COSCO SHIPPING Development Co., Ltd. — Governance Information 2017

Aug 30, 2017

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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中遠海運發展股份有限公司 COSCO SHIPPING Development Co., Ltd.*

(A joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 02866)

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The board of directors (the “ Board ”) of COSCO SHIPPING Development Co., Ltd. (the “ Company ”) proposes to make certain amendments to the articles of association of the Company (the “ Articles of Association ”) in order to, among other things, further improve the corporate governance of the Company (the “ Proposed Amendments to the Articles of Association ”).

The Proposed Amendments to the Articles of Association relate to, among other things, (i) the “Opinion on the Comprehensive Promotion of the Construction of Legal Corporate Governance for Central State-owned Enterprises” (《關於全面推進法治央企建設的意見》); (ii) the composition of the Board and the supervisory committee of the Company; and (iii) the use of electronic means for the publication of corporate communications by the Company pursuant to Rule 2.07A of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”).

The full text of the Proposed Amendments to the Articles of Association, which were prepared in the Chinese language, is set out in the appendix to this announcement. In the event of any discrepancy between the English translation and the Chinese version of the Proposed Amendments to the Articles of Association, the Chinese version shall prevail.

The Proposed Amendments to the Articles of Association are subject to the approval by the shareholders of the Company (the “ Shareholders ”) by way of a special resolution at the extraordinary general meeting of the Company (the “ EGM ”) to be convened at 1:30 p.m. on Friday, 29 September 2017 (or at any adjournment thereof) at Level 3, Ocean Hotel Shanghai, 1171 Dong Da Ming Road, Hong Kou District, Shanghai, the People’s Republic of China (the “ PRC ”) and the approval of, and registration or filing with, the relevant PRC governmental authorities.

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A circular containing, among other things, further details of the Proposed Amendments to the Articles of Association and a notice convening the EGM will be despatched to Shareholders in due course.

By order of the Board COSCO SHIPPING Development Co., Ltd. Yu Zhen

Company Secretary

Shanghai, the People’s Republic of China 30 August 2017

The Board as at the date of this announcement comprises Ms. Sun Yueying, Mr. Wang Daxiong, Mr. Liu Chong and Mr. Xu Hui, being executive directors, Mr. Feng Boming, Mr. Huang Jian and Mr. Chen Dong, being non-executive directors, and Mr. Cai Hongping, Ms. Hai Chi Yuet and Mr. Graeme Jack, being independent non-executive directors.

• The Company is a registered non-Hong Kong company as defined under the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) and it is registered under its Chinese name and under the English name “COSCO SHIPPING Development Co., Ltd.”.

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APPENDIX

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The full text of the Proposed Amendments to the Articles of Association is set out below.

Existing articles To be amended as Chapter VIII General meeting Chapter VIII General meeting Notices of general meetings shall Article 8.15 Notices of general meetings shall be delivered to shareholders (with or without be delivered to shareholders (with or without voting right at the general meeting) by hand or voting right at the general meeting) by hand or by pre-paid mails to the address as recorded in by pre-paid mails to the address as recorded the register of shareholders. For shareholders in the register of shareholders. For A Share of domestic capital shares, such notices can holders, such notices can also be made in the also be made in the form of an announcement. form of an announcement for A Shares. For H Share holders, notices of general meetings The announcement as mentioned in the can be made in the form of an announcement preceding paragraph shall be published in on the website of the Stock Exchange and the one or more newspapers as designated by Company’s website.

Article 8.15 Notices of general meetings shall be delivered to shareholders (with or without voting right at the general meeting) by hand or by pre-paid mails to the address as recorded in the register of shareholders. For shareholders of domestic capital shares, such notices can also be made in the form of an announcement.

The announcement as mentioned in the preceding paragraph shall be published in one or more newspapers as designated by the securities supervisory authority of the State Council 45-50 days prior to the date of meeting. Once published, all shareholders of Domestic Shares shall be deemed to have received the relevant notice.

The announcement for A Share holders as mentioned in the preceding paragraph shall be published in one or more newspapers as designated by the securities supervisory authority of the State Council 45-50 days prior to the date of meeting. Once published, all A Share holders shall be deemed to have received the relevant notice.

received the relevant notice.	as designated by the securities supervisory authority of the State Council 45-50 days prior to the date of meeting. Once published, all A Share holders shall be deemed to have received the relevant notice.
Chapter X Board of directors	Chapter X Board of directors
Article 10.1The Company shall have a Board	Article 10.1The Company shall have a Board
of Directors which shall be responsible for	of Directors which shall be responsible for
reporting its work to the general meeting.	reporting its work to the general meeting.
The Board of Directors shall consist of nine	The Board of Directors shall consist of five
to nineteen directors, including one chairman	to nineteen directors, including one chairman
and no more than two vice chairmen. Of	and no more than two vice chairmen. Of
the directors, at least two members shall be	the directors, at least two members shall be
executive directors taking charge of the day-to-	executive directors taking charge of the day-to-
day business consigned by the Company; the	day business consigned by the Company; the
other members shall be non-executive directors	other members shall be non-executive directors
who do not deal with the day-to-day business.	who do not deal with the day-to-day business.
At least one third of the total members of	At least one third of the total members of
the Board of Directors shall be independent	the Board of Directors shall be independent
directors, and at least one independent	directors, and at least one independent
director shall have appropriate professional	director shall have appropriate professional
qualification or shall have accounting or related	qualification or shall have accounting or related
financial management expertise.	financial management expertise.

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At least half (inclusive) of the directors shall be external directors (i.e., directors not holding any position in the Company), and the Board of Directors shall have at least two independent non-executive directors (i.e., directors independent of the shareholders of the Company and not holding any position in the Company).

At least half (inclusive) of the directors shall be external directors (i.e., directors not holding any position in the Company), and the Board of Directors shall have at least two independent non-executive directors (i.e., directors independent of the shareholders of the Company and not holding any position in the Company).

Article 10.5The Board of Directors shall be responsible for general meeting and shall exercise the following powers: (I) to be responsible for convening general meeting and reporting its work to the general meeting; (II) to implement resolutions approved at general meetings; (III) to decide on the Company’s business operating plans, as well as investment plans and investment proposals other than those to be considered and approved at general meetings; (IV) to formulate the Company’s proposed annual financial budget and final accounts; (V) to formulate the Company’s profit distribution plan (including final dividend distribution plan) and plan for recovery of losses; (VI) to formulate proposals for the increase in or reduction of the Company’s registered capital and the issuance of corporate bonds or other securities and listing; (VII) to formulate plans for repurchase of shares of the Company, and plans for merging, separation and dissolution or transformation of the Company’s structure; (VIII)to decide on other external guarantees which require the approval of the general meetings pursuant to laws, administrative r e g u l a t i o n s a n d t h e A r t i c l e s o f Association;

Article 10.5The Board of Directors shall be responsible for general meeting and shall exercise the following powers: (I) to be responsible for convening general meeting and reporting its work to the general meeting; (II) to implement resolutions approved at general meetings; (III) to decide on the Company’s business operating plans, as well as investment plans and investment proposals other than those to be considered and approved at general meetings; (IV) to formulate the Company’s proposed annual financial budget and final accounts; (V) to formulate the Company’s profit distribution plan (including final dividend distribution plan) and plan for recovery of losses; (VI) to formulate proposals for the increase in or reduction of the Company’s registered capital and the issuance of corporate bonds or other securities and listing; (VII) to formulate plans for repurchase of shares of the Company, and plans for merging, separation and dissolution or transformation of the Company’s structure; (VIII)to decide on other external guarantees which require the approval of the general meetings pursuant to laws, administrative r e g u l a t i o n s a n d t h e A r t i c l e s o f Association;

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• (IX) to decide on the investment, purchase and disposal of assets, asset mortgage, en t ru s t ed fi n a n c i a l m a n a g e m ent, connected transactions, etc. within the authority granted by general meetings;

• (IX) to decide on the investment, purchase and disposal of assets, asset mortgage, entrusted financial m anagement, connected transactions, etc. within the authority granted by general meetings;

• (X) to decide on the establishment of the Company’s internal management structure;

• (X) to decide on the establishment of the Company’s internal management structure;

• (XI) in accordance with the chairman’s (XI) in accordance with the chairman’s nomination, to appoint or dismiss the nomination, to appoint or dismiss the Company’s chief executive officer or Company’s chief executive officer or board secretary, and in accordance with board secretary, and in accordance with the chief executive officer’s nomination, the chief executive officer’s nomination, to appoint or dismiss the general manager, to appoint or dismiss the general manager, deputy general manager, chief accountant deputy general manager, chief accountant or chief financial officer of the Company or chief financial officer of the Company and to decide on their remuneration; to and to decide on their remuneration; to appoint or replace the members of the appoint or replace the members of the Board of Directors and the supervisory Board of Directors and the supervisory c o m m i t t e e o f t h e w h o l l y - ow n e d c o m m i t t e e o f t h e w h o l l y - ow n e d subsidiaries of the Company, to appoint, subsidiaries of the Company, to appoint, replace or recommend on the appointment replace or recommend on the appointment of the shareholder representative, director of the shareholder representative, director and supervisors of the subsidiaries and and supervisors of the subsidiaries and associates of the Company; associates of the Company;

• (XII) to formulate the Company’s basic (XII) to formulate the Company’s basic management systems; management systems;

• (XIII) to formulate and implement share (XIII) to formulate and implement share incentive scheme (including share option incentive scheme (including share option plan permitted by laws and regulations); plan permitted by laws and regulations);

• (XIV) t o f o r m u l a t e p r o p o s a l s f o r t h e (XIV) t o f o r m u l a t e p r o p o s a l s f o r t h e amendments of the Company’s Articles of amendments of the Company’s Articles of Association; Association;

• (XV) subject to in compliance with the relevant (XV) subject to in compliance with the relevant laws of China, to decide upon the laws of China, to decide upon the Company’s wage standard and welfare Company’s wage standard and welfare and incentive policy; and incentive policy;

• (XVI) to resolve on the other important matters (XVI) to resolve on the other important matters and administrative affairs of the Company and administrative affairs of the Company other than those which shall be resolved other than those which shall be resolved at general meetings pursuant to Company at general meetings pursuant to Company Law and the Articles of Association, and Law and the Articles of Association, and to enter into other important agreements; to enter into other important agreements;

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• (XVII) to formulate the Company’s plans for major acquisition or disposal;

• (XVIII) to perform other functions as delegated by the general meeting and the Articles of Association of the Company.

Except for resolutions of the Board of Directors in respect of matters specified in items (VI), (VII), (VIII), (XI) and (XIV) of this article which shall be passed by more than two-thirds of all the directors, resolutions of the Board of Directors in respect of all other matters may be passed by a majority of directors.

If any director of the Company is associated with the enterprises that are involved in the matters to be resolved at the Board meetings, he or she shall not exercise his or her voting rights for such matters, nor shall such director exercise voting rights on behalf of other directors. Such Board meetings shall be convened by a majority of the directors present thereat who are not connected. The resolution of the Board meeting shall be passed by more than half of the non-connected directors. If the number of non-connected directors attending the meetings is less than 3, such resolutions shall be submitted to the general meeting for approval.

The Board of Directors’ resolutions in respect of connected transactions of the Company shall only come into effect upon the signing by independent directors.

• (XVII) to formulate the Company’s plans for major acquisition or disposal;

• (XVIII) to promote corporate governance and decision making in accordance with law, to supervise the construction planning of legal corporate governance, to develop and implement the general legal adviser system, and to guide the study of resolving major issues on construction of legal corporate governance, so as to provide the conditions and protection for the construction of legal corporate governance in accordance with law;

• (XIX) to perform other functions as delegated by the general meeting and the Articles of Association of the Company.

Except for resolutions of the Board of Directors in respect of matters specified in items (VI), (VII), (VIII), (XI) and (XIV) of this article which shall be passed by more than two-thirds of all the directors, resolutions of the Board of Directors in respect of all other matters may be passed by a majority of directors.

If any director of the Company is associated with the enterprises that are involved in the matters to be resolved at the Board meetings, he or she shall not exercise his or her voting rights for such matters, nor shall such director exercise voting rights on behalf of other directors. Such Board meetings shall be convened by a majority of the directors present thereat who are not connected. The resolution of the Board meeting shall be passed by more than half of the non-connected directors. If the number of non-connected directors attending the meetings is less than 3, such resolutions shall be submitted to the general meeting for approval.

The Board of Directors’ resolutions in respect of connected transactions of the Company shall only come into effect upon the signing by independent directors.

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Chapter XIV Supervisory committee

Chapter XIV Supervisory committee

Article 14.2 The Supervisory Committee is composed of 6 persons, including one as chairman of the Supervisory Committee. His appointment and dismissal is subject to voting by more than two thirds of the supervisors. They have a term of 3 years, and are eligible for re-election and re- appointment. The chairman shall make arrangement for fulfilling the duties of the Supervisory Committee.

The duties of the chairman of the Supervisory Committee include:

• (I) convening and presiding over meetings of the Supervisory Committee;

• (II) making arrangement for fulfilling the duties of the Supervisory Committee;

• (I) exercising other functions and powers conferred by the Supervisory Committee.

Article 14.3 The Supervisory Committee is composed of 2 shareholders’ representatives, 2 employees’ representatives and 2 independent supervisors Shareholders’ representatives and independent supervisors are elected and dismissed by the general meeting, while the employees’ representative is elected and dismissed by the employees of the Company in a democratic way. Independent supervisors refer to supervisors independent of the shareholders and not serving any positions in the Company.

In the Supervisory Committee of the Company, external supervisors (not holding any post in the Company, same below) shall account for more than one half of all the supervisors, and there shall be at least 2 independent supervisors. The proportion of employees’ representative in the Supervisory Committee should not be lower than one third.

Additional and supplemental supervisors elected by the general meeting or the Company’s employees, have their term starting from the date of election and ending on the termination of the term of the Supervisory Committee.

Article 14.2 The Supervisory Committee is composed of not less than 3 persons (inclusive), including one as chairman of the Supervisory Committee. His appointment and dismissal is subject to voting by more than two thirds of the supervisors. They have a term of 3 years, and are eligible for re-election and re- appointment. The chairman shall make arrangement for fulfilling the duties of the Supervisory Committee.

The duties of the chairman of the Supervisory Committee include:

• (I) convening and presiding over meetings of the Supervisory Committee;

• (II) making arrangement for fulfilling the duties of the Supervisory Committee;

• (III) exercising other functions and powers conferred by the Supervisory Committee.

Article 14.3 The Supervisory Committee can be composed of external supervisors (not serving any positions in the Company, including shareholder’s representatives, same below) and employees’ representatives. External supervisors are elected and dismissed by the general meeting of the Company, while the employees’ representatives are elected and dismissed by the employees of the Company in a democratic way.

In the Supervisory Committee of the Company, external supervisors shall account for more than one half of all the supervisors. The proportion of employees’ representative in the Supervisory Committee should not be lower than one third.

Additional and supplemental supervisors elected by the general meeting or the Company’s employees, have their term starting from the date of election and ending on the termination of the term of the Supervisory Committee.

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Chapter XXV Notice	Chapter XXV Notice
Article 25.1The notice of the Company may be served as follows: (I) by personal delivery; (II) by post; (III) by bulletin; (IV) by other means specified in the Articles of Association.	Article 25.1The notice of the Company may be served as follows: (I) by personal delivery; (II) by post; (III) by bulletin; (IV) by electronic means or publication on the website of the Company; (V) by other means specified in the Articles of Association.
Article 25.2Save as otherwise specified in the Articles of Association, notices, documents or written statements sent by the Company to H Share holders of the Company shall be served by personal delivery or prepaid mail to the registered addresses of all the H Share holders.	Article 25.2Corporate communications refers to any documents issued or to be issued by the Company for the information or action of any holders of its securities, including but not limited to: (1) the directors’ report, its annual accounts together with a copy of the auditors’ report and, where applicable, its summary financial report; (2) the interim report and, where applicable, its summary interim report; (3) a notice of meeting; (4) a listing document; (5) a circular; and (6) a proxy form. Save as otherwise specified in the Articles of Association, corporate communications, notices, information or written statements sent by the Company to the shareholders shall be served by hand or prepaid mail to the registered addresses of each of the shareholders, or by electronic means or publication on the Company’s website.

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Article 25.3

Save as otherwise specified, notices or reports required or allowed by the Articles of Association to be sent by announcement shall be announced on at least one of the national newspapers and periodicals designated by the securities regulatory authority of the State Council and on other newspapers and periodicals in China designated by the Board, and shall be announced in English and Chinese on the same day on at least one of the principal English and Chinese newspapers and periodicals in Hong Kong.

Article 25.3

Save as otherwise specified, notices or reports required or allowed by the Articles of Association or the Related Listing Rules to be sent by announcement shall be announced on at least one of the national newspapers and periodicals designated by the securities regulatory authority of the State Council and on other newspapers and periodicals in China designated by the Board, and shall be announced in English and Chinese on the same day on at least one of the principal English and Chinese newspapers and periodicals in Hong Kong, or by electronic means or by posting on the website of the Company as stipulated by the Articles of Association or by any other means as prescribed in the Related Listing Rules. Save as otherwise specified, the Company shall simultaneously disclose any announcements or reports issued pursuant to the Listing Rules of the Stock Exchange of Hong Kong Limited in Hong Kong to the domestic market.

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