09:49     YANION INT'L<00082> - Announcement & Resumption (7)                 

    the Vendors.                                                              
                                                                              
    Notwithstanding any provision contained in the Sale                       
    and Purchase Agreement, all the conditions mentioned                      
    above (other than the conditions in (a), (e), (f),                        
    (g), (i), (l), (n) and (o)) shall be deemed to have                       
    been fulfilled or otherwise waived by the Company when                    
    the Company has pursuant to the provisions of the                         
    Listing Rules, despatched a circular to the                               
    Shareholders in relation to the transactions                              
    contemplated by the Sale and Purchase Agreement.                          
                                                                              
    As regards condition in (b) above, the firm of Hong                       
    Kong certified public accountants is yet to be                            
    appointed by the Company. The financial information                       
    will, in any event, be reviewed according to Generally                    
    Accepted Accounting Principles in Hong Kong.                              
                                                                              
    In the event that any of the conditions is waived by                      
    the Company, a further announcement in relation to                        
    the reason for granting such waiver(s) will be issued.                    
                                                                              
    Completion                                                                
    Subject to the satisfaction or, as the case may be,                       
    waiver of the other conditions, completion of the                         
    Acquisition shall take place on the date on which the                     
    last of the conditions in (a), (e), (f), (g), (i),                        
    (l) and (n) is fulfilled.                                                 
                                                                              
    Representations, Warranties and Undertakings                              
    On the part of the Vendors:                                               
    Under the Sale and Purchase Agreement, each of the                        
    Vendors has given certain representations,                                
    warranties and undertakings in relation to the                            
    business operations, financial condition and                              
    prospects of Guohua International, Yingkou Steel JV                       
    and the Steel Plant, and the Company shall be entitled                    
    to claim both before and after completion of the                          
    Acquisition by notice in writing to the Vendors that                      
    any of the Vendors' representations, warranties and                       
    undertakings is or was untrue or misleading or has                        
    or had been breached even if the Company may have                         
    discovered or could have discovered on or before                          
    completion of the Acquisition that the Vendors'                           
    representations, warranties and undertakings in                           
    question was untrue, misleading or had been breached                      
    and completion of the Acquisition shall not in any                        
    way constitute a waiver of any of the Company's rights.                   
    The maximum aggregate liability of the Vendors in                         
    respect of all claims for breach of Vendors'                              
    representations, warranties and undertakings shall                        
    not exceed HK$380,000,000 (which was negotiated by                        
    the Vendors and the Company at arm's length with                          
    reference to the expected total consideration of the                      
    Acquisition) whereas the Vendors shall not be liable                      
    for any individual claim which does not exceed                            
    HK$5,000,000 (which was negotiated by the Vendors and                     
    the Company at arm's length taking into account the                       
    capital-intensive nature of the operation of the                          
    steel industry). In addition, the Vendors further                         
    undertake with the Company that they shall procure                        
    that the shareholders of the Steel Plant shall only                       
    make demand upon the Steel Plant to effect                                
    distribution of the undistributed profits of the                          
    Steel Plant for the period(s) up to 30 November 2004                      
    of approximately RMB255,504,000 (approximately                            
    HK$241,042,000) after completion of the current phase                     
    of expansion of the Steel Plant and when the Steel                        
    Plant has sufficient amount of cashflow to pay full                       
    amount of such distribution without affecting the                         
    adequacy of working capital from