Deutsche Bank AG
(incorporated under the laws of the Federal Republic of Germany)
acting through its London Branch
400,000,000 European Style (Cash Settled) Call Warrants
due 24 November 2008
relating to the ordinary H shares of par value RMB1.00 each of
Bank of Communications Co., Ltd.
(Stock Code: 5597)
Exercise price: HK$10.08 per ten warrants
This document includes particulars given in compliance with the Rules Governing the Listing of
Securities on The issuer accepts full responsibility for the accuracy of the
information contained in the base listing document dated 27 April 2007, the disclosure addendum dated
21 May 2007 and this document and confirms, having made all reasonable enquiries, that to the best
of its knowledge and belief there are no other facts the omission of which would make any statement
in the base listing document, the disclosure addendum and/or this document misleading in any material
respect.
Investors are warned that the price of the warrants may fall in value as rapidly as it may rise
and holders may sustain a total loss of their investment. Prospective purchasers should
therefore ensure that they understand the nature of the warrants and carefully study the risk
factors set out in the base listing document and this document and, where necessary, seek
professional advice, before they invest in the warrants.
The warrants constitute general unsecured contractual obligations of the issuer and of no other
person. If you purchase the warrants you are relying upon the creditworthiness of the issuer and have
no rights under the warrants against the company which has issued the underlying shares.
23 July 2007
IMPORTANT
You should read this document together with our base listing document dated 27 April
2007 and our disclosure addendum to our base listing document dated 21 May 2007 before
you invest in the warrants.
We cannot give you investment advice. You must decide for yourself whether the
warrants meets your investment needs, taking professional advice if appropriate.
During the period in which any structured products issued by us are listed on the stock
exchange, you can come to the office of European Asian Bank (Hong Kong) Nominees
Limited, which is presently at 55th Floor, Cheung Kong Center, 2 Queen’s Road Central,
Hong Kong to inspect the following documents:
(a) a copy of our base listing document together with any addenda or successor
document to our base listing document (both the English versions and the Chinese
translations);
(b) a copy of this supplemental listing document (both the English version and the
Chinese translation);
(c) a copy of our latest publicly available annual report and interim report (if any); and
(d) copies of the consent letters of our auditors referred to in our base listing document.
Our warrants are not available to U.S. persons (as defined in the U.S. Securities Act of
1933, as amended).
| TABLE OF CONTENTS | |
| Riskfactors | 3 |
| Summary of the issue | 4 |
| Terms and conditions of the warrants | 8 |
| Information relating to the company | 9 |
| Informationontheliquidityprovider | 10 |
| Furtherinformation | 12 |
| More information about our warrants | 13 |
| Supplemental information about us | 14 |
| −2− |
RISK FACTORS
You should consider the following summary of risks and the risk factors set out in our base
listing document, together with all other information in this document and in our base listing
document before making any investment decision. The following summary does not
necessarily set out all the risks related to the warrants and you should not rely on it without
reference to the conditions in our base listing document. If you have any concerns or doubts
about the warrants, you should obtain independent professional advice.
The price of the warrants may fall in
value as rapidly as it may rise and you
may sustain a total loss in your
investment.
If you purchase the warrants, you rely on
our creditworthiness and have no rights
under the warrants against any company
which issues the underlying shares.
If trading in the underlying shares is
suspended on the stock exchange,
trading in the warrants will be suspended
for a similar period.
There is a time lag between exercise and
payment of the warrants.
Events may occur which may affect the
value of the underlying share. If such
event does not require an adjustment to
the warrants, the price of the warrants
may be affected.
We or our liquidity provider may be the
only market participants for the warrants.
The secondary market may be limited.
The value of the warrants may not
correlate with the movements of the
underlying share price and may be
affected by other factors including the
time remaining to expiry.
Various potential and actual conflicts of
interest may arise from our overall
activities or activities of our subsidiaries
and affiliates.
In the ordinary course of our business,
we may effect transactions on our own
account or for the account of our
customers and hold positions in the
underlying shares.
You will not receive any definitive
certificates for any warrants you hold.
You will have to rely on CCASS and/or
your brokers to (a) determine your
beneficial interest in the warrants, (b)
receive announcements and/or
information relating to the warrants and
(c) receive payments (if any) from us.
−3−
SUMMARY OF THE ISSUE
The following is only a summary of the terms of the warrants. You should read all of this
document together with our base listing document.
Warrants European style (cash settled) call warrants due 24
November 2008 relating to the shares of the company.
Company and its shares ordinary H shares of par value RMB1.00 each of Bank of
Communications Co., Ltd. The warrants relate to
40,000,000 shares of the company.
If a corporate event occurs in respect of the company, for
example, if there is a rights issue, bonus issue, sub-division
or consolidation of its shares, we may adjust the terms of
the warrants to take into account the consequences of such
events. Please refer to condition 6 for further details as to
what the adjustments will be in these circumstances.
Launch date 17 July 2007
Number 400,000,000 warrants
Issue price HK$0.25 per warrant
Board lot 10,000
Exercise amount Ten warrants
Cash settlement amount For each exercise amount you will receive a cash payment
in Hong Kong dollars calculated by us using the following
formula:
Entitlement x (Closing Price – Exercise Price) – Exercise Expenses
If the amount calculated using the above formula is equal to
zero or less, you will not receive any payment.
Entitlement One share
Closing price The arithmetic mean of the closing price of one share
(which is obtained from the daily quotation sheet of the
stock exchange (subject to any adjustments as provided in
condition 2)) for each valuation date.
−4−
Valuation dates Each of the five business days immediately before the
expiry date.
A day is a business day if the stock exchange is open for
dealings in Hong Kong and banks are open for business in
Hong Kong (excluding Saturday and Sunday).
If a market disruption event occurs on a valuation date, then
such valuation date will be postponed. Please refer to
condition 4B(d) for details on what will happen in such
circumstances and when we may have to make a good faith
estimate of the value of the shares.
Exercise price The exercise price is HK$10.08 for each exercise amount.
Expiry date 24 November 2008 or, if that day is not a business day, the
immediately succeeding business day.
Exercise at expiry Warrants are exercisable only on the expiry date in board
lots or integral multiples of the board lot.
If on the expiry date the cash settlement amount is greater
than zero, the warrants will be automatically exercised on
the expiry date. You do not need to deliver any exercise
notice.
If on the expiry date the cash settlement amount is less
than or equal to zero, you will lose the value of your
investment.
Payment of cash settlement
amount
If the warrants are automatically exercised on the expiry
date, we will pay you the cash settlement amount.
You must pay your own exercise expenses on exercise
of the warrants on the expiry date. Payment of the
exercise expenses is reflected in the calculation of the cash
settlement amount.
We will send the cash settlement amount no later than three
business days following the expiry date. Please note that
we will make all payments through Central Clearing and
Settlement System (CCASS). You may have to rely on your
broker/custodian to ensure the cash settlement amount is
credited to your account with them. Once we make the
payment to HKSCC Nominees Limited, who operates
CCASS, you will have no further right against us for that
payment, even if CCASS or your broker/custodian does not
transfer your share of payment to you, or is late in making
that transfer.
−5−
Exercise and trading
currency
Hong Kong dollars.
Listing We have applied to the stock exchange for the listing of and
the dealings in the warrants. The stock exchange has
approved this in principle. We will not issue the warrants if
we do not obtain the approval from the stock exchange for
such listing. We expect that dealings in the warrants on the
stock exchange will commence on or about 24 July 2007.
We do not intend to apply for a listing of the warrants on any
other stock exchange other than the stock exchange.
Admission into CCASS We have made all necessary arrangements to enable the
warrants to be admitted to CCASS. The General Rules of
CCASS and CCASS Operational Procedures will apply to all
activities in CCASS. If you are a CCASS individual investor
participant, you may hold your warrants in your account with
CCASS. If you do not have a CCASS account, your broker
(as a CCASS participant) will arrange to hold the warrants
for you in an account at CCASS.
Form The warrants are represented by a global certificate
registered in the name of HKSCC Nominees Limited. You
are not entitled to definitive certificates. If we need to send
you any notices, we will do so through CCASS. You may
have to rely on your broker/custodian to ensure the notices
reach you.
Please refer to the records of CCASS or your
brokers/custodian and the statements you receive from
CCASS or your brokers/custodians to determine your
beneficial interest in the warrants.
Transfers of warrants You can transfer your warrants only in board lots or integral
multiples of the board lot in CCASS. If you transfer your
warrants through the stock exchange, settlement must
currently be made not later than two trading days after the
dealing was entered into.
Status of the warrants upon
our liquidation
The warrants will constitute our general, unsecured,
contractual obligations and of no other person and will rank
equally among themselves and (save for certain obligations
required to be preferred by law) equally with all our other
unsecured obligations.
Governing law Hong Kong law.
Maintenance of register European Asian Bank (Hong Kong) Nominees Limited will
maintain the register for the warrants.
−6−
Liquidity provider Deutsche Securities Asia Limited
(Broker ID Number: 9529)
Address: 55th Floor, Cheung Kong Center
2 Queen’s Road Central
Hong Kong
Telephone: (852) 2203 6116
−7−
TERMS AND CONDITIONS OF THE WARRANTS
The conditions applicable to the warrants are set out in the section “Terms and Conditions
of the Call Warrants (Cash Settled)” (the conditions) of our base listing document. For the
purposes of the conditions, the terms below shall have the following meanings:
Board Lot: 10,000
Company: Bank of Communications Co. Ltd.
Entitlement: One Share
Exercise Amount: Ten warrants
Exercise Price: HK$10.08
Issue Date: 23 July 2007
Maturity Date: 24 November 2008
Shares: Ordinary H shares of par value RMB1.00 each of the
Company
Warrants: 400,000,000 European Style (Cash Settled) Call Warrants
due 24 November 2008 relating to the Shares
−8−
INFORMATION RELATING TO THE COMPANY
Where can you obtain information on the company?
If you want to find out more about the company, such as its published accounts, you can do
the following:
talk to your financial advisers
view the website of Hong Kong Exchanges and Clearing Limited (www.hkex.com.hk)
view the website of the company (www.bankcomm.com). The company may not always
maintain a website and may change or add a new website or websites, or may amend, or
remove any information posted on such websites. You should conduct your own web
searches to ensure that you are viewing the most up-to-date version of the company’s
website. We accept no responsibility for that information, including whether that
information is accurate, complete or up-to-date.
−9−
INFORMATION ON THE LIQUIDITY PROVIDER
Will there be a market for the warrants?
The stock exchange requires us to provide
liquidity in the warrants to ensure that there
will always be a market price available for the
purchase and sale of the warrants (other than
in the circumstances described below). We
have appointed Deutsche Securities Asia
Limited (Broker ID Number: 9529) as the
liquidity provider for the warrants.
What is a liquidity provider?
The liquidity provider is one of our affiliates.
The liquidity provider is a stock exchange
participant and is therefore subject to
prudential and conduct regulation by the stock
exchange and the Securities and Futures
Commission. The liquidity provider has
agreed to act as our agent in providing
liquidity in the warrants. If the liquidity
provider takes any actions or makes any
determinations, it does so on our behalf. If the
liquidity provider is unable to perform its
functions, we will appoint a substitute liquidity
provider for the warrants.
How will the liquidity provider provide
liquidity?
The liquidity provider will use its reasonable
endeavours to make a market in the warrants
by responding to requests for bid and offer
prices. You can request for a price by calling
(852) 2203 6116. The liquidity provider will
respond to your request within 15 minutes of
your request.
All quotes will be displayed on the designated
stock page for the warrants. Under normal
market conditions, the liquidity provider will
provide quotes with a maximum of a 25 tick
spread (where ‘spread’ is as prescribed under
the rules of the stock exchange) between bid
and offer prices, for a minimum of ten board
lots of the warrants. The liquidity provider will
provide you with prices for the warrants in the
secondary market during the life of the
warrants. Such prices will be available on
each business day on which the warrants are
traded on the stock exchange from five
minutes after the market opens until the
market closes on any such business day.
How does the liquidity provider calculate
the prices?
Any price provided by the liquidity provider
will be based on a pricing model which takes
into account such factors as the liquidity
provider deems appropriate, including,
without limitation, the volatility and price of
the shares, the time left to the expiry of the
warrants, the exercise price of the warrants,
the dividend yield of the shares and the
prevailing interest rate climate.
Are there circumstances that the liquidity
provider cannot provide liquidity?
There will be circumstances under which the
liquidity provider may not be able to, and will
not be obliged to, provide liquidity. Such
circumstances include:
(i) when the warrants are suspended from
trading for any reason including, but
without limitation, as a result of the
shares being suspended from trading;
(ii) when there are no warrants available for
market making activities by the liquidity
provider, and for the avoidance of doubt,
in determining whether warrants are
available for market making activities,
warrants held by us or any of our
affiliates on behalf of others shall not be
treated as being available for market
making activities;
(iii) during the period of five business days
immediately prior to the expiry date of
the warrants;
(iv) operational and technical problems or
other events beyond the control of the
liquidity provider (such as a natural or
man-made disaster or an act of
terrorism) affecting the ability of the
liquidity provider to provide liquidity or
−10−
operational and technical problems or
other events beyond the control of the
stock exchange affecting the proper
functioning of the stock exchange;
(v) if the stock market experiences
exceptional price movement and
volatility, i.e. during fast markets;
(vi) the occurrence of market disruption
events, including, without limitation, any
suspension of or limitation imposed on
trading (caused by movements in price
exceeding limits permitted by the
relevant exchange or otherwise) in the
shares or any warrants, options
contracts or futures contracts relating to
the shares;
(vii) when the ability of the liquidity provider
to source a hedge or unwind an existing
hedge, as determined by the liquidity
provider in its discretion acting in good
faith, is materially affected by prevailing
market conditions (in which case either
only a bid price or only an offer price of
the warrants shall be made but not both);
and
(viii) when the theoretical value of each
warrant (as determined by the liquidity
provider based on the pricing model) is
less than HK$0.01, then the liquidity
provider will not be obliged to provide a
bid price for the warrants.
−11−
FURTHER INFORMATION
Are we regulated by any bodies under the
listing rules?
Other than being regulated by the
Hong Kong Monetary Authority as
a licensed bank and, for the purpose of
investment business in the U.K., by the
Financial Services Authority, we are not
regulated by any of the bodies referred to in
rule 15A.13(2) or (3) of the listing rules.
We are regulated by the Bundesanstalt
fr Finanzdienstleistungsaufsicht (Federal
Financial Supervisory Authority).
Have we been rated by any credit rating
agency?
As at the date of this document, our senior
long term debt was rated Aa1 by Moody’s
Investors Service, Inc., AA- by Standard and
Poor’s Ratings Group and AA- by Fitch IBCA
Ltd.
Are we involved in any litigation?
Except as set out in this document, our base
listing document and our disclosure
addendum, there are no legal or arbitration
proceedings (including any such proceedings
which are pending or threatened of which we
are aware) which may have, or have had in
the previous 12 months, a significant effect on
our group.
Has there been any material adverse
change?
Except as set out in this document, our base
listing document and our disclosure
addendum, there has been no material
adverse change in our group’s financial
position or prospects, or significant change in
our group’s financial or trading position, since
31 December 2006.
Who makes determinations and
calculations?
We will make any necessary determinations
or calculations in respect of the warrants.
Are there any experts/auditors involved?
Our auditors, KPMG Deutsche
Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprufungsgesellschaft, have given
and have not withdrawn their written consent
to the inclusion of their report dated 9 March
2007, in our base listing document and/or the
references to their name, in our base listing
document, in the form and context in which
they are included. The report was not
prepared exclusively for incorporation in our
base listing document. Our auditors do not
have any shareholding in our company or in
any member of our group, nor do they have
the right (whether legally enforceable or not)
to subscribe for or to nominate persons to
subscribe for securities in any member of our
group.
Do the stock exchange and the Securities
and Futures Commission charge any fees?
The stock exchange charges a trading fee of
0.005 per cent. and the Securities and
Futures Commission charges a transaction
levy at a current rate of 0.004 per cent. in
respect of each transaction effected on the
stock exchange payable by each of the seller
and the buyer and calculated on the value of
the consideration for the relevant securities.
The levy for the investor compensation fund is
currently suspended.
Is stamp duty payable?
There is no stamp duty payable in Hong Kong
on the transfer of the warrants.
Has there been any updated information
about us since the date of our base listing
document?
There is no supplemental information about
us except as set out in the section
“Supplemental information about us”. The
information in our base listing document and
our disclosure addendum is up-to-date and is
true and accurate as at the date of this
document, except as modified and
supplemented in this document.
−12−
MORE INFORMATION ABOUT OUR WARRANTS
What happens if a market disruption event
occurs on a valuation date?
Generally, if we decide that a market
disruption event has occurred on a valuation
date, then that valuation date will be
postponed until the next business day on
which there is no market disruption. However,
if the postponed valuation date falls on the
expiry date (or after), then the business day
before the expiry date will be the valuation
date even if there may be market disruption
on that day. In this case, we will make a good
faith estimate of the value of the shares on
that valuation date. Please refer to condition
2(c) for a list of events constituting a market
disruption event and condition 4(B)(d) for
details.
Who should buy the warrants? Are they
suitable for everyone?
The warrants are not suitable for everyone.
You should make sure you fully understand
the terms of the warrants, how the warrants
work and the associated risks. The risk factor
sections in our base listing document and in
this document highlight some of the
associated risks and you should study them
carefully. You should also consider your
financial position and investment objectives
before deciding to invest in the warrants. Most
importantly, you should consult your financial
advisers, accounting and tax professionals
where necessary.
Where can you find more information
about us and the warrants?
Our warrants are issued under our Hong Kong
listed structured products programme. The
programme is described in our base listing
document dated 27 April 2007 and our
disclosure addendum dated 21 May 2007.
Please read our base listing document and
our disclosure addendum together with this
document carefully before you decide
whether to buy our warrants. Our base listing
document and disclosure addendum contain
important information, including information
about:
our business and financial condition;
the risks of buying our warrants;
Hong Kong taxation issues in relation to
our warrants; and
the legally binding terms and conditions
of the warrants.
We have not authorised anyone to give you
any information about our warrants other than
the information in this document, our base
listing document and our disclosure
addendum. You should not rely on any other
information and we will not be responsible for
any losses arising from such other
information. Our base listing document, our
disclosure addendum and this document are
also available in a Chinese translation if you
prefer.
−13−
SUPPLEMENTAL INFORMATION ABOUT US
Recent Developments and Outlook
On 31 January 2007, the Supervisory Board of Deutsche Bank AG announced that Dr.
Tessen von Heydebreck will be leaving Deutsche Bank’s Management Board. His activity on
the Management Board ended at the close of the bank’s Annual General Meeting on 24 May
2007.
Dr. von Heydebreck’s responsibilities have been re-allocated to other members of the
bank’s Management Board. Mr. Hermann-Josef Lamberti took charge of Human Resources
including the duties of Deutsche Bank’s Labour Director. Dr. Josef Ackermann additionally took
over Corporate Social Responsibility, encompassing the bank’s cultural and social activities
worldwide. Dr. Hugo Bnziger took charge of Legal and Compliance. Mr. Anthony di Iorio is
responsible for Audit. Dr. von Heydebreck will continue to serve Deutsche Bank in a
consultative function.
On 1 February 2007, Deutsche Bank published preliminary and unaudited key figures for
the fourth quarter and the full year 2006 for its consolidated group.
On 27 March 2007, Deutsche Bank published its 2006 Annual Report on the basis of
United States Generally Accepted Accounting Principles (“U.S. GAAP”).
Starting with the fiscal year 2007, Deutsche Bank is required to prepare its annual
consolidated financial statements (Annual Report), and its Interim Reports, in accordance with
International Financial Reporting Standards (“IFRS”).
On 19 April 2007, Deutsche Bank published its Transition Report – 2006 IFRS
Comparatives (“Transition Report”). The Transition Report summarizes and analyzes the
principal effects that the adoption of IFRS had on Deutsche Bank’s previously published U.S.
GAAP 2006 financial information. The 2006 IFRS results will appear as comparatives in
Deutsche Bank’s 2007 quarterly Interim Reports and its Annual Report for the year ended 31
December 2007.
On 8 May 2007, Deutsche Bank published its Interim Report for the first quarter 2007 in
accordance with IFRS with 2006 comparatives. Deutsche Bank reported income before
income taxes for the first quarter 2007 of EUR 3.2 billion, up 22% versus EUR 2.6 billion for
the first quarter 2006. Net income was EUR 2.1 billion, up 29% from EUR 1.6 billion in the prior
year quarter.
The publication of Deutsche Bank’s interim reports for the second and third quarter in
2007 is scheduled as follows:
Second Quarter 2007: 1 August 2007
Third Quarter 2007: 31 October 2007
On 24 May 2007 the Annual General Meeting of Deutsche Bank decided that a dividend
of EUR 4.00 per share shall be paid for the 2006 financial year. This is an increase of 60 per
cent compared with the previous year, when a dividend of EUR 2.50 per share was paid.
−14−
Share buyback program
At the Annual General Meeting on 24 May 2007, Deutsche Bank’s shareholders renewed
the authorization to buy back up to 10 per cent of shares issued, replacing the authorization
of the Annual General Meeting 2006. As a result, the Management Board decided to conclude
the current program and to continue share buybacks under the scope of the new buyback
program with immediate effect.
Within the concluded share buyback program, which was launched at 2 June 2006, a total
of 14,075,105 shares, or 2.7% of the share capital as at the Annual General Meeting in 2006,
had been repurchased at an average price of EUR 95.26, for a total consideration of EUR 1.34
billion. The current inventory in own shares within the buyback program amounts to 23.3
million shares, or 4.4 per cent of shares issued. This inventory is a result of the 18.8 million
shares held at the time of the Annual General Meeting in 2006 plus the repurchases of the
concluded program. Thereof, roughly 9.6 million shares were used to hedge share awards.
Deutsche Bank hasn’t cancelled any shares since the Annual General Meeting 2006.
Under the new program Deutsche Bank may buy back up to 10 per cent of shares issued
at the time of the Annual General Meeting, i.e. up to 52,570,473 shares, by 31 October 2008.
Deutsche Bank reserves the right to suspend the program in favour of strategic growth
initiatives.
The buybacks will again be executed systematically by direct purchases of shares in the
spot market and potentially through the use of derivatives. Deutsche Bank intends to use the
repurchased shares not only to further reduce its share capital but also to support potential
future equity-based compensation programs. The bank also reserves the option to use the
repurchased shares for other purposes in accordance with the authorization granted at the
Annual General Meeting.
Deutsche Bank intends to manage all transactions in such a way that Deutsche Bank’s
core capital ratio will not fall below the target range of eight to nine percent. The bank will
regularly publish information on the progress of the buyback program.
−15−
Head Office of the Issuer
Deutsche Bank AG
Taunusanlage 12
D-60325 Frankfurt am Main
Germany
Office of the Issuer
Deutsche Bank AG London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB
United Kingdom
Registrar and Transfer Office
European Asian Bank (Hong Kong) Nominees Limited
55th Floor, Cheung Kong Center
2 Queen’s Road Central
Hong Kong
Liquidity Provider
Deutsche Securities Asia Limited
55th Floor, Cheung Kong Center
2 Queen’s Road Central
Hong Kong
Auditors
KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprufungsgesellschaft
Marie-Curie Strasse 30
D-60439 Frankfurt am Main
Germany
