10:04     GUANGZHOU SHIP<00317> - Announcement (2)                            

    Framework Agreement and noted that the amounts of certain Transactions    
    for 2005 may exceed the cap amounts as earlier determined. Consequently,  
     the Group entered into the Supplemental Agreement with the CSSC Group    
    with regard to those Transactions which may be affected.                  
                                                                              
    TERMS OF THE SUPPLEMENTAL AGREEMENT                                       
                                                                              
    Parties                                                                   
                                                                              
    CSSC and the Company                                                      
                                                                              
    Date                                                                      
                                                                              
    31 March 2005                                                             
                                                                              
    I.   Scope of products and services provided by the Group to the CSSC     
    Group                                                                     
                                                                              
    (1)   Steel materials and accessories, comprising steel products,         
    non-ferrous metal products and electrical equipment                       
                                                                              
    (2)   Utilities, primarily the supply of electricity and water            
                                                                              
    (3)   Labour services                                                     
                                                                              
    Pricing basis                                                             
                                                                              
    In respect of (1) above, pricing will be based on market price.           
                                                                              
    In respect of (2) above, pricing will be based on utilities costs         
    supplied to the CSSC Group plus a management fee of 25% based on such     
    costs.                                                                    
                                                                              
    In respect of (3) above, pricing will be based on terms not less          
    favorable compared to third parties.                                      
                                                                              
    The above pricing basis remain unchanged as those in the Framework        
    Agreement.                                                                
                                                                              
    Basis for determining cap amounts                                         
                                                                              
    In respect of (1) above, cap amount for 2005 is determined based on       
    existing orders on hand and current steel prices. Cap amount for 2006 is  
     expected to increase by approximately 15% per annum based on the CSSC    
    Group's planned increase in production output for shipbuilding.           
                                                                              
    In respect of (2) above, cap amount for 2005 is determined based on       
    orders on hand and current utilities prices. Cap amount for 2006 is       
    expected to increase by approximately 15% per annum based on the CSSC     
    Group's planned increase in production output for shipbuilding.           
                                                                              
    In respect of (3) above, cap amount for 2005 is determined based on       
    orders on hand. Cap amount for 2006 is expected to increase by            
    approximately 15&HPer annum based on the CSSC Group's planned increase    
    in production output for shipbuilding.                                    
                                                                              
    II.   Scope of products and services provided by CSSC Group to the Group  
                                                                              
                                                                              
    (1)   Steel products, ship building accessories and ship equipment        
                                                                              
    (2)   Labour and ship design services                                     
                                                                              
    Pricing basis                                                             
                                                                              
    In respect of (1) above, pricing will be based on market price.           
                                                                              
    In respect of (2) above, labour services will be based on costs plus a    
    management fee of 10% (inclusive of 5.5% business tax) whereas ship       
    design services will be based on standard of charges provided by the PRC  
     Government from time to time.                                            
                                                                              
    The above pricing basis remain unchanged as those in the Framework        
    Agreement.                                                                
                                                                              
    Basis for determining cap amounts                                         
                                                                              
    In respect of (1) above, cap amount for 2005 is determined based on       
    orders on hand and expected purchases from the CSSC Group in relation to  
     the Group's production requirements. Cap amount for 2006 is expected to  
     increase by 15% per annum based on the Group's planned increase in       
    production output for shipbuilding and steel structure fabrication, due   
    to the increase of the orders on hand and the productivity achievement.   
                                                                              
    In respect of (2) above, cap amount for 2005 is determined based on