Dida Inc. — Capital/Financing Update 2008

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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CHINA SHIPPING DEVELOPMENT COMPANY LIMITED 中海發展股份有限公司

(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 1138)

DISCLOSEABLE TRANSACTION

SIGNING OF JOINT VENTURE CONTRACT CONSTRUCTION OF NEW VESSELS

A letter from the Board is set out on pages 4 to 9 of this circular.

27 June 2008

CONTENTS

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DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

• “Agreements”

eight agreements all dated 10 June 2008, each of which is entered into between the Company, CSSC and Jiangnan Construction for the construction of one bulk cargo carrier (for a total of eight bulk cargo carriers) for the transportation of bulk cargoes

• “associates”

• has the meaning ascribed thereto in the Listing Rules

• “Baosteel Resources”

Baosteel Resources Co., Ltd. (寶鋼資源有限公司) (formerly known as Baosteel Trading Co., Ltd.), a company incorporated in Shanghai, PRC and a wholly-owned subsidiary of Baosteel Group Corp. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Baosteel Resources and its ultimate beneficial owners are third parties independent of the Company and its connected persons (as defined under the Listing Rules)

• “Board” The board of Directors

• “China Shipping Group”

• China Shipping (Group) Company (中國海運(集團)總公司), the controlling shareholder of the Company

• “Company”

• China Shipping Development Company Limited (中海發展股 份有限公司), a joint stock limited company established in the PRC, the H shares of which are listed on The Stock Exchange of Hong Kong Limited

• “CS Development Hong Kong”

• China Shipping Development (Hong Kong) Marine Co., Limited (中海發展(香港)航運有限公司), a wholly-owned subsidiary of the Company

• “CSSC”

• China State Shipbuilding Corporation* (中國船舶工業集團公 司), a Chinese shipbuilder. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, CSSC and its ultimate beneficial owners are independent third parties not connected with the Company and its connected persons (as defined under the Listing Rules)

• “Director(s)” The director(s) of the Company

• “Group”

• The Company and its subsidiaries

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DEFINITIONS

• “Guangzhou Longxue”

CSSC Guangzhou Longxue Shipbuilding Co., Ltd* (廣州中船龍穴造船有限公司), a Chinese shipbuilder. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Guangzhou Longxue and its ultimate beneficial owners are independent third parties not connected with the Company and its connected persons (as defined under the Listing Rules)

• “HK$” Hong Kong dollar, the lawful currency of Hong Kong

• “Hong Kong”

• The Hong Kong Special Administrative Region of the PRC

“Jiangnan Construction” Jiangnan Construction Group Limited* (江南造船(集團)有限 責任公司), a Chinese shipbuilder. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Jiangnan Construction and its ultimate beneficial owners are independent third parties not connected with the Company and its connected persons (as defined under the Listing Rules)

• “Joint Venture Contract” the joint venture contract and the supplemental agreement both dated 10 June 2008 in relation to the formation of the joint venture by the Company with Baosteel Resources

• “Latest Practicable Date” 25 June 2008, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• “PRC” The People’s Republic of China

• “Registered Owner Shares” the shares of the single-vessel company held by the Company as the registered owner of the relevant VLOCs

• “RMB” Renminbi yuan, the lawful currency of the PRC

• “SFO” Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong)

• “Shareholder(s)” shareholder(s) of the Company

• “Stock Exchange” The Stock Exchange of Hong Kong Limited “US$” United States dollar, the lawful currency of the United States

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DEFINITIONS

“Vendors” CSSC and Jiangnan Construction “VLOC(s)” very large iron ore carrier(s) “%” Percentage or per centum

For the purpose of this circular, unless otherwise specified, conversion of US$ into HK$ is based on the exchange rate of US$1.00 = HK$7.81.

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LETTER FROM THE BOARD

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CHINA SHIPPING DEVELOPMENT COMPANY LIMITED 中海發展股份有限公司

(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 1138)

Executive Directors: Li Shaode (Chairman) Ma Zehua Lin Jianqing Wang Daxiong Zhang Guofa Mao Shijia Wang Kunhe

Independent Non-Executive Directors:

Registered Office: 168 Yuanshen Road Shanghai The PRC

Principal place of business in Hong Kong: 20/F., Alexandra House 16-20 Chater Road Central, Hong Kong

Ma Xun Xie Rong Hu Honggao Zhu Yongguang Zhou Zhanqun

27 June 2008

To the Shareholders

Dear Sir/Madam,

DISCLOSEABLE TRANSACTION SIGNING OF JOINT VENTURE CONTRACT CONSTRUCTION OF NEW VESSELS

INTRODUCTION

The Company had made announcements dated 21 February, 10 June and 12 June 2008 respectively in relation to the formation of a joint venture shipping company with Baosteel Resources, pursuant to which a Hong Kong incorporated company would be established to carry out shipping related businesses so as to allow the Company to further strengthen its strategic cooperation with iron and steel enterprises and allow the Company to fully capitalize on the resources advantages of iron and steel enterprises and the shipping advantages of the Company to jointly compete in the imported iron ore transportation market and to obtain stable investment returns.

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LETTER FROM THE BOARD

The Company also made an announcement dated 10 June 2008 in relation to the Agreements entered into with Jiangnan Construction and CSSC for the construction of eight bulk cargo carriers each of 76,000 dead weight tons for the transportation of bulk cargoes. The entering into of the Agreements (which, for the purpose of the Listing Rules, will be aggregated with the agreements for the construction of four VLOCs of 230,000 dead weight tons each between the CS Development Hong Kong, CSSC and Guangzhou Longxue, details of which were contained in the Company’s announcement dated 29 October 2007) constitutes a discloseable transaction of the Company under the Listing Rules.

JOINT VENTURE WITH BAOSTEEL RESOURCES

Terms of the joint venture arrangement with Baosteel Resources

The Company and Baosteel Resources signed the Joint Venture Contract on 10 June 2008, the main provisions of which are set out below:-

1. The joint venture company is a private limited company incorporated in Hong Kong. Its name is Hong Kong Hai Bao Shipping Co. Limited (香港海寶航運有限公司).

2. The issued share capital of the joint venture company will be US$8,000,000 (equivalent to approximately HK$62,480,000), with 51% and 49% to be contributed by the Company and Baosteel Resources respectively. The joint venture parties will further provide shareholder’s loan in the total amount of approximately US$132,000,000 (equivalent to approximately HK$1,030,920,000) to the joint venture company on equivalent terms in proportion to their shareholdings in the joint venture company. The shareholders’ loan will be used for payments in respect of the construction contracts referred to below other than repayment of banking facilities. It is also intended that the joint venture company will raise bank borrowings in the amount of approximately US$563,660,000 (equivalent to approximately HK$4,402,584,600) to be guaranteed (where necessary) by the Company and Baosteel Resources pro rata to their shareholding interest in the joint venture company. Accordingly, the total investment amount in connection with the joint venture company is expected to be approximately US$703,660,000 (equivalent to approximately HK$5,495,584,600). The total amount of capital commitment to be made by the Company under the Joint Venture Contract is therefore approximately US$358,866,600 (equivalent to approximately HK$2,802,748,146) and the Company expects to fund these commitments as to 20% by internal financial resources and 80% by way of bank borrowing. As the joint venture company will be consolidated as a subsidiary of the Company, the assets and liabilities of the Company will increase to the extent prescribed by the generally accepted accounting principles applicable to the Company for the consolidation of the joint venture company’s assets and liabilities. The Company’s earnings are also expected to increase as soon as the joint venture company commences its business operations.

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LETTER FROM THE BOARD

1. The principal business scope of the joint venture company includes international marine large bulk cargo shipping, chartering, sale and purchase and management of vessels, crew management and other shipping related businesses.

2. Upon the incorporation of the joint venture company, the Company will transfer construction contracts in relation to two 300,000-tonne VLOCs and four 230,000-tonne VLOCs or the Registered Owner Shares to the joint venture company or a single-vessel company designated by it with the consideration to be settled in cash in US$.

3. (a) The consideration at which these VLOCs construction contracts are to be transferred is as follows:-

   • (i) the construction progress payments already made by the Company to the shipbuilding company;

   • (ii) the costs of fund paid by the Company from the payment date of the progress payments to the date of the transfer of the construction contracts; and

   • (iii) other fees and expenses paid by the Company in connection thereto.

4. (b) In the event that Registered Owner Shares are to be transferred, the consideration at which such shares are to be transferred is the consideration determined in sub-paragraph (a) above as reduced by the payables recorded on the books of the relevant single-vessel company.

5. The Company will further transfer its rights and obligations under five contracts of affreightment contracts entered into with Baoshan Iron & Steel Co., Ltd. on 26 January 2007 and 21 February 2008 to the joint venture company or a single-vessel company designated by the joint venture company.

6. Under equivalent conditions, the joint venture company will give priority to entering into a vessel management agreement with the vessel management company recommended by the Company and hand over the management of engineering, marine, maintenance and crew affairs to the vessel management company.

7. Under equivalent conditions, the joint venture company will give priority to entering into a crew hire agreement with the crew management company recommended by the Company.

Once the internal audit and approval procedures of the joint venture parties are completed, the joint venture parties will report the project to the relevant government authorities. Upon completion of all approval procedures, the joint venture company will complete the relevant matters such as the establishment of the company according to law.

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LETTER FROM THE BOARD

Financial arrangements of the Joint Venture Company

The issued share capital of US$4,080,000 (equivalent to approximately HK$31,864,800) and the proportionate shareholders’ loan of US$67,320,000 (equivalent to approximately HK$525,769,200) payable by the Company will be utilised to pay for the construction progress payments of the ship constructions referred to above.

There are no prior transaction between the Company and Baosteel Resources which requires aggregation under rule 14.22 of the Listing Rules.

Information about the Group and Baosteel Resources

The business scope of the Group includes: coastal, ocean and Yangtze River cargo transportation, container transportation, oil transportation, chartering, cargo agency and cargo transportation agency. The Directors are optimistic of the demand in the international dry bulk cargo transportation market, the PRC coastal coal transportation market and their persistent growth in the coming years.

Baosteel Resources is a wholly owned subsidiary of Baosteel Group Corp and is principally engaged in the investment and development, trading and logistics operation of iron and steel related raw materials.

Reason for the transaction

As announced in the Company’s announcement dated 21 February 2008, the Directors are of the view that the formation of the joint venture company will further strengthen the strategic cooperation with iron and steel enterprises and allow the Company to fully capitalize on the resources advantages of iron and steel enterprises and the shipping advantages of the Company to jointly compete in the imported iron ore transportation market and to obtain stable investment returns.

In particular, the formation of the joint venture company by the Company and Baosteel Resources will make use of their respective advantages to realize a strong union and guarantee that long-term steady cargo sources and investment returns can be obtained whilst the Company expands its fleet of vessels and is beneficial to the Company’s development in the long run.

Accordingly the Directors (including the independent non-executive Directors) are of the view that the terms of the Joint Venture Contract are fair and reasonable and in the interest of the shareholders of the Company as a whole.

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LETTER FROM THE BOARD

AGREEMENTS FOR THE CONSTRUCTION OF VESSELS

Terms of the Agreements

The total consideration for the construction of the bulk cargo carriers is US$428,000,000 (equivalent to approximately HK$3,342,680,000). The consideration is determined by reference to the market price of bulk carriers ranging in sizes from 60,000 to 80,000 dead weight tons during the past 3 months. The prices of the bulk cargo carriers will be payable in RMB in cash. Relevant payments under each of the Agreements will be payable in 5 instalments at various stages of the construction of the relevant bulk cargo carriers:

• (i) for the first instalment, to pay 20% of the price within 5 business days after the Agreements become effective;

• (ii) for the second, third and fourth instalment, to pay 20% of the price within 5 business days of the receipt of the progress report from the Vendors and endorsed by the Company; and

• (iii) for the final instalment, to pay 20% of the price within 5 business days of the receipt of all documentation in relation to completion of the relevant bulk cargo carriers from the Vendors.

The expected delivery date for each of the bulk cargo carriers is on or before 28 February 2011, 31 August 2011, 31 October 2011, 31 December 2011, 31 March 2012, 30 April 2012, 31 May 2012 and 30 June 2012 respectively.

Each of the eight Agreements provides that there will be no adjustment in the price of the relevant bulk cargo carriers if the delivery is delayed for a period not exceeding 30 days respectively. If the delay exceeds such period of time but does not exceed 180 days, there will be a daily reduction of US$7,000 in the price of the relevant bulk cargo carriers. Under the eight Agreements, delay will be permitted on account of force majeure events.

If the delay exceeds 180 days, unless the parties agree otherwise, the Company has the right to accept delivery of the relevant bulk cargo carriers with a reduction in price of no more than US$1,050,000 or refuse to accept delivery of the relevant bulk cargo carriers in which case all payments paid under the relevant Agreement together with interests will be refunded to the Company.

Financing Terms

The construction of the bulk cargo carriers will be funded by the Company as to approximately 80% of the price by bank borrowings and approximately 20% of the price by internal resources. As a result of the Agreements, the assets of the Company is expected to increase with the completion of the construction of the bulk cargo carriers and the liabilities of the Company increased as a result of its commitments to fund these constructions under the Agreements. Earnings of the Company are expected to increase once these new bulk cargo carriers commence operations upon completion of their respective constructions.

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LETTER FROM THE BOARD

Reason for the transaction

The Directors are optimistic of the demand in the international dry bulk cargo transportation market, the PRC coastal coal transportation market and their persistent growth in the coming years. The Directors are of the view that the construction and ownership of the bulk cargo carriers will enable the Group to take advantage of the business opportunities in the shipping market, enjoy economies of scale, optimize its overall route arrangements and improve its operating efficiency and profitability. The Directors (including the Independent non-executive Directors) considered that the terms of the Agreements are determined on an arm’s length basis, on normal commercial terms and fair and reasonable and in the interests of the Company and the Shareholders as a whole.

General

As at the date of this circular, the Board is comprised of Mr. Li Shaode, Mr. Ma Zehua, Mr. Lin Jianqing, Mr. Wang Daxiong, Mr. Zhang Guofa, Mr. Mao Shijia and Mr. Wang Kunhe as executive directors, Mr Ma Xun, Mr. Xie Rong, Mr. Hu Honggao, Mr. Zhu Yongguang and Mr. Zhou Zhanqun as independent non-executive directors.

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

Directors’ Interests and Short Positions

As at the Latest Practicable Date, none of the Directors and chief executives, nor their associates, had any interest and short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO and to be notified to the Company and the Stock Exchange under the provisions of Divisions 7 and 8 of Part XV of the SFO or pursuant to the Model Code for Securities Transactions by Directors of Listed Companies as set out in appendix 10 of the Listing Rules to be notified to the Company and the Stock Exchange or which are required, pursuant to section 352 of the SFO, to be entered in the register referred to therein.

Directors’ Interest in Any Asset Acquired, Disposal or Leased

None of the Directors has had any material interest, direct or indirect, in any asset which, since 31 December 2007, being the date to which the latest audited consolidated financial statements of the Group have been made up, had been acquired by or leased to any member of the Group or was proposed to be acquired or disposed of by or leased to any member of the Group.

Directors’ Service Contracts

None of the Directors or supervisors has a service contract with the Company or any of its subsidiaries which is not determinable by the Group within one (1) year without the payment of compensation other than statutory compensation. The Directors are not entitled to any compensation if their respective service contracts are to be terminated by the Group.

Directors’ Interest in Contract

No contracts of significance to which the Company, any of its holding companies, fellow subsidiaries or subsidiaries was a party and in which a Director had a material interest and which is significant to the Group’s business, whether directly or indirectly, subsisted at the date of this circular. None of the Directors or their respective associates has any competing interest with the Group (as would be required to be disclosed to be disclosed under Rule 8.10 of the Listing Rules if each of them were a controller shareholder of the Company for the purpose of the Listing Rules).

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GENERAL INFORMATION

APPENDIX

Substantial Shareholders

As at the Latest Practicable Date, so far as known to any Directors or chief executive of the Company, the following persons (other than a Director or chief executive of the Company) had, or were deemed or taken to have interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or, who were, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group or had any option in respect of such capital:

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APPENDIX

GENERAL INFORMATION

Note: Mr. Li Shaode is the president of China Shipping Group. Mr. Ma Zehua is the secretary of the party committee of China Shipping Group. Mr. Lin Jianqing is the vice president of China Shipping Group. Mr. Wang Daxiong is the vice president of China Shipping Group. Mr. Zhang Guofa is the vice president of China Shipping Group.

Save as disclosed above, so far as is known to the Directors or chief executives of the Company, no other person (not being a Director or chief executive of the Company) who had any interests or short positions in shares or underlying shares of the Company which would fall to be disclosed to the Company and the Stock Exchange, under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group or held any option in respect of such capital.

3. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial position or trading prospects of the Group since 31st December 2007, the date to which the latest audited financial statements of the Group were made up.

4. LITIGATION

Neither the Company nor any of its subsidiaries is engaged in any litigation or arbitration of material importance and no litigation or claim of material importance known to the Directors to be pending or threatened by or against the Company or any of its subsidiaries.

5. MISCELLANEOUS

• (i) The legal address and head office of the Company is at 168 Yuanshen Road, Shanghai, The People’s Republic of China.

• (ii) The principal place of business of the Company in Hong Kong is at 20/F., Alexandra House, 16-20 Chater Road, Central, Hong Kong.

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GENERAL INFORMATION

APPENDIX

• (iii) The Company’s branch share registrar and transfer office in Hong Kong is at Hong Kong Registrars Limited at Rooms 1712-1716, 17th Floor, Hopewell Cnetre, 183 Queen’s Road East, Wanchai, Hong Kong.

• (iv) The secretary of the Company is Ms. Yao Qiaohong. Ms. Yao Qiaohong obtained a company secretary training certificate from the Shanghai Stock Exchange.

• (v) Mr. Wang Kangtian, a PRC qualified accountant, is the qualified accountant of the Company appointed under Rules 3.24 of the Listing Rules. Mr. Wang Kangtian is able to meet the requirement as set out in Rule 3.24 of the Listing Rules except that he is not a fellow or associate of the Hong Kong Institute of Certified Public Accountants (“HKICPA”) or a similar body of accountants recognized by HKICPA for the purpose of granting exemptions form the examination requirement for membership of HKICPA. The Stock Exchange has agreed to grant a three-year conditional waiver to the Company from strict compliance with Rule 3.24 of the Listing Rules commencing from 27 December 2007. From 27 December 2007 to 27 December 2009, the Company has appointed Mr. Yip Sai On, David, a fellow member of the HKICPA, to assist Mr. Wang.

• (vi) In the event of inconsistency, the English language text of this circular shall prevail over the Chinese language text.

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