THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING OF 2018

Transcription

1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in Industrial and Commercial Bank of China Limited, you should at once hand this circular together with the accompanying proxy form and the reply slip to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular. Stock Code: 1398 USD Preference Shares Stock Code: 4603 EUR Preference Shares Stock Code: 4604 RMB Preference Shares Stock Code: NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING OF 2018 A notice convening the EGM to be held at Industrial and Commercial Bank of China Limited, No. 55 Fuxingmennei Avenue, Xicheng District, Beijing, PRC on Wednesday, 21 November 2018 at 2.30 p.m., is set out on pages 61 to 66 of this circular. Holders of H Shares If you intend to appoint a proxy to attend the EGM, you are required to complete and return the accompanying proxy form in accordance with the instructions printed thereon. For holder of H Shares, the proxy form should be returned to Computershare Hong Kong Investor Services Limited by hand, by post or by fax not less than 24 hours before the time appointed for holding the EGM or any adjourned meeting thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or at any adjourned meeting should you so wish, but in such event the instrument appointing a proxy shall be deemed to be revoked. If you intend to attend the EGM in person or by proxy, you are required to complete and return the reply slip to Computershare Hong Kong Investor Services Limited or to the Bank s Board of Directors Office on or before Thursday, 1 November The Chinese and English version of the circular and enclosed proxy form and reply slip are available on the Bank s website at and the HKEXnews website of the Hong Kong Exchanges and Clearing Limited at You may download or access the aforesaid documents by clicking Investor Relations on the homepage of the Bank s website or browsing through the HKEXnews website of the Hong Kong Exchanges and Clearing Limited. Holders of Existing Offshore Preference Shares A further notice will be sent to holders of Existing Offshore Preference Shares in due course which sets out additional information in relation to the procedures for attending and voting at the EGM for holders of Existing Offshore Preference Shares. If there are any inconsistencies between the Chinese version and the English version of this circular, the Chinese version shall prevail. 28 September 2018

2 TABLE OF CONTENTS DEFINITION... 1 LETTER FROM THE BOARD INTRODUCTION PROPOSAL ON THE ELECTION OF MR. ZHENG FUQING AS NON-EXECUTIVE DIRECTOR OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED PROPOSAL ON THE ELECTION OF MR. FEI ZHOULIN AS NON-EXECUTIVE DIRECTOR OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED PROPOSAL ON THE ELECTION OF MR. NOUT WELLINK AS INDEPENDENT DIRECTOR OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED PROPOSAL ON THE ELECTION OF MR. FRED ZULIU HU AS INDEPENDENT DIRECTOR OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED PROPOSAL ON THE ELECTION OF MR. QU QIANG AS EXTERNAL SUPERVISOR OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED PROPOSAL ON THE PAYMENT PLAN OF REMUNERATION TO DIRECTORS FOR PROPOSAL ON THE PAYMENT PLAN OF REMUNERATION TO SUPERVISORS FOR PROPOSAL TO ISSUE ELIGIBLE TIER 2 CAPITAL INSTRUMENTS PROPOSAL ON THE GENERAL MANDATE TO ISSUE SHARES BY INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED PROPOSAL ON THE DOMESTIC PREFERENCE SHARE ISSUANCE PLAN OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED PROPOSAL ON THE OFFSHORE PREFERENCE SHARE ISSUANCE PLAN OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED PROPOSAL ON THE IMPACT ON DILUTION OF IMMEDIATE RETURNS OF THE ISSUANCE OF PREFERENCE SHARES AND THE REMEDIAL MEASURES OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED Page i

3 TABLE OF CONTENTS 14 PROPOSAL ON FORMULATING THE SHAREHOLDER RETURN PLAN FOR 2018 TO 2020 OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA IMPACT OF THE ISSUANCE OF PREFERENCE SHARES ON THE SHAREHOLDING STRUCTURE OF THE BANK THE EGM RECOMMENDATION APPENDIX 1 PAYMENT PLAN OF REMUNERATION TO DIRECTORS FOR APPENDIX 2 PAYMENT PLAN OF REMUNERATION TO SUPERVISORS FOR Page APPENDIX 3 APPENDIX 4 APPENDIX 5 APPENDIX 6 APPENDIX 7 APPENDIX 8 PROPOSAL ON THE GENERAL MANDATE TO ISSUE SHARES BY INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED PROPOSAL ON THE DOMESTIC PREFERENCE SHARE ISSUANCE PLAN OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED PROPOSAL ON THE OFFSHORE PREFERENCE SHARE ISSUANCE PLAN OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED PROPOSAL ON THE IMPACT ON DILUTION OF IMMEDIATE RETURNS OF THE ISSUANCE OF PREFERENCE SHARES AND THE REMEDIAL MEASURES OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED PROPOSAL ON FORMULATING THE SHAREHOLDER RETURN PLAN FOR 2018 TO 2020 OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA OPINIONS OF INDEPENDENT DIRECTORS OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED REGARDING THE ISSUANCE OF PREFERENCE SHARES NOTICE OF EGM ii

4 DEFINITION In this circular, unless the context requires otherwise, the following expressions have the following meanings: A Shares domestic shares of RMB1.00 each in the share capital of ordinary shares of the Bank, which are listed on the Shanghai Stock Exchange and traded in RMB Articles of Association Articles Bank Board CBIRC Company Law CSRC Directors Domestic Preference Shares EGM Existing Offshore Preference Shares Existing Preference Shares the articles of association of the Bank from time to time Industrial and Commercial Bank of China Limited ( ), a joint stock limited company incorporated in the PRC, the H Shares and Existing Offshore Preference Shares of which are listed on the Hong Kong Stock Exchange (H Shares Stock Code: 1398, USD Preference Shares Stock Code: 4603, EUR Preference Shares Stock Code: 4604 and RMB Preference Shares Stock Code: 84602) and the A Shares and domestic preference shares of which are listed on the Shanghai Stock Exchange (A shares Stock Code: and Domestic Preference Shares Stock Code: ), respectively the board of directors of the Bank the China Banking and Insurance Regulatory Commission The Company Law of the PRC the China Securities Regulatory Commission the directors of the Bank the preference shares of an aggregate amount of not more than RMB100 billion, proposed to be issued by the Bank in the domestic market pursuant to the Proposal on the Domestic Preference Share Issuance Plan of Industrial and Commercial Bank of China Limited as set out in Appendix 4 to this circular the first extraordinary general meeting for the year 2018 of the Bank to be held on 21 November 2018 U.S.$2,940,000, %, Non-Cumulative, Non-Participating, Perpetual Offshore Preference Shares, EUR600,000, %, Non-Cumulative, Non-Participating, Perpetual Offshore Preference Shares, and RMB12,000,000, %, Non- Cumulative, Non-Participating, Perpetual Offshore Preference Shares of the Bank in issue RMB45,000,000, %, Non-Cumulative, Non-Participating, Perpetual Domestic Preference Shares of the Bank in issue and the Existing Offshore Preference Shares 1

5 DEFINITION General Mandate the general mandate in relation to issuance of Shares to be granted by the Shareholders at the EGM to the Board pursuant to the Proposal on the General Mandate to Issue Shares by Industrial and Commercial Bank of China Limited H Shares overseas listed foreign shares of RMB1.00 each in the share capital of ordinary shares of the Bank, which are listed on the Hong Kong Stock Exchange and traded in Hong Kong dollars HKD Hong Kong Hong Kong Stock Exchange Latest Practicable Date Listing Rules Offshore Preference Shares Ordinary Shares PRC Preference Shares RMB Securities Law Shareholders Shares Hong Kong dollars, the lawful currency of Hong Kong the Hong Kong Special Administrative Region of the PRC The Stock Exchange of Hong Kong Limited 25 September 2018, being the latest practicable date for the purpose of ascertaining certain information contained in this circular prior to its publication The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited the preference shares of an aggregate amount of not more than RMB44 billion or its equivalent, proposed to be issued by the Bank in the offshore market pursuant to the Proposal on the Offshore Preference Share Issuance Plan of Industrial and Commercial Bank of China Limited as set out in Appendix 5 to this circular A Shares and/or H Shares the People s Republic of China Offshore Preference Shares and/or Domestic Preference Shares Renminbi, the lawful currency of the PRC The Securities Law of the PRC holders of Shares Ordinary Shares and/or preference shares 2

6 LETTER FROM THE BOARD Stock Code: 1398 USD Preference Shares Stock Code: 4603 EUR Preference Shares Stock Code: 4604 RMB Preference Shares Stock Code: Executive Directors: Mr. Yi Huiman Mr. Gu Shu Non-executive Directors: Mr. Cheng Fengchao Mr. Zheng Fuqing Mr. Fei Zhoulin Ms. Mei Yingchun Mr. Dong Shi Mr. Ye Donghai Registered Office: No. 55 Fuxingmennei Avenue Xicheng District, Beijing PRC Place of Business in Hong Kong: 33/F, ICBC Tower 3 Garden Road Central, Hong Kong Independent non-executive Directors: Mr. Or Ching Fai Mr. Hong Yongmiao Mr. Anthony Francis Neoh Mr. Yang Siu Shun Ms. Sheila Colleen Bair Mr. Shen Si 28 September 2018 To the Shareholders Dear Sir or Madam, NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING OF INTRODUCTION The purpose of this circular is to provide you with information regarding certain proposals to be considered at the EGM and to set out the notice of the EGM. 3

7 LETTER FROM THE BOARD At the EGM, the following resolutions will be considered and, if thought fit, to be passed: As Ordinary Resolutions: (1) Proposal on the Election of Mr. Zheng Fuqing as Non-executive Director of Industrial and Commercial Bank of China Limited (2) Proposal on the Election of Mr. Fei Zhoulin as Non-executive Director of Industrial and Commercial Bank of China Limited (3) Proposal on the Election of Mr. Nout Wellink as Independent Director of Industrial and Commercial Bank of China Limited (4) Proposal on the Election of Mr. Fred Zuliu Hu as Independent Director of Industrial and Commercial Bank of China Limited (5) Proposal on the Election of Mr. Qu Qiang as External Supervisor of Industrial and Commercial Bank of China Limited (6) Proposal on the Payment Plan of Remuneration to Directors for 2017 (7) Proposal on the Payment Plan of Remuneration to Supervisors for 2017 As Special Resolutions: (8) Proposal to Issue Eligible Tier 2 Capital Instruments (9) Proposal on the General Mandate to Issue Shares by Industrial and Commercial Bank of China Limited (10) Proposal on the Domestic Preference Share Issuance Plan of Industrial and Commercial Bank of China Limited (11) Proposal on the Offshore Preference Share Issuance Plan of Industrial and Commercial Bank of China Limited As Ordinary Resolutions: (12) Proposal on the Impact on Dilution of Immediate Returns of the Issuance of Preference Shares and the Remedial Measures of Industrial and Commercial Bank of China Limited (13) Proposal on Formulating the Shareholder Return Plan for 2018 to 2020 of Industrial and Commercial Bank of China 4

8 LETTER FROM THE BOARD 2 PROPOSAL ON THE ELECTION OF MR. ZHENG FUQING AS NON-EXECUTIVE DIRECTOR OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED The term of office of Mr. Zheng Fuqing, a Non-executive Director of the Board, has expired and he is eligible for re-election in accordance with relevant regulations. According to the Company Law, relevant laws and regulations and the Articles of the Bank, the Board considered and approved the Proposal on the Nomination of Mr. Zheng Fuqing as Candidate for Non-executive Director of Industrial and Commercial Bank of China Limited and Re-engaging Him to Hold Relevant Posts in Special Committees of the Board of Directors at the Board meeting of the Bank held on 29 May 2018, and agreed to nominate Mr. Zheng Fuqing as the candidate for re-election as Non-executive Director. An ordinary resolution will be proposed at the EGM to consider and approve the re-election of Mr. Zheng Fuqing as Non-executive Director, and his new term of office will commence on the date when his appointment is approved at the EGM. The biography of Mr. Zheng Fuqing is set out below: Zheng Fuqing, male, Chinese nationality, born in August Mr. Zheng Fuqing has served as Non-executive Director of the Bank since February He joined Ministry of Finance in 1989, and served as Deputy Head and Head of Shanxi Finance Ombudsman Office, and Assistant Ombudsman and Associate Counsel of Shanxi Finance Ombudsman Office. Mr. Zheng graduated from the Party School of the Central Committee of C.P.C. majoring in law theory. He is an economist. According to the Articles, the term of office of each director is three years, and a director is eligible for re-election upon the expiry of his/her term. Mr. Zheng Fuqing will not receive remuneration from the Bank during his term of office, his remuneration shall be paid by Central Huijin Investment Ltd. (the Huijin ). The details of the remuneration of the Directors are available in the Bank s annual reports and related announcements. Save as disclosed above, Mr. Zheng Fuqing has not held any other directorships in any listed companies, and other position in the Bank or the subsidiaries of the Bank in the last three years. Mr. Zheng Fuqing does not have any relationship with any other directors, senior management, substantial shareholders or controlling shareholders of the Bank, nor does he hold any interests in the shares of the Bank within the meaning of Part XV of the Hong Kong Securities and Futures Ordinance. Save as disclosed in this circular, there are no other matters relating to the election of Mr. Zheng Fuqing that need to be brought to the attention of the Shareholders, nor is there any other information to be disclosed pursuant to any of the requirements of Rule 13.51(2) of the Listing Rules. 3 PROPOSAL ON THE ELECTION OF MR. FEI ZHOULIN AS NON-EXECUTIVE DIRECTOR OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED The term of office of Mr. Fei Zhoulin, a Non-executive Director of the Board, has expired and he is eligible for re-election in accordance with relevant regulations. According to the Company Law, relevant laws and regulations and the Articles of the Bank, the Board considered and approved the Proposal on the Nomination of Mr. Fei Zhoulin as Candidate for Non-executive Director of Industrial and Commercial Bank of China Limited and Re-engaging Him to Hold Relevant Posts in Special Committees of the Board of Directors at the Board meeting of the Bank held on 29 May 2018, and agreed to nominate Mr. Fei Zhoulin as the candidate for re-election as Non-executive Director. 5

9 LETTER FROM THE BOARD An ordinary resolution will be proposed at the EGM to consider and approve the re-election of Mr. Fei Zhoulin as Non-executive Director, and his new term of office will commence on the date when his appointment is approved at the EGM. The biography of Mr. Fei Zhoulin is set out below: Fei Zhoulin, male, Chinese nationality, born in October Mr. Fei Zhoulin has served as Non-executive Director of the Bank since March He joined Ministry of Finance in 1995, and served as Deputy Head of General Division and Head of Business Division II of Shaanxi Finance Ombudsman Office, Assistant Ombudsman and Vice Ombudsman of Shaanxi Finance Ombudsman Office, and Ombudsman of Ningxia Finance Ombudsman Office. Mr. Fei graduated from the Correspondence Institute of the Party School of the Central Committee of C.P.C. in economic management. According to the Articles, the term of office of each director is three years, and a director is eligible for re-election upon the expiry of his/her term. Mr. Fei Zhoulin will not receive remuneration from the Bank during his term of office, his remuneration shall be paid by Huijin. The details of the remuneration of the Directors are available in the Bank s annual reports and related announcements. Save as disclosed above, Mr. Fei Zhoulin has not held any other directorships in any listed companies, and other position in the Bank or the subsidiaries of the Bank in the last three years. Mr. Fei Zhoulin does not have any relationship with any other directors, senior management, substantial shareholders or controlling shareholders of the Bank, nor does he hold any interests in the shares of the Bank within the meaning of Part XV of the Hong Kong Securities and Futures Ordinance. Save as disclosed in this circular, there are no other matters relating to the election of Mr. Fei Zhoulin that need to be brought to the attention of the Shareholders, nor is there any other information to be disclosed pursuant to any of the requirements of Rule 13.51(2) of the Listing Rules. 4 PROPOSAL ON THE ELECTION OF MR. NOUT WELLINK AS INDEPENDENT DIRECTOR OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED The term of office of certain Independent Director of the Board will expire soon and such Independent Director is not eligible for re-election in accordance with relevant regulations. According to the Company Law, relevant laws and regulations and the Articles of the Bank, the Board considered and approved the Proposal on the Nomination of Mr. Nout Wellink as a Candidate of Independent Director of Industrial and Commercial Bank of China Limited at the Board meeting of the Bank held on 29 May 2018, and agreed to nominate Mr. Arnout Henricus Elisabeth Maria Wellink (Nout Wellink) as the candidate for re-election as Independent Director. An ordinary resolution will be proposed at the EGM to consider and approve the appointment of Mr. Nout Wellink as Independent Director. The appointment of Mr. Nout Wellink as Independent Director is subject to the approval of CBIRC or compliance with the relevant procedures as required by CBIRC. The biography of Mr. Nout Wellink is set out below: Nout Wellink (Nout WELLINK), male, Dutch nationality, born in August Mr. Nout Wellink served as a member of the Executive Board of the Dutch Central Bank ( DNB ) for almost 30 years, with the last 14 years as its President until retirement from DNB on 1 July DNB is part of the European System of Central Banks since 1999, but is still responsible for supervising the Dutch national pension funds and insurance companies. Since the establishment of the European Monetary Union, Mr. Wellink served as a member of the Governing Council of the European Central Bank. Starting from 1997, Mr. Wellink 6

10 LETTER FROM THE BOARD served as a member of the Board of Directors of the Bank for International Settlements, which he chaired from 2002 to From 2006 to 2011, he also chaired the Basel Committee on Banking Supervision. From 1997 to 2011, Mr. Wellink was a member of the Group of Ten Central Bank Governors and Governor of the International Monetary Fund. Prior to his appointment in 1982 as an executive director of DNB, Mr. Wellink held several posts in the Dutch Ministry of Finance, including as the Treasurer General from 1977 to He also served as Independent Director of Bank of China Limited and the Vice Chairman of Supervisory Board of PricewaterhouseCoopers Accountants N.V.. After studying Dutch law at Leyden University from 1961 to 1968 with a Master s degree obtained, Mr. Wellink obtained a doctor s degree in economics at the Rotterdam Erasmus University in In 2008 he received an honorary doctorate from Tilburg University. From 1988 to 1998, Mr. Wellink was an Emeritus Professor at the Free University in Amsterdam. Mr. Wellink had served many additional functions in the past, including member of the supervisory board of a bank, a re-insurance company and other enterprises on behalf of the Dutch authorities, Chairman of the Board of Supervisors of the Netherlands Open Air Museum, member and treasurer of the Royal Picture Gallery Mauritshuis and the Westeinde Hospital in The Hague. He was awarded a Knighthood in the Order of the Netherlands Lion in 1980 and is Commander of the Order of Orange-Nassau since According to the Articles, the term of office of each director is three years, and a director is eligible for re-election upon the expiry of his/her term. The remuneration of the Independent Directors shall follow the relevant regulations. The remuneration plan will be considered by the compensation committee of the Board and subsequently considered and approved by the Board, and will be submitted to the EGM for consideration and approval. The details of the remuneration of the Directors are available in the Bank s annual reports and related announcements. Save as disclosed above, Mr. Nout Wellink has not held any directorships in other listed companies, and positions in the Bank or the subsidiaries of the Bank in the last three years. Mr. Nout Wellink does not have any relationship with any directors, senior management, substantial shareholders or controlling shareholders of the Bank, nor does he hold any interests in the shares of the Bank within the meaning of Part XV of the Hong Kong Securities and Futures Ordinance. Save as disclosed in this circular, there are no other matters relating to the election of Mr. Nout Wellink that need to be brought to the attention of the Shareholders, nor is there any other information to be disclosed pursuant to any of the requirements of Rule 13.51(2) of the Listing Rules. 5 PROPOSAL ON THE ELECTION OF MR. FRED ZULIU HU AS INDEPENDENT DIRECTOR OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED The term of office of an Independent Director of the Board will expire soon and such Independent Director will not be re-elected in accordance with relevant regulations. According to the Company Law, relevant laws and regulations and the Articles of the Bank, the Board considered and approved the Proposal on Nominating Mr. Fred Zuliu Hu as Candidate for Independent Director of Industrial and Commercial Bank of China Limited at the Board meeting of the Bank held on 30 August 2018, and agreed to nominate Mr. Fred Zuliu Hu as the candidate for re-election as Independent Director. An ordinary resolution will be proposed at the EGM to consider and approve the appointment of Mr. Fred Zuliu Hu as Independent Director. The appointment of Mr. Fred Zuliu Hu as Independent Director is subject to the approval of CBIRC. The term of office of Mr. Fred Zuliu Hu as Independent Director will commence on the date when the approval from the CBIRC has been obtained. 7

11 LETTER FROM THE BOARD The biography of Mr. Fred Zuliu Hu is set out below: Fred Zuliu Hu, male, Chinese nationality, permanent resident of Hong Kong, born in June 1963 in Hunan. Mr. Fred Zuliu Hu currently serves in various positions such as the chairman of Primavera Capital Group, the non-executive chairman of Yum China Holdings, Inc, the independent non-executive director of Hong Kong Exchanges and Clearing Limited, the director of UBS Group AG, the independent director of Dalian Wanda Commercial Management Group Co., Ltd., the non-executive director of China Asset Management Co., Ltd. and the independent director of Minsheng Financial Leasing Co., Ltd. and is the co-chair of The Nature Conservancy s Asia Pacific Council and the director of the China Medical Board. Mr. Fred Zuliu Hu is also a member of the Global Board of Advisors for the Council on Foreign Relations, the 21st Century Council of the Berggruen Institute, the Advisory Committee for the Harvard China Fund, the Harvard Kennedy School Mossavar-Rahmani Center for Business and Government, the Stanford Center for International Development, and the Jerome A. Chazen Institute of International Business at Columbia University. Mr. Fred Zuliu Hu concurrently serves as the co-director of the National Center for Economic Research and a professor at Tsinghua University, and he is also an adjunct professor at the Chinese University of Hong Kong and Peking University. Mr. Fred Zuliu Hu previously served as a senior economist at the International Monetary Fund from 1991 to 1996; Head of Research at the World Economic Forum from 1996 to 1997; the chairman for Greater China and a partner at Goldman Sachs Group Inc. from 1997 to 2010, an independent non-executive director of Great Wall Pan Asia Holdings Limited (formerly known as SCMP Group Limited) from 2010 to 2016 and an independent non-executive director of Hang Seng Bank Limited from 2011 to May Mr. Fred Zuliu Hu obtained a master s degree in engineering science from Tsinghua University in 1986, and a master s degree and a PhD in economics from Harvard University in According to the Articles, the term of office of each director is three years, and a director is eligible for re-election upon the expiry of his/her term. The remuneration of the Independent Non-executive Directors shall follow the relevant regulations. The remuneration plan will be considered by the compensation committee of the Board and subsequently considered and approved by the Board, and will be submitted to the EGM for consideration and approval. The details of the remuneration of the Directors are available in the Bank s annual reports and related announcements. Save as disclosed above, Mr. Fred Zuliu Hu has not held any position in the Bank or the subsidiaries of the Bank in the last three years and does not have any relationship with any other directors, senior management, substantial shareholders or controlling shareholders of the Bank, nor does he hold any interests in the shares of the Bank within the meaning of Part XV of the Hong Kong Securities and Futures Ordinance. Save as disclosed in this circular, there are no other matters relating to the election of Mr. Fred Zuliu Hu that need to be brought to the attention of the Shareholders, nor is there any other information to be disclosed pursuant to any of the requirements of Rule 13.51(2) of the Listing Rules. 6 PROPOSAL ON THE ELECTION OF MR. QU QIANG AS EXTERNAL SUPERVISOR OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED The term of Mr. Qu Qiang as External Supervisor will expire in December 2018 and he is eligible for re-election upon the expiry of his term according to the Company Law, relevant laws and regulations and the Articles of the Bank. The board of supervisors of the Bank considered and approved the Proposal on the Nomination of Mr. Qu Qiang as a Candidate for the Post of External Supervisor of Industrial and Commercial Bank of China Limited at the meeting of the board of supervisors of the Bank held on 30 August 2018, and nominated Mr. Qu Qiang for re-election as a candidate of External Supervisor of the Bank. 8

12 LETTER FROM THE BOARD An ordinary resolution will be proposed at the EGM to consider and approve the re-election of Mr. Qu Qiang as External Supervisor. His new term of office as External Supervisor will commence from the date when his current term as External Supervisor expires. The biography of Mr. Qu Qiang is set out below: Qu Qiang, male, Chinese nationality, born in February Mr. Qu Qiang has served as External Supervisor of the Bank since December Currently, he is a professor and tutor for PhD students of Renmin University of China, Director of China Fiscal and Financial Policy Research Center (a key research center of humanities and social sciences of the Ministry of Education), Deputy Director of Financial and Securities Institute of Renmin University of China, a council member of China Finance Society, a member of China Finance 40 Forum and External Expert of China Development Bank. He was Head of the Applied Finance Department of the School of Finance, Renmin University of China. Currently, he is also External Supervisor of Bank of Beijing. Mr. Qu Qiang graduated from Renmin University of China, and received a Doctorate degree in Economics. Save as disclosed above, Mr. Qu Qiang has not held any directorships in any listed public companies and other position in the Bank or the subsidiaries of the Bank in the last three years and does not have any relationship with any Directors, senior management, substantial shareholders or controlling shareholders of the Bank, nor does he hold any interests in the shares of the Bank within the meaning of Part XV of the Hong Kong Securities and Futures Ordinance. According to the Articles of the Bank, the term of each supervisor is three years and supervisors are eligible for re-election upon expiry of their terms. The remuneration of the supervisors shall follow the relevant regulations. The remuneration plan will be submitted to the EGM for consideration and approval after being considered according to relevant procedures. Details of the remuneration of the supervisors of the Bank are available in the Bank s annual reports and related announcements. Save as disclosed in this circular, there are no other matters relating to the election of Mr. Qu Qiang that need to be brought to the attention of the Shareholders of the Bank nor is there any other information to be disclosed pursuant to any of the requirements of Rule 13.51(2) of the Listing Rules. 7 PROPOSAL ON THE PAYMENT PLAN OF REMUNERATION TO DIRECTORS FOR 2017 In accordance with the relevant government policies and the results of the appraisals conducted by the Bank on the directors for 2017, the proposal on payment of remuneration to the directors for 2017 is now submitted as an ordinary resolution for consideration and approval at the EGM. Details of the Payment Plan of Remuneration to Directors for 2017 are set out in Appendix 1 to this circular. 8 PROPOSAL ON THE PAYMENT PLAN OF REMUNERATION TO SUPERVISORS FOR 2017 In accordance with the relevant government policies and the results of the appraisals conducted by the Bank on the supervisors for 2017, the proposal on payment of remuneration to the supervisors for 2017 is now submitted as an ordinary resolution for consideration and approval at the EGM. Details of the Payment Plan of Remuneration to Supervisors for 2017 are set out in Appendix 2 to this circular. 9

13 LETTER FROM THE BOARD 9 PROPOSAL TO ISSUE ELIGIBLE TIER 2 CAPITAL INSTRUMENTS According to the relevant laws and regulations and the Articles of the Bank, to further strengthen the Bank s capital strength, optimize the capital structure, raise the risk resilience capability and ability of sustainable development and to maintain a good market image, the Bank proposes to issue eligible tier 2 capital instruments, details as follows: (1) It will be submitted to the Shareholders general meeting to consider and approve the Bank s proposed issuance of new eligible tier 2 capital instruments up to RMB110 billion equivalent by the Bank. The issuance of the eligible tier 2 capital instruments will remain valid until 31 December (2) It will be submitted to the Shareholders general meeting to consider and approve the Board, at the relevant time, corresponding to actual circumstances, to approve the issuance, delivery, redemption and other subsequent matters regarding the eligible tier 2 capital instruments, in accordance with the management measures and implementation rules as imposed by the relevant authorities, and approval requirements of the regulatory authorities. (3) It will be submitted to the Shareholders general meeting to consider and approve the Board to apply to the regulatory authorities for filing and redemption matters in relation to the eligible tier 2 capital instruments, subordinated bonds and other capital instruments issued and to be issued by the Bank in accordance with the early redemption terms determined at the time of issuance. The Proposal to Issue Eligible Tier 2 Capital Instruments was considered and approved at the meeting of the Board which was held on 30 August 2018 and is now submitted to the EGM as special resolution for consideration and approval. 10 PROPOSAL ON THE GENERAL MANDATE TO ISSUE SHARES BY INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED In order to continuously enhance the capital strength of the Bank and to raise the capital management level, it is proposed to the Shareholders general meeting to grant a general mandate to issue Shares, in particular, to separately or concurrently authorise, issue and deal with the newly issued A Shares and/or H Shares, preference shares and/or options (including warrants, convertible bonds, preference shares that can be convertible into A Shares and/or H Shares and any other securities carrying rights of subscription for or conversion into shares), provided that the respective aggregate amounts of A Shares and/or H Shares, preference shares and/or options authorised, issued and dealt with shall not exceed 20% of the respective amounts of existing A Shares and H Shares as at the date of the passing of the General Mandate by the Shareholders general meeting. Details of the Proposal on the General Mandate to Issue Shares by Industrial and Commercial Bank of China Limited are set out in Appendix 3 to this circular. As at the Latest Practicable Date, there were 269,612,212,539 A Shares and 86,794,044,550 H Shares in issue. On the basis of such figures, a maximum of 53,922,442,507 A Shares and 17,358,808,910 H Shares may be issued under the General Mandate based on the 20% threshold as mentioned above. 10

14 LETTER FROM THE BOARD The Board has proposed to the Shareholders general meeting that the Board be authorised to deal with matters relating to the change in the registered capital of the Bank to reflect the number of Shares to be issued by the Bank pursuant to this special resolution, to make such appropriate and necessary amendments to the provisions of the Articles relating to the shareholding structure after the issuance of Shares and the registered capital (if applicable) as they think fit and necessary and to take any other action and complete any formality required to effect the issuance of Shares pursuant to this proposal. Pursuant to the relevant PRC laws and regulations, if the Bank issues the Preference Shares under the General Mandate, such issuance is subject to a separate Shareholders approval even if the General Mandate has been approved at the EGM. Such approval is also being sought at the EGM as further described in paragraphs 11 and 12 below. The validity period of the General Mandate commences on the date on which it is approved by the Shareholders general meeting and ends on the earliest of: (i) the conclusion of the next annual general meeting of the Bank; (ii) the expiration of the 12-month period from the date of passing of this special resolution; and (iii) the date on which the authority granted to the Board set out in this special resolution is revoked or varied by a special resolution of the Shareholders at a Shareholders general meeting. The validity period of the other resolutions relating to the proposed issuance of Preference Shares will remain effective for 24 months from the date when they are approved by the Shareholders general meeting. If the proposed issuance of Preference Shares as described in paragraphs 11 and 12 below is not completed before the expiry of the validity period of the General Mandate, the Bank may seek Shareholders approval to renew the General Mandate or for specific authorisation (if appropriate) to proceed further with the issuance of Preference Shares. To enhance decision making efficiency and ensure successful issuance, the Board may delegate to the Chairman, Vice Chairman, President and any person authorised by the Chairman, the full power to, jointly or individually, deal with all matters relating to the issuance of Shares. This proposal has been considered and approved in the meeting of the Board held on 30 August 2018 and is now submitted as a special resolution for consideration and approval by the holders of Ordinary Shares and the holders of Existing Preference Shares of the Bank separately at the EGM. 11 PROPOSAL ON THE DOMESTIC PREFERENCE SHARE ISSUANCE PLAN OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED The Bank has always been adhering to an operating model of safety, stability and efficiency. The Bank has also continuously increased its level of capital management through accumulation of internal capital resources and reasonably utilizing external channels to replenish capital. In order to ensure continuous business development and to enhance overall competitiveness and risk resistance capacity, the Bank proposes to issue Preference Shares in the domestic and offshore markets with an aggregate amount of not more than the equivalent of RMB100 billion to replenish of the Bank s capital, among which, the aggregate amount of Preference Shares to be issued in the domestic market either in a single or multiple series will be not more than RMB100 billion. In accordance with the relevant requirements of the Company Law, the Securities Law, the Guidance Opinion of the State Council on the Pilot of Preference Shares, the Administrative Measures on the Pilot of Preference Shares, the Capital Management Rules of Commercial Banks (for Trial Implementation), the Guidance Opinion on Commercial Banks Issuing Preference Shares to Replenish Tier 1 Capital and other laws, regulations and regulatory documents, the Bank has satisfied the requirements for issuance of preference shares. 11

15 LETTER FROM THE BOARD The Domestic Preference Shares are proposed to be issued by way of a non-public issuance and shall be issued either in a single or multiple series in accordance with the relevant procedures after being approved by regulatory authorities such as the CBIRC, the CSRC and other competent authorities. The Domestic Preference Shares will be transferred on the Shanghai Stock Exchange. The Bank shall have the right to mandatorily convert all or part of the Domestic Preference Shares into A Shares on the occurrence of certain prescribed events. In the case of a partial conversion, the par value of Domestic Preference Shares to be converted shall be determined in accordance with the principle that the losses will be absorbed in equal proportion among the Domestic Preference Shares and Offshore Preference Shares. Details of the Proposal on the Domestic Preference Share Issuance Plan of Industrial and Commercial Bank of China Limited are set out in Appendix 4 to this circular. The Independent Directors issued their opinions on certain matters relating to the issuance of Preference Shares, details of which are set out in Appendix 8 to this circular. This proposal has been considered and approved in the meeting of the Board held on 30 August 2018 and is now submitted as a special resolution for consideration and approval by the holders of Ordinary Shares and the holders of Existing Preference Shares of the Bank separately at the EGM. Upon approval by the Shareholders general meeting, the Bank shall also obtain the approval of the CBIRC and the CSRC. Shareholders and potential investors should be aware that the proposed issuance of Domestic Preference Shares is subject to all necessary approvals being obtained and various factors including market conditions, and therefore the proposed issuance of the Domestic Preference Shares may or may not proceed. 12 PROPOSAL ON THE OFFSHORE PREFERENCE SHARE ISSUANCE PLAN OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED The Bank has always been adhering to an operating model of safety, stability and efficiency. The Bank has also continuously increased its level of capital management through accumulation of internal capital resources and reasonably utilizing external channels to replenish capital. In order to ensure continuous business development and to enhance overall competitiveness and risk resistance capacity, the Bank proposes to issue Preference Shares in the domestic and offshore markets with an aggregate amount of not more than the equivalent of RMB100 billion to replenish the Bank s capital, among which, the aggregate amount of Preference Shares proposed to be issued in the offshore market will be not more than the equivalent of RMB44 billion. In accordance with the relevant requirements of the Company Law, the Securities Law, the Guidance Opinion of the State Council on the Pilot of Preference Shares, the Administrative Measures on the Pilot of Preference Shares, the Capital Management Rules of Commercial Banks (for Trial Implementation), the Guidance Opinion on Commercial Banks Issuing Preference Shares to Replenish Tier 1 Capital, the Listing Rules and other laws, regulations and regulatory documents, the Bank has satisfied the requirements for non-public issuance of the offshore preference shares. The Offshore Preference Shares are proposed to be issued by way of a non-public placement in accordance with the relevant rules of issuance and shall be issued either in a single or multiple series in accordance with the relevant procedures after being approved by regulatory authorities. Application for listing of the Offshore Preference Shares on the Hong Kong Stock Exchange will be made in accordance with relevant regulatory requirements. The Bank shall have the right to mandatorily 12

16 LETTER FROM THE BOARD convert all or part of the Offshore Preference Shares into H Shares on the occurrence of certain prescribed events. In the case of a partial conversion, the value of Offshore Preference Shares to be converted shall be determined in accordance with the principle that the losses will be absorbed in equal proportion among the Offshore Preference Shares and Domestic Preference Shares. Details of the Proposal on the Offshore Preference Share Issuance Plan of Industrial and Commercial Bank of China Limited are set out in Appendix 5 to this circular. The Independent Directors issued their opinions on certain matters relating to the issuance of Preference Shares, details of which are set out in Appendix 8 to this circular. This proposal has been considered and approved in the meeting of the Board held on 30 August 2018 and is now submitted as a special resolution for consideration and approval by the holders of Ordinary Shares and the holders of Existing Preference Shares of the Bank separately at the EGM. Upon approval by the Shareholders general meeting, the Bank shall also obtain the approval of the CBIRC and the CSRC. Shareholders and potential investors should be aware that the proposed issuance of Offshore Preference Shares is subject to all necessary approvals being obtained and various factors including market conditions, and therefore the proposed issuance of the Offshore Preference Shares may or may not proceed. 13 PROPOSAL ON THE IMPACT ON DILUTION OF IMMEDIATE RETURNS OF THE ISSUANCE OF PREFERENCE SHARES AND THE REMEDIAL MEASURES OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED In accordance with the requirements under the Opinions of the General Office of the State Council on Further Strengthening the Protection of Legitimate Rights and Interests of Minority Investors in Capital Market (Guobanfa [2013] No.110), the Opinions of the State Council on Further Promoting the Healthy Development of Capital Market (Guofa [2014] No.17) and the Guiding Opinions on Matters Concerning Dilution of Immediate Return in Initial Public Offering, Refinancing and Material Assets Restructuring (No.31 Announcement of CSRC in 2015), the Bank has analysed the possible impact of issuance of the Preference Shares on immediate returns and, with reference to the actual conditions of the Bank, proposed relevant measures. Details of the Proposal on the Impact on Dilution of Immediate Returns of the Issuance of Preference Shares and the Remedial Measures of Industrial and Commercial Bank of China Limited are set out in Appendix 6 to this circular. This proposal has been considered and approved in the meeting of the Board held on 30 August 2018 and is now submitted as an ordinary resolution for consideration and approval by the holders of Ordinary Shares of the Bank at the EGM. At the same time, it is proposed to the Shareholders general meeting to authorise the Board to formulate, revise and supplement relevant remedial measures and exercise full power to handle other relevant matters, after further analysing, studying and demonstrating the impact of the issuance of the Preference Shares on immediate financial indicators and immediate returns of Shareholders in accordance with the latest provisions and requirements of relevant laws and regulations, regulatory authorities and stock exchanges when new provisions and requirements on remedying immediate returns of refinancing are put forward by relevant laws and regulations, regulatory authorities and stock exchanges. 13

17 LETTER FROM THE BOARD 14 PROPOSAL ON FORMULATING THE SHAREHOLDER RETURN PLAN FOR 2018 TO 2020 OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA With a view to further enhancing the awareness of shareholder return, to provide continuous, stable and reasonable investment return to shareholders, in accordance with the Company Law, the Securities Law, the Circular of the China Securities Regulatory Commission on Further Implementation of Relevant Matters on Payment of Cash Dividends by Listed Companies, the Regulatory Guidance to Listed Companies No. 3 Cash Dividend Payments by Listed Companies and other laws and regulations, as well as relevant regulatory requirements, the Board has formulated the Shareholder Return Plan for 2018 to 2020 of Industrial and Commercial Bank of China. Details of the Proposal on Formulating the Shareholder Return Plan for 2018 to 2020 of Industrial and Commercial Bank of China are set out in Appendix 7 to this circular. This proposal has been considered and approved in the meeting of the Board held on 30 August 2018 and is now submitted as an ordinary resolution for consideration and approval by the holders of Ordinary Shares of the Bank at the EGM. 15 IMPACT OF THE ISSUANCE OF PREFERENCE SHARES ON THE SHAREHOLDING STRUCTURE OF THE BANK If no additional tier 1 capital trigger event or tier 2 capital trigger event as prescribed in each of the issuance plan of the Domestic Preference Shares and the issuance plan of the Offshore Preference Shares occurs, the Domestic Preference Shares and Offshore Preference Shares will not be convertible into A Shares and H Shares respectively and the issuance of Domestic Preference Shares and Offshore Preference Shares will not affect the ordinary share capital of the Bank. The initial mandatory conversion price of the Domestic Preference Shares shall be the average trading price of the A Shares of the Bank for the 20 trading days preceding the date of publication of the Board resolution in respect of the issuance plan of the Domestic Preference Shares (i.e. 30 August 2018). The average trading price of the A Shares of the Bank for the 20 preceding trading days = total trading amount of A Shares of the Bank for such 20 preceding trading days/total trading volume of A Shares for such 20 trading days, i.e. RMB5.43 per A Share. On the trading day prior to the date of publication of the Board resolution (i.e. 29 August 2018), the closing price of A Shares is RMB5.49 and the initial mandatory conversion price represents a discount of 1.09% to such closing price. The average closing price of A Shares in the five consecutive trading days immediately prior to the date of publication of the Board resolution is RMB5.48 and the initial mandatory conversion price represents a discount of 0.91% to such price. The closing price of A Shares on the Latest Practicable Date is RMB5.67 and the initial mandatory conversion price represents a discount of 4.23% to such closing price. The initial mandatory conversion price of the Offshore Preference Shares shall be the average trading price of the H Shares of the Bank for the 20 trading days preceding the date of publication of the Board resolution in respect of the issuance plan of the Offshore Preference Shares (i.e. 30 August 2018). The average trading price of the H Shares of the Bank for the 20 preceding trading days = total trading amount of H Shares of the Bank for such 20 preceding trading days/total trading volume of H Shares for such 20 trading days, i.e. HKD5.73 per H Share. On the trading day prior to the date of publication of the Board resolution (i.e. 29 August 2018), the closing price of H Shares is HKD5.87 and the initial mandatory conversion price represents a discount of 2.39% to such price. The average closing price of H Shares in the five consecutive trading days immediately prior to the date of publication of the Board resolution is HKD5.81 and the initial mandatory conversion price 14

18 LETTER FROM THE BOARD represents a discount of 1.38% to such closing price. The closing price of H Shares on the trading date immediately preceding the Latest Practicable Date (the Latest Practicable Date was public holiday in Hong Kong and the Hong Kong market was closed) is HKD5.64 and the initial mandatory conversion price represents a premium of 1.60% to such closing price. Currently there is no requirement on fixing the mandatory conversion price under applicable laws, rules and regulations. In determining the respective initial mandatory conversion price of the Domestic Preference Shares and Offshore Preference Shares, the Bank has taken into consideration various factors including but not limited to: (i) the respective average trading price of the A Shares and H Shares of the Bank for the 20 trading days preceding the date of publication of the Board resolution in respect of the issuance plans of the Domestic Preference Shares and Offshore Preference Shares (i.e. 30 August 2018); (ii) the historical trading prices of A Shares and H Shares; (iii) the market practice of offering domestic and offshore preference shares by other PRC commercial banks; and (iv) the actual circumstances of the Bank. Since the Bank proposes to issue Preference Shares in the domestic and offshore markets with an aggregate amount of not more than the equivalent of RMB100 billion: (1) Assuming an issue size of RMB56 billion of the Domestic Preference Shares and the equivalent of RMB44 billion of the Offshore Preference Shares were issued (being the maximum amount of Offshore Preference Shares that may be issued) and all the Domestic Preference Shares and Offshore Preference Shares were subject to conversion, on the basis of the above initial mandatory conversion price of RMB5.43 and HKD5.73 (equivalent to RMB4.97 based on the CNY Central Parity Rate published by the China Foreign Exchange Trading Centre on the trading date immediately preceding the date of publication of the Board resolution in respect of the issuance plan of the Domestic Preference Shares and Offshore Preference Shares) respectively, the number of A Shares to be issued upon conversion of the Domestic Preference Shares would not exceed 10,313,075,506 A Shares and the number of H Shares to be issued upon conversion of the Offshore Preference Shares would not exceed 8,853,118,712 H shares. Assuming that the number of issued A Shares and issued H Shares remains unchanged on the date the proposed special resolutions regarding the issuance plan of the Domestic Preference Shares and the issuance plan of the Offshore Preference Shares are passed at the EGM, the maximum number of A Shares that may be issued upon conversion represents (i) 3.83% of the total number of A Shares in issue of the Bank, (ii) 3.68% of the enlarged share capital of A Shares of the Bank, and (iii) 2.75% of the enlarged total issued share capital of Ordinary Shares of the Bank; while the maximum number of H Shares that may be issued upon conversion represents (i) 10.20% of the total number of H Shares in issue of the Bank, (ii) 9.26% of the enlarged share capital of H Shares of the Bank, and (iii) 2.36% of the enlarged total issued share capital of Ordinary Shares of the Bank. 15