Cosco Shipping Intrntl Hongkong : Audit Committee - Terms of Reference

Audit Committee Terms of Reference Revised version dated 24th August 2017 Audit Committee Terms of Reference Constitution

1. The board of directors (the "Board") of COSCO SHIPPING International (Hong Kong) Co., Ltd. (the "Company") established an Audit Committee on 21st September 1998 and approved its terms of reference.

   Membership

2. The members of the Audit Committee shall be appointed by the Board from amongst the non-executive directors of the Company and shall consist of not less than three members, a majority of whom should be independent non-executive directors. A quorum for the meeting shall be two committee members.

3. The chairman of the Audit Committee should be an independent non-executive director and shall be appointed by the Board. In his absence, committee members present may elect another member who is an independent non-executive director to chair the committee meeting.

   Attendance at meeting

4. In addition to the members of the Audit Committee, the Financial Controller/Chief Financial Officer, the head of Internal Audit Department of the Company and the representative(s) of the external auditor shall normally attend the meetings. The Audit Committee shall meet with the external auditor, the head of Internal Audit Department and the Financial Controller/Chief Financial Officer at least twice a year without executive directors being present.

5. The Audit Committee may, from time to time, invite any Board member or senior management of the Company or any other person to attend any of its meetings so as to ensure that the Audit Committee can better perform its duties and obligations.

6. The Company Secretary or his or her delegate or such other person appointed by the chairman of the Audit Committee shall be the secretary of the Audit Committee.

   Frequency and procedure of meeting

7. Meetings shall be held at least twice a year. The external auditor may request a meeting if they consider that is necessary. The members of the Audit Committee may, from time to time, adopt the procedure governing the convening of committee meetings, the means and procedure for passing the resolutions at committee meetings.

   Authority

8. The Audit Committee is authorised by the Board to:

9. carry out such related matters in accordance with its terms of reference. It is authorised to obtain any information it requires from any employees of the Company and all the employees of the Company are required to co-operate with any request made by the Audit Committee;

10. communicate with the external auditor, the head of Internal Audit Department, management and employees of the Company without any restrictions; and

11. seek advice from external professionals at the Company's expense, and if necessary, may invite those external professional(s) to attend the meeting of the Audit Committee.

    Duties

12. The duties of the Audit Committee are as follows:

13. to contribute towards a climate of discipline, ethical behaviour, awareness of the risk management and internal controls within the Company and its subsidiaries (collectively, the "Group"); and

14. to ensure all members of the Audit Committee have full understanding in all aspects including the structure, controls and types of transactions of the Group, in order to have assessment of the significant risks faced by the Group.

15. Part A：Relationship and communication with the Company's external auditor

16. primarily responsible for making recommendations to the Board on the appointment, re-appointment and removal of the external auditor;

17. to approve the remuneration and terms of engagement of the external auditor;

18. responsible for the matters relating to the resignation or dismissal of the external auditor, and to review and approve the announcement to be published in relation to the change of external auditor;

19. to review and monitor the external auditor' independence and objectivity and the effectiveness of the audit process in accordance with applicable standards;

20. to discuss with the external auditor the nature and scope of the audit and reporting obligations before the audit commences;

21. to review with the external auditor the recent or anticipated developments in accounting principles or reporting practices that may affect the scope of the audit before audit commences; to discuss identified audit risk areas and anticipated audit problems; and to suggest to the external auditor the performance of any supplementary audit or other agreed-upon procedures deemed by the Audit Committee to be appropriate;

22. to meet with the external auditor every year (and on the basis whenever the external auditor or the Audit Committee consider it necessary), and in the absence of management, to discuss matters relating to the audit fees, any issues arising from the audit and any other matters the external auditor or the Audit Committee may wish to raise in respect of the accounting, financial reporting and internal control issues;

23. to review any material queries or issues raised by the external auditor to the Company's management about the accounting records, financial accounts or systems of control, and the management's response to such queries or issues. In general, the purpose is to resolve the different points of view between the management and the external auditor;

24. to review the management letter from external auditor and to ensure the Board provides a timely response to the issues raised in the letter;

25. to develop and implement policies on engaging an external auditor to provide non-audit services to the Company, and to ensure that the external auditor do not perform any services that impair or appear to impair the external auditor' judgement or independence in respect of the Company; and

26. to conclude, the Audit Committee is to act as the key representative body for overseeing the relationship between the Company and the external auditor, including the relationships involving the provision of non-audit services.

Part B：Review of the Company's financial information

1) to review and monitor the completeness, accuracy and fairness of the Company's annual reports, financial statements, interim reports and quarterly reports (if published) and to review significant financial reporting judgements contained therein. In reviewing these reports before submission to the Board, the Audit Committee shall focus particularly on the following matters: