Dida Inc. — Governance Information 2012

Dec 28, 2012

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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)

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

The board of directors (the “Board”) of China Shipping Development Company Limited (the “Company” and together with its subsidiaries, the “Group”) is pleased to announce that it is proposed that amendments be made to Chapter 15 “Accounting regulation and profit distribution” of the Articles of Association of the Company (“Articles”). Pursuant to the “Notice on Further Implementing Issues Concerning Cash Dividends of Listed Companies” (《關於進一步落實上市公司現金分紅有關事項的通知》) released by China Securities Regulatory Commission and the new requirements under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The proposed amendments to the Articles are subject to the approval of the shareholders of the Company (“Shareholders”) by way of a special resolution at the next upcoming general meeting, which is expected to be held no later than 30 June 2013.

The details of the proposed amendments to the Articles are as follows:

1. Article 218 of the existing Articles, being “The Company shall submit an annual financial accounting report to the China Securities Regulatory Commission (CSRC) and the Stock Exchange within 4 months after the end of each accounting year; a semi-annual financial accounting report to CSRC agencies and the Stock Exchange within 2 months after the end of the first 6 months of the accounting year.” be deleted and replaced as follows:

“The Company shall submit an annual financial accounting report to the China Securities Regulatory Commission (CSRC) and the Stock Exchange within three months after the end of each accounting year; an interim financial accounting report to CSRC and the Stock Exchange within two months after the end of the first 6 months of the accounting year.”

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1. Article 221 of the existing Articles, being “The Company shall issue four financial reports every fiscal year, i.e. quarterly financial reports issued within one month after the end of the first quarter and third quarter of the fiscal year, an interim financial report issued within two months after the end of the first 6 months of the fiscal year and an annual financial report issued within four months after the end of the fiscal year.” be deleted and replaced as follows:

“The Company shall issue four financial reports every fiscal year, i.e. quarterly financial reports issued within one month after the end of the first quarter and third quarter of the fiscal year, an interim financial report issued within two months after the end of the first 6 months of the fiscal year and an annual financial report issued within three months after the end of the fiscal year.”

1. Article 223 of the existing Articles states that:

“When the Company distributes after-tax profits it shall collect 10% to be used for the reserve fund. Such withdrawal may cease when the statutory common reserve fund of the Company amounts to more than 50% of the registered capital of the Company.

If the statutory common reserve fund is insufficient to make up for the losses of the preceding year, the profits of the current year shall first be used to make up for the said losses before any statutory common reserve fund is withdrawn as per the preceding paragraph.

After the statutory common reserve fund is withdrawn from the after-tax profits, the discretionary common reserve fund may also be withdrawn pursuant to a resolution passed at a general meeting.

The after-tax profits remaining after recovery of losses and withdrawal of common reserve funds may be distributed as dividends to the shareholders in proportion to their shareholding percentages.

If the meeting of shareholders violates the aforementioned regulations — distributes dividends to the shareholders before the Company recovers its losses and withdraws from the statutory common reserve fund — shareholders must return the unlawfully distributed dividends to the Company.

Shares held by the Company shall not participate in distribution of profits.”

The last paragraph “Shares held by the Company shall not participate in distribution of profits.” be deleted.

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1. Article 224 of the existing Articles, being

“The Company may distribute the dividends in the following forms (or combination of the two forms):

• I. Cash;

• II. Shares.”

be deleted.

1. Article 225 of the existing Articles be renumbered as Article 224 of the new Articles.

2. Article 226 of the existing Articles be renumbered as Article 225 of the new Articles.

3. Article 227 of the existing Articles, being “The Company’s domestic shares and overseas listed foreign shares shall carry the same rights in any distribution made in the form of dividends or in other forms.” be deleted.

4. Article 228 of the existing Articles be renumbered as Article 226 of the new Articles.

5. Article 229 of the existing Articles be renumbered as Article 227 of the new Articles.

6. Article 230 of the existing Articles, being

“The Company’s policy on the distribution of profits holds that after the recovery of losses and withdrawal of the common reserve fund, as stated in Article 225, cash dividends shall be considered first when the Company distributes dividends. The specific proportion of the distribution of dividends shall be determined by the meeting of shareholders.

Cash dividends and other monies paid by the Company to domestic capital stockholders shall be paid in RMB. Cash dividends and other monies paid by the Company to holders of overseas listed foreign capital stock shall be stated and announced in RMB and paid in foreign currency. Foreign currency required by the Company to pay cash dividends and other monies to holders of overseas listed foreign capital stock and holders of other foreign capital stock shall be obtained pursuant to relevant state regulations on foreign exchange.”

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be deleted and replaced by Articles 228 to 236 in the new Articles to be inserted as follows:

“Article 228

Basic principles of profit distribution policy of the Company

The profit distribution policy shall be continuous and stable. Profit distribution shall be in full consideration of reasonable return to investors, the long term interests and sustainable development of the Company, and the interests of all shareholders as a whole.

The profit distribution of the Company shall be based on the distributable profit realized for the year and dividend shall be distributed to shareholders in a sequence in compliance with the statutory requirements and in proportion to their shareholdings. The same shares shall be entitled to the same rights and dividend. Shares of the Company held by the Company are not entitled to distribution.

The Company shall give priority to profit distribution in the form of cash.

Article 229

Forms of profit distribution

The Company may distribute dividends in the forms of cash, shares or a combination of both cash and shares.

Article 230

Time intervals between profit distributions

Provided that the Company makes a profit for the year, and its operating cash flow and total undistributed profit are positive, the Company shall make profit distribution at least once a year.

The Company may distribute interim profit. The Board of the Company may propose distribution of interim dividends based on the scale of profit, cash flows status, stage of development and capital requirements of the Company.

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Article 231

Specific circumstances and proportions of cash dividends

Profit distributions by the Company in cash shall at least meet the following conditions:

• (1) The realised distributable profit of the Company for the year (the profit after tax of the Company after recovery of losses and allocation to the common reserve) is positive with sufficient cash flows, and the cash dividend distribution will not affect the subsequent continuing operation of the Company;

• (2) The auditors have issued an audit report with standardized unqualified opinions on the annual financial report of the Company.

Upon the fulfillment of the aforesaid conditions, the Company shall distribute dividend in cash. The total profit to be distributed in cash in any consecutive three years shall not be less than 30% of the average annual distributable profit realized in the three years. The actual proposal relating to the proportion of cash dividend per annum shall be recommended by the Board based on the annual profitability and the future plan of capital utilization.

Article 232

Specific conditions for share dividend distribution

The Company may distribute profit by share dividend according to actual conditions such as the accumulated distributable profit and cash flows of the Company, and on the premise that there is adequate cash dividend and a reasonable share capital structure of the Company. The actual proposal relating to the proportion of share dividends shall be recommended by the Board. In determining the specific amount for the share dividend distribution, the Board shall take full account of whether the total share capital after share dividend distribution is suitable for the current operational scale and the development of the Company, so as to ensure that the profit distribution plan is in the interest of all shareholders as a whole in the long run.

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Article 233

The consideration and deliberation procedures and decision-making mechanism for the profit distribution plan

The Company’s profit distribution proposal shall be formulated by the management of the Company. In formulating the profit distribution proposal the views of investors shall be taken into account and the proposal so formulated shall be submitted to the consideration of the Board of the Company. The Board of the Company shall fully consider and deliberate the profit distribution proposal pursuant to the provisions of the Articles of Association, having fully taken into account the Company’s ability to operate continuously, and the capital required for ensuring routine production, operation and business development as well as reasonable return to investors. In deliberating and decision-making of the profit distribution proposal, the Board of the Company shall take full account of the views of the independent directors. In considering the profit distribution proposal, the Board shall record in detail the advice of the management, key points of the speeches of directors present at the meeting, opinions of independent directors, voting results of Board meetings, etc. and prepare written minutes to be kept properly as the Company’s records.

Where the profit distribution proposal is considered by the Board, it requires the consent of more than half of all the directors to be approved. Independent directors shall provide their independent opinion on the profit distribution proposal.

The resolutions formed for the profit distribution proposal shall be submitted to the shareholders general meeting for consideration. Upon receipt of any qualifying profit distribution proposal proposed by other shareholders, the Board shall communicate with the proposing shareholder to understand the specific reasons and background for proposing the proposal, announce the contents of and reasons for the proposal in accordance with the procedures as required by the Articles of Association, and submit the same to the shareholders general meeting for consideration.

Where the profit distribution proposal is considered at the shareholders general meeting, the Company shall communicate and exchange ideas through multiple channels with shareholders (minority shareholders in particular), take full account of the opinion and demands of minority shareholders, and give timely replies to issues that concern minority shareholders.

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Where the profit distribution plan is considered at the shareholders general meeting, it requires the consent of more than half of all shareholders (including proxies of shareholders) carrying voting rights present at the meeting to be approved. Where plans for share dividend distribution or for transfer from the common reserve to share capital is considered at the shareholders general meeting, it requires the consent of more than two thirds of the shareholders (including proxies of shareholders) carrying voting rights present at the shareholders general meeting to be approved.

Article 234

Under circumstances where no cash dividends are paid

Where the Company makes a profit and meets the conditions for cash dividend in the previous accounting year but has not proposed a cash dividend distribution plan, the Board shall disclose in regular reports the reasons for not proposing a cash dividend distribution plan and the purpose for the retained capital, and independent directors shall express their opinion thereon.

Article 235

Adjustments to profit distribution policy

In the event of war, natural disasters and other force majeure, or any material changes to the external business environment or internal operating conditions of the Company, the Company may adjust its profit distribution policy through amendment of the Articles of Association.

In considering the adjustment to the profit distribution policy, the Board shall obtain the consents from more than two thirds of all directors to pass the resolution. Independent directors shall express independent opinion in this regard.

Any adjustment to the profit distribution policy shall only be submitted to the shareholders general meeting for consideration after being approved by the Board, and the Company shall provide access to online-voting for shareholders to facilitate their participation in the shareholders general meeting. The Company shall, for the sake of protecting interests of shareholders, make deliberations and explanations in the proposal to be submitted to the shareholders general meeting. Where the adjustment to the profit distribution policy is considered at the shareholders general meeting, it requires the consent of more than two thirds of the shareholders (including proxies of shareholders) carrying voting rights eligible for attending the shareholders general meeting to be approved.

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Article 236

Payment forms of cash dividends

Cash dividends and other amounts paid by the Company to shareholders of domestic shares shall be paid in RMB. Cash dividends and other amounts paid by the Company to shareholders of overseas listed foreign shares shall be denominated and declared in RMB and paid in foreign currency. The Company shall arrange the foreign currency for payment of cash dividends and other amounts to holders of overseas listed foreign shares and holders of other foreign shares in accordance with foreign exchange management regulations of the PRC.

Except as otherwise specified in relevant laws and regulations, if cash dividends and other monies are paid in other currencies, the exchange rate shall be the exchange rate for RMB to other currencies quoted by the People’s Bank of China on the date of the general meeting.”

1. Article 231 of the existing Articles, being “Except as otherwise specified in relevant laws and administrative regulations, if cash dividends and other monies are paid in cash, the exchange rate shall be the average selling bid issued by People’s Bank of China one Gregorian week before the announcement of the dividends and other monies.” be deleted.

2. Article 232 of the existing Articles, being “The Company may distribute dividends in the form of cash or shares. The Company may declare an interim dividend in cash. The aggregate profit distributed by the Company in cash for three consecutive years shall not be less than 30% of the annual average distributable profit realized for the three years. The profit distribution policy of the Company shall maintain consistency and stability and shall comply with the requirements of the relevant laws, regulations and regulatory documents.” be deleted.

3. The numbering of the articles subsequent to Article 233 of the existing Articles be renumbered accordingly in the new Articles.

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GENERAL

A circular containing, among other things, details of the proposed amendments to the Articles together with a notice convening the general meeting (expected to be held no later than 30 June 2013) shall be dispatched to the Shareholders in due course.

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

Company secretary

Shanghai, the People’s Republic of China 28 December 2012

As at the date of this announcement, the Board of Directors of the Company comprises Mr. Li Shaode, Mr. Xu Lirong, Mr. Zhang Guofa, Mr. Wang Daxiong, Mr. Ding Nong, Mr. Yan Zhichong and Mr. Qiu Guoxuan as executive Directors, Mr. Zhu Yongguang, Mr. Zhang Jun, Mr. Lu Wenbin and Mr. Wang Wusheng as independent non-executive Directors.

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