CSSC Offshore & Marine Engineering : ANNOUNCEMENT ON CHANGE OF ACCOUNTING FIRM

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

Stock Code: 00317

ANNOUNCEMENT ON CHANGE OF ACCOUNTING FIRM

The board of directors of the Company and all directors warrant that there are no false representations or misleading statements contained in, or material omissions from, this announcement, and jointly and severally accept responsibilities for the truthfulness, accuracy and completeness of this announcement.

IMPORTANT NOTICE:

• Name of the accounting firm to be engaged: BDO China SHU LUN PAN Certified Public Accountants LLP
• Name of the accounting firm formerly engaged: WUYIGE Certified Public Accountants LLP
• Brief reasons for the change of accounting firm and dissenting views of the accountants formerly engaged: Having comprehensively considered the current business and development needs, the Company intends to appoint BDO China SHU LUN PAN Certified Public Accountants LLP (hereinafter referred to as "Shu Lun Pan CPAs") as the auditor for financial reports and internal control auditor of the Company for the year 2021. The Company has fully communicated with WUYIGE Certified Public Accountants LLP (hereinafter referred to as "WUYIGE") regarding the change of accounting firm and WUYIGE has noted the matter and confirmed that it has no objection.

The sixth meeting of the tenth session of the board of directors of CSSC Offshore & Marine Engineering (Group) Company Limited (the "Company") was held on Monday, 17 May 2021 by way of telecommunication voting, at which the "Proposal on the appointment of auditor of the Company for financial reports for 2021" and the "Resolution in relation to the appointment of internal control auditor of the Company for 2021" were considered and approved. The Company intends to appoint BDO China SHU LUN PAN Certified Public Accountants LLP as the auditor for financial reports and internal

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control auditor of the Company for the year 2021 for a term of one year, among which, the financial reporting audit fee of RMB1.05 million (tax inclusive) is subject to be submitted to the general meeting of the Company for consideration and approval; and internal control audit fee of RMB0.28 million (tax inclusive). Relevant information is set out as below:

1. BASIC INFORMATION ON THE ACCOUNTING FIRM TO BE ENGAGED
2. 1. Information about the institution

   1. Basic information

1. Overview

Founded in Shanghai in 1927, Shu Lun Pan CPAs was re-established in 1986 and became the first special general partnership accounting firm in China to be restructured in 2010 with the registration address in Shanghai. The chief partner is Mr. Zhu Jiandi. Shu Lun Pan CPAs is a member firm of the international accounting network of BDO, it has been engaged in securities service business for a long time and is qualified to provide audit for H-share, and has been registered with the American Public Company Accounting Oversight Board (PCAOB). According to the "Information on the Top 100 Accounting Firms with Comprehensive Evaluation for 2019" released by the China Institute of Certified Public Accountants in November 2020, Shu Lun Pan CPAs ranked first in terms of revenue size for domestic firms and second in terms of comprehensive evaluation for domestic firms.

1. Personnel Information

As of the end of 2020, Shu Lun Pan CPAs had 232 partners, 2,323 registered accountants and a total of 9,114 practitioners, all of whom were engaged in the securities services business.

1. Business Scale

Shu Lun Pan CPAs's business income in 2020 (unaudited) was RMB3.814 billion, of which income from audit business was RMB3.040 billion and income from securities business was RMB1.246 billion.

In 2020, Shu Lun Pan CPAs has provided annual report audit services for 576 listed companies and provided audit for 9 clients of listed companies in the same industry (industry in railway, ship, aerospace and other equipment manufacturing transportation).

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2. Investor protection capability

As of the end of 2020, Shu Lun Pan CPAs had drawn down an occupational risk fund of RMB129 million and purchased occupational insurance with an accumulated limit of RMB1.25 billion, and the relevant occupational insurance is able to cover civil liability for compensation arising from audit failures.

3. Integrity record

In the past three years, Shu Lun Pan CPAs was subject to 0 criminal penalties, 4 administrative penalties, 26 supervision and administration measures, 0 self-regulatory measures, and 3 disciplinary sanctions due to its practice, involving 62 practitioners.

1. Project information

1. Basic information

					Commencement
			Commencement	Commencement	of providing
		CPA practice	of auditing listed	of practice with	audit service for
Project	Name	time	companies	this firm	the Company
Project partner	Liang Qianhai	2006	2006	2012	2021
Signing CPA	Lu Li	2015	2012	2015	2021
Quality control	Wang Shouyi	2008	2006	2012	2021
reviewer

1. Project partners' practice in the past three years:
   Name: Liang Qianhai

Time	Name of the listed company	Position
2018	Harbin Electric Corporation	Project partner
2020	Guangdong Adway Construction (Group)	Project partner
	Holdings Company Limited
2018-2020	China Shipbuilding Industry Group Power Co.,	Project partner
	Ltd.
2018-2019	Guangzhou Xiangxue Pharmaceutical Co., Ltd	Project partner
2018-2019	Zhanjiang Guolian Aquatic Products Co., Ltd.	Project partner
2018-2020	China Harzone Industry Corp., Ltd.	Project partner
2018-2020	Hubei Jiuzhiyang Infrared System Co., Ltd.	Project partner
2020	Zhiyang Innovation Technology Co., Ltd.	Project partner
2019-2020	Xiangyu Medical Co., Ltd.	Project partner

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1. Signing CPA's practice in the past three years:
   Name: Lu Li

Time	Name of the listed company	Position
2018	Beijing Trust & Far Technology Co., Ltd.	Signing CPA
2018-2019 Bohai Ferry Group Co., Ltd.	Signing CPA
2019-2020 Lepu Medical Technology(Beijing) Co., Ltd.	Signing CPA
2019-2020 Wuhan Nusun Landscape Co., Ltd.	Signing CPA
2020	Shanghai Qifan Cable Co., Ltd.	Signing CPA
2020	Tianjin You Fa Steel Tubes Group Co., Ltd	Signing CPA
2020	Shenzhen EXC-LED technology Co., Ltd.	Signing CPA
2020	Shenzhen Bioeasy Biotechnology Co., ltd.	Signing CPA

1. Quality control reviewer's practice in the past three years:
   Name: Wang Shouyi

Time	Name of the listed company	Position
2018	Shanghai Aerospace Automobile	Project partner
	Electromechanical Co., Ltd.
2019	Beijing Watertek Information Technology Co.,	Project partner
	Ltd.
2019	Shunliban Information Service Co., Ltd.	Project partner
2020	Shenzhen Changhong Technology Co., Ltd.	Project partner
2018-2020	GuangZhou Seagull Kitchen And Bath Products	Project partner
	Co., Ltd.
2019-2020	CNOOC Energy Technology & Services	Project partner
	Limited
2019-2020	Shenzhen Guangyunda Photoelectric	Project partner
	Technology Co., Ltd.
2019-2020	Jinzhou Jixiang Molybdenum Co., Ltd.	Project partner

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2. Independence and integrity record of project team members

There is no breach of the independence requirement under the Code of Ethics for Certified Public Accountants of PRC by the project partner, signing CPA and quality control reviewer. Except for the project partner who was subject to administrative regulatory measures once in 2019, there is no record of criminal penalties, administrative penalties and other administrative regulatory measures and self- regulatory measures in the past three years.

1. Audit fee

1. Pricing principles for audit fee

The pricing principles for audit fee are based on a number of factors including the size of business of the company, the industry in which it operates and the complexity of the accounting process, and are determined by the number of auditors required to audit the annual report of the Company and the amount of work involved, as well as the standard of fees charged by the firm.

2. Year-on-year changes in audit fees
	2020	2021	Changes (%)
Audit fee for annual report (RMB ten
thousand)	121.00	105.00	-13.22
Audit fee for internal audit (RMB ten
thousand)	30.00	28.00	-6.67

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