CAN FINANCIALS INCOME CORP T.FIC

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[fairchild2]

From Aug. 2005 N.R. https://www.cdnx.com/data/lcdb/DOCP/AUG2005/WW1R01!.DOC Overview The principal asset of Fairchild Investments Ltd. (the Company) lays within its investment in Springbend Investments Company Limited, which in turn has a 75% interest in Anhui Stone Pharmaceutical Co. Ltd. (Anhui Stone), a Sino-foreign equity joint venture company in China. Anhui Stone was principally engaged in the manufacturing of vitamin C and related products. Here is the whole thing in the entire form... Source MARKET NEWS Date 08/29/2005 Time 08:52:27 AM Company Fairchild Investments Ltd. Title Management Discussion For The Three Months Ended DMIS Processed No CDNX Symbol: FIC Exchange: VSE Symbol: FIC Exchange: Symbol: Exchange: Symbol: Press Release Management Discussion For The Three Months Ended June 30, 2005 ---> 2833@NEWS RELEASE FAIRCHILD INVESTMENTS LTD ("FIC-V;FDIVF-L") - Management Discussion For The Three Months Ended June 30, 2005 MANAGEMENT DISCUSSION AND ANALYSIS For The Three Months Ended June 30, 2005 This management's discussion and analysis ("MD & A") should be read in conjunction with the second quarter financial statement among other related notes Fairchild Investments Ltd. (the "Company") prepared in accordance with the generally accepted accounting principle in Canada. This document and additional information regarding the company are available at www.sedar.com. Overview The principal asset of Fairchild Investments Ltd. (the Company) lays within its investment in Springbend Investments Company Limited, which in turn has a 75% interest in Anhui Stone Pharmaceutical Co. Ltd. (Anhui Stone), a Sino-foreign equity joint venture company in China. Anhui Stone was principally engaged in the manufacturing of vitamin C and related products. Besides such, Anhui Stone was also capable of producing various generic drugs, owning dozens of licenses to produce these medicines. As with the previous season, the sales in Anhui stone for this quarter remains zero. The factory has no production at the moment. The reason for such is a regrettable performance mainly due to the finances supporting the continuous operation of the factory. Aside from that, the huge bank debts as well as the unbearable cost to settle the labor issue has discouraged any further attempts at reopening the production lines. In essence, running Anhui Stone cannot bring any revenue or profit. On the 17th of March 2005, the Bengbu Middle Court in Anhui Province in PRC ruled that Anhui Stone has to pay 136 redundant workers 1 million plus RMB (about 0.12 million US$), worsening the confidence in the Company. At the moment, Anhui Stone maintains a singular function in clearing itself of debts and leftover facilities. However, with the continuous support of its major shareholders, the Company looks for other opportunity to invest in China. In the second quarter of 2005, the Company lost 0.43 million USD in its operations in China. This loss was partially due to the payment of interest from the bank loans to Anhui Stone and the expenses for general and admission. Anhui Stone paid roughly 0.2 million USD for the interest and bank charges. Also contributing about 0.22 million US$ towards administrative expenses. This details to, 56, 000 US$ for the depreciation, 20,000 US$ for salaries, 87,000USD for professional feed, 24,000 USD for miscellaneous, and 12,000 USD was for entertainment. //st Review of Operating Results (In millions except per Q2-05 Q1-05 Q4-04 Q3-04 Q2-04 Q1-04 Q4-03 Q3-03 share data) Sales 0 0 -0.013 0.046 0.051 0.104 0.175 0.098 Net income (loss) (0.46) (0.42) (0.97) (0.49) (0.55)(0.285) 0.889 (0.150) Income (loss) per share (0.55 (0.55 (1.12 (0.56 (0.64 (0.33 0.9 cents (0.17 cents) cents) cents) cents) cents) cents) cents) //et (Due to the year-end audit, the sales in the fourth quarter of 2004 have been adjusted.) In the second quarter of 2005, Anhui Stone did not sell any products to the market. thereby entailing the sales revenue to be zero. The Company has concluded its business in Anhui Stone and is expecting a new start through a reorganization of itself. Liquidity and Capital Resources With the exception of a slight earning derived from account receivables, Anhui Stone's income remained at a minimum. Since Anhui Stone has stopped its production, it will no longer attract any loans from financial institute or business investors. The only capital resources the Company can rely on remains the loans from Springbend Holding Ltd., the largest shareholder of the Company. The Cash and cash equipment at the end of the period was 76,555 US$. The Company, at present, is capable of obtaining the necessary working capital to maintain its minimum daily expenditures. Cancellation of Performance Shares In accordance with Provision 8 (c) of the Escrow Agreemt made as of the 22nd day of June, 1995 between Montreal Trust Company of Canada ("the Escrow Agent") and Fairchild Investments Ltd (the" Company") as well as each escrow shareholder, all the escrow shares issued thereof by the Company have expired and are subject to cancellation. The board of directors of the Company has therefore resolved that the total performance shares, consisting of 9,218,750 common shares, issued by the Company and held in escrow be and are cancelled with effect from July 19th, 2005. The Return to Treasury Order was issued to Computershare Trust Company of Canada (" the Escrow Agent") accordingly the same day. So far the number of total issued and outstanding shares from the Company were 77,279,060. Tel: [phone] Fairchild Investments Ltd. Fax: [phone] Email: [e-mail] ______________________________________ ___________________________________________________________________ (c) Market News Publishing Inc. Tel:[phone] All rights reserved. Fax:[phone] MarketbyFax(tm) - To get the NEWS as it happens, call [phone]. 050829ML+3+000888