10. Interests in affiliates

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Interests in affiliates

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

The Company is holding 20% equity interests in Zhejiang Tianlan Environmental Protection Technology Co. Ltd. (“Blue Sky”), a company incorporated in the PRC, with total cost of investment US$5,540,000. Blue Sky provides a comprehensive service for design, general contract, equipment manufacturing, installation, testing and operation management of the treatment of waste gases emitted from various boilers and industrial furnaces of power plants, steel works and chemical plants since 2000.

Blue Sky has recently received approval from the National Equities Exchange and Quotations (“NEEQ”) to list its shares on the New Third Board in the People’s Republic of China (“PRC”) on November 17, 2015.

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

	2015			2014
Balance Sheet:	US$’000			US$’000
Current assets		57,432			61,708
Non-current assets		26,587			28,287
Total assets		84,019			89,995
Total liabilities		(58,149	)		(64,572	)
Total shareholders’ equity		25,870			25,423

	2015		2014
Operating results:	US$’000		US$’000
Net sales		66,899		64,131
Operating income		4,260		2,637
Net income		3,458		2,266

The Company is holding 20% equity interests in Zhejiang Jia Huan Electronic Co. Ltd. (“Jia Huan”), a company incorporated in the PRC, with total cost of investment US$2,486,000. Jia Huan provides a comprehensive service for 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:

	2015			2014
Balance Sheet:	US$’000			US$’000
Current assets		22,693			21,264
Non-current assets		4,717			5,288
Total assets		27,410			26,552
Total liabilities		(13,627	)		(12,675	)
Total shareholders’ equity		13,783			13,877

	2015		2014
Operating results:	US$’000		US$’000
Net sales		18,481		16,162
Operating income		1,316		1,024
Net income		788		762