The Announcement of 2004 1st Extraordinary Shareholders' Meeting of Shanghai Worldbest Co.,Ltd.
Stock Code:600094 900940 Stock Abbreviation: Worldbest A Share Worldbest B Share No: Lin 2004-014
The Announcement of 2004 1st Extraordinary Shareholders' Meeting of Shanghai Worldbest Co.,Ltd.
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 recording, misleading statement or serious omission of the announcement.
Important Notice:
There is no veto or the amendment of proposal in this meeting.
There is no additional proposal submitted for voting in this meeting.
1. The notice, convening and attendance of the meeting.
On Nov.10th, 2004, the Company publicized the notice of the convening of 2004 1st extraordinary shareholders' meeting on “ China Securities”, “Shanghai Securities” and “Hong Kong Wen Hui Daily”. On the afternoon of Dec 10th, 2004, 2004 1st extraordinary shareholders' meeting of Shanghai Worldbest Co.,Ltd. was held in the Conference Hall on the 3rd floor of Shanghai ShuangYong Tower. The board of the Company convened the meeting. Chairman of the board Sun Ying presided over the meeting, 24 shareholders attended the meeting, representing166,624,223 shares, accounting for 33.8836% of total share equity of the Company. Of which 15 were domestic capital share shareholders, representing 165,097,375 shares, accounting for 57.9789% of the domestic capital share equity; 9 were foreign capital share shareholders, representing 1,526,848 shares, accounting for 0.7376% of the total foreign capital share equity. Some of the directors, supervisors and senior management of the Company attended the meeting , which is in conformity with the stipulations of the "Company Law", "Articles of Association" and the "Guiding opinions of the shareholders meeting of listed company”. The shareholders attended meeting voted by open ballot and approved the proposals. The related shareholders abstained from the voting for the second proposal.
2. The review of the proposal
The meeting approved the following proposals reviewed by the shareholders and the agents attended meeting:
1. The Proposal of the Additional Investment to Worldbest Biochemical (Thailand) Co.,Ltd.
Approved by the Ministry of Commerce with Document Shang He Pi [2004] No.397, the Company increased the investment USD 8,961,000 to Worldbest Biochemical (Thailand) Co.,Ltd. (Briefed as “Thailand Biochemical”). After the capital increase, the total investment of Thailand Biochemical increased from USD 29,698,000 to USD 38,659,000.
Before that, approved by Document Wai Jing Mao He Han[2001] No.418 issued by the original Ministry of Foreign Trade and Economic Cooperation, the Company invested and established Thailand biochemical citric acid project with the annual production capacity of 30 thousand tons in Thailand. The total investment was USD 29,698,000, of which USD 4.8 million was cash investment, and the rest was invested by equipments and materials. The project has been reviewed by the 3rd Extraordinary Board of Directors Meeting in 2001, and has been approved by the 2nd Extraordinary Shareholders’ Meeting in 2001.
Since the construction of the project from Dec 2002, 95% of the civil engineering of the project has been completed, and 95% of the equipment purchasing has been completed, of which 85% of the equipments have been transported to the site in Thailand. During the construction of the project, the following objective reasons caused the investment exceeded the budget for about RMB 74.14 million.
1). Required by the relative department of Thailand government for environmental protection, Thailand Biochemical adopted the industrial ion chromatography method ---the state level invention patent held by Chinese Science Academy ----instead of the original calcium salt method, which required the additional investment RMB 22.24 million.
2). As the market positioning of products were mainly for the developed countries in European and American, and in order to adapt to the new technology and improve the quality of the products, some of the equipments improved by supplementing advanced devices and some imported equipments, all of which required additional investment RMB 7.16 million.
3). In order to make full use of the surplus energy to reduce the operation cost and improve the economic benefits, in the final design added one set of 6000 kw steam generator, which required the additional investment RMB 6.49 million.
4). In 2003, the transportation fee and the domestic and international market price of steel and other construction materials increased which caused additional project construction fee RMB 19.40 million.
5). The land purchase fee, the project design fee, the project supervision fee and the joint test running fee actually exceeded the estimation, totally required additional RMB 16.35 million.
6). The devaluation of US dollars, the loss from exchange rate and the interests occurred during the construction period required additional RMB 2.5 million.
At present, the global consumption of citric acid increased by 5% annually, and the domestic and international market price rise again largely therefore the market of the citric acid is very well; originally the citric acid of the Thailand market were mainly imported from China , while since last year the Thailand government implement penalized customs duty to Chinese products, the price of anhydrous citric acid produced in Thailand has been very high; besides the cost of raw materials in Thailand was lower and products export from Thailand to USA is more convenient . All above factors have provide wonderful opportunities and development advantage for Thailand Biochemical. At present, many customers from USA, Korea, Hong Kong and Philippine have visited the Thailand factory and some have signed the intention of purchase.
In order to seize the opportunity and try to completed the construction of the project as soon as possible to produce good quality products to match the good citric acid market, the Company invested additional USD 8,961,000 (converted to RMB 74,197,000), for the additional domestic equipment purchase fee and other cost occurred domestically .The aforesaid additional investment would be fund by the Company it self and by the loan from China Import and Export Bank.
The Shareholders' meeting entrusted the board of the Company to implement the capital increase issue of Worldbest (Thailand) Biochemical Co.,Ltd.
2. The proposal of the assets exchange between the Company and Shanghai Worldbest Investment and Development (Group) Co.,Ltd;
The Company will exchange 13.08% of the equity of China Worldbest Life Industry Co.,Ltd. (Briefed as “Worldbest Life”) and 42% of the equity of China Worldbest (Mexico) Textile Industrial Co.,Ltd. (originally China Worldbest North American Mexico Co.,Ltd., herein after briefed as “Worldbest North American”) with 100% equity of China Worldbest (Thailand)Industrial Co.,Ltd.(briefed as “Thailand Industrial”) and 100% equity of Worldbest International Enterprise (Thailand) Co.,Ltd. (briefed as “Thailand International”) and 44% of the equity of Anhui Huawan Carbon Fiber Co.,Ltd. (briefed as “An Hui Hua Wan ”) held by Shanghai Worldbest Investment and Development (Group) Co.,Ltd. (briefed as “Worldbest Investment and Development”).
Worldbest Life was co established by Worldbest Group and the Company, the registered capital was RMB 1.3 billion,Worldbest Group holds 86.92% of the share equity, the Company holds 13.08% of share equity. Worldbest North American was invested by Worldbest Group and the Company, the registered capital was USD 96 million, Worldbest Group holds 58% , the Company holds 42%. In accordance with the evaluation report provided by Shanghai Orient Certified Appraisal Co., Ltd., an evaluation organization qualified for securities business, upon August 31st 2004 the evaluated value of the net assets corresponding to 13.08% of the equity of “Worldbest Life” was RMB 184.88 million, and after the two parties negotiation, confirmed the evaluated value of net assets as the price of transaction; the evaluated value of the net assets corresponding to 42% of the equity of “Worldbest North American” was RMB 300.17 million, and after the two parties negotiation, based on the evaluated value of the net assets plus10% appreciation totally RMB 330.19 million as the price of transaction; after the two parties negotiation , the share equity transfer price of the aforesaid two assets put out was RMB 515.07 million.
The total investment of Thailand Industrial was USD 29.5 million, the registered capital was 650 million baht(USD 15 million);The total investment of Thailand International was USD 29.5 million, and the registered capital was 650 million baht(USD 15 million).In accordance with the evaluation report provided by Shanghai Orient Certified Appraisal Co., Ltd., an evaluation organization qualified for securities business, upon August 31st,2004, the evaluated value of the net assets corresponding to the 100% equity of “Thailand Industrial” was RMB 194.36 million, the evaluated value of the net assets corresponding to the 100% equity of “Thailand International” was RMB 217.55 million, the total of the two was RMB 411.91 million, after the two party’s negotiation, based on the evaluated value of the net assets plus 2.9% appreciation totally RMB 423.85 million as the price of the transaction ;An Hui Hua Wan was co-established by Worldbest Investment and Development and Bang Bu Corduroy Group and the registered capital was RMB 165 million. In accordance with the evaluation report provided by Shanghai Orient Certified Appraisal Co., Ltd., an evaluation organization qualified for securities business, upon August 31st, 2004, the evaluated value of the net assets corresponding to the 44% of the equity of “An Hui Hua Wan” was RMB 91.22 million, after the two parties negotiation, confirmed the evaluated value of the net assets as the price of the transaction. With the two parties negotiation and confirmation, the price of the aforesaid three equity transfer of the input assets input was RMB 515.07 million.
The Company shall pay totally RMB 515.07 million to “Worldbest Investment and Development ” for the input assets, “Worldbest Investment and Development ”shall pay the Company totally RMB 515.07 million for the input assets .The two parties agreed to defray the two payments.
After the settlement of the assets exchange, the Company will no longer hold any share equity of Worldbest North American and Worldbest Life, the Company will hold 100% share equity of Thailand Industrial, 100% share equity of Thailand International and 44% of share equity of An Hui Hua Wan.
After the merge of the Thailand cotton spinning projects, the overseas cotton spinning projects will be moved together to Thailand and the current situation that overseas projects were scattered can be changed and the big scale advantage can be realized, and it will be beneficial for the enterprise to adjust the product varieties reasonably according to the market demand and to improve the competitiveness of the products, and to avoid the disorder competition of the cotton spinning projects in Thailand , reduce the management cost effectively and to achieve the best profits. Meanwhile, after the merge of the Thailand cotton spinning projects, it will also be beneficial for the Company to establish the dynamic production chains between the domestic and overseas textile and chemical fiber enterprises in order to reduce the market risk. After the input of the equity of An Hui Hua Wan, the unique advantage and prospect of carbon fiber will enhance the high and new technology resources of Shanghai Worldbest Co.,Ltd. After the transfer of the equity of Worldbest Life, the Company can avoid the horizontal competition with Worldbest Group in the life industry effectively.
ZhongLei Certified Public Accountants Co.,Ltd who has the qualification for securities business presented the independent financial consultation report for the related transaction. The independent financial consultation report stated that the related transaction is in conformity with the relative laws and regulations of “ Company Law”, “Securities Law ”, following the principle of open, fair, equality and honesty, which is in conformity with the interests of the listed company as well as the whole shareholders.
The shareholders' meeting entrusted the board of the Company to conduct the relative implementations of the assets exchange with Shanghai Worldbest Investment and Development (Group) Co.,Ltd.
3. The proposal of the engagement of 2004 Annual Audit Organization of the Company
Since 1996 when the Company went public till 2003, the Company engaged Ernst & Young Da Hua Certified Public Accountants Co., Ltd. (Briefed as “Ernst &Young Da Hua” ) as the domestic audit organization, and from 1999 to 2003 the Company engaged Ernst & Young Hong Kong.(Briefed as “Ernst & Young”)as overseas audit organization .During the previous years, Ernst & Young Da Hua and Ernst &Young conducted objective and fair audit workings for the Company and provided the reliable annual audit report for the Company.
Since this year, as the business of Ernst & Young Da Hua and Ernst & Young developed very quickly, and the Company wanted to expand the service scope of the corporation with the audit organization as well as to reduce the management cost, the Company planned to engage SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS CO., LTD (Briefed as “SHU LUN PAN”) HORWATH SHANGHAI CPA. CO., LTD (Briefed as “HORWATH SHANGHAI“) as the 2004 annual domestic and overseas audit organization for the Company. The annual audit fee was RMB 1.75 million (including the travel fee).
4. The proposal of the amendment of some articles of the “Articles of Association” of the Company
In accordance with the change of the situation, the Board of Directors planned to amend some articles of the “Articles of Association” as the followings:
(1) The amendment of Article No.68
The original “Article No.68 At the shareholders meeting the shareholders vote by open ballot or vote by show of hands..”
Changed into “Article No.68 At the shareholders meeting the shareholders vote by open ballots.”
(2) The amendment of Article No. 153
The original “Article No.153 The Company shall edit the semi-annual financial report of the Company within 60 days after the end of the first 6 months of every fiscal year; edit the annual financial report of the Company within 120 days after the end of every fiscal year. “
Changed into “Article No.153 The Company shall edit the quarter report within one month after the end of the 1st quarter and the 3rd quarter; the Company shall edit the semi-annual financial report within two months after the end of the first six months of every fiscal year; and edit the annual report within four months after the end of every fiscal year. ”
5.The proposal of the adjustment of the members of Board of Directors of the Company.
1) As work changes, Mr. Yu Chaoyang would be no longer the director of the Company. 2)Elect Ms. Jian Jun as the Director of the Board of the Company.
Resume:
Jian Jun, female, born in Nov 1959,Han nationality, member of CCP, graduate student of Party University of Beijing Municipal Party Committee, major in economic management, senior engineer, at present she served as Chairman of Board of Supervisors of World best (Thailand) Industrial Co.,Ltd.
Chief experience:
1977.12---1992.5 Secretary of League committee of finishing workshop, technician , deputy secretary of League committee, director of air spinning workshop, assistant to the director of Beijing No.2 Cotton Spinning Mill.
1992.5---1997.8 Deputy director, presidium deputy director, director , deputy secretary of Party Committee of Beijing No.2 Cotton Spinning Mill.
1997.8---2001.5 Director, general manager of Beijing JingMian Textile Group Co.,Ltd.
2001.5---2002.2 General manager of Beijing Zhongshang Century Nanometer Textile Technology Development Co.,Ltd.
2002.2.---2004.6 Presidium deputy general manager, general manager of China High Tech Investment and Development Co.,Ltd.
2004.6---now Chairman of Board of supervisors of Worldbest (Thailand) Industrial Co.,Ltd.
6. The proposal of the amendment of the “Rules of Procedures of Board of Supervisors”;
In accordance with the rectification requirements of China Securities Regulatory Committee Shanghai Supervision and Management Bureau, the Board planned to amend some articles as follows:
(1) Amend Article No.8
The original:” Article 8 When the Board of Supervisors convene the regular meeting, it shall inform all the supervisors in written notice 15 days earlier of the meeting , when convene the working meeting or special subject meeting it shall inform all the supervisors in written notice 10 days earlier of the meeting, and clearly state the time, place ,content and relative materials of the meeting. “
Changed into:” Article 8 When the Board of Supervisors convene the regular meeting, working meeting or special subject meeting, it shall inform all the supervisors in written notice 10 days earlier, and clearly stated the time, place, content and relative materials of the meeting. ”
(2) Amend Article No.13
The original article:” Article 13 The resolutions of the meeting of Board of Supervisors will be vote by open ballot by the supervisors. Each supervisor has the right to one vote. When the assenting votes and dissenting votes equal, the chairman of the Board of Supervisors has the right of one more vote. The resolutions can only be effective when more than half of the supervisors approved the resolutions, each supervisor shall signed his name on the resolution and has the right to make certain explanatory record of his statement on the meeting. ”
Changed into” Article 13 The resolutions of the meeting of Board of Supervisors will be vote by open ballot by the supervisors. Each supervisor has the right to one vote. . The resolutions can only be effective when more than half of the supervisors approved the resolutions, each supervisor shall signed his name on the resolution and has the right to ask to make certain explanatory record of his statement on the meeting. ”
3. Witness of lawyer
LLINKS LAW OFFICE presented a legal opinion for this shareholders’ meeting, stating that procedures for convening the Meeting, qualifications of attendees and the voting procedures of the Meeting were in line with regulations of the laws, regulations and relative regulations of the company’s Articles of Association. The proposals of the Shareholders’ Meeting were legal and valid.
.
4.Documents for reference
1. The resolutions of 2004 1st extraordinary shareholders meeting of Shanghai
Worldbest Co.,Ltd.
2. The legal opinion about 2004 1st extraordinary shareholders' meeting of Shanghai Worldbest Co.,Ltd. presented by LLINKS LAW OFFICE .
Hereby Announced
Shanghai Worldbest Co.,Ltd.
Dec 10th, 2004.
04/02/2005
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