10:25     JINGWEI TEXTILE<00350> - Announcement (2)                           

    was provided by the Company to the Bank on a joint and several            
    basis with Hualian Building Company. The Guarantee Agreement              
    is in securing the Loan together with all the related interests,          
    penalties, damages and the Bank's expenses incurred in relation           
    to the enforcement of the Loan Agreement and the Guarantee                
    Agreement. The Guarantee Agreement is for a term of two years             
    from the due date for Hualian Building Company to perform its             
    repayment obligations under the Loan Agreement.                           
                                                                              
    As agreed between the Company and Hualian Building Company, the           
    Company would receive an income of RMB1,000,000 (being 0.5% of            
    the total principal amount of the Loan) from Hualian Building             
    Company for the provision of the Guarantee.                               
                                                                              
    The Guarantee was counter-indemnified by the Counter Indemnity            
    Letter provided by Hualian Investment Company, a substantial              
    shareholder of Hualian Building Company, in favour of the Company.        
    Pursuant to the terms of the Counter Indemnity Letter, if Hualian         
    Building Company defaults under the Loan Agreement and the                
    Company performs its obligation pursuant to the Guarantee                 
    Agreement, Hualian Investment Company has undertaken to                   
    indemnify the Company the same amount within three days after             
    the date of the receipt of the demand note issued by the Company.         
                                                                              
    As at the date of this announcement, the outstanding balance              
    of the Loan was RMB200 million.                                           
                                                                              
    DISCLOSEABLE TRANSACTION AND DISCLOSURE PURSUANT TO RULE 13.13            
    OF THE LISTING RULES                                                      
                                                                              
    The principal amount of the Loan under the Guarantee represented          
    approximately 10.6% of the Market Capitalisation as at 24 March           
    2005. As a result, the provision of the Guarantee by the Company          
    constitutes a discloseable transaction under Chapter 14 of the            
    Listing Rules and is also subject to the disclosure requirement           
    under Rule 13.13 of the Listing Rules.                                    
                                                                              
    The Company will fulfill the continuing disclosure obligation             
    under Rules 13.14 and 13.20 of the Listing Rules so long as               
    circumstances giving rise to such disclosure obligation continue          
    to exist.                                                                 
                                                                              
    REASONS FOR THE ENTERING INTO THE GUARANTEE AGREEMENT                     
                                                                              
    To the Directors' best knowledge and understanding, it is a               
    common practice for some of the banks in the PRC to request a             
    third party's guarantee when granting banking facilities to an            
    entity. Such banks normally would not accept any guarantee                
    provided by related parties to the borrower. As (i) banking               
    facilities and bank loans are one of the Group's major financial          
    resources which may require third party guarantee as security;            
    (ii) Hualian Building Company has undertaken to the Company that          
    in future as and when the Company requests, Hualian Building              
    Company will or will procure other parties to provide guarantee           
    in the same amount of the Loan for the Company to the relevant            
    banks; and (iii) the Company will receive an income of                    
    RMB1,000,000 for the provision of the Guarantee, the Directors            
    consider that the entering into the Guarantee Agreement was in            
    the commercial interest of the Company, which provided more               
    convenience and flexibility for the Group's financial resources           
    and the Guarantee Agreement was entered into on normal commercial         
    terms and the terms thereof are fair and reasonable so far as             
    the Company and the shareholders of the Company as a whole are            
    concerned.                                                                
                                                                              
    The entering into the Guarantee Agreement will not have any               
    immediate effects on the earning and assets and liabilities of            
    the Group. However, the Company will be