Announcement on the Resolutions of the 5th Session of the 3rd Board of Directors Meeting of Shanghai Worldbest Co., Ltd. and the Notice of Convening 2003 Annual Shareholders’ Meeting
The Company and all the members of Board of Directors guarantee the authenticity, precision and integrity of the announcement and will be jointly liable for the false record, misleading statement or serious omission in the announcement.
The 5th Session of the 3rd Board of Directors Meeting of Shanghai Worldbest Co., Ltd. was held on April 15,2004 at the Meeting Room of the Company. 14 of the 15 Directors attended the meeting (proxy included: Director Xu Duanfu asked for leave because of illness and he entrusted Chairman Wu Yunsheng to exercise the voting rights on his behalf; Director Chen Yongming asked for leave for other engagement. ). The members of the Board of Supervisors and the senior management of the Company attended the meeting as non-voting delegates, which is in conformity with the stipulations of “Company Law” and “Articles of Associations.” of the Company .The Meeting reviewed and approved the following proposals:
1. The working report of board of directors;
2. The business report of general manager
3. The 2003 financial report and the 2004 financial budget;
4. The 2003 profit distribution proposal
In 2003, audited in accordance with the domestic accounting principle and the accounting system, the Company realized the consolidated net profits RMB 60, 323,264.25, of which parent company RMB 61,804,587.23, plus the last year end retained earnings RMB67, 566,332.84 and the other amount transferred into RMB 1,146,962.90 (made by the transference of subsidiary) the profits available for distribution at the end of 2003 was RMB 129,036,559.99
In 2003 the parent Company withdrew 10% of the net profits as surplus common reserve RMB 6,180,758.72 and statutory public welfare fund RMB 6,180,758.72., at the end of 2003, the profits available for distribution for the shareholders was RMB 107,253,401.82.
Audited in accordance with the international accounting principle, in 2003 the consolidated net profit of the Company was RMB 67.233 million. ,plus the retained earnings of the last reporting period RMB13.937 million and the other amount transferred into RMB 1.147 million, less t surplus common reserve and public welfare fund RMB 21.783 million of this year, the retained earnings was RMB 60.534 million.
In accordance with the requirement of the implementation of the present investment project, the profits distribution proposal of 2003 is: No cash dividend, no equity increases with capital reserves.
5. The 2003 annual report and abstract
6. The 2004 first quarter report;
7. The management system on the relationship of the Company investors
The details see the website of Shanghai Stock Exchange : www.sse.com.cn
8. The provisional management measures on Company guarantee;
The details see the website of Shanghai Stock Exchange : www.sse.com.cn
9. The proposal of the extension of the 200-thousand-ton bottle polyester chip technology transformation project of Changzhou Worldbest Radici Co., Ltd.;
In order to further expand the Company’s primary business production scale, reduce the production cost and increase the products added value and to further explore the domestic and overseas market and improve the essential competitiveness, based on the present market situation and developing trend of bottle polyester chips together with the current production and operation condition of the Company, the Company planned to extend an 200-thousand-ton bottle polyester chip annual production project in addition to the present 270-thousand-ton bottle polyester chip production scale of Changzhou Worldbest Radici Co.,Ltd. The total investment of the project is RMB 301,900,000 (including foreign exchange USD 9,500,000), of which the fixed assets investment is RMB 239,800,000(including foreign exchange USD 9,500,000), the interest of the construction period is RMB 5,030,000, and the initial working capital is RMB 57,070,000.
With the increase of the world population and the improvement of the people’s living and consuming level, the global demand for bottle polyester has increased quickly by the average annual rate of 15% from 1996 to 2002. It is estimated that from 2004 to 2007, the global demand for bottle polyester chips will also increase by the average annual rate of 7% to 8%, and by 2007, the demand for bottle polyester will take 30% of the total polyester production amount. Meanwhile, Changzhou Worldbest Radici Co., Ltd. has the brand advantage and the technology advantage for the extension of the bottle polyester production; and the extension construction based on the present factory can reduce the investment of the construction. Therefore the extension project is expected to bring favorable economic benefits and social benefits.
The enterprise will raise 40% of the project’s fixed assets investment, 60% will be from the bank loan, and the interest rate of the loan is 5.7%. Of the total working capital RMB 1,902,500 of the project, 30% will be raised by the Company, 70% from the bank loan by the interest rate5.42%.. It is estimated after the project start the production, the average annual sales revenue will be RMB 1,970,000,000, and the average annual sales profit will be RMB 108,230,000, the investment pay-back period will be 5.35 years (including 1 year construction period.)
10.The proposal of the implementation of new PTT fiber spinning technology improvement project of Changzhou Chemical Fiber Company;
The Company planned to invest RMB 128,000,000 for the new PTT fiber spinning technology improvement project of Changzhou Chemical Fiber Company.
PTT is a very prospective new polyester fiber invented during the mid of 1990s.PTT fiber has its unique good performance, and it has the softness of nylon with better dye ability, the bulkiness of acrylic fiber, the soil resistance and hand touch of polyester fiber, together with its own elasticity, the fiber combine the good performance of various kinds of fibers together and has become one of the heated international new polymer materials.
According to the experts estimation from 2001 to 2010 the global demand for PTT fiber will reach 1,200,000 tons and by 2010, the use of PTT will take place of 15% of spandex, 35% of polyamide, 99% of PBT and 10% of PET. Looking toward the future, PTT can be the new upgrade products of the above fibers and the demand will be huge in the millions tons of consumption of textile fabrics.
In 2000 the Company have established the cooperation intension for the co-development of PTT with US Shell Company, and since then it has started the PTT filament yarn development work in Changhzhou Chemical Fiber Company and carpet fiber development in Anhui Chemical fiber Company.The Company has achieved the PTT filament yarn industrial production technology. This technology is the first domestic PTT filament year production technology and in accordance with the national industry policy, the project has been listed as the 2002 State Important Technology Transformation Project supported by the 8 series of national treasury financed loan.
The implementation of the project can make full use of the current resources of Changzhou Chemical Fiber Company, and the products strategic operation advantage of Changzhou Chemical Fiber Company to gain the initiatives in the domestic PTT fiber industrial production, which will build the foundation for the Company to keep its leading role in the domestic new fiber material development and to build more competitive commercial and technology advantage.
The construction scale of the new PTT fiber spinning technology transformation project is 3,000 tons of PTT filament yarns per year; calculated by the typical product varieties, the DTY made from POY will be 3,950 tons per year. The total investment of the project is RMB 128,000,000. ,the annual sales revenue is RMB 116,680,000, and the annual sales profits is RMB. 211,000,000 The investment pay-back period is 5.57 years (including one year of construction period.) RMB 84,000,000 of the project will be financed by the capital from national treasury financed loan; the Company will raise the remaining part RMB 44,000,000.
11.The proposal of the proposed continuous mutual guarantee by the Company and “Wai Gao Qiao Co., Ltd.”
The detailed information sees the Announcement No. Lin 2004-003 publicized on the same day.
The aforesaid 5 proposals: No. 1, No.3, No.4, No.9 and No.11 will be submitted by the Board of Directors of the Company.to the 2003 annual shareholders meeting for review
12 The proposal of the accrual of various items of assets depreciation reserve of the Company of 2003.
13.The proposal of convening the 2003 annual shareholders meeting
1).The time and the place.
Time: 1:30 pm, May 18,2004
Place: Meeting Hall, 3rd floor, Shanghai Shuang Yong Hotel (No.2601 , Pudong Avenue. Transportation: bus 81, 85,981,625,639,Shenlu line, Shangchuan line, Chuanxin line, etc. )
2)The agenda of the meeting
(1) Review the working report of Board of Directors
(2) Review the working report of Board of Supervisors
(3) Review the 2003 annual financial report and 2004 annual financial budget
(4) Review the 2003 profit distribution proposal
(5) Review the proposal of the extension of the 200-thousand-ton bottle polyester chips technology transformation project of Changzhou Worldbest Radici Co., Ltd.
(6) Review the proposal of the continuous mutual guarantee by the Company and Wai Gao Qiao Co., Ltd.
3)Attending the meeting
A share: Shareholders of the Company registered at China Securities Clearance and Settlement Corporation Shanghai Branch after the market is closed on April 26, 2004.
B share: Shareholders of the Company registered at China Securities Clearance and Settlement Corporation Shanghai Branch after the market is closed on April 29 , 2004 (The last trading day is April 26).
Qualified shareholders attending the meeting should bring their shareholder’s account cards and personal IDs (Trustees should bring their own IDs, power of attorney and stock accounts of trustors, and legal person shareholders should bring their certificates of legal entity, power of attorney of the legal entity and ID of the attendee) to the shareholders’ meeting secretariat of the Company for registration from 9 o’clock in the morning to 5 o’clock in the afternoon on May 11, 2004. For those who register by letter or fax, postmark of the post office of the Company’s location will be taken as the standard.
Registration place: Meeting Room of the Company (31F, No.161 , Lujiazui Rd (E) ,Pudong, Shanghai)
Registration by letter or fax: Shareholders attending the meeting in person should attach ID duplicate, give the shareholder’s name, shareholder account number, number of shares held, address, and post code in the letter or fax so that the Company can send the notice of the meeting to such shareholders. Trustees should also present the power of attorney as hereunder attached. Shareholders registered by fax must confirm their registration by phone after the fax is sent.
Contact telephone: 021-58799888*229 58823020
Fax: 021-58825887
Post code: 200120
Contact persons: Ms.Lin Huaduan
4. Duration of the meeting is half a day, and all the expenses of board and lodging and transportation will be born by the shareholders themselves.
5.In accordance with the requirements of the supervision authorities, no gifts, valuable papers or transportation fees of any kind will be given at this meeting.
Hereby Announced
Board of Directors of Shanghai Worldbest Co., Ltd.
2004/4/15…
Appendix
Power of Attorney
This is to entrust Mr. (Ms.)_____________ to attend the 2001 Shareholders’ Meeting of Shanghai Worldbest Co., Ltd. and exercise voting right on behalf of myself (my company).
Signature of trustor: ID number:
Shares held by trustor: Shareholder’s account of trustor:
Signature of trustee: ID number:
Date:
04/02/2005
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