09:54 BOC HONG KONG<02388> - Announcement (1) The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, 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 announcement. BOC HONG KONG (HOLDINGS) LIMITED (incorporated in Hong Kong with limited liability) (Stock Code: 2388) CONTINUING CONNECTED TRANSACTIONS In the ordinary course of its business, the Group has conducted certain Continuing Connected Transactions with BOC and its associates that have been disclosed in the Prospectus. At the time of the initial listing of the Company's shares on the Stock Exchange, the Company obtained from the Stock Exchange a waiver (the "Waiver") from strict compliance with the requirements under the Listing Rules in respect of these Continuing Connected Transactions and an annual cap was assigned to some of the Continuing Connected Transaction for each of the three financial years ending 31 December 2004 (the "Existing Caps"). The Continuing Connected Transactions will continue following the expiration of the Waiver at the end of December 2004. Based on its internal estimate and business plan for the Group's business or service requirements regarding the relevant types of Continuing Connected Transactions, the Company has assigned new annual caps for each of the three financial years ending 31 December 2007 (the "New Caps"). Pursuant to Rule 14A.34 of the Listing Rules, the Continuing Connected Transactions are subject to the reporting requirements under Rules 14A.45 and 14A.46 and the annual review requirements under Rules 14A.37 and 14A.38 of the Listing Rules. Appropriate disclosure of the Continuing Connected Transactions will be made in the published annual report and accounts of the Company for each of the three financial years ending 31 December 2007. The board of directors of the Company has set up an independent board committee comprising all the independent non-executive directors of the Company and chaired by Mr. TUNG Chee Chen (the "Independent Board Committee") to review and approve the Continuing Connected Transactions. Although it is not required under the Listing Rules, the Company has retained Rothschild as the independent financial adviser to the Independent Board Committee for the purpose of considering the Continuing Connected Transactions. Rothschild has confirmed to the Independent Board Committee that in its opinion the Continuing Connected Transactions have been entered into on normal commercial terms. On the basis of Rothschild's advice and its own review, the Independent Board Committee is satisfied that the Continuing Connected Transactions have been entered into in the ordinary and usual course of the Group's business on normal commercial terms. The Continuing Connected Transactions which are subject to the New Caps are summarised below: New Caps Type of Continuing Connected Transactions 2005 2006 2007 (HK$ million) 1. Securities Transactions 180 220 260 2. Fund Distribution Transactions 140 190 250 3. Credit Card Services 170 220 290 4. Information Technology Services 80 110 140 5. Property Transactions 120 140 160 6. Bank-note Delivery 80 100 120 7. Insurance Agency 310 410 530 8. Provision of Insurance Cover 90 110 130 9. Foreign Exchange Transactions 550 550 550 10. Trading of Interests in Loans 18,500 18,500 18,500 11. Inter-bank Capital Markets 3,500 3,500 3,500