Dida Inc. — Regulatory Filings 2004

May 14, 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)

CLARIFICATION ANNOUNCEMENT CONNECTED TRANSACTION

Certain press articles appearing in the South China Morning Post dated 25 December 2003 and 1 March 2004 contain allegations that the charter payments for various charterparties entered into between certain associates of Holding Company and the Company or its subsidiaries on 23 December 2003, as referred to in the Company’s announcement of the same date, do not reflect market rates. This announcement seeks to clarify the Company’s position as regards these allegations.

This announcement also sets out the particulars of the termination of the bareboat Charterparties relating to the dry bulk cargo vessels, “Yong An 1”, “Yong An 2”, “Yong An 3” and “Yong An 4”, between certain indirect wholly owned subsidiaries of the Company and an indirect wholly owned subsidiary of Holding Company.

Clarification

The board (the “ Board ”) of directors (the “ Directors ”) of China Shipping Development Company Limited (the “ Company ”) refers to the Company’s connected transactions announcement dated 23 December 2003 (the “ Announcement ”). The Board wishes to point out that as stated in the Announcement, the terms and conditions of each of the connected transactions mentioned in the Announcement have been negotiated on an arm’s length basis and are conducted on normal commercial terms. The Board (including the independent non-executive Directors (the “ Independent Directors ”)), having taken into account the state of the subject vessels as described below and its familiarity with the state of the shipping market, considers the aforementioned connected transactions to be fair and reasonable and are in the interest of the Company and its shareholders (other than China Shipping (Group) Company (the “ Holding Company ”) and its associates), taken as a whole.

The Board also refers to the press articles appearing in the South China Morning Post on 25 December 2003 and on 1 March 2004 (together, the “ Articles ”). In the Articles, it was alleged, inter alia, that in accordance with an alleged “independent valuation”, the charter payments for various charterparties entered into between certain associates of Holding Company and the Company or its subsidiaries (the “ Charterparties ”) on 23 December 2003, as referred to in the Company’s announcement of the same date, do not reflect market rates.

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The Board wishes to state that the Company has appointed an independent maritime consulting firm (the “ Bareboat Charterparties Valuer ”) to issue a valuation report setting out its independent valuation of the charter payments for the bareboat Charterparties as in December 2003 (the “ Bareboat Charterparties Valuation ”). The Bareboat Charterparties Valuation indicates that the charter payments due from Holding Company to the Company in relation to:

• (a) “Yong An 1”, “Yong An 2”, “Yong An 3”, “Yong An 4”, “Xiang Xing”, “Xiang Wang”, “Xiang Xiu” and “Xiang Da” were all at or above the market rates; and

• (b) “Xiang Zhu” was below the market rate

for similar types of charterparties.

“Xiang Zhu” has a relatively small container size and is suitable only for short route transportation. Hence, having taken into account the specifics of “Xiang Zhu”, the Bareboat Charterparties Valuer concluded that, as compared to “normal” size container vessels, “Xiang Zhu’s” charter payment was approximately 20% below market rate. The Board is of the view that the current charter payment for “Xiang Zhu” is reasonable considering the size and the short navigation range of the vessel.

“Xiang Li”, “Xiang Mao”, “Xiang Yue” and “Xiang Zhuang” (together, the “ Modified Container Vessels ”) are actually dry-bulk cargo vessels which have been modified to become container vessels. They are slow and their condition only allows them to engage in domestic coastal transportation. In addition, the fees for their modification were borne by Holding Company, being the charterer. It would be difficult, if not impossible, for the Company to lease the Modified Container Vessels to independent third parties in an open market. For the above reasons, the Bareboat Charterparties Valuer expressed the opinion that it was not able to provide a valuation of the charter payments for the Modified Container Vessels, in comparison with the prevailing market rates. Due to the particular nature of the Modified Container Vessels, the charter payments for such Modified Container Vessels are incomparable with those for “normal” container vessels.

The Board wishes to state that the Company has also appointed an independent maritime consulting firm (the “ Time Charterparties Valuer ”) to issue a valuation report setting out its independent valuation of the charter payments for the time Charterparties as in December 2003 (the “ Time Charterparties Valuation ”). The Time Charterparties Valuation indicates that the time charter payments due from the Company to the Holding Company relating to “Daqing 88” and “Song Lin Wan” are below market rates for similar types of charterparties.

The Board has discussed with the relevant valuers the assumptions they have made in making the Bareboat Charterparties Valuation and the Time Charterparties Valuation and considers that they are appropriate under the circumstances.

The Board wishes to clarify that the charter payments for the Charterparties have been determined with reference to the international rates for similar types of charterparties (where available/applicable), on similar terms and for similar vessels at or about the time at which the Charterparties were entered into. Vessels are designed and manufactured pursuant to the

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specific requests of the shipowners. Hence, due to the difference in, the fittings, the technical specifications of the vessels (such as the full load of the trapeze, the size of the hatchway, oil consumption and navigational speed, etc.), the condition of the vessels (considering factors such as the age and maintenance of the vessels and the wear and tear of equipment, etc.), there could be wide discrepancies between the charter payments for different vessels even though their sizes may be the same. Thus, it is impracticable if not impossible for any valuer to assess the market charter payments for the Company’s vessels merely on the basis of the information disclosed to the public by the Company.

As the Company is not aware of the identity of the relevant valuer(s) and the detailed particulars of the “independent valuation” allegedly made in the Articles, the Company is not in a position to verify or even comment on the allegations made in the Articles about the “independent valuation” allegedly carried out.

Based on the above reasons, the Board (including the Independent Directors) is of the view that, in line with the terms and conditions of the connected transactions mentioned in the Announcement, the charter payments in relation to the 15 vessels referred to above have been determined with reference to the international rates for similar types of charterparties (where available/applicable), on similar terms and for similar vessels at or about the time at which the Charterparties were entered into. The terms and conditions of each of the Charterparties have been negotiated on an arm’s length basis and are normal commercial terms. Before the Company or its relevant subsidiaries entered into the relevant Charterparties, the Board had considered each of the Charterparties from a normal business and commercial perspective which included taking into account factor such as the Company’s strategy to maintain a steady increase in its operating results in relation to oil and cargo transportation. In line with the above strategy, the Company took a series of effective measures (including leasing some of its spare shipping capacity to certain associates of Holding Company) in order to achieve maximum usage of its shipping capacity. The Company’s effort on this front is reflected in its annual results for the year ended 31 December 2003.

The Board (including the Independent Directors) considers the terms and conditions of the Charterparties to be fair and reasonable, and are in the interest of the Company and its shareholders (other than Holding Company and its associates), taken as a whole.

Termination of bareboat Charterparties

Pursuant to a resolution passed at the second meeting of the 2004 Board, (as described in an announcement of the Company dated 12 March 2004), each of Purple Gold Mountain Shipping S.A. ( ) (“ Purple Gold ”), Feng Huang Shan Shipping S.A. ( )(“ Feng Huang Shan ”), Wu Tai Shan Shipping S.A. ( ) (“ Wu Tai Shan ”) and Jiu Hua Shan Shipping S.A. ( ) (“ Jiu Hua Shan ”), all indirect wholly owned subsidiaries of the Company, and Southern Shipping Management Company Limited ( ) (“ Southern Shipping ”), an indirect wholly owned subsidiary of Holding Company, have terminated their respective obligations (i.e. for nil consideration) under the separate bareboat Charterparties which they entered into on 23 December 2003 whereby each of Purple Gold, Feng Huang Shan, Wu Tai Shan and Jiu Hua Shan has agreed to lease to Southern Shipping each of “Yong An 1”, “Yong An 2”, “Yong An 3” and “Yong An 4”, respectively, all being dry bulk cargo vessels, for a term of one year

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commencing from 1 January 2004 for an aggregate annual charter payment of US$7,300,000 (approximately HK$56,940,000). The termination of such obligations took effect on 1 March 2004 (for “Yong An 2”, “Yong An 3” and “Yong An 4”) and 26 March 2004 (for “Yong An 1”), respectively, when the relevant bareboat Charterparties’ assignments finished. Each of Purple Gold, Feng Huang Shan, Wu Tai Shan and Jiu Hua Shan has received leasing income in full, relating to “Youg An 1”, “Yong An 2”, “Yong An 3” or “Yong An 4”, as the case may be, from Southern Shipping in respect of the period from 1 January 2004 to 29 February 2004 or 25 March 2004 (as the case may be).

”Yong An 1”, “Yong An 2”, “Yong An 3” and “Yong An 4” were constructed by an independent third party shipyard in the Republic of Korea during the period between 1995 and 1996. “Yong An 1” and “Yong An 2” were commissioned into service in 1995, each with a gross tonnage of approximately 44,072 tonnes. “Yong An 3” and “Yong An 4” were commissioned into service in 1996, each with a gross tonnage of approximately 44,072 tonnes. The leasing income received by the Company and its subsidiaries (the “ Group ”) in respect of “Yong An 1”, “Yong An 2”, “Yong An 3” and “Yong An 4” for each of the two financial years ended on 31 December 2002 and 31 December 2003 amounted to US$5,694,000 (approximately HK$44,413,200).

As the shipping market has improved recently, the Board has negotiated with Holding Company for termination of the bareboat Charterparties relating to “Yong An 1”, “Yong An 2”, “Yong An 3” and “Yong An 4”, so that it may retain those dry-bulk cargo vessels for its own use or sell them in due course or lease them out to independent third parties at a better price. The Board (including the Independent Directors), having taken into account the change in circumstances as described above, considers the terms and conditions for the termination of the bareboat Charterparties relating to “Yong An 1”, “Yong An 2”, “Yong An 3” and “Yong An 4” to be fair and reasonable, and are in the interest of the Company and its shareholders (other than Holding Company and its associates), taken as a whole. Due to the nature of the vessels concerned, and as the other bareboat Charterparties can continue to provide a stable stream of income for the Company, the Board has decided not to negotiate for their termination.

General

The business of the Company mainly involves coastal, ocean and Yangtze River cargo transportation, oil transportation, international passenger transportation, chartering, cargo, and cargo agency. The business of Southern Shipping mainly involves international cargo transportation. The business of Holding Company mainly involves container transportation, multi-transportation, ship leasing, ship agency, cargo forwarding, air cargo transportation and forwarding.

Southern Shipping is a wholly owned subsidiary of China Shipping (Hong Kong) Holdings Company Limited which in turn is a wholly owned subsidiary of Holding Company. Holding Company holds approximately 50.51 percent interest in the issued share capital of the Company and is the controlling shareholder of the Company. Southern Shipping is an associate (as defined under The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“ Listing Rules ”)) of Holding Company and is a connected person (as defined under the Listing Rules) of the Company.

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The Board confirms that save as disclosed above, the Board is not aware of any matter discloseable under the general obligation imposed by Rule 13.09 of the Listing Rules, which is or may be of a price sensitive nature.

In the meantime, shareholders and potential investors of the Company should exercise caution when dealing in the shares in the Company.

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

13 May 2004 Shanghai The People’s Republic of China

• As at the date of this announcement, the Board of Directors of the Company is comprised of Mr. Li Shaode, Mr. Xu Zuyuan, Mr. Wang Daxiong, Mr. Yan Mingyi and Mr. Yao Zuozhi as executive directors, Mr. Xie Rong, Mr. Hu Honggao and Mr. Zhou Zhanqun as independent non-executive directors.

• Note: Unless otherwise specified, the conversion of US$ into HK$ is based on the exchange rate of US$1.00 = HK$7.80.

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

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