Dida Inc. — Audit Report / Information 2016

Mar 29, 2016

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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)

OVERSEAS REGULATORY ANNOUNCEMENT CHANGE IN ACCOUNTING ESTIMATES

This announcement is made by China Shipping Development Company Limited (the “Company” and together with its subsidiaries, the “Group”) pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”).

I. Changes in accounting estimates

1. Date of change: adopted since 1 January 2016

2. Reasons of change: according to the relevant requirements of the “China Accounting Standards for Business Enterprises No. 4 - Fixed Assets”, an enterprise should review the estimated useful lives, net residual values and depreciation method of its fixed assets at the end of each accounting year. Where the estimated useful lives and net residual values of the fixed assets are different from the original accounting estimates, such differences shall be adjusted accordingly.

Recently, the Company reviewed the useful lives, estimated residual values and depreciation method of its own vessels. In view of the significant changes of the shipping market, the current conditions and estimated economic benefits of vessels, and in order to provide more reliable, relevant and comparable accounting information, the Company shall adjust the accounting estimates of the net residual values of the vessels.

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• II. Changes in accounting estimates of the Company’s fixed assets (vessels)

  1. Prior to these changes in accounting estimates, the accounting policy on the Company’s vessels was as follows: all new vessels have an unified estimated useful life of 25 years, and second-hand vessels are depreciated over its estimated remaining useful life. The net residual value of vessels is determined based on US$420/LDT, and the Company consistently maintained the above accounting policy during 2014 and 2015.

  2. After these changes in accounting estimates, the accounting policy on the Company’s vessels is as follows: all new vessels have an unified estimated useful life of 25 years, and second-hand vessels are depreciated over its estimated remaining useful life. The net residual value of vessels is determined based on US$280/LDT, which were adopted with effect from 1 January 2016.

III. Effects of these changes in accounting estimates on the Company

According to the depreciation policy originally adopted by the Company, the estimated vessel depreciation expense of the Company in 2016 is approximately RMB1,943,000,000. According to the new depreciation policy, the estimated vessel depreciation expense for the year ending 31 December 2016 is approximately RMB2,031,000,000, resulting in the decrease of total profit for the year ending 31 December 2016 by approximately RMB88,000,000 due to the adjustment in accounting estimates.

According to the relevant requirements of the “China Accounting Standards for Business Enterprises No. 4 - Fixed Assets”, the adjustment of annual rate of depreciation and estimated residual values of vessels are considered as changes in accounting estimates, and it would not affect the Company’s published financial statements for the year ended 31 December 2015.

IV. The explanatory statement of the board (the “Board”) of directors of the Company in respect of the changes in accounting estimates

The third Board meeting of the Company in 2016 was convened on 29 March 2016, which passed the “Resolution on Changes in Accounting Estimates in Respect of the Fixed Assets (Vessels) of the Company”.

The Board considered that the adjustment of accounting estimates of estimated useful lives and net residual values of the fixed assets (vessels) complies with the requirements of the “China Accounting Standards for Business Enterprises”. The financial conditions of the Company can be better reflected after the changes in estimated useful lives and net residual values of the vessels.

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The Board agreed with the changes in accounting estimates of the Company.

• V. Independent non-executive directors’ opinion

According to the relevant requirements of the “Guidelines on the Establishment of Independent Directorship of Listed Companies” and the “Code of Corporate Governance for Listed Companies” issued by the Chinese government and the “Articles of Association” of the Company, the independent non-executive directors of the Company have carefully reviewed the materials of the Board meeting of the Company, and expressed their opinion as follows :

1. The Board approved the changes in accounting estimates and its approval procedure has complied with the requirements of the “Articles of Association” of the Company and the relevant laws and regulations;

2. The annual rate of depreciation and net residual values of the fixed assets (vessels) of the Company can be more accurately reflected after the changes in accounting estimates. The basis of such changes are true, reliable and in compliance with the relevant regulations of the “China Accounting Standards for Business Enterprises”, and the financial conditions of the Company can be more reliably reflected without prejudice to the interests of the Company and its minority shareholders;

3. After prudent judgments, the independent non-executive directors of the Company agreed to the above changes in accounting estimates of the Company.

VI. Supervisory Committee’s Opinion

The supervisory committee of the Company (“Supervisory Committee”) expressed its review opinion in respect in the changes of accounting estimates as follows: 1. The changes in accounting estimates of the Company have taken into account the actual situation of the Company and have complied with the relevant requirements of laws and regulations;

1. The financial conditions and operating results of the Company can be reflected more fairly and reliably after the changes in accounting estimates, thus such changes will improve the quality of the financial information of the Company;

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1. The Supervisory Committee unanimously agreed to the above changes in accounting estimates.

This announcement is made pursuant to Rule 13.10B of the Listing Rules. The A-Shares of the Company are listed on the Shanghai Stock Exchange, which has requested the Company to publish an announcement similar to this announcement.

By order of the Board China Shipping Development Company Limited Yao Qiaohong

Company Secretary

Shanghai, the PRC 29 March 2016

As at the date of this announcement, the Board of Directors of the Company comprises Mr. Xu Lirong, Mr. Huang Xiaowen, Mr. Ding Nong, Mr. Yu Zenggang, Mr. Yang Jigui, Mr. Han Jun and Mr. Qiu Guoxuan as executive Directors, and Mr. Wang Wusheng, Mr. Ruan Yongping, Mr. Ip Sing Chi, Mr. Rui Meng and Mr. Teo Siong Seng as independent non-executive Directors.

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