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dollar funds from Chinese banks to make the acquisition in cash if required. Because SZLN had raised approximately US$90 million equity funds in late 2006 and had accumulated profits in 2006 and 2007, its liabilities–assets ratio had decreased from approximately 70 per cent to 50 per cent over the 2006-2007 period. This financial slack provided the company with a degree of flexibility to take on this opportunity. Nevertheless, the future cash needs of PEM would need to be considered before signing the deal. Another potential source of funds would be the issuing, again, of new shares on the stock exchange. However, this option did not appear to be feasible because the stock issuance of Chinese public companies was closely regulated and took a relatively long time (approximately six months) to process. A third potential option was to offer to exchange newly issued SZLN shares to the holders of PEM shares. However, in addition to the time required gain approval, SZLN was authorized to issue only class A shares, which only mainlanders and selected foreign institutional investors were allowed to
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Exhibit 14 CLOSING PRICES OF SELECTED STOCKS AND FOREIGN EXCHANGE RATES, 2006 TO 2008 CBH PEM (note 1 & (note 1) 4) (AUD) (AUD) 0.14 0.04 0.23 0.05 0.30 0.07 0.53 0.10 0.54 0.14 0.74 0.19 0.79 0.29 1.07 0.36 1.05 0.36 1.65 0.40 0.41 1.64 2.64 0.55 2.96 0.60 3.89 0.56 3.99 0.53 3.85 0.54 4.76 0.62 4.37 0.54 4.18 0.56 4.21 0.59 3.62 0.50 4.42 0.60 5.19 0.61 5.48 0.74 4.69 0.78 4.35 0.71 2.87 0.46 3.08 0.45 2.65 0.35 2.39 0.34 2.87 0.45 2.82 0.44 2.46 0.40 1.88 0.28 2.03 0.28 SZLN (note 1) (RMB) 7.40 6.46 10.43 10.57 13.93 14.02 27.43 29.58 30.86 39.94 35.08 44.44 37.24 60.00 64.00 48.60 40.90 29.30 31.35 30.89 26.65 24.79 21.16 16.99 17.70 13.97 11.67 12.38 11.94 13.07 14.17 13.24 10.95 8.70 8.85 AUD USD Shenzhen ASX200 (note 2) (note 1 & Composite Index (note 2) (note 1) 3) (AUD) (RMB) (RMB/AUD) (RMB/USD) 3,743 6,659 4.4821 6.8349 4,018 5,839 4.5525 6.8258 4,601 7,559 5.4519 6.8183 5,136 8,004 5.9074 6.8345 4,977 9,470 6.4551 6.8388 5,215 9,371 6.5964 6.8591 5,655 12,048 6.6217 6.9472 5,595 13,505 6.5256 7.0002 5,356 13,302 6.4131 7.0190 5,572 15,824 6.7232 7.1058 5,650 15,858 6.3954 7.1853 6,340 17,701 6.4036 7.3046 6,533 15,638 6,754 19,531 6,568 18,865 6,247 17,872 6,144 15,200 6,275 12,546 6.4607 7.6155 6,314 12,944 6,166 10,866 5,995 8,549 5,833 8,040 5,773 7,633 5,670 6,647 6.1599 7.8087 5,482 5,667 5,384 4,622 5,154 4,327 5,115 4,179 4,986 3,947 5,074 4,302 5.9196 7.9956 5,002 4,292 5,259 3,848 5,130 3,516 4,921 3,352 4,930
Exhibit 14 CLOSING PRICES OF SELECTED STOCKS AND FOREIGN EXCHANGE RATES, 2006 TO 2008 CBH PEM (note 1 & (note 1) 4) (AUD) (AUD) 0.14 0.04 0.23 0.05 0.30 0.07 0.53 0.10 0.54 0.14 0.74 0.19 0.79 0.29 1.07 0.36 1.05 0.36 1.65 0.40 0.41 1.64 2.64 0.55 2.96 0.60 3.89 0.56 3.99 0.53 3.85 0.54 4.76 0.62 4.37 0.54 4.18 0.56 4.21 0.59 3.62 0.50 4.42 0.60 5.19 0.61 5.48 0.74 4.69 0.78 4.35 0.71 2.87 0.46 3.08 0.45 2.65 0.35 2.39 0.34 2.87 0.45 2.82 0.44 2.46 0.40 1.88 0.28 2.03 0.28 SZLN (note 1) (RMB) 7.40 6.46 10.43 10.57 13.93 14.02 27.43 29.58 30.86 39.94 35.08 44.44 37.24 60.00 64.00 48.60 40.90 29.30 31.35 30.89 26.65 24.79 21.16 16.99 17.70 13.97 11.67 12.38 11.94 13.07 14.17 13.24 10.95 8.70 8.85 AUD USD Shenzhen ASX200 (note 2) (note 1 & Composite Index (note 2) (note 1) 3) (AUD) (RMB) (RMB/AUD) (RMB/USD) 3,743 6,659 4.4821 6.8349 4,018 5,839 4.5525 6.8258 4,601 7,559 5.4519 6.8183 5,136 8,004 5.9074 6.8345 4,977 9,470 6.4551 6.8388 5,215 9,371 6.5964 6.8591 5,655 12,048 6.6217 6.9472 5,595 13,505 6.5256 7.0002 5,356 13,302 6.4131 7.0190 5,572 15,824 6.7232 7.1058 5,650 15,858 6.3954 7.1853 6,340 17,701 6.4036 7.3046 6,533 15,638 6,754 19,531 6,568 18,865 6,247 17,872 6,144 15,200 6,275 12,546 6.4607 7.6155 6,314 12,944 6,166 10,866 5,995 8,549 5,833 8,040 5,773 7,633 5,670 6,647 6.1599 7.8087 5,482 5,667 5,384 4,622 5,154 4,327 5,115 4,179 4,986 3,947 5,074 4,302 5.9196 7.9956 5,002 4,292 5,259 3,848 5,130 3,516 4,921 3,352 4,930