10:43     MAANSHAN IRON<00323> - Announcement (4)                             

    electrical and mechanical equipment installation business from            
    the Construction Company. The valuation date in respect of the            
    assets and liabilities is 31 January 2005. For the period from            
    1 February 2005 to the effective date of this agreement, these            
    businesses are entrusted to the Construction Company for                  
    management and the profits or losses incurred are assumed by              
    the Company.                                                              
                                                                              
    4.      Pricing: the acquisition price was determined on the basis        
    of the net asset value of the proposed acquired assets as at              
    31 January 2005 which has been appraised by Jiangsu Talent                
    Certified Public Accountants.                                             
                                                                              
    5.      Consideration of the transaction: based on the appraised net      
    assets value, the consideration of the acquisition amounted to            
    RMB149,773,600 (approximately HK$141.2958 million). The                   
    consideration will be paid in cash within 15 days from the                
    effective date of the agreement.                                          
                                                                              
    E.      REASON FOR THE ACQUISITION AND ITS EFFECT ON THE COMPANY          
                                                                              
    With the acquisition of the steel structure manufacturing and             
    installation business, the Company can make use of the H shaped           
    steel, coated plate, etc. manufactured by the Company to produce          
    the steel structure products much demanded in the market in order         
    to expand its product sales operation. As a result of the                 
    acquisition of the electrical and mechanical equipment                    
    installation business, the Company can make use of the relevant           
    technical capability to complete the installation and debugging           
    processes of electrical and mechanical equipment for the                  
    Company's various large-scale infrastructure projects and                 
    technological improvement projects. This will help lower                  
    construction costs and shorten the construction period, ensuring          
    that the projects can be completed on schedule. The acquisition           
    will not have any adverse effect on the current or future                 
    financial positions and operating results of the Company.                 
                                                                              
    F.      OPINIONS OF INDEPENDENT DIRECTORS                                 
                                                                              
    Independent Director Madam Cheng Shaoxiu (representing herself            
    and Mr. Shi Jianjun and Mr. Chan Yuk Sing) and Mr. Wu Junnian             
    have rendered their opinions on the connected transaction as              
    follows:                                                                  
                                                                              
    The connected transaction is in line with the overall development         
    strategies of the Company and is beneficial to the strengthening          
    of the principal steel operation. The terms of the transaction            
    are made on normal commercial terms and are fair and reasonable.          
    The consideration for the acquisition has been determined on              
    the basis of the appraised net asset value as at 31 January 2005          
    and such consideration is fair and reasonable and in the                  
    interests of the Company and shareholders as a whole.                     
                                                                              
    G.      DOCUMENTS AVAILABLE FOR INSPECTION                                
                                                                              
    1.      The resolutions of the twenty-third meeting of the fourth         
    session of the Board of Directors of the Company.                         
                                                                              
    2.      The opinions of independent directors on the acquisition of       
    the steel structure manufacturing and installation business and           
    the electrical and mechanical equipment installation business.            
                                                                              
    3.      The resolutions of the fourteenth meeting of the fourth           
    session of the Supervisory Committee of the Company.                      
                                                                              
    4.      The Acquisition Agreement entered into between the Company        
    and the Construction Company.