Common use of REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Clause in Contracts

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. To the Board of Directors and Shareholders of IDEX Corporation We have audited the consolidated financial statements of IDEX Corporation and its Subsidiaries (the Company) as of December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004, management's assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2004, and the effectiveness of the Company's internal control over financial reporting as of December 31, 2004, and have issued our reports thereon dated February 14, 2005; such consolidated financial statements and reports are included in your 2004 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the financial statement schedule of IDEX Corporation, listed in Item 15. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein. DELOITTE & TOUCHE LLP Chicago, Illinois February 14, 2005 IDEX CORPORATION AND SUBSIDIARIES SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002 DESCRIPTION BALANCE BEGINNING OF YEAR CHARGED TO COSTS AND EXPENSES(1) DEDUCTIONS(2) OTHER(3) BALANCE END OF YEAR ----------- --------- ----------- ------------- (IN THOUSANDS) -------- ------- Allowance for Doubtful Accounts Year Ended December 31, 2004: Deducted from assets to which they apply: Allowance for Doubtful Accounts.... $3,794 $ 987 $906 $385 $4,260 Year Ended December 31, 2003: Deducted from assets to which they apply: Allowance for Doubtful Accounts.... 3,089 1,150 565 120 3,794 Year Ended December 31, 2002: Deducted from assets to which they apply: Allowance for Doubtful Accounts.... 3,375 75 533 172 3,089 ---------------

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. To the Board of Directors and Shareholders of IDEX FFD Financial Corporation We have audited the accompanying consolidated financial statements of IDEX financial condition of FFD Financial Corporation and its Subsidiaries (the Company) as of December 31June 30, 2004 and 2003 2003, and the related consolidated statements of earnings, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended December 31June 30, 2004, management's assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2004, and the effectiveness of the Company's internal control over financial reporting as of December 31, 2004, and have issued our reports thereon dated February 14, 2005; such . These consolidated financial statements and reports are included in your 2004 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the financial statement schedule of IDEX Corporation, listed in Item 15. This financial statement schedule is the responsibility of the CompanyCorporation's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a wholereferred to above present fairly, presents fairly in all material respects respects, the information set forth thereinfinancial position of FFD Financial Corporation as of June 30, 2004 and 2003, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2004, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE /s/ Grant Thornton LLP ChicagoCinxxxxxxx, Illinois February 14Xxxx September 3, 2005 IDEX 2004 FFD FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION June 30, 2004 and 2003 (In thousands, except share data) ASSETS 2004 2003 Cash and due from banks $ 1,999 $ 1,845 Interest-bearing deposits in other financial institutions 8,821 10,398 --------- --------- Cash and cash equivalents 10,820 12,243 Investment securities designated as available for sale - at market 4,402 1,502 Mortgage-backed securities designated as available for sale - at market 630 832 Mortgage-backed securities held to maturity - at amortized cost, approximate market value of $411 and $687 as of June 30, 2004 and 2003, respectively 395 651 Loans receivable - net 114,288 114,199 Loans held for sale - at lower of cost or market 217 1,767 Real estate acquired through foreclosure -- 161 Office premises and equipment - at depreciated cost 2,028 2,134 Stock in Federal Home Loan Bank - at cost 2,047 1,967 Accrued interest receivable 381 386 Prepaid expenses and other assets 275 244 Prepaid federal income taxes 409 322 --------- --------- Total assets $ 135,892 $ 136,408 ========= ========= LIABILITIES AND SUBSIDIARIES SCHEDULE II SHAREHOLDERS' EQUITY Deposits $ 105,446 $ 104,351 Advances from the Federal Home Loan Bank 12,669 13,891 Accrued interest payable 97 96 Other liabilities 719 935 Deferred federal income taxes 223 217 --------- --------- Total liabilities 119,154 119,490 Commitments -- VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31-- Shareholders' equity Preferred stock - authorized 1,000,000 shares without par value; no shares issued -- -- Common stock - authorized 5,000,000 shares without par or stated value; 1,454,750 shares issued -- -- Additional paid-in capital 7,910 7,889 Retained earnings - restricted 12,385 12,202 Accumulated comprehensive income (loss); unrealized gains (losses) on securities designated as available for sale, net of related tax effects (66) 8 Shares acquired by stock benefit plans (444) (559) Less 266,757 and 241,753 treasury shares at June 30, 2004 and 2003, respectively - at cost (3,047) (2,622) --------- --------- Total shareholders' equity 16,738 16,918 --------- --------- Total liabilities and shareholders' equity $ 135,892 $ 136,408 ========= ========= The accompanying notes are an integral part of these statements. FFD FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS Year ended June 30, 2004, 2003 AND and 2002 DESCRIPTION BALANCE BEGINNING (In thousands, except per share data) 2004 2003 2002 Interest income Loans $ 6,043 $6,373 $ 7,406 Mortgage-backed securities 58 99 388 Investment securities 132 109 14 Interest-bearing deposits and other 127 177 197 ------- ------ ------- Total interest income 6,360 6,758 8,005 Interest expense Deposits 1,899 2,382 3,118 Borrowings 588 584 775 ------- ------ ------- Total interest expense 2,487 2,966 3,893 ------- ------ ------- Net interest income 3,873 3,792 4,112 Provision for losses on loans 25 131 150 ------- ------ ------- Net interest income after provision for losses on loans 3,848 3,661 3,962 Other income Gain on sale of loans 354 908 220 Loss on sale of real estate acquired through foreclosure (7) -- -- Gain on sale of mortgage-backed securities designated as available for sale -- -- 67 Other operating 269 130 249 ------- ------ ------- Total other income 616 1,038 536 General, administrative and other expense Employee compensation and benefits 1,537 1,252 1,249 Occupancy and equipment 391 387 285 Franchise taxes 210 191 150 Data processing 285 269 320 Other operating 1,000 1,034 808 ------- ------ ------- Total general, administrative and other expense 3,423 3,133 2,812 ------- ------ ------- Earnings before income taxes 1,041 1,566 1,686 Federal income taxes Current 311 520 598 Deferred 43 14 (25) ------- ------ ------- Total federal income taxes 354 534 573 ------- ------ ------- NET EARNINGS $ 687 $1,032 $ 1,113 ======= ====== ======= EARNINGS PER SHARE Basic $ .59 $ .88 $ .94 ======= ====== ======= Diluted $ .58 $ .86 $ .92 ======= ====== ======= The accompanying notes are an integral part of these statements. FFD FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF YEAR CHARGED TO COSTS AND EXPENSES(1COMPREHENSIVE INCOME Year ended June 30, 2004, 2003 and 2002 (In thousands) DEDUCTIONS(22004 2003 2002 Net earnings $ 687 $ 1,032 $ 1,113 Other comprehensive income (loss), net of tax: Unrealized holding gains (losses) OTHER(3on securities during the period, net of taxes (benefits) BALANCE END of $(38), $(5) and $4 in 2004, 2003 and 2002, respectively (74) (11) 8 Reclassification adjustment for realized gains included in earnings, net of taxes of $23 in 2002 -- -- (44) ----- ------- ------- Comprehensive income $ 613 $ 1,021 $ 1,077 ===== ======= ======= Accumulated comprehensive income (loss) $ (66) $ 8 $ 19 ===== ======= ======= The accompanying notes are an integral part of these statements. FFD FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF YEAR ----------- --------- ----------- ------------- SHAREHOLDERS' EQUITY For the years ended June 30, 2004, 2003 and 2002 (IN THOUSANDSIn thousands, except per share data) Unrealized gains (losses) Shares on securities acquired by Additional designated stock Treasury Common paid-in Retained as available benefit shares- stock capital earnings for sale plans at cost Total Balance at July 1, 2001 $ -- $ 7,861 $ 10,962 $ 55 $ (852) $ (1,422) $ 16,604 Net earnings for the year ended June 30, 2002 -- -- 1,113 -- -- -- 1,113 Purchase of treasury shares -- -- -- -- -- (936) (936) Amortization expense of stock benefit plans -- 16 -- -- 175 -- 191 Unrealized losses on securities designated as available for sale, net of related tax effects -- -- -- (36) -- -- (36) Exercise of stock options -- (16) -- -- -- 67 51 Dividends of $.375 per share -- -- (446) -- -- -- (446) -------- ------- Allowance -------- -------- ------ -------- -------- -------- Balance at June 30, 2002 -- 7,861 11,629 19 (677) (2,291) 16,541 Net earnings for Doubtful Accounts the year ended June 30, 2003 -- -- 1,032 -- -- -- 1,032 Purchase of treasury shares -- -- -- -- -- (380) (380) Amortization expense of stock benefit plans -- 39 -- -- 118 -- 157 Unrealized losses on securities designated as available for sale, net of related tax effects -- -- -- (11) -- -- (11) Exercise of stock options -- (11) -- -- -- 49 38 Dividends of $.395 per share -- -- (459) -- -- -- (459) -------- -------- -------- ------ -------- -------- -------- Balance at June 30, 2003 -- 7,889 12,202 8 (559) (2,622) 16,918 Net earnings for the year ended June 30, 2004 -- -- 687 -- -- -- 687 Purchase of treasury shares -- -- -- -- (769) (769) Amortization expense of stock benefit plans -- 51 -- -- 115 -- 166 Unrealized losses on securities designated as available for sale, net of related tax effects -- -- -- (74) -- -- (74) Exercise of stock options -- (30) -- -- -- 344 314 Dividends of $.415 per share -- -- (504) -- -- -- (504) -------- -------- -------- ------ -------- -------- -------- Balance at June 30, 2004 $ -- $ 7,910 $ 12,385 $ (66) $ (444) $ (3,047) $ 16,738 ======== ======== ======== ====== ======== ======== ======== FFD FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31ended June 30, 2004: Deducted from assets to which they apply: Allowance for Doubtful Accounts.... $3,794 $ 987 $906 $385 $4,260 Year Ended December 31, 2003: Deducted from assets to which they apply: Allowance for Doubtful Accounts.... 3,089 1,150 565 120 3,794 Year Ended December 31, 2002: Deducted from assets to which they apply: Allowance for Doubtful Accounts.... 3,375 75 533 172 3,089 ---------------2003 and 2002 (In thousands)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. To the Board of Directors and Shareholders of IDEX New Harvest Capital Corporation We have audited the consolidated accompanying statements of operations, shareholders' equity and cash flows for the year ended April 30, 2004. These financial statements of IDEX Corporation and its Subsidiaries (the Company) as of December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004, management's assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2004, and the effectiveness of the Company's internal control over financial reporting as of December 31, 2004, and have issued our reports thereon dated February 14, 2005; such consolidated financial statements and reports are included in your 2004 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the financial statement schedule of IDEX Corporation, listed in Item 15. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our auditsaudit. We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a wholereferred to above present fairly, presents fairly in all material respects respects, the information set forth thereinresults of operations and cash flows of New Harvest Capital Corporation for the year ended April 30, 2004 in conformity with United States generally accepted accounting principles. DELOITTE & TOUCHE /s/ GXXXXXXXX GXXXX KXXXXXX LLP ChicagoGXXXXXXXX GXXXX KXXXXXX LLP New York, Illinois February 14New York August 6, 2004 NEW HARVEST CAPITAL CORPORATION BALANCE SHEET April 30, 2005 IDEX ASSETS Current Assets Cash and Cash Equivalents $ 139,556 TOTAL ASSETS $ 139,556 LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable and Accrued Expenses $ 1,800 Total Current Liabilities 1,800 Stockholders' Equity Preferred Stock - $.0001 par value, 5,000,000 shares authorized; no shares issued and outstanding - Common Stock - $.0001 par value, 300,000,000 shares authorized; shares issued and outstanding 136,959,999 13,696 Additional Paid in Capital 592,984 Accumulated Deficit (468,924 ) Total Stockholders' Equity 137,756 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 139,556 The accompanying notes are an integral part of the financial statements. NEW HARVEST CAPITAL CORPORATION AND SUBSIDIARIES SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31STATEMENTS OF OPERATIONS For the Years Ended April 30, 20042005 and 2004 2005 2004 (Audited) (Audited) Revenues Interest $ 798 $ 746 Operating Expenses General & Administrative Expenses 9,470 38,664 Total Operating Expenses 9,470 38,664 Net Income (Loss) $ (8,672 ) $ (37,918 ) Net loss per weighted average number of Common Shares $ - $ - Weighted average number of Common Shares outstanding 130,659,999 128,559,999 The accompanying notes are an integral part of the financial statements. NEW HARVEST CAPITAL CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY For the years ended April 30, 2005 and 2004 Preferred Preferred Common Common Additional Accumulated Shares Stock Shares Stock Paid-In Capital Deficit Balance at May 1, 2003 AND 2002 DESCRIPTION BALANCE BEGINNING - $ - 128,559,999 $ 12,856 $ 574,324 $ (422,334 ) Net Loss for the Year (37,918 ) Balance at April 30, 2004 - - 128,559,999 12,856 574,324 (460,252 ) Issuance of Common Stock for Services 8,400,000 840 18,660 Net Loss for the Year (8,672 ) Balance at April 30, 2005 - $ - 136,959,999 $ 13,696 $ 592,984 $ (468,924 ) The accompanying notes are an integral part of the financial statements. NEW HARVEST CAPITAL CORPORATION STATEMENT OF YEAR CHARGED CASH FLOWS For the Years Ended April 30, 2005 and 2004 (Audited) (Audited) CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ (8,672 ) $ (37,918 ) Adjustments to Reconcile Net Loss to Net Cash Used for Operating Activities: Increase (Decrease) in Accounts Payable & Accruals (1,200 ) 16,285 Net Cash Used for Operations (9,872 ) (21,633 ) Net Decrease in Cash (9,872 ) (21,633 ) Cash at Beginning of Year 149,428 171,061 Cash at End of Year $ 139,556 $ 149,428 SCHEDULE OF NONCASH ACTIVITIES: Common Stock Issued for Services $ 19,500 The accompanying notes are an integral part of the financial statements. NEW HARVEST CAPITAL CORPORATION NOTES TO COSTS AND EXPENSES(1) DEDUCTIONS(2) OTHER(3) BALANCE END FINANCIAL STATEMENTS April 30, 2005 and 2004 NOTE 1 SUMMARY OF YEAR ----------- --------- ----------- ------------- SIGNIFICANT ACCOUNTING POLICIES Organization New Harvest Capital Corporation was organized under the laws of the state of Delaware on August 29, 1985. The Company is currently engaged in the activity of searching for and investigating business opportunities (IN THOUSANDS) -------- ------- Allowance for Doubtful Accounts Year Ended December 31, 2004: Deducted from assets to which they apply: Allowance for Doubtful Accounts.... $3,794 $ 987 $906 $385 $4,260 Year Ended December 31, 2003: Deducted from assets to which they apply: Allowance for Doubtful Accounts.... 3,089 1,150 565 120 3,794 Year Ended December 31, 2002: Deducted from assets to which they apply: Allowance for Doubtful Accounts.... 3,375 75 533 172 3,089 ---------------see Note 2-Subsequent Events).

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. To the Board of Directors and Shareholders of IDEX Corporation Stockholders Taiyuan Rongan Business Trading Limited Company We have audited the accompanying consolidated financial statements balance sheet of IDEX Corporation Taiyuan Rongan Business Trading Limited Company and its Subsidiaries (the Company) subsidiaries as of December 31, 2004 2005 and 2003 the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2005 and 2004, management's assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2004, and the effectiveness of the Company's internal control over financial reporting as of December 31, 2004, and have issued our reports thereon dated February 14, 2005; such . These consolidated financial statements and reports are included in your 2004 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the financial statement schedule of IDEX Corporation, listed in Item 15. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our auditsaudit. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a wholereferred to above present fairly, presents fairly in all material respects respects, the information set forth therein. DELOITTE & TOUCHE LLP Chicagoconsolidated financial position of Taiyuan Rongan Business Trading Limited Company and subsidiaries as of December 31, Illinois February 142005, and the results of its consolidated operations and its cash flows for the years ended December 31, 2005 IDEX CORPORATION and 2004 in conformity with accounting principles generally accepted in the United States of America. KABANI & COMPANY, INC. CERTIFIED PUBLIC ACCOUNTANTS Los Angeles, California October 20, 2006 TAIYUAN RONGAN BUSINESS TRADING LIMITED COMPANY CONSOLIDATED BALANCE SHEET DECEMBER 31, 2005 ASSETS CURRENT ASSETS Cash & cash equivalents $ 2,785,558 Other receivable, net 16,591 Advances to suppliers 32,260 Loan to employees, net 576,871 Loan to related parties, net 636,546 Loan to others, net 5,223,981 Prepaid expenses 87,908 Total current assets 9,359,715 PROPERTY AND SUBSIDIARIES SCHEDULE II -- VALUATION EQUIPMENT, NET 43,178,610 CONSTRUCTION IN PROGRESS 24,783 LONG TERM INVESTMENT 5,383 INTANGIBLE ASSETS, NET 9,681,120 TOTAL ASSETS $ 62,249,610 LIABILITIES AND QUALIFYING ACCOUNTS STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 5,993,738 Tax payable 4,390,621 Customer deposit 1,557,337 Other payable 1,687,695 Accrued expenses 577,495 Loan from bank 2,396,230 Loan from employee 2,745,148 Loan from others 2,474,507 Loan from related parties 1,226,405 Deferred income - current 7,127,327 Total current liabilities 30,176,502 DEFERRED INCOME - NON CURRENT 18,069,750 Total liabilities 48,246,253 STOCKHOLDERS' EQUITY Stockholders' capital 2,080,979 Minority interest 3,230,641 Retained earnings 8,399,025 Translation gain 292,712 Total stockholders' equity 14,003,357 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 62,249,610 The accompanying notes are an integral part of these consolidated financial statements. TAIYUAN RONGAN BUSINESS TRADING LIMITED COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 20042005 AND DECEMBER 31, 2003 AND 2002 DESCRIPTION BALANCE BEGINNING OF YEAR CHARGED TO COSTS AND EXPENSES(1) DEDUCTIONS(2) OTHER(3) BALANCE END OF YEAR ----------- --------- ----------- ------------- (IN THOUSANDS) -------- ------- Allowance for Doubtful Accounts Year Ended 2004 December 31, 2004: Deducted from assets to which they apply: Allowance for Doubtful Accounts.... $3,794 $ 987 $906 $385 $4,260 Year Ended December 31, 2003: Deducted from assets to which they apply: Allowance for Doubtful Accounts.... 3,089 1,150 565 120 3,794 Year Ended 2005 2004 RENTAL REVENUE $ 7,943,921 $ 7,236,578 OTHER REVENUE 5,204,950 4,582,523 Total net revenue 13,148,871 11,819,101 OPERATING EXPENSES (INCOME) General and administrative expenses 7,098,416 2,547,258 Financial expenses (income) (650,351) 3,534,764 Total operating expenses 6,448,065 6,082,022 INCOME FROM OPERATIONS 6,700,806 5,737,079 NON-OPERATING INCOME (EXPENSES) Interest income 295,532 456,639 Other expenses (185,056) (657,933) Interest expense (697,173) (1,283,132) Total non-operating expenses (586,696) (1,484,426) NET INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS 6,114,109 4,252,653 PROVISION FOR INCOME TAXES (1,824,482) (1,283,132) INCOME BEFORE MINORITY INTERESTS 4,289,627 2,969,521 MINORITY INTEREST (1,025,221) - NET INCOME 3,264,406 2,969,521 OTHER COMPREHENSIVE INCOME Foreign currency translation adjustment 292,712 - COMPREHENSIVE INCOME $ 3,557,118 $ 2,969,521 The accompanying notes are an integral part of these consolidated financial statements. TAIYUAN RONGAN BUSINESS TRADING LIMITED COMPANY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004 Common Stock Total Number of Additional Translation Minority Interest Retained stockholders' shares Amount Paid in Capital Gain Earnings equity Balance at December 31, 20022002 - $ - $ - $ - $ - $ 1,237,056 $ 1,237,056 Additional Paid in Capital - - 1,210,000 - - - 1,210,000 Net income for the year ended December 31, 2003 - - - - - 2,540,623 2,540,623 Balance at December 31, 2003 - - 1,210,000 - - 3,777,679 4,987,679 Additional Paid in Capital - - 1,270,500 - - - 1,270,500 Net income for the year ended December 31, 2004 - - - - - 2,969,521 2,969,521 Balance at December 31, 2004 - - 2,480,500 - - 6,747,200 9,227,700 Additional Paid in Capital - - 193,318 - - - 193,318 Net income for the year ended December 31, 2005 - - - - - 4,289,627 4,289,627 Translation Gain - - - 292,712 - - 292,712 Reclassification and adjustments to minority interest - - (592,840) - 3,230,641 (2,637,802) - Balance at December 31, 2005 - $ - $ 2,080,979 $ 292,712 $ 3,230,641 $ 8,399,025 $ 14,003,357 The accompanying notes are an integral part of these consolidated financial statements. TAIYUAN RONGAN BUSINESS TRADING LIMITED COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004 2005 2004 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 3,264,406 $ 2,969,521 Adjustments to reconcile net income to net cash provided by operating activities: Deducted Depreciation and amortization 1,243,739 770,973 Minority interest 1,025,221 - Bad debt expense (income) (622,933) 3,534,764 Decrease in current assets: Other receivable (138,721) (12,218) Advances to suppliers (31,774) - Prepaid expenses (86,583) - Long term investment (5,302) - Interest receivable on loans 819,500 (456,639) Increase (decrease) in liabilities: Accounts payable 142,458 4,743,754 Tax payable 1,916,861 Deposit from customer 571,845 1,305,737 Accrued Expenses (365,983) 688,435 Deferred income (6,173,606) (6,435,161) Net cash provided by operating activities 1,559,129 7,109,166 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets (24,409) (11,433,121) Proceeds from disposal of fixed assets 3,906,521 - Acquisition of intangible assets - (239,580) Loans receivable from others (2,179,394) (1,587,841) Loans receivable from related parties (1,459,489) (1,581,184) Payments to which they apply: Allowance for Doubtful Accounts.... 3,375 75 533 172 3,089 ---------------(proceeds from) loans receivable from employees (364,566) 1,123,783 Net cash used in investing activities (121,337) (13,717,943) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from loans from bank 1,993,988 - Proceeds from loans from others 865,369 439,133 Proceeds from (payments to) loans from employees (543,439) 2,003,346 Proceeds from (payments to) related parties (2,185,452) 2,995,875 Capital contribution 195,274 1,270,500 Net cash provided by financing activities 325,738 6,708,854 EFFECT OF EXCHANGE RATE CHANGE ON CASH AND CASH EQUIVALENTS 46,739 - NET INCREASE IN CASH & CASH EQUIVALENTS 1,810,269 100,077 CASH & CASH EQUIVALENTS, BEGINNING BALANCE 975,289 875,212 CASH & CASH EQUIVALENTS, ENDING BALANCE $ 2,785,558 $ 975,289 The accompanying notes are an integral part of these consolidated financial statements. TAIYUAN RONGAN BUSINESS TRADING LIMITED COMPANY NOTES TO FINANCIAL STATEMENTS