The Industrial Bank Co., Ltd (the Company) and all members of the Board of Directors hereby warrant that the information contained in this announcement is true, accurate and complete, and assume joint and several liabilities for any false representation, misleading statement or material omission.
The 19th Meeting of the sixth Board of Directors of Industrial Bank Co., Ltd. was held in Fuzhou on November 21, 2009 after prior notice thereof was given on November 15, 2009. The number of directors required to attend the meeting was 13, whereas the number of directors that actually attended the meeting was 13 (wherein, Director John Law and Director Chen Dekang entrusted Chairman Gao Jianping to exercise voting rights on deliberated matters on their behalf, and Independent Director Ba Shusong entrusted Independent Director Wang Guogang to exercise voting rights on deliberated matters on his behalf). Meeting attendance complied with the Company Law of the People’s Republic of China and the Articles of Association of the Company. Five supervisors from the Board of Supervisors of the Company attended the meeting as non-voting delegates.
The meeting was presided by Chairman Gao Jianping. The meeting deliberated on and approved the following proposals and formed relevant resolutions:
I. Proposal on Director Change. Since Director Patrick Chan has resigned as a director of the Company due to job change, the Board of Directors agrees to nominate Mr. Andrew Fung as candidate for the post of director of the sixth Board of Directors. Mr. Andrew Fung’s resume is as follows:
Mr. Andrew Fung, 52-year old, Bachelor Degree, General Manager and Head of Investment and Insurance of Hang Seng Bank Limited. He has previously acted as Treasurer and Director of Asian Capital Market of Hong Kong Branch of Commonwealth Bank of Australia, President and General Manager of Global Financial Market of DBS Bank, Vice General Manager and Head of Investment and Insurance of the Hang Seng Bank, General Manager and Head of Investment and Insurance of the Hang Seng Bank
Voting Results: 13 votes in favor; 0 votes in opposition; and 0 abstention votes
II. Resolution on Compliance with the Conditions for Rights Issue. With serious self-checking and discussion, the Board of Directors considers that the Company complies with the conditions for offering new shares to its original shareholders, and is thereby qualified for rights issue.
Voting Results: 13 votes in favor; 0 votes in opposition; and 0 abstention votes
III. Proposal on Rights Issue Plan. The Board of Directors agrees on the following rights issue plan:
1. Type of share and book value per share
The type of share for rights issue is RMB common share (A share) listed in China, and the book value per share is RMB 1.00.
2. Proportion and quantity of rights issue
Shares in this rights issue will be offered to all shareholders at a proportion of no more than 2.5 shares for every 10 shares. Depending on the market before offering, the final proportion of share placement will be determined by the Board of Directors or other party authorized by the Board of Directors together with the sponsor/lead underwriter under the authorization of the general shareholders’ meeting. The A share rights issue will be underwritten on an agency basis. The quantity will be determined on the base of the total capital of A shares on the date of record. The net amount of the funds raised will not exceed RMB 18 billion.
3. Share price and pricing basis
(1) Share price: Depending on the trading on the A-share market before publishing the issue announcement, price of the shares offered in the right issue will be determined by the Board of Directors or other party under the authorization of the general shareholders’ meeting together with the sponsor/lead underwriter by the method of market price discount on the condition that the price of share offered shall not be lower than the net assets per share prior to the issue as determined by auditors’ in China according to Chinese Accounting Standards.
(2) Pricing basis: a) in reference to the price, price/earnings ratio and price/book ratio of the Company’s shares traded on the secondary market; b) demand of core capital of the Company in the next three years; c) not lower than the latest net assets per share prior to the issue that is determined by auditors’ in China according to Chinese Accounting Standards; d) determined by the Company and the sponsor/lead underwriter through negotiation.
4. Target of rights issue
All registered shareholders of the Company in the book of the Shanghai Branch of China Securities Depository and Clearing Corporation Limited after the closing of trading on the date of record.
5. Use of raised funds
The net amount of raised funds in the rights issue after deduction of relative offering expenses will be used to supplement the capital of the Company so as to increase the capital adequacy ratio and support the sustainable, rapid and sound development of business.
6. Term of validity of the resolution
The resolution will be valid for 18 months as of the approval of the rights issue proposal by the general shareholders’ meeting of the Company.
The rights issue is subject to the review and approval of the China Banking Regulatory Commission and China Securities Regulatory Commission. The final plan is subject to approval thereby.
Voting Results: 13 votes in favor; 0 votes in opposition; and 0 abstention votes
IV. Proposal on disposal of undistributed profits accumulated prior to the rights issue. The Board of Directors agrees that the undistributed profits accumulated prior to the rights issue will be shared among all shareholders in proportion to their shareholding after the right s issue has been completed.
Voting Results: 13 votes in favor; 0 votes in opposition; and 0 abstention votes
V. Proposal on Report on Use of Funds Raised in the Previous Issue. The Board of Directors holds that the raised funds in the previous A share offering after deduction of relative offering expenses has been used to supplement the capital of the Company, which accords with the committed use of said raised funds. The Company has faithfully performed its obligation to disclose the use and progress of the funds raised in the previous offering. Please refer to the announcement on that day or visit the website of the Shanghai Stock Exchange for the full text.
Voting Results: 13 votes in favor; 0 votes in opposition; and 0 abstention votes
VI. Proposal on the feasibility report for the use of funds raised in this rights issue. The Board of Directors agrees that all the funds raised in the offering will be used to supplement the core capital of the Company so as to further increase the capital adequacy ratio and core capital adequacy ratio, establish a solid foundation for the sustainable and sound development of the Company in the future, and provide sufficient support for the stable expansion of business. Please visit the website of Shanghai Stock Exchange for the full text of the report.
Voting Results: 13 votes in favor; 0 votes in opposition; and 0 abstention votes
VII. Proposal on preparing Administrative Measures for Use of Raised Funds. Please visit the website of the Shanghai Stock Exchange for the full text.
Voting Results: 13 votes in favor; 0 votes in opposition; and 0 abstention votes
VIII. Proposal on requesting the general shareholders’ meeting to authorize the Board of Directors to handle specific matters regarding the rights issue. In order to ensure the sound progress of matters related to the rights issue, the Board of Directors agrees to request the general shareholders’ meeting to authorize itself to reauthorize Chairman Gao Jianping, President Li Renjie and Board Secretary Tang Bin to handle matters related to the rights issue within the scope of their authority.
Voting Results: 13 votes in favor; 0 votes in opposition; and 0 abstention votes
IX. Proposal on self evaluation report on internal control. Please visit the website of Shanghai Stock Exchange for the full text.
Voting Results: 13 votes in favor; 0 votes in opposition; and 0 abstention votes
X. 2009-2012 Capital Management Plan. Please visit the website of Shanghai Stock Exchange for the full text.
Voting Results: 13 votes in favor; 0 votes in opposition; and 0 abstention votes
XI. Proposal on writing off large-sum bad loans. The Board of Directors agrees to write off the principle and interest of the bad loan capital of RMB 153.78 million as applied by Guangzhou Branch, and impose credit responsibility punishment on relative persons responsible for such loan projects.
Voting Results: 13 votes in favor; 0 votes in opposition; and 0 abstention votes
XII. Proposal on convening the 2009 First Extraordinary General Shareholders’ Meeting.
Voting Results: 13 votes in favor; 0 votes in opposition; and 0 abstention votes
Proposals I, II, III, IX, V, VI, VIII and X are subject to approval by the general shareholders' meeting.
The Board of Directors also listened to the report on the recent operating situation of the Company and the operating plan for the coming period.
Board of Directors
Industrial Bank Co., Ltd.
November 23, 2009