1

3 4 6 8 9 10 11 16 17 19 42 2

1 TIANJIN MARINE SHIPPING CO. LTD. TMSC 2 3 207 300204 86-22-23281780 86-22-23286115 tmsc900938@163.com 4 188 188 207 300204 http//www.tmsc-tj.com.cn tmsc900938@163.com 5 http//www.sse.com.cn 6 A ST 600751 B ST B 900938 7 1992 12 1 13 2003 9 16 188 010467 120101103062175 333 12 Clarendon House,2 Church Street,Hamilton,Bermuda 3

1-575 592 819-557 074 008-536 983 227-90 416 232 4 982 121-555 998 591 496 553 0-20 090 781-30 166 075-272 659 351-20 090 781-20 090 781 2. % -90 416 232-18.06-7.76-0.18-0.18-555 998 591-111.06-41.71-1.13-1.13-557 074 008-111.28-41.85-1.13-1.13-536 983 227-107.26-40.25-1.09-1.09 3. -557,074-562,573 2003 2002 (557,074) (72,583) 4,206 1,007 (2,818) (1,352) (9,544) 2,657 (245) (562,573) (73,173) 500,625 504,625 2003 12 31 2002 12 31 500,625 1,067,243 (13,142) (17,348) 17,381 20,200 (239) (2,897) 4

504,625 1,067,198 4 2003 2002 2001 716,621,496 782,140,835.41 740,396,235 855,644,642.96 855,644,642.96-557,074,008-72,583,244.47-72,583,245 24,774,786.70 24,774,786.70 1,503,339,757 2,098,092,087.47 2,098,092,089 2,001,101,546.75 2,001,101,546.75 500,625,267 1,067,243,488.17 1,067,243,487 1,141,178,345.51 1,141,178,345.51-1.13 0.1473-0.1473 0.05 0.05-1.09-0.1490-0.1490 0.05 0.05 1.02 2.17 2.17 2.32 2.32 0.72 2.02 2.02 2.17 2.17-0.06-0.1991-0.1991 0.08 0.08 % -111.28-6.8010-6.8010 2.17 2.18-107.26-6.8560-6.8560 2.17 2.17 % 5 492648820 280265597 64779036 55512963 176330628 1067243487 637514 572327 558283849 566618220 492648820 280265597 65416550 56085290-381953221 500625267 10% 9% 5

1. 1 184088520 24871000 184088520 24871000 2 3 4 208959520 208959520 1 103689300 2 180000000 103689300 180000000 3 4 283689300 283689300 492648820 492648820 2 2001 [2001]11 2000 466,000,000 10:3 2,720,520 23,928,300 26,648,820 2001 4 3 492,648,820 93754 A 61469 B 32285 0 184088520 37.37 0 3080000 0.63 6

950 0 1310000 0.27 B 0 1132000 0.23 B 0 1000000 0.21 B 0 650000 0.14 0 572000 0.17 0 500000 0.11 B 0 468000 0.09 A 0 440000 0.19 9 9 1310000 B 1132000 B 1000000 B 500000 B 468000 A 424500 B NATA SECURITIES CO. LTD. 411188 B TOYO SECURITIES ASIA LTD. A/C CLIENT 410800 B 408600 B HKIT S/A 006-11389-431 370000 B 1 5% 2003 10 13 2004 10 14 3055 2003 11 10 2004 5 10 1360 2003 6 26 2004 6 25 1700 2003 10 23 2004 10 22 1600 2004 1 12 2005 1 11 2. 37.37% 1.62 7

63 2002.6-2005.6 95000 95000 40 2002.6-2005.6 60000 60000 53 2002.6-2005.6 47000 47000 53 2002.6-2005.6 29000 29000 66 2002.6-2005.6 19000 19000 43 2002.6-2005.6 0 0 49 2003.8-2005.6 0 0 32 2002.6-2005.6 0 0 45 2002.6-2005.6 34000 34000 57 2002.6-2005.6 23000 23000 60 2002.6-2005.6 15000 15000 49 2002.6-2005.6 64000 64000 48 2002.6-2005.6 38000 38000 57 2002.6-2005.6 0 0 48 2002.6-2005.6 20000 20000 44 2002.6-2005.6 21446 21446 54 2002.6-2005.6 21446 21446 46 2002.6-2005.6 0 0 34 2002.6-2005.6 0 0 1995 1 2 101.09 23.23 19.51 2.4 3 4 5 6 5 6 5 6 7 3 7 8 1 9 1 3. ( ) 4. 2002 6 28 2001 2.4 2003 8 22 2002 2004 2 17 2003 882 85 174 486, 137 187 386 8

9 1 2 3 4 5 6

2003 7 17 2002 2002 2003 8 22 10 184805966 37.51% 1 2002 2 2002 3 2002 4 2002 2002-72,583,244.47 10% 258,489.09 9% 232,640.19 2002 176,330,628.34 5 1 2 3 2003 8 23 10

1 2 716 621 496-90 416 232 3 366 691 448-13.60 103 625 119-17.16 69 128 608 14.46 149 895 265 39.78 4 9,270,423 8,754,845 195,671,816-40,380,011 27,252,900-1,359,118 33,667,498 3,420,334 10,153,100 5,701,517 4,760,708 4,496,489 5 277,389,419 39% 6 2003 12 2 1 2 2001 3 2.88 2.88 12083.47 17410.47 1.4 12410.47 20.30 1 5000 11

2.88 17410.47 20.30 2001 3 2000 2003 10 2 12 2. 45700 1 2 3 2003 2002 % 1,503,339,757 2,098,092,089-28.35 58,454,193 135,884,806-56.98 500,625,267 1,067,243,487-53.09-90,416,232 24,487,430-469.24-557,074,008-72,583,245-667.50. 2004 1 2004 4 26 2 2003 2004 1 2003 2 10 12

2003 4 29 2002 2003 2003 5 30 2002 2003 6 4 2003 6 12 2002 2003 6 11 2003 6 25 2002 2002 2002 2002 2003 2003 6 27 2002 2003 7 5 1360 2003 6 26 2004 6 25 2003 7 14 2003 7 14 2003 7 17 2002 2002 2002 2002 2002 2003 7 31 2003 8 2 2002 2003 8 5 2002 2003 8 22 2002 2003 8 23 2003 8 26 2003 8 27 2003 2003 2003 10 16 2002 7 5600 2003 10 13 2003 10 28 950 2002 9 2003 10 13 2004 10 14 2003 10 29 2003 2003 10 31 1700 2003 10 23 2004 10 22 2003 11 12 3055 2003 11 10 2004 5 10 2003 12 5 2003 12 30 2003 2003 2003 2004 1 16 1600 2004 1 12 2005 1 11 2004 2 18 13

2004 2 17 2004 3 1 2004 3 1 2003 2004 4 13 2 2002 2003 2003 2003-557,983,227 10% 637,514 9% 572,327 2003-381,953,221 2003 2003 12 31 2003 2004 4 28 2004 1600 [2003]56 2003 12 31 2003 2003 : 2004 4 28 : 2003 12 31 2,076 (19,259) 25,108 1,098 (13,373) 17,462 (32,632) 45,744 2,692 (2,451) 6,283 (2,451) 8,975 14

[2003]56 50% 2004 4 30 15

2003 4 29 2002 2003 2003 6 25 2002 2002 2002 2003 2003 8 27 2003 2003 10 29 2003 1 2 2003 3 2001 3 2.88 5327 3571.89 3511.58 4. 5. 16

1 400 2003 8 26 2 2003 12 5 2003 12 2 20 20 21 30 12 3 12 3 2000 1 2 4984 82 274 32 1 10% 2 3 4 5% 2002 2002 93 80 2003 2003 45 85 2003 12 30 2003 2003 2003 2003 17

2003 7 25 2002 2003 8 5 2002 2004 2 18 2002 2004 3 1 2002 2004 4 26 45700 18

1 2 3 4 19

(2004) 1600 ( ) )2003 12 31 2003 2 37 (6)(a) 2003 12 31 325 547 2003 12 31 2004 4 28 20

1980 1992 12 1995 11 B 1996 4 B 1996 10 7 1996 9 1999 9 A 188 (1) 2003 12 31 557 498 (2) 1 1 12 31 (3) (4) 21

(5) (6) (7) (a) 5% 10% 20% 40% 100% 22

(b) (8) 50% ( 50 ) 2003 3 17 10 2003 3 17 10 (9) 2001 1 1 3% 23

11-35 20-50 5-8 / (10) (11) (12) / 24

(13) (14) (a) (i) (ii) (b) (15) (16) (17) (1995)11 25

(1) 15% 33% (2) : 3% 5% 5% 3%-10% 2003 12 31 ( ) ( ) 7,000 8,867.2 90% 0% 4,200 3,564.4 90% 0% 3,570 3,270 91.6% 2.1% 1,600 894 52% 1,500 1,350 90% 0% 1,000 900 90% 0% 800 566 70.75% 29.25% 500 231.97 46.39% 53.61% 500 404.1 60% 500 225 45% 55% 361.5 300 83% 7% 26

300 210 70% 30% 300 210 70% 0% 200 200 100% 50 45 90% 0% 50 - - 00% 30 20 66.67% 33.33% 5,327 5,327 100% 13,600 100% - - 00% - - 00% - - 00% - - 00% 470 162.9 50% ( (4)(a)) 40,347.6 (1) 2003 12 31 2002 12 31 285,208,168 473,633,188 222,224 318,205 285,430,392 473,951,393 2003 12 31 1,498 8.3 12,399 5,685 0.08 439 2003 12 31 2002 12 31 285,430,392 473,951,393 27

( (6)) (84,138,350) - 201,292,042 473,951,393 (473,951,393) (528,729,428) (272,659,351) (54,778,035) (2) (a) 2003 12 31 2002 12 31 1,026,119,890 1,003,650,924 (426,751,242) (92,901,116) 599,368,648 910,749,808 (i) 212,829,546 1,003,650,924 (101,993,893) (92,901,116) 110,835,653 910,749,808 ( (6)(a)) 813,290,344 - (324,757,349) - 488,532,995 - (i) 2003 12 31 2002 12 31 % % 109,616 52 (7,661) 582,401 58 (53,909) 4,662 2 (3,245) 61,169 6 (5,662) 2,761 1 (1,338) 185,899 19 (17,207) 95,791 45 (89,750) 174,182 17 (16,123) 212,830 100 (101,994) 1,003,651 100 (92,901) 28

2003 12 31 43 20% (b) 2003 12 31 2002 12 31 131,763,170 208,565,827 (86,718,945) (45,603,567) 45,044,225 162,962,260 2003 12 31 2002 12 31 % % 46,544 35 (7,391) 23,316 11 (5,098) 33,744 26 (29,000) 125,570 60 (27,457) 8,457 6 (7,338) 40,056 19 (8,758) 43,018 33 (42,990) 19,624 10 (4,291) 131,763 100 (86,719) 208,566 100 (45,604) 5%( 5%) 2003 12 31 2002 12 31 89,754 114,261 ( (6)(a)) (62,834) - 26,920 114,261 2003 12 31 63 48% (3) 2003 12 31 2002 12 31 % % 29

3,703 100 30,129 99 - - 232 1 3,703 100 30,361 100 5%( 5%) (4) 2002 2003 21 31 12 31 (27,587,243) (19,900,584) - 2,758,724 (17,141,860) 2,629,000 2,465,868 1,000,000-3,465,868 (24,958,243) (17,434,716) 1,000,000 2,758,724 (13,675,992) (a) (1,655,868) - - (1,655,868) (19,090,584) 1,000,000 2,758,724 (15,331,860) (a) 2002 2002 (b) 598,738 10 (359,243) 299,369 (59,874) 239,495 (17,381,355 (28,185,981) 10 10,804,626 (20,199,953) 2,818,598 ) (27,587,243) 10,445,383 (19,900,584) 2,758,724 (17,141,860 ) 30

30 500,000 5% 30 500,000 10% 510,000 0.33% 30 300,000 6% 10 1,655,868 50% 3,465,868 (1,655,868) 1,810,000 (5) 2002 12 31 593,574,218 172,586,961 20,249,290 19,016,920 805,427,389 70,835,002 32,273,845 3,796,221 2,502,420 109,407,488 - - - (272,450) (272,450) 2003 12 31 664,409,220 204,860,806 24,045,511 21,246,890 914,562,427 2002 12 31 (238,525,408) (20,691,436) (16,908,715) (8,739,407) (284,864,966) (34,182,315) (6,975,902) (3,078,924) (3,220,298) (47,457,439) - - - 231,247 231,247 2003 12 31 (272,707,723) (27,667,338) (19,987,639) (11,728,458) (332,091,158) 2003 12 31 391,701,497 177,193,468 4,057,872 9,518,432 582,471,269 2002 12 31 355,048,810 151,895,525 3,340,575 10,277,513 520,562,423 (a) (b) 2003 12 31 167 ( 324 ) ( (6)) ( (10)) 2003 12 31 2002 12 31 469,321 469,321 (209,223) (183,544) 260,098 285,777 31

(c) 12 15 50 (6) 2003 12 31 2002 12 31 52,000,000 20,693,250 158,859,710 251,777,300 353,303,410 330,033,490 564,163,120 602,504,040 (a) (b) 2003 2.2%-6.9% (2002 3.1%-7.8%) 2003 12 31 ( (5)) 8,414 (2002 8,414 ) ( (1)) (7) 2003 12 31 5% (8) 2003 12 31 2002 12 31 11,970,131 10,487,628 36,425,116 29,646,978 3,874,380 3,983,447 52,269,627 44,118,053 (9) 2003 12 31 2002 12 31 20,000,000-12,135,298 10,492,695 15,621,627 21,294,351 7,291,248 3,524,213 32

55,048,173 35,311,259 (10) 2003 12 31 2002 12 31-14,485,275 127,602,219 136,884,806 127,602,219 151,370,081 (69,148,026) (15,485,275) 58,454,193 135,884,806 2003 2.3%-6.0% (2002 5.8%-6.0%) (11) 2003 2002 2003 2002 ( ) ( ) 1 A 103,689 103,689 103,689 103,689 B 180,000 180,000 180,000 180,000-184,089 184,089 184,089 184,089 24,871 24,871 24,871 24,871 492,649 492,649 492,649 492,649 (12) (13) 33

2003 1 1 64,779,036 55,512,963 120,291,999 ( (14)) 637,514 572,327 1,209,841 2003 12 31 65,416,550 56,085,290 121,501,840 10% 50% 2003 10% 637,514 (2002 10% 258,489 ) 5% 10% 2003 9% 572,327 (2002 9% 232,640 ) (14) ( )/ 2003 2002 176,330,628 249,405,002 (557,074,008) (72,583,245) ( (13)) (637,514) (258,489) ( (13)) (572,327) (232,640) ( )/ (381,953,221) 176,330,628 (15) 2003 2002 ( (5)(b)) 251,091 303,162 438,250 410,598 23,586 12,409 3,694 14,227 716,621 740,396 277 39% 34

(16) 2003 2002 19,991,413 15,857,002 2,027,202 1,684,242 22,018,615 17,541,244 (17) 2003 2002 80,466,947 (79,552,652) 914,295 78,145,664 (67,354,398) 10,791,266 1,691,876-1,691,876 12,387,624-12,387,624 6,558,650 (4,182,700) 2,375,950 12,240,465 (2,365,769) 9,874,696 88,717,473 (83,735,352) 4,982,121 102,773,753 (69,720,167) 33,053,586 (18) 325 ( (6)(a)) (19) 2003 2002 37,822,456 34,995,501 (4,683,650) (3,241,484) 1,083,999 2,315,800 (4,785,487) (4,225,684) 634,800 459,968 30,072,118 30,304,101 (20) 2003 2002 30,000 27,500 2,760,110 2,758,724 35

2,790,110 2,786,224 (21) 20 ( ) (1) (a) 2003 12 31 2002 12 31 784,117,711 779,813,635 (380,359,281) (63,162,282) 403,758,430 716,651,353 (i) 135,816,534 779,813,635 (65,601,932) (63,162,282) 70,214,602 716,651,353 ( (6)(a)) 648,301,177 - (314,757,349) - 333,543,828 - (i) 2003 12 31 2002 12 31 (%) (%) 38,004 28 (313) 385,890 50 (31,256) - 0-57,108 7 (4,626) 2,158 2 (4,514) 181,555 23 (14,705) 95,654 70 (60,775) 155,261 20 (12,575) 135,816 100 (65,602) 779,814 100 (63,162) (b) 2003 12 31 2002 12 31 36

154,382,339 276,603,103 (51,115,029) (36,188,264) 103,267,310 240,414,839 2003 12 31 2002 12 31 (%) (%) 44,097 29 (5,852) 72,263 26 (9,447) 9,064 6 (3,186) 167,959 61 (21,980) 7,886 5 (6,780) 36,381 13 (4,761) 93,335 60 (35,297) - - - 154,382 100 (51,115) 276,603 100 (36,188) (2) 2002 2003 12 31 12 31 403,476 513,344,911 71,612,580 (63,604,428) 521,353,063 2,629 1,655,868 1,000,000-2,655,868 (22,659) (19,900,584) - 2,758,724 (17,141,860) 383,446 495,100,195 72,612,580 (60,845,704) 506,867,071 (1,655,868) - - (1,655,868) 493,444,327 72,612,580 (60,845,704) 505,211,203 (3) 2003 2002 379,881,786 (461,968,863) 422,472,243 (419,523,874) (4) 2003 2002 37

(63,604,428) (2,010,720) 2,758,724 2,758,724 (60,845,704) 748,004 (1) ( ) 207 (2) 2002 12 31 2003 12 31 162,000,000 - - 162,000,000 (3) : 2003 12 31 2002 12 31 % % 184,088,520 37.37% 184,088,520 37.37% (4) ( ) ( ) ( ) ( ) ( ) 38

( ) ( ) ( ) (5) (a) (b) 2003 2002-233,473 193,777-17,618 109,385 251,091 303,162 3,694 3,610 (10,418) (4,333) (49,164) (54,432) (c) 2003 1 3 1 2003 12 31 (6) / (a) / 2003 12 31 2002 12 31 39

89,754 114,261 463,381 464,429 318,816 319,327 871,951 898,017 (324,757) - 547,194 898,017 98,809 106,184 (86,407) (78,365) 12,402 27,819 559,596 925,836 488,533 925,836 71,063-559,596 925,836 (6) / ( ) (a) / ( ) 2004 4 2004 11 90 457 2003 12 31 325 40

(b) / 2003 12 31 2002 12 31 9,832-3,626 8,368 2,167-2003 12 2 20 2003 12 31 2003 12 31 2002 12 31 38,983 23,923 17,068-17,068-73,120 23,923 2003 (557,074,008) / ( ) - 20,116,609 - (25,828) (536,983,227) 41

1 2 3 2004 4 30 42

2003 12 31 ( ) 2003 12 31 2002 12 31 2003 12 31 2002 12 31 (1) 285,430,392 473,951,393 241,318,924 397,252,379 (2)(a) (1)(a) 110,835,653 910,749,808 70,214,602 716,651,353 (2)(b) (1)(b) 45,044,225 162,962,260 103,267,310 240,414,839 (3) 3,703,078 30,361,059 (700,585) 2,637,093 445,013,348 1,578,024,520 414,100,251 1,356,955,664 (4) (2) (15,331,860) (19,090,584) 505,211,203 493,444,327 (15,331,860) (19,090,584) 505,211,203 493,444,327 (4) (17,141,860) (19,900,584) - - - 914,562,427 805,427,389 233,063,256 202,442,098 (332,091,158) (284,864,966) (62,777,815) (59,579,179) - (5) 582,471,269 520,562,423 170,285,441 142,862,919-16,948,788-2,719,038 582,471,269 537,511,211 170,285,441 145,581,957 39,078 457,355-268,971 2,614,927 1,189,587-204,848 (6)(a) 488,532,995-333,543,828-491,187,000 1,646,942 333,543,828 473,819 1,503,339,757 2,098,092,089 1,423,140,723 1,996,455,767 43

2003 12 31 ( ) ( ) 2003 12 31 2002 12 31 2003 12 31 2002 12 31 (6) 564,163,120 602,504,040 501,403,410 584,726,740 (7) 99,688,704 126,708,195 253,191,186 237,212,647 (7) 24,959,098 14,896,372 2,979,380 858,495-471,623 - - 2,930,122 1,165,804 245,267-263,690 129,641 - - (8) 52,269,627 44,118,053 16,873,325 12,344,975 (7) 74,135,861 40,345,786 43,715,094 14,789,967 (9) 55,048,173 35,311,259 38,676,636 27,322,099 (10) 69,148,025 15,485,275 49,663,800-942,606,420 881,136,048 906,748,098 877,254,923 (10) 58,454,193 135,884,806-49,663,800 1,001,060,613 1,017,020,854 906,748,098 926,918,723 1,653,877 13,827,748 - - (11) 492,648,820 492,648,820 492,648,820 492,648,820 (12) 280,265,597 280,265,597 284,687,193 280,265,597 (13) 121,501,840 120,291,999 111,291,540 111,291,540 56,085,290 55,512,963 51,249,588 51,249,588 ( )/ (14) (381,953,221) 176,330,628 (372,234,928) 185,331,087 (11,837,769) (2,293,557) - - 500,625,267 1,067,243,487 516,392,625 1,069,537,044 1,503,339,757 2,098,092,089 1,423,140,723 1,996,455,767 44

2003 2003 1 1 2003 12 31 (92,901) (63,162) (9,093) (2,440) (101,994) (65,602) (45,604) (36,188) (41,115) (14,927) (86,719) (51,115) (1,656) (1,656) - - (1,656) (1,656) (1,656) (1,656) - - (1,656) (1,656) - - (324,757) (314,757) (324,757) (314,757) (140,161) (101,006) (374,965) (332,124) (515,126) (433,130) 45

2003 ( ) 2003 2002 2003 2002 (15) (3) 716,621,496 740,396,235 379,881,786 422,472,243 (3) (785,019,113) (698,367,561) (461,968,863) (419,523,874) (16) (22,018,615) (17,541,244) (10,904,360) (9,270,093) ( ) / (90,416,232) 24,487,430 (92,991,437) (6,321,724) / ( ) (17) 4,982,121 33,053,586 (6,345,785) 16,106,662 (26,705) (86,369) - - (18) (440,465,657) (101,010,928) (351,381,476) (58,024,679) - (19) (30,072,118) (30,304,101) (25,966,810) (24,991,148) (555,998,591) (73,860,382) (476,685,508) (73,230,889) /( ) (20) (4) 2,790,110 2,786,224 (60,845,704) 748,004 25,828 927,803-1,200 (21) (20,116,609) (209,743) (20,034,803) (101,560) (573,299,262) (70,356,098) (557,566,015) (72,583,245) (1) (4,081,958) (3,695,442) - - 10,763,000 116,572 - - 9,544,212 1,351,723 - - (14) (557,074,008) (72,583,245) (557,566,015) (72,583,245) 46

2003 ( ) 2003 2002 2003 2002 (14) (557,074,008) (72,583,245) (557,566,015) (72,583,245) (14) 176,330,628 249,405,002 185,331,087 257,914,332 (380,743,380) 176,821,757 (372,234,928) 185,331,087 (13) (637,514) (258,489) - - (13) (572,327) (232,640) - - (381,953,221) 176,330,628 (372,234,928) 185,331,087 ( )/ (14) (381,953,221) 176,330,628 (372,234,928) 185,331,087 47

2003 ( ) 840,215,484 507,749,704 4,208,727 6,368,531 844,424,211 514,118,235 (742,094,674) (463,294,282) (31,737,533) (7,103,752) (20,594,199) (8,960,718) (80,163,880) (11,487,089) (874,590,286) (490,845,841) (30,166,075) 23,272,394 30,000-100,000,000 100,000,000 100,030,000 100,000,000 (93,884,040) (69,407,409) (2,409,485) (1,000,000) - (30,249,485) (100,000,000) (100,000,000) (196,293,525) (200,656,894) (96,263,525) (100,656,894) - - - - 938,737,440 812,096,660 938,737,440 812,096,660 (1,000,846,223) (895,419,990) (37,822,456) (32,691,797) (50,000,000) (50,000,000) (1,088,668,679) (978,111,787) (149,931,239) (166,015,127) 3,701,488 3,327,822 ( (1)) (272,659,351) (240,071,805) 48

2003 ( ) ( ) 1. (557,074,008) (557,566,015) (10,763,000) - 374,965,504 332,123,764 47,457,439 8,212,426 418,277 268,971-204,848 20,074-19,736,914 11,354,537 41,203-34,255,017 29,363,975 ( ) (496,553) 60,845,704 (11,837,769) - (71,371) - 62,093,654 101,855,051 11,088,544 36,609,133 - - (30,166,075) 23,272,394 2. - - 3. 201,292,042 157,180,574 (473,951,393) (397,252,379) - - - - (272,659,351) (240,071,805) 49

TIANJIN MARINE SHIPPING CO., LTD. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF THE AUDITORS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2003

TIANJIN MARINE SHIPPING CO., LTD. CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF THE AUDITORS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2003 Contents Page Report of the auditors 1 Consolidated income statement 2 Consolidated balance sheet 3 Consolidated statement of changes in equity 4 Consolidated cash flow statement 5 Notes to the consolidated financial statements 6-27

12th Floor, Shui On Plaza 333 Huai Hai Zhong Lu Shanghai 200021 People's Republic of China Telephone +86 (21) 6386 3388 Facsimile +86 (21) 6386 3300 REPORT OF THE AUDITORS TO THE SHAREHOLDERS OF TIANJIN MARINE SHIPPING CO., LTD. We were engaged to audit the accompanying consolidated balance sheet of Tianjin Marine Shipping Co., Ltd. (the Company ) and its subsidiaries ( the Group ) as at 31 December 2003 and the related consolidated income, changes in shareholders equity and cash flow statements for the year then ended. These consolidated financial statements set out on pages 2 to 27 are the responsibility of the Company s management. As disclosed in Note 21 (c) to the accompanying consolidated financial statements, as at 31 December 2003, the net amount due from Tian Hai Group Co., Ltd. ( Tian Hai ), the largest shareholder of the Company, and its two subsidiaries, guaranteed by Tian Hai, amounted to approximately RMB547 million, net of provision of approximately RMB325 million. Other than a written confirmation from Tian Hai indicating its intention to repay the Group, we have not been able to obtain the necessary audit evidence nor were we able to perform any alternative procedures regarding the recoverability of the net amount outstanding as at 31 December 2003. Because of the significance of the matter discussed in the preceding paragraph, we are not able to express an opinion on the accompanying consolidated financial statements. PricewaterhouseCoopers Zhong Tian CPAs Co., Ltd. 28 April 2004 Business is undertaken in the registered name of.

TIANJIN MARINE SHIPPING CO., LTD. CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) Year ended 31 December Notes 2003 2002 Revenue 3, 21(a) 694,603 728,310 Operating costs (780,813) (692,559) Gross (loss) / profit (86,210) 35,751 Other operating (loss)/income 4 (15,077) 26,291 Administrative and selling expenses (113,138) (102,363) Provision for restructured debt due from related parties. 21(c) (324,757) - Loss from operations 5 (539,182) (40,321) Finance costs net 6 (30,072) (30,273) Loss before tax (569,254) (70,594) Income tax 8 (4,082) (3,695) Loss before minority interests (573,336) (74,289) Minority interests 10,763 1,116 Net loss (562,573) (73,173) Dividends 9 - - Loss per share Basic 10 RMB(1.142) RMB(0.149)

TIANJIN MARINE SHIPPING CO., LTD. CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) ASSETS As at 31 December Notes 2003 2002 Non-current assets Property, plant and equipment 11 557,356 504,685 Due from related companies 21(c) 488,533 925,836 Land use right 11(c) 11,973 13,053 Other non-current assets 4,464 810 1,062,326 1,444,384 Current assets Trade receivables, net 12 73,354 102,486 Due from related companies 21(c) 71,063 - Other receivables 13 15,167 53,409 Cash 14 285,430 471,118 445,014 627,013 Total assets 1,507,340 2,071,397 EQUITY AND LIABILITIES Shareholders equity Share capital 18 492,649 492,649 Reserves 19 424,053 422,843 (Accumulated losses)/retained earnings (412,077) 151,706 504,625 1,067,198 Minority interests 1,654 13,279 Non-current liabilities Bank loans 16 58,454 135,885 Current liabilities Trade payables 118,461 125,488 Accruals and other payables 15 178,865 95,149 Current tax liabilities 11,970 16,409 Bank loans 16 633,311 617,989 942,607 855,035 Total equity and liabilities 1,507,340 2,071,397

TIANJIN MARINE SHIPPING CO., LTD. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY FOR THE YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) Reserves Share Capital Statutory Retained capital reserve reserves earnings Total Note (18) Note 19(a) Note 19(b) /(Accumulated losses) Balance at 1 January 2002 492,649 290,945 131,407 225,370 1,140,371 Net loss for the year - - - (73,173) (73,173) Appropriation from net profit - - 491 (491) - Balance at 31 December 2002 492,649 290,945 131,898 151,706 1,067,198 Net loss for the year - - - (562,573) (562,573) Appropriation from net profit - - 1,210 (1,210) - Balance at 31 December 2003 492,649 290,945 133,108 (412,077) 504,625

TIANJIN MARINE SHIPPING CO., LTD. CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) Cash flows from operating activities Years ended 31 December Notes 2003 2002 Cash generated from operations 20 54,941 (100,944) Interest paid 6 (37,822) (36,623) Income tax paid (2,318) (6,994) Net cash generated from /(used in) operating activities 14,801 (144,561) Cash flows from investing activities Purchase of property, plant and equipment and land use right (93,884) (82,765) Proceeds on disposal of fixed assets - 21,982 Interest received 4,183 4,912 Decrease in other non-current assets (2,379) (300) Net cash used in investing activities (92,080) (56,171) Cash flows from financing activities Proceeds from bank loans 938,737 939,668 Repayment of bank loans (1,000,846) (800,135) Increase in minority interests - 1,319 Decrease in bank time deposits with maturity over three months (50,000) (65,330) Net cash (used in)/generated from financing activities (112,109) 75,522 Effects of exchange rate changes 6 3,701 1,899 Net decrease in cash (185,687) (123,311) Cash at beginning of year 386,979 510,290 Cash at end of year 14 201,292 386,979

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 1. General information Tianjin Marine Shipping Co., Ltd. (the Company ), a state-owned enterprise established in the People s Republic of China (the PRC ) in 1980, was reorganized into a joint stock company in December 1992. In November 1995, in connection with the issuance of its domestically-listed foreign currency ordinary shares on the Shanghai Stock Exchange ( B shares), the Company underwent another reorganization whereby Tian Hai Group Co., Ltd. ( Tian Hai ), its largest shareholder, injected certain businesses, assets and related liabilities into the Company. The Company s B shares were listed on the Shanghai Stock Exchange in April 1996, following which on 7 October 1996, the Company was recognized as a foreign invested joint stock limited company. In September 1996 and September 1999, shares held by the Company s employees were listed on the Shanghai Stock Exchange as domestically-listed Rmb ordinary shares. ( A shares). The Company and its subsidiaries (the Group ) are principally engaged in international short-haul container shipping business, provision of international and domestic shipping and freight agency services and crew services. The registered office of the Company is located at No.188, Jing Men Avenue, Tianjin Port Free Trade Zone, PRC. 2. Principal accounting policies a Basis of preparation The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ). The consolidated financial statements have been prepared under the historical cost convention as modified by impairment of assets. This basis of accounting differs from that used in the preparation of the Group s statutory accounts which are prepared in accordance with accounting regulations of the People s Republic of China ( Statutory Accounts ). The adjustments made to conform the Statutory Accounts of the Group to IFRS are shown in Note 24. The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management s best knowledge of current event and actions, actual results ultimately may differ from those estimates.

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 2. Principal accounting policies (continued) a Basis of preparation (continued) As at 31 December 2003, the Company suffered a net loss of approximately Rmb563 million for the year then ended, (including a provision for restructured debt due from related parties of Rmb 325 million) while the current liabilities exceeded current assets by approximately Rmb498 million. The continuation of the business of the Company depends on continuing financial support from bankers. The Directors believe the Company is able to obtain the continuous financial support from the bankers to enable the Company to meet its financial liabilities as and when they fall due and to carry on its business without significant curtailment of operations for the foreseeable future. Consequently, the Directors have prepared these consolidated financial statements on the going concern basis. b Group accounting policies (1) Subsidiaries Subsidiaries are entities in which the Group has an interest of more than one half of the voting rights or otherwise has power to govern the financial and operating policies. Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries. Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated; unrealized losses are also eliminated unless cost cannot be recovered. Where necessary, accounting policies of subsidiaries have been changed to ensure consistency with the policies adopted by the Group. Details of the Group s subsidiaries are set out in Note 23. (2) Minority interests Minority interests are that part of the net results of operations and of the net assets of a subsidiary attributable to interests which are not owned by the parent company, either directly or indirectly through its subsidiaries. c Foreign currency translation (1) Measurement currency The companies within the Group maintain their books and records in RMB, the measurement currency. The subsidiaries incorporated in Republic of Liberia and Hong Kong also maintain their books and records in RMB as their business operations are in the PRC.

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 2. Principal accounting policies (continued) c Foreign currency translation (continued) (2) Transactions and balances Foreign currency transactions are translated into the measurement currency using the exchange rates prevailing on the first day of the month in which the transactions took place. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. Non-monetary assets and liabilities in other currencies are translated at historical rates. d Property, plant and equipment Property, plant and equipment are initially measured at cost. Subsequent to initial recognition, property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment loss. Depreciation is calculated on the straight-line method to write off the cost of each asset to its estimated residual value of 3% of cost over its estimated useful life as follows: Vessels Buildings Machinery and motor vehicles 11 35 years 20 35 years 5 8 years Construction-in-progress represents property under construction and machinery pending installation and is stated at cost. This includes the costs of construction and equipment and other direct costs. Construction-in-progress is not depreciated until such time when the assets are completed and ready for use. Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in operating profit. Interest costs on borrowings to finance the construction of property, plant and equipment are capitalized during the period that is required to complete and prepare the asset for its intended use. Other borrowing costs are expensed as incurred. Repairs and maintenance are charged to the income statement during the period in which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset.

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 2. Principal accounting policies (continued) e Land use right Acquired land use right is stated at cost less accumulated amortization and accumulated impairment losses. Amortization is calculated using the straight line method to write off the cost less accumulated impairment losses over the term of the land use right. f Leases (1) Group company as the lessee Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the income statement on a straight-line basis over the period of the lease. (2) Group company as the lessor Assets leased out under operating leases are included in property, plant and equipment in the consolidated balance sheet. They are depreciated over their expected useful lives on a basis consistent with similar owned property, plant and equipment. Rental income is recognized on a straight-line basis over the lease term. g Trade receivables Trade receivables are carried at original invoiced amount less provision made for impairment of these receivables. A provision for impairment is established when there is an objective evidence that the Group may not be able to collect all amounts due according to the original terms of receivables. h Cash Cash is carried in the balance sheet at cost. For the purposes of the cash flow statement, cash comprises cash in hand and deposits held at call with banks with original maturities of three months or less. i Borrowings Borrowings are recognized initially at the proceeds received net of transaction costs incurred.

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 2. Principal accounting policies (continued) j Pension schemes All employees of the Group of PRC nationality participate in defined contribution employee pension plans organised by the governmental authorities in accordance with relevant regulations. Contributions to these plans are made to a governmental agency which is then responsible for the pension liabilities relating to the Group s existing and retired employees. The Group accounts for these contributions on an accrual basis. Contributions to the plans are charged to the income statement as incurred. k Provisions Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The Group recognizes a provision for onerous contracts when the expected benefits to be derived from a contract are less than the unavoidable costs of meeting the obligations under the contract. l Revenue recognition Provided it is probable that the economic benefits associated with a transaction will flow to the Group and the revenue and costs, if applicable, can be measured reliably, revenue is recognized on the following bases: (i) Container shipping income from international short-haul container shipping is recognized upon completion of the voyage and unloading of cargoes. (ii) Commission income is recognized when agency and other services are rendered. (iii) Income from operating leases is recognized on a straight-line basis over the lease term.

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 2. Principal accounting policies (continued) m Cost of operations The major operating costs being bunker oil, ship stores, spare parts, dry-docking and survey expenses are charged to operating expenses as consumed or incurred. n Taxation The Company and its subsidiaries provide for current corporate income tax on the basis of their respective taxable profit in the Statutory Accounts. Deferred taxation is provided under the balance sheet liability method in respect of significant temporary differences between the tax base of an asset or liability and its carrying amount in the balance sheet. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which the deductible temporary difference can be utilized. o Impairment of assets (1) Financial instruments Financial instruments are reviewed for impairment at each balance sheet date. For financial assets carried at amortized cost, whenever it is probable that the Group will not collect all amounts due according to the contractual terms of loans or receivables, an impairment or bad debt loss is recognized in the income statement. Reversal of impairment losses previously recognized is recorded when the decrease in impairment loss can be objectively related to an event occurring after the write-down. Such reversal is recorded as income. However, the increased carrying amount is only recognized to the extent it does not exceed what amortized cost would have been had the impairment not been recognized.

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 2. Principal accounting policies (continued) o Impairment of assets (continued) (2) Other assets Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognized in the consolidated income statement. The recoverable amount is the higher of an asset s net selling price and value in use. The net selling price is the amount obtainable from the sale of an asset at an arm s length transaction less the costs of disposal while value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if it is not possible, for the cash-generating unit. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased. The reversal is recorded in the consolidated income statement or as a revaluation increase. However, the increased carrying amount of an asset due to a reversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for that asset in prior years. 3. Revenue 2003 2002 Container shipping income Related parties (Note 21 (a)) 251,091 303,162 Third parties 419,694 391,046 Commission income 20,700 11,818 Others 3,118 22,284 694,603 728,310 The Group operates in the East Asia region, and is involved in the international short-haul container shipping business which includes related shipping and freight agency services, leasing of vessels, provision of customs declaration services and provision of logistic services. No segment information is presented as the Group operates in one industry and one geographical segment.

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 4. Other operating (loss)/income 2003 2002 Income from delayed return of containers by customers 1,692 12,173 Provision for expenses to overhaul a damaged vessel and other related costs (Note 25) (20,000) - Vessels lease income 80,467 75,802 Vessels lease expense (79,553) (67,354) Others 2,317 5,670 (15,077) 26,291 5. Loss from operations Loss from operations include: 2003 2002 Provision for doubtful receivables from related parties 332,618 25,551 third parties 42,166 24,451 374,784 50,002 Major operating costs (other than depreciation and staff costs ) Domestic and overseas port charges 388,755 342,587 Bunker oil, ship stores and spare parts consumed 159,274 119,305 Operating lease rentals vessels 127,142 165,438 containers 53,526 39,859 Other container expenses 30,639 25,668 Depreciation on property, plant and equipment owned assets 20,973 10,832 owned assets (vessels) leased out 21,028 25,678 Staff costs (Note 7) 34,090 24,103 Directors remuneration 405 328 6. Finance costs-net 2003 2002 Interest expenses - bank loans (37,822) (36,623) Interest income 4,684 4,912 Net foreign exchange gains 3,701 1,899 Others (635) (461) (30,072) (30,273)

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 7. Staff costs 2003 2002 Salaries 24,503 16,249 Provision for staff welfare benefits 5,911 4,369 Pensions costs - defined contribution pension scheme 3,676 3,485 34,090 24,103 The average number of full time employees in 2003 was 787. (2002: 771) 8. Income tax expense 2003 2002 PRC corporate income tax - current year 4,082 3,695 The Company and all of its subsidiaries incorporated in China are subject to the statutory corporate tax rate of 33%, except for one which enjoys the preferential rate of 15% due to its location in a special economic zone. All of the subsidiaries incorporated outside of the PRC are exempt from corporate income tax of the respective countries in which they are incorporated.

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 8. Income tax expense (continued) The Group s tax expense principally refers to taxes paid by subsidiaries with individual taxable profits. The Group s statutory tax rate is reconciled to the effective tax rate as follows: 2003 2002 % % Accounting loss (569,254) 100 (70,594) 100 Assumed tax assets at the statutory tax rate (187,854) 33 (23,296) 33 Unrecognized tax losses 98,870 (17) 10,769 (15) Tax effect of expenses that are not deductible in determining taxable profit 94,375 (17) 16,501 (23) Effect of tax holidays enjoyed by subsidiaries (1,309) - (279) - Income tax expense 4,082 (1) 3,695 (5) For the year ended 31 December 2003, the Group had temporary differences resulted from tax losses carried forward and provision for doubtful receivables, for which no deferred tax asset is recognized due to the uncertainty of the taxable profit of the Group in the future. Such unrecognized deferred tax asset amounted to approximately RMB 171 million as at 31 December 2003 (2002: RMB 56 million). 9. Dividends The Directors do not propose any dividend for the year (2002: Nil). 10. Loss per share Basic loss per share is calculated by dividing the net loss attributable to shareholders by the weighted average number of ordinary shares in issue during the year. 2003 2002 Net loss (RMB 000) (562,573) (73,173) Weighted average number of ordinary shares in issue (thousands) 492,649 492,649 Basic loss per share (RMB per share) (1.142) (0.149) No diluted loss per share was presented as there were no dilutive potential ordinary shares issued / outstanding during the year.

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 11. Property, plant and equipment Vessels Buildings Machinery Motor vehicles Construction -in-progress Total Year ended 31 December 2002 Opening net book amount 337,236 140,036 2,576 114 13,503 493,465 Additions 49,097 942 1,869 11,893 5,911 69,712 Disposals (20,470) (1,466) - (42) (4) (21,982) Transfers - 9,806 - - (9,806) - Depreciation charge (28,162) (5,419) (1,575) (1,354) - (36,510) Closing net book value 337,701 143,899 2,870 10,611 9,604 504,685 At 31 December 2002 Cost 522,591 165,738 19,855 19,554 9,604 737,342 Accumulated depreciation (184,890) (21,839) (16,985) (8,943) - (232,657) Net book amount 337,701 143,899 2,870 10,611 9,604 504,685 Year ended 31 December 2003 Opening net book value 337,701 143,899 2,870 10,611 9,604 504,685 Additions - 3,274 4,267 2,168 85,175 94,884 Disposals - - - (272) - (272) Transfers 70,835 23,944 - - (94,779) - Depreciation charge (29,977) (5,896) (3,079) (2,989) - (41,941) Closing net book value 378,559 165,221 4,058 9,518-557,356 At 31 December 2003 Cost 593,426 191,808 24,046 21,247-830,527 Accumulated depreciation (214,867) (26,587) (19,988) (11,729) - (273,171) Net book value 378,559 165,221 4,058 9,518-557,356 (a) As at 31 December 2003, buildings and vessels with net book value of approximately RMB167 million (2002: RMB164 million) were mortgaged as collateral for the Group s bank loans. (Note 16(a) (ii)). (b) The following is the analysis of vessels leased to third parties under operating leases: 2003 2002 Cost 469,321 469,321 Accumulated depreciation (209,223) (183,544) Net book value 260,098 285,777 (c) The land on which the buildings are situated are leasehold land which the Group has right to use for 15-50 years from October 2001. The title to the land use right is still in process of being transferred to the Group.

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 12. Trade receivables, net 2003 2002 Trade receivables 119,059 143,243 Less: provision for doubtful receivables (45,705) (40,757) 73,354 102,486 13. Other receivables 2003 2002 Other receivables 71,768 72,791 Less: provision for doubtful receivables (56,601) (19,382) 15,167 53,409 14. Cash 2003 2002 Bank deposits 285,208 470,800 Cash at bank and in hand 222 318 285,430 471,118 For the purpose of the cash flow statement, cash comprises the following: 2003 2002 Cash and bank balances 285,430 471,118 Less: Deposits pledged for bank loans (Note 16(a)) (84,138) (84,139) 201,292 386,979 15. Accruals and other payables 2003 2002 Business tax & other taxes payable 40,300 33,630 Accruals--damaged vessel overhaul expenses 20,000 - --others 7,291 9,476 Advances from customers 22,952 12,790 Construction fees 9,743 - Insurance fees 4,525 4,372 Salary and welfare payable 2,930 3,267 Others 71,124 31,614 178,865 95,149

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 16. Bank loans 2003 2002 Short-term bank loans: Unsecured 52,000 38,471 Secured 158,860 134,000 Guaranteed by Tian Hai 353,303 430,033 564,163 602,504 Add: Current portion of long-term bank loans 69,148 15,485 633,311 617,989 Long-term bank loans: Unsecured - 14,277 Secured 127,602 137,093 127,602 151,370 Less: Current portion of long-term bank loans (69,148) (15,485) 58,454 135,885 Total bank loans 691,765 753,874 (a) Short-term bank loans bear interest at rates ranging from 2.2% to 6.9% (2002: 3.1% to 7.8%) per annum while long-term bank loans bear interest at rates ranging from 2.3% to 6.0% (2002: 5.8% to 6.0%) per annum. (b) (c) (d) Collaterals and guarantee given for the secured bank loans are as follows: (i) certain buildings and vessels (Note 11), (ii) RMB84.1 million of bank deposits (2002: RMB 84.1 million) (Note 14) and Portion not covered by collaterals of certain vessel will be guaranteed by Tian Hai Repayment of the long-term bank loans is scheduled as follows: Year of repayment 2003 2002 2003-15,485 2004 69,148 62,940 2005 58,454 72,945 127,602 151,370

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 17. Commitments Capital commitments There is no outstanding capital expenditure contracted for at the balance sheet date but not recognized in the financial statements as at 31 December 2003 (2002:RMB32 million). Operating lease commitments group company as the lessee The future aggregate minimum lease payments under non-cancellable operating leases are as follows: 2003 2002 Not later than 1 year 38,983 23,923 Later than 1 year and not later than 5 years 34,137-73,120 23,923 Operating lease commitments group company as the lessor As at 31 December 2003, the Group had operating lease agreements for vessels. The lease terms did not contain any renewal or purchase options, escalation clause and restrictions on the Group s activities concerning dividends, additional debt or further leasing. The future minimum lease payments receivable under non-cancellable operating leases are as follows: 2003 2002 Not later than 1 year 23,784 19,145

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 18. Share capital Details of the Company s share capital are as follows: Balance at the beginning and end of year: Ordinary shares of Rmb 1 each: 2003 2002 2003 2002 Shares in thousands Listed: A shares 103,689 103,689 103,689 103,689 B shares 180,000 180,000 180,000 180,000 Unlisted: Shares held by Tian Hai 184,089 184,089 184,089 184,089 Other legal person shares 24,871 24,871 24,871 24,871 492,649 492,649 492,649 492,649 A shares rank pari passu with the B shares in all respects except that A shares can only be owned and traded by investors in the PRC and Qualified Foreign Institutional Investors; while B shares can be owned and traded in foreign currency by both PRC and foreign investors. 19. Reserves (a) Capital reserves Capital reserves mainly represent the premium on the issuance of shares. Pursuant to the Company s Articles of Association, share premium can only be used to increase share capital. (b) Statutory reserves According to the Articles of Association of the Company and its subsidiaries incorporated in the PRC, each is required to provide certain statutory reserves which are appropriated from the net profit as reported in the Statutory Accounts. According to the respective Articles of Association, 10% of net profit shall be set aside for the statutory reserve (which may be stopped when the reserve has reached 50% of the then share capital); 5% to 10% for the statutory common welfare fund and appropriation may be made to the discretionary reserve upon approval by the shareholders. These reserves cannot be used for purposes other than those for which they are created and are not distributable as cash dividends without the prior approval by shareholders under certain conditions.

TIANJIN MARINE SHIPPING CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2003 (Unless otherwise indicated, all amounts are stated in Renminbi thousands) 19. Reserves (continued) (b) Statutory reserves (continued) As the Company incurred a loss for the year ended 31 December 2003, the Directors did not propose any profit appropriation plan for the Company but the profitable subsidiaries made the reserve appropriation accordingly (2002: nil). 20. Cash generated from operations 2003 2002 Net loss for the year (562,573) (73,173) Adjustments for: Minority interests (10,763) (1,116) Income tax paid 2,318 3,695 Provision for doubtful receivables 374,966 50,002 Depreciation of property and equipment and amortization of other assets 43,670 36,510 Loss on disposal of property equipment 40 - Interest expenses 37,822 36,623 Interest income (4,049) (4,912) Investment income (31) - Exchange gain (3,701) (1,899) (122,301) 45,730 Changes in working capital: Decrease in due from the largest shareholder 24,507 489 Decrease / (increase) in accounts receivables 22,680 (16,654) Decrease / (increase) in due from other related companies 66,330 (107,605) Decrease / (increase) in other current assets 30,352 (16,074) (Decrease) / increase in trade payables (14,549) 48,484 Increase / (decrease) in other current liabilities 47,922 (55,314) Cash generated from / (used in) operations 54,941 (100,944)