On behalf of the Board of Directors (the "Board") of the Company, I herein present the annual results of the Company and its subsidiaries (collectively the "Group") for the financial year ended 31 December 2010 to the shareholders of the Company.

Following a sharp and global economic downturn in late 2008, the economy appears to be recovering in 2010. During the year under review, the Group has achieved a sales growth by 22% and recovered to a positive gross margin of 8%. This marked a significant improvement from prior year’s results even though it was still way behind the sales and profit level that were reported by the Group before the global financial crisis. However, the Company is optimistic in the future market of zirconium chemicals and is expecting to see a significant demand growth in 2011 and ensuing years as a result of the worldwide nuclear resurgence. The increasing use of nuclear power, as an alternative to environmentally unfriendly coal power stations, is likely to continue with the world needing to deal with global warming issue, which in turn will see demand for zirconium continue. The nuclear risk in Japan triggered by the earthquake in March 2011 has caused globally a reconsideration of the promotion and popularization of nuclear power, which in turn might slowdown the previously forecast growth rate of zirconium grade nuclear. However, based on our understanding with the Japanese customers, after the earthquake their government might put more emphasis on the applications of new materials and new energy. Hence, demand for zirconium chemicals is forecasted to be even better than before. Being an exporter of zirconium chemicals supplying to the overseas nuclear grade zirconium and new materials producers, the Company is expected to benefit from the promotion of nuclear power and new materials globally.

Anticipating the increase in market demand for zirconium oxychloride, the Group's new production plant in Binhai has resumed the machinery installation, which was substantially completed in November 2010. The Binhai plant has commenced test-runs in December 2010 and it is scheduled to commence small scale production in March 2011, then stepping up gradually to full-scale production. After the Binhai plant came into operation, the plant at Yixing will be repositioned to become a production base of medium- and high-end zirconium products.

The rechargeable batteries business was also growing steadily and continued to contributing net profit to the Group’s results in 2010. The Group’s batteries sales have increased by 22% in 2010 as compared to prior year and the gross margin has further improved from 23% to 26%. The Group will persist in its differentiation strategy by focusing on the promotion of the high temperature batteries (with zirconium) to the overseas market.

Apart from the consolidation of the existing core businesses, the Company is also actively seeking potential investment opportunities. On 4 November 2010, the Company announced the proposed acquisition of Muntari Holdings Limited, which is an investment holding company principally engaged in the wholesale and storage business of petrochemicals through certain contractual arrangements with its subsidiaries. This major acquisition transaction was completed on 6 January 2011, marking the commencement of a new business for the Group. The management is confident that the new business will contribute positively to the Group’s revenue and profit in the coming year.

Looking forward to 2011, I and the Board will continue to dedicate incessant efforts in attaining the Group’s goal of diversifying into new energy and energy business, expanding income streams and improving profitability. Additionally, the Group will consolidate the existing foundation in zirconium chemicals and rechargeable batteries businesses through restructuring the resource allocation in a more efficient manner, so as to achieve better results for the Company.

Last but not least, I would like to express my heartfelt thanks to the management and the staff for their dedication and contribution to the Company. My gratitude is also extended to our shareholders, fellow Board members and all business partners for their continuing support and unwaving trust. We will adhere to our aggressive yet pragmatic approach in capturing future development opportunities and strive to attain better returns to our shareholders.

Yang Xin Min
Chairman