Securities code: 002513 securities abbreviation: Jiangsu Lanfeng Bio-Chemical Co.Ltd(002513) Announcement No.: 2022-004 Jiangsu Lanfeng Bio-Chemical Co.Ltd(002513)
Announcement on foreign investment and establishment of joint venture subsidiaries by wholly-owned subsidiaries
The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete, and there are no false records, misleading statements or major omissions.
1、 Overview of foreign investment
Jiangsu Lanfeng New Material Co., Ltd. (hereinafter referred to as “Lanfeng new material” and “party a”), a wholly-owned subsidiary of Jiangsu Lanfeng Bio-Chemical Co.Ltd(002513) (hereinafter referred to as “the company”), intends to invest jointly with Chongqing Shenggan New Material Technology Co., Ltd. (hereinafter referred to as “Shenggan new material” and “Party B”), Jiangsu Lanfeng nylon Co., Ltd. (tentative name, subject to the approval of the industrial and commercial registration department, hereinafter referred to as the “joint venture”) is established in Xinyi City, Jiangsu Province, and takes the joint venture as the platform to cooperate in the R & D, production and related business of high-temperature nylon. The registered capital of the joint venture is 50 million yuan, of which Lanfeng new material contributes 40 million yuan in currency or its own assets, accounting for 80% of the total investment in the joint venture; Shenggan new material invested RMB 10 million with patented technology and proprietary technology of high-temperature nylon production process, accounting for 20% of the investment in the joint venture.
This investment has been deliberated and approved at the 8th meeting of the 6th board of directors of the company. In accordance with the guidelines for standardized operation of listed companies on Shenzhen Stock Exchange, the articles of association, the measures for the administration of foreign investment and other relevant systems, this foreign investment is within the approval authority of the board of directors and does not need to be submitted to the general meeting of shareholders for deliberation and approval.
This investment of the company does not constitute a connected transaction, nor does it constitute a major asset reorganization as stipulated in the administrative measures for major asset reorganization of listed companies.
2、 Basic information of partners
1. Company name: Chongqing Shenggan New Material Technology Co., Ltd
2. Date of establishment: September 25, 2018
3. Company type: limited liability company
4. Company domicile: type B plant, No. 29, Hefeng Avenue, Fuling District, Chongqing (area B of standardized plant in Fuling Industrial Park)
5. Legal representative: Chen Peilong
6. Registered capital: 50 million yuan
7. Unified social credit Code: 91500102ma603je3x5
8. Business scope: general items: R & D, production and sales of synthetic and modified products of high-tech nylon series products, waterborne polyurethane series products, 3D printing materials, high-performance separation membranes, high-tech engineering plastics and related equipment; Consultation, service, transfer and promotion of relevant high and new technologies, and manufacturing of plastic products (except for projects subject to approval according to law, business activities shall be carried out independently according to law with business license)
9. Relationship with the company: None
As of September 30, 2021, the main financial data of Shenggan new material in the latest year and the first period are as follows (Unaudited):
Unit: Yuan
Project September 30, 2021 December 31, 2020
Total assets 51483730.6951538943.74
Liabilities 2840714.872148572.00
Owner’s equity 48643015.8249390371.74
Operating income 398.232008271.23
Net profit -810024.61215066.91
Chongqing Shenggan New Material Technology Co., Ltd. is a high-tech company focusing on the R & D, modification and industrialization of special engineering polymer materials. Especially in the field of high temperature nylon (PPA / htpA) resin, it has China’s leading continuous solid-state synthesis industrial production technology. At present, it has the laboratory, testing equipment and pilot test equipment required for R & D, has applied for invention patents of polyphenylene sulfide, high-temperature nylon and polyarylene ether, and has carried out long-term cooperation with Chinese scientific research institutions.
3、 Basic information of the joint venture
1. Name of joint venture: Jiangsu Lanfeng nylon Co., Ltd. (tentative name, specific name shall be subject to the name approved and registered by the market supervision and administration department)
2. Enterprise type: limited liability company
3. Registered capital: 50 million yuan
4. Address: No. 2, Ningxia road, Xinyi Economic Development Zone, Jiangsu Province (tentative)
5. Business scope: R & D, production and sales of synthetic and modified products of new nylon series products, high-tech engineering plastics and related equipment; Manufacturing of plastic products (except for projects subject to approval according to law, business activities shall be carried out independently according to law with business license).
7. The amount, mode and equity structure of capital contribution are as follows:
Contribution amount and contribution method of sequential shareholders
No. (10000 yuan) proportion
1. Jiangsu Lanfeng New Material Co., Ltd. 400080% of monetary or self owned assets
2 Chongqing Shenggan New Material Technology Co., Ltd. 100020% high temperature nylon production process patent technology and proprietary technology
Total 5000100%-
The above registration information of the joint venture shall be subject to the contents approved by the market supervision and administration department.
4、 Main contents of cooperation agreement
(i) Cooperation content
1.1 both parties intend to establish a joint venture in the form of monetary funds or assets in Xinyi City, Jiangsu Province, and use the joint venture as a platform to carry out close cooperation in the R & D, production and related business fields of high-temperature nylon.
1.2 the organizational form of the joint venture is: limited liability company.
1.3 the proposed registered capital of the joint venture at the time of establishment is RMB 50 million. Among them, Party A contributes RMB 40 million in currency or its own assets, accounting for 80% of the contribution in the joint venture; Party B invested RMB 10 million with patented technology and proprietary technology of high-temperature nylon production process, accounting for 20% of the investment in the joint venture.
1.4 both parties agree that the non monetary property as capital contribution shall be evaluated and valued by an evaluation institution with the qualification of enterprise legal person, handle the transfer procedures of its property rights according to law within 60 days after the verification of the registered capital of the joint venture, and submit relevant certificates to the company registration authority when applying for the establishment registration of the joint venture.
（2） Joint venture corporate governance
2.1 both parties shall become shareholders of the joint venture company after paying their capital contributions as agreed. The shareholders of the joint venture company shall enjoy rights and undertake obligations according to the proportion of equity held by them. The shareholders’ meeting of the joint venture company is composed of all shareholders and is the highest authority of the company. After the major matters of the joint venture are voted at the shareholders’ meeting, no one shall interfere with the matters that do not violate laws and regulations for any reason.
2.2 the joint venture does not have a board of directors, but an executive director, who shall be appointed by Party A.
2.3 the joint venture company does not have a board of supervisors, but a supervisor appointed by Party A.
2.4 the joint venture shall have a general manager appointed by the executive director.
2.5 the chief financial officer of the joint venture shall be appointed by Party A.
2.6 the technical director of the joint venture shall be appointed by Party B. The department setting and staffing of the joint venture shall be set by the joint venture according to the actual operation needs.
2.7 the authority of the shareholders’ meeting, the composition, authority, term of office of the executive director, the composition, authority, term of office of the supervisor, the authority and term of office of the general manager of the joint venture shall be specifically determined by each party in the articles of association of the joint venture in accordance with the provisions of the company law and the actual operation needs of the joint venture.
（3） Finance and accounting
3.1 the joint venture company shall establish its financial and accounting systems in accordance with laws, administrative regulations and the provisions of the competent financial department under the State Council.
3.2 at the end of each fiscal year, the joint venture shall prepare financial and accounting reports, which shall be reviewed and verified according to law.
3.3 in the first three months of each business year, the joint venture shall prepare the balance sheet, profit and loss statement and profit distribution plan of the previous year and submit them to the shareholders’ meeting for deliberation and approval.
3.4 the financial and accounting reports shall be made available to the shareholders of the joint venture company 20 days before the annual meeting of the shareholders’ meeting.
3.5 when the joint venture distributes the after tax profits of the current year, 10% of the profits shall be withdrawn and included in the joint venture’s statutory reserve fund. If the cumulative amount of the joint venture’s statutory reserve fund is more than 50% of the company’s registered capital, it may not be withdrawn.
3.6 if the statutory reserve fund of the joint venture is insufficient to make up for the losses of previous years, the profits of the current year shall be used to make up for the losses before withdrawing the statutory reserve fund in accordance with the provisions of the preceding paragraph.
3.7 the joint venture company shall accept the audit by the accounting firm designated by Party A or Party A’s parent company, and provide the hired accounting firm with true and complete accounting vouchers, accounting books, financial accounting reports and other accounting materials, and shall not refuse, hide or make false reports.
3.8 the joint venture company shall not establish any other accounting book except the legal accounting book. The assets of the joint venture company shall not be deposited in an account opened in the name of any individual.
（4） Profit distribution
4.1 both parties confirm and agree that the remaining after tax profits after the JV company withdraws the statutory reserve fund will be determined according to the decision of the shareholders’ meeting of the JV Company within 3 months after the end of the business year.
（5） Liability for breach of contract
5.1 if one party violates the agreement after the agreement takes effect, the observant party has the right to require the defaulting party to correct within a time limit, and the defaulting party shall compensate all losses caused to the observant party; If the breach is not corrected within the time limit, the non breaching party has the right to terminate this agreement, and the breaching party shall compensate all losses caused to the non breaching party (including but not limited to the loss of investment principal and interest during the period when the funds are occupied, as well as legal fees and attorney fees). 5.2 each party shall pay its capital contribution in full and on time as agreed in this agreement. If any party’s capital contribution is untrue, it shall bear the responsibility of making up the capital contribution, and compensate for the losses caused to the joint venture and the observant party.
5、 Impact of this investment on the company
High temperature nylon is a high-tech product encouraged by the state and an engineering plastic with superior performance. The joint venture will mainly produce high-temperature nylon pa10t and its alloy resin PA11 / 10t and related products. High temperature nylon pa10t has high crystallinity, low water absorption, excellent heat resistance and processability, and can be used as electrical / electronic parts and automobile parts, In particular, it can be used as a substrate forming material for electronic components.
The establishment of the joint venture is the company’s specific practice in the field of high-performance fiber materials, which is consistent with the company’s strategic development direction in the field of new materials. At the same time, it will have a positive impact on the company’s development and performance improvement, and there is no damage to the interests of listed companies and shareholders. This investment is a decision made by the company for the long-term development of the company according to the actual operation and strategic deployment.
6、 Risk tips
1. The business of the joint venture belongs to the initial stage, and there are uncertainties in the follow-up development. There are certain management and operation risks in this investment. At the same time, although Shenggan new material, the main technology provider of the joint venture, currently has certain technical advantages, if it cannot continue to maintain its advantages in product technology research and development in the future, The follow-up will affect the sustainable profitability of the joint venture. Based on the existing advantages of Shenggan new material in the field of high-temperature nylon, the company will make use of its management experience and its own advantages to strive to improve the management level and market competitiveness of the joint venture, so as to make the smooth implementation of the investment project.
2. Although Lanfeng new material and Shenggan new material agree that the non monetary property as capital contribution shall be evaluated and valued by an evaluation institution with the qualification of enterprise legal person, they shall go through the transfer procedures of their property rights according to law within 60 days after the verification of the registered capital of the joint venture, and submit relevant certificates to the company registration authority when applying for the establishment registration of the joint venture. However, in the future, there is still a risk that the shareholders’ capital contribution can not be in place on time. The company will continue to pay attention to the progress of this foreign investment and fulfill the obligation of information disclosure in time.
7、 Documents for future reference
1. Resolution of the 8th meeting of the 6th board of directors
2. Cooperation agreement
Jiangsu Lanfeng Bio-Chemical Co.Ltd(002513) board of directors December 31, 2021
