with terms not more than 6 months;
(ii) 6.00% for loans with terms over 6 months but not more than 1 year;
(iii) 6.15% for loans with terms over 1 year but not more than 3 years;
(iv) 6.40% for loans with terms over 3 years but not more than 5 years; and (v) 6.55% for loans with terms over 5 years.
There is currently no available rate published by PBOC in this respect and in the event that PBOC publishes any such rate in the future during the term of the Finance Leasing Master Agreement, the Lessor and the Lessee will determine the handling fee by reference to such rate, which will be given priority over the rates adopted by other major financial institutions, accordingly.

— 9 —

LETTER FROM THE BOARD

The price for exercising the purchase option will be determined taking into account, inter alia, the lease payment structure, which will be given priority in the assessment, and the expected market value of the Leasing Equipment at the end of the lease period.

In general, taking into account the lease payment structure (which is determined based on factors including the financial needs of the Lessee, the lease period, the useful life of the Leasing Equipment), the purchase option price is the difference between the Lessor’s purchase price of the Leasing Equipment and the amount of lease payments (excluding the portion of interests). For example, if 95% of the purchase price of the Leasing Equipment has been covered by the total amount of lease payments (excluding the portion of interests) payable by the Lessee for the entire lease term, the purchase option price will be the remaining 5% of the Lessor’s purchase price, which may not be close to the residual value of the Leasing Equipment, unless the lease period ends on a date close to the end of the useful life of the Leasing Equipment, in which case, as the purchase price of the Leasing Equipment should have been substantially (if not fully) covered by the amount of lease payments (excluding the portion of interests) already made by the Lessee, the open market residual amount of the Leasing Equipment may be taken into account in determining the purchase option price.

There are currently no available rate published by PBOC in this respect and in the event that PBOC publishes any such rate in the future during the term of the Finance Leasing Master Agreement, the Lessor and the Lessee will determine the price for the purchase option by reference to such rate, which will be given priority over the methodology and market practice adopted by other major financial institutions, accordingly.
In determining the interest rate or amounts of the handling fee and purchase option, the Lessor will conduct an overall return assessment after considering, inter alia, the prevailing rates of PBOC or the major financial institutions, as the case may be, so as to meet its own return requirements and the credit risk assessment to the relevant Finance Leasing. Therefore, the pricing with respect to such aspects of each Finance Leasing will be determined on a case by case basis.

Historical amounts:

The historical amount of the transactions between the Florens Capital Management Group and the COSCO Ports Group which is of a nature similar to the transactions under the Finance Leasing Master Agreement in respect of each of the years ended 31 December 2010 and 31 December 2011 and the period from 1 January 2012 to 30 September 2012 were nil, RMB186,036,000 (approximately HKD226,874,000) and RMB173,089,000 (approximately HKD211,085,000), respectively[1] .

1 Members of the Florens Capital Management Group became connected persons of the Company on 22 December 2011.

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LETTER FROM THE BOARD

Proposed annual caps and basis of determination for annual caps:

The annual cap amounts for the transactions under the Finance Leasing Master Agreement, which represent the estimated aggregate amount of all payments payable throughout over the lease period (including all expected lease payments, pre-lease interests, handling fee and price for exercising the purchase option) under the Finance Leasing Agreements entered into during the year, and the basis of determination of such annual cap amounts are set out as follows:

Basis of Annual cap for the year ending 31 December determination for 2013 2014 2015 the annual cap Aggregate amount USD200,000,000 USD250,000,000 USD 300,000,000 Based on the past payable by the (approximately (approximately (approximately experience of the COSCO Ports Group HKD1,551,000,000) HKD1,939,755,000) HKD2,326,500,000) Company and the to the Florens current financing Capital Management market conditions Group for the and with reference provision of Finance to, inter alia, the Leasing by the expected nature Florens Capital amount of assets Management Group the COSCO Ports

Based on the past experience of the Company and the current financing market conditions and with reference to, inter alia, the expected nature and amount of assets of the COSCO Ports Group to be arranged with finance lease and the historical transaction amounts and terms of the existing finance lease arrangements between members of the Florens Capital Management Group and members of the COSCO Ports Group

Connected relationship:

Florens Capital Management is owned as to 50% by COSCO, which is the ultimate controlling Shareholder. Accordingly, the Florens Capital Management Group (including Florens Capital Management) are connected persons of the Company.

Listing Rules implication:

Since one or more of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the amount expected to be payable by the COSCO Ports Group pursuant

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LETTER FROM THE BOARD

to the transactions under the Finance Leasing Master Agreement exceed 5% but are below 25%, the Finance Leasing Master Agreement constitutes a discloseable transaction and a non-exempt continuing connected transaction of the Company. Accordingly, the Finance Leasing Master Agreement is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules and is also subject to the reporting, annual review, announcement and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

B. THE CONTINUING CONNECTED TRANSACTION

On 30 October 2012, the relevant members of the COSCO Pacific Group entered into the APM Shipping Services Master Agreement which constitute a continuing connected transaction of the Company subject to independent shareholders’ approval requirement, the principal terms of which are summarized as follows:

APM Shipping Services Master Agreement

Date: 30 October 2012 Parties: COSCO Ports PCT the Line Duration: 1 January 2013 to 31 December 2015 Condition: Conditional upon the approval of the independent shareholders of COSCO Pacific If the above condition is not fulfilled on or before 31 December 2012 (or such later date as COSCO Ports and PCT may notify the Line which shall be no later than 31 January 2013), then unless the parties agree in writing to extend the period for the fulfillment of such condition, the APM Shipping Services Master Agreement shall lapse. Nature of Provision of shipping related services by members of the COSCO Ports transaction: Group or PCT to the Line, including but not limited to handling, storage, stevedoring, transshipment, maintenance of cargoes, provision of container storage space and collection of port construction fee. Terms and fees : The transactions shall be conducted on normal commercial terms (Note 8) . The terms on pricing under the APM Shipping Services Master Agreement are determined based on the existing scale and operations of the businesses of the COSCO Ports Group and PCT, the anticipated growth and development of such businesses and the anticipated demand for such services after taking into account that the economic condition will improve in the future compared with that in the past few years.

Note 8: In determining normal commercial terms, COSCO Ports and PCT will ensure that the terms and rates will be no less favourable to COSCO Ports and PCT than the terms and rates available from independent third parties for the relevant transactions.

— 12 —

LETTER FROM THE BOARD

Historical amounts:

The historical amounts for transactions of a nature similar to the transactions under the APM Shipping Services Master Agreement are as follows:

Historical transaction amounts

For the For the year ended For the year ended nine months ended 31 December 2010 31 December 2011 30 September 2012

Aggregate amount received RMB55,416,000 RMB178,040,000 RMB202,950,000 by the COSCO Ports Group (approximately (approximately (approximately and PCT from the Line HKD67,581,000) HKD217,212,000) HKD247,500,000)

Proposed annual caps and basis of determination for annual caps:

The annual cap amounts for the transactions under the APM Shipping Services Master Agreement and the basis of determination for such annual cap amounts are set out as follows:

				Basis of
	Annual cap	for the year ending 31 December		determination for
	2013	2014	2015	the annual cap
Aggregate amount	RMB905,651,000	RMB1,318,430,000	RMB1,875,845,000	Based on the
receivable by the	(approximately	(approximately	(approximately	existing scale and
COSCO Ports Group	HKD1,104,453,000)	HKD1,607,842,000)	HKD2,287,616,000)	operations of the
and PCT from the				businesses of the
Line				COSCO Ports Group
				and PCT, the
				anticipated growth
				and development of
				such businesses and
				the anticipated
				demand for such
				services after taking
				into account that the
				economic condition
				will improve when
				compared with that
				in the past few years
				(Note 9).

Note 9: The basis that the annual cap would increase year-on-year from 2013 to 2015 is mainly due to (i) the expected future business growth for the terminal subsidiaries; (ii) the expected future growth for Xiamen Ocean Gate Terminal since its operation in May 2012; and (iii) the expected new terminal projects which may become subsidiaries of the Company in the future.

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LETTER FROM THE BOARD

Connected relationship:

APM Terminals Invest Company Limited, which is a subsidiary of APM, is a substantial shareholder of a subsidiary of the Company. The Line are majority-owned by APM and are therefore associates of APM Terminals Invest Company Limited. Accordingly, the Line are connected persons of the Company by virtue of the relationship with the Company’s subsidiary.

Listing Rules implication:

One or more of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the amount expected to be receivable by the COSCO Ports Group and PCT pursuant to the transactions under the APM Shipping Services Master Agreement exceed 5% on an annual basis. Accordingly, the transactions under the APM Shipping Services Master Agreement are subject to the reporting, annual review, announcement and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

C. REASONS FOR AND BENEFITS OF ENTERING INTO THE CONTINUING CONNECTED TRANSACTIONS

By entering into the Finance Leasing Master Agreement, the Florens Capital Management Group can further develop its finance leasing business and financing platform and, at the same time, an alternative source of financing will be available to the members of the COSCO Ports Group for its operation.

The COSCO Pacific Group has entered into and will continue to enter into the transactions contemplated under the APM Shipping Services Master Agreement because the terminal business is part of the principal business activities of the COSCO Pacific Group in the course of its ordinary business and is consistent with the businesses and commercial objectives of the COSCO Pacific Group.

The COSCO Pacific Group has contracted with the relevant connected persons in the Continuing Connected Transactions because both the COSCO Pacific Group and the relevant connected persons are assured of the quality of the relevant services or products of each other, and such continuing relationships are expected to either increase the revenue of the COSCO Pacific Group, bring synergies to the parties and/or provide the COSCO Pacific Group with overall business and operational convenience, and therefore, can enhance the same of the Group.

D. DIRECTORS’ CONFIRMATION

Mr. WEI Jiafu, Mr. MA Zehua, Mr. LI Yunpeng, Ms. SUN Yueying, Mr. SUN Jiakang, Mr. XU Minjie and Mr. JIANG Lijun are Directors nominated by COSCO and have therefore abstained from voting on the relevant board resolutions approving the Finance Leasing Master Agreement pursuant to the articles of association of the Company. Save as disclosed above, none of the Directors has a material interest in the Continuing Connected Transactions. Dr. FAN HSU Lai Tai, Rita has voluntarily abstained from voting on the relevant board resolutions approving the Continuing Connected Transactions for the reason that she is also an independent non-executive director of COSCO Pacific.

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LETTER FROM THE BOARD

The Board (including the independent non-executive Directors (other than Dr. FAN HSU Lai Tai, Rita)) considers that, based on the reasons mentioned above and the view of the directors of COSCO Pacific, the Finance Leasing Master Agreement and the APM Shipping Services Master Agreement are and will be entered into in the ordinary and usual course of business of the Group and are and will be on normal commercial terms and that the terms thereof are fair and reasonable and in the interests of the Shareholders as a whole.

E. INFORMATION ON THE RELEVANT PARTIES

The Company was established in the PRC on 3 March 2005. The Company, through its various subsidiaries, provides a wide range of container shipping, dry bulk shipping, logistics, terminals and container leasing services covering the whole shipping value chain for both international and domestic customers. The COSCO Pacific Group is principally engaged in the businesses of managing and operating terminals, container leasing, management and sale, container manufacturing, and their related businesses.

COSCO is one of the mega-size state-owned enterprises under the State-owned Assets Supervision and Administration Commission of the State Council. Apart from the business operated by the Group, the main business currently operated by the COSCO Group also includes operation of oil tankers and other liquefied bulk cargo shipping, general cargo and special vessel shipping, ship repair and retrofit, ship building, provision of vessel fuels, and provision of financial services, ship trading services and seaman and ship management services, etc.

The Line’s principal business activities are to carry out activities in respect of vessels owned or operated by APM, including soliciting cargo, issuing bills of lading, settling freight charges and entering into service contracts. APM and its subsidiaries are principally engaged in the business of managing and operating container shipping, container terminals, tankers, offshore and other shipping activities, oil and gas production and exploration, retail business and other industrial activities.

The Florens Capital Management Group is principally engaged in the business of finance leasing.

EGM

The EGM will be held for the Independent Shareholders to consider and, if thought fit, approve, among other things, the Finance Leasing Master Agreement and the APM Shipping Services Master Agreement and the proposed annual caps for the transactions under each of such agreements for each of the three years ending 31 December 2015.

In accordance with the Listing Rules, COSCO and its associates, being connected persons of the Company and having material interest (which are different from those of the Independent Shareholders) in the Finance Leasing Master Agreement, will abstain from voting at the EGM for the relevant resolution. As at the Latest Practicable Date, COSCO and its associates held and controlled the voting rights of 5,313,082,844 A shares and 81,179,500 H shares, representing approximately 52.80% of the issued share capital of the Company.

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LETTER FROM THE BOARD

A notice of the EGM is set out on pages 47 to 49 of this circular. The EGM will be held at Function Room, 47th Floor, COSCO Tower, 183 Queen’s Road Central, Hong Kong and Conference Center, Ocean Plaza, 158 Fuxingmennei Avenue, Xicheng District, Beijing, the PRC at 10:00 a.m. on Wednesday, 19 December 2012.

A reply slip and a proxy form for use at the EGM is enclosed with this circular. Whether or not you intend to attend the EGM, you are requested to complete and return the enclosed proxy form to the Hong Kong H share registrar of the Company, Computershare Hong Kong Investor Services Limited at Shops 1806-1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 24 hours before the time appointed for the EGM or any adjournment of it. If you intend to attend the EGM, you are required to complete and return the enclosed reply slip to the Hong Kong H share registrar of the Company, Computershare Hong Kong Investor Services Limited at Shops 1806-1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong on or before Thursday, 29 November 2012.

Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment of it should you so wish, and completion and return of the reply slip will not affect your right to attend the respective meeting.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of the Shareholders to be taken at a general meeting of the Company shall be taken by poll. An announcement of the poll results will be made by the Company after the EGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

RECOMMENDATIONS

Your attention is drawn to the letter from the Independent Board Committee set out on pages 18 to 19 of this circular and the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders set out on pages 20 to 41 of this circular in connection with the Continuing Connected Transactions contemplated under the Finance Leasing Master Agreement and the APM Shipping Services Master Agreement, their respective proposed annual caps and the principal factors and reasons considered by the Independent Financial Adviser in arriving at such advice.

The Independent Board Committee, having taken into account the advice of the Independent Financial Adviser, considers that (i) the Continuing Connected Transactions are in the ordinary and usual course of business of the Group (including the COSCO Pacific Group) and are in the interests of the Company and the Shareholders as a whole; (ii) the terms of the Agreements are normal commercial terms and are fairly and reasonably determined; and (iii) the proposed annual caps for the Continuing Connected Transactions for the three years ending 31 December 2015 are determined based on the reasonable estimation and after due and careful consideration and that it is fair and reasonable for the management of the Company and COSCO Pacific to make reference to the aforesaid factors as the bases to determine such caps. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the resolutions to approve the Finance Leasing Master Agreement and the APM Shipping Services Master Agreement, the transactions contemplated under such agreements (including their respective proposed annual caps) at the EGM.

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LETTER FROM THE BOARD

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendix to this circular.

Yours faithfully, By order of the Board China COSCO Holdings Company Limited GUO Huawei

Joint Company Secretary

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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中國遠洋控股股份有限公司 China COSCO Holdings Company Limited[*] (a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock code: 1919)

2 November 2012

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

CERTAIN CONTINUING CONNECTED TRANSACTIONS MASTER AGREEMENTS BY COSCO PACIFIC LIMITED

We refer to the circular issued by the Company to its Shareholders dated 2 November 2012 (the “ Circular ”) of which this letter forms part. Terms defined in the Circular shall have the same meanings in this letter unless the context otherwise requires.

We have been appointed by the Board to advise the Independent Shareholders as to whether the Finance Leasing Master Agreement and the APM Shipping Services Master Agreement were entered into in the ordinary and usual course of business of the Group on normal commercial terms, and the terms of Finance Leasing Master Agreement and the APM Shipping Services Master Agreement and the respective proposed annual caps under such agreements are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Asia Investment Management Limited has been appointed to act as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Finance Leasing Master Agreement and the APM Shipping Services Master Agreement. The text of the letter of advice from the Independent Financial Adviser containing their recommendations and the principal factors they have taken into account in arriving at their recommendations are set out from pages 20 to 41 of the Circular.

* The Company is registered as a non-Hong Kong company under Part XI of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) under its Chinese name “ 中國遠洋控股股份有限公司 ” and its English name “China COSCO Holdings Company Limited”.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having considered the terms of the Finance Leasing Master Agreement and the APM Shipping Services Master Agreement and the advice of the Independent Financial Adviser, we are of the opinion that considers that (i) the Continuing Connected Transactions are in the ordinary and usual course of business of the Group (including the COSCO Pacific Group) and are in the interests of the Company and the Shareholders as a whole; (ii) the terms of the Agreements are normal commercial terms and are fairly and reasonably determined; and (iii) the proposed annual caps for the Continuing Connected Transactions for the three years ending 31 December 2015 are determined based on the reasonable estimation and after due and careful consideration and that it is fair and reasonable for the management of the Company and COSCO Pacific to make reference to the aforesaid factors as the bases to determine such caps. We therefore recommend the Independent Shareholders to vote in favour of the relevant resolutions to be proposed at the EGM to approve the Finance Leasing Master Agreement and the APM Shipping Services Master Agreement and the transactions contemplated under such agreements (including their respective proposed annual caps).

Yours faithfully,

For and on behalf of the Independent Board Committee

Mr. TEO Siong Seng Mr. KWONG Che Keung, Gordon Mr. Peter Guy BOWIE Independent non-executive Directors

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of a letter received from the Independent Financial Adviser setting out its advice to the Independent Board Committee and the Independent Shareholders for inclusion in this circular.

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Asia Investment Management Limited

Room 1203, 12th Floor, Tower 2 Lippo Centre, Admiralty, Hong Kong

2 November 2012

To the Independent Board Committee and the Independent Shareholders of China COSCO Holdings Company Limited

Dear Sirs,

CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our engagement as the independent financial adviser to make recommendations to the independent board committee (the “ Independent Board Committee ”) and the independent shareholders (the “ Independent Shareholders ”) of China COSCO Holdings Company Limited (the “ Company ”) in relation to the continuing connected transactions (the “ Continuing Connected Transactions ”) contemplated under the master agreements, namely (i) the APM Shipping Services Master Agreement; and (ii) the Finance Leasing Master Agreement (thereafter collectively referred to as the “ Agreements ”), with the proposed annual caps (the “ Annual Caps ”).

Details of the Continuing Connected Transactions were disclosed in the announcement of the Company dated 30 October 2012 (the “ Announcement ”) and in the letter from the board (the “ Letter from the Board ”) set out on pages 5 to 17 of the circular of the Company dated 2 November 2012 (the “ Circular ”) to its shareholders, of which this letter forms part. Capitalized terms used in this letter shall have the same meanings as defined in the Circular unless the context otherwise requires.

On 30 October 2012, the relevant members of the COSCO Pacific Group, which are in turn subsidiaries of the Company, entered into the following Agreements, each for a term of three years commencing from 1 January 2013 and ending on 31 December 2015:

(1) the APM Shipping Services Master Agreement between COSCO Ports, PCT and the Line; and

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(2) the Finance Leasing Master Agreement between COSCO Ports and Florens Capital Management.

Florens Capital Management is owned as to 50% by COSCO, which is the ultimate controlling Shareholder. Accordingly, members of the Florens Capital Management Group (including Florens Capital Management) are connected persons of the Company.

Since all counter-contract parties of the Agreements are connected persons of the Company, the transactions contemplated under the Agreements constitute continuing connected transactions of the Company as defined under the Listing Rules. As the applicable percentage ratios in respect of the Annual Caps calculated pursuant to Rule 14.07 of the Listing Rules are more than 5% and the annual consideration of the transactions contemplated under each of the Agreements is more than HKD10 million, the Continuing Connected Transactions, together with the Annual Caps, are subject to the reporting, announcement, independent shareholders’ approval and annual review requirements under Chapter 14A of the Listing Rules.

In addition, since the relevant percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the amount expected to be payable by the COSCO Ports Group pursuant to the transactions under the Finance Leasing Master Agreement exceed 5% but are below 25%, the transaction contemplated under the Finance Leasing Master Agreement constitutes a discloseable transaction of the Company. Accordingly, the Finance Leasing Master Agreement is subject to the notification and announcement requirements pursuant to Chapter 14 of the Listing Rules.

In view of COSCO’s interests in the Finance Leasing Master Agreement and COSCO was interested in approximately 52.80% of the total issued share capital of the Company as at the Latest Practicable Date, COSCO and its associates are required to abstain from voting on the resolution to be proposed at the EGM to approve the Finance Leasing Master Agreement and the transactions contemplated thereunder.

The Independent Board Committee, comprising Mr. TEO Siong Seng, Mr. KWONG Che Keung, Gordon and Mr. Peter Guy BOWIE, all being independent non-executive Directors, has been formed to advise the Independent Shareholders as to whether (i) the terms of the Agreements and the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Continuing Connected Transactions are on normal commercial terms and in the ordinary and usual course of business of the Group; and (ii) the Continuing Connected Transactions, including the Annual Caps, are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole, and to advise the Independent Shareholders on how to vote, taking into account the recommendation of the independent financial adviser. We, Asia Investment Management Limited, have been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

The transactions contemplated under the Agreements also constitute continuing connected transactions of COSCO Pacific, which is a subsidiary of the Company, and are subject to the reporting, announcement, independent shareholders’ approval and annual review requirements under Chapter 14A of the Listing Rules since the applicable percentage ratios in respect of the Annual Caps are more than 5% and the annual consideration of the continuing connected transactions contemplated under each of the Agreements is more than HKD10 million. We have also been appointed by COSCO Pacific as the independent financial adviser to advise the independent board committee and the independent shareholders of COSCO Pacific as to whether (i) the terms of the continuing connected transactions contemplated under the Agreements are on normal commercial terms and in the ordinary and usual course of business of the COSCO Pacific Group; and (ii) the continuing connected transactions contemplated under the Agreements, including the annual caps, are fair and reasonable so far as the independent shareholders of COSCO Pacific are concerned and in the interests of COSCO Pacific and its shareholders as a whole.

Apart from normal professional fees for our services to the Company and COSCO Pacific in connection with the engagements described above, no arrangement exists whereby we will receive any fees and/or benefits from the Group, the COSCO Pacific Group, the contracting parties to the Agreements (the “ Contracting Parties ”) and/or any of their respective associates. We are independent from and not connected with the Group, the COSCO Pacific Group, the Contracting Parties or any of their respective substantial shareholders, directors or chief executives, or any of their respective associates pursuant to Rule 13.84 of the Listing Rules, and are accordingly qualified to give independent advice to the Independent Board Committee and the Independent Shareholders regarding the Continuing Connected Transactions.

BASIS OF OUR OPINION

In formulating our opinion and recommendations, we have reviewed, inter alia, the Announcement, the Agreements, the master agreement entered into between COSCO Ports, PCT and the Line on 30 November 2009 in relation to the provision of shipping related services by members of the COSCO Ports Group or PCT to the Line (the “ 2009 APM Shipping Services Master Agreement ”), the announcement of the Company dated 30 November 2009 (the “ 2009 Announcement ”) and the circular of COSCO Pacific dated 21 December 2009 (“ 2009 CP Circular ”) in relation to, among others, the continuing connected transactions contemplated under the 2009 APM Shipping Services Master Agreement, the 2011 annual report of the Company (the “ 2011 Annual Report ”), the 2012 interim report of the Company (the “ 2012 Interim Report ”), the 2011 annual report of COSCO Pacific (the “ 2011 CP Annual Report ”) and the 2012 interim report of COSCO Pacific (the “ 2012 CP Interim Report ”). We have also reviewed certain information and facts provided by the management of the Company and COSCO Pacific relating to the operations, financial

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

condition and prospects of the Group (including the COSCO Pacific Group). We have (i) considered such other information, analyses and market data as we deemed relevant; and (ii) conducted discussions with the management of the Company and COSCO Pacific regarding the terms of the Agreements, the basis for determination of the Annual Caps, the businesses and the future outlook of the Group (including the COSCO Pacific Group). We have assumed that all information, opinions, statements, and representations made to us or as contained in the Circular, are true, accurate and complete in all material respects as at the date hereof and we have relied upon them in formulating our opinion.

All Directors collectively and individually accept full responsibility for the purpose of giving information with regard to the Company in the Announcement and the Circular and, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in the Announcement and the Circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters not contained in the Announcement and the Circular, the omission of which would make any statement herein or in the Announcement and the Circular misleading. We consider that we have been provided with, and we have reviewed, all currently available information and documents which are available under present circumstances to enable us to reach an informed view regarding the terms of, and the reasons for, the Continuing Connected Transactions and to justify reliance on the accuracy of the information contained in the Circular so as to provide a reasonable basis of our opinion. We have no reason to suspect that any material information has been withheld by the Directors or management of the Company and/or directors or management of COSCO Pacific, or is misleading, untrue or inaccurate. We have not, however, for the purpose of this exercise, conducted any independent detailed investigation or audit into the businesses or affairs or future prospects of the Group (including the COSCO Pacific Group). Our opinion is necessarily based on financial, economic, market and other conditions in effect, and the information made available to us, at the date of the Circular. We are not responsible for the negotiation of the terms of the Agreements and the outcomes resulting from the compliance or non-compliance of the relevant Agreements.

This letter is issued to provide the information for the Independent Board Committee and the Independent Shareholders solely in connection with their consideration of the Continuing Connected Transactions contemplated under the Agreements, and, except for its inclusion in the Circular, 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 CONSIDERED

In arriving at our opinion in respect of the terms of the relevant Agreements, we have considered the following principal factors and reasons:

1. The background to, the reasons for, and the benefits of, the Continuing Connected Transactions

The Group is a reputable shipping-related conglomerate providing a wide range of services including container shipping, dry bulk shipping, logistics, terminals and container leasing services covering the whole shipping value chain for both international and domestic customers through its various subsidiaries (including but not limited to the COSCO Pacific Group and COSCON).

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The COSCO Pacific Group is a world-renowned container-related operator with a comprehensive spectrum of business operations comprising three core components, namely (i) terminal and related business; (ii) container leasing, management and sale businesses; and (iii) container manufacturing business. As at 31 December 2011, the COSCO Pacific Group operated and managed 23 terminal companies in 18 ports worldwide, among which 19 terminal companies were based in the PRC. The COSCO Pacific Group’s terminal network covered 14 ports in the PRC and 4 major overseas hub ports, including without limitation, Qingdao, Shenzhen, Guangzhou Nansha and Piraeus. According to the “Global Container Terminal Operations 2012: Annual Review and Forecast” published by Drewry Shipping Consultants in August 2012, the combined terminal-operating businesses of the COSCO Pacific Group and COSCON were ranked as the world’s fifth largest container terminal operator with an aggregate annual throughput of approximately 53.2 million twenty-foot equivalent units (“ TEUs ”) and captured a global market share of approximately 9.0% in 2011.

Although the global economy was adversely affected by the widening European debt crisis, the COSCO Pacific Group maintained its growth at a steady rate in 2011 on the back of the support from the COSCO Group and its affiliated subsidiaries. According to the 2011 CP Annual Report, the COSCO Pacific Group’s annual total throughput in 2011 reached approximately 50.7 million TEUs, representing a year-on-year growth of approximately 15.1% from approximately 44.0 million TEUs in 2010. The container leasing business had a total number of customers of 287 in 2011, among which international customers accounted for approximately 69.2% of the total container fleet. The COSCO Pacific Group’s revenue attributable to the terminal business and container leasing business rose by approximately 34.2% to approximately USD599.2 million (equivalent to approximately HKD4,646.5 million) for the financial year ended 31 December 2011, as compared to the same period in 2010.

In 2012, the COSCO Pacific Group aims to maintain a steady development in the terminal business by way of strengthening its position in the PRC’s terminal industry and, in the meanwhile, developing Piraeus terminal into the key transshipment terminal in the Mediterranean region. It was stated in the 2011 CP Annual Report that the COSCO Pacific Group’s annual handling capacity was expected to increase by approximately 5.15 million TEUs to approximately 60.6 million TEUs by the end of 2012 (representing an annual expansion of 9.3% as compared to that of 2011), driven by the commencement of 7 new Chinese berths’ formal operation and the completion of the upgrading work at Pier 2 of Piraeus terminal in 2012. The COSCO Pacific Group’s container leasing business was operated solely by Florens. Since approximately 93.8% of the total revenue from container leasing in 2011 was derived by the long-term leases, the management of COSCO Pacific expected that the rental income from this business sector will grow steadily in 2012.

In the course of its ordinary business, the COSCO Pacific Group has been from time to time carrying out transactions with its connected persons. Indeed, the COSCO Pacific Group has been carrying on transactions pursuant to the 2009 APM Shipping Services Master Agreement, which constitutes continuing connected transactions of COSCO Pacific under Chapter 14A of the Listing Rules. Pursuant to Rule 14A.43 and Rule 14A.53 of the Listing Rules, COSCO Pacific had applied to the Stock Exchange for, and the Stock Exchange had granted, a waiver of the requirement to hold a shareholders’ meeting and the permission for the independent shareholders’ approval to be given in the form of written approval in respect of, among others, the 2009 APM Shipping Services Master Agreement. Details of the transactions under the 2009 APM Shipping Services Master Agreement were disclosed in the 2009 CP Circular. The 2009 APM Shipping Services Master Agreement will expire on

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

31 December 2012, and it is expected that the COSCO Pacific Group will continue to enter into transactions of nature similar to the transactions under the 2009 APM Shipping Services Master Agreement from time to time thereafter. Accordingly, the COSCO Pacific Group and the Line entered into the APM Shipping Services Master Agreement as an extension of the 2009 APM Shipping Services Master Agreement.

The COSCO Group is a global terminal and shipping conglomerate. Designated members of the COSCO Group (including, without limitation, the Florens Capital Management Group) undertake the responsibilities of the provision of financing and treasury services to other members within the COSCO Group so as to consolidate the treasury and the financial management functions of the COSCO Pacific Group and to segregate the functions and duties of different members of the COSCO Group in other respects. Such arrangement is intended to best rationalize the allocation of resources and use of funds within the COSCO Group. As the COSCO Pacific Group is a part of the COSCO Group, the COSCO Pacific Group is eligible to use the finance leasing services provided by members of the Florens Capital Management Group. The management of COSCO Pacific is of the view, and the management of the Company concurs, that, if circumstances so permit and so appropriate, the COSCO Pacific Group may, in future, consider the service of members of the Florens Capital Management Group for finance leasing services. Apparently, there would be commercial benefits for the COSCO Pacific Group to enter into the Finance Leasing Master Agreement with Florens Capital Management in relation to the provision of finance leasing by members of the Florens Capital Management Group.

Accordingly, on 30 October 2012, the relevant members of the COSCO Pacific Group, which are in turn subsidiaries of the Company, entered into the Agreements, each for a term of three years from 1 January 2013 to 31 December 2015, with various connected persons of COSCO Pacific and so the Company. Set out below are the details of the Agreements:

1. APM Shipping Services Master Agreement

I. Contract party within the Group: 1. COSCO Ports; and

2. PCT

II. Counter-contract party: The Line

III. Nature of business of counter-contract party:

Soliciting cargo, issuing bills of lading, settling freight charges and entering into service contracts in respect of vessels owned or operated by APM

IV. Nature of transactions:

Provision of shipping related services by members of the COSCO Ports Group or PCT to the Line, including but not limited to handling, storage, stevedoring, transshipment, maintenance of cargoes, provision of container storage space and collection of port construction fee

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

2. Finance Leasing Master Agreement

I. Contract party within the Group: COSCO Ports
II. Counter-contract party: Florens Capital Management

III. Nature of business of counter-contract party:

Provision of finance leasing

IV. Nature of transactions:

By the very nature of the COSCO Pacific Group’s business activities, transactions with the connected persons are inevitable. The support by the COSCO Group will assist the business development and further strengthen the financial position of COSCO Pacific. Indeed, the COSCO Pacific Group has entered into, and will continue to enter into, agreements with its connected persons in relation to different natures of transactions (including but not limited to the 2009 APM Shipping Services Master Agreement). The management of COSCO Pacific is of the view, and the management of the Company agrees, that the entering into of the Agreements can facilitate the long-term development of the COSCO Pacific Group’s operation.

Rationale of the APM Shipping Services Master Agreement

As discussed above, the Line’s principal business activities include soliciting cargo, issuing bills of lading, settling freight charges and entering into service contracts in respect of vessels owned or operated by APM. According to the “ Global Container Terminal Operations 2012: Annual Review and Forecast ”, APM was the second largest container terminal operator in the world with an annual throughput of approximately 63.7 million TEUs, enjoying a global market share of approximately 10.8% in the year of 2011.

We further noted from the 2011 CP Annual Report that the terminal and related business had become the core revenue stream to the COSCO Pacific Group, contributed approximately USD323.3 million (representing approximately HKD2,507.5 million) and accounted for approximately 54.0% of the total revenue of the COSCO Pacific Group’s main businesses for the year ended 31 December 2011. We have enquired and were advised by the management of COSCO Pacific that the Line are the key customers of the COSCO Pacific Group’s terminal business.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

To further strengthen the terminal and related businesses, the COSCO Pacific Group is now actively developing Piraeus terminal into the key transshipment terminal in the Mediterranean region. Due to the prime location of Pireaus terminal, it provides efficient, reliable and stable transshipment container handling services and is a key partner to a lot of international shipping companies. The upgrading work at Pier 2 has been completed in June 2012 while the construction of Pier 3 has started in the fourth quarter of 2011. It is expected that such development shall bring an additional annual handling capacity of 2.1 million TEUs to the COSCO Pacific Group. At the same time, the COSCO Pacific Group continues its principal strategy of strengthening its leading position in the PRC by expanding its geographical coverage. According to the 2011 CP Annual Report, 7 new berths distributed in 5 terminals in the PRC will commence formal operation by stage in 2012, contributing an additional annual handling capacity of 4.15 million TEUs to the COSCO Pacific Group.

Given the fact that the Line are the key customers of the COSCO Pacific Group’s terminal business, the management of the Company is of the view that the entering into of the APM Shipping Services Master Agreement with regard to the provision of shipping related services by the COSCO Ports Group and PCT to the Line is in the ordinary and usual course of business of the Group (including the COSCO Pacific Group) and is in the interests of the Company and the Shareholders as a whole.

Rationale of the Finance Leasing Master Agreement

Florens Capital Management was established in November 2010 and was previously an indirect wholly-owned subsidiary of COSCO Pacific. On 22 November 2011, COSCO (Cayman) Fortune Holding Co., Ltd (“ Fortune Holding ”), a wholly-owned subsidiary of COSCO, subscribed for the increased share capital of Florens Capital Management and advanced a shareholder’s loan of USD50 million to Florens Capital Management. Florens Capital Management is now owned as to 50% by Fortune Holding and 50% by Florens. Despite the change in shareholding structure, Florens Capital Management is still accounted for as a subsidiary of COSCO Pacific. According to the management of COSCO Pacific, the principal business of the Florens Capital Management Group is to provide finance lease services to both members of the COSCO Pacific Group and third parties. The business activities of the Florens Capital Management Group have remained the same since its establishment.

By entering into the Finance Leasing Master Agreement, the Florens Capital Management Group can further develop its finance leasing business and further strengthen itself as a financing platform within the organization of the COSCO Pacific Group and the COSCO Ports Group can better utilize its financial resources in the terminal business via the assistance of the Florens Capital Management Group. As advised by the management of COSCO Pacific, the Leasing Equipment relates to all kinds of machinery, equipment or other property related to shipping and operation of terminal. The finance lease arrangement allows the COSCO Ports Group to re-deploy the upfront consideration or purchase cost of the Leasing Equipment obtained from the Florens Capital Management Group to the terminal business operation. Given both Florens Capital Management and COSCO Ports are subsidiaries of the COSCO Pacific Group, the management of the Company concurs with the management of COSCO Pacific’s view that the finance lease arrangement can help segregate the functions of each member of the COSCO Pacific Group and, at the same time, consolidate all financing functions and financing activities to enable a higher yield and return through a central management of financing resources and portfolios and reduce the cost of borrowings.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Conclusion

In light of the above, we concur with the Directors’ view that the conduction of the Continuing Connected Transactions with the counter-contract parties is in the ordinary and usual course of business of the Group (including the COSCO Pacific Group) and is in the interest of the Company and the Shareholders as a whole.

2. Principal terms of the Agreements

Each of the Agreements, with a term of three years commencing from 1 January 2013 and ending on 31 December 2015, is conditional upon the approval of the relevant Agreement by the Independent Shareholders. Furthermore, each of the Agreements is also conditional upon the approval of the relevant Agreement by the independent shareholders of COSCO Pacific. Pursuant to the terms of each of the Agreements, each of the Continuing Connected Transactions shall be conducted in accordance with the terms and fees as tabulated below:

1. APM Shipping Services Master Agreement

Terms: The transactions shall be conducted on normal commercial terms [(Note][1)] .

The terms on pricing under the APM Shipping Services Master Agreement are determined based on the existing scale and operations of the businesses of the COSCO Ports Group and PCT, the anticipated growth and development of such businesses and the anticipated demand for such services after taking into account that the economic condition will improve in the future compared with that in the past few years.

Note 1: In determining normal commercial terms, COSCO Ports and PCT will ensure that the terms and rates will be no less favourable to COSCO Ports and PCT than the terms and rates available from independent third parties for the relevant transactions.

We have reviewed and compared the terms of the APM Shipping Services Master Agreement and the 2009 APM Shipping Services Master Agreement, and noted that, save for (i) the Annual Caps; and (ii) the slight change on the coverage of shipping related services provided by the COSCO Ports Group or PCT (specifically, the inclusion of provision of container storage space and collection of port construction fee), there is no material change between the terms of the two aforementioned agreements. We have discussed with the respective management of the Company and COSCO Pacific on the terms, and in particular the pricing terms, of the APM Shipping Services Master Agreement. The management of the Company is of the view that the terms are on normal commercial terms.

In assessing the terms of the APM Shipping Services Master Agreement, we have reviewed and compared the sample copies of service contracts entered into between (a) the COSCO Ports Group/ PCT and the Line, and (b) the COSCO Ports Group/ PCT and its independent service receivers in relation to the transactions under the 2009 APM Shipping Services Master Agreement during the period commencing from 1 January 2010 to the Latest Practicable Date (the “ Review Period ”). We consider that it is rational to compare such sample copies of service contracts as the basis of our analysis since the terms of the APM Shipping Services Master Agreement are substantially the same

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

as that of the 2009 APM Shipping Services Master Agreement. We noted that (i) the terms under those separate contracts entered into between the COSCO Ports Group/ PCT and the Line are comparable to, and no less favorable to COSCO Ports Group/PCT, than that offered by the COSCO Ports Group/ PCT to other independent service receivers; and (ii) the shipping related services provided under those separate contracts entered into between the COSCO Ports Group/ PCT and the Line were charged at prices comparable to those charged to other independent service receivers. Therefore, we are of the view that the terms of the APM Shipping Services Master Agreement are on normal commercial terms and fair and reasonable so far as the Independent Shareholders are concerned.

2. Finance Leasing Master Agreement

Terms and fees: (a) Lease method

(b) Lease period

The lease period for each Finance Leasing will be determined taking into account, inter alia, the useful life of the relevant Leasing Equipment [(Note][2)] , the financial needs of the Lessee and the funding availability of the Lessor, which in general should not exceed the useful life of such Leasing Equipment.

(c) Lease payments and interest rate

The lease payments charged by the Lessor will include the purchase price or the value of the Leasing Equipment [(Note][3)] and interest thereon charged on terms no less favourable to the Lessee than those offered by independent third parties and at a rate determined by reference to the benchmark lending rates published by PBOC from time to time [(Notes][4][and][8)] , or, if no such rate is available, by reference to, among other factors, the rate charged by the other major financial institutions for the same or similar types of services.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(d) Pre-lease interests

(e) Handling fee

(f) Title and remedies

The legal title and all rights of the Leasing Equipment shall vest in the Lessor throughout the lease period.

to demand full repayment of all outstanding lease payments;
to recover the relevant Leasing Equipment and to claim all damages arising from the Lessee; and/or
to take necessary legal actions according to the relevant Finance Leasing Agreement.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(g) Purchase option

Subject to the Lessee having duly and satisfactorily performed all its obligations under, and upon the expiry of the lease period under the Finance Leasing Agreement, the Lessee shall have an option to purchase the relevant Leasing Equipment at a price charged on terms no less favourable to the Lessee than those offered by independent third parties [(Note][6)] and at a rate determined by reference to, among other factors, the methodology and market practice for determining such price by the other major financial institutions in relation to finance leasing of the same or similar types of assets, or if available, the applicable rates published by PBOC for this kind of service from time to time [(Notes][7][and][8)] , which will be agreed between the Lessor and the Lessee at the time of entering into, and will be set out in, the Finance Leasing Agreement.

(h) General

Notes (which are for illustration purpose only and do not form part of the Finance Leasing Master Agreement):

2. The useful life of the Leasing Equipment will be assessed by reference to the COSCO Pacific Group’s assets management policy, industry practice, the past experience in using the Leasing Equipment and information obtained from internal engineering department staff who has technical knowledge on the use of the Leasing Equipment.

3. In respect of the Finance Leasing involving sale and leaseback, the basis of determining the value of the Leasing Equipment is the fair market value of such Leasing Equipment and the Lessor will also make reference to the net carrying amount of such Leasing Equipment and ensure that the amount to be leased will not exceed the lower of the fair market value and the net carrying amount of the Leasing Equipment in any event.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. The existing interest rates for RMB loans published by PBOC are as follows:

(i) 5.60% for loans with terms not more than 6 months; (ii) 6.00% for loans with terms over 6 months but not more than 1 year; (iii) 6.15% for loans with terms over 1 year but not more than 3 years; (iv) 6.40% for loans with terms over 3 years but not more than 5 years; and (v) 6.55% for loans with terms over 5 years.

5. There is currently no available rate published by PBOC in this respect and in the event that PBOC publishes any such rate in the future during the term of the Finance Leasing Master Agreement, the Lessor and the Lessee will determine the handling fee by reference to such rate, which will be given priority over the rates adopted by other major financial institutions, accordingly.

6. The price for exercising the purchase option will be determined taking into account, inter alia, the lease payment structure, which will be given priority in the assessment, and the expected market value of the Leasing Equipment at the end of the lease period.

In general, taking into account the lease payment structure (which is determined based on factors including the needs of the Lessee, the lease period, the useful life of the Leasing Equipment), the purchase option price is the difference between the Lessor’s purchase price of the Leasing Equipment and the amount of lease payments (excluding the portion of interests). For example, if 95% of the purchase price of the Leasing Equipment has been covered by the total amount of lease payments (excluding the portion of interests) payable by the Lessee for the entire lease term, the purchase option price will be the remaining 5% of the Lessor’s purchase price, which may not be close to the residual value of the Leasing Equipment, unless the lease period ends on a date close to the end of the useful life of the Leasing Equipment, in which case, as the purchase price of the Leasing Equipment should have been substantially (if not fully) covered by the amount of lease payments (excluding the portion of interests) already made by the Lessee, the open market residual amount of the Leasing Equipment may be taken into account in determining the purchase option price.

7. There are currently no available rate published by PBOC in this respect and in the event that PBOC publishes any such rate in the future during the term of the Finance Leasing Master Agreement, the Lessor and the Lessee will determine the price for the purchase option by reference to such rate, which will be given priority over the methodology and market practice adopted by other major financial institutions, accordingly.

8. In determining the interest rate or amounts of the handling fee and purchase option, the Lessor will conduct an overall return assessment after considering, inter alia, the prevailing rates of PBOC or the major financial institutions, as the case may be, so as to meet its own return requirements and the credit risk assessment to the relevant Finance Leasing. Therefore, the pricing with respect to such aspects of each Finance Leasing will be determined on a case by case basis.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In assessing the terms of the Finance Leasing Master Agreement, we have discussed with the respective management of the Company and COSCO Pacific in relation to the terms, including but not limited to the interest rates, handling fee and purchase option. According to the management of COSCO Pacific, the COSCO Ports Group has never conducted any finance leasing businesses with any parties in the past other than member(s) of the Florens Capital Management Group. We have reviewed a sample copy of finance lease contract entered into between a member of the COSCO Ports Group and a member of the Florens Capital Management Group regarding the provision of finance lease services by the Florens Capital Management Group to the COSCO Ports Group during the Review Period (the “ Sample Contract ”), and we noted that the terms offered by the Florens Capital Management Group to the COSCO Ports Group, including but not limited to the lease payment and interest rate, under that separate contract were normal commercial terms.

We have also reviewed (i) a copy of joint finance lease agreement entered into between a member of the Florens Capital Management Group (as joint lessor) and an independent third party (as leasing arranger and joint lessor); and (ii) a number of announcements of different listed companies on the Stock Exchange in respect of finance leasing arrangement with connected parties (altogether referred to as “ Reference Cases ”). We noted from those Reference Cases that (i) interest rate of finance leasing arrangements conducted in the PRC are normally made with reference to the benchmark PBOC lending rates quoted from time to time and varied from a premium over or a discount to the benchmark PBOC lending rates; (ii) the handling fee varied from nil to 2.99% of the principal amount of the subject under the finance lease; and (iii) the exercise price of the purchase option ranged from nil to RMB44,000.

As advised by the management of COSCO Pacific, the spread of the interest rates from the benchmark PBOC lending rates is normally determined with reference to the availability of funds in the market, economic situation and other conditions of the lessor and the lessee. We noted from the Sample Contract that (i) the interest rates is 2% above the benchmark PBOC lending rate; (ii) the handling fee is 1%; and (iii) the price for exercising the purchase option is RMB10,000.

Having considered that (i) the terms under the Finance Leasing Master Agreement are common terms in finance leasing arrangements; (ii) the Finance Lease Master Agreement governed that the interest rate, the handling fee and the exercise price of the purchase option to be on terms no less favourable to the Lessee than those offered by independent third parties; and (iii) the transactions contemplated under the Finance Lease Master Agreement shall be reported annually by the auditors of the Company and COSCO Pacific, we are of the view that the terms of the Finance Leasing Master Agreement are on normal commercial terms and fair and reasonable so far as the Independent Shareholders are concerned.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3. Rationale of determining the annual caps

As stated in the Letter from the Board, (a) the annual caps for the continuing connected transactions contemplated under the APM Shipping Services Master Agreement; (b) the actual transacted amounts for the continuing connected transactions contemplated under the APM Shipping Services Master Agreement for the two years ended 31 December 2011 and the nine months ended 30 September 2012; and (c) the Annual Caps for the Continuing Connected Transactions for the three years ending 31 December 2015 are as follows:

										Basis of
										determination for the
			Historical	annual caps			Annual Caps			Annual Caps
		For the year ended			For the year ending
		31 December			31 December	For the	year ending 31	December
		2010		2011	2012	2013		2014	2015
1.	APM Shipping Services	Master Agreement
	Aggregate amount	RMB334,504,000	RMB443,599,000		RMB527,878,000	RMB905,651,000	RMB1,318,430,000		RMB1,875,845,000	Based on the existing
	received/ receivable by	(approximately	(approximately		(approximately	(approximately	(approximately		(approximately	scale and operations of
	the COSCO Ports	HKD407,932,000)	HKD540,974,000)		HKD643,754,000)	HKD1,104,453,000)	HKD1,607,842,000)		HKD2,287,616,000)	the businesses of the
	Group and PCT from									COSCO Ports Group
	the Line for the									and PCT, the
	provision of shipping									anticipated growth and
	related services by the									development of such
	COSCO Ports Group									businesses and the
	and PCT									anticipated demand for
										such services after
										taking into account
										that the economic
										condition will improve
										when compared with
										that in the past few years_(Note 9)_
	Percentage change of	N/A		N/A	N/A	N/A	45.6%		42.3%
	Annual Cap over
	previous year
	Actual transacted	RMB55,416,000	RMB178,040,000		RMB202,950,000	N/A		N/A	N/A
	amounts	(approximately	(approximately		(approximately
		HKD67,581,000)	HKD217,122,000)		HKD247,500,000)
					(Note10)
	Utilization rate	16.6%		40.1%	38.4%	N/A		N/A	N/A

Notes:

9 the basis that the annual cap would increase year-on-year from 2013 to 2015 is mainly due to (i) the expected future business growth for the terminal subsidiaries of COSCO Pacific; (ii) the expected future growth for Xiamen Ocean Gate Terminal since its operation in May 2012; and (iii) the expected new terminal projects which may become subsidiaries of COSCO Pacific in the future.
10 the actual transacted amount for the nine months ended 30 September 2012.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

									Basis of
									determination for the
			Historical annual caps			Annual Caps			Annual Caps
		For the year ended		For the year ending
		31 December		31 December	For the	year ending 31	December
		2010	2011	2012	2013		2014	2015
2.	Finance Leasing
	Master Agreement
	Aggregate amount	N/A	N/A	N/A	USD200,000,000	USD250,000,000		USD300,000,000	Based on the past
	payable by the COSCO				(approximately	(approximately		(approximately	experience of COSCO
	Ports Group to the				HKD1,551,000,000)	HKD1,938,750,000)		HKD2,326,500,000)	Pacific and the current
	Florens Capital								financing market
	Management Group for								conditions and with
	the provision of the								reference to, inter alia,
	Finance Leasing by the								the expected nature
	Florens Capital								and amount of assets
	Management Group								of the COSCO Ports
									Group to be arranged
									with finance lease and
									the historical
									transaction amounts
									and terms of the
									existing finance lease
									arrangements between
									members of the Florens
									Capital Management
									Group and members of
									the COSCO Ports
									Group. Each annual
									cap represents the
									estimated aggregate
									amount of all payments
									payable throughout the
									lease period (including
									all lease payments,
									pre-lease interests,
									handling fee and price
									for exercising the
									purchase option) under
									the Finance Leasing
									Agreements to be
									entered into during the
									year.
	Percentage change of	N/A	N/A	N/A	N/A	25.0%		20.0%
	Annual Cap over
	previous year
	Actual transacted	Nil	RMB186,036,000	RMB173,089,000
	amounts		(approximately	(approximately
			HKD226,874,000)	HKD211,085,000)
				(Note 10)

Note

10 the actual transacted amount for the nine months ended 30 September 2012.

As illustrated in the table above, the Annual Caps of the Continuing Connected Transactions under the APM Shipping Services Master Agreement for the three years ending 31 December 2015 are substantially higher than the historical transacted amounts of the transactions contemplated under the 2009 APM Shipping Services Master Agreement for the two years ended 31 December 2011 and the nine months ended 30 September 2012. The respective management of the Company and COSCO Pacific advised us that the reason for the relatively lower utilization rates than expectation for the period during the two years ended 31 December 2011 and the nine months ended 30 September 2012 were mainly due to the turbulent economic environment over the same period as a result of the outbreak of the European debt crisis in 2009.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In determining the Annual Caps for the Continuing Connected Transactions, we understand that COSCO Pacific has primarily taken into consideration factors including, among others, (i) the historical value of the transactions under the 2009 APM Shipping Services Master Agreement between COSCO Ports, PCT and the Line; (ii) the existing scale and operations of the businesses of the relevant members of the COSCO Pacific Group; (iii) the anticipated growth and development of such relevant businesses and the perceived increase in demand for such relevant services contemplated under the Agreements; (iv) the expansion of operating capacity as a result of the increase in the numbers of container terminals, berths or cargoes handling facilities yet to be in operation for the three years ending 31 December 2015; (v) the plans and requirements of the COSCO Pacific Group, after allowing a buffer for the inherent volatility of business in the transportation and container-related services industry; (vi) the expected market trends and changes, the estimated rates of services fee and the scope of the transactions covered by the relevant Agreements; (vii) the possible increase in the business volume as a result of the possible recovery of the overall economic condition; and/or (viii) the prevailing and expected benchmark lending rates published by PBOC and the current financing market.

In order to assess the fairness and reasonableness of the Annual Caps, we have discussed with the respective management of the Company and COSCO Pacific on the bases and assumptions underlying the determination of the Annual Caps and were given to understand that they have taken into account the major factors as bases of determination of the said caps which details are set out as below:

Demand for the Continuing Connected Transactions

Since the entering into of the World Trade Organization in 2001, the economy of the PRC has been sustaining a continuous growth. According to the China Statistical Yearbook 2011 issued by the National Bureau of Statistics of China, the gross domestic products (the “ GDP ”) of the PRC expanded from approximately RMB21,631.4 billion (equivalent to approximately HKD26,379.8 billion) in 2006 to approximately RMB40,120.2 billion (equivalent to approximately HKD48,927.1 billion) in 2010, representing a compound annual growth rate (“ CAGR ”) of approximately 16.7%. The throughput volume of major ports along the coastline in the PRC also surged from approximately 3,882.0 million ton in 2007 to approximately 5,483.6 million ton in 2010, representing a CAGR of approximately 12.2%. The total amount of import and export trade in the PRC, though recorded a drop in 2009, still maintained an upward trend with an increase from RMB14,097.4 billion (equivalent to approximately HKD17,192.0 billion) in 2006 to RMB20,172.2 billion (equivalent to approximately HKD24,600.2 billion) in 2010, representing a CAGR of approximately 9.4%.

Notwithstanding the adverse impact of the European debt crisis on the global economy since 2009, the momentum of the PRC economy has not been much hindered. According to the recent statistics released by the National Bureau of Statistics of China, the GDP for the first half of 2012 increased by approximately 7.8% to approximately RMB22,709.8 billion (equivalent to approximately HKD27,694.9 billion) as compared to the corresponding period in 2011. According to the Ministry of Transport of the PRC, the container ports throughput for major terminals in the PRC reached approximately 84.6 million TEU for the first half of 2012, representing an increase of approximately 8.8% as compared to the same period in 2011.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As discussed with the respective management of the Company and COSCO Pacific, the terminal and container businesses are largely correlated to the economic activities among different cities in the world. It is apparent that the global economy is showing a slowdown and trading among different cities has dropped inevitably. On the other hand, the economic downturn will result in consolidation or closure of certain business enterprises. The COSCO Pacific Group and its counter-contract parties, as the market leaders, may benefit from market consolidation by taking the chance of acquisition at reasonable or even low cost and therefore further expanding its market share. Furthermore, the respective management of the Company and COSCO Pacific are optimistic to the sustainability of stable economic environment in the PRC where the COSCO Pacific Group derives the majority of its revenue. According to the 2011 CP Annual Report, approximately 67.6% of revenue of the terminal and related business were attributable to businesses from the PRC (excluding Hong Kong) and approximately 67.2% of the non-current assets of the COSCO Pacific Group were based in the PRC (excluding Hong Kong).

Based on the foregoing, we consider that it is reasonable to take into account the estimated increase in demand for the products and services to be provided by the COSCO Pacific Group and the counter-contract parties.

Business plan of the COSCO Pacific Group

Under influence of the European debt crisis, it is expected that the global economy will remain stern and challenging in 2012. To cope with such volatile economic environment, the COSCO Pacific Group has planned and implemented a series of marketing outreach programs for its terminal and container businesses in 2011, which enables the COSCO Pacific Group to capture every possible strategic cooperation opportunity with the leading terminal and shipping operators and, in turn, improves revenue and profitability of its core businesses. According to the 2011 CP Annual Report, the COSCO Pacific Group’s revenue increased by approximately USD152.7 million (equivalent to approximately HKD1,183.9 million) to approximately USD599.2 million (equivalent to approximately HKD4,646.5 million), representing a year-on-year growth of approximately 34.2%. Among which, 38.0% of the total revenue (equivalent to approximately USD227.8 million or approximately HKD1,766.6) was derived by the transactions conducted with the connected persons of the COSCO Pacific Group. Undoubtedly, there is a high relevance and importance of maintaining good business relationship between the COSCO Pacific Group and its connected persons (including not but limited to the COSCO Group, the Group, the Line, the GZ Port Group and the Yangzhou Port Group). The management of the Company and COSCO Pacific expected that the COSCO Pacific Group will continue to implement its marketing strategies with an ultimate goal of maintaining a steady business growth in spite of the possible exposure to unfavorable market environment. The management of the Company and COSCO Pacific are optimistic about the COSCO Pacific Group’s future and are confident that the COSCO Pacific Group is capable of overcoming the near to mid-term challenges over the next few years.

We have discussed with the respective management of the Company and COSCO Pacific the business plans and operation strategies of COSCO Pacific in the coming few years. We noted that the COSCO Pacific Group will continue to boost up its annual handling capacity by ways of (i) acquiring terminal assets; and (ii) expanding or upgrading its existing terminals. As scheduled, 7 new berths in the PRC (including 1 berth in Dalian Port Terminal, 2 berths in Xiamen Ocean Gate Terminal, 1 berth

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

in Jinjiang Pacific Terminal, 1 berth in Yangzhou Yuanyang Terminal and 2 berths in Ningbo Yuan Dong Terminal) will start or would have started formal operation in 2012, contributing an additional annual handling capacity of 4.15 million TEUs. Furthermore, the COSCO Pacific Group is continuing to developing the Piraeus terminal into the key transshipment terminal in the Mediterranean region, providing efficient, reliable and stable transshipment container handling services to attract more international shipping companies. A series of other development programs have been executed at Piraeus terminal in Greece. Specifically, the upgrading working at Pier 2 of Piraeus terminal has kicked-off in the second quarter of 2011 and has been completed in June 2012, bringing an increase in the annual handling capacity of 1 million TEUs. At the same time, the construction of Pier 3 at Piraeus terminal has started in the fourth quarter of 2011 and is expected to further expand the annual handling capacity of Piraeus terminal to 3.7 million TEUs upon completion of the said construction. The management of COSCO Pacific further advised us that 31 new berths (including 15 container berths and 16 break-bulk cargo berths) of the COSCO Pacific Group were expected to commence operation in the next three years.

In view of (i) the overall business plans and operation strategies provided by the management of COSCO Pacific; (ii) the progressive expansion of the COSCO Pacific Group’s annual handling capacity; (iii) the PRC’s ports being mature and influential to the global markets gradually; (iv) the COSCO Pacific Group’s leading position in the PRC’s container terminal industry; (v) the effort placed by the COSCO Pacific Group in Piraeus terminal for developing it into a chief transshipment hub, we concur with the view of the management of the Company and COSCO Pacific that it is fair and reasonable for the management of the Company and COSCO Pacific to make reference to the aforesaid information as the basis to determine the Annual Caps.

The historical transacted amounts of similar continuing connected transactions

We have reviewed the historical transacted amounts between the relevant members of the COSCO Pacific Group and the counter-contract parties which are of nature similar to that of the Continuing Connected Transactions and have discussed with the respective management of the Company and COSCO Pacific the relevant historical trends. We understand that due to the slow-down of global economy after the European debt crisis in 2009, the utilization rates of the annual caps approved by the then Independent Shareholders under the 2009 APM Shipping Services Agreement with the Line is lower than expected.

However, we concur with the view of the management of the Company and COSCO Pacific that it would be in the interest of the COSCO Pacific Group to provide sufficient buffer over the historical transacted amounts recorded when determining the proposed new cap amounts, so as to cater for the inherent volatility of business in the transportation and container-related industry, where magnitude of which cannot be ascertained at the moment. It is particularly important that the COSCO Pacific Group has been demonstrating a steady growth in its business scale and financial results, and it is possible that the COSCO Pacific Group may require and utilize the full amount of the Annual Caps now proposed under the Continuing Connected Transactions for the three years ending 31 December 2015 if the market recovers and if the COSCO Pacific Group outperforms the market.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Analysis of the proposed annual caps for the Finance Leasing Master Agreement

As discussed with the respective management of the Company and COSCO Pacific, the proposed annual caps of USD200 million (equivalent to approximately HKD1,551.0 million), USD250 million (equivalent to approximately HKD1,938.8 million) and USD300 million (equivalent to approximately HKD2,326.5 million) for the three years ending 31 December 2015 were determined on the bases of (i) the expected nature and amount of assets of the COSCO Ports Group to be arranged with finance lease; (ii) the benchmark lending rates published by PBOC; and (iii) the terms of the existing finance lease arrangements between the Florens Capital Management Group and the COSCO Ports Group, including the lease period, handling fee and purchase option.

We have reviewed the benchmark lending rates published by PBOC since late 2010 and noted that the benchmark lending rate for 5 years or above ranged from 6.14% to 7.05% per annum. We have also reviewed the unaudited consolidated balance sheet of Florens Capital Management as at 30 June 2012. We were advised by the management of COSCO Pacific that the source of funds of the Florens Capital Management Group for the purchase costs of assets were mainly derived from shareholders’ loan, bank borrowings and operating cash inflow. Having considered the above, we are of the same view as the management of the Company and COSCO Pacific that the proposed annual caps for the Finance Leasing Agreement are determined based on reasonable estimation, after due and careful consideration and that it is fair and reasonable for the management of the Company and COSCO Pacific to make reference to the aforesaid information as the basis to determine such annual caps.

Conclusion

Taking into consideration the factors including (i) the demand for the Continuing Connected Transactions; (ii) the business plan of the COSCO Pacific Group; and (iii) the historical transacted amounts of similar continuing connected transactions as elaborated above, we concur with the view of the management of the Company and COSCO Pacific that the annual caps for the continuing connected transactions contemplated under the APM Shipping Services Master Agreement for the three years ending 31 December 2015 are fairly and reasonably determined based on the reasonable estimation and after due and careful consideration and that it is fair and reasonable for the management of the Company and COSCO Pacific to make reference to the aforesaid factors as the bases to determine such annual cap amounts.

Taking into consideration our analysis of the proposed annual caps for the Finance Leasing Master Agreement as disclosed above, we concur with the view of the management of the Company and COSCO Pacific that the annual caps for the continuing connected transactions contemplated under the Finance Leasing Master Agreement for the three years ending 31 December 2015 are fairly and reasonably determined based on the reasonable estimation and after due and careful consideration and that it is fair and reasonable for the management of the Company and COSCO Pacific to make reference to the aforesaid factor as the basis to determine such annual cap amounts.

However, the Shareholders should note that as the Annual Caps are determined based on various factors relating to future events and assumptions which may or may not remain valid for the entire

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

period up to 31 December 2015, they do not represent forecasts of revenue to be generated from the operations of the Group (including the COSCO Pacific Group). Consequently, we express no opinion as to how closely the actual future transacted amounts of the Continuing Connected Transactions will correspond with the relevant Annual Caps.

4. Requirements of the Listing Rules on the Continuing Connected Transactions

Pursuant to Rules 14A.37 to 14A.40 of the Listing Rules, the Continuing Connected Transactions are subject to the following annual review requirements:

(i) Each year the independent non-executive Directors must review the Continuing Connected Transactions and confirm in the annual report and accounts that the Continuing Connected Transactions have been entered into:
(a) in the ordinary and usual course of business of the Group;
(b) either on normal commercial terms or, if there are not sufficient comparable transactions to judge whether they are on normal commercial terms, on terms no less favorable to the Group than terms available to or from (as appropriate) independent third parties; and
(c) in accordance with the Agreements governing them on terms that are fair and reasonable and in the interests of the Shareholders as a whole;
(ii) each year the auditors of the Company must provide a letter to the Board (with a copy provided to the Stock Exchange at least 10 business days prior to the bulk printing of the Company’s annual report), which provide limited assurance that the Continuing Connected Transactions:
(a) have received the approval of the Board;
(b) are in accordance with the pricing policies of the Group if the Continuing Connected Transactions involve provision of goods or services by the Group;
(c) have been entered into in accordance with the Agreements governing the Continuing Connected Transactions; and
(d) have not exceeded the Annual Caps;
(iii) the Company shall allow, and shall procure that the relevant counter-parties to the Continuing Connected Transactions shall allow, the auditors of the Company sufficient access to their records for the purpose of reporting on the Continuing Connected Transactions as set out in paragraph (ii) above; the Board must state in the annual report whether its auditors have provided limited assurance regarding the matters stated in paragraph (ii) above; and

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(iv) the Company shall promptly notify the Stock Exchange and publish an announcement in accordance with the Listing Rules if it knows or has reason to believe that (a) the independent non-executive Directors will not be able to confirm the matters set out in paragraph (i) above; and/or (b) the auditors of the Company will not be able to provide limited assurance regarding the matters set out in paragraph (ii) above, respectively.

We have reviewed (i) the confirmation letters from the independent non-executive directors of COSCO Pacific to the board of COSCO Pacific for the two years ended 31 December 2011 which confirmed, among others, that the historical continuing connected transactions contemplated under the 2009 APM Shipping Services Master Agreement were conducted in accordance with their terms and that the relevant annual caps were not exceeded; and (ii) the unqualified letters prepared and issued by the auditors of COSCO Pacific containing its findings and conclusions in respect of, among others, the 2009 APM Shipping Services Master Agreement for the two years ended 31 December 2011 in accordance with Rule 14A.38 of the Listing Rules. In light of the reporting requirements attached to the Continuing Connected transactions, in particular, (i) the restriction of the values of the Continuing Connected Transactions by way of the Annual Caps; and (ii) the on-going review by the independent non-executive Directors and the auditors of the Company on the terms of the Continuing Connected transactions and the Annual Caps not being exceeded, we are of the view that appropriate measures will be in place to govern the conduct of the Continuing Connected transactions and safeguard the interests of the Independent Shareholders.

OPINION

Having considered the principal factors and reasons referred to in the above, we are of the view that (i) the Continuing Connected Transactions are in the ordinary and usual course of business of the Group (including the COSCO Pacific Group) and are in the interests of the Company and the Shareholders as a whole; (ii) the terms of the Agreements are normal commercial terms and are fairly and reasonably determined; and (iii) the Annual Caps for the Continuing Connected Transactions for the three years ending 31 December 2015 are determined based on the reasonable estimation and after due and careful consideration and that it is fair and reasonable for the management of the Company and COSCO Pacific to make reference to the aforesaid factors as the bases to determine the Annual Caps.

Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the relevant resolution(s) to be proposed at the EGM to be convened to approve, inter alia, the Agreements and the transactions contemplated thereunder (including the Annual Caps contemplated therein).

Yours faithfully, For and on behalf of

Asia Investment Management Limited Alice Kan

Managing Director

— 41 —

GENERAL INFORMATION

APPENDIX

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 Company. 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. DISCLOSURE OF INTERESTS

(a) Directors’ and Supervisors interests or short positions in the Shares

Save as disclosed in this section, as at the Latest Practicable Date, none of the Directors, Supervisors and chief executive of the Company had any interests or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 of Part XV of the SFO, to be entered in the register referred to therein; or (c) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (“Model Code”) as set out in Appendix 10 to the Listing Rules to be notified to the Company and the Stock Exchange.

(i) Long positions in the Shares, underlying Shares and debentures of the Company:

				Approximate
			Number of H	percentage of
		Nature of	shares of the	total issued H
Name of Director	Capacity	interests	Company	share capital
FAN HSU Lai Tai, Rita	Beneficial owner	Personal	10,000	0.0004%
Peter Guy BOWIE	Beneficial owner	Personal	15,000	0.0006%
				Approximate
			Number of	percentage of
Name of		Nature of	A shares of the	total issued
Director/Supervisor	Capacity	interests	Company	A share capital
LI Yunpeng	Beneficial owner	Family	3,000	0.00004%
LUO Jiulian	Beneficial owner	Family	1,000	0.00001%

(ii) Long positions in shares, underlying shares and debentures of associated corporations of the Company:

	Name of			Number of	Percentage of
Name of associated	Director/		Nature of	ordinary	total issued
corporation	Supervisor	Capacity	interests	shares	share capital
COSCO Corporation	WEI Jiafu	Beneficial	Personal	1,520,000	0.07%
(Singapore) Limited		owner
COSCO Corporation	SUN Yueying	Beneficial	Personal	600,000	0.06%
(Singapore) Limited		owner

— 42 —

GENERAL INFORMATION

APPENDIX

(iii) Long positions in the underlying shares of equity derivatives of the Company:

A share appreciation rights plan (the “Share Appreciation Rights Plan”) was adopted by the Company, which was designed to align the interests of Directors, Supervisors and senior management of the Company with the Company’s operating results and the Company’s share value. The issuance of share appreciation rights does not involve any issuance of new shares.

As at the Latest Practicable Date, the share appreciation rights held by the Directors and Supervisors are set at below:

Number of units of share appreciation rights

									Approximate
									% of issued
									share capital
									of the
							Transfer		H shares
							(to)/from		of the
						Exercised/	other	Outstanding	Company
				Outstanding	Granted	lapsed	category	as at the	as at the
Name of		Nature		as at	during	during	during	Latest	Latest
Director/		of	Exercise	1 January	the	the	the	Practicable	Practicable
Supervisor	Capacity	interest	price	2012	period	period	period	Date	Date	Note
WEI Jiafu	Beneficial owner	Personal	HK$3.195	680,000	—	—	—	680,000	0.03%	(1)
			HK$3.588	900,000	—	—	—	900,000	0.03%	(2)
			HK$9.540	880,000	—	—	—	880,000	0.03%	(3)
SUN Yueying	Beneficial owner	Personal	HK$3.195	450,000	—	—	—	450,000	0.02%	(1)
			HK$3.588	600,000	—	—	—	600,000	0.02%	(2)
			HK$9.540	580,000	—	—	—	580,000	0.02%	(3)
SUN Jiakang	Beneficial owner	Personal	HK$3.195	375,000	—	—	—	375,000	0.01%	(1)
			HK$3.588	500,000	—	—	—	500,000	0.02%	(2)
			HK$9.540	480,000	—	—	—	480,000	0.02%	(3)
XU Minjie	Beneficial owner	Personal	HK$3.195	75,000	—	—	—	75,000	0.003%	(1)
			HK$3.588	90,000	—	—	—	90,000	0.003%	(2)
LI Yunpeng	Beneficial owner	Personal	HK$3.195	450,000	—	—	—	450,000	0.02%	(1)
			HK$3.588	600,000	—	—	—	600,000	0.02%	(2)
			HK$9.540	580,000	—	—	—	580,000	0.02%	(3)
MA Jianhua	Beneficial owner	Personal	HK$9.540	480,000	—	—	—	480,000	0.02%	(3)
GAO Ping	Beneficial owner	Personal	HK$3.195	—	—	—	100,000	100,000	0.004%	(1)
			HK$3.588	—	—	—	90,000	90,000	0.003%	(2)
			HK$9.540	—	—	—	85,000	85,000	0.003%	(3)

— 43 —

GENERAL INFORMATION

APPENDIX

Notes:

(1) The share appreciation rights were granted by the Company in units with each unit representing one H-Share pursuant to the Share Appreciation Rights Plan. At each of the last day of the third, fourth, fifth and sixth anniversary of the date of grant (i.e. 16 December 2005), the total number of the share appreciation rights exercisable shall not exceed 25%, 50%, 75% and 100%, respectively, of each of the total share appreciation rights granted. The share appreciation rights are exercisable at HK$3.195 per unit according to its terms between 16 December 2007 and 15 December 2015.
(2) The share appreciation rights were granted by the Company in units with each unit representing one H-Share pursuant to the Share Appreciation Rights Plan. At each of the last day of the third, fourth, fifth and sixth anniversary of the date of grant (i.e. 5 October 2006), the total number of the share appreciation rights exercisable shall not exceed 25%, 50%, 75% and 100%, respectively, of each of the total share appreciation rights granted. The share appreciation rights are exercisable at HK$3.588 per unit according to its terms between 5 October 2008 and 4 October 2016.
(3) The share appreciation rights were granted by the Company in units with each unit representing one H-Share pursuant to the Share Appreciation Rights Plan. At each of the last day of the third, fourth, fifth and sixth anniversary of the date of grant (i.e. 4 June 2007), the total number of the share appreciation rights exercisable shall not exceed 25%, 50%, 75% and 100%, respectively, of each of the total share appreciation rights granted. The share appreciation rights are exercisable at HK$9.540 per unit according to its terms between 4 June 2009 and 3 June 2017.
(iv) Long positions in underlying shares of equity derivatives of associated corporations of the Company:

The share options granted to the Directors and Supervisors by the associated corporations of the Company as at the Latest Practicable Date are set out as below:

							Number of share options	Number of share options
											Percentage
											of total issued
						Transferred					share capital
						(to)/from				Outstanding	of associated
					Outstanding	other				as at the	corporation as
Name of	Name of				as at	categories	Granted	Exercised	Lapsed	Latest	at the Latest
associated	Director/		Nature of	Exercise	1 January	during the	during the	during the	during the	Practicable	Practicable
corporation	Supervisor	Capacity	interests	price	2012	period	period	period	period	Date	Date	Note
COSCO Pacific	WEI Jiafu	Beneficial	Personal	HK$13.75	1,000,000	—	—	—	—	1,000,000	0.04%	(1)
		owner
	SUN Yueying	Beneficial	Personal	HK$13.75	1,000,000	—	—	—	—	1,000,000	0.04%	(1)
		owner
	SUN Jiakang	Beneficial	Personal	HK$13.75	700,000	—	—	—	—	700,000	0.03%	(1)
		owner
	XU Minjie	Beneficial	Personal	HK$19.30	800,000	—	—	—	—	800,000	0.03%	(3)
		owner
	LI Yunpeng	Beneficial	Personal	HK$13.75	1,000,000	—	—	—	—	1,000,000	0.04%	(1)
		owner
COSCO	WEI Jiafu	Beneficial	Personal	HK$ 1.37	1,200,000	—	—	—	—	1,200,000	0.08%	(2)
International		owner
	SUN Jiakang	Beneficial	Personal	HK$ 1.37	800,000	—	—	—	—	800,000	0.03%	(2)
		owner

Notes:

(1) The share options were granted by COSCO Pacific during the period from 25 November 2004 to 16 December 2004 under the 2003 Share Option Scheme at an exercise price of HK$13.75. The options are exercisable at any time within ten years from the commencement date which is the date on which an offer is accepted or deemed to be accepted by the grantee pursuant to the 2003 Share Option Scheme (“Commencement Date”). The Commencement Date of the options of the grantees was from 25 November 2004 to 16 December 2004.

— 44 —

GENERAL INFORMATION

APPENDIX

(2) These share options were granted on 2 December 2004 pursuant to the Share Option Scheme of COSCO International Holdings Limited (“COSCO International”), an associated corporation of the Company, and can be exercised at HK$1.37 per share at any time between 29 December 2004 and 28 December 2014.
(3) The share options were granted during the period from 17 April 2007 to 19 April 2007 under the 2003 Share Option Scheme at an exercise price of HK$19.30. The options are exercisable at any time within ten years from the Commencement Date. The Commencement Date of the options of the grantees was from 17 April 2007 to 19 April 2007.

Save as disclosed above, as at Latest Practicable Date, none of the Directors, Supervisors or chief executives of the Company had any interests or short positions in any shares or underlying shares or interests in debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were 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 they were taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange.

(b) Competing Interests

As at the Latest Practicable Date, so far as the Directors are aware, none of the Directors or Supervisors nor their respective associates have any interest in any business, which competes or may compete, either directly or indirectly, with the business of the Group.

(c) Directors’ and Supervisors’ Interests in assets of the Group

As at the Latest Practicable Date, so far as the Directors are aware, none of the Directors or Supervisors nor their respective associates have any direct or indirect interests in any assets which have been acquired, disposed of or leased to, or which are proposed to be acquired, disposed of or leased to, any member of the Group since 31 December 2011, being the date to which the latest published audited consolidated financial statements of the Group were made up.

(d) Directors’ and Supervisors’ interests in contracts of the Group

As at the Latest Practicable Date, none of the Directors or Supervisors is materially interested in any contract or arrangement, which was significant in relation to the business of the Group.

3. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors or Supervisors of the Company has entered or proposed to enter into a service contract with any member of the Group which will not expire or is not determinable within one year without payment of compensation (other than statutory compensation).

4. MATERIAL ADVERSE CHANGE

The Group recorded a net loss in the first three quarters of 2012 as a result of the imbalances between supply and demand in the shipping industry in general, the low freight rates in the dry bulk shipping industry and the continuous high bunker costs.

— 45 —

GENERAL INFORMATION

APPENDIX

Save as disclosed in the above paragraph, and as at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2011, being the date to which the latest published audited consolidated financial statements of the Group were made up.

5. EXPERT

The following is the qualification of the professional adviser who has given its opinion or advice which is contained in this circular:

Name Qualification Asia Investment a corporation licensed to conduct type 4 (advising on Management Limited securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO

As at the Latest Practicable Date, Asia Investment Management Limited did not have any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

Asia Investment Management Limited has given and has not withdrawn its consent to the issue of this circular with the inclusion herein of its letter of advice and references to its names and its advice in the form and context in which they appear.

As at the Latest Practicable Date, Asia Investment Management Limited did not have any direct or indirect interests in any assets which have been acquired, disposed of or leased to, or which are proposed to be acquired, disposed of by or leased to, any member of the Group since 31 December 2011, being the date to which the latest published audited consolidated financial statements of the Group were made up.

6. MISCELLANEOUS

(1) The joint company secretaries of the Company are Dr. GUO Huawei and Ms. HUNG Man, Michelle. Dr. GUO Huawei is a senior economist. Ms. HUNG Man, Michelle is a practicing solicitor in Hong Kong and is qualified to practice law in England and Wales.
(2) The registered office of the Company is located at 3rd Floor, No.1 Tongda Square, Tianjin Port Free Trade Zone, Tianjin 300461, the PRC. The head office and principal place of business of the Company is located at 49th Floor, COSCO Tower, 183 Queen’s Road Central, Hong Kong.
(3) The Hong Kong H share registrar and transfer office of the Company is Computershare Hong Kong Investor Services Limited located at Units 1806-1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

7. DOCUMENTS FOR INSPECTION

Copies of the Finance Leasing Master Agreement and the APM Shipping Services Master Agreement will be made available for inspection during normal business hours at the Company’s principal place of business in Hong Kong at 49th Floor, COSCO Tower, 183 Queen’s Road Central, Hong Kong from the date of this circular up to and including the date of the EGM.

— 46 —

NOTICE OF EXTRAORDINARY GENERAL MEETING

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this notice, 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 notice.

==> picture [76 x 61] intentionally omitted <==

**中國遠洋控股股份有限公司 China COSCO Holdings Company Limited[*]**

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

(Stock code: 1919)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the “ EGM ”) of China COSCO Holdings Company Limited (the “ Company ”) will be held at 10:00 a.m. on Wednesday, 19 December 2012 at Function Room, 47th Floor, COSCO Tower, 183 Queen’s Road Central, Hong Kong and Conference Center, Ocean Plaza, 158 Fuxingmennei Avenue, Xicheng District, Beijing, the People’s Republic of China for the purposes of considering and, if thought fit, passing (with or without modifications) the following resolutions numbered 1 to 2 as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

“ THAT :
(a) the form and substance of the APM shipping services master agreement dated 30 October 2012 between COSCO Ports (Holdings) Limited (“ COSCO Ports ”), Piraeus Container Terminal S.A. (the “ PCT ”) and entities trading under the names of Maersk Line, Safmarine, MCC or any other future names with majority ownership by A.P. Moller — Masersk A/S (the “ Line ”) (the “ APM Shipping Services Master Agreement ”) (a copy of which is tabled at the meeting and marked “A” and initialed by the chairman of the meeting for identification purpose) and the transactions contemplated under it be and are hereby approved, ratified and confirmed; and
(b) the proposed annual caps as set out in the circular of the Company dated 2 November 2012, being the aggregate amount receivable by COSCO Ports and its subsidiaries and PCT from the Line for the provision of shipping related services by COSCO Ports and its subsidiaries or PCT to the Line under the APM Shipping Services Master Agreement for the three financial years ending on 31 December 2015, be and are hereby approved.”

— 47 —

NOTICE OF EXTRAORDINARY GENERAL MEETING

“ THAT :
(a) the form and substance of the finance leasing master agreement dated 30 October 2012 between COSCO Ports and Florens Capital Management Company Limited (“ Florens Capital Management ”) (the “ Finance Leasing Master Agreement ”) (a copy of which is tabled at the meeting and marked “B” and initialed by the chairman of the meeting for identification purpose) and the transactions contemplated under it be and are hereby approved, ratified and confirmed; and
(b) the proposed annual caps as set out in the circular of the Company dated 2 November 2012, being the aggregate amount payable by COSCO Ports and its subsidiaries to Florens Capital Management and its subsidiaries for the provision of finance leasing under the Finance Leasing Master Agreement for the three financial years ending on 31 December 2015, be and are hereby approved.”

By order of the Board China COSCO Holdings Company Limited GUO Huawei Joint Company Secretary

Beijing, the People’s Republic of China 2 November 2012

Notes:

A shareholder entitled to attend and vote at the EGM may appoint one or more proxies to attend and vote in his stead. A proxy need not to be a shareholder of the Company.
The instrument appointing a proxy must be in writing under the hand of a shareholder or his attorney duly authorized in writing. If the shareholder is a corporation, that instrument must be either under its common seal or under the hand of its director(s) or duly authorized attorney(s). If that instrument is signed by an attorney of the shareholder, the power of attorney authorizing that attorney to sign or other authorization document must be notarized.
In order to be valid, the form of proxy together with the power of attorney or other authorization document (if any) must be deposited at the H share registrar of the Company, Computershare Hong Kong Investor Services Limited (address: Rooms 1806-1807, 18/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong) for holders of H shares as soon as possible and in any event not less than 24 hours before the time appointed for the holding of the EGM or any adjournment of it (as the case may be). Completion and return of a proxy form will not preclude a shareholder from attending and voting in person at the EGM if he so wishes.
The H share register of members of the Company will be closed from Monday, 19 November 2012 to Wednesday, 19 December 2012, both days inclusive, during which period no transfer of the H shares of the Company will be effected. Shareholders whose names appear in the register of members of the Company on Friday, 16 November 2012 at 4:30 p.m. are entitled to attend and vote at the EGM.
Shareholders who intend to attend the EGM in person or by proxy should return the reply slip to the H share registrar of the Company, Computershare Hong Kong Investor Services Limited, for holders of H shares not later than 20 days before the date of the EGM, i.e. Thursday, 29 November 2012.

— 48 —

NOTICE OF EXTRAORDINARY GENERAL MEETING

Shareholders or their proxies attending the EGM shall produce their identity documents. If the attending shareholder is a corporate, its legal representative or person authorized by the board or other decision making authority shall present a copy of the relevant resolution of the board or other decision making authority in order to attend the EGM.
As at the date hereof, the Directors are Mr. WEI Jiafu [2] (Chairman), Mr. MA Zehua [1] (Vice Chairman), Mr. LI Yunpeng [2] , Mr. SUN Yueying [2] , Mr. SUN Jiakang [1] , Mr. XU Minjie [1] , Mr. JIANG Lijun [1] (President), Mr. TEO Siong Seng [3] , Dr. FAN HSU Lai Tai, Rita [3] , Mr. KWONG Che Keung, Gordon [3] and Mr. Peter Guy BOWIE [3] .
1 Executive Director
2 Non-executive Director
3 Independent non-executive Director
The Company is registered as a non-Hong Kong company under Part XI of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) under its Chinese name “中國遠洋控股股份有限公司” and its English name “China COSCO Holdings Company Limited”.

— 49 —

AI assistant

COSCO SHIPPING Holdings Co., Ltd. — Proxy Solicitation & Information Statement 2012

50267_rns_2012-11-01_5f207f3f-ee3a-4455-aa42-79c21ef18a13.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

中國遠洋控股股份有限公司 China COSCO Holdings Company Limited[*]

DISCLOSEABLE TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

CERTAIN CONTINUING CONNECTED TRANSACTIONS MASTER AGREEMENTS BY COSCO PACIFIC LIMITED

Asia Investment Management Limited

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

中國遠洋控股股份有限公司 China COSCO Holdings Company Limited[*]

Head office and principal place

To the Shareholders

DISCLOSEABLE TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

CERTAIN CONTINUING CONNECTED TRANSACTIONS MASTER AGREEMENTS BY COSCO PACIFIC LIMITED

INTRODUCTION

LETTER FROM THE BOARD

DISCLOSEABLE TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

A. THE DISCLOSEABLE AND CONTINUING CONNECTED TRANSACTION

Finance Leasing Master Agreement

LETTER FROM THE BOARD

Nature of transaction:

Terms and fees:

(a) Lease method

(b) Lease period

(c) Lease payments and interest rate

(d) Pre-lease interests

LETTER FROM THE BOARD

(e) Handling fee

(f) Title and remedies

(g) Purchase option

LETTER FROM THE BOARD

(h) General

LETTER FROM THE BOARD

Historical amounts:

LETTER FROM THE BOARD

Proposed annual caps and basis of determination for annual caps:

Connected relationship:

Listing Rules implication:

LETTER FROM THE BOARD

B. THE CONTINUING CONNECTED TRANSACTION

APM Shipping Services Master Agreement

Historical amounts:

Historical transaction amounts

Proposed annual caps and basis of determination for annual caps:

Connected relationship:

Listing Rules implication:

C. REASONS FOR AND BENEFITS OF ENTERING INTO THE CONTINUING CONNECTED TRANSACTIONS

D. DIRECTORS’ CONFIRMATION

LETTER FROM THE BOARD

E. INFORMATION ON THE RELEVANT PARTIES

EGM

LETTER FROM THE BOARD

RECOMMENDATIONS

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

DISCLOSEABLE TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

CERTAIN CONTINUING CONNECTED TRANSACTIONS MASTER AGREEMENTS BY COSCO PACIFIC LIMITED

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Yours faithfully,

Asia Investment Management Limited

CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

BASIS OF OUR OPINION

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

PRINCIPAL FACTORS CONSIDERED

1. The background to, the reasons for, and the benefits of, the Continuing Connected Transactions

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1. APM Shipping Services Master Agreement

I. Contract party within the Group: 1. COSCO Ports; and

2. PCT

II. Counter-contract party: The Line

III. Nature of business of counter-contract party:

IV. Nature of transactions:

COSCO SHIPPING Holdings Co., Ltd. Proxy Solicitation & Information Statement 2012

**中國遠洋控股股份有限公司 China COSCO Holdings Company Limited[*]**

**中國遠洋控股股份有限公司 China COSCO Holdings Company Limited[*]**

**中國遠洋控股股份有限公司 China COSCO Holdings Company Limited[*]**