0001201800-11-000102.txt : 20111114 0001201800-11-000102.hdr.sgml : 20111111 20111114074913 ACCESSION NUMBER: 0001201800-11-000102 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20110904 ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20111114 DATE AS OF CHANGE: 20111114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VASOMEDICAL INC CENTRAL INDEX KEY: 0000839087 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 112871434 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-18105 FILM NUMBER: 111197785 BUSINESS ADDRESS: STREET 1: 180 LINDEN AVENUE CITY: WESTBURY STATE: NY ZIP: 11590 BUSINESS PHONE: 5169974600 MAIL ADDRESS: STREET 1: 150 MOTOR PARKWAY STREET 2: SUITE 408 CITY: HAUPPAUGE STATE: NY ZIP: 11788 FORMER COMPANY: FORMER CONFORMED NAME: FUTURE MEDICAL PRODUCTS INC /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: FUTURE MEDICAL PRODUCTS INC /NY/ DATE OF NAME CHANGE: 19920506 8-K/A 1 vaso8ka-sept42011.htm vaso8ka-sept42011.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 8-K/A


CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report: September 4, 2011
(Date of earliest event reported)

VASOMEDICAL, INC.
(Exact name of registrant as specified in charter)

Delaware
0-18105
11-2871434
(State or other jurisdiction
(Commission File
(IRS Employer
of incorporation)
Number)
Identification No.)

180 Linden Avenue, Westbury, New York
11590
(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code:                                                                                     (516) 997-4600

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]
Pre-commencement to communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 
 

 


 
Explanatory Note

This Current Report on Form 8-K/A amends the Current Report on Form 8-K of Vasomedical, Inc. (the “Company”) filed with the Securities and Exchange Commission on September 12, 2011 (the “Original Report”) related to the completion of the Company’s  purchase of all the outstanding capital stock of privately held Fast Growth Enterprises Limited (“FGE”), a British Virgin Islands company that owns Life Enhancement Technology Limited and Biox Instruments Co. Ltd.,  pursuant to a Stock Purchase Agreement dated as of August 19, 2011.  In response to parts (a) and (b) of Item 9.01of the Original Report, the Company stated that it would file the required financial statements of businesses acquired and pro forma financial information by amendment, as permitted by Items 9.01(a)(4) and (b)(2) of Form 8-K.  This Form 8-K/A amends the Original Report to include the financial statements of businesses acquired and the pro forma financial information required by Items 9.01 (a)(1) and (b)(1) of Form 8-K.

Item 9.01 Financial Statements and Exhibits

(a)           Financial Statements of Businesses Acquired.   The audited financial statements for the year ended December 31, 2010 and the unaudited financial statements for the six months ended June 30, 2011 of each of the businesses acquired are attached hereto as Exhibit 99.1 and incorporated herein by reference.

(b)           Pro Forma Financial Information.  The unaudited pro forma combined balance sheet as of August 31, 2011 and unaudited pro forma combined statements of operations for the three months ended August 31, 2011 and the twelve months ended May 31, 2011, in each case giving effect to the acquisition of FGE, is attached hereto as Exhibit 99.2 and incorporated herein by reference.

 (d)             Exhibits

Exhibit Number
Exhibit Title
99.1
Audited Financial Statements listed in Item 9.01(a).
99.2
Unaudited Pro Forma Financial Information listed in Item 9.01(b).



 
 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
VASOMEDICAL, INC.
 
By: /s/ Jun Ma
Jun Ma
President and Chief Executive Officer
 
 
Date:  November 11, 2011

 
 

 

EX-99.1.1 2 vaso8ka-biox2010ex9911.htm BIOX AUDITED FINANCIALS 12/31/10 vaso8ka-biox2010ex9911.htm
 
WUXI  TAIHU  CERTIFIED  PUBLIC  ACCOUNTANTS  CO.,LTD
 No.155  Fuxing  Road
Wuxi   China,P.R
 Tel:(0510)80211885   (0510)82491512                 
Fax:(0510)82491512   214001
 
Audit   Report
 
BIOX INSTRUMENTS CO.,LTD
 
We have audited the accompanying consolidated balance sheet of BIOX INSTRUMENTS CO., LTD, (the “Company”) at December 31, 2009 and 2010.
 
The management is responsible for the preparation and fair presentation of these financial statements in accordance with the Accounting Standards for Business Enterprises and China Accounting System for Business Enterprises. This responsibility includes: (i) designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; (ii) selecting and applying appropriate accounting policies; and (iii) making accounting estimates that are reasonable in the circumstances. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Auditing Standards of China. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement.

1Basic summary of the Company
 
Registered Capital: RMB Five Hundred Thousand yuan
Paid-In Capital: RMB Five Hundred Thousand yuan
The company was invested by the natural persons of Shen Qiuming, Wu Qun and Zhang Zemin.  Shen Qiuming invested RMB 200 thousand,40% of the registered capital; Wu Qun invested RMB 200 thousand,40% of the registered capital; Zhang Zemin invested RMB 100 thousand,20% of the registered capital.
Date of Establishment: May 24,1996
Registration No.: 320211000072852
Residence: Room A of the fourth floor No. 45-1,Liangxi Road, Wuxi
Legal Representative: Shen Qiuming
 
Scope of Business:
·  
Licensed operation items:
 
o  
Medical equipment production
 
o  
Class II 6821 medical electronic instrumentation
 
o  
Medical equipment sales in accordance with the items listed in medical equipment operating enterprise’s permit
 
·  
General operation items:
 
o  
Development and technical advisory services of instruments, automated control equipment, office automation equipment and computer hardware/software
 
o  
Sales of self-produced products
 
o  
Sales and service of computers and accessories, office automation equipment, and electrical parts and components
 
o  
Production, sales, and service of instruments, automation and automatic control equipment
 
o  
Service of medical equipment
 
o  
Import and export of self-produced and represented products and technology, except products and technology restricted or prohibited by the laws.
 
1

 
2.  Opinion.
 
Unit:RMB
Project
 
Jan.1,2009
   
Dec.31,2009
   
Dec.31,2010
 
Total Assets
    1,784,775.98       3,510,315.85       3,768,612.25  
Total Liabilities
    102,102.69       1,208,299.65       1,752,571.25  
Total Owner's Equity
    1,682,673.29       2,302,016.20       2,016,041.00  
 

3.  Others
 
(i) The beginning balance of consolidated balance sheet of 2009 was not audited.
 
(ii)  Confirmation of the company's tax related items by the relevant tax authority shall be final.
 
(iii) The consolidated balance sheet of the company included assets out of accounts.
 
(iv) The consequences caused by the client or other third party’s improper use of this report is independent of the auditors and accounting firm.
 
Attachment:
 
1. Financial Statements of the Year 2010 of BIOX INSTRUMENTS CO., LTD,
 
 
 

 
Wuxi Taihu Certified Public ACCOUNTANTS CO.,LTD
 
No.155 Fuxing Road,Wuxi China,P.R.
 
Jan.30,2011
 
2

 
 
 
BIOX INSTRUMENTS CO., LTD.
 
BALANCE SHEET
 
           
12/31/2010
As Of Dec.31,2010 (FORM AFI-01)
 
 
 
MONETARY UNIT:RMB
 
    ASSETS
 
Dec. 31, 2009
 
       
Dec. 31, 2010
 
CURRENT  ASSETS:
         
Cash
  2,415,537.71   1,287,377.63  
Short-term  investments
         
Notes  receivable
         
Dividends  receivable
         
Interest  receivable
         
Accounts  receivable
  299,254.04   515,835.45  
Other  receivables
  77,806.26   515,945.21  
Advanced  to  suppliers
  75,620.65   117,769.90  
        cover cost
         
    Subsidy  receivable
         
        tax refunds on export receivables
         
    Inventories
  530,606.78   1,202,502.49  
       inventory of raw materials on hand
         
       merchandise inventory
         
Prepaid  expenses
         
Long-term debt investment within one year
         
        Other current assets
         
     TOTAL CURRENT ASSETS
  3,398,825.44   3,639,430.68  
           
 LONG-TERM INVESTMENTS
         
   Long-term  equity  investments
         
   Long-term debt  investments
         
   Equity investment  difference
         
 TOTAL  LONG-TERM  INVESTMENTS
  -   -  
 FIXED ASSETS:
         
   Fixed assets original cost
  322,603.64   390,301.31  
   Less:Accumulated depreciation
  211,113.23   261,119.74  
   Fixed assets--net value
  111,490.41   129,181.57  
   Less:Fixed assets impairment provision
     
Fixed assets--net book value
  111,490.41   129,181.57  
Construction  supplies
         
Construction in process
         
Fixed assets pending disposal
         
           
           
           TOTAL FIXED ASSETS
  111,490.41   129,181.57  
INTANGIBLE ASSETS AND OTHERS
         
 Intangible  assets
         
 Long-term prepaid assets
         
 Other long-term assets
         
 Including:Exchange loss to be written off
         
           
TOTAL INTANGIBLE  &. OTHER ASSETS
  -   -  
Deferred taxes
         
        Deferred tax debits
         
            TOTAL ASSETS
  3,510,315.85   3,768,612.25  
 
3

 
BALANCE SHEET
 
12/31/2010
 As Of  Dec.31,2010
 
 
   
(FORM AFI-01)
 
 
       
MONETARY UNIT:RMB
 
   LIABILITIES AND OWNERS' EQUITY
                   
CURRENT  LIABILITIES
                   
Short-term  loans
                   
Notes  payable
                   
Accounts  payable
          280.00       5,614.00  
Accounts  advanced from customers
          907,425.00       1,202,340.00  
Accrued  payroll
                     
Welfare  benefits  payable
                     
Including :Staff and worker's bonus and welfare
                     
Dividends  payable
                     
interest payable
                     
Taxes  payable
          215,889.06       480,597.91  
Other levies  payable
          8,647.08       19,342.92  
Other  payables
          76,058.51       44,676.42  
Accrued   expenses
                     
Provisions  for  foreseeable liabilities
                     
Deferred  revenue
                     
Long-term liabilities  maturing within one year
                     
Other current liabilities
                     
       TOTAL CURRENT LIABILITIES
          1,208,299.65       1,752,571.25  
LONG-TERM LIABILITIES
                     
Long-term loans
                     
Debentures payable
                     
Payables  due after one year
                     
Government grants payables
                     
Other long -term payables
                     
Including:Exchange loss to be charged
                     
TOTAL LONG-TERM LIABILITIES
          -       -  
Deferred taxes                      
Deferred taxes credits
                     
                      TOTAL LIABILITIES
          1,208,299.65       1,752,571.25  
Minority interest
                     
OWNERS' EQUITY
                     
Registered  capital
          500,000.00       500,000.00  
            500,000.00       500,000.00  
            
                     
Less:Returned investment
                     
Registered capital--net book value
          500,000.00       500,000.00  
Capital  surplus
                     
Surplus  reserve
          -       -  
Including:statutory accumulation reserve
                     
statutory welfare reserve
                     
discretionary accumulation
                     
Reserved funds
                     
Enterprise expension funds
                     
Profits capitalised on return of investments
                     
Uncertained investment loss
                     
Undistributed  profits
          1,802,016.20       1,516,041.00  
currency exchange difference
                     
 TOTAL OWNERS' EQUITY
          2,302,016.20       2,016,041.00  
 TOTAL LIABILITIES &.OWNERS' EQUITY
          3,510,315.85       3,768,612.25  
 
                     

 
4

 

                   
BIOX INSTRUMENTS CO., LTD.
 
INCOME AND PROFIT APPROPRIATION STATEMENT
 
2010
For the period ended 2010
 
     
FORM AFI-02
 
  
         
 
 
 December 31,
2009
   
MONETARY
UNIT:RMB
 
 
December 31,
2010
 
 
                     
SALES OF MAIN OPERATIONS
          5,700,611.97       6,761,956.32  
Includes: Export sales
                     
Less:cost of main operations
          1,397,682.97       1,819,628.41  
Includes: Cost of export sales
                     
Sales tax and additions
          87,456.48       97,343.52  
GROSS PROFIT
          4,215,472.52       4,844,984.39  
Add: Income from other operations
                     
Less: Selling expenses
          1,443,331.68       2,179,447.37  
General and administrative expenses
          1,268,384.73       1,361,050.44  
Entertainment expenses
                     
Research and development expenses
                     
Financial expenses
          3,593.22       -25,718.83  
Interest expense
                     
Interest income
                     
Exchange loss(less exchange gain)
                     
OPERATING INCOME
          1,500,162.89       1,330,205.41  
Investment income(loss expressed with )
                     
Futures income(loss expressed with)
                     
Subsidiary revenue
                     
Non-operating income
          368,810.54       440,486.35  
Less:Non-operating expenses
          33,777.88       59,769.10  
Donations Contributed
                     
INCOME BEFORE TAX (LOSS EXPRESSED WITH "-")
          1,835,195.55       1,710,922.66  
Less: Income tax
          74,988.33       85,302.06  
Minority interest
                     
Uncertained investment loss
                     
NET INCOME (LOSS EXPRESSED WITH "-")
          1,760,207.22       1,625,620.60  
SUPPLEMENT INFORMATION
                     
1 Profits from sale, disposal of a business
                     
2 Loss due to natural disaster
                     
3.Increase/(decrease) in total profit/(loss)
                     
4.Increase/(decrease) in total profit/(loss)
                     
5.Losses from debt restructuring
                     
6.Other
                     
         
                     
 

 
5

 

 
 
BIOX INSTRUMENTS CO., LTD.
 
INCOME AND PROFIT APPROPRIATION STATEMENT
 
 
2010
For the period ended 2010
 
     
FORM AFI-02
 
         
 
             
MONETARY UNIT:RMB
 
                   
NET INCOME (LOSS EXPRESSED WITH "-")
          1,760,207.22       1,625,620.60  
Add:Undistributed profits at beginning of year
          1,182,673.29       1,802,016.20  
Other turned in
          -30,864.31       353,674.78  
PROFIT AVAILABLE FOR DISTRIBUTION
          2,912,016.20       3,781,311.58  
Less: Statutory accumulation reserve
                     
Statutory accumulation reserve
                     
Staff and workers' bonus and welfare
                     
Reserve fund
                     
Enterprise expansion fund
                     
Profits capitalized on return of investment
                     
PROFIT AVAILABLE FOR DISTRIBUTION TO INVESTORS
          2,912,016.20       3,781,311.58  
Preferred dividends payable
                     
Discretionary accumulation reserve
                     
Common dividends payable
          1,110,000.00       2,265,270.58  
Chinese dividends payable
          1,110,000.00       2,265,270.58  
Foreign dividends payable
                     
Common dividends turn to capital
                     
Chinese dividends turn capital
                     
Foreign dividends turn capital
                     
 UNDISTRIBUTED PROFIT
          1,802,016.20       1,516,041.00  

 
6

 
BIOX INSTRUMENTS CO., LTD.
 
CASH FLOW STATEMENT
 
2010
For the period ended 2010
 
     
03
 
     
From AFJ-03
 
         
 
 
         
MONETARY UNIT:RMB
 
             
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Cash received from sale of goods or rendering of services
          7,820,458.73  
Refund of tax and levies
          312,713.86  
Other cash received relating to operating activities
          59,525.40  
Sub-total of cash inflows
          8,192,697.99  
Cash paid for goods and services
          2,006,812.28  
Cash paid to and on behalf of employees
          1,894,952.60  
Payments  of  all  types  of  taxes
          883,215.35  
Other cash paid relating to operating activites
          2,182,786.59  
Sub-total of cash outflows
          6,967,766.82  
Net cash flows from operating activities  
          1,224,931.17  
CASH FLOWS FROM INVESTING  ACTIVITIES:
             
Cash received from disposal of investments
             
Cash received from returns on investments
             
Net cash received from disposal of fixed assets ,intangible assets and other long-term assets
             
Other cash received relating to investing activities  
             
Sub-total of cash inflows
          -  
Cash  paid to acquire fixed assets,intangible assets and other long-term assets
          67,697.67  
Cash paid to acquire   investments
             
Other cash payments relating to investing activities
             
Sub-total of cash outflows
          67,697.67  
Net cash flows from investing  activities
          -67,697.67  
CASH FLOWS FROM FINANCING  ACTIVITIES:
             
Cash received from capital contribution
             
Cash reveived  from borrowings
             
Other cash received relating to financing activities
             
Sub-total of cash  inflows
          -  
Cash  repayments of  amounts borrowed
             
Cash payments  for interest expenses, distribution of  dividends  or profit
          2,265,270.58  
Other cash  payments relating to financing activities
             
Sub-total  of  cash  outflows
          2,265,270.58  
Net cash flows from  financing  activities
          -2,265,270.58  
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH
          -20,123.00  
NET INCREASE/(DECREASE) IN CASH AND  CASH EQUIVALENTS
          -1,128,160.08  
               
               


 
7

 

CASH FLOW STATEMENT
  2010
For the period ended 2010
 
 
  03  
 
 
From AFJ-03
 
           
       
MONETARY UNIT:RMB
 
                                                                 
         
           
Reconciliation of net profit /(loss) to cash flows from operating activities
         
Net  profit
      1,619,930.20  
Add: Provision for asset impairment
         
Depreciation of fixed assets
      50,006.51  
Amortization of intangible assets
         
Amortization of  long-term prepaid  expenses
         
Decrease in prepaid expenses (deduct:increase)
      -  
Increase in accrued expenses (deduct:decrease)
         
Losses on disposal of fixed assets, intangible assets and other long-term assets (deduct:gain)
         
Losses on disposal of fixed assets
         
Financial expenses
         
Losses arising from investments (deduct:gains)
         
Deferred tax credit(deduct:debit)
         
Decrease in inventories(deduct:increase)
      -671,895.71  
Decrease in operating receivable(deduct:increase)
      -422,970.76  
Increase in operating payables(deduct:decrease)
      373,152.28  
Others
      276,708.65  
Net cash flows from operating activities
      1,224,931.17  
Investing and financing activities that do not involve cash receipts and payments
         
Conversion of debt into capital
         
Reclassification of convertible bonds expiring within one year as current liability
         
Fixed assets acquired under finance leases
         
Others
         
           
Net increase /(decrease)in cash and cash equivalents
         
Cash  at  end of year
      1,287,377.63  
Less: cash  at beginning of year
      2,415,537.71  
Plus: Cash equivalents at end of year
         
Less: Cash equivalents at  beginning of year
         
Net increase/(decrease)in cash and cash equivalents
      -1,128,160.08  
           
           

 
8

 
EX-99.1.2 3 vaso8ka-pjm2010ex9912.htm PJM AUDITED FINANCIALS 12/31/10 vaso8ka-pjlet2010ex9912.htm




















PEACE JOY MANAGEMENT LIMITED


REPORTS AND FINANCIAL STATEMENTS
 
FOR THE YEAR ENDED 31 DECEMBER 2010

 
 

 



PEACE JOY MANAGEMENT LIMITED


REPORTS AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
 
CONTENTS



 
 
PAGE(S)
   
   
   
DIRECTOR'S REPORT
1-2
   
INDEPENDENT AUDITOR'S REPORT
3 - 4
   
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
5
   
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
 6
   
STATEMENT OF FINANCIAL POSITION
7
   
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
8
   
CONSOLIDATED STATEMENT OF CASH FLOWS
9
   
NOTES TO THE FINANCIAL STATEMENTS
10 -21

 
 

 



PEACE JOY MANAGEMENT LIMITED

                        DIRECTOR'S REPORT


The director has pleasure in presenting his report with the audited financial statements of the
Company and its subsidiary (collectively the "Group") for the year ended 31 December 2010.


PRINCIPAL ACTIVITY

The Group continues to engage in the manufacturing of medical devices.


RESULTS AND APPROPRIATIONS

The results of the Group for the year ended 31 December 2010 are set out in the consolidated
statement of comprehensive income on page 5 to the financial statements. The director does not
recommend the payment of any dividend.


FIXED ASSETS

Details of movements in the plant and equipment during the year are shown in note 12 to the
financial statements.


SHARE CAPITAL

Details of the share capital of the Company are set out in note 17 to the financial statements.


DIRECTOR

The sole director of the Company during the year and up to the date of this report was:

LI Xichang

The sole director should continue in office.

The Company did not enter into any agreement, other than the contracts of service with the
director, whereby any individual, firm or body corporate undertakes the management and
administration of the whole, or any substantial part of any business of the Company.

 

 
1

 


PEACE JOY MANAGEMENT LIMITED
 
 
DIRECTOR'S REPORT
 
 
DIRECTOR'S SHARE AND DEBENTURE OPTIONS

At no time during the year was the Company or its subsidiary a party to any arrangements to
enable the director of the Company to acquire benefits by means of the acquisition of shares in,
or debentures of, the Company or any other body corporate.


DIRECTOR'S INTERESTS IN CONTRACTS

Other than as disclosed in note 20 to the financial statements concerning related party
transactions, there has been no contract of significance to which the Company or its subsidiary
was a party and in which a director of the Company had a material interest, whether directly or
indirectly, at the end of the year or at any time during the year.


AUDITOR

The financial statements have been audited by G Tong & Co., Certified Public Accountants.


On behalf of the Board

                         /s/  Li Xichang

SOLE DIRECTOR
9 March 2011

 
 
 

 
2

 



G TONG & CO.

Certified Public Accountants
Management Consultants

Unit 1411 14/F. LippoSun Plaza.
2B Cantor Road. Tsim Sha Tsui,
Kowloon, Hong Kong
Ter    : (852) 2420 4006
Fax   : (852) 2892 1856
E-mail : holistic@gtongcpa.com.hk

                         INDEPENDENT AUDITOR'S REPORT
TO THE SHAREHOLDERS OF PEACE JOY MANAGEMENT LIMITED
(Incorporated in the British Virgin Islands with limited liability)

We have audited the consolidated financial statements of  PEACE JOY MANAGEMENT
LIMITED (the "Company") and its subsidiary (together the "Group") set out on pages 5 to 21,
    which comprise the consolidated and company statements of financial position as at 31
December 2010, and the consolidated statement of comprehensive income, the consolidated
    statement of changes in equity and the consolidated statement of cash flows for the year then
    ended, and a summary of significant accounting policies and other explanatory notes.

Director's responsibility for the financial statements
    The director of the Company is responsible for the preparation of consolidated financial
statements that give a true and fair view in accordance with the Hong Kong Financial Reporting
Standard for Private Entities issued by the Hong Kong Institute of Certified Public Accountants,
and for such internal control as the director determines is necessary to enable the preparation of
the consolidated financial statements that are free from material misstatement, whether due to
fraud or error,

Auditor's responsibility
Our responsibility is to express ati opinion on these consolidated financial statements based on
our audit and to report our opinion solely to you, as a body, in the coming general meeting of the
Company, and for no other purpose. We do not assume responsibility towards or accept
liability to any other person for the contents of this report. We conducted our audit in
accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of
Certified Public Accountants.   Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on the
auditor's judgment, including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error.  In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation of the
consolidated financial statements that give a true and fair view 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. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the director, as well as evaluating the overall presentation of the consolidated financial
statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.

 
3

 

G TONG & CO.

Certified Public Accountants
Managefnent Consultants


Unit 1411,14/F, Lippo Sun Plaza
28 Canton Road. Tsim Sha Tsui.
Kowloon Hong Kong
Tel:   (852) 2420 4006
Fax:  (852] 2892 1856
E-mail:  holistic@gtongcpa.com.hk
 









INDEPENDENT AUDITOR'S REPORT
TO THE SHAREHOLDERS OF PEACE JOY MANAGEMENT LIMITED
(Incorporated in the British Virgin Islands with limited liability)


Opinion
In our opinion, the consolidated financial statements give a true and fair view of the state of
affairs of the Company and of the Group as at 31 December 2010 and of the Group's profit and
cash flows for the year then ended in accordance with the Hong Kong Financial Reporting
Standard for Private Entities.
 

/s/
G TONG & CO.
Certified Public Accountant
Hong Kong, 9 March 2011





 
4

 



PEACE JOY MANAGEMENT LIMITED



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2010





 
   
NOTES
   
2010
US$
   
2009
US$
 
Revenue
    4       572,S36       925,380  
Cost of sales
            (299,068 )     (424,660 )
Gross profit
            273,768       500,720  
Other income
    5       180       168  
Distribution costs
            (10,135 )     (22.653 )
Administrative expenses
            (98,499 )     (89.246 )
Other expenses
            (35,992 )     (32,987 )
Finance costs
    6       (12,479 )     (22,849 )
Profit before tax
    7       116,843       333,153  
Income tax expense
    8       .       .  
PROFIT FOR THE YEAR
            116,843       333,153  
Other comprehensive income
           
·
      .  
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR
            116,843       333,153  
Profit for the year and total comprehensive income
attributable to owners of  the Group
          116,843       333,153  
 




The accompanying notes form an integral part of these financial statements.


 
5

 



PEACE JOY MANAGEMENT LIMITED


CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2010



 
 
 
 
 
 
 
 
 
NOTES
   
 
 
 
2010
US$
   
2009
US$
 
ASSETS                        
Current Assets                        
Trade receivables              192,649      
213,306
 
Other receivables and deposits              31,870      
6,873
 
Amounts due from related companies     10       60,885       
1,933
 
Inventories      11      
261,992
     
247.930
 
Bank balances and cash            
130,403
     
70,661
 
Non-Current Assets
                       
 Plant and equipment     12        9,832        12,385   
Total Assets
            687,631       553,088  
LIABILITIES AND EQUITY
               
 
 
Current Liabilities                         
Trade payables             230,539        
104,338
 
Other payables and accrued charges             30,912         
32,629
 
Amount due to a related company    
14
     
-
     
74,208
 
Amount due to director
   
15
      146,965        
146,954
 
Loans      16       315,683          348,270  
              724,099         
706,399
 
             
 
 
 
 
   
 
 
 
 Equity                        
Share capital    
17
      3,000        3,000   
Reserves      18       (39,468)        (156,311)   
              (36,468)       
(153,311)
 
Total Liabilities and Equity
            687,631       553,088  
 
The financial statements on pages 5 to 21 were approved by the Board of Director on 9 March 2011 and are signed on its behalf by:
 
/s/ Li  Xichang
SOLE DIRECTOR
 
The accompanying notes form an integral part of these financial statements.


 
6

 




PEACE JOY MANAGEMENT LIMITED


STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2010



 
   
 
NOTES
   
2010
US$
   
2009
US$
 
ASSETS                  
Current Assets                  
Trade receivables           192,649       200.529  
Other receivables and deposits           23,002          
Amount due from a related company     10       53,300       1,933  
 Bank balances and cash             817       4.243   
              269,768       206,705  
Non-Current Assets
                       
 Interests in subsidiary     13       133,000       133,000  
Total Assets
            402,768       339,705  
                         
 LIABILITIES AND EQUITY                        
 Current Liabilities                        
 Trade payables             175,000       65,698  
 Other payables and accrued charges             5,128       13,145  
 Amount due to a related company     14       -       74,208  
 Amount due to director     15       147,000       147,000  
              327,128       300,051  
                         
Equity
    17       3.000       3,000  
 Share capital     18       72,640       36.654  
 Reserves             75,640       39,654  
                         
                         
Total Liabilities and Equity
            402,768       339,705  
 
The financial statements on pages 5 to 21 were approved by the Board of Director on 9 March 2011 and are signed on its behalf by:


/s/   Li  Xichang
SOLE DIRECTOR

The accompanying notes form an integral part of these financial statements.
 
7

 



PEACE JOY MANAGEMENT LIMITED


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2010



 
     
  
                 
     
      Share capital     
     
Accumulated losses
      Total  
     
US$
     
US$
     
US$
 
At 31 December 2009
    3,000       (156,311 )     (153,311 )
Profit for the year
          116,843       116.843  
At 31 December 2010
    3,000       (39,468 )     (36,468 )
 
The accompanying notes form an integral part of these financial statements.

 
8

 



PEACE JOY MANAGEMENT LIMITED



CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2010

 
 
     
2010
     
2009            
 
     
US$
     
US$
 
Cash inflows from operating activities
           
Profit before taxation
    116,843       333,153  
Depreciation
    5,003       12,477  
Interest income
 
(180)
      (168 )
Operating profit before working capital changes
    121,666       345,462  
Decrease (increase) in trade receivables
    20,657       (175,597 )
(Increase) decrease In other receivables and deposits
    (24,997 )     237,617  
(Decrease) increase in amounts due from related companies
    (58,952 )     69,494  
(Increase) decrease in inventories
    (14,062 )     81J14  
Increase (decrease) in trade payables
    126,201       (162,142 )
Increase (decrease) in other payables and accrued charges
    (1,717 )     (211,712 )
Decrease in amount due to a related company
    (74,208 )     (25,524 )
Increase in amount due to director
    11       66  
Net cash generated from operating activities
    94,599       158,778  
Cash flows from investing activities
               
Purchase of equipment
    (2,450 )     (700 )
Net cash used in investing activities
    (2,450 )     (700 )
Cash flows from financing activities
               
Interest received
 
180
      168  
Repayment of loan principal
    (122,646 )     (161,150 )
New loan principal raised
    75,850       -  
Increase in loans interest accrual
    14,209       22,849  
Net cash used in financing activities
    (32,407)       (138,133 )
Increase in cash and cash equivalents
    59,742       19,945  
Cash and cash equivalents at beginning of the year
    70,661       50,716  
Cash and cash equivalents at end of the year
               
Represented by bank balances and cash
    130,403       70,661  
 
The accompanying notes form an integral part of these financial statements.

 
9

 



PEACE JOY MANAGEMENT LIMITED



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010

          1.  GENERAL

The Company is a private limited company incorporated in the British Virgin Islands. Its
registered office is locatcd at Akara Building, 24 De Castro Street, Wickhanis Cay I, Road
Town, Tortola, British Virgin Islands
 
The Group continues to engage in the manufacturing of medical devices.
 
The consolidated financial statements are presented in United States Dollars ("US$"), the
functional currency of the Group.


2.  ADOPTION OF NEW HONG KONG FINANCIAL REPORTING STANDARD FOR PRIVATE ENTITIES
 
In the current year, the Group has taken the option to apply, for the first time, a number of
the new Hong Kong Financial Reporting Standard for Private Entities ("HKFRS - Private
Entities"), issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA").
The Group does not produce financial staternents available for public use.
 
The adoption of the new HKFRS - Private Entities has not resulted in a material change to
the accounting policies and also has no material effect on how the results for the current or
prior accounting periods are prepared. Accordingly, no prior year adjustment has been
required.
 
The HKICPA has also issued the following standards and interpretations that are not yet
effective, which the Company has considered these options but does not expect they will
have a material effect on how the results of operations and financial position of the
Company and the Group are prepared and present.
 
 
 
HKFRSs (Amendments)
 
 
 
Improvements to HKFRSs 2010
 
 
Effective for accounting periods beginning on or
after 1 July 2010 or 1 January 2011
     
HK (IFRJC)-INT 17
 
Classification of Rights Issues
 
February 2010
HK (IFR1C)-INT I9
 
Extinguishing Financial Liabilities 
with Equity Instruments
 
1 July 2010
 
HKAS 24 (Revised)
 
Related Party Disclosure
 
1 January 2011
HKAS 12 (Amendments)
 
Income Taxes
 
1 January 2012
HKFRS 9
 
Financial Instruments
 
1 January 2013


 
10

 



PEACE JOY MANAGEMENT LIMITED


NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010


3.  SIGNIFICANT ACCOUNTING POLICIES


Basis of preparation
The financial statements have been prepared under the historical cost convention and in
accordance with HKFRS - Private Entities issued by HKICPA and accounting principles
generally accepted in Hong Kong.

At the reporting date, the Group has a net current liahilities of US$46,300 (2009:
US$165,696) and net liabilities of US$36,468 (2009: US$153,311).  However, the
Company's director has strong confidence to obtain adequate financial supports to enable
the Group to meet its liabilities as and when they fall due so that the Group can continue its
business in the foreseeable future. Consequently, the director has prepared the financial
statements of the Group on a going concern basis.

The principal accounting policies adopted are set out below.

Consolidation
These consolidated financial statements incorporate the financial statements of the
Company and its subsidiary. A subsidiary is an entity (including special purpose entity)
over which the Group has the power to govern the financial and operating policies so as to
obtain benefits from its activities, generally but not necessarily accompanying a
shareholding of more than half of the voting power. The subsidiary is fully consolidated
from the date on which control is transferred to the Group and is de-consolidated from the
date that control ceases.


All intra-group transactions, balances, income and expenses are eliminated on
consolidation. Accounting policies of the subsidiary have been changed where necessary
to ensure consistency with the policies adopted by the Group.  There is no difference in
the reporting date of the financial statements of the Company and its subsidiary used in the
preparation of the consolidated financial statements.

In the statement of financial position of the Company, investment in subsidiary is stated at
cost less provision for impairment loss. The results of the subsidiary are accounted by the
Company on the basis of dividend received and receivable.

Revenue recognition
Revenue during the year represents sales of goods, which are recognized when goods are
delivered and title has been passed.

Interest income is recognized as it accrues using the effective interest method.
 
 
11

 

 
PEACE JOY MANAGEMENT LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010

3.  SIGNIFICANT ACCOUNTING POLICIES - cont'd

Plant and equipment
Items of plant and equipment are measured at cost less accumulated depreciation and any
accumulated impairment losses.

Depreciation is charged so as to allocate the cost of assets less their residue values (10% of
cost) over their estimated useful lives, using the straight-line method. The following
annual rates are used for the depreciation of plant and equipment.

Machinery
18%
Furniture and equipment
18%
Motor vehicles
18%
   




If there is an indication that has been a significant change in the depreciation rate, useful
life or residual value of an asset, the depreciation of that asset is revised prospectively to
reflect the new expectations.

An asset's carrying amount is written down immediately to its recoverable amount if the
asset's carrying amount is greater than its estimated recoverable amount.

The gain or loss arising from the disposal or retirement of an asset is determined as the
difference between the sale proceeds and the carrying amount of the asset and is recognized
in the profit or loss.

Impairmeat of non-financial assets, other than inventories
At each reporting date, the Group reviews the carrying amounts of plant and equipment to
determine whether there is any indication that those assets have suffered an impairment
loss. If there is an indication of possible impairment, the recoverable amount of any
affectcd asset (or group of related assets) is estimated and compared with its carrying
amount.  If an estimated recovered amount, and an impairment loss is recognized
immediately in profit and loss.

If an impairment loss subsequently reverses, the carrying amount of the asset (or group of
related assets) is increased to the revised estimate of its recoverable amount, but not in
excess of the amount that would have been determined had no impairment loss been
recognized for the asset (group of related assets) in prior year.  A reversal of an
impairment loss is recognized immediately in profit or loss.


 
12

 



PEACE JOY MANAGEMENT LIMITED



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAH ENDED 31 DECEMBER 2010

3.  SIGNIFICANT ACCOUNTING POLICIES - cont'd

Borrowings
Borrowings are recognized initially at the transaction price and arc subsequently stated at
amortised cost. Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liabilities for at least twelve months after the
reporting date.

Interest expense is recognized on the basis of the effective interest method and is included
in finance cost.

Trade receivables
Trade receivables are recognized initially at the transaction price. They are subsequently
measured at amortised cost using the effective interest method less provision for
impairment. A provision for impairment of trade receivables is established when there is
objective evidence that the Group will not be able to collect all amounts due according to
the original terms of receivables.

Inventories
Inventories are stated at the lower of cost and selling price less costs to complete and sell.
Cost is calculated using the average cost method. The cost of finished goods and work in
progress is comprised of packaging costs, raw materials, direct labour, other direct costs and
related production overheads (based on normal operating capacity). At each reporting date,
inventories are assessed for impairment and the carrying amount is reduced to its selling
price less cost to complete and sell with the impairment loss recognized immediately in
profit and loss.

Operating lease
Rental payable under operating lease is charged to profit and loss on a straight-line basis
over the term of the relevant lease.

Trade payables
Trade payables are recognized initially at the transaction price and subsequently measured
at amortised cost using the effective interest method.

Foreign currencies translation
The financial statements are presented in United State Dollars, which is the functional and
presentation currency of the Group.

Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies at the exchange rates prevailing at the
reporting sheet date are recognized in the profit and loss account.


 
13

 


PEACE JOY MANAGEMENT LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010


3.  SIGNIFICANT ACCOUNTING POLICIES -cont'd


Related parties
For the purpose of these financial statements, related party includes a person and entity as
defined below;

(a) A person or a close member of that person's family is related to the Company if that
person:
 
(i)
 is a member of the key management personnel of the Company or of a parent of the Company;
   
(ii)
has control over the Company; or
(iii)
has joint control or significant influence over the reporting entity or has  significant voting power in it.
   


(b) An entity is related to the Company if any of the following conditions applies:

 
(i)
 the entity and the Company are members of the same group (which means that each
 parent, subsidiary and fellow subsidiary is related to the others).
(ii)
either entity is an associate or joint venture of other entity (or a member of a group of which
the other entity is a member).
(iii)
both entities are joint ventures of a third entity.
(iv)
either entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v)
the entity is a post-employment benefit plan for the benefit of employees of either the Company or an
entity related to the Company. If the reporting entity is itself such a plan, the sponsoring employers
are also related to the plan.
(vi)
 the entity is controlled or jointly controlled by a person identified in (a).
(vii)
a person identified in (a) has significant voting power in the entity.
   

Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs
from profit as reported in the statement of comprehensive income because of items of
income or expense that are taxable and deductible in other years and items that are never
taxable or deductible. The Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the end of the reporting period.

 
14

 



PEACE JOY MANAGEMENT LIMITED



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010

3.  SIGNIFICANT ACCOUNTING POLICIES - cont'd

Taxation - cont'd
Deferred tax is recognized on temporary differences between the carrying amount of assets
and liabilities in the financial statements and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are generally recognized for all
taxable temporary differences that are expected to increase taxable profit in the future.
Deferred tax assets are recognized to the extent that it is probable that taxable profits will
be available against which deductible temporary differences can be utilized.  Such
deferred assets and liabilities are not recognized if the temporary difference arises from
goodwill or from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.

The carrying amount of deferred tax assets is reviewed at the reporting date and reduced to
the extent that it is no longer probable that sufficient taxable profits will be available to
allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the rates that are expected to apply in the
period when the liability is settled or the asset is realized, based on tax rates (and tax laws)
that have been enacted or substantively enacted at the reporting date. The measurement of
deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Group expects, at the reporting date, to recover or settle the carrying
amount of its assets and liabilities. However, the measured at fair value does not exceed
the amount of tax that would be payable on its sale to an unrelated market participant at fair
value at the reporting date. Deferred tax is recognized in profit or loss, expect when it
relates to items that are recognized in other comprehensive income or directly in equity, in
which case the deferred tax is also recognized in other comprehensive income or directly in
equity respectively.

Cash equivalents
Cash equivalents represent short-term, highly liquid investments which are readily
convertible into known amounts of cash and which were within three months of maturity
when acquired, less advances from banks repayable within three months from the date of
the advance.


Employee benefit obligations
Salaries, wages, bonuses, paid leave, contributions to defined contribution retirement plans
and the cost of non-monetary benefits are accrued in the year in which the associated
services are rendered by employees. Where payment or settlement is deferred and the
effect would be material, these amounts are stated at their present values.



 
15

 


PEACE JOY MANAGEMENT LIMITED



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010

4.   REVENUE

Revenue, which is also the Group's turnover, represents the net invoiced value of goods
sold during the year.



5.   OTHER INCOME
 
 
 
2010
 
2009
 
US$
 
US$
Bank interest income
180
 
168
 
 

6.   FINANCE COSTS
 
 
 
2010
 
2009
 
US$
 
US$
Interest on loans wholly repayable within five years
12,479
 
22,849

       7.   PROFIT BEFORE TAX
   
   
2010
   
2009
 
   
US$
   
US$
 
Profit from continuing operations before taxation
           
has been arrived at after charging (crediting) :
           
             
Audit fee
    2,564       2,564  
Depreciation
    5,003       12,477  
Director's remuneration
    16,997       10,987  
Exchange differences
    9,031       (5,689 )
Operating lease rentals for factory premise
    13,654       10,632  
Staff costs (excluded director's remuneration)
    73,216       49,442  
   
Staff costs above include social insurance contribution in the People's Republic of China amounted to US$ 11,456 (2009: US$8,569).


 
16

 



PEACE JOY MANAGEMENT LIMITED



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010

8.   INCOME TAX EXPENSE

No provision for income tax has been made in the financial statements as neither the
Company nor its subsidiary has assessable profit.

At the reporting date, insignificant deferred tax has not been provided in the financial
statements.



9.   NET PROFIT FOR THE YEAR

Of the consolidated profit of US$ 116,843 (2009: US$333,153) a net profit of
US$35,986 (2009: US$142,799) has been recognized within the financial statements of the
Company,



10.  AMOUNTS DUE FROM RELATED COMPANIES
 

                     
     
Maximum outstanding balance during the year
   
Balance at 31.12.2010
   
Balance at 31.12.2009
 
     
US$
   
US$
   
US$
 
The Group
                   
Fast Growth Enterprise Limited
      53,300       53,300       1,933  
 Other       7,585       7,585        
                  60,885        1,933   
The Company
                         
Fast Growth Enterprise Limited
      53,300       53,300       1,933  
                             

      
       The amounts due from related companies are interest-free, unsecured and have no fixed terms of repayment. The Companys director is a director and shareholder of the above related companies.


 
17

 



PEACE JOY MANAGEMENT LIMITED



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010

13.    INVENTORIES
 

 
2010
 
2009
 
USS
 
USS
The Group
   
Raw materials
120,362
    110,561
Work-in-progress
88,918
 
70,882
Finished goods
52,712
 
66,487
 
261,992
    247,930
 
 
12, PLANT AND EQUIPMENT
 

 
                           
     
Furniture & Equipment
     
Machinery         
     
Motor Vehicles
     
Total
 
The Group
   
US$              
     
US$              
     
US$
     
US$
 
Cost
                       
At 1.1.2010
    27,723       19,660       21,294       68,677  
Additions
    2,031       419       -       2,450  
At 31.12.2010
    29,754       20,079       21,294       71,127  
Accumulated Depreciation
                               
At 1.1.2010
    22,944       12,179       21,169       56,292  
Charge for The year
    2,005       2,873       125       5,003  
At 31.12.2010
    24,949       15,052       21,294       61,295  
                                 
   Carrying Amount                                
   At 31.12.2010     4,805        5,027              9,832   
                                 
   At 31,12,2009     4,779        7,481        125        12,385   

         
13. INTERESTS IN SUBSIDIARY
 
   
2010
   
2009
 
   
US$
   
US$
 
             
Contributed capital
    120,000       120,000  
Amount due from subsidiary
    13,000       13,000  
                 
      133,000       133,000  



 
18

 



PEACE JOY MANAGEMENT LIMITED



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010

13. INTERESTS IN SUBSIDIARY - cont'd

Particulars of the subsidiary dircctly held by the Company at the reporting date.
 


 
Name
 
Country of
Incorporation
 
Paid-up registered
Capital
 
Percentage
holding
 
Principal
Activity
Life Enhancement Technology  Limited
 
People’s Republic of China
 
US$120,000
 
100%
 
Manufacturing of medical device

 
 
Amount due from subsidiary is unsecured, interest free and has no fixed term of repayment.



14. AMOUNT DUE TO A RELATED COMPANY

Amount due to Nature Way Technology Limited was unsecured, interest free and had been
fully repaid during the year. The Company's director is a director and shareholder of
Nature Way Technology Limited.



15. AMOUNT DUE TO DIRECTOR

Amount due to director is unsecured, interest free and has no fixed term of repayment.



16. LOANS
 

   
2010
   
2009
 
   
US$
   
US$
 
Loans
           
Principals
    258,858       305,654  
Interest accruals
    56,825       42,616  
      315,683       348.270  

    The loan raised by the subsidiary in previous years is unsecured, interest-bearing at the
bank lending rate and repayable within one year. During the current reporting period, the
subsidiary has also obtained another unsecured loan, interest-bearing at 3.65% per annum
and repayable within one year. According to the Company's director, concerned parties
are not related parties to the Group.

 
19

 



PEACE JOY MANAGEMENT LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010

17.  SHARE CAPITAL
     
2010
     
2009
 
     
US$
     
US$
 
Authorized
           
50,000 shares of US$1 each
    50.000       50,000  
                 
Issued and fully paid
               
3,000 shares of US$1 each
    3,000       3,000  

 
18. RESERVES
 
   
Retained Earnings
(Accumulated Losses)
US$
 
       
       
The Group
     
At 31 December 2009
    (156,311 )
Profit for the year
    116,843  
         
At 31 December 2010
    (39,468 )
         
The Company
       
At 31 December 2009
    36,654  
Profit for the year
    35,986  
         
At 31 December 2010
    72,640  
 

                            19. OPERATING LEASE COMMITMENTS

At the reporting date, the Group had commitments payable regarding the total of future
minimum lease payments under non-cancellable operating leases with respect to rented factory
premises as follows:
 
 
      2010      
2009
 
 
     
US$
      US$  
               
Within one year
      14,970       3,544  
Later than one year but within five years
      18,712       -  
                   
          33,682       3,544   
                     


 
20

 



PEACE JOY MANAGEMENT LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
 
20. RELATED PARTY TRANSACTIONS

Details of significant related party transactions during the year as at the reporting date are as
follows:
 
             
     
2010
      2009  
     
US$
      US$  
             
Amount due from;
           
   Fast Growth Enterprise Limited
    53,300       1,933  
   Other
    7.585       -  
                 
Amount due to:
                 
   Nature Way Technology Limited
    -       74.208  
   LI Xichang
    146,965       146,954  

Li Xichang is the Company's director, who is also director and shareholder of the above
related companies. All the above