Jingwei Textile Machinery Limited By Share Ltd Continued Related Paction Announcement

Stock Code: 000666 securities short: Jingwei Textile Machinery announcement number: 2010-36

All members of the company and the board of directors guarantee the authenticity, accuracy and completeness of the announcement, and assume responsibility for any false record, misleading statement or major omission in the notice.

First,

Jingwei Textile Machinery Limited by Share Ltd (hereinafter referred to as "our company")

In December 21, 2007, the company signed a "comprehensive service contract" with the China spinning machinery group to regulate pactions between the two sides in providing products and services in their daily operations, including: (I) providing products, processing or technical services (including the supply of spare parts and provision of maintenance services) (II) to provide public and social services; and (III) leasing production equipment / housing.

The service contract will expire in December 31, 2010.

In order to ensure the smooth operation of our company's production and operation, in September 20, 2010, the company signed a new comprehensive service contract with the China spinning machinery group. The term of the contract is three years, and it will take effect from January 1, 2011 to December 31, 2013 after approval by the relevant shareholders' meeting.

In view of the controlling shareholder of the Sino spinning machinery group and the related party of the company, the above matters constitute related pactions according to the Listing Rules of the Shenzhen stock exchange and the Listing Rules of The Stock Exchange of HongKong Limited, which must be approved by the general meeting of shareholders, while the China Textile Machinery group shall abandon its voting right at the shareholders' meeting.

Two, the basic situation of related parties

China Textile Machinery Group is the largest shareholder of the company, holding 33.83% of the total share capital of the company.

China Textile Machinery Group was founded in December 28, 1983, the enterprise type is a limited liability company, its registered capital is 2 billion 735 million 820 thousand yuan, the residence is 99, Jianguo Road, Chaoyang District, Beijing, the legal representative is Zhang Jie, and the business scope of China spinning machinery group is to organize the development, manufacture, sale and sale of textile machinery and equipment, spare parts and so on.

The actual control of China spinning machinery group is China Hi-Tech Group Corporation (its 87.57% stake in China Textile Machinery Group).

Three, the basic situation of related party pactions

According to the new comprehensive service contract, the products and services provided by our company and China spinning machinery group include: (I) providing products, processing or technical services (including supply of spare parts and provision of maintenance services) (II) to provide public and social services; and (III) leasing of production equipment / housing.

For the three years ended December 31, 2013, the expected annual ceiling for all types of continuous related pactions is as follows:

Unit: RMB yuan.

Year ended December 31st

2011, 2012, 2013

The services provided by the company to the China Textile Machinery Group 1416453551 1615293551 1782699543

(I) providing products, processing or technical services (including supply parts)

1299962051 1497922051 1664662043

And provide maintenance services)

(II) provision of public and social services 110915500111783500 112379500

(III) rental of production equipment / housing 55760005588000 5658000

B. Textile Machinery Group's services to the company 746180643783329208 857766717

(I) providing products, processing or technical services (including supply parts)

721736640758422347 832362714

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And provide maintenance services)

(II) provision of public and social services 2310200323864861 24062003

(III) rental of production equipment / housing 13420001342000 1342000

The above annual cap is based on the following criteria:

(a) historical paction records based on existing integrated service contracts in the past three years;

(b) expected growth of class A pactions over the next three years;

(c) the price of raw materials, spare parts and labor for manufacturing textile machinery is expected to rise.

(d) according to our company's long-term development strategy, we expect the company's business growth in the next three years.

Four, pricing policy and pricing basis for continuous related party pactions.

In accordance with the new comprehensive service contract, all continuous related pactions will be carried out on a fair basis, and the price payable or payable to the company will be determined on the basis of the following principles:

(1) if the prices of the related services are subject to state price control, the price of the country shall prevail.

(2) if there is no applicable national price, the lower the market price or the actual cost (the growth rate is not higher than the increase in the price index of the relevant area in the last year).

Five. Main contents of integrated service contract

1. Prerequisites for the entry into force of services.

(1) the resolution of the general service contract adopted by the provisional shareholders meeting of the company in the form of ordinary resolutions;

(2) (if required), the comprehensive service contract is approved by the SFC, the Shenzhen Stock Exchange and / or the stock exchange and / or exempt from applicable rules (including chapter 14A of the Listing Rules of The Stock Exchange of HongKong Limited).

2. Payment of service charges

Service charges can be paid at once or in installments.

The payment time shall be executed by the parties in accordance with the contract schedules.

The two parties may also negotiate separately with reference to the nature of the service and general business practices.

3. On the premise that the total amount of pactions does not exceed the relevant annual ceiling approved by the shareholders' meeting, the amount of service charges provided by the spinning machinery group or the individual members of the company to the other party members can be adjusted from time to time by the relevant companies according to the actual situation.

Six, the purpose of continuing related pactions and its impact on the company.

Our company is mainly engaged in the manufacture and sale of textile machinery.

China Textile Machinery Group is mainly engaged in organizing the development, manufacture and sale of textile machinery and equipment, spare parts and so on.

Based on the strong supporting capability of the spinning machine group and the long history of cooperation between the company and the China spinning machinery group, continuous related party pactions will facilitate the smooth operation of the cost company's business.

Therefore, the Board considers that the terms of the comprehensive service contract are fair and reasonable, and is in line with the interests of the company and its shareholders.

Seven. Views of independent non-executive directors

The 3 independent non-executive directors of the company, Mr. Xu Wenying, Mr. Liu Yesong and MS. An Guojun, have made independent comments on this paction. The independent non-executive directors have received the relevant information of the comprehensive service contract from January 1, 2011 to December 31, 2013 in advance, and have carefully examined and asked the senior management of the company on relevant issues.

In my opinion, the continuous related paction under the comprehensive service contract is carried out by the company for normal business needs and operated according to the principle of marketization. The terms of the comprehensive service contract adopted fair prices and conditions, in line with the principle of fairness and impartiality, and signed and executed the comprehensive service contract, which is in line with the interests of all shareholders of the company.

Therefore, I agree to submit this matter to the board of directors for consideration.

The independent non-executive director attended the relevant board meeting and held that the paction had been held in accordance with the law eight and the relevant shareholders' meeting was deliberated.

According to the Listing Rules of the Shenzhen stock exchange and the Listing Rules of The Stock Exchange of HongKong Limited, the continuous related pactions under the comprehensive service contract are subject to the approval of independent shareholders.

Therefore, the China Textile Machinery Group and those interested in continuing related pactions must give up voting rights at this shareholders' meeting.

The relevant shareholders' meeting will inform the company that it will be issued separately.

Nine. Reference documents:

1. resolution of the third session of the sixth session of the board of directors;

2. independent directors' opinions;

3. comprehensive service contract.

Notice hereby

Jingwei Textile Machinery Limited by Share Ltd

Board of directors

September 21, 2010