In compliance with relevant requirements of the Harbin Intermediate People's Court, on 15 Aug 2008, the China Securities Depository and Clearing Corporation, Shanghai branch, assisted the company in adjusting its investors’ equity triggered by a bankruptcy reorganization procedure, following which the company's total outstanding shares will decrease to 274,335,027.

In addition, according to an agreement signed by the company, its liquidation working group and Heilongjiang Xinbeiya Liquidation Service Co., Ltd., Xinbeiya will assume the company's book assets and liabilities as of 31 Jan 2008, making the company a zero assets and liability-free company.

The company’s bankruptcy reorganization procedure, assets reorganization and share reform are currently in progress.

There exists a de-listing risk for the company's shares.

Board of Directors
1 Sept 2008

Source: Shanghai Stock Exchange

Date: 1 Sept 2008

CN01/ZZ/SW/BT/KM