- Zhongrui Yuehua Certified Public Accountants Co., Ltd.
Phone: +86(10)88091188
Address: 8-9/F Block A Corporation Bldg. No. 35 Finance Street, Xicheng District, Beijing, PRC
Post Code: 100032
Fax: +86(10)88091199
Audit Report No. Zhongrui Yuehua Audit [2009] No. 04803
To all shareholders of Panzhihua Steel Group Chongqing Titanium Industry Co., Ltd.:
We have audited the financial statements of Panzhihua Steel Group Chongqing Titanium Industry Co., Ltd. (hereinafter referred to as "Chongqing Titanium") attached herewith, including the balance sheet and consolidated balance sheet as of December 31, 2008, the income statement and consolidated income statement for the year 2008, the statement of changes in shareholders' equity and consolidated statement of changes in shareholders' equity, the cash flow statement and consolidated cash flow statement, as well as the notes to the financial statements.
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Management's Responsibility for the Financial Statements
The management of Chongqing Titanium is responsible for the preparation of the financial statements in accordance with the provisions of the Enterprise Accounting Standards. This responsibility includes: (1) designing, implementing, and maintaining internal controls related to the preparation of financial statements to ensure that the financial statements are free from material misstatement due to fraud or error; (2) selecting and applying appropriate accounting policies; (3) making reasonable accounting estimates. -
Auditor's Responsibility
Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with Chinese auditing standards. Chinese auditing standards require us to comply with ethical requirements, plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. The audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements due to fraud or error. In making those risk assessments, we considered internal controls relevant to the entity's preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. The audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. -
Audit Opinion
In our opinion, the financial statements of Chongqing Titanium have been prepared in accordance with the provisions of the Enterprise Accounting Standards and fairly present, in all material respects, the financial position of Chongqing Titanium as of December 31, 2008, and the results of its operations and cash flows for the year 2008.
Zhongrui Yuehua Certified Public Accountants Co., Ltd.
Certified Public Accountant: Kuang Xiaochang
Beijing, China
Certified Public Accountant: Zhang Junshu
April 26, 2009
Notes to the Financial Statements of Panzhihua Steel Group Chongqing Titanium Industry Co., Ltd. for the Year 2008 (All amounts are in Renminbi Yuan unless otherwise stated)