09:49     YANION INT'L<00082> - Announcement & Resumption (8)                 

    operation to maintain its normal operation from time                      
    to time (as reasonably determined by the Steel Plant).                    
                                                                              
    In addition, the Vendors have jointly and severally                       
    undertaken to the Company and the Stock Exchange that                     
    each of them will not, and will procure his associates                    
    and parties acting in concert with him (as defined                        
    in the Takeovers Code) not to, take up or indicate                        
    any interest in any Placing Shares offered under the                      
    Placing whether on his or their respective own account                    
    or as a nominee for others.                                               
                                                                              
    On the part of the Company:                                               
    Save and except the Options, the Company warrants that                    
    there are no existing convertible or exchangeable                         
    securities or options of the Company in issue as at                       
    the date of the Sale and Purchase Agreement; and                          
    undertakes that prior to completion of the                                
    Acquisition, no convertible or exchangeable                               
    securities or options of the Company will be issued                       
    by the Company without the prior written consent of                       
    the Vendors.                                                              
                                                                              
    Vendors' Guarantee                                                        
    Pursuant to the Sale and Purchase Agreement, the                          
    Vendors undertake to the Company that, amongst other                      
    things, the audited total assets of the Steel Plant                       
    less all liabilities of the Steel Plant as at 31                          
    December 2004 (the "Audited Net Asset Value") as                          
    reviewed by the Hong Kong certified public                                
    accountants/auditors (to be appointed) reasonably                         
    approved by the Company shall not be less than                            
    RMB830,000,000 (approximately HK$783,000,000) (the                        
    "Targeted Amount") according to Hong Kong Generally                       
    Accepted Accounting Principles. The Company intends                       
    to appoint a reputable independent firm of certified                      
    public accountants of international repute and good                       
    standing as the certified public                                          
    accountants/auditors to conduct such review. In the                       
    event that the Audited Net Asset Value falls short                        
    of the Targeted Amount and if any of the Vendors                          
    objects to such finding, a reputable firm of certified                    
    public accountants of international repute and good                       
    standing with an office in Hong Kong (the "Dispute                        
    Accountants") will be appointed by the Vendors and                        
    the Company to provide an opinion as to the disputed                      
    matters and the Dispute Accountants' determination                        
    as to the amount of the Audited Net Asset Value, save                     
    for manifest error, shall be final and binding on the                     
    Vendors and the Company. In the event that the Audited                    
    Net Asset Value (as adjusted by the Dispute                               
    Accountants) is less than the Targeted Amount, the                        
    Vendors shall pay an amount equal to 40.8% (which                         
    represents the approximate effective interest of the                      
    Company in the Steel Plant) of the shortfall to the                       
    Company. The Directors consider that such arrangement                     
    is fair and reasonable to the Company and the                             
    Shareholders.                                                             
                                                                              
    THE PROPOSED PLACING                                                      
    The Company has appointed Kim Eng Securities, both                        
    itself and the ultimate beneficial owners of which                        
    are Independent Third Parties, as the placing agent                       
    for the proposed Placing. It is expected that before                      
    completion of the Acquisition, the Company and Kim                        
    Eng Securities will enter into the Placing Agreement                      
    pursuant to which Kim Eng Securities, as the placing                      
    agent, will place for a commission fee (which is                          
    subject to negotiation with reference to the then                         
    market conditions and market practice), on a best                         
    efforts basis, such number of Placing Shares to not                       
    less than six placees, which will be professional,                        
    institutional or other private