CSSC Offshore & Marine Engineering : DISCLOSEABLE TRANSACTION REVISION OF EXISTING ANNUAL CAPS UNDER THE 2020-2022 FRAMEWORK AGREEMENT

20093021 CSSC Anno D3 (eng)

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.

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

（H Shares Stock Code: 00317）

DISCLOSEABLE TRANSACTION

REVISION OF EXISTING ANNUAL CAPS UNDER THE 2020-2022 FRAMEWORK AGREEMENT

Independent Financial Adviser to the Independent Board Committee

and Independent Shareholders

Vinco Capital Limited

Reference is made to the announcement of the Company dated 30 December 2019 and the circular of the Company dated 5 February 2020 in relation to the 2020-2022 Framework Agreement. The Supplemental Agreement The Board has reviewed the various existing continuing connected transactions of the Group contemplated under the 2020-2022 Framework Agreement and anticipates that the demand of the Group for certain products and services (including financial services) provided by the CSSC Group pursuant to the 2020-2022 Framework Agreement will exceed the previous projection to the effect that certain existing annual caps contemplated under the 2020-2022 Framework Agreement will not be sufficient to meet the demand of the Group. As such, the Company and CSSC entered into the Supplemental Agreement on 10 September 2020 to revise certain existing caps for products and services (including financial services) provided by the CSSC Group for the year ending 31 December 2020, 2021 and 2022 respectively. For the avoidance of doubt, the entering into and the implementation of the Supplemental Agreement and the transactions (together with the Revised Annual Caps) contemplated thereunder, is conditional upon the approval by Independent Shareholders at the EGM. In any event, prior to obtaining the approval from Independent Shareholders at the EGM, the Company shall continue to comply with the terms of, and the continuing connected transactions (together with the relevant annual caps) under the 2020-2022 Framework Agreement (as approved by Independent Shareholders on 26 February 2020). Hong Kong Listing Rules Implication CSSC, being a controlling shareholder of the Company, is a connected person of the Company pursuant to the Hong Kong Listing Rules. As a result, the transactions between the Group and the CSSC Group constitute connected transactions of the Company. The provision of Financial Services provided by CSSC Group to the Group under the Supplemental Agreement constitutes financial assistance received by the Group from a connected person. As (i) the provision of Financial Services is to be provided to the Group on normal commercial terms that are comparable to or more favourable than those offered by Independent Third Parties for similar services in the PRC and (ii) no security over the assets of the Group is granted in respect of the Financial Services, the Financial Services to be provided by CSSC Group to the Group under the Supplemental Agreement are exempt from reporting, announcement and Independent Shareholders' approval requirements under Rule 14A.90 of the Hong Kong Listing Rules. As the applicable percentage ratios calculated pursuant to Rule 14.07 of the Hong Kong Listing Rules for each of (i) the Aggregated Annual Caps (Products and Services); and (ii) the Aggregated Annual Caps (Financial Services) contemplated under the 2020-2022 Framework Agreement as supplemented by the Supplemental Agreement (save for the provision of the Financial Services by the CSSC Group which is fully exempt pursuant to Rule 14A.90 of the Hong Kong Listing Rules) are higher than 5% on an annual basis, each of the aforesaid transactions contemplated under the 2020-2022 Framework Agreement as supplemented by the Supplemental Agreement constitutes a non-exempt continuing connected transaction of the Company that is subject to reporting, announcement and Independent Shareholders' approval requirements under Chapter 14A of the Hong Kong Listing Rules. As the applicable percentage ratios for the Revised Annual Caps of each of (i) the maximum outstanding daily balance on the Deposits; (ii) the maximum daily balance on the FX Forward Contracts; and (iii) the maximum value of the entrusted assets management under the Supplemental Agreement exceeds 5% but less than 25% calculated pursuant to Rule 14.07 of the Hong Kong Listing Rules, the Revised Annual Caps in relation to each of the above transactions contemplated under the Supplemental Agreement also constitutes a discloseable transaction of the Company and is also subject to the relevant discloseable transaction requirements under Chapter 14 of the Hong Kong Listing Rules. The EGM The Company will convene the EGM at which ordinary resolution will be proposed to approve, among others, the Supplemental Agreement and the transactions contemplated thereunder and the Revised Annual Caps. A circular containing, among others, details of the Supplemental Agreement and the transactions contemplated thereunder and the Revised Annual Caps, a letter from the Independent Board Committee and a letter of advice from the Independent Financial Adviser together with the notice of EGM will be despatched to the Shareholders as soon as practicable. Pursuant to the Hong Kong Listing Rules, CSSC and its associates will abstain from the voting in relation to the ordinary resolution to be put forward at the EGM for the purpose of approving the Supplemental Agreement and the transactions contemplated thereunder and the Revised Annual Caps. Vinco Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders. Shareholders and potential investors may refer to the circular to be despatched by the Company for more details.

I. BACKGROUND

Reference is made to the announcement of the Company dated 30 December 2019 and circular of the Company dated 5 February 2020 in relation to the 2020-2022 Framework Agreement.

The Company and CSSC entered into the Supplemental Agreement on 10 September 2020 to revise certain existing caps for products and services (including financial services) provided by the CSSC Group to the Group for the year ending 31 December 2020, 2021 and 2022 respectively.

For the avoidance of doubt, the entering into and the implementation of the Supplemental Agreement and the transactions (together with the Revised Annual Caps contemplated thereunder), is conditional upon the approval by Independent Shareholders at the EGM. In any event, prior to obtaining the approval from Independent Shareholders at the EGM, the Company shall continue to comply with the terms of, and the continuing connected transactions (together with the relevant annual caps) under the 2020-2022 Framework Agreement (as approved by Independent Shareholders on 26 February 2020).

II. THE SUPPLEMENTAL AGREEMENT

Revision of annual caps

On 10 September 2020, the Company and CSSC entered into the Supplemental Agreement, pursuant to which conditional upon approval by the Independent Shareholders at the EGM, certain existing annual caps under the 2020-2022 Framework Agreement for the year ending 31 December 2020, 2021 and 2022 respectively will be revised as follows.

Unit RMB million

	Existing Annual Caps	Revised Annual Caps
	For the year ending 31 December	For the year ending 31 December
Transaction	2020	2021	2022	2020	2021	2022
Products and services provided by the CSSC Group to the Group:
(a) Equipment for ship, electrical and mechanical engineering equipment and metallic materials, shipbuilding accessories , etc.	5,739.49	5,569.10	6,427.65	6,219.49	6,125.90	7,073.54
(b) Leasing of production areas, labour supply, design and technical services; and Comprehensive Services	327.84	282.12	321.63	530.67	517.40	594.55
Financial services provided by the CSSC Group to the Group:
(c) (i) (1) Maximum daily balance on the Deposits (Note 1)	6,235.00	4,235.00	4,235.00	6,235.00	6,235.00	6,235.00
(2) Aggregate interest on Deposits for the year	40.55	34.55	34.55	81.65	86.75	86.75
(ii) Aggregate fees on financial and credit services (Note 2)	2.33	1.72	1.72	3.62	4.22	4.82
(iii) Maximum daily balance on the FX Forward Contracts (Note 3)	4,740.56	800.00	800.00	4,740.56	2,000.00	2,000.00
(iv) (1) Maximum value of entrusted assets managements	2,000.00	1,000.00	1,000.00	3,000.00	3,500.00	3,500.00
(2) Aggregate interest on entrusted assets management services (Note 4)	44.55	36.30	36.30	44.55	73.50	73.50
(d) Guarantee fee for guarantee services by the CSSC Group (Note 5)	-	-	-	12.80	12.80	12.80

((a) to (d) collectively "Continuing Connected Transactions" and each a "Continuing Connected Transaction")

Notes:

1. The annual caps in respect of the maximum daily balance on the Deposits for the year ending 31 December 2020 remains unchanged.

2. The maximum subject amount for the financial and credit services in aggregate for each of the year ending 31 December 2020, 2021 and 2022 respectively remains unchanged.

3. The annual caps in respect of the maximum daily balance on the FX Forward Contracts for the year ending 31 December 2020 remains unchanged.

4. The annual caps in respect of the aggregate interest on entrusted assets management services for the year ending 31 December 2020 remains unchanged.

5. The maximum guaranteed amount will be revised from RMB1,600 million to RMB4,800 million for each of the year ending 31 December 2020 and 2021. The increase of the above-mentioned guaranteed amount is due to the fact that Huangpu Wenchong is bidding a series of ship products with total value of approximately RMB3,200 million. The counterparty requested the Group to provide a letter of guarantee from CSSC. The expected guarantee period is 79-month. It is expected that the contract for the said project will be entered into in November 2020 or early 2021, and a letter of guarantee from CSSC is expected to be required within 30 days after the signing of contract. Therefore, a guarantee of RMB3,200 million by CSSC will be required in late 2020 or early 2021. Accordingly, the maximum guaranteed amount in both 2020 and 2021 is increased by RMB3,200 million in view of the above. In case the said guarantee by CSSC is signed in 2020, the above-mentioned RMB3,200 million will not be included in the maximum guaranteed amount in 2021. The maximum guaranteed amount for the year ending 31 December 2022 will remain unchanged at RMB1,600 million.

Save as to the above, the other terms of the 2020-2022 Framework Agreement, including the principal terms, the pricing policy and the existing annual caps for such other transactions contemplated under the 2020-2022 Framework Agreement shall remain unchanged.

III. HISTORICAL AMOUNTS

The table below sets out the amount of each category of the Continuing Connected Transactions for the seven months ended 31 July 2020 and the comparison with the respective annual caps approved by the Independent Shareholders under the 2020-2022 Framework Agreement for the year ending 31 December 2020.

Unit RMB million

	Existing Annual Caps	Historical Figures
	For the year ending 31 December 2020	For seven months ended 31 July 2020
Transaction
Products and services provided by the CSSC Group to the Group:
(a) Equipment for ship, electrical and mechanical engineering equipment and metallic materials, shipbuilding accessories , etc.	5,739.49	2,748.43
(b) Leasing of production areas, labour supply, design and technical services; and Comprehensive Services	327.84	303.06
Financial services provided by the CSSC Group to the Group:
(c) (i) (1) Maximum daily balance on the Deposits	6,235.00	5,974.87
(2) Aggregate interest on Deposits for the year	40.55	37.40
(ii) Aggregate fees on financial and credit services (Note 1)	2.33	0.76
(iii) Maximum daily balance on the FX Forward Contracts	4,740.56	3,475.65
(iv) (1) Maximum value of entrusted assets managements	2,000.00	1,550.00
(2) Aggregate interest on entrusted assets management services	44.55	3.04
(d) Guarantee fee for guarantee services by the CSSC Group (Note 2)	-	-

Notes:

* The historical figures for the seven months ended 31 July 2020 were unaudited figures.

1. The maximum subject amount for the financial and credit services in aggregate for the year ending 31 December 2020 is RMB6,570 million.

2. The maximum guaranteed amount under the 2020-2022 Framework Agreement for the year ending 31 December 2020 is RMB1,600 million, which will be revised to RMB4,800 million pursuant to the Supplemental Agreement.

IV. REASONS AND BENEFITS FOR ENTERING INTO THE SUPPLEMENTAL AGREEMENT

The Board has reviewed the various existing continuing connected transactions of the Group contemplated under the 2020-2022 Framework Agreement and anticipates that the demand of the Group for certain products and services (including financial services) provided by the CSSC Group pursuant to the 2020-2022 Framework Agreement will exceed the previous projection to the effect that certain existing annual caps contemplated under the 2020-2022 Framework Agreement will not be sufficient to meet the demand of the Group. Accordingly, the Company entered into the Supplemental Agreement with CSSC in order to cater for the Group's demand for such products and services and to facilitate the Group in capturing its potential business growth.

V. BASIS FOR DETERMINING THE REVISED ANNUAL CAPS

The Revised Annual Caps are determined taking into account primarily the historical transaction amounts, production orders in hand, expected orders, material costs and anticipated total production value of the Group.

In arriving at the Revised Annual Caps, the Directors have also taken into consideration the following factors:

Products and services provided by the CSSC Group to the Group

Benefiting from the rapid development of the offshore wind power industry, the Group is expected to achieve a substantial increase in the contract amount in relation to offshore wind power infrastructure component in 2020. It is expected that there will be an increase in the Group's demand sourcing of equipment for ship, electrical and mechanical engineering equipment and metallic materials, shipbuilding accessories in each of the year ending 31 December 2020, 2021 and 2022.

As to leasing of production areas, labour supply, design and technical services; and Comprehensive Services, following the initiation of relocation of a factory in Wenchong to Nansha ("Nansha Factory") by Guangzhou Wenchong Shipyard Co. Ltd., a subsidiary of Huangpu Wenchong, the manufacturing work of those products which were originally made in the factory in Wenchong have successively begun to be transferred to the Nansha Factory. However, the personnel dispatched to the Nansha Factory by lavour service companies is unable to meet the production needs of the Nansha Factory, coupled with the impact of COVID-19 epidemic resulting those dispatched personnel cannot resume work on time. The local labour supply is unstable as well. As such, in order to ensure the business operation of the Nansha Factory could commence normally, Huangpu Wenchong has introduced the labour workforce team of the shipbuilding factory of Dalian Shipbuilding Industrial Engineering Company Limited* (大連船舶工業工程公司), being a member of the CSSC Group for provision of labour services, on terms that should be of no less favourable to the Group than terms available to or from (as appropriate) Independent Third Parties. In view of the expected increase in demand for labour supply, the annual caps for leasing of production areas, labour supply, design and technical services; and Comprehensive Services for each of the year ending 31 December 2020, 2021 and 2023 should be increased accordingly.

Financial services provided by the CSSC Group to the Group

Based on the estimation of order acceptance and collection plan of the Group and Huangpu Wenchong, it is expected that the Group's capital on hand will increase gradually and the Group's demand for deposit services and entrusted assets management services from the CSSC Group and the aggregate interest generated therefrom will increase accordingly.

As to financial and credit services and FX Forward Contracts, in view of the production orders in hand and expected new product acceptance plan, together with the fact that the terms of the financial and credit services and FX Forward Contracts of CSSC Group are no less favourable to the Group than terms available to or from (as appropriate) Independent Third Parties, it is expected that there will be an increase in the demand of the Group for the said financial services.

In respect of guarantee services, given that Huangpu Wenchong is in the process of tendering a project which requires guarantee from CSSC Group and is expected to take place between late 2020 and early 2021, as such it is expected that there may be a significant increase in the maximum guaranteed amount for either of the year ending 31 December 2020 and 31 December 2021 respectively. Further, given that the guarantee services contemplated under the Supplemental Agreement is different from the same as contemplated under the 2020-2022 Framework Agreement, since the guarantee services for the project as mentioned above are guarantee services to be provided by CSSC Group for a specific project of the Group, hence the CSSC Group may charge relevant guarantee fee which is of no less favourable terms to the Group than terms available to or from (as appropriate) Independent Third Parties.

The Directors (excluding the view of the independent non-executive Directors who will provide their view based on the advice to be provided by the Independent Financial Adviser) are of the view that the Supplemental Agreement was entered into: (i) in the ordinary and usual course of business of the Company; (ii) on normal commercial terms (on arm's length basis or on terms no less favourable to the Company than terms available from Independent Third Parties); and (iii) on terms (including the Revised Annual Caps) that are fair and reasonable and in the interest of the Company and its shareholders as a whole.

VI. IMPLICATIONS UNDER THE HONG KONG LISTING RULES

CSSC, being a controlling shareholder of the Company, is a connected person of the Company pursuant to the Hong Kong Listing Rules. As a result, the transactions between the Group and the CSSC Group constitute connected transactions of the Company.

The provision of Financial Services provided by CSSC Group to the Group under the Supplemental Agreement constitutes financial assistance received by the Group from a connected person. As (i) the provision of Financial Services is to be provided to the Group on normal commercial terms that are comparable to or more favourable than those offered by Independent Third Parties for similar services in the PRC and (ii) no security over the assets of the Group is granted in respect of the Financial Services, the Financial Services to be provided by CSSC Group to the Group under the Supplemental Agreement are exempt from reporting, announcement and Independent Shareholders' approval requirements under Rule 14A.90 of the Hong Kong Listing Rules.

As the applicable percentage ratios calculated pursuant to Rule 14.07 of the Hong Kong Listing Rules for each of (i) the Aggregated Annual Caps (Products and Services); and (ii) the Aggregated Annual Caps (Financial Services) contemplated under the 2020-2022 Framework Agreement as supplemented by the Supplemental Agreement (save for the provision of the Financial Services by the CSSC Group which is fully exempt pursuant to Rule 14A.90 of the Hong Kong Listing Rules) are higher than 5% on an annual basis, each of the aforesaid transactions contemplated under the 2020-2022 Framework Agreement as supplemented by the Supplemental Agreement constitutes a non-exempt continuing connected transaction of the Company that is subject to reporting, announcement and Independent Shareholders' approval requirements under Chapter 14A of the Hong Kong Listing Rules.

As the applicable percentage ratios for the Revised Annual Caps of each of (i) the maximum outstanding daily balance on the Deposits; (ii) the maximum daily balance on the FX Forward Contracts; and (iii) the maximum value of the entrusted assets management under the Supplemental Agreement exceed 5% but less than 25% calculated pursuant to Rule 14.07 of the Hong Kong Listing Rules, the Revised Annual Caps in relation to each of the above transactions contemplated under the Supplemental Agreement also constitutes a discloseable transaction of the Company and is also subject to the relevant discloseable transaction requirements under Chapter 14 of the Hong Kong Listing Rules.

The Company will comply with all relevant reporting and independent non-executive Directors' review requirements under Chapter 14A of the Hong Kong Listing Rules in respect of the Continuing Connected Transactions (save for the provision of the Financial Services).

VII. INFORMATION ABOUT THE COMPANY, CSSC AND CSSC FINANCE

Information about the Company

The Company is a core subsidiary and platform of CSSC Group (a large-scale state-owned enterprise) in Southern China. As at the date of this announcement, the Company has a major non-wholly owned subsidiary, Huangpu Wenchong, and its principal activities cover four major segments including defense equipment, shipbuilding, offshore engineering and non-ship business, with principal products of shipbuilding and marine products including military ships, special supporting ships, public services ships, feeder container ships, offshore platform, as well as non-ship products including steel structures.

Information about CSSC

CSSC is a State-authorized investment institution directly supervised and administered by SASAC whose core business includes shipbuilding, ship-repairing, processing, export/import of marine equipment, diversified businesses such as other steel structure manufacturing and international cooperation, joint venture operations, financing, technology trading and workforce exportation.

As at the date of this announcement, CSSC, the controlling shareholder of the Company, held 841,264,642 Shares of the Company, representing 59.52% of the issued Shares of the Company.

Information about CSSC Finance

CSSC Finance is a wholly-owned subsidiary of CSSC. The principal business of CSSC Finance includes deposit-taking, loans handling, acceptance and discounting of bills, inter-bank borrowing businesses and provision of other financial services.

Under the Hong Kong Listing Rules, CSSC is a connected person of the Company while the transactions between the Group and any of the CSSC Group (including CSSC Finance) constitute connected transactions of the Company, subject to the compliance with the relevant disclosures and/or

Independent Shareholders' approval requirements of the Hong Kong Listing Rules.

VIII. CIRCULAR AND EGM

The Company will convene the EGM to seek, among other things, the Independent Shareholders' prior approval on the entering into the Supplemental Agreement, and the transaction contemplated thereunder and the Revised Annual Caps. CSSC and its associates will abstain from voting on the approval of the relevant resolutions proposed at the EGM.

The Company will form an Independent Board Committee comprising of all the independent non-executive Directors to advise the Independent Shareholders whether, among other things, the terms of the Supplemental Agreement and the transaction contemplated thereunder and the Revised Annual Caps are fair and reasonable and are in the interests of the Company and its Shareholders as a whole. The Company has appointed Vinco Capital as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders on, among other things, the Supplemental Agreement and the transactions contemplated thereunder and the Revised Annual Caps.

A circular containing, among others, details of the Supplemental Agreement and the transactions contemplated thereunder and the Revised Annual Caps, a letter from the Independent Board Committee and a letter of advice from the Independent Financial Adviser together with the notice of EGM, will be dispatched to the H Shareholders and posted on the website of Hong Kong Stock Exchange www.hkexnews.com.hk, the website of the Shanghai Stock Exchange www.sse.com.cn and the website of the Company comec.cssc.net.cn as soon as practicable.

IX. DEFINITIONS

"2020-2022 Framework Agreement"	framework agreement for the continuing connected transactions for the period from 1 January 2020 to 31 December 2022 (both days inclusive) entered into between the Company and CSSC on 30 December 2019 and approved by the Independent Shareholders on 26 February 2020;
"Aggregated Annual Caps (Financial Services)"	the aggregated annual caps for financial services provided by the CSSC Group to the Group contemplated under the 2020-2022 Framework Agreement as supplemented by the Supplemental Agreement, which are not otherwise exempt from reporting, announcement and Independent Shareholders' approval requirements under Rule 14A.90 of the Hong Kong Listing Rules, comprising the Revised Annual Caps of each of (i) the maximum daily balance on the Deposits; (ii) aggregate interest on Deposits for the year; (iii) aggregate interest on Loans Granted by CSSC Group for the year; (iv) aggregate fees on financial and credit services; (v) maximum daily balance on the FX Forward Contracts; (vi) maximum value of the entrusted assets management services; (vii) aggregate interest on entrusted assets management services; and (viii) guarantee fees for guarantee services;
"Aggregated Annual Caps (Products and Services)"	the aggregated annual caps for products and services provided by the CSSC Group to the Group and agency services provided by the CSSC Group to the Group contemplated under the 2020-2022 Framework Agreement as supplemented by the Supplemental Agreement, being the aggregation of the Revised Annual Caps for products and services provided by the CSSC Group to the Group and the Unrevised Annual Caps;
"associate(s)"	has the meaning ascribed to it in the Hong Kong Listing Rules;
"Board" or "Board of Directors"	the board of Directors of the Company;
"Business Day"	a day on which banks are open for business in the PRC, other than Saturdays, Sundays or public holidays in the PRC;
"CBRC"	China Banking Regulatory Commission;
"Company"	CSSC Offshore & Marine Engineering (Group) Company Limited, a joint stock company established in the PRC with limited liability, the H Shares of which are listed on the Stock Exchange and the A Shares of which are listed on the Shanghai Stock Exchange;
"Comprehensive Services"	the medical services, catering services, infant care and nursery, training programs for skilled labour and management of staff quarters provided to the Group, the staff of the Group and their family members by the CSSC Group;
"connected person(s)"	has the meaning ascribed to it under the Hong Kong Listing Rules;
"controlling shareholder(s)"	has the meaning ascribed to it under the Hong Kong Listing Rules;
"CSSC"	China State Shipbuilding Corporation* (中國船舶工業集團有限公司), a state-owned enterprise and a state-authorized investment institution directly supervised and administered by the SASAC. As at the date of this announcement, CSSC holds 841,264,642 Shares of the Company, representing 59.52% of the issued Shares of the Company, and is a controlling shareholder of the Company;
"CSSC Finance"	CSSC Finance Company Limited* (中船財務有限責任公司), a wholly-owned subsidiary of CSSC;
"CSSC Group"	CSSC and its subsidiaries;
"Deposits"	the deposits maintained or to be by the Group from time to time with CSSC Finance under the financial services provided by the CSSC Group to the Group;
"Director(s)"	the director(s) of the Company;
"EGM"	the extraordinary general meeting to be convened by the Company for the Independent Shareholders to consider and approve, if thought fit, the Supplemental Agreement and the transactions contemplated thereunder and the Revised Annual Caps;
"Financial Services"	the financial services provided or to be provided by CSSC Group or CSSC Finance to the Group, including the provision of Loans, financial and credit services and guarantee services but excluding the Deposits, the FX Forward Contracts and entrusted assets management services;
FX Forward Contract(s)"	a foreign exchange forward contract or a set of such contracts proposed to be entered into by the Group to hedge against the Group's currency risk in relation to the possible appreciation/depreciation of RMB against foreign currencies;
"Group"	the Company and its subsidiaries;
"H Shares"	overseas listed foreign shares of the Company listed on the Stock Exchange;
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC;
"Hong Kong Listing Rules"	the Rules Governing the Listing of Securities on the Stock Exchange;
"Hong Kong Stock Exchange"	The Stock Exchange of Hong Kong Limited;
"Huangpu Wenchong"	CSSC Huangpu Wenchong Shipbuilding Company Limited* (中船黃埔文沖船舶有限公司), a company established on 1 June 1981 in the PRC and as at the Latest Practicable Date, a subsidiary of the Company
"Independent Third Party(ies)"	party who is a third party independent of the Company and its connected person(s)
"Independent Board Committee"	an independent committee of the Board comprising all the independent non-executive Directors, established for the purpose of advising the Independent Shareholders in connection with the Supplemental Agreement and the transactions contemplated thereunder and the Revised Annual Caps;
"Independent Financial Adviser" or "Vinco Capital"	Vinco Capital Limited, a corporation licensed to carry on type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO, and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in connection with the Supplemental Agreement and the transactions contemplated thereunder and the Revised Annual Caps;
"Independent Shareholders"	Shareholders other than CSSC and its associates, none of them will be required to abstain from voting at the EGM to be convened for approval of the relevant transactions;
"Loans"	the loans advanced or to be by CSSC Finance to the Group from time to time under the financial services to be provided by the CSSC Group to the Group pursuant to the Supplemental Agreement;
"PRC"	the People's Republic of China and, for the sole purposes of this announcement, excludes Taiwan, Hong Kong and Macau Special Administrative Region of the PRC;
"Revised Annual Caps"	the revised annual caps for the continuing connected transaction contemplated under the Supplemental Agreement;
"RMB"	Renminbi, the lawful currency of the PRC;
"SASAC"	the State-owned Assets Supervision and Administration Commission of the State Council of the PRC;
"Shareholder(s)"	holder(s) of Shares;
"Shares"	shares of RMB1.00 each in the share capital of the Company;
"Supplemental Agreement"	the supplemental agreement to the 2020-2022 Framework Agreement entered into between the Company and CSSC on 10 September 2020, which is conditional up on approval by the Independent Shareholders at EGM;
"Unrevised Annual Caps"	the annual caps for the agency services provided by the CSSC Group to the Group contemplated under the 2020-2022 Framework Agreement which have not been revised pursuant to the Supplemental Agreement;
"%"	percent.

By order of the Board

CSSC Offshore & Marine Engineering (Group) Company Limited

Li Zhidong

Company Secretary

Guangzhou, 10 September 2020

As at the date of this announcement, the Board comprises eleven Directors, namely executive Directors Mr. Han Guangde, Mr. Chen Zhongqian, Mr. Chen Liping, Mr. Sheng Jigang, Mr. Xiang Huimin and Mr. Chen Ji, non-executive Directors Mr. Shi Jun, and independent non-executive Directors Mr. Wang Yichu, Mr. Min Weiguo, Mr. Liu Renhuai and Mr. Yu Shiyou.

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