The Directors of Sinwa KS Limited (the "Company") wish to announce that the Company has entered into discussions with a substantial shareholder, KS Tech Ltd ("KS Tech"), in relation to issues arising from the proposed acquisition of MarineHub Pte Ltd by Aqua-Terra Supply (2001) Co. Pte Ltd, a wholly-owned subsidiary of KS Tech (the "Proposed Acquisition"). Further details of the Proposed Acquisition are contained in a circular to the shareholders of KS Tech dated 29 August 2003.

In particular, the Company is concerned about the effect of the Proposed Acquisition vis-a-vis the terms of a restructuring agreement dated 1 November 2002 between, inter alia, KS Tech and the Company.

Discussions are presently ongoing with the intention of reaching an amicable solution to these issues.