ELL Environmental Holdings Limited — Proxy Solicitation & Information Statement 2016

Apr 28, 2016

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Sinotrans Limited, you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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

(Stock Code: 0598)

PROPOSED CONTINUING CONNECTED TRANSACTIONS AND DISCLOSEABLE TRANSACTIONS CMB FINANCIAL SERVICES AGREEMENT

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

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A notice convening the EGM to be held in the Meeting Room, 13th Floor, Sinotrans Plaza A, A43, Xizhimen Beidajie, Haidian District, Beijing, the PRC (Post Code 100082) on 18 May 2016 at 11:00 a.m. or immediately after the conclusion or adjournment of the domestic shares class meeting of the Company to be held at the same place and on the same day at 10:30 a.m and a form of proxy for use at the EGM are available on the website of Sinotrans Limited and the website of The Stock Exchange of Hong Kong Limited.

If you do not intend to attend the EGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to Hong Kong registered office of the Company at Units F&G, 20/F., MG Tower, 133 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong as soon as possible and in any event no later than twenty-four (24) hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment of it, if you so wish.

28 April 2016

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . . . . .	12
LETTER FROM HERCULES CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
APPENDIX – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22

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DEFINITIONS

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

“Articles of Association” the articles of association of the Company “Associates” the meaning ascribed to it under the Listing Rules “Board” the board of Directors of the Company

• “CBRC” China Banking Regulatory Commission

• “China Merchants”

• China Merchants Group Limited, a state wholly-owned enterprise established under the laws of the PRC under direct control of the State-owned Assets Supervision and Administration Commission of the State Council

“China Merchants Bank” China Merchants Bank Co., Ltd., a joint stock company incorporated in the People’s Republic of China with limited liability, the A Shares of which are listed on the Shanghai Stock Exchange and the H shares of which are listed on the Stock Exchange

• “China Merchants Bank Group” China Merchants Bank and its subsidiaries and associates

• “CMB Financial Services the financial services agreement entered into between the Company Agreement” and China Merchants Bank on 31 March 2016

• “Company”

• 中國外運股份有限公司 (Sinotrans Limited), a joint stock company incorporated in the PRC with limited liability, the H shares of which are listed on the Stock Exchange

• “Deposit Services”

• the provision of the deposit services by the China Merchants Bank Group to the Group under the CMB Financial Services Agreement

• “Director(s)” the director(s) of the Company

• “EGM”

the extraordinary general meeting of the Company to be convened pursuant to the notice of extraordinary general meeting dated 31 March 2016 to approve the Deposit Services and the related annual caps

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DEFINITIONS

“Finance Company” Sinotrans & CSC Finance Co. Ltd., a non-wholly owned subsidiary of the SINOTRANS & CSC Group, whose 55% share capital is held by SINOTRANS & CSC，the Company and Sinotrans Air Transportation Development Corporation Limited (a non-whollyowned subsidiary of the Company) hold 10% and 5% of its share capital respectively and the remaining 30% share capital are held by three subsidiaries of SINOTRANS & CSC

• “Group” the Company and its subsidiaries

“Hercules Capital” Hercules Capital Limited, a corporation licensed under the SFO to carry out Type 6 (Advising on Corporate Finance) regulated activity under the SFO, the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Deposit Services (including related annual caps) contemplated under the CMB Financial Services Agreement

• “Hong Kong” The Hong Kong Special Administrative Region of the PRC

• “Independent Board Committee” the board committee of the Company comprising all independent non-executive Directors, namely Guo Minjie, Lu Zhengfei, Han Xiaojing and Liu Junhai, established to make recommendation to the Independent Shareholders in respect of the Deposit Services (and its proposed annual caps) contemplated under the CMB Financial Services Agreement

• “Independent Shareholder(s)” Shareholders other than those required to abstain from voting at the relevant resolutions at the EGM

• “Latest Practicable Date” 25 April 2016, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular

• “Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• “PRC” the People’s Republic of China

• “RMB” Renminbi, the legal currency of PRC

• “SFO” the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong)

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DEFINITIONS

“Shareholder(s)”

holder(s) of domestic invested share(s) of RMB1.00 each and overseas listed foreign invested share(s) of RMB1.00 each in the share capital of the Company

• “Sinotrans Financial Services the financial services agreement dated 16 April 2015 entered into Agreement” between the Company and the Finance Company in respect of provision of financial services (including deposit services) by the Finance Company to the Group, which was the subject of the Company’s announcement dated 16 April 2015

• “SINOTRANS & CSC” SINOTRANS & CSC Holding Corporation Limited, the controlling shareholder of the Company which holds 55.76% of issued share capital of the Company as at the Latest Practicable Date

• “SINOTRANS & CSC Group” SINOTRANS & CSC and its subsidiaries

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Subsidiary(ies)” the meaning ascribed to it under the Listing Rules

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LETTER FROM THE BOARD

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(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 0598)

Chairman: Zhao Huxiang

Vice Chairman: Zhang Jianwei

Registered Office and Headquarters: Sinotrans Plaza A A43, Xizhimen Beidajie Beijing 100082 People’s Republic of China

Executive Directors: Li Guanpeng Wang Lin Yu Jianmin Wu Xueming

Principal Place of Business in Hong Kong:

Units F & G, 20/F., MG Tower, 133 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong

Non-executive Directors: Jerry Hsu

Independent non-executive Directors:

Guo Minjie Lu Zhengfei Han Xiaojing Liu Junhai

28 April 2016

To the Shareholders

Dear Sir and Madam,

PROPOSED CONTINUING CONNECTED TRANSACTIONS AND DISCLOSEABLE TRANSACTIONS CMB FINANCIAL SERVICES AGREEMENT

INTRODUCTION

Reference is made to the (i) announcements of the Company dated 20 November 2015 and 19 January 2016 in respect of the possible reorganisation of SINOTRANS & CSC and China Merchants whereby SINOTRANS & CSC will be administratively allocated into, and become a wholly-owned subsidiary of, China Merchants (the “Possible Reorganisation”); and (ii) the announcement of the Company dated 31 March 2016 in respect of the entering into of the CMB Financial Services Agreement between the Company and China Merchants Bank.

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LETTER FROM THE BOARD

The Group in the course of its ordinary and usual course of business has engaged financial services of China Merchants Bank Group from time to time. China Merchants Bank is indirectly owned as to approximately 29.97% by China Merchants and directly and indirectly owned as to approximately 0.09% by SINOTRANS & CSC.

As a result of the Possible Reorganisation, China Merchants and its subsidiaries and associates will become connected persons of the Company, and China Merchants Bank and its subsidiaries will become associates of the Company. Therefore, financial services provided by China Merchants Bank Group to the Group will also become continuing connected transactions of the Group upon the completion of the Possible Reorganisation.

To comply with the Chapter 14A requirements in respect of such continuing connected transactions arising as a result of the Possible Reorganisation, on 31 March 2016, the Company entered into the CMB Financial Services Agreement with China Merchants Bank, whereby China Merchants Bank Group agreed to provide a series of financial services to the Group within the caps agreed under the CMB Financial Services Agreement, which includes: (1) the Deposit Services; (2) loan services; (3) other financial services (including but not limited to settlement services, notes services, foreign exchange services and other financial services within the business scope of the relevant entity). Additionally, as one or more of the applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the maximum daily outstanding balance of the Deposit Services contemplated under the CMB Financial Services Agreement, when aggregated with annual cap of the deposit services under the Sinotrans Financial Services Agreement (particulars of which was the subject of the Company’s announcement dated 16 April 2015), will be more than 5% but less than 25%, the Deposit Services contemplated under the CMB Financial Services Agreement constitute discloseable transactions for the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

Subject to Independent Shareholders’ approval of the Deposit Services (including the annual caps) contemplated under the CMB Financial Services Agreement, the CMB Financial Services Agreement will become effective upon completion of the Possible Reorganisation.

The purpose of this circular is to provide you with information in respect of, among other things, the Deposit Services (including the annual caps) contemplated under the CMB Financial Services Agreement to enable you to make a decision on whether to vote for or against the relevant resolution at the forthcoming EGM.

CMB FINANCIAL SERVICES AGREEMENT

Date: 31 March 2016

Parties: (1) the Company (2) China Merchants Bank

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LETTER FROM THE BOARD

Financial Services to be provided by China Merchants Bank Group to the Group:

The Group may from time to time obtain the following financial services from China Merchants Bank Group:

• 1) Deposit Services: the provision of deposit services by the China Merchants Bank Group to the Group on normal commercial terms.

• 2) Loan services: subject to the applicable laws and regulations, the provision of loan services on normal commercial terms. The China Merchants Bank Group will to the extent within its own capital capacity give priority to the needs of the Group.

• 3) Other financial services:

• a) Settlement Services: provision of settlement services to the Group on normal commercial terms.

• b) Notes Services: provision of notes services (including but not limited to bank acceptance bill, commercial acceptance bill and related business) on normal commercial terms on application of the Group.

• c) Foreign exchange services: The China Merchants Bank Group may on application of the Group provide foreign exchange settlement services on normal commercial terms.

• d) The China Merchants Bank Group may also provide other financial services to the Group within the business scope of the relevant entity on normal commercial terms.

Annual caps for the Deposit Services

As at 31 December 2014 and 31 December 2015, the outstanding balance placed by the Group with the China Merchants Bank Group were approximately RMB85.21 million and RMB56.83 million respectively. Having taken into the historical figures and the business needs of the Group (including the desirability of allowing some flexibility for members of the Group in establishing its commercial banking relationships), it is provided under the CMB Financial Services Agreement that the maximum daily outstanding balance of deposits placed by the Group with the China Merchants Bank Group (including accrued interests and surcharges, but not including any loans advanced by the China Merchants Bank Group) for the two years ending 2016 and 2017 will not exceed RMB500 million.

The annual cap represents approximately 7.1% of the total cash and cash equivalents (including term deposits but excluding restricted cash) of the Group as at 31 December 2015 and is determined by reference to:

• (i) the historical maximum month-end deposits placed with the China Merchants Bank Group for the years ended 31 December 2013, 31 December 2014 and 31 December 2015, amounting to approximately RMB228 million, RMB146 million and RMB153 million respectively and representing approximately 3.7%, 2.3% and 2.2% of the total cash and cash equivalents

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LETTER FROM THE BOARD

(including term deposits but excluding restricted cash) of the Group as at the 2013, 2014 and 2015 year ends respectively. However, the cash flows of the Group and the balance of deposits maintained with China Merchants Bank may fluctuate from time to time as (i)in order to facilitate the settlement of trade receivables, the Group will normally provide its customers a list of banks for settlement purposes and the customers may choose to settle through different banks at their discretion; and (ii) certain suppliers or governmental authorities might prefer the Group to make payments through designated banks. Therefore, the Directors have taken into account the buffer that the Group may need in determining the annual cap in order to have flexibility in managing the Group’s cash to ensure smooth operation for its daily business operation.

Historically, the Group did not track daily deposit balance maintained with the China Merchants Bank Group given that there has not been any commercial need to do so. Following completion of the Possible Reorganization, in order to ensure that the maximum daily outstanding balance of deposits placed by the Group with the China Merchants Bank Group will not exceed the annual caps, all relevant members of the Group will be informed of the annual caps and obliged to report any foreseeable material change in the outstanding balance of deposits placed with the China Merchants Bank Group to the headquarters of the Group as soon as practicable.;

• (ii) the expected increase in the Deposit Services transactions to be carried out with the China Merchants Bank Group in coming years having taken into account the expected increase in business volume and the development of trading logistics. For the financial year ended 31 December 2015, the external revenue of the Group from the logistics segment increased by approximately 10.8% from the year before, to approximately RMB6,921 million as a result of the growth in business volume and the development of trading logistics. The Company expected that the increased business volume and the development of trading logistics will continue to bring additional cash inflow for the Group which may lead to increase in the need for the Deposit Services; and

• (iii) the expected increase in intra-group business activities, including storage and terminal services, logistics services and shipping and trucking services, conducted among members of the enlarged group upon completion of the Possible Reorganisation. Such expected increase in intra-group cooperation may lead to increased need for the Deposit Services.

Termination

The CMB Financial Services Agreement may unilaterally be terminated by the Group upon:

• a) the occurrence of any of the following which exposes or potentially exposes the Group to substantial risks or losses:

• i. breach of laws and regulations, regulatory requirements of the CBRC and other regulatory authorities by the China Merchants Bank Group or by its non-performance or default of any material terms of the CMB Financial Services Agreement; or

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LETTER FROM THE BOARD

• ii. the relevant China Merchants Bank Group entity experiences or anticipates any operational problems or liquidity difficulties;

• b) breach of laws and regulations (including the Listing Rules) by the Group as a result of compliance with the CMB Financial Services Agreement.

Internal control and risk management measures set out in the CMB Financial Services Agreement

• 1) The Group utilises the services of the China Merchants Bank Group on a voluntary, nonexclusive basis and is not obliged to engage the China Merchants Bank Group for any services. The China Merchants Bank Group is merely one of the financial institutions which provide services to the Group.

• 2) In accordance with the compliance and disclosure requirements to which the Group is subject, the China Merchants Bank Group will provide all legal documents, agreements, government approvals, financial data and other information as required by the Group.

• 3) The China Merchants Bank Group has obligation to keep confidential the Group’s unpublished information that it has obtained in the course of its provision of financial services to the Group under the CMB Financial Services Agreement, except as otherwise required by applicable laws and regulations (including the Listing Rules).

• 4) The China Merchants Bank Group will strictly comply with the relevant laws and regulations and requirements imposed by the regulatory authority and ensure the security of funds of the Group.

Pricing mechanism for the Deposit Services contemplated under the CMB Financial Services Agreement

The Company has engaged China Merchants Bank for the provision of the deposit services to the Group, on normal commercial terms, since 2003 when the China Merchants Bank Group was an independent third party. The existing deposit services used by the Group mainly involve placing/withdrawing current deposits in China Merchants Bank to facilitate the Group’s daily operations such as receiving sales proceeds from customers or making payments for expenses to suppliers or government authorities and payrolls. As maximizing interest income is not the Group’s only goal for using the Deposit Services, the Group also considers other selection criteria, in addition to the interest rates, such as fund security, preferences of customers, suppliers and the government authorities, location of bank branches, quality of services and convenience on fund transfers, in selection of deposit services providers. Given that the Group is satisfied with the quality of services provided by China Merchants Bank, the Group intends to continue the Deposit Services with China Merchants Bank after completion of the Possible Reorganisation.

In order to ensure the terms of the deposit services, in particular the interest rates, offered by its deposit services providers for both savings deposits and term deposits are on normal commercial terms, the Group compares the current interest rates offered by its deposit services providers with the relevant standard deposit rates published by the People’s Bank of China from time to time and the rates published by other

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LETTER FROM THE BOARD

major registered banks in the PRC. The Group would apply the same principles in selection of deposit services providers and in determination of the terms of the Deposit Services to be provided by the China Merchants Bank Group after the Possible Reorganisation.

REASONS FOR, AND BENEFITS OF ENTERING INTO THE CMB FINANCIAL SERVICES AGREEMENT

The Group is a leading integrated logistics services provider in the PRC whose principal businesses include freight forwarding, logistics, storage and terminal services, and other services mainly include trucking, shipping and express services.

China Merchants Bank is a joint stock company incorporated in the PRC and its shares are listed on the Stock Exchange and the Shanghai Stock Exchange. China Merchants Bank is principally engaged in the provision of banking and other related financial services. As at the Latest Practicable Date, China Merchants is indirectly interested in approximately 29.97% of the total issued share capital of China Merchants Bank, and SINOTRANS & CSC, the controlling shareholder of the Company, is directly and indirectly interested in approximately 0.09% of the total issued share capital of China Merchants Bank.

The Group maintains deposits with and engages financial services of commercial banks, including China Merchants Bank from time to time as part of its treasury activities and to satisfy its business needs in its ordinary and usual course of business. The Directors consider that China Merchants Bank, being a leading registered bank in the PRC which has been providing deposit services to the Group from time to time, is able to provide different banking and related services in support of the Group’s business and treasury activities. Notwithstanding the above, there is no restriction under the CMB Financial Services Agreement on the Group’s ability to secure the services of other banks or financial institutions of its choice. The Group may make its selection according to the fees being charged and the quality of services being delivered.

In view of the above, including information set out in the sections headed “Annual caps for the Deposit Services” and “Pricing mechanism for the Deposit Services contemplated under the CMB Financial Services Agreement” above, the Directors (including the independent non-executive Directors) consider the terms of the CMB Financial Services Agreement (including the annual caps) are fair and reasonable, and are on normal commercial terms and are in the interests of the Company and its shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

As at the Latest Practicable Date, China Merchants Bank is indirectly owned as to approximately 29.97% by China Merchants and directly and indirectly owned as to approximately 0.09% by SINOTRANS & CSC. As a result of the Possible Reorganisation, China Merchants and its subsidiaries and associates will become connected persons of the Company, and China Merchants Bank and its subsidiaries will become associates of the Company. Therefore, financial services provided by China Merchants Bank Group to the Group will become continuing connected transactions of the Group upon the completion of the Possible Reorganisation.

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LETTER FROM THE BOARD

As one or more of the applicable percentages calculated in accordance with the Listing Rules in respect of the maximum daily outstanding balance of the Deposit Services contemplated under the CMB Financial Services Agreement, when aggregated with annual cap of the deposit services under the Sinotrans Financial Services Agreement (particulars of which was the subject of the Company’s announcement dated 16 April 2015), will be higher than 5% and the annual caps exceed HK$10,000,000, the maximum daily outstanding balance of the Deposit Services under the CMB Financial Services Agreement is therefore subject to the reporting, annual review, announcement and the approval from Independent Shareholders requirements under Chapter 14A of the Listing Rules. Additionally, as one or more of the applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the transactions mentioned above will be more than 5% but less than 25%, the Deposit Services contemplated under the CMB Financial Services Agreement constitute discloseable transactions for the Company under Chapter 14 of the Listing Rules and are therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

The loan services provided by China Merchants Bank Group to the Group on normal commercial terms on an unsecured basis constitute financial assistance by a connected person for the benefit of the Group which is exempt under the Listing Rule 14A.90 from reporting, annual review, announcement and Independent Shareholders’ approval requirements.

The annual transaction amount of other financial services to be provided by the China Merchants Bank Group to the Group under the CMB Financial Services Agreement, when aggregated with financial services provided by the Finance Company under the Sinotrans Financial Services Agreement, will fall within the de minimis threshold for exemption set forth in the Listing Rules 14A.76(1). Thus, the provision of the other financial services by the China Merchants Bank Group to the Group is exempt from reporting, annual review, announcement and approval from Independent Shareholders requirements under the Listing Rules.

According to Article 125 of the Company Law of the PRC, the director of a listed company affiliated with the enterprise involved in the matters discussed by the Board shall not exercise his own, or represent other directors to exercise voting right for such matters. As Zhao Huxiang (being the chairman of the Company and a Director) holds positions in China Merchants and SINOTRANS & CSC and Zhang Jianwei (being the vice-chairman of the Company and a Director) holds positions in SINOTRANS & CSC, they abstained from voting in respect of the board resolution approving the transactions contemplated under the CMB Financial Services Agreement in accordance with the related regulations and laws.

The Company has set up an independent committee of the Board to advise the Independent Shareholders in respect of the Deposit Services and the related annual caps. The Company has appointed Hercules Capital as the independent financial advisor.

Any Shareholders with a material interest in the Deposit Services contemplated under the CMB Financial Services Agreement shall not vote at the EGM. Accordingly, pursuant to Rule 14A.36 of the Listing Rules, China Merchants Bank and its associates who are Shareholders are required to abstain from voting at the EGM in respect of the proposed resolution to approve the Deposit Services (including the annual caps) contemplated under the CMB Financial Services Agreement. As at the Latest Practicable Date, so far as the Company was aware and based on the information contained in the “disclosure of interests” section of the website of the Stock Exchange and the Company’s registers required to be maintained pursuant to sections 336 and 352 of the SFO, China Merchants Bank and its associates did not, directly and

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LETTER FROM THE BOARD

indirectly, hold any Shares. However, because upon completion of the Proposed Reorganisation, SINOTRANS & CSC will become a wholly-owned subsidiary of China Merchants and China Merchants will be a controlling shareholder of China Merchants Bank (taking into account China Merchants’ approximate 29.97% shareholding interest and SINOTRANS & CSC’s approximate 0.09% shareholding interest in China Merchants Bank), SINOTRANS & CSC will voluntarily abstain from voting at the resolution to approve the Deposit Services contemplated under the CMB Financial Services Agreement to be proposed at the EGM.

EXTRAORDINARY GENERAL MEETING

The notice convening the EGM to approve the Deposit Services (including the annual caps) contemplated under the CMB Financial Services Agreement has been despatched to the Shareholders on 31 March 2016.

DIRECTORS’ RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee as set out on page 12 to 13 of this circular which contains its recommendation to the Independent Shareholders in respect of the ordinary resolution set out in the notice of EGM to approve the Deposit Services (including the annual caps) contemplated under the CMB Financial Services Agreement.

The advice of Hercules Capital to the Independent Board Committee and the Independent Shareholders as to whether the Deposit Services (including the annual caps) are on normal commercial terms, in the ordinary and usual course of business of the Group, fair and reasonable and in the interests of the Company and the Shareholders as a whole is set out on pages 14 to 21 of this circular.

GENERAL INFORMATION

Your attention is drawn to the additional information as set out in the Appendices to this circular.

Yours faithfully, By order of the Board of Sinotrans Limited Gao Wei Company Secretary

Beijing, 28 April 2016

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of a letter from the Independent Board Committee, which has been prepared for the purpose of incorporation into this circular, setting out its recommendation to the Independent Shareholders in respect of the terms of Deposit Services (including the annual caps) contemplated under the CMB Financial Services Agreement and the transaction contemplated thereunder as set out in the Circular.

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(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 0598)

To the Independent Shareholders

Dear Sir and Madam,

PROPOSED CONTINUING CONNECTED TRANSACTIONS CMB FINANCIAL SERVICES AGREEMENT

We have been appointed as members of the Independent Board Committee to advise the Independent Shareholders of Sinotrans Limited (the “Company”) in respect of the resolution to approve the Deposit Services (including the annual caps) contemplated under the CMB Financial Services Agreement, details of which are set out in the “Letter from the Board” contained in the circular of the Company (the “Circular”) of which this letter forms part. Unless the context otherwise requires, terms defined in the Circular shall have the same meanings when used in this letter.

Your attention is drawn to the “Letter from the Board”, the advice of Hercules Capital in its capacity as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of whether the Deposit Services (including the annual caps) Contemplated under the CMB Financial Services Agreement are on normal commercial terms, in the ordinary and usual course of business of the Group, fair and reasonable and in the interests of the Company and the Shareholders as a whole, as set out in the “Letter from Hercules Capital” as well as other additional information set out in other parts of the Circular.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having taken into account the advice of, and the principal factors and reasons considered by Hercules Capital in relation thereto as stated in its letter, we consider the terms of the Deposit Services (including the annual caps) to be fair and reasonable, on normal commercial terms and in the ordinary and usual course of business of the Group and are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM in respect of the Deposit Services.

Yours faithfully,

The Independent Board Committee Guo Minjie Lu Zhengfei Han Xiaojing Liu Junhai Independent Independent Independent Independent non-executive Director non-executive Director non-executive Director non-executive Director

Beijing, 28 April 2016

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LETTER FROM HERCULES CAPITAL

The following is the full text of the letter from Hercules Capital to the Independent Board Committee and the Independent Shareholders in respect of the Deposit Services (including the annual caps) contemplated under the CMB Financial Services Agreement, prepared for the purpose of incorporation in this circular.

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1503 Ruttonjee House 11 Duddell Street Central Hong Kong

28 April 2016

To the Independent Board Committee and the Independent Shareholders

Dear Sirs and Madams,

PROPOSED CONTINUING CONNECTED TRANSACTIONS CMB FINANCIAL SERVICES AGREEMENT

INTRODUCTION

We refer to our engagement as the independent financial adviser to advise the independent committee of the Board (the “Independent Board Committee”) and the Independent Shareholders in respect of the Deposit Services contemplated under the CMB Financial Services Agreement and the related annual caps thereof (the “Annual Caps”), details of which are set out in the “Letter from the Board” contained in the circular dated 28 April 2016 to the Shareholders (the “Circular”), of which this letter forms part. Capitalized terms used in this letter shall have the same meanings as those defined elsewhere in the Circular unless the context otherwise requires.

The Group is a leading integrated logistics services provider in the PRC whose principal businesses include freight forwarding, logistics, storage and terminal services, and other services mainly include trucking, shipping and express services. In its ordinary and usual course of business, the Group maintains deposits with, and engages financial services of, commercial banks, including China Merchants Bank, from time to time as part of its treasury activities.

As disclosed in the Company’s announcements dated 15 November 2015, 20 November 2015, 29 December 2015 and 19 January 2016, SINOTRANS & CSC, the parent company of the Company, may undergo a possible reorganisation whereby SINOTRANS & CSC will be administratively allocated into, and become a wholly-owned subsidiary of, China Merchants (the “Possible Reorganisation”). As a result of the Possible Reorganisation, China Merchants and its subsidiaries and associates will become connected persons of the Company, and China Merchants Bank, which is indirectly owned as to approximately 29.97% by

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LETTER FROM HERCULES CAPITAL

China Merchants and directly and indirectly owned as to approximately 0.09% by SINOTRANS & CSC, and its subsidiaries will become associates of the Company. Accordingly, financial services provided by China Merchants Bank Group to the Group will become continuing connected transactions of the Group upon completion of the Possible Reorganisation.

To comply with the Chapter 14A of the Listing Rules requirements in respect of such continuing connected transactions arising as a result of the Possible Reorganisation, on 31 March 2016, the Company entered into the CMB Financial Services Agreement with China Merchants Bank, whereby China Merchants Bank Group agreed to provide a series of financial services to the Group within the caps agreed under the CMB Financial Services Agreement, which includes: (1) the Deposit Services; (2) loan services; (3) other financial services (including but not limited to settlement services, notes services, foreign exchange services and other financial services within the business scope of the relevant entity).

As one or more of the applicable percentages calculated in accordance with the Listing Rules in respect of the maximum daily outstanding balance of the Deposit Services contemplated under the CMB Financial Services Agreement, when aggregated with the annual cap of the deposit services under the Sinotrans Financial Services Agreement (particulars of which was the subject of the Company’s announcement dated 16 April 2015), will be higher than 5% and the annual caps exceed HK$10,000,000, the maximum daily outstanding balance of the Deposit Services under the CMB Financial Services Agreement is therefore subject to the reporting, annual review, announcement and the approval from Independent Shareholders requirements under Chapter 14A of the Listing Rules. Additionally, as one or more of the applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the transactions mentioned above will be more than 5% but less than 25%, the Deposit Services contemplated under the CMB Financial Services Agreement constitute discloseable transactions for the Company under Chapter 14 of the Listing Rules and are therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules. Pursuant to Rules 14A.90 and 14A.76(1) of the Listing Rules, the provisions of loan services and other financial services by the China Merchants Bank Group to the Group are exempt from reporting, annual review, announcement and approval from Independent Shareholders requirements.

According to Rule 14A.36 of the Listing Rules, China Merchants Bank and its associates who are Shareholders are required to abstain from voting at the EGM in respect of the proposed resolution(s) to approve the Deposit Services (including the Annual Caps) contemplated under the CMB Financial Services Agreement. As at the Latest Practicable Date, so far as the Company was aware of and based on the information contained in the “disclosure of interests” section of the website of the Stock Exchange and the Company’s registers required to be maintained pursuant to sections 336 and 352 of the SFO, China Merchants Bank and its associates did not, directly or indirectly, hold any Share. However, because upon completion of the Proposed Reorganisation, SINOTRANS & CSC will become a wholly-owned subsidiary of China Merchants and China Merchants will be a controlling shareholder of China Merchants Bank (taking into account China Merchants’ approximate 29.97% shareholding interest and SINOTRANS & CSC’s approximate 0.09% shareholding interest in China Merchants Bank), SINOTRANS & CSC will voluntarily abstain from voting at the resolution(s) to be proposed at the EGM to approve the Deposit Services contemplated under the CMB Financial Services Agreement.

The Independent Board Committee, comprising all the independent non-executive Directors, namely Mr. Guo Minjie, Mr. Lu Zhengfei, Mr. Han Xiaojing and Mr. Liu Junhai, has been established to advise the Independent Shareholders as to whether the terms of the Deposit Services contemplated under the CMB

• 15 -

LETTER FROM HERCULES CAPITAL

Financial Services Agreement are fair and reasonable, will be conducted on normal commercial terms and in the ordinary and usual course of business of the Group, and, including the Annual Caps, are in the interests of the Company and the Shareholders as a whole. We, Hercules Capital Limited, have been appointed to give an independent opinion to the Independent Board Committee and the Independent Shareholders in this regard and on how to vote on the resolution(s) to be proposed at the EGM.

We are not associated with the Group and its associates and do not have any shareholding in any member of the Group or right (whether legally enforceable or not) to subscribe for, or to nominate persons to subscribe for, securities in any member of the Group. Apart from normal professional fees payable to us in connection with this appointment, no arrangements exist whereby we will receive any fee or benefit from the Group and its associates.

BASIS OF OUR OPINION

In formulating our opinion and recommendation, we have relied on the information and representations supplied, and the opinions expressed, by the Directors and management of the Company and have assumed that such information and statements, and representations made to us or referred to in the Circular are true, accurate and complete in all material respects as of the date hereof and will continue as such at the date of the EGM. The Directors have collectively and individually accepted full responsibility for the Circular, including particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group and having made all reasonable enquiries have confirmed that, to the best of their knowledge and belief, the information contained in the 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 in the Circular misleading.

We consider that we have reviewed sufficient information to reach an informed view, to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation. We have no reasons to suspect that any material information has been withheld by the Directors or management of the Company, or is misleading, untrue or inaccurate, and consider that they may be relied upon in formulating our opinion. 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 and the related subjects of, and parties to, the CMB Financial Services Agreement. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including any material change in market and economic conditions) may affect and/or change this opinion and that we do not have any obligation to update, revise or reaffirm this opinion.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion regarding the Deposit Services and the Annual Caps, we have considered the following principal factors and reasons:

• 16 -

LETTER FROM HERCULES CAPITAL

1. Background and reasons for engaging China Merchants Bank for the Deposit Services

(a) Background of the Company and China Merchants Bank

The Group is a leading integrated logistics services provider in the PRC whose principal businesses include freight forwarding, logistics, storage and terminal services, and other services mainly include trucking, shipping and express services.

China Merchants Bank is a joint stock company incorporated in the PRC and its shares are listed on the Stock Exchange and the Shanghai Stock Exchange. China Merchants Bank is principally engaged in the provision of banking and other related financial services. As at the Latest Practicable Date, China Merchants was indirectly interested in approximately 29.97% of the total issued share capital of China Merchants Bank while SINOTRANS & CSC, the controlling shareholder of the Company, was directly and indirectly interested in approximately 0.09% of the total issued share capital of China Merchants Bank.

As disclosed in the Company’s announcements dated 15 November 2015, 20 November 2015, 29 December 2015 and 19 January 2016, SINOTRANS & CSC, the parent company of the Company, may undergo the Possible Reorganisation whereby SINOTRANS & CSC will be administratively allocated into, and become a wholly-owned subsidiary of, China Merchants. As a result of the Possible Reorganisation, China Merchants and its subsidiaries and associates will become connected persons of the Company, and China Merchants Bank and its subsidiaries will become associates of the Company.

(b) Reasons for engaging China Merchants Bank for the Deposit Services

The Group maintains deposits with, and engages financial services of, commercial banks, including China Merchants Bank, from time to time as part of its treasury activities. The Directors consider that China Merchants Bank, being a leading registered bank in the PRC, is able to provide different banking and related services in support of the Group’s business and treasury activities and it is the intention of the Group to continue the Deposit Services with China Merchants Bank after completion of the Possible Reorganisation.

Given that (i) the Group has the practical needs for the Deposit Services to satisfy its business needs in its ordinary and usual course of business; (ii) China Merchants Bank is one of the leading commercial banks in the PRC providing various banking services and provision of deposit services is one of its core businesses; (iii) China Merchants Bank has been providing the deposit services to the Group from time to time and the Group is satisfied with its quality of services; and (iv) the entering into of the CMB Financial Services Agreement shall not limit the Group’s choice of banks or financial institutions for any banking service and the Group is free to make its selection of service provider based on the charge and quality of services, we consider that the Deposit Services under the CMB Financial Services Agreement are normal commercial transactions conducted in the ordinary and usual course of business of the Group and 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.

• 17 -

LETTER FROM HERCULES CAPITAL

2. Principal terms of the Deposit Services contemplated under the CMB Financial Services Agreement

Pursuant to the CMB Financial Services Agreement, the Group may from time to time obtain, inter alia, Deposit Services from the China Merchants Bank Group on normal commercial terms, provided that the maximum daily outstanding balance of deposits placed by the Group with the China Merchants Bank Group (including accrued interests and surcharges, but not including any loans advanced by the China Merchants Bank Group) for the two years ending 2016 and 2017 will not exceed RMB500 million.

Subject to Independent Shareholders’ approval of the Deposit Services (including the Annual Caps) contemplated under the CMB Financial Services Agreement, the CMB Financial Services Agreement will become effective upon completion of the Possible Reorganisation and it may unilaterally be terminated by the Group upon:

• a) the occurrence of any of the following which exposes or potentially exposes the Group to substantial risks or losses:

• i. breach of laws and regulations, regulatory requirements of the CBRC and other regulatory authorities by the China Merchants Bank Group or by its non-performance or default of any material terms of the CMB Financial Services Agreement; or

• ii. the relevant China Merchants Bank Group entity experiences or anticipates any operational problems or liquidity difficulties;

• b) breach of laws and regulations (including the Listing Rules) by the Group as a result of compliance with the CMB Financial Services Agreement.

Pursuant to the terms of the CMB Financial Services Agreement, the use of the Deposit Services by the Group is on a voluntary basis. The Group is not obliged to engage the China Merchants Bank Group for any services including the Deposit Services and has its sole discretion to use deposit services from other commercial banks.

We understand from the management of the Company that China Merchants Bank has been providing the deposit services to the Group, on normal commercial terms, since 2003 when the China Merchants Bank Group was an independent third party. The existing deposit services used by the Group mainly involve placing/withdrawing current deposits in China Merchants Bank to facilitate the Group’s daily operations such as receiving sales proceeds from customers or making payments for expenses to suppliers or government authorities and payrolls. As maximizing interest income is not the Group’s only goal for using the Deposit Services, the Group also considers other selection criteria, in addition to the interest rates, such as fund security, preferences of customers, suppliers and the government authorities, location of bank branches, quality of services and convenience on fund transfers, in selection of deposit services providers.

In order to ensure the terms of the deposit services, in particular the interest rates, offered by its deposit services providers for both savings deposits and term deposits are on normal commercial terms, the Group compares the current interest rates offered by its deposit services providers with the relevant standard deposit rates published by the People’s Bank of China from time to time and the rates published by other

• 18 -

LETTER FROM HERCULES CAPITAL

major registered banks in the PRC. The management of the Company confirmed that the same principles would be applied by the Group in selection of deposit services providers and in determination of the terms of the Deposit Services to be provided by the China Merchants Bank Group after the Possible Reorganisation.

We were advised by the management of the Company that the Group did not track daily deposit balance maintained with the China Merchants Bank Group previously as there were no commercial needs to do so. However, in order to ensure that the maximum daily outstanding balance of deposits placed by the Group with the China Merchants Bank Group will not exceed the Annual Caps following completion of the Possible Reorganisation, all relevant members of the Group will be informed of the Annual Caps and obliged to report any foreseeable material change in the outstanding balance of deposits placed with the China Merchants Bank Group to the headquarters of the Group as soon as practicable.

We have reviewed samples of statements issued by China Merchants Bank relating to the Group’s deposits, which we considered are fair and representative, and noted that the interest rates offered by China Merchants Bank were comparable to other major registered banks in the PRC and in compliance with the relevant interest rate policies imposed by the People’s Bank of China for similar type of deposits at the relevant time.

Based on the above, we consider that the deposit services provided by the China Merchants Bank Group in the past were on normal commercial terms and fair and reasonable so far as the Independent Shareholders are concerned. We believe that the terms of the Deposit Services to be carried out in the future would also be on normal commercial terms and fair and reasonable to the Independent Shareholders if the same principles are consistently applied by the Group in selection of the service providers for deposit services.

3. The Annual Caps

Pursuant to the CMB Financial Services Agreement, the maximum daily outstanding balance of deposits placed by the Group with the China Merchants Bank Group (including accrued interests and surcharges, but not including any loan advanced by the China Merchants Bank Group) for the two years ending 31 December 2016 and 2017 will not exceed RMB500 million, which was determined based on the historical figures and the business needs of the Group (including the desirability of allowing some flexibility for members of the Group in establishing its commercial banking relationships).

To assess whether the Annual Caps are fair and reasonable, we have discussed with the management of the Company the determination basis for the Annual Caps, including the historical figures for the Deposit Services, the cash position of the Group and the expected increase in cash flows regarding the Deposit Services with the China Merchants Bank Group.

Historical figures

According to the annual reports of the Company, the Group had cash and cash equivalents (including term deposits but excluding restricted cash) of approximately RMB6,244 million, RMB6,254 million and RMB7,036 million respectively as at 31 December 2013, 31 December 2014 and 31 December 2015. With reference to the information provided by the Group, the maximum

• 19 -

LETTER FROM HERCULES CAPITAL

month-end deposits placed by the Group with the China Merchants Bank Group for the years ended 31 December 2013, 2014 and 2015 amounted to approximately RMB228 million, RMB146 million and RMB153 million respectively, which accounted for approximately 3.7%, 2.3% and 2.2% of the total cash and cash equivalents (including term deposits but excluding restricted cash) of the Group as at 31 December 2013, 2014 and 2015 respectively.

As advised by the management of the Company, in order to facilitate the settlement of trade receivables, the Group, in general, provides its customers a list of banks for bill settlement, the customers can choose from the list to settle the bills through different banks at their discretion. On the other hand, certain suppliers or governmental authorities might prefer the Group to make payments through designated banks. Therefore, the cash flows and the balance of deposits maintained with China Merchants Bank fluctuated from time to time.

Expected increase in cash flow with China Merchants Bank

We were advised by the management of the Company that it is expected that the Deposits Services transactions to be carried out with the China Merchants Bank Group will increase in the coming years having taken into account the expected increase in business volume and the development of trading logistics.

As set out in the annual report of the Company, the total revenue of the Group for the year ended 31 December 2015 amounted to approximately RMB45,528 million, representing a slight decrease of approximately 0.3% as compared to the previous year. However, the external revenue from the logistics segment increased by approximately 10.8%, as compared to the prior year, to approximately RMB6,921 million for the year ended 31 December 2015 as a result of the growth in business volume and the development of trading logistics. The Company expected that the increased business volume and the development of trading logistics will continue to bring additional cash inflow for the Group which may lead to increase in the need for the Deposit Services. Meanwhile, it is anticipated that more intra-group business activities, including storage and terminal services, logistics services and shipping and trucking services, shall be conducted among members of the enlarged group upon completion of the Possible Reorganisation. Such expected increase in intragroup cooperation may lead to increased need for the Deposit Services. Based on the above, the Company expected that the maximum daily outstanding balance of deposits placed by the Group with the China Merchants Bank Group (including accrued interests and surcharges, but not including any loan advanced by the China Merchants Bank Group) for the two years ending 31 December 2016 and 2017 will not exceed RMB500 million, representing approximately 7.1% of the total cash and cash and cash equivalents (including term deposits but excluding restricted cash) of the Group as at 31 December 2015.

Given that (i) the cash and cash equivalents (including term deposits but excluding restricted cash) of the Group has shown an increasing trend from approximately RMB6,244 million as at 31 December 2013 to approximately RMB7,036 million as at 31 December 2015 while the Annual Caps only account for approximately 7.1% of the cash and cash equivalents (including term deposits but excluding restricted cash) of the Group as at 31 December 2015; (ii) the expected increase in business volume and development of trading logistics may enhance the need for the Deposit Services in future; (iii) the Annual Caps only represent the highest daily amount that the Group may place with the

• 20 -

LETTER FROM HERCULES CAPITAL

China Merchants Bank Group and there are no obligations for the Group to deposit such amounts with the China Merchants Bank Group; (iv) the balance maintains with the China Merchants Bank Group may fluctuate significantly from time to time as a result of receipts of sales proceeds from customers and payments of operating expenses to service providers; and (v) it is commercially justifiable for the Group to have some flexibility in managing its cash to ensure smooth operation for its daily business operation, we consider that the Annual Caps in respect of the Deposit Services contemplated under the CMB Financial Services Agreement proposed by the Directors are fair and reasonable so far as the Independent Shareholders are concerned.

RECOMMENDATION

Having considered the above-mentioned principal factors and reasons, we consider that the terms, including the Annual Caps, of the Deposit Services contemplated under the CMB Financial Services Agreement are fair and reasonable and such transactions are conducted on normal commercial terms and in the ordinary and usual course of business of the Group and are in the interests of the Company and the Shareholders as a whole. We therefore recommend the Independent Board Committee to advise the Independent Shareholders, as well as the Independent Shareholders, to vote in favour of the resolution(s) to approve the Deposit Services and the Annual Caps at the upcoming EGM.

Yours faithfully, For and on behalf of Hercules Capital Limited Louis Koo Amilia Tsang Managing Director Director

Notes:

1. Mr. Louis Koo is a licensed person under the SFO to engage in Type 6 (advising on corporate finance) regulated activities and has over 20 years of experience in investment banking and corporate finance.

2. Ms. Amilia Tsang is a licensed person under the SFO to engage in Type 6 (advising on corporate finance) regulated activities and has over 15 years of experience in corporate finance, investment and corporate management.

3. 21 -

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

I. Interests of Directors

As at the Latest Practicable Date, so far as the Directors or supervisor of the Company are aware, none of the Directors or supervisors of the Company has interests and short positions in the Shares, underlying Shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (“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 or short positions which they are taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 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 Companies to be notified to the Company and the Stock Exchange.

Saved as disclosed in note 2 of the sections headed “II. Interests of Shareholders discloseable pursuant to the SFO” and “III. Directors’ Interests in competing business” below, as at the Latest Practicable Date, none of the Directors or a proposed Directors is a director or employee of a company which has an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO.

II. Interests of Shareholders disclosable pursuant to the SFO

As at the Latest Practicable Date, so far as is known to the Directors or supervisors of the Company and based on the Company’s register required to be maintained pursuant to section 336 of the SFO, the following persons (other than a Director or supervisor of the Company) had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or who were, directly or indirectly, interested in 10 per cent or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other members of the Group are as follows:

• 22 -

GENERAL INFORMATION

APPENDIX

(a) Interests in the Shares

			Percentage of	Percentage of	Percentage of
			the Company’s	**the **	Company’s
	Corporate		Total Issued	Issued H Share
Name	Interests	Class of Shares	Share Capital		Capital
	(Note 1)
SINOTRANS & CSC	2,461,596,200(L)	Domestic Shares	53.44%		—
Holdings Co., Ltd.,	106,789,000(L)	H Shares	2.32%		4.98%
(Note 2)
GIC Private Limited	130,128,000(L)	H shares	2.82%		6.07%
BlackRock, Inc.	110,086,033(L)	H shares	2.39%		5.13%

• *Note 1: (L) Long Position

• Note 2: Zhao Huxiang and Zhang Jianwei are directors or employees of Sinotrans & CSC which is the controlling shareholder of the Company. The 106,789,000 H Shares are held by Sinotrans (Hong Kong) Holdings Ltd., a wholly-owned subsidiary of Sinotrans & CSC.

(b) Substantial Shareholders of other members of the Group

As at the Latest Practicable Date, save as disclosed below and so far as is known to the Directors or supervisor of the Company, no person (not being a Director or supervisor of the Company) was interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the other members of the Group.

Name of entitles holding 10% or	Interest in
more interest in a member of the	relevant	Name of subsidiary of the
Group	company	Company
Transhold (Pvt) Ltd.	40%	中國外運（巴基斯坦）物流有限公司
		Sinotrans(Pakistan) Logistics Co.,
		Ltd.
蘇州物流中心有限公司	49%	中國外運蘇州物流中心有限公司
Suzhou Logistics Center Co., Ltd		Sinotrans Suzhou Logistics Center
		Co., Ltd
香�金發船務有限公司	33%	上海華發國際貨運有限公司
(Golden Shipping Co., Ltd)		(Shanghai Huafa International
		Transportation Co., Ltd.)

• 23 -

GENERAL INFORMATION

APPENDIX

Name of entitles holding 10% or Interest in more interest in a member of the relevant Name of subsidiary of the Group company Company

上海化學工業區奉賢分區發展有限 16% 上海中外運化工國際物流有限公司 公司 (Sinotrans Shanghai Chemical (Shanghai Chemical Industrial Park International Logistics Co. Ltd.) Fengxian Sub-zone Development Co., Ltd) 金發實業（香�）有限公司 10% 上海中外運化工國際物流有限公司 (Golden Fortune Enterprising (HK) (Sinotrans Shanghai Chemical Company Limited) International Logistics Co. Ltd.) 上海森華貨運經�有限公司 10% 華發騰飛國際貨運有限公司 (Shanghai Shumhua Freight (Huafa Tanefei International Forwarding Operation Company Transportation Company Limited) Limited)

日本通運株式會社

(Nippon Express Co., Ltd.)

新加坡太平船務有限公司

(Pacific International Lines (Pte) Ltd.)

• 49% 上海通運國際物流有限公司 (Shanghai Express International Co., Ltd.)

• 40% 上海華星國際集裝箱貨運有限公司 (Shanghai Huasing International Container Freight Transportation Co., Ltd.)

• 45% 寧波太平國際貿易聯運有限公司 (Ningbo Taiping International Trade Transportation Company Limited)

• 27% 寧波保稅區太平倉儲有限公司 (Ningbo Free Trade Zone Taiping Warehouse Co., Ltd.)

蘇州高新技術產業股份有限公司

(Suzhou New District New & HiTech Industrial Co., Ltd.)

• 40% 中外運高新物流（蘇州）有限公司 (Sinotrans Gaoxin Logistics (Suzhou) Ltd.)

蘇州高新區經濟發展集團總公司

(Suzhou New District Economy Development (Group) Corporation)

• 25% 蘇州新區報關有限公司

• (Suzhou New District Customs Broker Co., Ltd.)

• 24 -

GENERAL INFORMATION

APPENDIX

Name of entitles holding 10% or more interest in a member of the Group

寧波新世紀國際投資有限公司

(Ningbo New Century International Investment Co., Ltd.)

以星航運中國有限公司

(Zim Shipping Services (China) Ltd.)

阿聯船務代理（香�）有限公司

(Alian Shipping Agency (Hong Kong) Company Limited)

Interest in

relevant Name of subsidiary of the company Company

• 24.5% 寧波大�新世紀貨櫃有限公司 (Ningbo Da Gang Container Company Limited)

• 49% 上海運星國際船務代理有限公司 (Shanghai Yunsheng International Shipping Agency Company Limited)

• 49% 上海中外運阿聯船舶代理有限公司 (Sinotrans Shanghai Alian Shipping Agency Company Limited)

• 49% 寧波中外運阿聯船舶代理有限公司 (Sinotrans Ningbo Alian Shipping Agency Company Limited)

寧波泛洋國際貨運代理有限公司職工 持股會

(Ningbo Transocean International Forwarding Agency Ningbo Co. Ltd.)

寧波船務代理有限公司職工持股會

(China Marine Shipping Agency Ningbo Co. Ltd. Employee Shareholding Society)

寧波外運國際貨運代理有限公司職工 持股會

(Sinotrans Ningbo International Freight Forward Agency Co., Ltd. Employee Shareholding Society)

寧波外運國際集裝箱貨運有限公司職 工持股會

(Sinotrans Ningbo International Container Transportation Company Limited Employee Shareholding Society)

• 40% 寧波泛洋國際貨運代理有限公司

• (Ningbo Transocean International Forwarding Agency Company Limited)

• 40% 寧波船務代理有限公司

(China Marine Shipping Agency Ningbo Co., Ltd.)

• 40% 寧波外運國際貨運代理有限公司 (Sinotrans Ningbo International Freight Forwarding Agency Co., Ltd.)

40% 寧波外運國際集裝箱貨運有限公司

• (Sinotrans Ningbo International Container Transportation Company Limited)

• 25 -

GENERAL INFORMATION

APPENDIX

Name of entitles holding 10% or Interest in more interest in a member of the relevant Name of subsidiary of the Group company Company

南通市經濟技術開發區總公司 15% 南通中外運化工物流有限公司 (Nantong Economic & (Sinotrans Nantong Chemical Technological Development Area Logistics Co., Ltd.) Company)

廣東省食品進出口集團公司 20% 佛山中外運倉碼有限公司 (Guangdong Foodstuffs Imp & Exp (Sinotrans Foshan Company (Group) Corporation) Limited) 廣東省南海食品進出口有限公司 25% 佛山中外運倉碼有限公司 (Guangdong Nanhai Foodstuffs (Sinotrans Foshan Warehousing & Company Limited) Terminal Company Limited) 中山市城建集團有限公司 40.546% 中山中外運倉碼有限公司 (Zhongshan City Construction (Sinotrans Zhongshan Warehousing Group Company Limited) & Terminal Corp., Ltd.)

廣東省南海食品進出口有限公司

(Zhongshan City Construction Group Company Limited)

梧州市木材公司 17.67% 廣西梧州中外運倉碼有限公司 (Wuzhou Lumber Company) (Sinotrans Wuzhou Storage Terminal Company Limited)

梧州市木材公司

東莞市石龍鎮工業總公司

(Dongguan Shilong Town Industry Co., Ltd.)

20% 東莞中外運物流有限公司 (Sinotrans Dongguan Logistics Co., Ltd.)

遠升有限公司

(Lailon Enterprises Ltd.)

25% 青島聯通報關有限公司 (Qingdao Liantong Customs Broker Co., Ltd.) 25% 山東中外運弘志物流有限公司 (Sinotrans Shandong Hongzhi Logistics Co. Ltd.)

• 25% 青島金運航空貨運代理有限公司 (Qingdao Jinyun Air Cargo Freight Forwarding Co. Ltd.)

東海運株式會社

(Azuma Shipping Co., Ltd.)

• 30% 青島遠東儲運有限公司 (Qingdao Sinotrans-Azuma Logistics Co., Ltd.)

• 26 -

GENERAL INFORMATION

APPENDIX

Name of entitles holding 10% or more interest in a member of the Group

好明國際物流（上海）有限公司 (Haoming International Logistics (Shanghai) Co.,Ltd.) 福州市國有資產經�公司 (Fuzhou City State-owned Assets Management Company)

SIMME TRANSIT INTERNATIONAL

MAMBUK TRADING AND LOGISTICS PRIVATE LIMITED CO.

老撾榮興國際進出口有限公司 Lao Rong Xing International Import& Export Co., Ltd

韓進海運株式會社

(Hanjin Shipping Company Limited)

成�高新投資集團有限公司

(Chengdu New District Investment Group Corporation)

武漢東湖綜合保稅區建設投資有限 公司 Wuhan Eastlake Free Trade Zone Construction Investment Co. Ltd

瀘州市興瀘投資集團有限公司 LUZHOU XINGLU INVESTMENT GROUP CO. LTD

上海外高橋物流中心有限公司

Shanghai Waigaoqiao Logistics Center Co., Ltd.

Interest in

relevant Name of subsidiary of the company Company

• 49% 天津中外運好好冷鏈物流有限公司 (Sinotrans Tianjin Good Good Cold Chain Logistics Co., Ltd.)

• 30% 福州中外運大裕保稅倉儲有限公司 (Fuzhou Davu Bonded Storage Company Limited)

• 25% 吉布提運輸有限公司 Djibouti Transit & Transport SARL

• 24% 吉布提運輸有限公司 Djibouti Transit & Transport SARL

• 40% 中國外運榮興（老撾）物流有限公司 Sinotrans Rong Xing (Lao) Logistics Co., Ltd

• 49% 上海星瀚船務代理有限公司 (Shanghai Shenhan Shipping Agency Company Limited)

• 45.71% 成�保稅物流投資有限公司 (Chengdu Bonded Logistics Investment Company Limited)

• 40% 武漢東湖綜保區保稅物流有限公司 Wuhan Dast Lake Comprehensive Bonded Area Bonded Logistics Co. Ltd

• 40% 中外運瀘州�保稅物流有限公司 SINOTRANS LUZHOU PORT BONDED LOGISTICS CO. LTD.

• 20% 中外運外高橋上海（國際）物流有限 公司 Sinotrans Waigaoqiao Shanghai (International) Logistics Co., Ltd.

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APPENDIX

GENERAL INFORMATION

Save as disclosed above, the Directors are not aware that there is any person (other than a Director or chief executive of the Company) who, as at the Latest Practicable Date, had an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who is, directly or indirectly, interested in 10 per cent. or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at a general meeting of any other member of the Group.

As at the Latest Practicable Date:

• (i) none of the Directors had any direct or indirect interests in any assets which have since 31 December 2015 (being the date to which the latest published audited consolidated financial statements of the Group were made up) been acquired or disposed of by or leased to any members of the Group, or are proposed to be acquired or disposed of by or leased to any members of the Group;

• (ii) none of the Directors was materially interested in any contracts or arrangements entered into by any members of the Group subsisting as at the Latest Practicable Date which is significant in relation to the business of the Group.

III. Directors’ interests in competing business

Jerry Hsu (a non-executive Director) is considered to have interests in other business apart from the Group’s business, which competes or is likely to compete, either directly or indirectly with the Group’s business as at the Latest Practicable Date, within the meaning of the Listing Rules. He is a representative nominated by DHL Worldwide Express BV, the strategic investor of the Company (the “Strategic Investor”).

DHL Worldwide Express BV is a member of the Deutsche Post World Net Group whose business operations are global mail, express delivery, logistics and financial services serving both in Europe and around the world. While, for the purposes of the Listing Rules, Jerry Hsu is considered to have interests (by way of minority equity interests or stock options or directorships) in competing businesses (i.e. those of the Strategic Investor, being a major international company in the transportation and logistics industry), the Company has been and continues to carry on its business, management and operation independently of and at arms length from, those businesses and through its joint venture and cooperation arrangements with the Strategic Investor.

Zhao Huxiang and Zhang Jianwei are directors or employee of Sinotrans & CSC which is the controlling shareholder of the Company. Certain subsidiaries of Sinotrans & CSC Group engage in the Group’s “core businesses” (namely freight forwarding and shipping agency operations) in certain “core strategic regions” of the Group in the PRC which have only nominal operations which are the same as or similar to the “core businesses” of the Group. Details of the competition between Sinotrans & CSC Group and the Group and the non-competition agreement entered into between Sinotrans & CSC Group and the Company on 14 January 2003 are referred to in the section headed “Relationship with Sinotrans & CSC Group” in the prospectus of the Company dated 29th January 2003.

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GENERAL INFORMATION

APPENDIX

Save as disclosed above, as at the Latest Practicable Date, so far as is known to the Directors or supervisor of the Company, no other Directors or any of their respective associates had any interests in a business, which competes or may compete with the business of the Group.

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors or proposed Directors had entered into or proposed to enter into any service contract with any member of the Group (excluding contracts expiring or determinable by the Group within one year without payment of compensation (other than statutory compensation)).

4. MATERIAL ADVERSE CHANGE

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 2015, being the date to which the latest published audited consolidated financial statements of the Group were made up.

5. DIRECTORS’ INTERESTS IN CONTRACT OR ARRANGEMENT OF SIGNIFICANCE

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

6. EXPERT

The following is the qualification of Hercules Capital, which has given its opinion or advice which is contained in this circular:

Name Qualification

Hercules Capital a corporation licensed to carry out Type 6 (Advising on Corporate Finance) regulated activity under the SFO

As at the Latest Practicable Date, Hercules Capital did not have:

• (a) any direct or indirect interest in any assets which have been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2015, being the date to which the latest published audited consolidated financial statements of the Group were made up; and

• (b) 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.

Hercules Capital has given and has not withdrawn its consent to the issue of this circular with the inclusion of its letter and reference to its name in the form and context in which they respectively appear.

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GENERAL INFORMATION

APPENDIX

7. MISCELLANEOUS

• (a) The secretary of the Company is Gao Wei. He is a senior fellow of both of the Hong Kong Institute of Chartered Secretaries and the Institute of Chartered Secretaries and Administrators (FCIS, FCS). Mr. Gao is the council member and vice president of the Hong Kong Institute of Chartered Secretaries and he is also the vice chairman of the Professional Development Committee thereof.

• (b) The registered office and headquarters of the Company is situated at A43, Xizhimen Beidajie, Beijing, the People’s Republic of China (Post Code 100082). The principal place of business of the Company in Hong Kong is situated at Units F & G, 20/F., MG Tower, 133 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong.

• (c) The share registrars of the Company is Computershare Hong Kong Investor Services Limited at Rooms 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

In any event of inconsistency, the English language text of this circular shall prevail over the Chinese language text.

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the CMB Financial Services Agreement and the Sinotrans Financial Services Agreement will be available for inspection during normal business hours on any weekday (except public holidays) at the office of Reed Smith Richards Butler at 20th Floor, Alexandra House, 18 Chater Road, Central, Hong Kong from the date of this circular for a period of 14 days.

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