CHINA INSURANCE INTERNATIONAL HOLDINGS COMPANY LIMITED

Transcription

1 THE CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this Circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in China Insurance International Holdings Company Limited, you should at once hand this Circular and the accompanying form of proxy 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 transferee. The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular. CHINA INSURANCE INTERNATIONAL HOLDINGS COMPANY LIMITED ( Incorporated in Hong Kong with limited liability under the Companies Ordinance ) ( Stock Code: 966 ) CONNECTED TRANSACTION FORMATION OF A JOINT STOCK LIMITED COMPANY Independent financial adviser to the Independent Board Committee and Independent Shareholders Yu Ming Investment Management Limited A letter from the Board is set out on pages 4 to 11 of this Circular. A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on page 12 of this Circular. A letter from Yu Ming Investment Management Limited, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, is set out on pages 13 to 16 of this Circular. A notice convening an extraordinary general meeting of the Company to be held at 24/F., Ming An Plaza Phase II, 8 Sunning Road, Causeway Bay, Hong Kong on Wednesday, 25 August 2004 at 11:00 a.m. is set out on pages 23 to 24 of this Circular. Whether or not you are able to attend the extraordinary general meeting, you are requested to complete the accompanying form of proxy, in accordance with the instructions printed thereon and return it to the registered office of the Company at 12/F., Ming An Plaza Phase II, 8 Sunning Road, Causeway Bay, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the extraordinary general meeting or any adjournment thereof. Completion and return of the form of proxy will not prevent Shareholders from attending and voting at the extraordinary general meeting if they so wish. 30 July 2004

2 CONTENTS Page Definitions... 1 Letter from the Board... 4 Letter from the Independent Board Committee Letter from Yu Ming Appendix General Information Notice of the EGM i

3 DEFINITIONS In this Circular, the following expressions have the following meanings, unless context otherwise requires: associate(s) has the meaning ascribed to it under the Listing Rules Board the board of Directors CIGAM China Insurance Group Assets Management Limited ( ), a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company as at the Latest Practicable Date CIHC (China Insurance (Holdings) Company, Limited*), a PRC state-owned joint stock limited company established in PRC and the ultimate holding company of the Company, which effectively holds approximately 54.55% equity interest in the Company as at the Latest Practicable Date; CIHC is also a substantial shareholder of TPI holding 45.05% equity interest and a substantial shareholder of TPL holding 25.05% equity interest as at the Latest Practicable Date Circular this circular, including the appendix hereto Company China Insurance International Holdings Company Limited ( ), a company incorporated in Hong Kong with limited liability, the shares of which are listed on the main board of Stock Exchange as at the Latest Practicable Date Director(s) the director(s) of the Company EGM the extraordinary general meeting of the Company convened to be held at 24/F., Ming An Plaza Phase II, 8 Sunning Road, Causeway Bay, Hong Kong on Wednesday, 25 August 2004 at 11:00 a.m., notice of which is set out on pages 23 to 24 of this Circular Fortis Fortis International N.V. ( ), a company incorporated in the Netherlands and a holder of 24.90% equity interest in aggregate in TPL as at the Latest Practicable Date Group the Company and its subsidiaries 1

4 DEFINITIONS Hong Kong the Hong Kong Special Administrative Region of PRC ICBC (Asia) (Industrial and Commercial Bank of China (Asia) Limited), which is a subsidiary of (Industrial and Commercial Bank of China) holding 9.46% interest in the Company and a substantial shareholder in TPI holding 24.90% equity interest as at the Latest Practicable Date Independent Board Committee an independent committee of the Board comprising of the two independent non-executive Directors, namely Dr. Wu Jiesi and Mr. Lau Wai Kit Independent Shareholders Shareholder(s) other than CIHC, ICBC (Asia) and their respective associates Latest Practicable Date 27 July 2004, being the latest practicable date prior to the printing of this Circular for ascertaining certain information contained herein Listing Rules the Rules Governing the Listing of Securities on Stock Exchange Parties the parties to the Shareholders Agreement, namely TPL, CIGAM, TPI, Fortis and CIHC PRC the People s Republic of China, and for the purpose of this Circular, excludes Taiwan, Hong Kong and the Macau Special Administrative Region of PRC SFO the Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong Share(s) share(s) of HK$0.05 each in the issued share capital of the Company Shareholder(s) registered holder(s) of Share(s) of the Company Shareholders Agreement a conditional shareholders agreement dated 9 July 2004 entered into between the Parties in relation to the formation of Tai Ping Pension Stock Exchange The Stock Exchange of Hong Kong Limited 2

5 DEFINITIONS subsidiary(ies) if a company controls the composition of the board of directors of another company, or controls more than half of the voting rights or holds more than half of the issued share capital of another company (excluding any part of it which carries no right to participate beyond a specified amount in a distribution of either profits or capital), the second mentioned company is regarded as a subsidiary of the first mentioned company substantial shareholder(s) has the meaning ascribed to it under the Listing Rules Tai Ping Pension (Tai Ping Pension Company Limited*), a joint stock limited company to be established in PRC by the Parties under the Shareholders Agreement TPI (The Tai Ping Insurance Company, Limited*), a Sinoforeign equity joint venture established in PRC and is owned as to 45.05% by CIHC, as to 30.05% by the Company and as to 24.90% by ICBC (Asia) as at the Latest Practicable Date TPL (Tai Ping Life Insurance Company, Limited*), a Sino-foreign equity joint venture established in PRC and is owned as to 50.05% by the Company, as to 25.05% by CIHC and as to 24.90% by Fortis as at the Latest Practicable Date Yu Ming or Independent Financial Adviser Yu Ming Investment Management Limited, a deemed licensed corporation permitted to engage in types 1, 4, 6 and 9 regulated activities under the SFO HK$ Hong Kong dollars, the lawful currency of Hong Kong RMB Renminbi, the lawful currency of PRC US$ United States dollars, the lawful currency of the United States of America % per cent. * for identification purposes only In this Circular, the following exchange rates have been used: HK$1.00 = RMB1.06 HK$7.80 = US$1.00 3

6 LETTER FROM THE BOARD CHINA INSURANCE INTERNATIONAL HOLDINGS COMPANY LIMITED ( Incorporated in Hong Kong with limited liability under the Companies Ordinance ) ( Stock Code: 966 ) Executive Directors: Mr. Yang Chao (Chairman) Mr. Miao Jianmin Mr. Ng Yu Lam, Kenneth Dr. Dong Ming Mr. Shen Koping, Michael Mr. Lau Siu Mun, Sammy Registered Office: 12/F., Ming An Plaza Phase II 8 Sunning Road Causeway Bay Hong Kong Non-executive Director: Mr. Zheng Changyong Independent non-executive Directors: Dr. Wu Jiesi Mr. Lau Wai Kit 30 July 2004 To the Shareholders Dear Sir or Madam, CONNECTED TRANSACTION FORMATION OF A JOINT STOCK LIMITED COMPANY 1. INTRODUCTION On an announcement of the Company dated 9 July 2004 published on certain newspapers on 12 July 2004, the Board announced that on 9 July 2004, the Company (through TPL and CIGAM, its subsidiaries) entered into the Shareholders Agreement with TPI, Fortis and CIHC to form a new joint stock limited company, namely Tai Ping Pension. Upon its establishment, Tai Ping Pension will become a subsidiary of the Company. 4

7 LETTER FROM THE BOARD CIHC is the ultimate holding company of the Company. TPI is an associate of the CIHC. Fortis is a substantial shareholder of TPL. All of them are connected persons of the Company as defined under the Listing Rules. The Shareholders Agreement also constitutes a connected transaction for the Company under the Listing Rules. Accordingly, the Shareholders Agreement requires the approval by the Independent Shareholders at the EGM by poll. In view of the interest of CIHC, ICBC (Asia) and their respective associates in relation to the Shareholders Agreement, the Independent Board Committee has been established by the Board to advise the Independent Shareholders in relation to the Shareholders Agreement. Yu Ming has been appointed as the Independent Financial Adviser to provide its advice to the Independent Board Committee and the Independent Shareholders in connection with the Shareholders Agreement. The purpose of this Circular is to provide you with, among other things, details of the Shareholders Agreement, the letter from the Independent Board Committee to the Independent Shareholders containing its recommendation to the Independent Shareholders, the letter from Yu Ming containing its advice to the Independent Board Committee and the Independent Shareholders and the notice of the EGM. 2. THE SHAREHOLDERS AGREEMENT Date of the Shareholders Agreement 9 July 2004 The Parties (a) TPL, a subsidiary of the Company in which the Company holds 50.05% equity interest as at the Latest Practicable Date; (b) CIGAM, a wholly-owned subsidiary of the Company; (c) TPI, a company in which the Company holds 30.05% equity interest as at the Latest Practicable Date; (d) Fortis, a substantial shareholder of TPL; and (e) CIHC, the ultimate holding company of the Company. 5

8 LETTER FROM THE BOARD Business of Tai Ping Pension Upon establishment, Tai Ping Pension will engage in the supplementary corporate pension business and other related pension businesses. The Company will have an effective control of 74% equity interests in Tai Ping Pension (through its interests in TPL and CIGAM as shown in the chart below) and Tai Ping Pension will become a subsidiary of the Company. The relationship between the Group and the connected persons in relation to the formation of Tai Ping Pension is shown in the chart below: CIHC 100% 25.05% 45.05% China Insurance H.K. (Holdings) Co, Ltd % The Company Fortis 50.05% 100% 30.05% 24.90% TPL CIGAM TPI 10% 60% 14% 12% 4% Tai Ping Pension Conditions The formation of Tai Ping Pension under the Shareholders Agreement is subject to, among other things, the approval of the relevant PRC authority and the Independent Shareholders approval at the EGM. 6

9 LETTER FROM THE BOARD Registered capital RMB200,000,000 (equivalent to approximately HK$188,679,000) of which: (a) 60% (being RMB120,000,000 or approximately HK$113,208,000) shall be contributed in cash by TPL; (b) 14% (being RMB28,000,000 or approximately HK$26,415,000) shall be contributed in cash by CIGAM; (c) 12% (being RMB24,000,000 or approximately HK$22,642,000) shall be contributed in cash by TPI; (d) 10% (being RMB20,000,000 or approximately HK$18,868,000) shall be contributed in cash by Fortis; and (e) 4% (being RMB8,000,000 or approximately HK$7,547,000) shall be contributed in cash by CIHC. Upon the establishment of Tai Ping Pension, the percentage shareholding of each of the Parties in Tai Ping Pension will be in the same proportion as their respective capital contribution of registered capital in Tai Ping Pension as shown above. The total registered capital of Tai Ping Pension was determined on an arm s length basis between the Parties. The Group s contribution to the registered capital of Tai Ping Pension is funded by internal resources of the Group. The registered capital has been paid by the respective Parties in escrow in order to expedite the approval process in PRC. Other than the amount of the registered capital payable by the Parties under the Shareholders Agreement, the Parties do not have any further commitment to invest in Tai Ping Pension under the Shareholders Agreement. Should there be any future commitment to invest in Tai Ping Pension, the Company will comply with all such relevant requirements under the Listing Rules accordingly. Board of directors The board of directors of Tai Ping Pension shall comprise of seven directors. The Group will be entitled to nominate four directors of Tai Ping Pension, including one independent director. 7

10 LETTER FROM THE BOARD Board of supervisors The board of supervisors of Tai Ping Pension shall comprise of three supervisors who shall be nominated by the shareholders and employees of the company. Profits Distributable profits, after deducting any statutory and optional accumulative funds, public welfare funds and necessary reserves for indemnities, may be distributed to the Parties in proportion to their respective capital contributions in Tai Ping Pension. Dissolution / Winding-up Tai Ping Pension may be dissolved or wound up, subject to the approval of the Insurance Supervisory Committee of PRC upon the occurrence of any one or more of the following situation(s): (a) the shareholders of Tai Ping Pension passing a resolution for its dissolution / winding-up in general meeting; (b) as a result of any mergers or spin-offs of Tai Ping Pension; (c) upon an order to dissolve / wind-up by any government authorities as a result Tai Ping Pension s breach(es) in any law and/or regulations; (d) Tai Ping Pension being unable to carry on its business due to the occurrence(s) of any force majeure events; and/or (e) Upon a court order to wind up due to insolvency of Tai Ping Pension. Upon dissolution or winding-up of Tai Ping Pension, the net assets of Tai Ping Pension, after the payment of all its dissolution or winding-up expenses, salaries and employment insurance premiums for its employees, and debts, will be distributed to the Parties in proportion to their respective capital contributions in Tai Ping Pension. 8

11 LETTER FROM THE BOARD 3. REASONS FOR AND EFFECTS OF THE ESTABLISHMENT OF TAI PING PENSION The Directors consider the Shareholders Agreement to be an important milestone for the Group since Tai Ping Pension will be able to play a leading role in pension management business in PRC. Tai Ping Pension will focus exclusively on supplementary corporate pension business and other related pension business. By having a clear focus on pension business, Tai Ping Pension can broaden and enrich its range of products and services as well as actuarial support offered to both its corporate and individuals pension clients. This will also help the marketing of pension services and raise the level of expertise in investment management and account management of pension funds. The Directors believe that the Shareholders Agreement was entered into upon normal commercial terms. The Directors consider that the terms of the Shareholders Agreement are fair and reasonable and the formation of Tai Ping Pension is in the interest of the Shareholders as a whole. 4. INFORMATION ON THE GROUP The principal activity of the Company is investment holding. The principal activities of the Group (including without limitation, TPL and CIGAM) are the reinsurance underwriting, assets management, reinsurance broking and life insurance businesses. TPI is principally engaged in general insurance business in PRC. Fortis is principally engaged in international financial services businesses with core businesses in insurance, banking and asset management. CIHC is principally engaged in insurance and insurance related financial services businesses. 5. THE EGM A notice convening the EGM, which is to be held at 24/F., Ming An Plaza Phase II, 8 Sunning Road, Causeway Bay on Wednesday, 25 August 2004 at 11:00 a.m. is set out on pages 23 to 24 of this Circular. The EGM will be held for the purpose of proposing an ordinary resolution to the Shareholders to consider and, if thought fit, approving the Shareholders Agreement and the transactions contemplated thereunder. 9

12 LETTER FROM THE BOARD At the EGM, any connected persons of the Company or of any Shareholders with a material interest in the Shareholders Agreement and its associates will abstain from voting in respect of the ordinary resolution to be proposed thereat and at any adjournment thereof. Accordingly, CIHC (which is the ultimate holding company of the Company, controlling or is entitled to exercise 54.55% voting rights in the Company as at the Latest Practicable Date), ICBC (Asia) (which is a shareholder of the Company controlling or is entitled to exercise 9.46% voting rights in the Company as at the Latest Practicable Date) and their respective associates will abstain from voting at the EGM or any adjournment thereof. None of TPL, CIGAM, TPI and Fortis and their respective associates (other than CIHC, ICBC (Asia) and their respective associates) holds any interest in the Company. A form of proxy for use at the EGM is enclosed with this Circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy, in accordance with the instructions printed thereon and return it to the registered office of the Company at 12/F., Ming An Plaza Phase II, 8 Sunning Road, Causeway Bay, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of 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 if you so wish. 6. PROCEDURES FOR DEMANDING A POLL Pursuant to Article 71 of the articles of association of the Company, at any general meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is taken as may from time to time required under the Listing Rules or any other applicable laws, rules or regulations or unless (before or on the declaration of the results of the show of hands or on the withdrawal of any other demand of a poll) a poll is properly demanded by: (a) the chairman of the meeting; or (b) at least three Shareholders present in person or by proxy and entitled to vote; or (c) any Shareholder or Shareholders present in person or by proxy and representing in the aggregate of not less than one-tenth of the total voting rights of all Shareholders having the right to attend and vote at the meeting; or (d) any Shareholder or Shareholders present in person or by proxy and holding Shares conferring a right to attend and vote at the meeting on which there have been paid up sums in the aggregate equal to not less than one-tenth of the total sum paid up on all Shares conferring that right. 10

13 LETTER FROM THE BOARD 7. RECOMMENDATION Yu Ming has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders with regard to the Shareholders Agreement. Yu Ming is of the view that the terms of the Shareholders Agreement are in the interest of the Company and are fair and reasonable insofar as the Independent Shareholders are concerned. Accordingly, Yu Ming advises the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Shareholders Agreement and the transactions contemplated thereunder. Your attention is drawn to the text of the letter of advice from Yu Ming set out on pages 13 to 16 of this Circular. The Independent Board Committee, having taken into account the advice of Yu Ming, considers that the terms of the Shareholders Agreement and the transactions contemplated thereunder to be fair and reasonable so far as the Independent Shareholders are concerned and are in the interest of the Company and the Independent Shareholders as a whole. Accordingly, the Independent Board Committed recommends the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Shareholders Agreement and the transactions contemplated thereunder. Your attention is drawn to the text of the letter from the Independent Board Committee set out on page 12 of this Circular. 8. ADDITIONAL INFORMATION Your attention is also drawn to the additional information set out in the appendix to this Circular. Yours faithfully By order of the Board China Insurance International Holdings Company Limited YANG Chao The Chairman 11

14 LETTER FROM THE INDEPENDENT BOARD COMMITTEE CHINA INSURANCE INTERNATIONAL HOLDINGS COMPANY LIMITED ( Incorporated in Hong Kong with limited liability under the Companies Ordinance ) ( Stock Code: 966 ) Members of the Independent Board Committee: Dr. Wu Jiesi Mr. Lau Wai Kit Registered Office: 12/F., Ming An Plaza Phase II 8 Sunning Road Causeway Bay Hong Kong 30 July 2004 To the Independent Shareholders Dear Sir or Madam, CONNECTED TRANSACTION FORMATION OF A JOINT STOCK LIMITED COMPANY We have been appointed to advise you in respect of the Shareholders Agreement and the transactions contemplated thereunder. We refer to the Circular of which this letter forms part. Terms defined in the Circular shall have the same meanings when used in this letter, unless the context otherwise requires. We wish to draw your attention to the letter from the Board as set out on pages 4 to 11 of the Circular which sets out, among other things, information relating to the Shareholders Agreement and the letter from Yu Ming as set out on pages 13 to 16 of the Circular which contains its advice to us and to you in relation to the Shareholders Agreement. Having taken into account the terms of the Shareholders Agreement and the advice of Yu Ming, we consider that the terms of the Shareholders Agreement and the transactions contemplated thereunder to be fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Independent Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Shareholders Agreement and the transactions contemplated thereunder. Yours faithfully The Independent Board Committee Wu Jiesi Lau Wai Kit 12

15 LETTER FROM YU MING The following is the text of the letter from Yu Ming giving its advice to the Independent Board Committee and the Independent Shareholders, in relation to the terms and conditions of the Shareholders Agreement prepared for the purpose of inclusion in this Circular. Yu Ming Investment Management Limited 30 July 2004 To: the Independent Board Committee and the Independent Shareholders of China Insurance International Holdings Company Limited 12th Floor Ming An Plaza Phase II 8 Sunning Road Causeway Bay Hong Kong Dear Sir or Madam, CONNECTED TRANSACTION FORMATION OF A JOINT STOCK LIMITED COMPANY INTRODUCTION We, Yu Ming, have been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders on the Shareholders Agreement, the details of which are contained in the section headed Letter from the Board in the Circular, of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context otherwise requires. In formulating our opinion, we have relied on the statements, information, opinions and representations contained in the Circular and the information and representations provided to us by the Directors. We have assumed that all information, representations and opinions contained or referred to in the Circular and all information, representations and opinions which have been provided by the Directors, for which they are solely responsible, are true and accurate at the time they were made and continued to be so at the date hereof. 13

16 LETTER FROM YU MING We consider that we have been provided with sufficient information on which to form a reasonable basis for our opinion. We have no reason to suspect that any relevant information has been withheld, nor are we aware of any fact or circumstance which would render the information provided and the representations and opinions made to us untrue, inaccurate or misleading. Having made all reasonable enquiries, the Directors have further confirmed that, to the best of their knowledge, they believe there are no other facts or representations the omission of which would make any statement in the Circular, including this letter, misleading. We have not, however, carried out any independent verification of the information provided by the Directors, nor have we conducted an independent investigation into the business and affairs of any of the Company, CIHC, TPL, CIGAM, TPI or Fortis or any of their respective associates. THE SHAREHOLDERS AGREEMENT On 9 July 2004, the Company (through TPL and CIGAM, its subsidiaries) entered into the Shareholders Agreement with TPI, Fortis and CIHC to form a new joint stock limited company, namely Tai Ping Pension. Upon establishment, Tai Ping Pension will engage in the supplementary corporate pension business and other related pension businesses. The Company will have an effective control of 74% equity interests in Tai Ping Pension and Tai Ping Pension will become a subsidiary of the Company The total registered capital of Tai Ping Pension will be RMB200,000,000 (equivalent to approximately HK$188,679,000) of which: (a) 60% (being RMB120,000,000 or approximately HK$113,208,000) shall be contributed in cash by TPL; (b) 14% (being RMB28,000,000 or approximately HK$26,415,000) shall be contributed in cash by CIGAM; (c) 12% (being RMB24,000,000 or approximately HK$22,642,000) shall be contributed in cash by TPI; (d) 10% (being RMB20,000,000 or approximately HK$18,868,000) shall be contributed in cash by Fortis; and (e) 4% (being RMB8,000,000 or approximately HK$7,547,000) shall be contributed in cash by CIHC. 14

17 LETTER FROM YU MING Upon the establishment of Tai Ping Pension, the percentage shareholding of each of the Parties in Tai Ping Pension will be in the same proportion of their respective capital contribution of registered capital in Tai Ping Pension as shown above. The total registered capital of Tai Ping Pension was determined on an arm s length basis between the Parties. The Group s contribution to the registered capital of Tai Ping Pension is funded by internal resources of the Group. Other than the amount of the registered capital payable by the Parties under the Shareholders Agreement, the Parties do not have any further commitment to invest in Tai Ping Pension. CIHC is the ultimate holding company of the Company. TPI is an associate of the CIHC. Fortis is a substantial shareholder of TPL. All of them are connected persons of the Company as defined under the Listing Rules. The Shareholders Agreement also constitutes a connected transaction for the Company under the Listing Rules. Accordingly, the Shareholders Agreement requires the approval by the Independent Shareholders at the EGM by poll. CIHC and its associates will abstain from voting at the EGM. PRINCIPAL FACTORS CONSIDERED Development of business for the Group The principal activities of the Group are the reinsurance underwriting, assets management, reinsurance broking and life insurance businesses. Upon establishment, Tai Ping Pension will engage in the supplementary corporate pension business and other related pension business. The formation of Tai Ping Pension is in line with the existing businesses of the Group and will enable the Group to play a leading role in pension management business in the PRC. By having a clear focus on pension business, the Group can broaden and enrich its range of products and services as well as actuarial support offered to both its corporate and individuals pension clients. This will also help the marketing of pension services and raise the level of expertise in investment management and account management of pension funds. Therefore, we are of the view that the formation of Tai Ping Pension is in the interest of the business of the Group and the Shareholders. Control of management and voting rights The board of directors of Tai Ping Pension shall comprise of seven directors. The Group will be entitled to nominate four directors of Tai Ping Pension, including one independent director. As mentioned above, Tai Ping Pension will become a subsidiary of the Company upon its establishment. Therefore, the Company will have effective control over the management and voting rights of Tai Ping Pension under the Shareholders Agreement which is in the interest of Company and the Shareholders. 15

18 LETTER FROM YU MING Basis of contribution and financial impact The total registered capital of Tai Ping Pension was determined on an arm s length basis between the Parties and the respective registered capital contribution payable by each of the Parties are in proportion to their respective equity interest in Tai Ping Pension. In addition, as mentioned above, Tai Ping Pension will become a subsidiary of the Company upon its establishment. The formation of Tai Ping Pension will therefore have no impact on the consolidated balance sheet and profit and loss account of the Group. Accordingly, we are of the view that the basis of contribution by the Group under the Shareholders Agreement is fair and reasonable. Working capital As per the latest audited consolidated account, the Group had over HK$1.6 billion cash as at 31 December Moreover, other than the amount of the registered capital payable by the Group under the Shareholders Agreement, the Parties do not have any further commitment to invest in Tai Ping Pension. Therefore, the formation of Tai Ping Pension and the Shareholders Agreement will not have any impact on the working capital of the Group as a whole. RECOMMENDATION The Shareholders Agreement was entered into upon normal commercial terms and the total registered capital of Tai Ping Pension was determined on an arm s length basis between the Parties. Upon establishment of Tai Ping Pension, the Group can broaden and enrich its range of products and services as well as actuarial support offered to both its corporate and individuals pension clients. Moreover, there will be no impact on any of the net asset value, profit and loss, working capital and gearing ratio of the Group as a result of the Shareholders Agreement. Having taken into account the above, we are of the view that the terms of the Shareholders Agreement are in the interest of Company and are fair and reasonable insofar as the Independent Shareholders are concerned. Accordingly, we advise the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Shareholders Agreement and the transactions contemplated thereunder. Yours faithfully For and on behalf of YU MING INVESTMENT MANAGEMENT LIMITED Warren Lee Director 16

19 APPENDIX GENERAL INFORMATION 1. RESPONSIBILITY STATEMENT This Circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading. 2. DISCLOSURE OF INTERESTS (a) Directors interests and short positions in the securities of the Company and its associated corporations As at the Latest Practicable Date, the interests and short positions of each Director and the chief executive of the Company in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which (i) were required to be notified to the Company and Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies as contained in the Listing Rules, to be notified to the Company and Stock Exchange, were as follows: Ordinary Shares in the Company: Personal interests Approximate (held as Underlying percentage Name of beneficial Shares pursuant Total of issued Director owner) to share options interest share capital (%) Yang Chao 3,970,000 3,970, (Note) Miao Jianmin 2,640,000 2,640, (Note) Ng Yu Lam, Kenneth 366,000 2,200,000 2,566, (Note) Dong Ming 2,300,000 2,300, (Note) 17

20 APPENDIX GENERAL INFORMATION Personal interests Approximate (held as Underlying percentage Name of beneficial Shares pursuant Total of issued Director owner) to share options interest share capital (%) Shen Koping, Michael 2,000 2,006,000 2,008, (Note) Lau Siu Mun, Sammy 600,000 1,550,000 2,150, (Note) Zheng Changyong 1,500,000 1,500, (Note) Note: These represent interests of options granted to the Directors under the share option schemes adopted by the Company on 24 May 2000 ( Old scheme ) and on 7 January 2003 ( New scheme ) respectively to acquire for Shares. Save as disclosed in this Circular, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company or their associates had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which (i) were required to be notified to the Company and Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies as contained in the Listing Rules, to be notified to the Company and Stock Exchange. (b) Persons or corporations who have an interest or short position which is discloseable under Divisions 2 and 3 of Part XV of the SFO and substantial Shareholders So far as is known to each Director or the chief executive of the Company, as at the Latest Practicable Date, the following persons (not being Directors or chief executive of the Company) or corporations had an interests or short positions 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/which was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying 18

21 APPENDIX GENERAL INFORMATION rights to vote in all circumstances at general meetings of any other member of the Group and the amount of each of such person s / corporate s interest in such securities, together with particulars of any options in respect of such capital, were as follows: (i) The Company Approximate percentage Number of issued Name of company Capacity of Shares share capital (%) CIHC Interest of 726,389, controlled (Note 1) corporation China Insurance 643,425,705 Shares 726,389, H.K. (Holdings) as beneficial (Note 2) Company owner and Limited 82,964,000 Shares ( CIHK ) as interest of controlled corporation Interest of controlled 125,964, (Industrial and Corporation (Note 3) Commercial Bank of China) ( ICBC ) ICBC (Asia) Beneficial owner 125,964, J.P. Morgan Chase 79,622,000 Shares 79,622, & Co. as investment manager with 48,852,000 Shares as approved lending agent Lloyd George Investment manager 75,842, Investment Management (Bermuda) Ltd. Notes: 1. CIHC s interest in the Company is held by CIHK, Golden Win Development Limited and Toplap Investments Limited, all of which are wholly-owned subsidiaries of CIHC ,794,000 Shares are held by Golden Win Development Limited and 170,000 Shares are held by Toplap Investments Limited. 3. ICBC s interest in the Company is held by ICBC (Asia), a subsidiary of ICBC. 19

22 APPENDIX GENERAL INFORMATION (ii) The subsidiaries of the Company Approximate percentage of issued Name of subsidiary Name of shareholder share capital (%) TPL CIHC Fortis Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company was aware of any other person (other than a Director or chief executive of the Company) or corporation who had an interest or short position in the Shares or underlying Shares which would fall to be disclosed to the Company under provisions of Divisions 2 and 3 of Part XV of the SFO, or who/which was, directly or indirectly, 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 any other member of the Group, or any options in respect of such capital. 3. DIRECTORS SERVICE CONTRACTS As at the Latest Practicable Date, none of the Directors had entered, or proposed to enter, into a service contract with any member of the Group which does not expire or is not determinable by relevant member of the Group within one year without payment of compensation, other than statutory compensation. 4. QUALIFICATION AND CONSENT OF EXPERT The following is the qualifications of the expert who has given an opinion of advice which is contained in this Circular: Name Qualification Yu Ming A deemed licensed corporation permitted to engage in types 1, 4, 6 and 9 regulated activities under the SFO Yu Ming has given and has not withdrawn its written consent to the issue of this Circular with the inclusion herein of its letter and references to its name in the form and context in which they respectively appear. 20

23 APPENDIX GENERAL INFORMATION As at the Latest Practicable Date, Yu Ming had no shareholding interest 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 of any member of the Group. As at the Latest Practicable Date, Yu Ming was not interested, directly or indirectly, in any assets which had since 31 December 2003 (being the date to which the latest published audited accounts of the Company were made up) been acquired or disposed of by or leased to any member of the Group or which are proposed to be acquired or disposed of by or leased to any member of the Group. 5. LITIGATION As at the Latest Practicable Date, a claim has been made by the liquidator of an Australian reinsurance company against China International Reinsurance Company Limited, a whollyowned subsidiary of the Company, for repayment of an amount received to commute a policy of US$3 million (equivalent to approximately HK$23.4 million) plus interest. The liquidator alleged that the payment was an unfair preference within the meaning of Australian insolvency law. Based on a recently up-dated legal opinion given by an Australian-based law firm (on information then available to those lawyers), the Directors have considered that China International Reinsurance Company Limited s prospects of successfully defending the claim to be evenly balanced and no provision has been made. 6. COMPETING INTEREST As at the Latest Practicable Date, none of the Directors nor their respective associates had any interest in any business that competed or was likely to compete, either directly or indirectly, with the business of the Group. 7. MATERIAL INTEREST As at the Latest Practicable Date, no Directors was materially interested in any contract or arrangement entered into by any member of the Group subsisting at the Latest Practicable Date which was significant in relation to the business of the Group taken as a whole. As at the Latest Practicable Date, no Directors had any direct or indirect interest in any assets which have been acquired or disposed of by or leased to any member of the Group since 31 December 2003 (being the date to which the latest audited financial statements of the Group were made up), or are proposed to be acquired or disposed of by or leased to any member of the Group. 21

24 APPENDIX GENERAL INFORMATION 8. MATERIAL ADVERSE CHANGE So far as the Directors are aware, as at the Latest Practicable Date, the following factors may have a material adverse impact on the financial or trading position of the Group since 31 December 2003, being the date to which the latest audited financial statements of the Group were made up. First, due to further expansion of the scope of operations in the PRC by TPL and TPI, the net operating losses of both of these companies have increased and may have a material adverse impact on the financial or trading position of the Group. Secondly, the global equity markets experienced certain volatility since 31 December 2003 which may affect the valuation of the Group s investment in equities and debts and in turn may have a material adverse impact on the financial or trading position of the Group. 9. GENERAL (a) The registered office of the Company is situated at 12/F., Ming An Plaza Phase II, 8 Sunning Road, Causeway Bay, Hong Kong. (b) The Company s Hong Kong share registrar and transfer office is Hong Kong Registrars Limited, which is situated at Rooms , 19th Floor, Hopewell Centre, 183 Queen s Road East, Wanchai, Hong Kong. 10. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection during normal business hours at the office of Messrs. Woo, Kwan, Lee & Lo at 27th Floor, Jardine House, 1 Connaught Place, Central, Hong Kong up to and including 13 August 2004: (a) the Shareholders Agreement; (b) the letter from the Independent Board Committee as set out on page 12 of this Circular; (c) the letter from Yu Ming as set out on pages 13 to 16 of this Circular; and (d) the written consent of Yu Ming referred to in this appendix. 22

25 NOTICE OF THE EGM CHINA INSURANCE INTERNATIONAL HOLDINGS COMPANY LIMITED ( Incorporated in Hong Kong with limited liability under the Companies Ordinance ) ( Stock Code: 966 ) NOTICE OF EXTRAORDINARY GENERAL MEETING NOTICE IS HEREBY GIVEN that an extraordinary general meeting of China Insurance International Holdings Company Limited ( ) (the Company ) will be held at 24/F., Ming An Plaza Phase II, 8 Sunning Road, Causeway Bay, Hong Kong on Wednesday, 25 August 2004 at 11:00 a.m. for the purpose of considering and, if thought fit, passing the following resolution, with or without modification, as an ordinary resolution of the Company: ORDINARY RESOLUTION THAT a conditional shareholders agreement (the Shareholders Agreement ) dated 9 July 2004 entered into between (i) (Tai Ping Life Insurance Company, Limited) ( TPL ), a subsidiary of the Company in which the Company currently holds 50.05% equity interest; (ii) (China Insurance Group Assets Management Limited), a wholly-owned subsidiary of the Company; (iii) (The Tai Ping Insurance Company, Limited), a company in which the Company currently holds 30.05% equity interest; (iv) Fortis International N.V. ( ), a substantial shareholder of TPL; and (v) ( ) (China Insurance (Holdings) Company, Limited), the ultimate holding company of the Company, in relation to the formation of (Tai Ping Pension Company Limited) as a joint stock limited company (a copy of which marked A has been produced to the meeting and signed by the Chairman of the meeting for the purpose of identification) and all transactions contemplated thereby be and are hereby approved and that the directors of the Company be and are hereby authorised for and on behalf of the Company to sign, seal, execute, perfect, perform and deliver all such documents and deeds, and do all such acts, matters and things as they may in their discretion consider necessary or desirable to give effect to the Shareholders Agreement and the implementation of all transactions contemplated thereunder. Yours faithfully By Order of the Board TAM Chiu Tai Richard Company Secretary Hong Kong, 30 July

26 NOTICE OF THE EGM Registered office: 12/F., Ming An Plaza Phase II 8 Sunning Road Causeway Bay Hong Kong Notes: 1. A member who is entitled to attend and vote at this meeting shall be entitled to appoint up to two proxies if he holds two or more shares in the Company, to attend and vote instead of him, and on a poll, votes may be given either personally (or, in the case a member being a corporation, by its duly authorised representative) or by proxy in accordance with the articles of association of the Company. A proxy need not be a member of the Company but must attend this meeting in person to represent you. 2. In the case of joint holders of a share the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the names stand in the register in respect of the joint holding. 3. To be valid, a form of proxy together with any power of attorney or other authority (if any) under which it is executed, or a notarially certified copy thereof, must be delivered to 12/F., Ming An Plaza Phase II, 8 Sunning Road, Causeway Bay, Hong Kong not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. 4. The Ordinary Resolution as set out above will be determined by way of poll. 5. ( ) (China Insurance (Holdings) Company, Limited) (the ultimate holding company of the Company and a substantial shareholder of TPI and of TPL), ( ) (Industrial and Commercial Bank of China (Asia) Limited) (a shareholder of the Company and a substantial shareholder of TPI) and their respective associates (as defined under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited) will abstain from voting on the Ordinary Resolution as set out above at the meeting or any adjournment thereof. 24