Dida Inc. — Regulatory Filings 2012

Nov 27, 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)

Price-Sensitive Information

Announcement on Proposal regarding the Change of Accounting Treatment of Investment Properties

This announcement is made pursuant to Rule 13.09 of the Rules governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

To more accurately reflect the value of the investment properties held by China Shipping Development Company Limited (the “ Company ” and together with its subsidiaries, the “ Group ”), improve the quality of financial information and to assist the Company’s management and investors to keep abreast of the financial condition of the Group on a timely basis, the Board approved on 27 November 2012 the proposal regarding the change of accounting treatment of investment properties (from the cost model to the fair value model with effect from 1 December 2012).

Pursuant to the “Accounting Standard for Business Enterprises No. 3 - Investment properties” and “Accounting Standard for Business Enterprises No. 28 - Accounting policies, accounting estimate changes and error correction” promulgated by the Ministry of Finance of the PRC, the Company intends to change the accounting treatment for investment properties from the cost model to the fair value model.

Scope of Investment Property

Investment properties are generally properties held for the purpose of generating rentals or for capital appreciation or both. In particular, investment properties include land use rights leased out, land use rights held for resale (after appreciation in value) and buildings leased out.

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To be eligible to use the “Fair Value Model” for accounting treatment purposes, an investment property must satisfy two conditions, namely that there are active real estate markets where the investment properties are located, and market prices and other related information of similar properties are available in the real estate market, hence a reasonable estimation of the fair value of the investment properties can be made.

Investment Properties of the Group

Investment properties held by the Group primarily include Building 5 of the Shanghai Port International Cruise Terminal (located at 670 Dong Da Ming Road, Hongkou District, Shanghai) and ancillary parking spaces (the “ Property ”) which were acquired by the Company in 2008. The Property has a total gross floor area (“ GFA ”) of approximately 15,260 m[2] and 148 ancillary parking spaces. The Property has been progressively completed since 2011 with all floors used for leasing purpose, other than the 7th floor with a total GFA of approximately 1,570 m[2] which is for the Company’s own use.

As of 31 October 2012, the GFA leased by the Company was approximately 5,423 m[2] , with a carrying amount of approximately RMB 212 million. Remaining floors intended for leasing (with GFA of approximately 8,267 m[2] ) are currently under renovation and construction, which are expected to be leased to external parties progressively when completed.

Reasons and Basis of Adoption of the Fair Value Model

In light of the Group’s current condition and future development strategies, the investment properties held by the Group are assets held for leasing and sale in the future. The directors (the “ Directors ”) of the Company believe the market price of the investment properties held by the Group would be reflected more objectively and fairly through the adoption of the fair value model for accounting treatment of the investment properties.

Investment properties of the Group are held mainly for leasing. The Directors believe it is an internationally-accepted accounting treatment method to adopt the fair value model for accounting treatment of investment properties, which could fairly reflect the financial condition of the Group.

The investment properties held by the Group are mainly located in the shipping area of the North Bund, Hongkou District, Shanghai. With the development and construction of the Shanghai International Shipping Centre, prices of properties in the area are on an upward trend, thus the adoption of the fair value model for the accounting treatment of investment properties could reflect the value of the Group in a more accurate way.

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Since 2011, the Group has been leasing some floors of the Property, generating stable rental income. As the area where the building is located has an active property leasing and trading market, the Company can obtain market prices and other related information of similar properties from the real estate market, and thus could make a reasonable estimation of the fair value of investment properties such that the fair value of the Group’s investment properties can be determined on a continuous basis by reference to such market data.

Impact on the Group after the Adoption of the Fair Value Model Accounting Policy

Depreciation will no longer be provided for in the Group’s accounts for investment properties measured at fair value. Investment properties will be valued as at the balance sheet date and its carrying amount will be adjusted accordingly. The difference between the fair value and the carrying amount will be charged to the current profit and loss account of the Group.

Pursuant to the relevant requirements including the “Accounting Standard for Business Enterprises No. 3 - Investment properties”, this change in accounting policy involves a change in the measurement of the Group’s investment properties. Such change in the accounting policy requires us to make retrospective adjustments to the financial statements of the Group as at 31 December 2011. Based on information currently available to the Board, the value of investment properties of the Group as at 31 December 2011 is expected to be restated from approximately RMB230 million to approximately RMB380 million, representing an increase of approximately 65%. The value of the Group’s investment properties as at 31 December 2012 will be measured using the fair value model. Such information will be announced in the Group’s 2012 annual results in due course.

Following this change in the accounting policy, pursuant to the Company’s internal policy “Administrative Measures for the Measurement of the Fair Value of Investment Properties held by China Shipping Development”, the Group is required to appraise the fair value of its investment properties through market researches or valuation reports at the end of each financial year. If there is a change in the fair value of these investment properties arising from significant fluctuations in the real estate market where they are located, the risk of fluctuation in future annual results of the Group will increase.

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Opinion of the Independent Non-Executive Directors

The independent non-executive Directors are of the view that the adoption of the accounting policy to measure investment properties at fair value can more fairly reflect the value of the investment properties held by the Group and is in compliance with the “Accounting Standard for Business Enterprises” promulgated by the Ministry of Finance of the PRC, and thus have agreed to such adoption by the Group.

Upon approval by the Board on 27 November 2012, the Group will change the accounting treatment for subsequent measurement of its own investment properties from the cost model to the fair value model with effect from 1 December 2012. The Board also approved the “Administrative Measures for the Measurement of the Fair Value of Investment Properties held by China Shipping Development”. All wholly-owned, controlled and associated companies of the Company shall implement such change with reference to the above.

The financial information contained in this announcement is only a preliminary assessment based on the information currently available, which have not been reviewed nor audited by the Company’s auditors. Further details of the Group’s performance will be disclosed when the Group’s annual results for the year ending 31 December 2012 are announced.

Shareholders of the Company and potential investors are advised to exercise caution when dealing in the securities of the Company.

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

Company Secretary

Shanghai, the People’s Republic of China

27 November 2012

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

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