COSCO SHIPPING Development Co., Ltd. — Capital/Financing Update 2006

Jul 5, 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about any of the contents of this Circular, you should obtain independent professional advice.

If you have sold or transferred all your shares in China Shipping Container Lines Company Limited , you should at once hand this Circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

(Stock code: 2866)

DISCLOSEABLE TRANSACTION

FINANCE LEASE OF CONTAINERS

• The Company is registered as an oversea company under Part XI of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) under its Chinese name and the English name “China Shipping Container Lines Company Limited”.

5 July 2006

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
2.	The Head Lease Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
3.	Security Deed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
4.	Reasons for Entering into the Finance Lease Arrangements . . . . . . . . . . . .	9
5.	Accounting Treatment of Finance Lease of Containers . . . . . . . . . . . . . . . .	9
6.	Financial Effects of the Finance Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
7.	General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
8.	Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Appendix – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		12

DEFINITIONS

In this Circular, unless the context otherwise requires, the following terms shall have the following meanings:

• “Agreement to Lease”

the agreement to sub-lease executed on 9 June 2006 between CS Asia as lessor and the Company as lessee

• “associates” has the meaning ascribed to such term under the Listing Rules

• “Availability Period”

the period commencing on 9 June 2006 and ending on the earlier of (1), either (a) the date falling eleven months after 9 June 2006, or (b) (in the case where CF 2006-1 exercises its option to extend such period pursuant to the provisions of the Loan Agreement) the date falling fourteen months after 9 June 2006; and (2) the date on which the relevant funds under the Loan Agreement is fully drawn, cancelled or terminated under the provisions of the Loan Agreement

the board of directors of the Company

• “Board” the board of directors of the Company “Borrower S&P Agreements” container sale and purchase agreements or similar contracts to be executed during the Availability Period by a Vendor as seller and CF 2006-1 as purchaser for the purchase of containers

• “CF 2006-1” Container Finance 2006-1 Limited, a company incorporated under the laws of the Cayman Islands

• “China Shipping” China Shipping (Group) Company (中國海運（集團） 總公司), a wholly state-owned enterprise of the PRC and the controlling shareholder of the Company

• “China Shipping Group”

• China Shipping and its subsidiaries and associates (excluding the Group)

• “Citicorp” Citicorp International Limited, a restricted license bank incorporated in Hong Kong, which is a subsidiary of Citigroup Inc., a worldwide financial services organization incorporated in the State of New York, United States of America

– 1 –

DEFINITIONS

“Company”

• “Co-ordinating Lead Arrangers”

• “CS Asia”

• “CSHK”

• “DFIC”

• “Directors”

• “Finance Lease Agreements”

“Group”

China Shipping Container Lines Company Limited (中海集裝箱運輸股份有限公司), a joint stock limited company established in the PRC, of which 2,420,000,000 H shares are listed on The Stock Exchange of Hong Kong Limited

Citigroup Global Markets Asia Ltd., a limited liability company incorporated in Hong Kong, and its representative office Citibank, N.A. Shanghai Branch incorporated in the PRC, as co-ordinating lead arrangers under the Loan Agreement, each of which, so far as the Directors are aware, having made all reasonable enquiries, together with its ultimate beneficial owners are independent third parties that are not connected persons of the Company, and are not connected with the Directors, supervisors, chief executives or substantial shareholders of the Company or any of its subsidiaries or any of their respective associates

China Shipping Container Lines (Asia) Co., Ltd. (中 海集裝箱運輸（亞洲）有限公司 ), a company incorporated under the laws of the British Virgin Islands with its principal place of business in Hong Kong, and a wholly-owned subsidiary of the Company

China Shipping Container Lines (Hong Kong) Co., Ltd. (中海集裝箱運輸（香港）有限公司 ), a limited liability company incorporated in Hong Kong and a wholly-owned subsidiary of the Company

Dong Fang International Container (Lianyungang) Co., Ltd., a limited liability company incorporated in the PRC, a wholly-owned subsidiary of China Shipping and a connected person of the Company

the directors of the Company

the Lessee S&P Agreements, the Borrower S&P Agreements, the Head Lease Agreement, the SubLease Agreement, the Agreement to Lease, the Security Deed and the Loan Agreement

the Company and its subsidiaries

– 2 –

DEFINITIONS

• “Head Lease Agreement”

the agreement to lease executed on 9 June 2006 between CS Asia as lessee and CF 2006-1 as lessor

• “HK$”

• Hong Kong dollars, the lawful currency of Hong Kong

• “Hong Kong”

the Hong Kong Special Administrative Region of the PRC

• “Latest Practicable Date”

• 27 June 2006, being the latest practicable date prior to the printing of this Circular for the purpose of ascertaining certain information contained in this Circular

• “Lease Containers” relevant units and items of new containers to be purchased by CF 2006-1 from CS Asia under separate Lessee S&P Agreements or from the Vendors under separate Borrower S&P Agreements and to be leased back or leased by CF 2006-1 to CS Asia under the Head Lease Agreement

“Lenders” the banks and other financial institutions named in the Loan Agreement who agreed to make available a loan facility of up to US$300,000,000 to the CF2006-1

• “Lessee S&P Agreements” container sale and purchase agreements to be executed during the Availability Period by CS Asia as seller and CF 2006-1 as purchaser for the purchase of containers

• “Listing Rules”

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

• “Loan Agreement”

the loan agreement with CF 2006-1 as borrower and the Lenders as lenders dated 9 June 2006

• “Model Code”

• the Model Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix 10 to the Listing Rules

• “Outstanding Indebtedness”

the aggregate of all principal amounts advanced, all interest accrued thereon, the expenses and all other sums of money from time to time owing by CF 2006-1 to the Lenders under the Loan Agreement

– 3 –

DEFINITIONS

“percentage ratio”	has the meaning ascribed to such term under the
	Listing Rules
“PRC”	the People’s Republic of China
“Rights”	units of share appreciation rights
“Security Deed”	the security deed executed on 9 June 2006 between
	CF 2006-1, CS Asia and CSHK as assignors and
	Citicorp as security agent
“SFO”	the Securities and Futures Ordinance (Chapter 571
	of the Laws of Hong Kong) as amended and
	supplemented from time to time
“Shareholders”	shareholders of the Company
“Sub-Lease Agreement”	the agreement to sub-lease executed on 9 June 2006
	between CS Asia as lessor and CSHK as lessee
“TMS”	the display designated as page “3750” on the
	telerate monitor system or such other page as may
	replace page “3750” on that system for the purpose
	of displaying offered rates for US$ deposits
“US$”	United States dollars, the lawful currency of United
	States of America
“Vendors”	China International Marine Containers Group, Co.,
	Ltd., Changzhou Xin Huachang International
	Containers Co., Ltd., Singamas Container Holdings
	Ltd., Jindo Corporation, Yangzhou Tongyun
	Container Co., Ltd., Yangzhou Tonglee Reefer
	Container Co., Ltd., DFIC, and their respective
	subsidiaries or associated companies and such other
	companies which shall have been approved by the
	Co-ordinating Lead Arrangers and which have
	agreed to sell containers to CS Asia and CF 2006-1

The exchange rate adopted in this Circular for illustration purpose only is US$1.00 = HK$7.76.

– 4 –

LETTER FROM THE BOARD

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

(Stock code: 2866)

Directors:

Mr. Li Shaode Mr. Jia Hongxiang Mr. Huang Xiaowen Mr. Zhao Hongzhou Mr. Li Kelin[+] Mr. Zhang Jianhua[+] Mr. Wang Daxiong[+] Mr. Zhang Guofa[+] Mr. Xu Hui[+] Mr. Hu Hanxiang[++] Mr. Gu Nianzu[++] Mr. Wang Zongxi[++] Mr. Lam Siu Wai, Steven[++]

Legal address, head office address and principal place of business in the PRC: 27th Floor 450 Fu Shan Road Pudong New District Shanghai the PRC Principal place of business in Hong Kong: Level 69 The Center 99 Queen’s Road Central Hong Kong

+ non-executive Directors

++ independent non-executive Directors

5 July 2006

To the Shareholders

Dear Sir or Madam,

1. INTRODUCTION

On 13 June 2006, the Board announced that CS Asia, a wholly-owned subsidiary of the Company, as the lessee had on 9 June 2006 entered into the Head Lease Agreement with CF 2006-1 as the lessor for a finance lease of containers with an aggregate lease payment up to US$371,838,000 (equivalent to approximately HK$2,885,463,000).

Further to the announcement of the Company dated 13 June 2006, the purpose of this Circular is to provide you with further details of the finance lease transaction.

* The Company is registered as an oversea company under Part XI of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) under its Chinese name and the English name “China Shipping Container Lines Company Limited”.

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LETTER FROM THE BOARD

2. THE HEAD LEASE AGREEMENT

• (a) Date: 9 June 2006

• (b) Parties

Lessor: CF 2006-1, which to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, is a special purpose vehicle incorporated for the purpose of entering into the Finance Lease Agreements and has not otherwise carried on any other business prior to entering into the Finance Lease Agreements

Lessee: CS Asia, a wholly-owned subsidiary of the Company principally engage in arranging the finance lease of vessels, containers and relevant equipments to the Group

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, CF 2006-1 and its ultimate beneficial owners, the Lenders, are independent third parties that are not connected persons of the Company, and are not connected with the Directors, supervisors, chief executives or substantial shareholders of the Company or any of its subsidiaries or any of their respective associates.

(c) The Lease Containers

CF 2006-1 shall, during the Availability Period, either purchase from the Vendors under separate Borrower S&P Agreements or purchase from CS Asia under separate Lessee S&P Agreements batches of Lease Containers. The containers which might be sold by CS Asia to CF 2006-1 in the future will be supplied by the Vendors. Lease Containers purchased by CF 2006-1 from CS Asia or the Vendors shall be leased back or leased to CS Asia under the Head Lease Agreement.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Vendors, other than DFIC and certain subsidiaries of China Shipping, together with their ultimate beneficial owners are not connected persons of the Company, and are not connected with the Directors, supervisors, chief executives or substantial shareholders of the Company or any of its subsidiaries or any of their respective associates. The Board also confirms that the terms and conditions of the Borrower S&P Agreements to be entered into between the Vendors, other than DFIC and certain subsidiaries of China Shipping, and CF 2006-1 and those of the Lessee S&P Agreements to be entered into between CS Asia and CF 2006-1 shall be on normal commercial terms and on terms that are fair and reasonable and no less favourable to the Group than terms available from independent third parties.

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LETTER FROM THE BOARD

The Vendors are principally engaged in the production of marine containers and container spare parts.

• (d) Lease Payments

Under the Head Lease Agreement, the lease payments for each batch of Lease Containers shall be paid in 32 quarterly payments, which are not of the same amount, each comprising of principal and/or interest components. The principal component of any particular batch of Lease Containers shall be its purchase price payable by CF 2006-1 under the relevant Borrower S&P Agreement or the relevant Lessee S&P Agreement. The interest component is determined by the principal amount outstanding, the lease period and the interest rate, which is LIBOR plus a certain margin. Pursuant to the Loan Agreement, the LIBOR in relation to any relevant sum and relevant period shall be the rate shown on the TMS as being the rate per annum at which United States dollars deposits for a three-month period are offered at or about 11:00 a.m. (London time) on the second business day on which United States dollars deposits may be dealt in on the London interbank market before the first day of such period or, if no such rate appears on the TMS, the rate determined by Citicorp. CS Asia shall pay each lease payment to CF 2006-1 in arrears, with the first payment falling due on the seventh calendar day prior to the date falling three months after that batch of containers have been accepted by CS Asia and subsequent payments falling due on each of the dates which fall at consecutive three months’ intervals after such first payment date. All the lease payments shall be paid in full and in United States dollars. Under the Loan Agreement, the Lenders shall provide to CF 2006-1 a loan up to the maximum principal amount of US$300,000,000 (equivalent to approximately HK$2,328,000,000) to fund the purchase of the Lease Containers from the Vendors and CS Asia. On the assumption that such loan is fully drawn down on 9 June 2006 for the purchase of containers and LIBOR is at the rate of 5.24% (i.e. LIBOR on 5 June 2006) throughout the lease period, the maximum aggregate lease payments payable by CS Asia for the Lease Containers under the Head Lease Agreement is approximately US$371,838,000 (equivalent to approximately HK$2,885,463,000). CS Asia intends to fund such lease payments from the operating revenue of the Group to be generated through its utilization of such Lease Containers.

The terms of the Head Lease Agreement, including the interest element of the lease payments, were determined on the basis of arm’s length negotiations between CS Asia and the Lenders.

The principal amount of US$300,000,000 available under the Loan Agreement was determined by the Group after taking into account the expected growth in its container shipping business and the additional number of containers required to meet such growth.

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LETTER FROM THE BOARD

(e) Lease Period

Under the Head Lease Agreement, the lease period for each batch of Lease Containers shall be a term of eight years commencing from the date of acceptance of such batch of Lease Containers by CS Asia. Furthermore, CS Asia may elect to early terminate the lease period for a particular batch of Lease Containers at any time, provided that the Outstanding Indebtedness relating to such batch of Lease Containers has been satisfied and discharged in full by CS Asia, or CS Asia may elect to early terminate the lease period by written notice when CF 2006-1 defaults in the performance of certain of its obligations under the Head Lease Agreement and such default continues.

(f) Title

The title to each and every container shall remain fully vested in CF 2006-1 throughout its relevant lease period.

(g) Purchase Option

At the end of the lease period of each relevant batch of Lease Containers, provided that all sums owed by CS Asia to CF 2006-1 in respect of such batch of Lease Containers have been satisfied and discharged in full, CS Asia shall have the option to purchase such batch of Lease Containers for US$1 (equivalent to approximately HK$7.76).

(h) The Sub-Lease Agreement and the Agreement to Lease

On 9 June 2006, CS Asia entered into the Sub-Lease Agreement with CSHK, a wholly-owned subsidiary of the Company, for the sub-lease of each batch of Lease Containers it shall receive under the Head Lease Agreement. Under the Sub-Lease Agreement, the lease payments for each batch of Lease Containers shall be paid on a quarterly basis and shall be calculated based on the particular types of containers leased. CSHK shall pay each lease payment to CS Asia in arrears on the eighth calendar day before the end of each calendar quarter commencing from the date on which the first advance payment is made by the Lenders to CF 2006-1 under the Loan Agreement for the acquisition of the relevant batch of containers.

On the same day, CS Asia entered into the Agreement to Lease with the Company, under which the Company agreed to sub-lease from CS Asia the relevant Lease Containers upon the expiry or termination of the Sub-Lease Agreement for any reason. The lease period for each relevant batch of Lease Containers shall be at least eight years. The lease payments are the same as those set out in the Sub-Lease Agreement which shall be paid quarterly in arrear on the eighth day prior to the last day of each consecutive three months’ period commencing from the date on which CS Asia receives advance payment from the Company in relation to the sub-lease of such Lease Containers.

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LETTER FROM THE BOARD

3. SECURITY DEED

CF 2006-1, CS Asia and CSHK entered into the Security Deed with Citicorp as security agent on 9 June 2006, under which they agreed to assign with full title guarantee by way of a first priority assignment to Citicorp all their respective rights, title and interest present and future in and to, among other things, the Finance Lease Agreements and all their respective benefits therein by way of security for payment of the Outstanding Indebtedness.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, (1) Citicorp is a restricted licence bank and principally engages in dealing in securities, advising on securities and asset management; and (2) Citicorp and its ultimate beneficial owners are independent third parties that are not connected persons of the Company, and are not connected with the Directors, supervisors, chief executives or substantial shareholders of the Company or any of its subsidiaries or any of their respective associates.

4. REASONS FOR ENTERING INTO THE FINANCE LEASE ARRANGEMENTS

The Company is one of the world’s leading container shipping companies, currently seeking opportunities to acquire additional containers to meet growing transportation demand and achieve sustainable growth. The transaction outlined in this Circular is consistent with the Group’s strategy of generating operating revenue from additional containers, which can be used to finance the acquisition of such containers. Furthermore, when the repayment period or lease period exceeds 5 years (as stated above, the lease period for each batch of Lease Containers is 8 years), it is easier for the Company to acquire the containers on a finance lease basis as compared with funding such acquisition by obtaining a direct loan from banks, and the interest rate applicable under a finance lease arrangement is lower. The Company is therefore funding the acquisition of the Lease Containers on a finance lease basis.

The Board (including independent non-executive directors of the Company) also confirms that the transaction contemplated under the Head Lease Agreement (including the lease payments) was entered into in the ordinary and usual course of its business, and on normal commercial terms and on terms that are fair and reasonable, in the interests of the Company and its shareholders as a whole and no less favourable to the Company than terms available from independent third parties.

5. ACCOUNTING TREATMENT OF FINANCE LEASE OF CONTAINERS

The accounting treatment of this finance lease shall be consistent with the Company’s present accounting policy regarding finance leases described below.

This finance lease shall be capitalised at the lease’s commencement at the lower of the fair value of the Lease Containers and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations,

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LETTER FROM THE BOARD

net of finance charges, are included in current and non-current liabilities. The interest element of the finance cost is recognised in the consolidated profit and loss account over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Each Lease Container held under this finance lease is depreciated over the shorter of its estimated useful life or the relevant lease period.

6. FINANCIAL EFFECTS OF THE FINANCE LEASE

For accounting purposes, the fixed assets of the Group shall be increased upon the acceptance by CS Asia of each relevant batch of Lease Containers to be delivered under the Head Lease Agreement. The Group’s long-term liabilities will also be increased by the principal component of the aggregate lease payments payable and which remains outstanding for each such relevant batch of Lease Containers. The effect of the finance lease of containers on the earnings of the Group cannot be ascertained at present, which will depend on the conditions of the shipping market at the time of delivery of the containers. The interest expense of the Group will be increased as a result of the aggregate lease payments to be made in relation to each relevant batch of Lease Containers.

7. GENERAL INFORMATION

The Group is principally engaged in the operation and management of international and domestic container marine transportation.

As the transaction under the Head Lease Agreement constitutes a finance lease and the relevant percentage ratios applicable to such transaction for the purpose of Chapter 14 of the Listing Rules is more than 5% but less than 25%, it constitutes a discloseable transaction for the Company under Rule 14.06(2) of the Listing Rules.

DFIC is a Vendor and certain other subsidiaries of China Shipping might also become Vendors. Since DFIC and those subsidiaries of China Shipping are connected persons of the Company, the sale of containers by them to CS Asia constitute connected transactions of the Company under the Listing Rules. These connected transactions shall be entered into in accordance with the terms and conditions of the master provision of containers agreement dated 1 April 2006 entered into between the Company and China Shipping. Please refer to the Company’s announcement dated 27 January 2006 and circular dated 13 February 2006 for details of that agreement. Such connected transactions together with the associated annual caps have been approved by the Shareholders (China Shipping and its associates abstaining) at the special general meeting of the Shareholders on 31 March 2006.

The transactions whereby DFIC and certain subsidiaries of China Shipping sell containers to CF 2006-1 under the Borrower S&P Agreements and then CF 2006-1 leases such containers to CS Asia under the Head Lease Agreement shall be entered into in accordance with the terms and conditions of the above master provision of containers agreement.

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LETTER FROM THE BOARD

The aggregate annual consideration receivable by DFIC and those subsidiaries of China Shipping for the sale of containers to CS Asia and CF 2006-1, together with the aggregate annual consideration receivable by other members of the China Shipping Group for the sale of containers to the Group under the above master provision of containers agreement, shall not exceed the relevant annual cap mentioned in the Company’s announcement dated 27 January 2006.

8. ADDITIONAL INFORMATION

Your attention is also drawn to the additional information contained in the Appendix to this Circular.

By order of the Board of

China Shipping Container Lines Company Limited Li Shaode Chairman

– 11 –

APPENDIX

GENERAL INFORMATION

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. DIRECTORS’, SUPERVISORS’ AND CHIEF EXECUTIVES’ INTERESTS

9 Directors and 4 supervisors were granted Rights in accordance with the share appreciation rights scheme adopted by the Company’s shareholders on 12 October 2005. Details of the Rights scheme are set out in the Company’s circular to shareholders dated 26 August 2005. The interests of such Directors and supervisors in the underlying H shares of the Company as at the Latest Practicable Date were as follows:

	Number of	Capacity in which	Percentage	Percentage
	underlying H	underlying H	figure	figure in total
Name	shares involved	shares were held	in the H shares	issued shares
Directors
Li Kelin	1,180,000	Beneficial owner	0.05%	0.020%
			(Long position)	(Long position)
Jia Hongxiang	880,000	Beneficial owner	0.04%	0.015%
			(Long position)	(Long position)
Huang Xiaowen	820,000	Beneficial owner	0.03%	0.014%
			(Long position)	(Long position)
Zhao Hongzhou	720,000	Beneficial owner	0.03%	0.012%
			(Long position)	(Long position)
Li Shaode	680,000	Beneficial owner	0.03%	0.011%
			(Long position)	(Long position)
Wang Daxiong	300,000	Beneficial owner	0.01%	0.005%
			(Long position)	(Long position)
Zhang Guofa	300,000	Beneficial owner	0.01%	0.005%
			(Long position)	(Long position)
Zhang Jianhua	300,000	Beneficial owner	0.01%	0.005%
			(Long position)	(Long position)
Xu Hui	200,000	Beneficial owner	0.01%	0.003%
			(Long position)	(Long position)

– 12 –

APPENDIX

GENERAL INFORMATION

	Number of	Capacity in which	Percentage	Percentage
	underlying H	underlying H	figure	figure in total
Name	shares involved	shares were held	in the H shares	issued shares
Supervisors
Huang Xinming	720,000	Beneficial owner	0.03%	0.012%
			(Long position)	(Long position)
Wang Xiuping	450,000	Beneficial owner	0.02%	0.007%
			(Long position)	(Long position)
Yao Zuozhi	200,000	Beneficial owner	0.01%	0.003%
			(Long position)	(Long position)
Tu Shiming	60,000	Beneficial owner	0.002%	0.001%
			(Long position)	(Long position)

Save as disclosed above, as at the Latest Practicable Date, none of the Directors, supervisors or chief executive(s) of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which was required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which any such Directors, supervisors or chief executive(s) is taken or deemed to have under such provisions of the SFO) or which was required to be entered in the register required to be kept by the Company pursuant to Section 352 of the SFO or which was otherwise required to be notified to the Company and the Stock Exchange pursuant to the Model Code (which shall be deemed to apply to the Company’s supervisors to the same extent as it applies to the Directors).

Each of Li Shaode, Zhang Jianhua, Wang Daxiong and Zhang Guofa was as at the Latest Practicable Date the President, a Vice-President, a Vice-President and a Vice-President respectively of China Shipping, which was a company having, as at the Latest Practicable Date, an interest or short position in the Company’s shares and underlying shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

3. DIRECTORS’ SERVICE CONTRACTS

None of the Directors has entered into any service contract with the Company or any of its subsidiaries which is not determinable by the Company within one year without any payment of compensation, other than statutory compensation.

4. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

To the best knowledge of the Directors, none of the Directors or their respective associates has any interests in a business, which competes or may compete with the business of the Group.

– 13 –

APPENDIX

GENERAL INFORMATION

5. SHAREHOLDINGS OF OTHER SHAREHOLDERS WITH NOTIFIABLE INTERESTS

As at the Latest Practicable Date, so far as is known to the Directors, supervisors or chief executive(s) of the Company, the following persons (other than a Director, supervisor or chief executive of the Company) had 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:

		Number
		of shares/		Percentage in the			Percentage
Name of	Class of	underlying			relevant class of		in total
shareholder	shares	shares held	Capacity		share	**capital **	share capital
China Shipping	Domestic	3,610,000,000	Beneficial owner			100%	59.87%
(Group) Company	shares	(Long position)
Li Ka-Shing	H shares	365,637,000	Interest of controlled			15.11%	6.06%
		(Long position)	corporation and
			founder of a
			discretionary trust
Li Ka-Shing Unity	H shares	365,637,000	Trustee			15.11%	6.06%
Trustee Company		(Long position)
Limited
Li Ka-Shing Unity	H shares	362,637,000	Trustee and			14.99%	6.01%
Trustcorp Limited		(Long position)	beneficiary
			of a trust
Li Ka-Shing Unity	H shares	362,637,000	Trustee and			14.99%	6.01%
Trustee		(Long position)	beneficiary
Corporation			of a trust
Limited
Cheung Kong	H shares	362,637,000	Interest of			14.99%	6.01%
(Holdings)		(Long position)	controlled
Limited			corporation
Hutchison	H shares	241,758,000	Interest of			9.99%	4.01%
Whampoa		(Long position)	controlled
Limited			corporation
Hutchison	H shares	241,758,000	Beneficial			9.99%	4.01%
International		(Long position)	owner
Limited

– 14 –

APPENDIX

GENERAL INFORMATION

Save as disclosed above and so far as the Directors, supervisors or chief executive(s) of the Company are aware, as at the Latest Practicable Date, no other person had 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 was, directly or indirectly, interested in 10 per cent. or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the Company.

As at the Latest Practicable Date, so far as the Directors, supervisors or chief executive(s) are aware, each of the following persons, not being a Director, supervisor or chief executive of the Company or a member of the Group, 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:

			Percentage
Name of subsidiary (Note)	Name of shareholder (Note)	of	shareholding
China Shipping Container	China Shipping Group Investment Co. Ltd.		10%
Lines Dailian Co., Ltd.	（中海集團投資有限公司）
（中海集裝箱運輸大連有限公司）
China Shipping Container Lines	China Shipping Group Investment Co. Ltd.		10%
Guangzhou Co., Ltd.	（中海集團投資有限公司）
（中海集裝箱運輸廣州有限公司）
China Shipping Container Lines	(i) China Shipping Group Investment Co.	Ltd.	10%
Hainan Company Limited	（中海集團投資有限公司）
（中海集裝箱運輸海南有限公司）	(ii) China Shipping Agency Co., Ltd.		20%
	（中海船務代理有限公司）
	(iii) China Shipping Hainan Logistics Co., Ltd.		30%
	（中海海南物流有限公司）
China Shipping Container Lines	China Shipping Group Investment Co. Ltd.		10%
Qingdao Company Limited	（中海集團投資有限公司）
（中海集裝箱運輸青島有限公司）
China Shipping Container	China Shipping Group Investment Co. Ltd.		10%
Lines Shanghai Co., Ltd.	（中海集團投資有限公司）
（中海集裝箱運輸上海有限公司）
China Shipping Container	China Shipping Group Investment Co. Ltd.		10%
Lines Shenzhen Co., Ltd	（中海集團投資有限公司）
（中海集裝箱運輸深圳有限公司）
China Shipping Container Lines	China Shipping Group Investment Co. Ltd.		10%
Tianjin Company Limited	（中海集團投資有限公司）
（中海集裝箱運輸天津有限公司）

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APPENDIX

GENERAL INFORMATION

			Percentage
Name of subsidiary (Note)	Name of shareholder (Note)	of shareholding
China Shipping Container	China Shipping Group Investment Co. Ltd.
Lines Xiamen Co., Ltd	（中海集團投資有限公司）
（中海集裝箱運輸廈門有限公司）			10%
China Shipping (Yangpu)	(i) China Shipping Logistics Co., Ltd.		30%
Refrigeration Storage &	（中海集團物流有限公司）
Transportation Co., Ltd.	(ii) Suzhou China Shipping Containers Lines		30%
（中海（洋浦）冷藏儲運有限公司）	Storage and Transportation Co., Ltd.
	（蘇州中海集裝箱儲運有限公司）
China Shipping Container	China Shipping Agency Co., Ltd.		10%
Lines (Haikou) Co., Ltd.	（中海船務代理有限公司）
（海口中海集裝箱運輸有限公司）
Shanghai Puhai Shipping Co., Ltd.	China Shipping Container Lines Shanghai Co.,	Ltd	10%
（上海浦海航運有限公司）	（中海集裝箱運輸上海有限公司）
Shanghai HaiXin YuanCang	(i) Bermuda YuanCang International Co., Ltd.		40%
International Logistics Co., Ltd.	（百慕達遠倉國際股份有限公司）
（上海海興遠倉國際物流有限公司）	(ii) Shanghai YiHua Enterprises Company		20%
	（上海逸驊實業總公司）

Note: The English names of certain companies referred herein represent management’s best efforts at translating the Chinese names of these companies as no English names have been registered.

Save as disclosed above and so far as the Directors, supervisors or chief executive(s) are aware, as at the Latest Practicable Date, no other person, not being a Director, supervisor or chief executive of the Company, 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.

6. LITIGATION

As at the Latest Practicable Date, no litigation or claim of material importance is known to the Directors to be pending or threatened against any member of the Group.

7. MISCELLANEOUS

• (a) The secretary of the Company is Mr. Ye Yu Mang. Mr. Ye graduated from Shanghai Maritime University in 1989 with a Masters degree in mechanical engineering and was the company secretary of China Shipping Development Company Limited from April 2001 to March 2003.

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APPENDIX

GENERAL INFORMATION

• (b) The previous qualified accountant of the Company Mr. Lau Wai Yip resigned on 31 May 2006. The Company is in the process of identifying an appropriate candidate with the necessary qualifications to be appointed as its qualified accountant pursuant to Rule 3.24 of the Listing Rules.

• (c) The Hong Kong H Share registrar and transfer office of the Company is Computershare Hong Kong Investor Services Limited at 46th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (d) The English text of this Circular shall prevail over the Chinese text in case of any inconsistency.

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