COSCO SHIPPING Development Co., Ltd. — Governance Information 2012

Mar 30, 2012

China Shipping Container LineS Company Limited

Working rules for the audit Committee under the Board of directors

(Passed at the 19th meeting of the 3rd Session of the Board of Directors)

Chapter 1 general provisions

• Rule 1 In order to perfect the Company’s corporate governance structure and strengthen the decision making functions of the Board of Directors, so as to ensure effective supervision of the management by the Board of Directors, the Board of Directors of the Company decided to set up an Audit Committee and formulated these Rules in accordance with “The Company Law of the People’s Republic of China”, “Code of Corporate Governance for Listed Companies”, the “Rules Governing the Listing of Shares on the Stock Exchange of the Listing Place” and the “Articles of Association of China Shipping Container Lines Company Limited” (the “Articles of Association”) and other relevant provisions.

• Rule 2 The Audit Committee is a specific working body under the Board of Directors. Its main responsibilities are to review the Company’s internal control systems and significant connected transactions, review the Company’s financial information and make disclosure thereof, and carry out liaison, supervision and review in connection with the internal and external audit of the Company.

Chapter 2 Composition

• Rule 3 The Audit Committee shall comprise not less than three members, all being the current non-executive directors of the Company, and more than half of whom shall be independent non-executive directors. At least one of the members shall be an independent non-executive director with accounting expertise as required under the “Rules Governing the Listing of Shares on the Stock Exchange of the Listing Place”.

• Rule 4 The members of the Audit Committee shall be nominated by the Chairman of the Board of Directors, more than half of the number of independent nonexecutive directors or one third of all directors, and shall be appointed by the Board of Directors.

• Rule 5 The Audit Committee shall have a chairman who shall be an independent non-executive director.

• Rule 6 A former partner of the Company’s existing auditing firm shall be prohibited from acting as a member of the Audit Committee for a period of one year from the date of his ceasing:

• (a) to be a partner of the firm; or

• (b) to have any financial interest in the firm,

whichever is later.

• Rule 7 The term of office of the Audit Committee shall be the same as that of the Board of Directors. A member may serve consecutive terms if re-elected upon expiry of his/her term. If any member resigns from the position of director of the Company during his/her term of office, he/she shall automatically lose his/her position as a committee member, and the vacancy shall be filled by the Board of Directors in accordance with the provisions of Rules 3 to 6 above.

• Rule 8 A member of the Audit Committee may tender his/her resignation report in writing to the Board of Directors before expiry of his/her term, in which he/ she shall make explanation on any matter in respect of his/her resignation or other things, in his/her opinion, that need to be brought to the attention of the Board of Directors and shareholders of the Company.

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Chapter 3 duties and authorities

• Rule 9 The major duties and authorities of the Audit Committee include:

The Audit Committee shall exercise its professional judgement to serve the best interest of the Company and its shareholders, and its duties are specified as follows:

Relationship with the Company’s auditors

1. to be primarily responsible for making recommendations to the Board of Directors on the appointment, reappointment and removal of the external auditors (i.e. external auditing institutions), and to approve the remuneration and terms of engagement of the external auditors, and any questions of its resignation or dismissal.

2. to review and monitor the external auditors’ independence and objectivity and the effectiveness of the audit process in accordance with applicable standards. The Audit Committee should discuss with the auditors the nature and scope of the audit and reporting obligations before the audit commences, and must meet at least once a year with the auditors.

3. to develop and implement policy on engaging an external auditor to supply non-audit services. For this purpose, “external auditor” includes any entity that is under common control, ownership or management with the audit firm or any entity that a reasonable and informed third party knowing all relevant information would reasonably conclude to be part of the audit firm nationally or internationally. The Audit Committee should report to the Board, identifying and making recommendations on any matters where action or improvement is needed.

Review of financial information of the Company

1. to monitor the integrity of the Company’s financial statements and annual report and accounts, half-year report and quarterly reports, and to review significant financial reporting opinions contained in them so as to gain an understanding of the progress of dealing with such opinions and make recommendations or reports in this respect to the Board of Directors. In reviewing these reports before submission to the Board of Directors, the Audit Committee should focus particularly on:

2. (i) any changes in accounting policies and practices;

3. (ii) major judgmental areas;

4. (iii) significant adjustments resulting from audit;

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• (iv) the going concern assumptions and any qualifications;

• (v) compliance with accounting standards; and

• (vi) compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and legal requirements in relation to financial reporting.

• Regarding the section 4 above:

• (i) members of the Audit Committee should liaise with the Board and senior management and the committee must meet, at least twice a year, with the Company’s auditors; and

• (ii) the Audit Committee should consider any significant or unusual items that are, or may need to be, reflected in the reports and accounts, it should give due consideration to any matters that have been raised by the Company’s staff responsible for the accounting and financial reporting function, compliance officer or auditors.

Oversight of the Company’s financial reporting system and internal control procedures

1. to review the Group’s financial and accounting policies and practices through examining each department’s work reports on internal control and estimation; to supervise the Company’s internal audit system and its implementation; and to review the effectiveness of the financial control, internal control and risk management systems of the Company.

2. to listen to the report on the work of the internal audit department, and advise on the performance of duties by the personnel of the internal audit department and the appointment or dismissal of such personnel.

3. to discuss the internal control system with management to ensure that management has performed its duty to have an effective internal control system. This discussion should include the adequacy of resources, staff qualifications and experience, training programmes and budget of the Company’s accounting and financial reporting function.

4. to consider major investigation findings on internal control matters as delegated by the Board of Directors or on its own initiative and management’s response to these findings.

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1. to pay attention to the communication between the Company’s financial accounting department, internal audit department and the external auditors in respect of audit-related matters so as to ensure smooth coordination between the internal and external auditors, and ensure that the internal audit function is adequately resourced and has appropriate standing within the Company, and review and monitor its effectiveness.

2. to review the external auditor’s management letter, any material queries raised by the auditor to management about the accounting records, financial accounts or systems of control and management’s response.

3. to ensure that the Board of Directors will provide a timely response to the issues raised in the external auditor’s management letter.

4. to report to the Board of Directors on the matters in these Rules.

5. to consider other topics, as defined by the Board of Directors.

6. to review arrangements employees of the Company can use, in confidence, to raise concerns about possible improprieties in financial reporting, internal control or other matters. The Audit Committee should ensure that proper arrangements are in place for fair and independent investigation of these matters and for appropriate followup action.

7. to act as the key representative body for overseeing the Company’s relations with the external auditor.

8. to deal with other matters authorized by the Board of Directors.

9. Rule 10 The Audit Committee shall be accountable to the Board of Directors. The Audit Committee’s proposals shall be submitted to the Board of Directors for consideration and decision.

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Chapter 4 Working procedures

• Rule 11 The Audit Committee may request senior management personnel (including the General Manager) to directly make reports on their work or answer any enquiries in relation to their work. If necessary, the Audit Committee may separately convene a meeting with the management, internal audit department and external auditors, and the minutes of such meetings shall be submitted to the Board of Directors.

• Rule 12 The management of the Company and other relevant departments in charge of finance, accounting and supervision are responsible for providing relevant information of the Company in relation to:

• materials relating to the duties of the Audit Committee to be submitted to the Board of Directors for consideration;

• financial reports of the Company;

• work reports of internal auditors;

• external audit contracts and relevant work reports;

• public disclosure of financial information made by the Company;

• audit reports on the Company’s significant connected transactions; and

• other relevant matters.

• Rule 13 The Audit Committee shall negotiate with the auditors of the Company to determine a schedule for the audit of financial reports for the financial year within 30 days from the end of each financial year. Once the auditors commence their audit work, the Audit Committee shall strengthen communication with them and review again the financial statements and make written comments after the auditors have issued their preliminary audit opinions. The Audit Committee shall vote on the annual financial statements and submit its resolution to the Board of Directors for review and consideration. Meanwhile, the Audit Committee shall submit to the Board of Directors the summary report on the annual audit conducted by the auditors of the Company and its resolutions with respect to the renewal or reappointment of auditors for the next financial year.

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Chapter 5 rules of procedures for meetings

• Rule 14 For convening meetings of the Audit Committee, a notice of meeting shall be given to all members five days prior to that meeting. In case of emergency, an extraordinary meeting may be convened not subject to the aforesaid time limit for sending notice provided that all members have confirmed their receipt of such notice.

• Rule 15 The meetings of the Audit Committee shall be convened only with the presence of not less than two thirds of the members. The meetings shall be chaired by the chairman of the committee. If the chairman of the committee cannot attend the meeting, he/she may appoint another member who shall be an independent non-executive director to chair the meeting.

• Rule 16 A meeting of the Audit Committee may be convened by way of on-site meeting or correspondence meeting, at which members shall vote by a show of hands or in written form. Each member shall be entitled to one vote. Resolutions of a meeting must be adopted by the affirmative votes of more than half of all members.

• Rule 17 Other directors, supervisors, management personnel and other relevant officers of the Company may be invited to attend the meetings of the Audit Committee if necessary.

• Rule 18 When performing its duties, the Audit Committee may, if necessary, engage an intermediary institution to provide independent professional advice on its decision. The cost shall be borne by the Company.

• Rule 19 The procedures for convening a meeting, the method of voting and the resolutions passed at a meeting of the Audit Committee shall comply with the provisions of the relevant laws, regulations, the Articles of Association and these Rules.

• Rule 20 The Audit Committee shall keep minutes of its meetings. Members present at a meeting shall sign the minutes of the meeting which shall be kept by the duly appointed secretary of the meeting (usually the Secretary to the Board of Directors of the Company) for a period of not less than ten years. The secretary of the meeting shall make the minutes of meetings available for inspection at any reasonable time upon a reasonable request by any director of the Company.

• Rule 21 Any resolution passed and the result of any poll taken at a meeting of the Audit Committee shall be reported in writing to the Board of Directors of the Company. Minutes of meetings of the Audit Committee shall record in sufficient details the matters considered at the meetings and the decision reached, including any concerns raised by directors or dissenting view expressed. Draft and final versions of minutes of the meetings shall be sent to all committee members for their comment and records within a reasonable time after the meeting.

• Rule 22 The chairman of the Audit Committee or in his absence, another member of the committee or failing this, his duly appointed delegate, shall attend the annual general meeting of the Company and be prepared to answer questions at the annual general meeting on the Audit Committee’s activities and their responsibilities.

• Rule23 Any member of the Audit Committee shall be obliged to keep confidential all matters of the Company which came to his/her knowledge due to his/ her term of office, and shall not disclose any relevant information without authorization, otherwise he/she shall be liable for the corresponding legal responsibilities.

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Chapter 6 Supplementary provisions

• Rule 24 Any matters not covered by these Rules shall be implemented in accordance with the provisions of the relevant laws and regulations of the People’s Republic of China and the Articles of Association of the Company. If these Rules contravene any laws and regulations or the legally amended Articles of Association of the Company, these Rules shall be promptly amended and reported to the Board of Directors for consideration and adoption.

• Rule 25 The power of interpretation of these Rules shall be vested in the Board of Directors of the Company.

• Rule 26 These Rules shall be implemented on the date on which the relevant resolution is passed by the Board of Directors.

Note: These Working Rules are written in Chinese without an official English version. This English version is for reference only. In case of any inconsistency, the Chinese version shall prevail.

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