Interests in affiliates

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Interests in affiliates

Investments in affiliates are accounted for using the equity method of accounting.

The Group acquired 20% equity interests in Zhejiang Tianlan Environmental Protection Technology Co. Ltd, (“Tianlan”), a company incorporated in the PRC for a total consideration of US$4,648,000 in 2007. In 2010, Tianlan increased its share capital and the Group further invested US$262,000 in order to maintain the share holding of 20% in Tianlan. In 2011, Tianlan increased its share capital and the Group further invested US$435,000 in order to maintain the share holding of 20% in Tianlan.

A summary of the financial information of the affiliate, Zhejiang Tianlan Environmental Protection Technology Co. Ltd, is set forth below:

	2011			2010
Balance Sheet:	US$’000			US$’000
Current assets		50,668			22,540
Non-current assets		10,322			9,339
Total assets		60,990			31,879
Total liabilities		(34,868	)		(13,599	)
Total shareholders’ equity		26,122			18,280

	2011		2010
Operating results:	US$’000		US$’000
Net sales		45,966		24,567
Operating profits		6,899		3,395
Net profits		6,407		3,496

The Group acquired 20% of the equity interests in Zhejiang Jia Huan Electronic Co. Ltd., (“Jia Huan”), a company incorporated in the PRC, for approximately US$2,610,000 in 2008. Jia Huan has been in the environmental protection business since 1969 and is based in Jin Hua, Zhejiang.

A summary of the financial information of the affiliate, Zhejiang Jia Huan Electronic Co. Ltd, is set forth below:

	2011			2010
Balance Sheet:	US$’000			US$’000
Current assets		16,645			16,148
Non-current assets		5,402			5,047
Total assets		22,047			21,195
Total liabilities		(9,295	)		(8,252	)
Total shareholders’ equity		12,752			12,943

	2011			2010
Operating results:	US$’000			US$’000
Net sales		8,151			12,410
Operating (losses)/profits		(903	)		118
Net (losses)/profits		(749	)		121