Dida Inc. — Proxy Solicitation & Information Statement 2010

Nov 3, 2010

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt about this circular, you should consult appropriate independent advisers.

If you have sold all your shares in China Shipping Development Company Limited, you should at once hand this circular and the enclosed proxy form and reply slip to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim 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 AND CONNECTED TRANSACTION CONSTRUCTION OF NEW VESSELS

Independent Financial Advisor to the Independent Board Committee and The Independent Shareholders

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A letter from the Board is set out on pages 4 to 8 of this circular.

A letter from the Independent Board Committee is set out on page 9 of this circular.

A letter from the Independent Financial Adviser, containing its advice to the Independent Board Committee and the Independent Shareholders, is set out on pages 10 to 15 of this circular.

A notice convening the EGM of the Company to be held at 2:00 p.m. on Monday, 20 December 2010 at 700 Dong Da Ming Road, Shanghai, The People’s Republic of China, is set out on pages N-1 to N-3 of this circular.

A reply slip and form of proxy used at the EGM are enclosed. If you are eligible and intend to attend the EGM, please complete and return the enclosed reply slip in accordance with the instructions printed thereon on or before Tuesday, 30 November 2010. Whether or not you are able to attend the above meeting, please complete and return the enclosed proxy form in accordance with the instructions printed thereon as soon as practicable and in any event by not less than 24 hours before the time appointed for the holding of the meeting. Completion and return on the proxy form will not preclude you from attending and voting in person at the meeting or at any adjourned meetings should you so wish.

4 November 2010

CONTENTS

Pages	Pages
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Expected timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	N-1

— i —

DEFINITIONS

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

• “Agreements” 12 agreements all dated 28 September 2010, each of which is entered into between the Vendors and the Company for the construction of one Vessel (for a total of 12 Vessels) for the transportation of coal and other bulk cargo

• “China Shipping” 中國海運(集團)總公司(China Shipping (Group) Company*), a PRC state-owned enterprise and the controlling shareholder of the Company, holding 46.36% of the registered capital of the Company as at the Latest Practicable Date

• “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

• “Directors” directors of the Company “EGM” extraordinary general meeting of the Shareholders to be convened by the Company on Monday, 20 December 2010 to consider and, if thought fit, to approve (amongst other things) the Agreements

• “Group” the Company and its subsidiaries

• “H Shares” H shares of par value RMB1.00 each in the share capital of the Company, being overseas listed foreign invested shares

• “HK$” Hong Kong dollars, the lawful currency of the Hong Kong Special Administrative Region of the PRC

• “Independent Financial Adviser” TC Capital Asia Limited, a registered institution to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) of the regulated activities under the SFO, and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the terms of the Agreements

• “Independent Shareholder(s)” the Shareholders other than China Shipping and its associates (as defined in the Listing Rules)

• “Latest Practicable Date” 1 November 2010, 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

— 1 —

DEFINITIONS

“PRC”	The People’s Republic of China
“RMB”	Renminbi Yuan, the lawful currency of the PRC
“Shareholder(s)”	holders of share(s) of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Vendors”	中海工業有限公司(China Shipping Industrial Co.,Ltd.*) and
	中海工業(江蘇)有限公司(China Shipping Industrial (Jiangsu)
	Co., Ltd.*)
“Vessels”	Dry bulk carriers of 48,000 dead weight tons each

Note: Unless otherwise specified and for illustration purpose only, the conversion of RMB into HK$ is based on the exchange rate HK$1.00=RMB0.86.

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EXPECTED TIMETABLE

Date of despatch of this circular. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Thursday, 4 November 2010 Last date for returning the reply slips for the EGM . . . . . . . . . . . . . . .Tuesday, 30 November 2010 Latest time for lodging proxy forms for the EGM . . . . . .2:00 p.m. on Sunday, 19 December 2010 Time and date of EGM. . . . . . . . . . . . . . . . . . . . . . . . . . .2:00 p.m. on Monday, 20 December 2010

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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 Qiu Guoxuan

Independent Non-Executive Directors: Zhu Yongguang Gu Gongyun Zhang Jun Lu Wenbin

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

4 November 2010

To the Shareholders

Dear Sir/Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION CONSTRUCTION OF NEW VESSELS

1. INTRODUCTION

Reference is made to the announcement of the Company dated 28 September 2010 in respect of the Company entering into the Agreements with the Vendors.

The purpose of this circular is to provide the Shareholders with further information on the terms of the Agreements and to convene the EGM to seek the approval of the Shareholders with respect to the Agreements.

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LETTER FROM THE BOARD

2. THE AGREEMENTS

On 28 September 2010, the Company entered into the Agreements with the Vendors for the construction of 12 Vessels for the transportation of coal and other bulk cargo. The total consideration for the construction of the Vessels is approximately RMB2,553,600,000 (equivalent to approximately HK$2,969,302,000). The consideration is determined by reference to the market price for the past 6 months of dry bulk carriers of tonnage between 40,000 dead weight tons and 60,000 dead weight tons with similar specifications.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, each of the Vendors is a wholly-owned subsidiary of China Shipping. Since China Shipping is the controlling shareholder of the Company, the transactions contemplated under the Agreements are connected transactions for the Company under the Listing Rules and are subject to the approval of the Independent Shareholders at the EGM. The Company considers there were no prior transactions within the past 12 months between the Group and the Vendors which may require aggregation under Rule 14A.25 of the Listing Rules.

The Directors consider 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.

Terms of the Agreements

The price of the 12 Vessels will be payable in RMB. Relevant payments under each of the Agreements will be payable in 5 instalments at various stages of the construction of the relevant Vessel:

• (i) for the first instalment, to pay 20% of the price within 10 business days after the Agreements become effective and receipt of the relevant invoice from Vendors;

• (ii) for the second, third and fourth instalment, to pay 20% of the price within 5 business days of the receipt of the relevant invoice and related construction documents issued by the Vendors evidencing various phases of constructions including commencement of construction, docking and launching of the relevant vessel; and

• (iii) for the final instalment, to pay 20% of the price (and relevant adjustments applicable pursuant to the Agreements) upon delivery of the relevant vessel and receipt of all delivery related documentation by the Vendors.

The basis of the above payments have been determined based on the expected completion phases for the construction of the relevant vessels and on such basis, the Directors believe that such payment terms are fair and reasonable.

The expected delivery dates for the Vessels under the relevant Agreement will be during the period from May 2012 to April 2013.

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LETTER FROM THE BOARD

Each of the Agreements provides that there will be no adjustment in the price of the relevant Vessel if the delivery is delayed for a period not exceeding 30 or 60 days (as the case may be). If the delay exceeds 30 days to 60 days (as the case may be), there will be a reduction in the price of the relevant Vessel based on a daily reduction of RMB30,000 for the relevant Vessel. If the delay exceeds 210 days or 240 days (as the case may be), the Company has the right to cancel the relevant Agreement and the Vendors will within 10 business days return all previous payments by the Company together with interest. The per annum interest rate shall be the one year lending rate as published by the People’s Bank of China which the Directors believe is fair and reasonable in the circumstances contemplated.

There will be other downward adjustments in price of the relevant Vessel if its performance (such as speed, fuel consumption rate, tonnage) exceeds or falls below certain agreed criteria (as the case may be). However should the relevant performance exceeds or falls below certain agreed benchmark, the Company has the right to refuse delivery of the relevant Vessel and accept a refund with interest from the Vendors, or negotiate a new price for the relevant Vessel.

The Agreements are conditional upon the approval of the Independent Shareholders at the EGM.

Financing Terms

The construction of the Vessels will be funded by the Company as to approximately 70% of the price by bank borrowings and approximately 30% of the price by internal financial resources. As at the Latest Practicable Date, the Company had not secured the relevant bank borrowings as such bank borrowings are usually obtained subsequent to the construction contracts having become effective. There may or may not be pledges of assets (including the subject vessels to be constructed under the Agreements) involved which is customary to relevant bank facilities. However this will only be confirmed at the time when such bank borrowings are negotiated and secured from the banks.

The financing by way of bank borrowings is expected to increase the Company’s level of borrowings. Taking into account the Company’s capital and shareholders’ base, the Company considers that bank borrowing is the best means of financing for the construction of the Vessels. The Directors believe that in light of the Company’s fleet expansion plan, it is fair and reasonable and in the interest of the Company and the Shareholders as a whole to finance the transaction with such bank borrowings.

3. INFORMATION ABOUT THE GROUP AND CHINA SHIPPING

The business scope of the Group includes: coastal, ocean and Yangtze River cargo transportation, chartering, cargo agency and cargo transportation agency.

The business scope of China Shipping includes import and export businesses, trading, coastal and ocean cargo transportation, dry bulk cargo transportation, supply of food for vessels, management of docks and other services in relation to the above. Each of the Vendors is in the business of shipbuilding and ship repairing.

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LETTER FROM THE BOARD

4. REASONS FOR ENTERING INTO THE AGREEMENTS

The Directors are optimistic of the demand in the coal and other bulk cargo transportation market and its persistent growth in the coming years. The Directors are of the view that the construction and ownership of the Vessels 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.

Other than Mr. Li Shaode, Mr. Ma Zehua, Mr. Lin Jianqing, Mr. Wang Daxiong and Mr. Zhang Guofa who abstained from voting pursuant to relevant PRC requirements as a result of them being members of the senior management of China Shipping, none of the other Directors has a material interest in the transactions and had therefore not abstained from voting on the relevant board resolutions approving the Agreements.

5. LISTING RULES IMPLICATIONS

As at the Latest Practicable Date, China Shipping is beneficially interested in 1,578,500,000 Domestic shares, representing approximately 46.36 per cent. of the existing issued share capital of the Company and is therefore its controlling shareholder. Since China Shipping is the controlling shareholder of the Company and that each of the Vendors are wholly owned subsidiaries of China Shipping, the transactions contemplated under the Agreements are connected transactions for the Company under the Listing Rules and are subject to the approval of the Independent Shareholders at the EGM. China Shipping, the controlling shareholder of the Company, and its associates will abstain from voting on the Agreements at the EGM. Pursuant to rule 13.39(4) of the Listing Rules, votes in relation to the resolution to be proposed at the EGM shall be taken by poll.

The Company considers there were no prior transactions within the past 12 months between the Group and the Vendors which may require aggregation under Rule 14A.25 of the Listing Rules. Further, as the relevant percentage ratios are more than 5% but less than 25%, such transactions also constitute discloseable transactions under Chapter 14 of the Listing Rules.

6. EGM

It is proposed that the EGM be convened and held at 2:00 p.m. on Monday, 20 December 2010 at 700 Dong Da Ming Road, Shanghai, The People’s Republic of China to consider and, if thought fit, approve the Agreements. A notice of the EGM is set out on pages N-1 to N-3 of this circular.

A reply slip and form of proxy used at the EGM are enclosed. If you are eligible and intend to attend the EGM, please complete and return the enclosed reply slip in accordance with the instructions printed thereon on or before Tuesday, 30 November 2010. Whether or not you are able to attend the above meeting, please complete and return the enclosed proxy form in accordance with the instructions printed thereon as soon as practicable and in any event by not less than 24 hours before the time appointed for the holding of the meeting. Completion and return on the proxy form will not preclude you from attending and voting in person at the meeting or at any adjourned meetings should you so wish.

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LETTER FROM THE BOARD

7. CLOSURE OF H SHARE REGISTER OF MEMBERS OF THE COMPANY

The H share register of members of the Company will be closed from Saturday, 20 November 2010 to Monday, 20 December 2010 (both days inclusive), during which period no transfer of H Shares will be effected. The purpose of such closure of register is to enable the Company to determine the identity of the holders of H Shares of the Company who are entitled to attend and vote at the upcoming EGM. Any holders of H Shares of the Company, whose names appear on the Company’s register of members at the close of business on Friday, 19 November 2010, are entitled to attend and vote at the EGM after completing the registration procedures for attending the EGM. For holders of H Shares, in order to be entitled to attend and vote at the EGM, their share transfer documents, accompanied by the relevant share certificates, must be lodged with the Company’s H share registrar in Hong Kong, Hong Kong Registrars Limited at Room 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not later than 4:30 p.m. on Friday, 19 November 2010.

8. INDEPENDENT BOARD COMMITTEE

An Independent Board Committee comprising Messrs. Zhu Yongguang, Gu Gongyun, Zhang Jun and Lu Wenbin has been formed to advise the Independent Shareholders in respect of the transactions pursuant the Agreements. The Independent Financial Adviser has also been appointed as the independent financial adviser for the purpose of advising the Independent Board Committee and the Independent Shareholders in respect of the above transactions.

9. RECOMMENDATION

The Directors (including the independent non-executive Directors) consider that the terms of the transactions pursuant to the Agreements to be fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and its shareholders as a whole. Accordingly, the Directors recommend that all Independent Shareholders to vote in favour of the ordinary resolution set out in the notice of the EGM.

Yours faithfully,

China Shipping Development Company Limited Li Shaode Chairman

— 8 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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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)

4 November 2010

To the Independent Shareholders

Dear Sir/Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION CONSTRUCTION OF NEW VESSELS

We have been appointed as the Independent Board Committee to advise you in connection with the transactions pursuant to the Agreements, details of which are set out in the Letter from the Board contained in the circular to the shareholders of the Company dated 4 November 2010 (the “Circular”), of which this letter forms part. Terms defined in the Circular shall have the same meanings when used herein unless the context otherwise requires.

Having considered the transactions pursuant to the Agreements, and the opinion of the Independent Financial Adviser in relation thereto as set out on pages 10 to 15 of the Circular, we are of the opinion that the terms of the transactions pursuant to the Agreements are fair and reasonable and such transactions are in the interests of the Company and the Shareholders as a whole. We therefore recommend that you vote in favour of the ordinary resolution to be proposed at the EGM to approve such transactions.

Yours faithfully,

Zhu Yongguang Gu Gongyun Zhang Jun Lu Wenbin Independent Independent Independent Independent non-executive Director non-executive Director non-executive Director non-executive Director

— 9 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders which has been prepared for the purpose of incorporation into this circular.

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4 November 2010

The Independent Board Committee and the Independent Shareholders

China Shipping Development Company Limited 168 Yuanshen Road Shanghai The PRC

Dear Sir / Madam,

DISCLOSABLE AND CONNECTED TRANSACTION CONSTRUCTION OF NEW VESSELS

INTRODUCTION

We refer to our appointment as Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the connected transactions relating to the Agreements, details of which are set out in the circular dated 4 November 2010 (the “Circular”) to the Shareholders, of which this letter forms part. Capitalized terms used in this letter have the same meanings as those defined in the Circular unless the context otherwise requires.

On 28 September 2010, the Company entered into the Agreements with the Vendors for the construction of 12 Vessels for the transportation of coal and other bulk cargo. The total consideration for the construction of the Vessels is approximately RMB2,553,600,000 (equivalent to approximately HK$2,969,302,000).

China Shipping is the controlling shareholder of the Company and that each of the Vendors are wholly owned subsidiaries of China Shipping. Therefore, the Vendors are connected persons to the Company and transactions contemplated under the Agreements are connected transactions for the Company under the Listing Rules and are subject to, among other things, the approval of the Independent Shareholders.

— 10 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We have been appointed by the Company to advise the Independent Board Committee and the Independent Shareholders as to whether or not the terms of the Agreements are fair and reasonable so far as the Independent Shareholders are concerned and are in the interest of the Company and the Shareholders as a whole, and whether the Independent Shareholders should vote in favour of the connected transactions.

In formulating our recommendation, we have considered, among other things, (i) the Agreements; (ii) comparable vessel construction agreements from other ship builders that are independent third parties of the Group; (iii) the Company’s 2009 annual report and 2010 interim report; and (iv) other information as set out in the Appendix I to the Circular. We have also discussed with the management of the Group their plans and prospects for the Group.

In arriving at our recommendation, we have relied on the information and facts provided by the Company and have assumed that any representations made to us are true, accurate and complete. We have also relied on the statements, information, opinions and representations contained in the Circular and the information and representations provided to us by the Directors and management of the Company. We have assumed that all information, representations and opinions contained or referred to in the Circular and all information, representations and opinions which have been provided by the Directors and management of the Company for which they are solely responsible, are true and accurate at the time they were made and will continue to be accurate at the date of the despatch of the Circular. The Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, opinions expressed in the Circular have been arrived at after due and careful consideration and there are no other facts not contained in the Circular the omission of which would make any such statement contained in the Circular misleading. We consider that we have been provided with sufficient information on which to form a reasonable basis for our opinion. We have no reason to suspect that any relevant information has been withheld, nor are we aware of any fact or circumstance which would render the information provided and representations and opinions made to us untrue, inaccurate or misleading. Having made all reasonable enquiries, the Directors have further confirmed that, to the best of their knowledge, they believe there are no other facts or representations the omission of which would make any statement in the Circular, including this letter, misleading. We have not, however, carried out any independent verification of the information provided by the Directors and management of the Company, nor have we conducted an independent investigation into the business and affairs of the Group.

PRINCIPAL FACTORS AND REASONS

In arriving at our opinion on the terms of the Agreement, we have taken into consideration the following factors and reasons:

1. Background information

The Group’s principal business includes cargo transportation and oil transportation.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

China Shipping, a PRC state-owned enterprise and the controlling shareholder of the Company, is a large shipping conglomerate that operates in different regions of the PRC and across the world.

On 28 September 2010, the Company entered into the Agreements with the Vendors for the construction of 12 Vessels for the transportation of coal and other bulk cargo. The total consideration for the construction of the Vessels is approximately RMB2,553,600,000 (equivalent to approximately HK$2,969,302,000). The consideration is determined by reference to the market price for the past 6 months of dry bulk carriers of tonnage between 40,000 dead weight tons (“dwt”) and 60,000 dwt with similar specifications.

2. Key terms of the Agreements

Key terms of each of the 12 agreements defined under the Agreements for the construction of coal and other bulk cargo vessels of 48,000 dwt each are as follows:

Date of agreement : 28 September 2010 Parties : • The Company, as purchaser

• The Vendors, consisting of 中海工業有限公司 (China Shipping Industry Co., Ltd.) and 中海工業（江蘇）有限 公司 (China Shipping Industry (Jiangsu) Co., Ltd.), as sellers

• Subject matter : The Vendors shall design, build and deliver to the Company a dry bulk carrier constructed with steel, single-propeller, diesel powered and having 48,000 dwt.

• Consideration : RMB208,800,000 (approximately HK$242,790,698) or RMB220,800,000 (approximately HK$256,744,186) for each vessel.

• Payment terms : 5 installments of equal payments of 20% each, payable in RMB, at each stage of the construction of the vessel, with the first payment payable upon the Agreements becoming effective and receipt of the relevant invoice from the Vendors at various phases of constructions including commencement of construction, docking and launching of the relevant vessel.

• Vessel delivery date : The expected delivery dates for the Vessels under the relevant Agreement will be during the period from May 2012 to April 2013

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Late delivery penalty : If the delay in delivery exceeds the expected dates by 30 days to 60 days (as the case may be), there will be a reduction in price of the relevant Vessel based on a daily reduction rate of RMB30,000 for the relevant Vessel. If the delay exceeds 210 days or 240 days (as the case may be), the Company has the right to cancel the relevant Agreement and the Vendors will within 10 business days return all previous payments by the Company together with interest.

3. Basis of the Consideration

We were advised by the Company that the aggregate consideration of approximately RMB2,553,600,000 (equivalent to approximately HK$2,969,302,000) for the 12 Vessels, is decided after arm’s length negotiations between related parties.

According to information obtained from the Company, China Shipping Technology Research & Economy Development Institute (中國船舶工業綜合技術經濟研究院) and other publicly available information from the internet, the price of bulk cargo carrier ranging from 30,000 dwt to 60,000 dwt range from US$24 million to US$43.2 million per vessel, respectively. Based on the aforesaid publicly available prices, we have noted that the average price of the 12 Vessels is 6.8% higher than the market average when compared with other bulk cargo vessels sized between 40,000 dwt and 50,000 dwt. The premium is slightly lower at 6.3% when compared with the market average of vessels sized between 30,000 dwt and 60,000 dwt.

We have discussed with the Company with regards to the slightly higher than market average pricing and the Company attributed the slightly higher pricing to the Vessels’ specifications, which were higher than other cheaper vessels, in terms of fuel economy, engine specification and speed. Having taken this into consideration, we find the slight markup reasonable for a better specification vessel.

Pursuant to the Agreements, the consideration is payable by the Group to the Vendors in 5 equal installments at various stages of the construction of the relevant vessel. Based on industry standard, payments for the vessel are normally made in five installments based on the five major milestones of the construction progress and stage of completion, with the first 20% installment payable upon signing of agreement; second 20% installment payable upon commencement of construction, third 20% installment payable when the construction is in the keel laying stage; fourth 20% installment payable when the construction is in the launching stage and the final 20% installment payable when ship is delivered. We have compared the payment terms with terms of existing independent third party transactions and find that the payment terms are fair and reasonable.

— 13 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. Late delivery and specification inadequacy clauses

Under the Agreements, deliveries of the Vessels are expected to range from 18 months to 29 months after the initial payment depending on the Agreements or from May 2012 to April 2013 at the latest. As part of our analysis, we have obtained construction contracts of similar sized vessels (the “Comparable Contracts”) for comparison from the Company, whereby the Company ordered their vessels from independent third parties.

Should the Vendors fail to deliver the Vessels within the specified time under the respective Agreements, a discount on the Vessel price will apply. We have compared the late delivery discount penalty of the Agreements with the Comparable Contracts and find the price discounts due to the penalty are similar.

As the Vessels purchased should be of certain specifications as per the relevant Agreements, there is also a penalty in the event that the Vessels do not meet the stipulated specifications. These specifications include the maximum load tonnage, cruising speed of the Vessels, and the fuel consumption level.

Similarly, Vessel price discount penalties of specifications were compared with the Comparable Contracts used by other independent manufacturers. The rates of discount based on specification inadequacy were in line with those specified in the Agreements.

Having compared all the penalty clauses in the Agreements with those of the Comparable Contracts, we believe they are fair and are based on normal commercial terms.

5. Reasons and benefit for the Agreements

The Group is principally engaged in the shipping of oil, container and dry bulk cargo in coastal, ocean and Yangtze river region. Transportation of coal, one of the dry bulk cargo transported by the Group, is increasingly becoming a key revenue generator for the Company. In line with the Group’s strategy to grow the dry bulk cargo segment of their business, the Directors are would like to capitalize on the growing demand of coal and other dry bulk cargo in the PRC to increase their vessel fleet size as well as capturing a bigger market share.

The Directors stated in the “Letter from the Board” that they are optimistic of the demand in the coal and other bulk cargo transportation market and its persistent growth in the coming years. They are of the view that the construction and ownership of the Vessels 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.

We are of the view that the construction of the Vessels will help the Group to further expand its position further as one of the leading dry bulk carriers in the region and potentially expand its market share in the industry. Therefore we consider the transactions contemplated under the Agreements fair and reasonable as for as the Company and its shareholders are concerned and are in the interest of the Company and the Shareholders as a whole.

— 14 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

RECOMMENDATION

Having considered the above principal factors and reasons, we are of the opinion that the terms of the Agreements are on normal commercial terms, in the ordinary and usual course of business and are fair and reasonable so far as the Independent Shareholders are concerned and are in the interest of the Company and the Shareholders as a whole.

Accordingly, we would recommend the Independent Board Committee to advise the Independent Shareholders to vote in favor of the resolutions to approve the Agreements at the upcoming EGM.

Yours faithfully, For and on behalf of TC Capital Asia Limited Edward Wu

Managing Director

— 15 —

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the directors of the issuer collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular 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 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, Disposed or Leased

None of the Directors has had any material interest, direct or indirect, in any asset which, since 31 December 2009, being the date to which the latest audited consolidated financial statements of the Group have been made up, had been acquired or disposed of 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

As at the Latest Practicable Date, none of the Directors had entered into, or proposed to enter into, any service contracts with the Company or any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

Directors’ Interest in Contracts

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 (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

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 31 December 2009, the date to which the latest audited financial statements of the Group were made up.

4. CONSENT AND EXPERT

The following is the qualification of the professional adviser who has given opinion or advice, which is contained in this circular:

Name Qualification

TC Capital Asia Limited registered institution to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) of the regulated activities under the SFO

The Independent Financial Adviser has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and/or opinions and/or the references to its name in the form and context in which it respectively appears.

As at the Latest Practicable Date, (i) the Independent Financial Adviser did not have any interest, either direct or indirect, in any assets which had been, since the date to which the latest published audited financial statements of the Company were made up acquired or disposed of by or leased to any member of the Group or are proposed to be acquired or disposed of by or leased to any member of the Group; and (ii) the Independent Financial Adviser did not have any shareholding interests in any member of the Group and it did not have any right, whether legally enforceable or not, to subscribe for or nominate persons to subscribe for securities of any members of the Group.

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 registered office of the Company in Hong Kong is 20/F., Alexandra House, 16-20 Chater Road, Central, Hong Kong.

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

• (iv) The secretary of the Company is Ms. Yao Qiaohong.

• (v) In the event of inconsistency, the English version of this circular shall prevail over the Chinese version.

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GENERAL INFORMATION

6. DOCUMENTS FOR INSPECTION

Copies of the Agreements will be available for inspection at the office of 20/F., Alexandra House, 16-20 Chater Road, Central, Hong Kong during normal business hours on any weekday (except public holidays) from the date of this circular up to and including 18 November 2010.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [65 x 48] intentionally omitted <==

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)

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

Notice is hereby given that the extraordinary general meeting (the “ EGM ”) of China Shipping Development Company Limited (the “ Company ”) will be held at 2:00 p.m. on Monday, 20 December 2010 at 700 Dong Da Ming Road, Shanghai, The People’s Republic of China to consider and, if thought fit, pass the following ordinary resolution:

1. “ THAT :-

the 12 agreements all dated 28 September 2010 (the “Agreements”), each of which is entered into between 中海工業有限公司 (China Shipping Industrial Co., Ltd.) and 中海工業(江蘇)有限公司 (China Shipping Industrial (Jiangsu) Co., Ltd.) and the Company for the construction of one dry bulk carrier of 48,000 dead weight tons (the “Vessel”) (for a total of 12 Vessels) for the transportation of coal and other bulk cargo and the transactions contemplated thereunder, be and are hereby approved, confirmed and ratified; and the directors of the Company be and are hereby authorised to do such other acts and things and execute such other documents which in their opinion may be necessary or desirable to implement the Agreements.”

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

4 November 2010 Shanghai The People’s Republic of China

Notes:

• (A) The H Share register of the Company will be closed from Saturday, 20 November 2010 to Monday, 20 December 2010 (both days inclusive), during which no transfer of H Shares will be effected. The purpose of such closure of register is to enable the Company to determine the identity of the holders of H Shares of the Company who are entitled to attend and vote at the upcoming EGM. Any holders of H Shares of the Company, whose names appear on the Company’s register of members at the close of business on Friday, 19 November 2010 are

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NOTICE OF EXTRAORDINARY GENERAL MEETING

entitled to attend and vote at the EGM after completing the registration procedures for attending the EGM. For the holders of H Shares, in order to be entitled to attend and vote at the EGM, their share transfer documents, accompanied by the relevant share certificates, must be lodged with the Company’s H share registrar not later than 4:30 p.m. on Friday, 19 November 2010.

The address of the share registrar (for share transfer) for the Company’s H Shares is as follows:

Hong Kong Registrars Limited Rooms 1712-1716 17th Floor Hopewell Centre 183 Queen’s Road East Wanchai Hong Kong

• (B) Holders of H Shares, who intend to attend the EGM, must complete the reply slips for attending the EGM and return them to the Office of the Secretary to the Board of Directors of the Company not later than 20 days before the date of the EGM, i.e. no later than Tuesday, 30 November 2010.

Details of the Office of the Secretary to the Board of Directors of the Company are as follows:

Room 1601, 700 Dong Da Ming Road, Shanghai, The People’s Republic of China Postal Code: 200080 Tel: 86(21) 6596 6666 Fax: 86(21) 6596 6160

• (C) Each holder of H Shares who has the right to attend and vote at the EGM is entitled to appoint in writing one or more proxies, whether that proxy is a shareholder or not, to attend and vote on his behalf at the EGM.

• (D) The instrument appointing a proxy must be in writing under the hand of the appointor or his attorney duly authorised in writing. If that instrument is signed by an attorney of the appointor, the power of attorney authorising that attorney to sign, or other documents of authorisation, must be notarially certified.

• (E) For holders of H Shares, the form of proxy, and if the form of proxy is signed by a person under a power of attorney or other authority on behalf of the appointor, a notarially certified copy of that power of attorney or other authority, must be delivered to the Company’s H share registrar, Hong Kong Registrars Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not less than 24 hours before the time appointed for holding the EGM (or any adjournment thereof) in order for such documents to be valid.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (F) Each holder of A Shares is entitled to appoint in writing one or more proxies, whether a shareholder or not, to attend and vote on its behalf at the EGM. Notes (C) to (D) also apply to holders of A Shares, except that the proxy form or other documents of authority must be delivered to the Office of the Secretary to the Board of Directors, the address of which is set out in Note (B) above, not less than 24 hours before the time appointed for holding the EGM (or any adjournment thereof) in order for such documents to be valid.

• (G) If a proxy attends the EGM on behalf of a shareholder, he should produce his identity card and the instrument signed by the proxy or his legal representative, which specifies the date of its issuance. If the legal representative of a shareholder which shareholder is a legal person attends the EGM, such legal representative should produce his identity card and valid documents evidencing his capacity as such legal representative. If a shareholder which is a legal person appoints a company representative other than its legal representative to attend the EGM, such representative should produce his identity card and an authorization instrument affixed with the seal of that shareholder (which is a legal person) and duly signed by its legal representative.

• (H) The EGM is expected to last for an hour. Shareholders attending the EGM are responsible for their own transportation and accommodation expenses.

• (I) As at the date of this notice, the board of directors of the Company is comprised of Mr. Li Shaode, Mr. Ma Zehua, Mr. Lin Jianqing, Mr. Wang Daxiong, Mr. Zhang Guofa, Mr. Mao Shijia and Mr. Qiu Guoxuan as executive Directors, and Mr. Zhu Yongguang, Mr. Gu Gongyun, Mr. Zhang Jun and Mr. Lu Wenbin as independent non-executive Directors.

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