Dida Inc. — Capital/Financing Update 2004

Oct 7, 2004

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, 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 announcement.

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CHINA SHIPPING DEVELOPMENT COMPANY LIMITED

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

(Stock Code: 1138)

CONNECTED TRANSACTION

The board (the “ Board ”) of directors (the “ Directors ”) of China Shipping Development Company Limited (the “ Company ”) is pleased to announce that the Company and China Shipping Industry Company Limited ( ) (“ CS Industry ”) entered into a sale and purchase agreement (the “ Sale and Purchase Agreement ”) on 7 October 2004 whereby the Company had agreed to sell and CS Industry had agreed to purchase an oil tanker named “Daqing 246” (the “ Oil Tanker ”) for a consideration of RMB24,840,000 (approximately HK$23,433,962) (the “ Transaction ”). Such consideration had been determined with reference to the market value of the Oil Tanker, as at 31 August 2004, of approximately RMB24,610,000 (approximately RMB23,216,981.13) set out in a valuation report prepared by an independent professional valuer (the “ Valuation Amount ”).

China Shipping (Group) Company (the “ Group Company ”) holds approximately 50.51 percent of the issued share capital of the Company and is a controlling shareholder of the Company as defined under The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”). CS Industry is a wholly owned subsidiary of Group Company. Therefore, CS Industry is a connected person (as defined under the Listing Rules) of the Company. Hence, the Transaction constitutes a connected transaction of the Company for the purposes of the Listing Rules. As each of the percentage ratios (other than the profits ratio) in respect of the Transaction is more than 0.1% but less than 2.5%, the Transaction is only subject to the reporting and announcement requirements under Rules 14A.45 to 14A.47 of the Listing Rules but does not require the approval of the shareholders of the Company (the “ Shareholders ”) other than the Group Company and its associates (as defined under the Listing Rules) (the “ ” Independent Shareholders ).

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The terms and conditions of the Transaction have been negotiated on an arm’s length basis and are conducted on normal commercial terms. The Transaction is in the ordinary and usual course of business of the Company. The Board (including the independent non-executive Directors) (the “ Independent Directors ”) considers the Transaction to be, fair and reasonable, and is in the interests of the Company and the Shareholders, taken as a whole.

Particulars of the Sale and Purchase Agreement are set forth below, and will also be disclosed in the Company’s 2004 annual report.

1. Sale and Purchase Agreement dated 7 October 2004

1.1 Parties

Vendor: The Company Purchaser: CS Industry

• 1.2 Oil Tanker

The Oil Tanker was constructed by China Dalian Shipyard, an independent third party. It was commissioned into service in March 1978. The Oil Tanker weighs 8228 net tonnage. The Oil Tanker has been owned by the Company from its commencement of service.

1.3 Sale of the Oil Tanker

Pursuant to the Sale and Purchase Agreement, the Company has agreed to sell and CS Industry has agreed to purchase the Oil Tanker. CS Industry has also undertaken to the Company that it shall not employ the Oil Tanker in a business which competes with the Company.

1.4 Purchase price and payment terms

Pursuant to the Sale and Purchase Agreement, CS Industry will pay to the Company a sum of RMB24,840,000 (approximately HK$23,433,962) for the Oil Tanker as consideration for the purchase of the Oil Tanker. The Company has appointed an independent professional valuer to issue a valuation report which sets out the Valuation Amount. The consideration for the sale of the Oil Tanker had been determined with reference to the Valuation Amount. The net book value of the Oil Tanker as at 31 August 2004 was RMB19,907,094.51 (approximately HK$18,780,277.84). The net profit expected to arise from the sale of the Oil Tanker, being the difference between the consideration in respect of the sale and the net book value of the Oil Tanker, is RMB4,932,905.49 (approximately HK$4,653,684.42). The Company intends to use the net proceeds arising from the sale of the Oil Tanker as its working capital. The net profits before taxation and extraordinary items which are attributable to the Oil Tanker for the 2 financial years ended 31 December 2003 were RMB19,096,792.09 and RMB24,972,063.67, respectively. The net profits after taxation and extraordinary items which are attributable to the Oil Tanker for the 2 financial years ended 31 December 2003 were RMB17,676,048.51 and RMB23,257,288.14, respectively.

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Pursuant to the Sale and Purchase Agreement, the consideration shall be paid by CS Industry by remittance or in cash to the Company’s designated bank account within 5 banking days following the signing of the Sale and Purchase Agreement.

1.5 Delivery

The Oil Tanker will be delivered to CS Industry at China Shipping Industry Lifeng shipyard in Shanghai, the People’s Republic of China (the “ PRC ”) on or before 8 October 2004.

1.6 Other significant terms

The Company has warranted that upon delivery of the Oil Tanker, the Oil Tanker will not be subject to any priority rights, liabilities or pledges, and will not carry any illegal material.

All responsibilities, liabilities and risks relating to the delivery of the Oil Tanker shall be borne by the Company prior to delivery of the Oil Tanker, and by CS Industry immediately after such delivery.

The Sale and Purchase Agreement is subject to the usual force majeure provisions. In the event of occurrence of force majeure events such as earthquake, fire, tidal wave and war and, as a result, the Sale and Purchase Agreement cannot be performed by the Company, the Company shall notify CS Industry of the termination of the Sale and Purchase Agreement immediately.

If CS Industry fails to pay the total amount of the consideration in accordance with the Sale and Purchase Agreement, the Company shall have the right to terminate the Sale and Purchase Agreement and claim for any consequential losses and interest.

Should any dispute arise between the Company and CS Industry in respect of the Sale and Purchase Agreement, which remains unresolved after reasonable discussions, such dispute shall be referred to the China Maritime Arbitration Commission, for arbitration in Shanghai, the PRC.

There is no condition precedent to the Sale and Purchase Agreement.

2. Reasons for and benefits of entering into the Sale and Purchase Agreements

In accordance with a notice issued by the Ministry of Communication of the PRC on 9 April 2001, the Oil Tanker has reached the age for mandatory special routine inspection ( ). A more extensive programme of maintenance, repair and inspection is expected for the Oil Tanker. The Board estimates that the maintenance and repair costs for the Oil Tanker would thus be increased significantly.

The Oil Tanker is now mainly used for crude oil shipping along the domestic coast of the PRC. Due to the decrease of shipping volume of crude oil from Daqing Oilfield and Shengli Oilfield in northern China, the Board has decided to sell the Oil Tanker in accordance with the overall development strategy of oil tanker fleets owned by the

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Company. The Board believes that the disposal of the Oil Tanker will not have any material impact on the Company’s operation and will provide the Company with more working capital. The Board does not have intention on any specific use for such working capital.

3. General

The business of the Company mainly involves coastal, ocean and Yangtze River cargo transportation, container transportation, oil transportation, international passenger transportation, chartering, cargo agency and cargo transportation agency. The business of CS Industry mainly involves ship repair, ship construction, purchase of second hand ships, ship dismantling and ship leasing.

4. Listing Rules Requirements

Group Company holds approximately 50.51 percent of the issued share capital of the Company and is a controlling shareholder of the Company as defined under the Listing Rules. CS Industry is a wholly owned subsidiary of Group Company. Therefore, CS Industry is a connected person (as defined under the Listing Rules) of the Company. Hence, the Transaction constitutes a connected transaction of the Company for the purposes of the Listing Rules.

As each of the percentage ratios (other than the profits ratio) in respect of the Transaction is, more than 0.1% but less than 2.5%, the Transaction is only subject to the reporting and announcement requirements under Rules 14A.45 to 14A.47 of the Listing Rules and does not require approval by the Independent Shareholders.

The terms and conditions of the Transaction have been negotiated on an arm’s length basis and are conducted on normal commercial terms. The Transaction is in the ordinary and usual course of business of the Company. The Board (including the Independent Directors) considers the Transaction to be, fair and reasonable, and in the interests of the Company and the Shareholders, taken as a whole.

By order of the Board

China Shipping Development Company Limited Yao Qiaohong Company Secretary

Shanghai, the PRC 7 October 2004

Note: Unless otherwise specified, the conversion of HK$ into RMB is based on the exchange rate of HK$1.00=RMB1.06.

As at the date of this announcement, the Board of Directors of the Company comprises of Mr. Li Shaode, Mr. Sun Zhitang, Mr. Wang Daxiong, Mr. Yan Mingyi, Mr. Yao Zuozhi and Mr. Wang Kunhe as executive Directors, Mr. Xie Rong, Mr. Hu Honggao and Mr. Zhou Zhanqun as independent non-executive Directors.

Please also refer to the published version of this announcement in The Standard.

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