Code of A shares: 601166 Abbreviation of A Shares: Industrial Bank Code: TEMP 2016-40
Code of Preferred Stock: 360005, 360012 Abbreviation of Preferred Stock: Industrial Preferred 1, Industrial Preferred 2
Industrial Bank Co., Ltd.
Announcement on Related Transaction with
The People’s Insurance Company (Group) of China Limited
The Company and all members of Board of Directors guarantee the truthfulness, accuracy and integrity of the announcement and will be jointly and severally be responsible for false account, misleading statement or material omissions of the announcement.
Prompt of Important Content:
(I) Transaction Content:
On October 27, 2016, the 22th Meeting of the 8th Board of Directors of the Company reviewed and passed Proposal on Offer of Related Transaction Quota to The People’s Insurance Company (Group) of China Limited, agreed to give The People’s Insurance Company (Group) of China Limited and subordinate companies thereof (hereinafter called as "PICC Series Related Legal Person") RMB 54 billion internal basic credit quota and agreed to offer PICC Series Related Legal Persons non-credit related transaction quota of RMB 10.134 billion; and term of validity is 2 years.
(II) Voting Challenge: this transaction is a related transaction, the related director of the Company --- Mr. Fu Anping --- avoided the voting.
(III) Influence of Related Transaction: the said related transactions are reasonable transactions during daily business operation of the Company and have no significant influence on operation activities and financial conditions of the Company as well as the independence of the Company.
(IV) This related transaction still needs to be submitted to general meeting of the Company for review; The People’s Insurance Company (Group) of China Limited, PICC Property and Casualty Company Limited and PICC Life Insurance Company Limited and other related shareholders will challenge the voting for review on this related transaction conducted by general meeting of the Company.
I. Overview of Related Transaction
The 22th Meeting of the 8th Board of Directors of the Company reviewed and passed Proposal on Offer of Related Transaction Quota to The People’s Insurance Company (Group) of China Limited, agreed to give PICC Series Related Legal Persons internal basic credit quota of RMB 54 billion for interbank borrowing, daylight overdraft of legal person account, bond pledge-style repo, bond outright repo, local/foreign currency trust bond or debt investment with applicant as issuing body, guaranty and credit enhancement, capital transaction (for RMB interest rate swap and jointly processing forward foreign exchange settlement and sales), loan for working capital, financial guarantee and others; it also agreed to give PICC Series Related Legal Persons non-credit related transaction quota of RMB 10.134 billion, among which: break-even financing sales quota shall not exceed RMB 5 billion, capital business transaction quota shall not exceed RMB 3 billion, accumulative annual expenditure and indemnification of insurance service shall not exceed RMB 1.132 billion, and accumulative annual income and expenditure of various intermediate businesses (such as commissioned insurance product sales, investment in insurance asset management products, asset custody business, non-break-even financing sales, property leasing and insurance consultancy) shall not exceed RMB 1.002 billion; term of validity is 2 years.
II. Introduction of Related Parties
(I) Basic Information of Related Parties
The People’s Insurance Company (Group) of China Limited was established in October, 1949. It is the first national insurance company of China. Legal representative is Wu Yan, and its registered capital is RMB 42.424 billion. Its operation scope covers property insurance, life insurance, health insurance, asset management, insurance brokerage, trust, fund and other fields; therefore, it formed an insurance and finance industry cluster, and has deep influence at home and abroad.
PICC Property and Casualty Company Limited is the biggest property insurance company in China. It was established independently by The People’s Insurance Company (Group) of China Limited in July, 2003, and was listed in main board of The Stock Exchange of Hong Kong Ltd. on November 6, 2003. Its registered capital reaches RMB 14.829 billion, of which The People’s Insurance Company (Group) of China Limited holds 69% of shares. Its main businesses cover motor vehicle insurance, corporate property insurance, family property insurance, cargo transportation insurance, liability insurance, accidental injury insurance, short-term health insurance, insurance on hull, insurance on hull, guaranty insurance and other RMB and foreign currency insurances, reinsurance related to the said businesses and investment and capital application business allowed by national laws and regulations.
PICC Life Insurance Company Limited is a national life insurance company established mainly by The People’s Insurance Company (Group) of China Limited with consent of state Council and approval of China Insurance Regulatory Commission. Its registered capital reaches RMB 25.761 billion, of which The People’s Insurance Company (Group) of China Limited holds 71% of shares. Its main businesses cover life insurance, health insurance, accidental injury insurance and other insurances, and reinsurance related to the said businesses. It is allowed to act as agent for insurances of PICC Property and Casualty Company Limited and PICC Health Insurance Company Limited within the scope approved by China Insurance Regulatory Commission.
(II) Related Relationship with Listed Companies
The People’s Insurance Company (Group) of China Limited, PICC Property and Casualty Company Limited and PICC Life Insurance Company Limited hold 14.06% of total shares of the Company in total and are related legal persons of the Company, among which PICC Property and Casualty Company Limited and PICC Life Insurance Company Limited are subsidiaries of The People’s Insurance Company (Group) of China Limited.
III. Main Content and Pricing Policy of Related Transaction
(I) Main Content of Related Transaction
Give PICC Series Related Legal Persons internal basic credit quota of RMB 54 billion for interbank borrowing, daylight overdraft of legal person account, bond pledge-style repo, Bonds outright repo, local/foreign currency trust bond or debt investment with applicant as issuing body, guaranty and credit enhancement, capital transaction (for RMB interest rate swap and jointly processing forward foreign exchange settlement and sales), loan for working capital, financial guarantee and others; and give PICC Series Related Legal Persons non-credit related transaction quota of RMB 10.134 billion, among which: break-even financing sales quota shall not exceed RMB 5 billion, capital business transaction quota shall not exceed RMB 3 billion, accumulative annual expenditure and indemnification of insurance service shall not exceed RMB 1.132 billion, and accumulative annual income and expenditure of various intermediate businesses (such as commissioned insurance product sales, investment in insurance asset management products, asset custody business, non-break-even financing sales, property leasing and insurance consultancy) shall not exceed RMB 1.002 billion; term of validity is 2 years.
(II) Pricing Policy
For related transactions between the Company and PICC Series Related Legal Persons, non-related transaction price of an independent third party will be referenced for the pricing of such transactions. In case of credit related transactions, if related credit conditions are not better than conditions for the same credit of other borrowers, non-related transaction price of an independent third party will be referenced for related transaction price and settlement method is the same with that of non-related transaction of an independent third party; non-credit related transaction belongs to reasonable transaction during daily business operation of the Company, and for such transactions, general business rules will be followed, and conditions not more favorable than those of similar transactions of non-related parties will be adopted.
IV. Goal of Related Transaction and Influence of This Related Transaction on Listed Company
Relevant businesses conducted by the Company and PICC Series Related Legal Persons will facilitate continuous deep promotion of cooperation between both parties. With regard to the said related transactions, the Company will conclude based on general business rules or terms not more favorable than those applicable to independent third parties during the daily business operation; transaction conditions will be fair and reasonable, in the interest of the Company and all shareholders, subject to relevant regulations requirements of the regulatory department and internal policies of the Company and without prejudice to interests of the Company and minority shareholders, and will not have negative influence on current and future financial conditions of the Company and independence of the Company.
V. Opinion of Independent Directors
Independent directors, Mr. Li Ruoshan, Mr. Paul M. Theil, Mr. Zhu Qing, Mr. Liu Shiping and Mr. Lin Hua, expressed the following independent opinions with regard to such related transactions:
1. Fairness The said related transactions belong to reasonable transactions during the daily business operation of the Company, and for such transactions, general business rules will be followed, and conditions not more favorable than those for similar transactions of non-related parties will be adopted; transaction conditions are fair and reasonable; and such transactions are subject to relevant regulations requirements of the regulatory department and internal policies of the Company and without prejudice to interests of the Company and shareholders (especially minority shareholders), and will not have negative influence on current and future financial conditions of the Company and independence of the Company.
2. Procedure On October 26, 2016, Audit & Related Transaction Control Committee of Board of Directors of the Company convened a meeting, and reviewed and agreed to submit the said related transaction proposal to Board of Directors for review; the 22th Meeting of the 8th Board of Directors of the Company reviewed and approved the said related transactions on October 27, 2016, of which challenge and decision making procedures were in conformity with relevant regulatory requirements and relevant regulations of Articles of Association of the Company. This related transaction still needs to be submitted to general meeting of the Company for review.
VI. Contents of Reference Documents
1. Resolution of Audit & Related Transaction Control Committee of Board of Directors;
2. Resolution of Board of Directors;
3. Independent Opinion signed and confirmed by independent directors.
Hereby Announced.
Board of Directors of Industrial Bank Co., Ltd.
Friday, October 28, 2016