COSCO SHIPPING Development : OVERSEAS REGULATORY ANNOUNCEMENT - SHANGHAI UNIVERSAL LOGISTICS TECHNOLOGY CO., LTD. AUDITED FINANCIAL STATEMENTS FOR 2019 AND 2020

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.

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)

OVERSEAS REGULATORY ANNOUNCEMENT

This announcement is made pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The "Shanghai Universal Logistics Technology Co., Ltd. Audited Financial Statements for 2019 and 2020" as published by COSCO SHIPPING Development Co., Ltd. in Chinese on the website of the Shanghai Stock Exchange (www.sse.com.cn) on 29 April 2021 and its English translation extract is enclosed hereto as overseas regulatory announcement for your reference only. In case of any inconsistencies between the Chinese version and the English translation, the Chinese version shall prevail.

By order of the Board

COSCO SHIPPING Development Co., Ltd.

Cai Lei

Joint Company Secretary

29 April 2021

As at the date of this announcement, the Board comprises Mr. Wang Daxiong, Mr. Liu Chong and Mr. Xu Hui, being executive Directors, Mr. Huang Jian, Mr. Liang Yanfeng and Mr. Ip Sing Chi, being non-executive Directors, and Mr. Cai Hongping, Ms. Hai Chi Yuet, Mr. Graeme Jack, Mr. Lu Jianzhong and Ms. Zhang Weihua, being independent non-executive Directors.

• The Company is a registered non-Hong Kong company as defined in 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.".

AUDITOR'S REPORT

Ernst & Young Hua Ming (2021) Shen Zi No.61227808_B04

Shanghai Universal Logistics Technology Co., Ltd.

To the Board of Shanghai Universal Logistics Technology Co., Ltd.,

I. AUDIT OPINION

We have audited the financial statements of Shanghai Universal Logistics Technology Co., Ltd., which comprise the balance sheet as at 31 December 2019 and 31 December 2020, the income statements, the statements of changes in owners' equity and cash flow statements for 2019 and 2020, and notes to the relevant financial statements.

In our opinion, the financial statements of Shanghai Universal Logistics Technology Co., Ltd. as attached herewith are prepared in accordance with the provisions of Accounting Standards for Business Enterprises to a material extent, and give a fair view of the financial position of Shanghai Universal Logistics Technology Co., Ltd. as at 31 December 2019 and 31 December 2020, and of its operating results and its cash flows for 2019 and 2020.

II. BASIS FOR AUDIT OPINION

We conducted our audit in accordance with the provisions of the Standards on Auditing for Certified Public Accountants in China. Our responsibilities under those standards are further described in the section of Certified Public Accountants' Responsibilities for the Audit of the Financial Statements under this audit report. We are independent of Shanghai Universal Logistics Technology Co., Ltd. in accordance with the Code of Ethics for Certified Public Accountants in China, and we have fulfilled our other ethical responsibilities accordingly. We believe that the audit evidences we have obtained are sufficient and appropriate to provide a basis for our audit opinion.

III. KEY AUDIT MATTERS

Audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for 2019 and 2020. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Set against this background are our responses to these matters and how they are addressed in our audit.

We have performed our responsibilities described in the section of "Certified Public Accountants' Responsibilities for the Audit of the Financial Statements" under this report, which include the liabilities related to these key audit matters. Correspondingly, our audit includes audit procedures designed to be executed where there are material misstatement risks for these financial statements. The results deriving from our audit, including the procedures to address the following key audit matters, formed a basis for the audit opinion of the financial statements as a whole.

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	AUDITOR'S REPORT (Continued)
	Ernst & Young Hua Ming (2021) Shen Zi No.61227808_B04
	Shanghai Universal Logistics Technology Co., Ltd.
III. KEY AUDIT MATTERS (Continued)
Key Audit Matter		How Our Audit Addressed the Key
		Audit Matter
Revenue recognition

The revenue of the Company is mainly composed of income from technical service and procurement service. In 2020, the recognized revenue of the Company was RMB91,835,398.54; in 2019, the recognized revenue of the Company was RMB31,320,083.81, which was mainly from sales by domestic related parties.

Since revenue is one of the key performance indicators of the Company, and the accurate recognition of revenue has a material impact on the date of financial statements and various financial indicators of the Company. Therefore, revenue recognition was identified as a key audit matter.

For disclosure on the revenue recognition policy, please refer to Note III.13; for disclosure on the revenue, please refer to Note V.17.

Our audit procedures mainly included: We obtained an understanding of processes and internal controls of revenue recognition; performed testing on the design and execution effectiveness of key internal controls.

We inspected the sales contract on a sampling basis to identify the sales business contract and each individual performance obligation, and evaluated whether the point of time when the customer obtains control of the service as judged by the management meets the requirements of the Accounting Standards for Business Enterprises; We performed analytical procedures and detailed tests to review the completeness, authenticity, cut-off of revenue accounting and the accuracy of disclosure.

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AUDITOR'S REPORT (Continued)

Ernst & Young Hua Ming (2021) Shen Zi No.61227808_B04

Shanghai Universal Logistics Technology Co., Ltd.

IV. RESPONSIBILITIES OF THE MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIAL STATEMENT

The Management of Shanghai Universal Logistics Technology Co., Ltd. is responsible for the preparation of the financial statements that give a fair view in accordance with the provisions of Accounting Standards for Business Enterprises, and for such internal control to be designed, exercised and maintained as the management determines is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

In preparing the financial statements, the management is responsible for assessing the ability of Shanghai Universal Logistics Technology Co., Ltd. to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless under the circumstances of liquidation, cessation of operation or lack of other realistic alternatives.

Those charged with governance are responsible for overseeing the financial reporting process of Shanghai Universal Logistics Technology Co., Ltd..

V. CERTIFIED PUBLIC ACCOUNTANTS' RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with the Standards on Auditing, we exercise professional judgment and maintain skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

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AUDITOR'S REPORT (Continued)

Ernst & Young Hua Ming (2021) Shen Zi No.61227808_B04

Shanghai Universal Logistics Technology Co., Ltd.

V. CERTIFIED PUBLIC ACCOUNTANTS' RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENT (Continued)

As part of an audit in accordance with the Standards of Auditing, we exercise professional judgment and maintain skepticism throughout the audit. We also: (Continued)

1. Conclude on the appropriateness of the management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of Shanghai Universal Logistics Technology Co., Ltd. to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause Shanghai Universal Logistics Technology Co., Ltd. to cease to continue as a going concern.
2. Evaluate the overall presentation (including the disclosures), structure and content of the financial statements, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for 2019 and 2020 and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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AUDITOR'S REPORT (Continued)

Ernst & Young Hua Ming(2021) Shen Zi No.61227808_B04

Shanghai Universal Logistics Technology Co., Ltd.

（No text on this page）

Ernst & Young Hua Ming LLP	Chinese Certified Public Accountant:
	You Fei (尤飞) (Project partner)

Chinese Certified Public Accountant:

Zhu Li (朱莉)

Beijing, the PRC

27 April 2021

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Shanghai Universal Logistics Technology Co., Ltd.
BALANCE SHEET
As at 31 December 2019 and 31 December 2020			Unit: RMB
				31 December		31 December
Assets	Note V	2020	2019
Current assets
Cash and bank balances	1			295,901,732.22	25,078,115.30
Accounts receivable	2			55,611,986.69	4,508,242.67
Prepayments	3			5,200.00	131,144.00
Other receivables	4			203,746,612.68		53,240,459.72
Total current assets				555,265,531.59	82,957,961.69
Non-current assets
Fixed assets	5			695,071.35	728,680.01
Intangible assets	6			525,718.78	622,926.98
Long-term deferred expenses	7			1,572,124.11		34,748.46
Total non-current assets				2,792,914.24		1,386,355.45
Total assets				558,058,445.83		84,344,317.14

The accompanying notes of the financial statements form part of these financial statements

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Shanghai Universal Logistics Technology Co., Ltd.
BALANCE SHEET (Continued)
As at 31 December 2019 and 31 December 2020	Unit: RMB

			31 December	31 December
Liabilities and owners' equity	Note V	2020				2019
Current liabilities
Staff remuneration payable	8	22,387,237.22				3,731,094.33
Taxes payable	9	8,588,883.16				768,561.60
Other payables	10	210,138,344.20				50,919,292.18
Other current liabilities	11	281,045,680.95				-
Total current liabilities		522,160,145.53				55,418,948.11
Non-current liabilities
Other non-current liabilities	12	240,902.68				321,203.56
Long-term staff remuneration	13	467,725.95				-
payable
Total non-current liabilities			708,628.63				321,203.56
Total liabilities		522,868,774.16				55,740,151.67
Shareholders' equity
Paid-in capital	14	34,266,216.30				34,266,216.30
Surplus reserve	15	1,093,049.59				1,093,049.59
Accumulated losses	16		(169,594.22)		(6,755,100.42)
Total owners' equity			35,189,671.67				28,604,165.47
Total liabilities and owners' equity			558,058,445.83				84,344,317.14

These accompanying financial statements have been signed by:

Legal representative:	Person-in-charge of	Head of the accounting
	accounting affairs:	department:

The accompanying notes of the financial statements form part of these financial statements

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	Shanghai Universal Logistics Technology Co., Ltd.
	INCOME STATEMENT
	2019 and 2020						Unit: RMB
		Note V	2020			2019
Operating revenue	17	91,835,398.54			31,320,083.81
Less: Operating cost	17	44,748.36			63,195.51
	Taxes and surcharges	18	339,483.44			97,467.86
	Administrative expenses	19	83,196,302.97			31,841,837.72
	Finance income	20	(80,746.84)		(247,137.76)
	Including: Interest expense		135,107.41			-
	Interest income		222,084.25			258,908.99
Add: Other gains	21	316,045.57			655,970.11
	(Loss)/Gains from disposal of assets	22		(32,425.75)		23,673.13
Profit from operations		8,619,230.43			244,363.72
Less: Non-operating expense	23		485,622.45			3,605.00
Total profit		8,133,607.98			240,758.72
Less: Income tax expenses	25		1,548,101.78			-
Net profit			6,585,506.20			240,758.72
Total comprehensive income			6,585,506.20			240,758.72

The accompanying notes of the financial statements form part of these financial statements

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Shanghai Universal Logistics Technology Co., Ltd.
STATEMENT OF CHANGES IN OWNERS' EQUITY
2019 and 2020	Unit: RMB
2020

I. Balance at the beginning of the year

1. Changes during the year

1. Total comprehensive income

1. Balance at the end of the year

							Total shareholders'
Paid-in capital		Surplus reserve		Accumulated losses	equity
34,266,216.30	1,093,049.59	(6,755,100.42)		28,604,165.47
-	-	6,585,506.20			6,585,506.20
34,266,216.30	1,093,049.59	(169,594.22)		35,189,671.67

2019

									Total shareholders'
	Paid-in capital	Surplus reserve		Accumulated losses	equity
I. Balance at the beginning of the year	34,266,216.30			1,093,049.59	(6,995,859.14)		28,363,406.75
II. Changes during the year
(I) Total comprehensive income	-			-		240,758.72			240,758.72
III. Balance at the end of the year	34,266,216.30		1,093,049.59		(6,755,100.42)		28,604,165.47

The accompanying notes of the financial statements form part of these financial statements

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Shanghai Universal Logistics Technology Co., Ltd.
STATEMENT OF CASH FLOWS
2019 and 2020	Unit: RMB

		Note V
I.	Cash flow from operating activities
	Cash received from sales of goods and provision of services
	Other cash received from activities related to operation	26
	Sub-total of cash inflow from operating activities
	Cash paid for goods purchased and service rendered
	Cash paid to and on behalf of employees
	Taxes paid
	Other cash paid for activities relating to operation activities	26

Sub-total of cash outflow from operating activities

Net cash flows from operating activities

1. Cash flow from investment activities

Net cash received from disposal of fixed assets, intangible assets and other long-term assets

Sub-total of cash inflow from investment activities

Cash paid for purchase of fixed assets, intangible assets and other long-term assets

Sub-total of cash outflow from investment activities

Net cash flow from investment activities

1. Cash flow from financing activities

Other cash received from activities related to financing activities

26

Sub-total of cash inflow from financing activities

Net cash flow from financing activities

IV. Net decrease in cash and cash equivalents

Add: Balance of cash and cash equivalents at the beginning of the year

V.

Balance of cash and cash equivalents at the end of the year

27

20202019

46,160,185.40 42,175,999.62

1,103,162,306.49 65,586,085.58

1,149,322,491.89 107,762,085.20

358,349.07371,677.89

60,729,389.85 22,894,273.69

5,122,201.33 1,131,759.31

1,091,118,702.04 61,694,903.69

1,157,328,642.29 86,092,614.58

(8,006,150.40) 21,669,470.62

6,160.9956,405.71

6,160.9956,405.71

2,113,772.94-

2,113,772.94-

(2,107,611.95)56,405.71

280,937,379.27-

280,937,379.27-

280,937,379.27-

270,823,616.92 21,725,876.33

25,078,115.30 3,352,238.97

295,901,732.22 25,078,115.30

The accompanying notes of the financial statements form part of these financial statements

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