Company Introduction:

China Merchants Fund Management Co., Ltd. (CMF) was the first Joint Venture Fund Management Company approved by the China Securities Regulatory Commission (CSRC). The company was formally launched on December 27, 2002. China Merchants Securities and ING Asset Management each holds 40% and 30% share of CMF, respectively. The balance of the company is equally held (10%) by China Power Finance Co. Ltd, China HuaNeng Finance Co. Ltd, and China COSCO Finance Co. Ltd. CMF was registered in Shenzhen with 160 million Yuan registered capital. The main businesses of the company include launching of funds, fund management and other businesses permitted by CSRC.

CMF will utilize rigorous international standards of investment management to fulfill our objectives of providing first class investment services to our clients. Since preparatory work on the establishment of CMF began, the company has endeavored to utilize advanced international investment management, marketing and personnel management techniques to build an effective organization with formalized procedures and standards. Currently, CMF has nine departments and two marketing centers. The nine departments include the Investment Management Department, Investment Trading Department, Marketing Department, Client Services Department, IT Department, Business Development Department, Supervisory and Audit Department, General Management and Finance Department, and the Fund Accounting Department. The two marketing centers include the Beijing Marketing Center and the Shanghai Marketing Center. Besides these departments, CMF has also set up an Asset Allocation Committee, a Risk Management Committee and has also appointed an independent audit and compliance officer.

ShareHolders:

China Merchants Securities Co. Ltd. (”CMS”)
Established in 1991 and formed by 15 shareholders, CMS has a registered capital of Rmb 2.2 billion. It now consists of 14 functional departments, and operates a network of 31 securities trading outlets in 19 cities. In the past decade of business operations, all staffs of CMS have strived their bests, focused on innovation, and the company is operating in adherence to the business principle of “integrity, prudence, service and innovation”, that together has built a remarkable corporate image of growth and compliance. Up to 2001/12, total assets reached Rmb 10.6 billion, representing 300 folds in 11 years; Net assets reached Rmb 2.652 billion, representing 200 times of growth. Accumulated profit is recorded at Rmb 2 billion, which makes CMS ranked amongst the top few in the industry. The business of CMS is market oriented, and its clientele is the core. CMS is dedicated to expand its market share both by tangibly expanding distribution outlets and by virtual marketing efforts. By capitalizing on the collaboration between banks and securities companies, its service standard has been upgraded. By integration of company’s resources, our competitive edge is sharpened. Electronically delivered services and innovative products were launched, while service levels were continuously upgraded. CMS has successfully built a societal image representing “advanced technology and service”.

ING Asset Management B.V. (”INGAM”)
INGAM is a wholly owned subsidiary of the ING Group. ING’s roots dated back to 1845, when the Netherlands Insurance Company was formed in The Hague. Continual growth and business expansions in 150 years made it the largest insurance company in the Netherlands. In 1991 when merger took place with the prominent banking group, the NMB Postbank Group, ING Group was officially formed. ING was 3rd world largest financial institution ranked by revenue in 2001, and 20th world largest enterprise in 2002 rated by “Fortune” magazine.

Today, ING Group offers financial products in banking, insurance and asset management to over 50 million private, corporate and institutional clients in 65 countries. It has a diverse workforce of more than 110,000 employees. ING Group delivers added value to clients through a multi-product/ distribution approach and a customer centric organization. It places strong emphasis on cost control. Now ING Group has gained a reputation around the world as one of the leaders in providing integrated financial services, insurance planning and asset management. In the past few years, by achieving synergies amongst its business units and by capitalizing on its vast distribution network, ING experienced remarkable expansion and has significant achievements in many regions and locations worldwide.

China Power Finance Co. Ltd. (”CPFC”)
With its headquarters in Beijing, CPFC is formed by the State Power Holdings Co. Ltd. together with its 47 power companies located in various provinces (cities and municipalities). It has a registered capital of Rmb 1.822 billion, and up to 2001/09, its consolidated assets reached Rmb 64.4 billion, and maintains a working force of 700 staff. Amongst similar financial institutions, it scored No. 1 ranking in terms of: amount of capital, total profit, return on equity, total consolidated assets, headcount, and quality of staff. Business is conducted in strict adherence to the company’s principle “to conduct business legally, to progress with prudence, to deliver excellent service, and to manage in strict compliance”, and hence, enormous attention is paid to managing budget, implementing cost control, enhancement of information technology, building corporate culture, strengthening financial risk management, continuously improving relationships in all respects between growth and compliance, relationship between employer employee, relationship between human resources and quality of staff, relationship between wealth and honesty, relationship between personal conduct versus business conduct. It also actively creates a relaxing environment to promote development, and fully exhibits its strength amongst the power industries to be a financial center, a funding center and a window to external financial market. Its mission is to provide excellent service quality, excellent management standard, and to be an efficient finance company.

China Hua Neng Finance Co. Ltd. (”CHNF”)
CHNF (previously known as China Hua Neng Finance Company”) was established in 1987, which was amongst the first batch of finance companies being duly approved by the People’s Bank of China. Emerged as a non-bank financial institution and later restructured to a limited liability company, it now boosts a registered capital of Rmb 510 million, and maintains a workforce of 54 staff. It has different functional departments of general management, comprehensive planning, business, accounting, investment management, credit, human resources, compliance and auditing. Up to 2001/12, total assets reached Rmb 10.58 billion, comprising of deposits of Rmb 6 billion, outstanding loans of Rmb 4.14 billion, and additionally, trusted loan of Rmb 3.128 billion. Since restructuring in 2000, CHNF has adopted the business ideology of “improving consciousness to upgrade service, enhancing management fundamentals, sharpen competitiveness”, and management objective of “service, efficiency, compliance and innovation”, that together has successfully gained the trust of clientele based on its prudent business style and excellent service standard. All working levels of CHNF are united in harmony, and strive towards its mission of building a financial holdings company. It closely follows the development path of “sustain as a group company, servicing the group, focuses on core business, paying attention to other business opportunities”.

Cosco Finance Co. Ltd. (”CFC”)
CFC was established in 1994, and since then, the company experienced enormous growth, which resulted in significant business expansion. While efforts were made to develop the business of settlement, financial leasing and securities investments, it actively coordinated with to the parent Group’s business operations of foreign exchange, bonds issuance and bills settlement business, and to enhance cooperation with the Group’s other subsidiaries, with an aim to provide comprehensive services, and thus resulted in economic efficiency and societal rewards.

Organization Structure:

Adopting ING’s Internal Control System

Operation Mind

.Integrity - Always committed to the promises we made to others, just like we are loyal to ourselves.
.Harmony - Harmony of Oriental and Western Management Styles

.Innovation - Drawing on ING’s product design experiences and taking into account of local market characteristics , China Merchants Fund shall continuously develop fund products to fulfill the needs of the Chinese market.

.Excellence - China Merchants Fund will adhere to the principle of “Earn the trust of the market and society” to build a globally competitive investment management company that is endorsed by its clients, that can meet the expectations of shareholders and earn the loyalty of its employees.

Corporate Culture:

In accordance to China Merchants Fund Co. Ltd.’s (”CMF”) business principles, we shall pursue long-term development of our staff to fully recognize our corporate values, so as to shape our corporate culture.

1. The attitude of “openness” and “knowledge acquisition” formed the core values of our corporate culture. To adapt to the fast moving pace of today’s global economy, and to cope with unpredictable changes worldwide, all people and organizations should develop its ability, not only to cope with and manage changes, but also to become innovative and be prepared to adopt newer skills - this is what we called the ability to learn. CMF is a corporate entity facing the world. It will continuously absorb successful experience and advanced technology from local and overseas. It also attracts local and overseas talents, and continuously improves its own competitiveness. Each and every staff of CMF will be able to acquire knowledge and continue growing in such an open environment.

2. “Consolidation” and “teamwork” are important aspects of our corporate culture. Being a sino-foreign joint venture company, we see cultural differences between our shareholders and our employees as being normal. Nevertheless, we shall endeavor to integrate the competitive advantages of various parties, to advocate the concept of unity and to exhibit our competitive edge as an entity. We oppose individualism amongst the parties and we avoid unreasonable criticisms. We should uphold our team spirit to be able to achieve our ultimate goals. Team spirit should be reflected amongst every department, amongst every staff. While we respect different personalities so as to encourage the staff to exhibit their own enthusiasm and innovativeness, we also focus on team’s effort and ultimate success, while paying particular attention to the organic synthesis of personal incentive and team incentive.

3. “People is our foundation” and “steering towards achievements” are the major characteristics of our corporate culture. “People is our foundation” has two meanings: Externally, we treat our customers as our close friends, and we deliver them with excellent service. Internally, we pay every respect to our staff, to develop them and to be considerate. Human resources are the most important strategic resources, and are the basic foundation of every business success. The personal wisdom of every staff, their day-to-day laboring and their long-term growth and development, altogether shall shape the future of CMF. Their future careers are bonded to the company’s future development. Concurrent to the company’s continual growth, we shall provide a career platform and a performing stage for each of our staff during their own career path. All levels of our management shall respect every staff, and be able to make proper allocation and to stimulate staff’s productivity, and to be responsible for the future development of every staff. CMF advocates mutual respect, mutual consideration and mutual assistance amongst the staff. While we admit the fact that “who can come in can go out”, we encourage those enthusiastic and aggressive staff to stay long with the company. We pay strong emphasis on integrity and coherence. We shall seriously protect the legal rights of our staff; we shall actively create good working environment and living condition to our staff, and to assist relief of their personal difficulties.

“Steering towards achievements” forms the basis of every kind of our internal appraisals. We shall make every judgment according to the end-results and actual achievement. We do not mean to ignore the working process by which our staff has undertaken, but the end result is the always the decisive factor. While we will not forget the hardship our staff has experienced, we shall pay more attention to their genuine achievements.

Website: http://www.cmfchina.com

Copyright Fund China 2008.

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