Announcement of the resolution of the sixth meeting of the second Board of Directors of Anhui Tongfeng Electronics Co., LTD

The sixth meeting of the second Board of directors of Anhui Tongfeng Electronics Co., LTDIt was held in the conference hall of Beijing Zhongyuan Hotel on May 28, 2001。The meeting should be attended by 11 directors, 11 directors, senior executives and witness lawyers, in accordance with the relevant provisions of the Company Law of the People's Republic of China and the Articles of Association。The meeting was presided over by Mr. Chen Shengbin, chairman of the company。After careful discussion by the directors present, the following resolutions are reached:

1. Deliberating and passing the proposal on "Introducing the Independent director System";

In order to improve the corporate governance structure, improve the scientific and fair decision-making of the company, and effectively protect the interests of shareholders, the company intends to introduce the independent director system。At that time, the Company will amend the relevant provisions of the Articles of Association and appoint independent directors in accordance with the provisions on independent directors to be issued by the China Securities Regulatory Commission。

2. Deliberating and passing the motion on "Connected Transactions of imported polypropylene Slices";

The company intends to entrust Anhui Tongfeng Electronics (Group) Company import and export branch agent import polypropylene slice, Anhui Tongfeng Electronics (Group) company is the largest shareholder of our company, so the entrusted agent supply transaction behavior is related transactions。In accordance with the related party transaction avoidance voting system, the board membersFive directors of related parties performed a recuse vote on the "imported polypropylene slicing" motion, and the other six directors voted in favor of the "imported polypropylene slicing" motion, the details are shown in the "Related Transaction Announcement" below.。

3. Deliberating and passing the motion on "changing the investment direction of raised funds";

(1) Overview

The company is raising funds195 million yuan original investment project - capacitor polyester film production line technical transformation project is now changed to:

1, multi-functional capacitor film production line technical transformation project;

2, new film capacitor production line technical transformation project。

(2) Introduction to the project to be invested after the change of the raised funds

1, investment in the construction of "Multi-function capacitor film production line technology transformation Project"。

Total project investment171 million yuan (including foreign exchange 11 million US dollars)，The total investment in fixed assets was 141 million yuan，Working capital of 30 million yuan，A new multifunctional capacitor film production line with an annual output of 2700 tons was built，Among them: an annual output of 1000 tons of ultra-thin polypropylene film (3-5 microns) and an annual output of 1700 tons of single and double-sided coarse film (6-15 microns)，The project construction period is 2 years。After the project is put into operation, it will achieve annual sales revenue of 134.28 million yuan and annual new profit of 3,607.8万元。The leading products of this project are mainly to meet the demand for polypropylene coarse film in China's greatly increased power capacitor industry, as well as the urgent requirements for the development of miniaturized and ultra-miniaturized electronic devices for ultra-thin polypropylene film, and the market prospects are considerable。

（1) Ultra-thin polypropylene film

Ultra-thin polypropylene film is the key material for the production of microminiature capacitors, due to the rapid development of the electronics industry and the increasing miniaturization and miniaturization of electronic machine products, capacitors are required to be more miniaturized and miniaturized, and the market demand for film product thickness is gradually transiting to ultra-thin direction。Dominant in the market4μm-8μm polypropylene film products according to market changes，It is also gradually replaced by 3μm-7μm，At present, there is an increase in demand for less than 5μm in the market，In particular, there is a demand for 3μm products，It indicates that the development of film product thickness to ultra-thin type is the main development direction of polypropylene film products in the future。In recent years, China's film capacitor market demand has also shown a strong growth momentum。

With the rapid development of China's electronics industry, electronic machine products will be increasingly miniaturized and miniaturized, the requirements for capacitors are also more miniaturized and miniaturized, and the requirements for ultra-thin polypropylene films will be higher and higher, and the demand is growing。Ultra-thin polypropylene film, domestic manufacturers have not yet mass production, the thickness is less than4μm films are mainly imported。The existing manufacturers can only provide several specifications of film products, because of its equipment and technical reasons, the film grade produced is only equivalent to the low and medium level of foreign countries, so it is urgent to solve the localization of ultra-thin polypropylene film。

（2) Multi-layer composite coarse film

Polypropylene coarse film is the main raw material for manufacturing power capacitors。High quality coarse film plays a key role in the manufacturing level and quality of power capacitors。The development level of full-film power capacitors in China lags behind that of foreign countries10年，One of the important reasons is the raw material of the production of all-film power capacitors - polypropylene coarse film，Domestic production mainly adopts single-layer flat film method or single-layer tubular film method technology，However, the development of all-film power capacitors is restricted in the voltage uniformity and coarsening degree，A large amount of imports are needed every year to meet the market demand。With the rapid development of China's electronics industry, especially the expansion of the scale of China's power grid and the transformation of the existing power grid, the demand for power capacitor energy saving compensation will increase day by day, and the demand for its main raw material polypropylene coarse film will further increase。In order to change the backward status of China's power capacitors as soon as possible, improve the product level, and meet the urgent need for high-quality and high-performance power capacitors in our country, we must first produce high-quality polypropylene coarse-multilayer composite coarse-film。

The project mainly uses multi-layer composite flat film method to produce polypropylene rough film, which essentially solves the problem of uniformity and coarsing degree of pressure resistance. After the project is completed and put into operation, it not only fills the double-sided rough film and ultra-thin film in China.3μm) blank, but also to improve the level of China's BOPP film, close to the international level, which led to the development of China's high voltage full film power capacitor industry。At the same time, it also ensures that our company's film technology is in the leading position at home and abroad, and brings better economic benefits to our company。

The project has been completed in FranceTechnical exchanges, negotiations and preliminary business negotiations between DMT, Bruckner of Germany and Mitsubishi of Japan。

2, new film capacitor production line technical transformation project

The project has been Anhui economic and trade Commission economic and trade investment[2000] Approved by Document 540。The total investment of the project is 32.85 million yuan。After the completion of the project, the annual sales revenue will be 5150.50,000 yuan, a new annual profit of 8.83 million yuan。

See details of the projectShanghai Securities News, December 22, 2000。

The above two projects require a total investment203.85 million yuan, after the change there is a capital gap of 8.85 million yuan, the company will be solved through bank loans。

(3) Reasons for change

Capacitor polyester film production line technical transformation project has not yet invested, our company throughFrom 1999 to 2000, I conducted extensive research on the market, technology and varieties of polyester film and polypropylene film for film capacitors, and on the basis of technical exchanges with foreign manufacturers of polyester film and polypropylene film equipment for film capacitors, the following understandings were formed:

1. The output of an economical polyester film production line for capacitors is at least 1500 tons，Although there is no domestic polyester film manufacturers that can produce capacitors below 6 microns，However, the actual consumption of domestic DC film capacitor polyester film for capacitors in 1999 and 2000 was 856 tons and 986 tons，It is expected that the demand in 2001, 2002 and 2003 will be 1040 tons, 1180 tons and 1320 tons;

2, with the electronic machine towards miniaturization, lightweight, digital, multi-functional and networking process is accelerating，The domestic demand for polypropylene film for capacitors below 3 microns is more urgent，The demand for multilayer composite polypropylene coarse-coated capacitors for power grid energy saving is also increasing，But there are no domestic manufacturers can produce these two products，Import settlement。In 2000, the actual consumption of polypropylene film for capacitors below 3 microns and multi-layer composite polypropylene coarse film was 654 tons and 1237 tons, and the demand for 2003 was expected to be 1050 tons and 1800 tons, and the demand for 2005 was 2000 tons and 3000 tons。And an economy of scale multi-function capacitor film production line output of 2500 tons。

The company considers that: Within three years,The demand for polyester film in the domestic market continues to increase,But still can not reach an economy of scale polyester film production line for capacitors output;The market demand for polypropylene film for capacitors is more urgent than that for polyester film,And achieve economies of scale;And the company's technology for producing polypropylene film for capacitors is also more mature。Based on the above understanding, in order to achieve greater capital efficiency, the company has decided to postpone the implementation of the technical transformation project of the polyester film production line for capacitors until 2002。The company will speed up the implementation of multi-functional capacitor film production line technology transformation projects and new film capacitor production line technology transformation projects, play the relevant economic and social benefits, and will do the corresponding change procedures in accordance with legal procedures。

In addition, the "New film capacitor production line technical transformation project" has been approved by Anhui Economic and Trade Commission economic and trade investment[2000] Document 540 approved。The "Multi-function capacitor film production line technical transformation project" was submitted to the State Economic and Trade Commission by the Ministry of Information Industry Regulation Letter [2001] No. 102 document on April 20, 2001, and is now under final approval。However, due to the preparatory work of the multi-function capacitor film production line technology transformation project is ready, and the market demand is increasingly urgent, the construction of the multi-function capacitor film production line technology transformation project is imminent。

All of the above motions must be submittedThe first extraordinary general meeting of the year 2001 will be reviewed, and the Company will notify you separately about the convening of the general meeting。

Hereby announce

                              Anhui Tongfeng Electronics Co., LTD

                                   28 May 2001