![](/cdn/assets/images/search/clock.png)
We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Asia Time Corp | AMEX:TYM | AMEX | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.00 | - |
Delaware
|
20-4062619
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
|
Room
1601-1604, 16/F., CRE Centre
889
Cheung Sha Wan Road, Kowloon, Hong Kong
|
N/A
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
ITEM
|
Page
|
|||
PART
I
|
||||
Item
1.
|
Business
|
2
|
||
Item
1A.
|
Risk
Factors
|
7
|
||
PART
II
|
||||
Item
6.
|
Selected
Financial Data
|
18
|
||
Item
7.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
23
|
||
Item
7A.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
35
|
||
Item
8.
|
Financial
Statements and Supplementary Data
|
35
|
||
Item
9A.
|
Controls
and Procedures
|
35
|
||
PART
III
|
||||
Item
11.
|
Executive
Compensation
|
36
|
||
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
39
|
||
PART
IV
|
||||
Item
15.
|
Exhibits
and Financial Statement Schedules
|
42
|
||
Signatures
|
43
|
·
|
Dependence
on a limited number of suppliers;
|
·
|
Cyclicality
of our business;
|
·
|
Decline
in the value of our inventory;
|
·
|
Significant
order cancellations, reductions or
delays;
|
·
|
Competitive
nature of our industry;
|
·
|
Vulnerability
of our business to general economic
downturn;
|
·
|
Our
ability to obtain all necessary government certifications and/or
licenses
to conduct our business;
|
·
|
Development
of a public trading market for our securities;
|
·
|
The
cost of complying with current and future governmental regulations
and the
impact of any changes in the regulations on our operations;
and
|
·
|
The
other factors referenced in this report, including, without limitation,
under the sections entitled “Risk Factors,” “Management’s Discussion and
Analysis of Financial Condition and Results of Operations,” and
“Business.”
|
—
|
Automated
inventory management services.
We
manage our customers’ inventory reordering, stocking and administration
functions. We believe these services reduce paperwork, inventory, cycle
time and the overall cost of doing business for our customers. The
automated inventory management services are provided through our
computer
system through which we can manage our customer’s inventory reordering,
stocking and administration functions. We believe this helps us to
provide
better service to our customers by understanding their stock level,
purchase behavior and allows us to be more responsive to their demands
and
queries.
|
—
|
Integration.
Our sales specialists work directly with our customers to develop
and
deliver customized solutions and technical support to meet specific
requirements for our customers’ applications. We are able to offer
customers a one-stop source for their integration
needs.
|
·
|
increases
in tariffs or duties on imports from
Japan;
|
·
|
changes
in trade treaties between Japan and Hong
Kong;
|
·
|
strikes
or delays in air or sea transportation between Japan and Hong
Kong;
|
·
|
future
legislation with respect to pricing and/or import quotas on products
imported from Japan; and
|
·
|
turbulence
in the Japanese economy or financial
markets.
|
·
|
levying
fines;
|
·
|
revoking
our business and other licenses;
|
·
|
requiring
that we restructure our ownership or operations;
and
|
·
|
requiring
that we discontinue any portion or all of our
business.
|
·
|
quarantines
or closures of some of our manufacturing facilities, which would
severely
disrupt our operations,
|
·
|
the
sickness or death of our key officers and employees,
and
|
·
|
a
general slowdown in the Chinese
economy.
|
·
|
access
to the capital markets of the United
States;
|
·
|
the
increased market liquidity expected to result from exchanging stock
in a
private company for securities of a public company that may eventually
be
traded;
|
·
|
the
ability to use registered securities to make acquisition of assets
or
businesses;
|
·
|
increased
visibility in the financial
community;
|
·
|
enhanced
access to the capital markets;
|
·
|
improved
transparency of operations; and
|
·
|
perceived
credibility and enhanced corporate image of being a publicly traded
company.
|
|
Years
Ended December 31,
|
|||||||||||||||
2006
|
2005
|
2004
|
2003
|
2002
|
||||||||||||
(restated)
|
(restated)
|
(restated)
|
(restated)
|
(unaudited)
|
||||||||||||
|
(in
thousands, except share and per share
amounts)
|
|||||||||||||||
Net
sales
|
$
|
81,134
|
$
|
63,078
|
$
|
36,553
|
$
|
33,215
|
$
|
43,893
|
||||||
Cost
of sales
|
(71,496
|
)
|
(57,026
|
)
|
(34,609
|
)
|
(31,953
|
)
|
(43,036
|
)
|
||||||
Gross
profit
|
$
|
9,637
|
$
|
6,052
|
$
|
1,944
|
$
|
1,262
|
$
|
857
|
||||||
Other
income
|
424
|
939
|
-
|
-
|
-
|
|||||||||||
Depreciation
|
(326
|
)
|
(259
|
)
|
(126
|
)
|
(18
|
)
|
(17
|
)
|
||||||
Administrative
and other operating
expenses,
including stock based compensation
|
(1,285
|
)
|
(1,436
|
)
|
(1,345
|
)
|
(834
|
)
|
(700
|
)
|
||||||
Income
from operations
|
$
|
8,450
|
$
|
5,296
|
$
|
473
|
$
|
410
|
$
|
140
|
||||||
Fee
and costs related to reverse merger
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Interest
expense
|
(1,060
|
)
|
(515
|
)
|
(165
|
)
|
(115
|
)
|
(69
|
)
|
||||||
Other
income
|
238
|
156
|
28
|
20
|
74
|
|||||||||||
|
||||||||||||||||
Income
before taxes
|
$
|
7,628
|
$
|
4,937
|
$
|
336
|
$
|
315
|
$
|
145
|
||||||
Income
taxes
|
(1,308
|
)
|
(912
|
)
|
(132
|
)
|
(55
|
)
|
(24
|
)
|
||||||
Net
income
|
$
|
6,320
|
$
|
4,025
|
$
|
204
|
$
|
260
|
$
|
121
|
||||||
Earnings
per common share:
|
||||||||||||||||
-
Basic
|
$
|
0.32
|
$
|
0.21
|
$
|
0.01
|
$
|
0.01
|
$
|
0.01
|
||||||
-
Diluted
|
$
|
0.32
|
$
|
0.21
|
$
|
0.01
|
$
|
0.01
|
$
|
0.00
|
||||||
Dividends
declared per common share
|
$
|
0.11
|
$
|
0.03
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Weighted
average common shares:
|
||||||||||||||||
-
Basic
|
19,454,420
|
19,454,420
|
19,454,420
|
19,454,420
|
19,454,420
|
|||||||||||
-
Diluted
|
19,454,420
|
19,454,420
|
19,454,420
|
19,454,420
|
19,454,420
|
As
of December 31,
|
||||||||||||||||
|
2006
|
2005
|
2004
|
2003
|
2002
|
|||||||||||
|
(as restated)
|
(as restated)
|
(as restated)
|
(as restated)
|
(unaudited)
|
|||||||||||
|
(in
thousands)
|
|||||||||||||||
Current
Assets
|
$
|
21,400
|
$
|
16,648
|
$
|
12,432
|
$
|
4,836
|
$
|
3,838
|
||||||
Total
Assets
|
24,096
|
18,533
|
13,866
|
4,876
|
3,947
|
|||||||||||
Current
Liabilities
|
15,553
|
13,890
|
12,620
|
3,847
|
3,171
|
|||||||||||
Total
Liabilities
|
15,585
|
13,890
|
12,620
|
3,847
|
3,178
|
|||||||||||
Total
Stockholders' Equity
|
8,511
|
4,644
|
1,246
|
1,030
|
769
|
Asia
Time Corporation
|
||||||||||||||
Pro
Forma Combined Balance Sheets (Unaudited)
|
||||||||||||||
December
31, 2006
|
||||||||||||||
Historical
|
Historical
|
|||||||||||||
Asia
Time
|
Times
|
Pro
Forma
|
Pro
Forma
|
|||||||||||
Corporation
|
Manufacture
|
Adjustments
|
Combined
|
|||||||||||
$
|
$
|
$
|
$
|
|||||||||||
ASSETS
|
||||||||||||||
Current
Assets:
|
||||||||||||||
Cash
and cash equivalents
|
$
|
3,193
|
$
|
316,621
|
2,641,683
|
(1) |
|
$
|
2,331,383
|
|||||
(350,000)
|
(2) |
|
||||||||||||
(280,114)
|
(2) |
|
||||||||||||
Restricted
cash
|
-
|
4,523,679
|
4,523,679
|
|||||||||||
Accounts
receivable
|
-
|
8,188,985
|
8,188,985
|
|||||||||||
Prepaid
expenses and other
receivables
|
25,000
|
2,101,133
|
(139,083)
|
(2) |
|
1,987,050
|
||||||||
Tax
prepayment
|
-
|
767
|
767
|
|||||||||||
Inventories
|
-
|
6,646,185
|
6,646,185
|
|||||||||||
Prepaid
lease payments
|
-
|
22,958
|
22,958
|
|||||||||||
Total
Current Assets
|
28,193
|
21,400,328
|
23,301,007
|
|||||||||||
Deferred
tax assets
|
-
|
14,042
|
14,042
|
|||||||||||
Plant
and equipment, net
|
-
|
890,258
|
890,258
|
|||||||||||
Leasehold
lands
|
-
|
895,322
|
895,322
|
|||||||||||
Held-to-maturity
investments
|
-
|
301,196
|
301,196
|
|||||||||||
Intangible
assets
|
-
|
337,836
|
337,836
|
|||||||||||
Restricted
cash
|
-
|
257,301
|
257,301
|
|||||||||||
TOTAL
ASSETS
|
$
|
28,193
|
$
|
24,096,283
|
$
|
25,996,962
|
||||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||||||||
LIABILITIES
|
||||||||||||||
Current
Liabilities:
|
||||||||||||||
Accounts
payable
|
-
|
770,360
|
770,360
|
|||||||||||
Other
payables and accrued liabilities
|
-
|
190,358
|
190,358
|
|||||||||||
Advance
from related parties
|
33,000
|
-
|
(33,000)
|
(2) |
|
-
|
||||||||
Income
tax payable
|
-
|
1,387,571
|
1,387,571
|
|||||||||||
Bank
borrowings
|
-
|
13,205,167
|
13,205,167
|
|||||||||||
Total
Current Liabilities
|
33,000
|
15,553,456
|
15,553,456
|
|||||||||||
Deferred
tax liabilities
|
-
|
31,711
|
31,711
|
|||||||||||
TOTAL
LIABILITIES
|
33,000
|
15,585,167
|
15,585,167
|
|||||||||||
STOCKHOLDERS\'
EQUITY
|
||||||||||||||
Preferred
stock
|
-
|
-
|
225
|
(1) |
|
225
|
||||||||
Common
stock
|
270
|
1,946
|
370
|
(4) |
|
2,316
|
||||||||
(270)
|
(3) |
|
||||||||||||
Additional
paid-in capital
|
1,897
|
654,298
|
(370)
|
(4) |
|
3,290,579
|
||||||||
2,641,458
|
(1) |
|
||||||||||||
(4,807)
|
(3) |
|
||||||||||||
(1,897)
|
(3) |
|
||||||||||||
Accumulated
other comprehensive income
|
-
|
7,470
|
7,470
|
|||||||||||
6,974
|
(3) |
|
||||||||||||
Retained
earnings
|
(6,974
|
)
|
7,847,402
|
(736,197)
|
(2) |
|
7,111,205
|
|||||||
TOTAL
STOCKHOLDERS' EQUITY
|
(4,807
|
)
|
8,511,116
|
10,411,795
|
||||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
28,193
|
$
|
24,096,283
|
$
|
25,996,962
|
Asia
Time Corporation
Pro
Forma Combined Income statement (Unaudited)
December
31, 2006
|
||||||||||||||
Historical
|
Historical
|
|||||||||||||
Asia
Time
|
Times
|
Pro
Forma
|
Pro
Forma
|
|||||||||||
Corporation
|
Manufacture
|
Adjustments
|
Combined
|
|||||||||||
$
|
$
|
$
|
$
|
|||||||||||
Net
sales
|
-
|
$
|
81,134,275
|
$
|
81,134,275
|
|||||||||
Cost
of sales
|
-
|
(71,393,755
|
)
|
(71,393,755
|
)
|
|||||||||
Gross
profit
|
-
|
9,740,520
|
9,740,520
|
|||||||||||
Other
income
|
-
|
424,016
|
424,016
|
|||||||||||
Depreciation
|
-
|
(325,995
|
)
|
(325,995
|
)
|
|||||||||
Administrative
and other operating expenses
|
(6,974
|
)
|
(1,284,863
|
)
|
6,974
|
(3) |
|
(3,718,513
|
)
|
|||||
|
(2,433,650)
|
(5) | ||||||||||||
|
|
|||||||||||||
Income
from operations
|
(6,974
|
)
|
8,553,678
|
6,120,028
|
||||||||||
Other
income
|
-
|
237,571
|
237,571
|
|||||||||||
Interest
expenses
|
-
|
(1,060,536
|
)
|
(1,060,536
|
)
|
|||||||||
Income
before taxes
|
(6,974
|
)
|
7,730,713
|
5,297,063
|
||||||||||
Income
taxes
|
-
|
(1,325,761
|
)
|
(1,325,761
|
)
|
|||||||||
Net
income
|
$
|
(6,974
|
)
|
$
|
6,404,952
|
$
|
3,971,302
|
|||||||
Earnings
per share of common stock
|
||||||||||||||
-Basic
|
0.17
|
|||||||||||||
-Diluted
|
0.16
|
|||||||||||||
Weighted
average number of common stock
|
||||||||||||||
-Basic
and Diluted
|
23,156,629
|
(6)
|
||||||||||||
-Diluted
|
25,406,977
|
(6)
|
(1)
|
Reflect
the private placement of 2,250,348 shares of Series A Convertible
Preferred Stock at $1.29 per share.
|
(2)
|
Reflect
the legal and professional fees of share exchange and the payment
of
$350,000 to the shareholders of SRKP 9, Inc. as expense. Amount are
included in the Pro Forma Combined Balance Sheet but excluded from
the Pro
Forma Combined Income Statement, as they are non-recurring expenses
related only to the reverse merger.
|
(3)
|
Eliminate
the equity accounts, net asset accounts, and income statement accounts
of
SRKP 9, Inc as the Transaction was accounted for as a reverse merger
(corporate recapitalization) with Times Manufacture & E-Commerce
Corporation Limited being the accounting
acquirer,
|
(4)
|
Reflect
a 1.371188519-for-one stock reverse split in the course of the share
exchange.
|
(5)
|
In
connection with the Private Placement (See 1 above), Kwong Kai Shun,
the
Company's Chairman of the Board, Chief Executive Officer and Chief
Financial Officer, entered into an agreement with the investors in
the
Private Placement pursuant to which Mr. Kwong agreed to place 2,326,000
shares of his common stock in escrow for possible distribution to
the
investors (the "Escrow Shares").Pursuant to the Escrow Agreement,
if the
Company's net income for 2006 or 2007 (subject to specified adjustments)
as set forth in its filings with the SEC is less than $6,300,000
or
$7,700,000, respectively, a portion, if not all, of the Escrow Shares
will
be transferred to the investors based upon the Company's actual net
income, if any, for such fiscal years. This Arrangement is accounted
for
as or as the equivalent of a performance-based compensatory stock
plan
between Mr. Kwong and the Company and if Mr. Kwong retains his shares
the
company will have and expense of $2,433,650 based on the valuation
model
used by the Company. In the Proformas, the statement of proforma
operations reflects this performance award as if the underlying
transaction had happened at the beginning of 2006 and Mr. Kwong retained
his shares.
|
(6)
|
Weighted
average number of common stock are derived from the shares outstanding
after the merger considering the shares issued to the SRKP 9, Inc.,
and
split and reorganization required to accomplish recapitalization.
Diluted
Weighted Average Shares Outstanding include the effect of the preferred
shares issued on an as converted basis for the entire proforma
period.
|
Year
ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
Net
sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||
Cost
of sales
|
88.1
|
%
|
90.4
|
%
|
94.7
|
%
|
||||
Gross
profit
|
11.9
|
%
|
9.6
|
%
|
5.3
|
%
|
||||
Other
income
–
Note
4
|
0.5
|
%
|
1.5
|
%
|
-
|
|||||
Depreciation
|
0.4
|
%
|
0.4
|
%
|
0.3
|
%
|
||||
Administrative
and other operating
expenses,
including stock-based
compensation
|
1.6
|
%
|
2.3
|
%
|
3.7
|
%
|
||||
Income
from operations
|
10.4
|
%
|
8.4
|
%
|
1.3
|
%
|
||||
Fees
and costs related to reverse merger
|
-
|
-
|
-
|
|||||||
Other
income - Note 4
|
0.3
|
%
|
0.2
|
%
|
0.1
|
%
|
||||
Interest
expenses – Note 5
|
1.3
|
%
|
0.8
|
%
|
0.5
|
%
|
||||
Income
before taxes
|
9.4
|
%
|
7.8
|
%
|
0.9
|
%
|
||||
Income
taxes - Note 6
|
1.6
|
%
|
1.4
|
%
|
0.3
|
%
|
||||
Net
income
|
7.8
|
%
|
6.4
|
%
|
0.6
|
%
|
•
|
Hong
Kong / Chinese timepiece and jewelry companies
:
National Electronics Holdings Ltd. (SEHK:213), Hang Fung Gold Technology
Limited (SSEHK:870), and Peace Mark Holdings Ltd. (SEHK:304), LJ
International, Inc. (NasdaqNM: JADE) and Man Sang Holdings, Inc.
(Amex:
MHJ).
|
•
|
Hong
Kong / Chinese companies listed in the United States
:
China Architectural Engineering, Inc. (AMEX: RCH), Wonder Auto Technology,
Inc. (NasdaqNM:WATG — manufacturer of automotive electrical
parts in China), SORL Auto Parts, Inc.
(NasdaqNM:SORL — manufacturer and distributor of commercial
vehicle air brake valves and related components in China and
internationally), and Orsus Xelent Technologies, Inc.
(Amex:ORS — designer for retail and wholesale distribution of
cellular phones).
|
Name
and Position
|
Year
|
Salary
|
All Other
Compensation(2)
|
Total
|
|||||||||
Kwong
Kai Shun
|
2006
|
$
|
61,538
|
$
|
12,312
|
$
|
73,850
|
||||||
Chief
Executive Officer, Chief Financial Officer and Chairman of the
Board
|
2005
|
62,500
|
13,500
|
75,500
|
|||||||||
2004
|
62,000
|
13,500
|
75,500
|
||||||||||
Richard
Rappaport(1)
|
2006
|
—
|
—
|
—
|
|||||||||
Former
Chief Executive Officer and Former Director
|
2005
|
—
|
—
|
—
|
|||||||||
2004
|
—
|
—
|
—
|
||||||||||
Anthony
Pintsopoulos(1)
|
2006
|
—
|
—
|
—
|
|||||||||
Former
Chief Financial Officer and Former Director
|
2005
|
—
|
—
|
—
|
|||||||||
2004
|
—
|
—
|
—
|
(1)
|
Messrs.
Rappaport and Pintsopoulos resigned from all positions with the Company
upon the close of the Share Exchange on January 23,
2007.
|
(2) |
This
relates to automobile, housing and medical personal
benefits.
|
Name
|
Fees
Earned or
Paid
in
Cash
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
|
All
Other
Compensation
($)
|
Total
($)
|
|||||||||||||||
Kwong
Kai Shun
|
-
|
-
|
-
|
-
|
-
|
-
|
0
|
|||||||||||||||
Michael
Mak
|
-
|
-
|
-
|
-
|
-
|
-
|
0
|
A |
means
the number of additional shares of common stock to be transferred
by Mr.
Kwong to the investors.
|
N |
means
the number of stock held by the
investors.
|
S |
means
the shortfall in agreed valuation per share of Common Stock calculated
as
follows: $1.29 – ((actual amount of net income for 2007 x 4) /
25,482,210).
|
Asia
Time Corporation
|
|
/s/
Kwong Kai Shun
|
|
Kwong
Kai Shun
|
|
Chief
Executive Officer, Chief Financial Officer and
|
|
Chairman
of the Board
|
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/
Kwong Kai Shun
|
|
Chief
Executive Officer, Chief Financial Officer and Chairman of the Board
(Principal Executive Officer; Principal Financial and Accounting
Officer)
|
|
February
8, 2008
|
Kwong
Kai Shun
|
|
|
|
|
/s/
Michael Mak
|
|
Director
|
|
February
8, 2008
|
Michael
Mak
|
|
|
|
|
|
|
|
|
|
/s/
Siu Po Lee
|
Director
|
February
8, 2008
|
||
Siu
Po Lee
|
||||
Director
|
||||
Dr.
Ching Wah Leung
|
||||
Director
|
||||
Wu
Hok Lun
|
Exhibit No.
|
Exhibit
Description
|
|
2.1
|
Share
Exchange Agreement, dated as of December 15, 2006, by and among the
Registrant, Kwong Kai Shun and Times Manufacture & E-Commerce
Corporation, Limited (incorporated by reference from Exhibit 2.1
to
Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 29, 2007).
|
|
3.1
|
Certificate
of Incorporation (incorporated by reference from Exhibit 3.1 to
the
Registration Statement on Form 10-SB (File No. 000-51981) filed
with the
Securities and Exchange Commission on May 5, 2006).
|
|
3.2
|
Bylaws
(incorporated by reference from Exhibit 3.2 to the Registration
Statement
on Form 10-SB (File No. 000-51981) filed with the Securities and
Exchange
Commission on May 5, 2006).
|
|
3.3
|
Articles
of Merger Effecting Name Change (incorporated by reference from
Exhibit
3.3 to Current Report on Form 8-K filed with the Securities and
Exchange
Commission on January 29, 2007).
|
|
3.4
|
Certificate
Of Designations, Preferences And Rights Of Series A Convertible
Preferred
Stock (incorporated by reference from Exhibit 3.4 to Current Report
on
Form 8-K filed with the Securities and Exchange Commission on January
29,
2007).
|
|
4.1
|
Specimen
Certificate of Common Stock (incorporated by reference to Exhibit
4.1 of
the Registrant's Registration Statement on Form SB-2 filed August
20,
2004).
|
|
10.1
|
Form
of Subscription Agreement dated as of January 23, 2007 and February
9,
2007 (incorporated by reference from Exhibit 10.1 to Current Report
on
Form 8-K filed with the Securities and Exchange Commission on February
13,
2007).
|
|
10.2
|
Form
of Agreement between Kwong Kai Shun and Investors of Series A Convertible
Preferred Stock (incorporated by reference to Exhibit 10.2 of the
Registration Statement on Form S-1 filed with the Securities and
Exchange
Commission on September 26, 2007).
|
|
10.2(a)
|
Amendment
No. 1 to Agreement between Kwong Kai Shun and Investors of Series
A
Convertible Preferred Stock, dated June 30, 2007 (incorporated
by
reference to Exhibit 10.2(a) of the Registration Statement on Form
S-1
filed with the Securities and Exchange Commission on September
26,
2007).
|
|
21.1
|
List
of Subsidiaries (incorporated by reference from Exhibit 21.1 to
Current
Report on Form 8-K filed with the Securities and Exchange Commission
on
January 29, 2007).
|
|
31.1
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant
to
Item 601(b)(31) of Regulation S-K, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1*
|
Certifications
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
*
|
This
exhibit shall not be deemed "filed" for purposes of Section 18 of
the
Securities Exchange Act of 1934 or otherwise subject to the liabilities
of
that section, nor shall it be deemed incorporated by reference in
any
filing under the Securities Act of 1933 or the Securities Exchange
Act of
1934, whether made before or after the date hereof and irrespective
of any
general incorporation language in any
filings.
|
Report
Of Independent Registered Public Accounting Firm
|
F-2
|
Balance
Sheet
|
F-3
|
Income
Statement
|
F-5
|
Statement
of Stockholders’ Equity
|
F-6
|
Statement
of Cash Flows
|
F-7
|
Notes
to Financial Statements
|
F-9
|
At December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
$
|
$
|
||||||||
(restated)
|
(restated)
|
(restated)
|
||||||||
ASSETS
|
||||||||||
Current
Assets:
|
||||||||||
Cash
and cash equivalents
|
316,621
|
780,090
|
911,487
|
|||||||
Restricted
cash
|
4,523,679
|
4,306,474
|
3,551,304
|
|||||||
Accounts
receivable
|
8,188,985
|
4,829,586
|
3,369,326
|
|||||||
Prepaid
expenses and other receivables - Note 8
|
2,101,133
|
394,236
|
727,934
|
|||||||
Tax
prepayment
|
767
|
16,367
|
-
|
|||||||
Inventories,
net – Note 9
|
6,246,185
|
6,313,662
|
3,872,831
|
|||||||
Prepaid
lease payments – Note 11
|
22,958
|
7,993
|
-
|
|||||||
Total
Current Assets
|
21,400,328
|
16,648,408
|
12,432,882
|
|||||||
Deferred
tax assets – Note 7
|
14,042
|
-
|
-
|
|||||||
Plant
and equipment, net – Note 10
|
890,258
|
682,901
|
696,552
|
|||||||
Leasehold
lands – Note 11
|
895,322
|
315,939
|
-
|
|||||||
Held-to-maturity
investments – Note 12
|
301,196
|
301,954
|
-
|
|||||||
Intangible
assets – Note 13
|
337,836
|
584,149
|
736,934
|
|||||||
Restricted
cash
|
257,301
|
-
|
-
|
|||||||
TOTAL
ASSETS
|
24,096,283
|
18,533,351
|
13,866,368
|
|||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||
LIABILITIES
|
||||||||||
Current
Liabilities:
|
||||||||||
Accounts
payable
|
770,360
|
1,236,418
|
1,805,995
|
|||||||
Other
payables and accrued liabilities - Note 14
|
190,358
|
145,249
|
41,798
|
|||||||
Advance
from a related party – Note 15
|
-
|
28,854
|
89,296
|
|||||||
Income
tax payable
|
1,387,571
|
816,758
|
85,439
|
|||||||
Unearned
revenue – Note 14
|
-
|
1,598,314
|
3,197,160
|
|||||||
Bank
borrowings – Note 16
|
13,205,167
|
10,064,129
|
7,400,775
|
|||||||
Total
Current Liabilities
|
15,553,456
|
13,889,722
|
12,620,463
|
|||||||
Deferred
tax liabilities - Note 7
|
31,711
|
-
|
-
|
|||||||
TOTAL
LIABILITIES
|
15,585,167
|
13,889,722
|
12,620,463
|
At
December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
$
|
$
|
||||||||
(restated)
|
(restated)
|
(restated)
|
||||||||
STOCKHOLDERS’
EQUITY
|
||||||||||
Preferred
stock
|
||||||||||
Par
value: US$0.0001
|
||||||||||
Authorized:
2006 – 10,000,000 shares
|
||||||||||
Issued
and outstanding: 2006 – none issued (2005 and 2004 – none)
|
-
|
-
|
-
|
|||||||
Common
stock
|
||||||||||
Par
value: US$0.0001
|
||||||||||
Authorized:
100,000,000 shares
|
||||||||||
Issued
and outstanding: 2006 – 19,454,420 shares (2005 and 2004 – 19,454,420
shares)
|
1,946
|
1,946
|
1,946
|
|||||||
Additional
paid-in capital
|
654,298
|
654,298
|
652,488
|
|||||||
Accumulated
other comprehensive income
|
7,470
|
13,549
|
412
|
|||||||
Retained
earnings
|
7,847,402
|
3,973,836
|
591,059
|
|||||||
TOTAL
STOCKHOLDERS’ EQUITY
|
8,511,116
|
4,643,629
|
1,245,905
|
|||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
24,096,283
|
18,533,351
|
13,866,368
|
Year
ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
$
|
$
|
||||||||
(restated)
|
(restated)
|
(restated)
|
||||||||
Net
sales
|
81,134,275
|
63,078,409
|
36,553,084
|
|||||||
Cost
of sales – Note 20
|
(71,496,801
|
)
|
(57,026,036
|
)
|
(34,608,653
|
)
|
||||
Gross
profit
|
9,637,474
|
6,052,373
|
1,944,431
|
|||||||
Other
income - Note 5
|
424,016
|
938,573
|
-
|
|||||||
Depreciation
|
(325,995
|
)
|
(259,127
|
)
|
(126,225
|
)
|
||||
Administrative
and other operating expenses – Note 22
|
(1,284,863
|
)
|
(1,436,069
|
)
|
(1,344,786
|
)
|
||||
Income
from operations
|
8,450,632
|
5,295,750
|
473,420
|
|||||||
Other
income - Note 5
|
237,571
|
156,199
|
28,047
|
|||||||
Interest
expenses – Note 6
|
(1,060,536
|
)
|
(514,637
|
)
|
(164,558
|
)
|
||||
Income
before taxes
|
7,627,667
|
4,937,312
|
336,909
|
|||||||
Income
taxes - Note 7
|
(1,307,728
|
)
|
(911,687
|
)
|
(131,951
|
)
|
||||
Net
income
|
6,319,939
|
4,025,625
|
204,958
|
|||||||
Earnings
per share of common stock – Note 3
|
||||||||||
-
Basic and diluted
|
0.32
|
0.21
|
0.01
|
|||||||
Weighted
average number of shares of common stock – Note 3
|
||||||||||
-
Basic and diluted
|
19,454,420
|
19,454,420
|
19,454,420
|
Preferred Stock
|
Common Stock
|
Additional
paid-in |
Accumulated
other comprehensive |
Retained
|
|||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Income
|
earnings
|
Total
|
||||||||||||||||||
$
|
$
|
$
|
$
|
$
|
$
|
||||||||||||||||||||
December
31, 2003 (as previously reported)
|
-
|
-
|
23,156,629
|
2,316
|
642,120
|
(705
|
)
|
414,550
|
1,058,281
|
||||||||||||||||
Restatements
(note 23)
|
-
|
-
|
(3,702,209
|
)
|
(370
|
)
|
370
|
(28,449
|
)
|
(28,449
|
)
|
||||||||||||||
Balance,
January 1, 2004
|
-
|
-
|
19,454,420
|
1,946
|
642,490
|
(705
|
)
|
386,101
|
1,029,832
|
||||||||||||||||
Issuance
of shares – TMEHK
|
-
|
-
|
-
|
-
|
9,998
|
-
|
-
|
9,998
|
|||||||||||||||||
Comprehensive
income
|
|||||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
-
|
204,958
|
204,958
|
|||||||||||||||||
Foreign
currency translation
|
|||||||||||||||||||||||||
Adjustments
|
-
|
-
|
-
|
-
|
-
|
1,117
|
-
|
1,117
|
|||||||||||||||||
Total
comprehensive income
|
-
|
-
|
-
|
-
|
-
|
1,117
|
204,958
|
206,075
|
|||||||||||||||||
Balance,
December 31, 2004
|
-
|
-
|
19,454,420
|
1,946
|
652,488
|
412
|
591,059
|
1,245,905
|
|||||||||||||||||
Issuance
of shares – Note 2
|
-
|
-
|
-
|
-
|
30,000
|
-
|
-
|
30,000
|
|||||||||||||||||
Restructuring
– Note 2
|
-
|
-
|
-
|
-
|
(28,190
|
)
|
-
|
-
|
(28,190
|
)
|
|||||||||||||||
Comprehensive
income
|
|||||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
-
|
4,025,625
|
4,025,625
|
|||||||||||||||||
Foreign
currency translation
|
|||||||||||||||||||||||||
Adjustments
|
-
|
-
|
-
|
-
|
-
|
13,137
|
-
|
13,137
|
|||||||||||||||||
Total
comprehensive income
|
-
|
-
|
-
|
-
|
-
|
13,137
|
4,025,625
|
4,038,762
|
|||||||||||||||||
Dividends
|
-
|
-
|
-
|
-
|
-
|
-
|
(642,848
|
)
|
(642,848
|
)
|
|||||||||||||||
Balance,
December 31, 2005
|
-
|
-
|
19,454,420
|
1,946
|
654,298
|
13,549
|
3,973,836
|
4,643,629
|
|||||||||||||||||
Comprehensive
income
|
|||||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
-
|
6,319,939
|
6,319,939
|
|||||||||||||||||
Foreign
currency translation
|
-
|
-
|
|||||||||||||||||||||||
Adjustments
|
-
|
-
|
-
|
-
|
-
|
(6,079
|
)
|
-
|
(6,079
|
)
|
|||||||||||||||
Total
comprehensive income
|
-
|
-
|
-
|
-
|
-
|
(6,079
|
)
|
6,319,939
|
6,313,860
|
||||||||||||||||
Dividends
|
-
|
-
|
-
|
-
|
-
|
-
|
(2,446,373
|
)
|
(2,446,373
|
)
|
|||||||||||||||
Balance,
December 31, 2006
|
-
|
-
|
19,454,420
|
1,946
|
654,298
|
7,470
|
7,847,402
|
8,511,116
|
Year
ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
$
|
$
|
||||||||
(restated)
|
(restated)
|
(restated)
|
||||||||
Cash
flows from operating activities
|
||||||||||
Net
income
|
6,319,939
|
4,025,625
|
204,958
|
|||||||
Adjustments
to reconcile net
income to net cash flows provided by operating activities:
|
||||||||||
Amortization
of intangible assets
|
154,436
|
154,438
|
35,382
|
|||||||
Amortization
of leasehold lands
|
23,247
|
7,968
|
-
|
|||||||
Depreciation
|
325,995
|
259,127
|
126,225
|
|||||||
Loss
on disposal of plant and equipment
|
7,715
|
-
|
-
|
|||||||
Gain
on disposal of intangible assets
|
(210,594
|
)
|
-
|
-
|
||||||
Income
taxes
|
1,307,728
|
911,687
|
131,951
|
|||||||
Changes
in operating assets and liabilities:
|
||||||||||
Accounts
receivable
|
(3,369,347
|
)
|
(1,445,937
|
)
|
(1,997,310
|
)
|
||||
Prepaid
expenses and other receivables
|
(1,706,789
|
)
|
334,759
|
310
|
||||||
Inventories
|
50,990
|
(2,421,140
|
)
|
(2,577,568
|
)
|
|||||
Accounts
payable
|
(462,658
|
)
|
(573,017
|
)
|
538,433
|
|||||
Other
payables and accrued liabilities
|
45,445
|
103,007
|
370
|
|||||||
Income
tax payable
|
(701,921
|
)
|
(199,079
|
)
|
(76,747
|
)
|
||||
Unearned
revenue
|
(1,593,280
|
)
|
(1,603,082
|
)
|
3,191,721
|
|||||
Net
cash flows provided by (used in) operating activities
|
190,906
|
(445,644
|
)
|
(422,275
|
)
|
|||||
Cash
flows from investing activities
|
||||||||||
Acquisition
of leasehold lands
|
(618,025
|
)
|
(330,884
|
)
|
-
|
|||||
Acquisition
of held-to-maturity investments
|
-
|
(301,007
|
)
|
-
|
||||||
Acquisition
of intangible assets
|
-
|
-
|
(771,063
|
)
|
||||||
Acquisition
of plant and equipment
|
(544,678
|
)
|
(243,504
|
)
|
(781,095
|
)
|
||||
Proceeds
from disposal of plant and equipment
|
2,031
|
-
|
-
|
|||||||
Proceeds
from disposal of intangible assets
|
300,849
|
-
|
-
|
|||||||
Net
cash flows used in investing activities
|
(859,823
|
)
|
(875,395
|
)
|
(1,552,158
|
)
|
||||
Cash
flows from financing activities
|
||||||||||
Proceeds
from new short-term bank loans
|
1,700,622
|
346,622
|
140,937
|
|||||||
Repayment
of short-term bank loans
|
(525,535
|
)
|
(408,211
|
)
|
(11,527
|
)
|
||||
Repayment
of a capital lease
|
-
|
-
|
(6,975
|
)
|
||||||
Net
advancement of other bank borrowings
|
1,789,269
|
2,946,182
|
4,176,477
|
|||||||
Increase
in restricted cash
|
(484,997
|
)
|
(755,170
|
)
|
(2,255,598
|
)
|
||||
Increase/(decrease)
in bank overdrafts
|
199,893
|
(250,997
|
)
|
599,814
|
||||||
Advance
from a related party
|
(28,763
|
)
|
(60,511
|
)
|
122,571
|
|||||
Dividends
paid
|
(2,446,373
|
)
|
(642,848
|
)
|
-
|
|||||
Net
cash flows provided by financing activities
|
204,116
|
1,175,067
|
2,765,699
|
|||||||
Net
(decrease) / increase in cash and cash equivalents
|
(464,801
|
)
|
(145,972
|
)
|
791,266
|
|||||
Effect
of foreign currency translation on cash and cash
equivalents
|
1,332
|
14,575
|
7,242
|
|||||||
Cash
and cash equivalents - beginning of year
|
780,090
|
911,487
|
112,979
|
|||||||
Cash
and cash equivalents - end of year
|
316,621
|
780,090
|
911,487
|
Year
ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
$
|
$
|
||||||||
(restated)
|
(restated)
|
(restated)
|
||||||||
Supplemental
disclosures for cash flow information:
|
||||||||||
Cash
paid for:
|
||||||||||
Interest
|
1,060,536
|
514,637
|
164,558
|
|||||||
Income
taxes
|
701,921
|
199,079
|
76,747
|
1. |
Change
of company name
|
2.
|
Corporation
information
and
reorganization
|
2. |
Corporation
information
and
reorganization (Cont’d)
|
2. |
Corporation
information
and
reorganization (Cont’d)
|
3. |
Description
of business
|
Name of company
|
Place and date of
incorporation |
Issued and fully paid
capital |
Principal activities
|
|||
Times
Manufacture & E-Commerce Corporation Ltd
|
British
Virgin Islands
March 21, 2002 |
US$20,002
Ordinary
|
Investment
holding
|
|||
Times
Manufacturing & E-Commerce Corporation Ltd
(“TME
HK”)
|
British
Virgin Islands
January
2, 2002
|
US$20,000
Ordinary
|
Investment
holding
|
|||
Billion
Win International Enterprise Ltd (“BW”)
|
Hong
Kong
March
5, 2001
|
HK$5,000,000
Ordinary
|
Trading
of watch components
|
|||
Goldcome
Industrial Ltd (“GI”)
|
Hong
Kong
March
2, 2001
|
HK$10,000
Ordinary
|
Trading
of watch components
|
|||
Citibond
Industrial Ltd (“CI”)
|
Hong
Kong
February
28, 2003
|
HK$1,000
Ordinary
|
Trading
of watch components
|
|||
Megamooch
International Ltd (“MI”)
|
Hong
Kong
April
2, 2001
|
HK$100
Ordinary
|
Trading
of watches and watch components
|
|||
TME
Enterprise Ltd
|
British
Virgin Islands
November
28, 2003
|
US$2
Ordinary
|
Investment
holding
|
|||
Citibond
Design Ltd
|
British
Virgin Islands
August
1, 2003
|
US$2
Ordinary
|
Inactive
|
|||
Megamooch
Online Ltd
|
British
Virgin Islands
June
6, 2003
|
US$2
Ordinary
|
Trading
of watches and watch components
|
4. |
Summary
of significant accounting
policies
|
4. |
Summary
of significant accounting policies
(Cont’d)
|
Year
ended December 31
|
||||||||||
2006
|
2005
|
2004
|
||||||||
|
|
$
|
|
$
|
|
$
|
|
|||
1
st
largest customer
|
9,587,395
|
15,112,655
|
4,482,110
|
|||||||
2
nd
largest customer
|
8,935,246
|
7,047,980
|
-
|
|||||||
Net
sales
|
18,522,641
|
22,160,635
|
4,482,110
|
|||||||
Accounts
receivable
|
1,463,565
|
-
|
417,954
|
4. |
Summary
of significant accounting policies
(Cont’d)
|
Trademarks
|
20
|
%
|
||
Websites
|
20
|
%
|
4. |
Summary
of significant accounting policies
(Cont’d)
|
Buildings
|
over the unexpired lease term
|
|||
Furniture
and fixtures
|
20
- 25
|
%
|
||
Office
equipment
|
25
- 33
|
%
|
||
Machinery
and equipment
|
25
- 33
|
%
|
||
Moulds
|
33
|
%
|
||
Motor
vehicles
|
25
- 33
|
%
|
4. |
Summary
of significant accounting policies
(Cont’d)
|
4. |
Summary
of significant accounting policies
(Cont’d)
|
2006
|
2005
|
2004
|
||||||||
Year
end HK$
:
US$ exchange rate
|
7.7730
|
7.7535
|
7.7760
|
|||||||
Average
yearly HK$
:
US$ exchange rate
|
7.7783
|
7.7778
|
7.7893
|
4. |
Summary
of significant accounting policies
(Cont’d)
|
4. |
Summary
of significant accounting policies
(Cont’d)
|
4. |
Summary
of significant accounting policies
(Cont’d)
|
4. |
Summary
of significant accounting policies
(Cont’d)
|
5. |
Other
income
|
Year
ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
|
|
$
|
|
$
|
|
$
|
||||
Operating
income
|
||||||||||
Commission
income
|
-
|
771,432
|
-
|
|||||||
Gain
on disposal of intangible assets
|
210,594
|
-
|
-
|
|||||||
License
fee of intangible assets
|
167,138
|
167,141
|
-
|
|||||||
Rental
income
|
46,284
|
-
|
-
|
|||||||
424,016
|
938,573
|
-
|
||||||||
Non-operating
income
|
||||||||||
Bank
interest income
|
208,854
|
76,358
|
15,720
|
|||||||
Dividend
income
|
8,977
|
4,481
|
-
|
|||||||
Insurance
compensation
|
-
|
8,325
|
-
|
|||||||
Net
exchange gains
|
1,078
|
1,302
|
170
|
|||||||
Other
interest income
|
18,635
|
49,440
|
-
|
|||||||
Sundry
income
|
27
|
16,293
|
12,157
|
|||||||
237,571
|
156,199
|
28,047
|
||||||||
661,587
|
1,094,772
|
28,047
|
6. |
Interest
expenses
|
Year
ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
$
|
$
|
||||||||
Interest
on bank trust receipts
|
981,184
|
457,983
|
139,209
|
|||||||
Interest
on short-term bank loans
|
25,322
|
6,254
|
14,505
|
|||||||
Interest
on bank overdrafts
|
54,030
|
45,302
|
6,648
|
|||||||
Interest
on a capital lease
|
-
|
-
|
1,947
|
|||||||
Interest
on other loans
|
-
|
5,098
|
2,249
|
|||||||
1,060,536
|
514,637
|
164,558
|
7. |
Income
taxes
|
Year
ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
|
$
|
|
$
|
||||||
Hong
Kong profits tax
|
||||||||||
Current
year
|
1,311,479
|
948,933
|
136,117
|
|||||||
Over
provision in prior year
|
(21,408
|
)
|
(37,246
|
)
|
(4,166
|
)
|
||||
1,290,071
|
911,687
|
131,951
|
||||||||
Deferred
taxes
|
17,657
|
-
|
-
|
|||||||
1,307,728
|
911,687
|
131,951
|
7. |
Income
taxes (Cont’d)
|
Year
ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
|
$
|
|
$
|
||||||
Income
before taxes
|
7,627,667
|
4,937,312
|
336,909
|
|||||||
Provision
for income taxes at Hong Kong income tax rate
|
1,334,842
|
864,030
|
58,959
|
|||||||
Change
in valuation allowance
|
486
|
50,918
|
118,129
|
|||||||
Non-taxable
items
|
(43,870
|
)
|
(14,147
|
)
|
-
|
|||||
Non-deductible
items
|
7,363
|
27
|
418
|
|||||||
Others
|
8,907
|
45,927
|
(44,228
|
)
|
||||||
1,307,728
|
911,687
|
131,951
|
At
December 31
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
|
$
|
|
$
|
||||||
Temporary
difference on accelerated tax depreciation on plant and
equipment
|
17,669
|
-
|
-
|
|||||||
Deferred
tax liabilities, net
|
17,669
|
-
|
-
|
|||||||
Recognized
in the balance sheet:
|
||||||||||
Net
deferred tax assets
|
(14,042
|
)
|
-
|
-
|
||||||
Net
deferred tax liabilities
|
31,711
|
-
|
-
|
|||||||
17,669
|
-
|
-
|
8. |
Prepaid
expenses and other
receivables
|
At
December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
|
|
$
|
|
$
|
$
|
|||||
Rental
receivable
|
46,314
|
-
|
-
|
|||||||
Interest
receivable
|
20,218
|
-
|
-
|
|||||||
Purchase
deposits paid
|
1,530,372
|
361,221
|
727,725
|
|||||||
Sales
proceeds of intangible assets receivable
|
301,042
|
-
|
-
|
|||||||
Other
deposits and prepayments
|
203,187
|
33,015
|
209
|
|||||||
2,101,133
|
394,236
|
727,934
|
9. |
Inventories
|
At
December 31
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
|
$
|
$
|
|||||||
Merchandises,
at cost – completed watches
|
1,745,648
|
3,630,754
|
2,446,048
|
|||||||
Merchandises,
at cost – watch movements
|
4,500,537
|
2,682,868
|
1,426,783
|
|||||||
6,246,185
|
6,313,622
|
3,872,831
|
10. |
Plant
and equipment
|
At
December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
|
$
|
|
$
|
||||||
Cost
|
||||||||||
Buildings
|
242,350
|
104,008
|
-
|
|||||||
Furniture
and fixtures
|
492,866
|
478,811
|
350,425
|
|||||||
Office
equipment
|
145,911
|
137,410
|
124,157
|
|||||||
Machinery
and equipment
|
321,626
|
128,974
|
128,601
|
|||||||
Moulds
|
384,665
|
230,863
|
230,195
|
|||||||
Motor
vehicles
|
45,928
|
26,375
|
26,299
|
|||||||
1,633,346
|
1,106,441
|
859,677
|
||||||||
Accumulated
depreciation
|
||||||||||
Buildings
|
8,441
|
2,542
|
-
|
|||||||
Furniture
and fixtures
|
237,508
|
140,271
|
21,049
|
|||||||
Office
equipment
|
100,612
|
68,766
|
35,020
|
|||||||
Machinery
and equipment
|
93,475
|
32,447
|
6,633
|
|||||||
Moulds
|
276,936
|
153,139
|
76,732
|
|||||||
Motor
vehicles
|
26,116
|
26,375
|
23,691
|
|||||||
743,088
|
423,540
|
163,125
|
||||||||
Net
|
||||||||||
Buildings
|
233,909
|
101,466
|
-
|
|||||||
Furniture
and fixtures
|
255,358
|
338,540
|
329,376
|
|||||||
Office
equipment
|
45,299
|
68,644
|
89,137
|
|||||||
Machinery
and equipment
|
228,151
|
96,527
|
121,968
|
|||||||
Moulds
|
107,729
|
77,724
|
153,463
|
|||||||
Motor
vehicles
|
19,812
|
-
|
2,608
|
|||||||
890,258
|
682,901
|
696,552
|
11. |
Leasehold
lands
|
At
December 31
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
|
$
|
|
$
|
||||||
Cost
|
949,514
|
331,924
|
-
|
|||||||
Accumulated
amortization
|
31,234
|
7,992
|
-
|
|||||||
Net
|
918,280
|
323,932
|
-
|
|||||||
Analyzed
for reporting purposes as:
|
||||||||||
Current
asset
|
22,958
|
7,993
|
-
|
|||||||
Non-current
asset
|
895,322
|
315,939
|
-
|
|||||||
918,280
|
323,932
|
-
|
12. |
Held-to-maturity
investments
|
At
December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
|
|
$
|
|
$
|
|
$
|
||||
Hang
Seng Capital Guarantee Investment Fund - 30,000 units at $10 each,
interest rate at 10.5% in 3.75 years
|
||||||||||
Cost
|
301,196
|
301,954
|
-
|
|||||||
Fair
value
|
294,410
|
275,100
|
-
|
13. |
Intangible
assets
|
At
December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
$
|
$
|
||||||||
Cost
|
||||||||||
Trademarks
|
200,695
|
201,199
|
200,617
|
|||||||
Websites
|
421,459
|
573,418
|
571,759
|
|||||||
622,154
|
774,617
|
772,376
|
||||||||
Accumulated
amortization
|
||||||||||
Trademarks
|
112,389
|
72,431
|
32,099
|
|||||||
Websites
|
171,929
|
118,037
|
3,343
|
|||||||
284,318
|
190,468
|
35,442
|
||||||||
Net
|
||||||||||
Trademarks
|
88,306
|
128,768
|
168,518
|
|||||||
Websites
|
249,530
|
455,381
|
568,416
|
|||||||
337,836
|
584,149
|
736,934
|
$
|
||||
2007
|
124,430
|
|||
2008
|
124,430
|
|||
2009
|
88,976
|
|||
337,836
|
14. |
Other
payables and accrued
liabilities
|
At
December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
|
$
|
|
$
|
|
|||||
Accrued
expenses
|
181,352
|
145,249
|
41,798
|
|||||||
Sales
deposits received
|
9,006
|
-
|
-
|
|||||||
190,358
|
145,249
|
41,798
|
15. |
Advance
from a related party
|
At
December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
|
$
|
|
$
|
|
|||||
Advance
from a director
|
-
|
28,854
|
89,296
|
16.
|
Bank
borrowings
|
At
December 31
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
$
|
|
$
|
|||||||
Secured:
|
||||||||||
Bank
overdrafts repayable on demand
|
551,714
|
352,577
|
602,614
|
|||||||
Repayable
within one year
|
||||||||||
Non-recurring
bank loans
|
1,469,866
|
294,764
|
129,631
|
|||||||
Other
bank borrowings
|
11,183,587
|
9,416,788
|
6,668,530
|
|||||||
13,205,167
|
10,064,129
|
7,400,775
|
Amount
|
||||||||||
Facilities
granted
|
Granted
|
Utilized
|
Unused
|
|||||||
$
|
|
$
|
|
$
|
||||||
Bank
overdrafts
|
643,252
|
551,714
|
91,538
|
|||||||
Non-recurring
bank loans
|
1,469,866
|
1,469,866
|
-
|
|||||||
Other
facilities including:
|
||||||||||
-
Outstanding letter of credit
|
||||||||||
-
Letter of credit under trust receipt
|
||||||||||
-
Invoice/account payable financing
|
11,578,541
|
11,183,587
|
394,954
|
|||||||
13,691,659
|
13,205,167
|
486,492
|
(a)
|
first
fixed legal charge over leasehold land and buildings with carrying
amounts
of $1,152,189 (note 11 and 12);
|
(b) |
charge
over bank deposits of $4,780,980;
|
(c) |
charge
over held-to-maturity investments of $301,196 (note 12);
and
|
(d)
|
personal
guarantee executed by a director of the
Company;
|
(e) |
other
financial covenant.
|
17.
|
Pension
plans
|
18.
|
Commitments
and contingencies
|
Year
ending December 31
|
$
|
|||
2007
|
89,011
|
|||
2008
|
70,272
|
|||
159,283
|
19.
|
Common
stock
|
At
December 31
|
|||||||||||||||||||
Number
of shares
|
Amount
|
||||||||||||||||||
2006
|
2005
|
2004
|
2006
|
2005
|
2004
|
||||||||||||||
Authorized:
|
|||||||||||||||||||
The
Company of $0.0001 each
|
100,000,000
|
100,000,000
|
100,000,000
|
10,000
|
10,000
|
10,000
|
|||||||||||||
Issued
and outstanding:
|
|||||||||||||||||||
The
Company of $0.0001 each
|
19,454,420
|
19,454,420
|
19,454,420
|
1,946
|
1,946
|
1,946
|
20.
|
Segment
Information
|
2006
|
Watch
movements |
Completed
watches |
Total
|
|||||||
|
$
|
|
$
|
|
$
|
|||||
Sales
|
73,047,632
|
8,086,643
|
81,134,275
|
|||||||
Cost
of sales
|
(67,228,452
|
)
|
(4,268,349
|
)
|
(71,496,801
|
)
|
||||
Segment
result
|
5,819,180
|
3,818,294
|
9,637,474
|
|||||||
Acquisition
of leasehold lands
|
618,025
|
-
|
618,025
|
|||||||
Acquisition
of plant and equipment
|
158,227
|
386,451
|
544,678
|
|||||||
Depreciation
|
159,003
|
166,992
|
325,995
|
|||||||
Amortization
of intangible assets
|
-
|
154,436
|
154,436
|
|||||||
Amortization
of leasehold lands
|
23,247
|
-
|
23,247
|
20. |
Segment
Information (continued)
|
2005
|
Watch
movements
|
Completed
watches
|
Total
|
|||||||
$
|
$
|
$
|
||||||||
Sales
|
58,843,209
|
4,235,200
|
63,078,409
|
|||||||
Cost
of sales
|
(55,069,673
|
)
|
(1,956,363
|
)
|
(57,026,036
|
)
|
||||
Segment
result
|
3,773,536
|
2,278,837
|
6,052,373
|
|||||||
Acquisition
of leasehold lands
|
330,884
|
-
|
330,884
|
|||||||
Acquisition
of plant and equipment
|
243,504
|
-
|
243,504
|
|||||||
Depreciation
|
183,180
|
75,947
|
259,127
|
|||||||
Amortization
of intangible assets
|
-
|
154,438
|
154,438
|
|||||||
Amortization
of leasehold lands
|
7,968
|
-
|
7,968
|
2004
|
Watch
movements
|
Completed
watches
|
Total
|
|||||||
$
|
$
|
$
|
||||||||
Sales
|
36,533,084
|
-
|
36,553,084
|
|||||||
Cost
of sales
|
(34,608,653
|
)
|
-
|
(34,608,653
|
)
|
|||||
Segment
result
|
1,944,431
|
-
|
1,944,431
|
|||||||
Acquisition
of plant and equipment
|
551,293
|
229,802
|
781,095
|
|||||||
Acquisition
of intangible assets
|
-
|
771,063
|
771,063
|
|||||||
Depreciation
|
49,654
|
76,571
|
126,225
|
|||||||
Amortization
of intangible assets
|
-
|
35,382
|
35,382
|
21.
|
Cost
of sales
|
Year
ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
$
|
$
|
||||||||
Opening
inventories
|
6,313,662
|
3,872,831
|
1,293,049
|
|||||||
Purchases
|
71,429,324
|
59,466,867
|
37,188,435
|
|||||||
Less
:
closing inventories
|
(6,246,185
|
)
|
(6,313,662
|
)
|
(3,872,831
|
)
|
||||
71,496,801
|
57,026,036
|
34,608,653
|
22.
|
Administrative
and other operating
expenses
|
Year
ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
$
|
$
|
||||||||
Administrative
expenses
|
||||||||||
Accounting
fee
|
-
|
20,121
|
16,459
|
|||||||
Advertising
and promotion
|
2,502
|
19,718
|
66,914
|
|||||||
Auditor’s
remuneration
|
62,695
|
131,141
|
22,030
|
|||||||
Director’s
remuneration
|
61,713
|
61,713
|
61,623
|
|||||||
Legal
and professional fees
|
29,263
|
255,758
|
479,095
|
|||||||
Mandatory
provident fund contributions
|
18,749
|
18,802
|
15,346
|
|||||||
Staff
salaries
|
444,903
|
410,542
|
321,771
|
|||||||
Other
administrative expenses
|
11,187
|
9,150
|
8,320
|
|||||||
631,012
|
926,945
|
991,558
|
22. |
Administrative
and other operating expenses
(continued)
|
Year
ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
$
|
$
|
$
|
||||||||
Other
operating expenses
|
||||||||||
Amortization
of intangible assets
|
154,436
|
154,438
|
35,382
|
|||||||
Amortization
of leasehold lands
|
23,247
|
7,968
|
-
|
|||||||
Bank
charges
|
132,670
|
60,735
|
22,565
|
|||||||
Building
management fee
|
10,830
|
14,512
|
6,846
|
|||||||
Consultancy
fee
|
109,701
|
50,770
|
1,284
|
|||||||
Electricity
and water
|
12,936
|
12,255
|
8,402
|
|||||||
Loss
on disposal of plant and equipment
|
7,715
|
-
|
-
|
|||||||
Motor
vehicle expenses
|
11,361
|
13,937
|
23,910
|
|||||||
Rent
and rates
|
108,312
|
138,992
|
49,865
|
|||||||
Telephone
|
10,465
|
10,849
|
9,868
|
|||||||
Other
operating expenses
|
72,178
|
44,668
|
195,106
|
|||||||
653,851
|
509,124
|
353,228
|
||||||||
1,284,863
|
1,436,069
|
1,344,786
|
23. |
Restatement
|
23. |
Restatement
(continued)
|
2006
|
2006
|
2006
|
||||||||
(As
originally
|
(restated)
|
(Effect of
|
||||||||
reported)
|
adjustments)
|
|||||||||
$
|
$
|
$
|
||||||||
Net
sales
|
81,134,275
|
81,134,275
|
-
|
|||||||
Cost
of sales
|
(71,393,755
|
)
|
(71,496,801
|
)
|
(103,046
|
)
|
||||
Gross
profit
|
9,740,520
|
9,637,474
|
(103,046
|
)
|
||||||
Other
income
|
A |
-
|
424,016
|
424,016
|
||||||
Depreciation
|
(325,995
|
)
|
(325,995
|
)
|
-
|
|||||
Administrative
and other operating expenses
|
B |
(1,291,837
|
)
|
(1,284,863
|
)
|
6,974
|
||||
Income
from operations
|
8,122,688
|
8,450,632
|
327,944
|
|||||||
Other
income
|
A |
661,587
|
237,571
|
(424,016
|
)
|
|||||
Interest
expenses
|
(1,060,536
|
)
|
(1,060,536
|
)
|
-
|
|||||
Income
before taxes
|
7,723,739
|
7,627,667
|
(96,072
|
)
|
||||||
Income
taxes
|
(1,325,761
|
)
|
(1,307,728
|
)
|
18,033
|
|||||
Net
income
|
6,397,978
|
6,319,939
|
(78,039
|
)
|
||||||
Earnings
per share of common stock
|
||||||||||
-
Basic
|
0.27
|
0.32
|
0.05
|
|||||||
-
Diluted
|
0.25
|
0.32
|
0.07
|
|||||||
Weighted
average number of shares of common stock
|
||||||||||
-
Basic
|
23,156,629
|
19,454,420
|
(3,702,209
|
)
|
||||||
-
Diluted
|
25,406,977
|
19,454,420
|
(5,952,557
|
)
|
23. |
Restatement
(continued)
|
2005
|
2005
|
2005
|
||||||||
(As originally
|
(restated)
|
(Effect of
|
||||||||
reported)
|
adjustments)
|
|||||||||
$
|
$
|
$
|
||||||||
Net
sales
|
63,078,409
|
63,078,409
|
-
|
|||||||
Cost
of sales
|
(56,813,199
|
)
|
(57,026,036
|
)
|
(212,837
|
)
|
||||
Gross
profit
|
6,265,210
|
6,052,373
|
(212,837
|
)
|
||||||
Other
income
|
A |
-
|
938,573
|
938,573
|
||||||
Depreciation
|
(259,127
|
)
|
(259,127
|
)
|
-
|
|||||
Administrative
and other operating expenses
|
(1,436,069
|
)
|
(1,436,069
|
)
|
-
|
|||||
Income
from operations
|
A |
4,570,014
|
5,295,750
|
725,736
|
||||||
Other
income
|
1,094,772
|
156,199
|
(938,573
|
)
|
||||||
Interest
expenses
|
(514,637
|
)
|
(514,637
|
)
|
-
|
|||||
Income
before taxes
|
5,150,149
|
4,937,312
|
(212,837
|
)
|
||||||
Income
taxes
|
(948,933
|
)
|
(911,687
|
)
|
37,246
|
|||||
Net
income
|
4,201,216
|
4,025,625
|
(175,591
|
)
|
||||||
Earnings
per share of common stock
|
||||||||||
-
Basic
|
0.18
|
0.21
|
0.03
|
|||||||
-
Diluted
|
0.16
|
0.21
|
0.05
|
|||||||
Weighted
average number of shares of common stock
|
||||||||||
-
Basic
|
23,156,629
|
19,454,420
|
(3,702,209
|
)
|
||||||
-
Diluted
|
25,406,977
|
19,454,420
|
(5,952,557
|
)
|
23. |
Restatement
(continued)
|
2004
|
2004
|
2004
|
||||||||
(As originally
|
(restated)
|
(Effect of
|
||||||||
reported)
|
adjustments)
|
|||||||||
$
|
$
|
$
|
||||||||
Net
sales
|
36,553,084
|
36,553,084
|
-
|
|||||||
Cost
of sales
|
(34,584,844
|
)
|
(34,608,653
|
)
|
(23,809
|
)
|
||||
Gross
profit
|
1,968,240
|
1,944,431
|
(23,809
|
)
|
||||||
Other
income
|
-
|
-
|
-
|
|||||||
Depreciation
|
(126,225
|
)
|
(126,225
|
)
|
-
|
|||||
Administrative
and other operating expenses
|
(1,344,786
|
)
|
(1,344,786
|
)
|
-
|
|||||
Income
from operations
|
497,229
|
473,420
|
(23,809
|
)
|
||||||
Other
income
|
28,047
|
28,047
|
-
|
|||||||
Interest
expenses
|
(164,558
|
)
|
(164,558
|
)
|
-
|
|||||
Income
before taxes
|
360,718
|
336,909
|
(23,809
|
)
|
||||||
Income
taxes
|
(136,117
|
)
|
(131,951
|
)
|
4,166
|
|||||
Net
income
|
224,601
|
204,958
|
(19,643
|
)
|
||||||
Earnings
per share of common stock
|
||||||||||
-
Basic
|
0.01
|
0.01
|
-
|
|||||||
-
Diluted
|
0.01
|
0.01
|
-
|
|||||||
Weighted
average number of shares of common stock
|
||||||||||
-
Basic
|
23,156,629
|
19,454,420
|
(3,702,209
|
)
|
||||||
-
Diluted
|
25,406,977
|
19,454,420
|
(5,952,557
|
)
|
23. |
Restatement
(continued)
|
2006
|
2006
|
2006
|
||||||||
(As originally
|
(restated)
|
(Effect of
|
||||||||
reported)
|
adjustments)
|
|||||||||
$
|
$
|
$
|
||||||||
ASSETS
|
||||||||||
Current
Assets
:
|
||||||||||
Cash
and cash equivalents
|
319,814
|
316,621
|
(3,193
|
)
|
||||||
Restricted
cash
|
4,523,679
|
4,523,679
|
-
|
|||||||
Accounts
receivable
|
8,188,985
|
8,188,985
|
-
|
|||||||
Prepaid
expenses and other receivables
|
2,126,133
|
2,101,133
|
A
|
(25,000
|
)
|
|||||
Tax
prepayment
|
767
|
767
|
-
|
|||||||
Inventories,
net
|
6,620,361
|
6,246,185
|
(374,176
|
)
|
||||||
Prepaid
lease payments
|
22,958
|
22,958
|
-
|
|||||||
Total
Current Assets
|
21,802,697
|
21,400,328
|
(402,369
|
)
|
||||||
Deferred
tax assets
|
14,042
|
14,042
|
-
|
|||||||
Plant
and equipment, net
|
890,258
|
890,258
|
-
|
|||||||
Leasehold
lands
|
895,322
|
895,322
|
-
|
|||||||
Held-to-maturity
investments
|
301,196
|
301,196
|
-
|
|||||||
Intangible
assets
|
337,836
|
337,836
|
-
|
|||||||
Restricted
cash
|
257,301
|
257,301
|
-
|
|||||||
TOTAL
ASSETS
|
24,498,652
|
24,096,283
|
(402,369
|
)
|
||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||
LIABILITIES
|
||||||||||
Current
Liabilities
:
|
||||||||||
Accounts
payable
|
770,360
|
770,360
|
-
|
|||||||
Other
payables and accrued liabilities
|
190,358
|
190,358
|
-
|
|||||||
Advance
from a related party
|
33,000
|
-
|
A
|
(33,000
|
)
|
|||||
Income
taxes payable
|
1,453,051
|
1,387,571
|
(65,480
|
)
|
||||||
Unearned
revenue
|
-
|
-
|
-
|
|||||||
Bank
borrowings
|
13,205,167
|
13,205,167
|
-
|
|||||||
Total
Current Liabilities
|
15,651,936
|
15,553,456
|
(98,480
|
)
|
||||||
Deferred
tax liabilities
|
31,711
|
31,711
|
-
|
|||||||
TOTAL
LIABILITIES
|
15,683,647
|
15,585,167
|
(98,480
|
)
|
||||||
COMMITMENTS
AND CONTINGENCIES
|
23. |
Restatement
(continued)
|
2006
|
2006
|
2006
|
||||||||
(As originally
|
(restated)
|
(Effect of
|
||||||||
reported)
|
adjustments)
|
|||||||||
$
|
$
|
$
|
||||||||
STOCKHOLDERS’
EQUITY
|
||||||||||
Preferred
stock
|
||||||||||
Par
value
:
2006 - US$0.0001
|
||||||||||
Authorized:
2006 – 10,000,000 shares
|
||||||||||
Issued
and outstanding: 2006 – none issued
|
-
|
-
|
-
|
|||||||
|
||||||||||
Common
stock
|
||||||||||
Par
value
:
2006 - US$0.0001
|
||||||||||
Authorized:
2006 – 100,000,000 shares
|
||||||||||
Issued
and outstanding: 2006 - 19,454,420 shares
|
2,316
|
1,946
|
(370
|
)
|
||||||
Additional
paid-in capital
|
656,095
|
654,298
|
(1,797
|
)
|
||||||
Accumulated
other comprehensive income
|
7,470
|
7,470
|
-
|
|||||||
Retained
earnings
|
8,149,124
|
7,847,402
|
(301,722
|
)
|
||||||
TOTAL
STOCKHOLDERS’ EQUITY
|
8,815,005
|
8,511,116
|
(303,889
|
)
|
||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
24,498,652
|
24,096,283
|
(402,369
|
)
|
23. |
Restatement
(continued)
|
2005
|
2005
|
2005
|
||||||||
(As originally
|
(restated)
|
(Effect of
|
||||||||
reported)
|
adjustments)
|
|||||||||
$
|
$
|
$
|
||||||||
ASSETS
|
||||||||||
Current
Assets
:
|
||||||||||
Cash
and cash equivalents
|
780,090
|
780,090
|
-
|
|||||||
Restricted
cash
|
4,306,474
|
4,306,474
|
-
|
|||||||
Accounts
receivable
|
4,829,586
|
4,829,586
|
-
|
|||||||
Prepaid
expenses and other receivables
|
394,236
|
394,236
|
-
|
|||||||
Tax
prepayment
|
16,367
|
16,367
|
-
|
|||||||
Inventories,
net
|
6,584,792
|
6,313,662
|
(271,130
|
)
|
||||||
Prepaid
lease payments
|
7,993
|
7,993
|
-
|
|||||||
Total
Current Assets
|
16,919,538
|
16,648,408
|
(271,130
|
)
|
||||||
Deferred
tax assets
|
-
|
-
|
-
|
|||||||
Plant
and equipment, net
|
682,901
|
682,901
|
-
|
|||||||
Leasehold
lands
|
315,939
|
315,939
|
-
|
|||||||
Held-to-maturity
investments
|
301,954
|
301,954
|
-
|
|||||||
Intangible
assets
|
584,149
|
584,149
|
-
|
|||||||
Restricted
cash
|
-
|
-
|
-
|
|||||||
TOTAL
ASSETS
|
18,804,481
|
18,533,351
|
(271,130
|
)
|
||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||
LIABILITIES
|
||||||||||
Current
Liabilities
:
|
||||||||||
Accounts
payable
|
1,236,418
|
1,236,418
|
-
|
|||||||
Other
payables and accrued liabilities
|
145,249
|
145,249
|
-
|
|||||||
Advance
from a related party
|
28,854
|
28,854
|
-
|
|||||||
Income
taxes payable
|
864,205
|
816,758
|
(47,447
|
)
|
||||||
Unearned
revenue
|
1,598,314
|
1,598,314
|
-
|
|||||||
Bank
borrowings
|
10,064,129
|
10,064,129
|
-
|
|||||||
Total
Current Liabilities
|
13,937,169
|
13,889,722
|
(47,447
|
)
|
||||||
Deferred
tax liabilities
|
-
|
-
|
-
|
|||||||
TOTAL
LIABILITIES
|
13,937,169
|
13,889,722
|
(47,447
|
)
|
||||||
COMMITMENTS
AND CONTINGENCIES
|
23. |
Restatement
(continued)
|
2005
|
2005
|
2005
|
||||||||
(As
originally
|
(restated)
|
(Effect
of
|
||||||||
reported)
|
adjustments)
|
|||||||||
$
|
$
|
$
|
||||||||
STOCKHOLDERS’
EQUITY
|
||||||||||
Preferred
stock
|
||||||||||
Par
value
:
2005 - none
|
||||||||||
Authorized:
2005 – none
|
||||||||||
Issued
and outstanding: 2005 – none issued
|
-
|
-
|
-
|
|||||||
Common
stock
|
||||||||||
Par
value
:
2005 - US$0.0001
|
||||||||||
Authorized:
2005 – 100,000,000 shares
|
||||||||||
Issued
and outstanding: 2005 - 19,454,420 shares
|
2,316
|
1,946
|
(370
|
)
|
||||||
Additional
paid-in capital
|
653,928
|
654,298
|
370
|
|||||||
Accumulated
other comprehensive income
|
13,549
|
13,549
|
-
|
|||||||
Retained
earnings
|
4,197,519
|
3,973,836
|
(223,683
|
)
|
||||||
TOTAL
STOCKHOLDERS’ EQUITY
|
4,867,312
|
4,643,629
|
(223,683
|
)
|
||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
18,804,481
|
18,533,351
|
(271,130
|
)
|
23. |
Restatement
(continued)
|
2004
|
2004
|
2004
|
||||||||
(As originally
|
(restated)
|
(Effect of
|
||||||||
reported)
|
adjustments)
|
|||||||||
$
|
$
|
$
|
||||||||
ASSETS
|
||||||||||
Current
Assets
:
|
||||||||||
Cash
and cash equivalents
|
911,487
|
911,487
|
-
|
|||||||
Restricted
cash
|
3,551,304
|
3,551,304
|
-
|
|||||||
Accounts
receivable
|
3,369,326
|
3,369,326
|
-
|
|||||||
Prepaid
expenses and other receivables
|
727,934
|
727,934
|
-
|
|||||||
Advance
to a related party
|
50,900
|
-
|
A
|
(50,900
|
)
|
|||||
Tax
prepayment
|
-
|
-
|
-
|
|||||||
Inventories,
net
|
3,931,124
|
3,872,831
|
(58,293
|
)
|
||||||
Prepaid
lease payments
|
-
|
-
|
-
|
|||||||
Total
Current Assets
|
12,542,075
|
12,432,882
|
(109,193
|
)
|
||||||
Deferred
tax assets
|
-
|
-
|
-
|
|||||||
Plant
and equipment, net
|
696,552
|
696,552
|
-
|
|||||||
Leasehold
lands
|
-
|
-
|
-
|
|||||||
Held-to-maturity
investments
|
-
|
-
|
-
|
|||||||
Intangible
assets
|
736,934
|
736,934
|
-
|
|||||||
Restricted
cash
|
-
|
-
|
-
|
|||||||
TOTAL
ASSETS
|
13,975,561
|
13,866,368
|
(109,193
|
)
|
||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||
LIABILITIES
|
||||||||||
Current
Liabilities
:
|
||||||||||
Accounts
payable
|
1,805,995
|
1,805,995
|
-
|
|||||||
Other
payables and accrued liabilities
|
41,798
|
41,798
|
-
|
|||||||
Advance
from a related party
|
140,196
|
89,296
|
A
|
(50,900
|
)
|
|||||
Income
taxes payable
|
95,640
|
85,439
|
(10,201
|
)
|
||||||
Unearned
revenue
|
3,197,160
|
3,197,160
|
-
|
|||||||
Bank
borrowings
|
7,400,775
|
7,400,775
|
-
|
|||||||
Total
Current Liabilities
|
12,681,564
|
12,620,463
|
(61,101
|
)
|
||||||
Deferred
tax liabilities
|
-
|
-
|
-
|
|||||||
TOTAL
LIABILITIES
|
12,681,564
|
12,620,463
|
(61,101
|
)
|
||||||
COMMITMENTS
AND CONTINGENCIES
|
23. |
Restatement
(continued)
|
2004
|
2004
|
2004
|
||||||||
(As
originally
|
(restated)
|
(Effect
of
|
||||||||
reported)
|
adjustments)
|
|||||||||
|
|
$
|
$
|
$
|
||||||
STOCKHOLDERS’
EQUITY
|
||||||||||
Preferred
stock
|
||||||||||
Par
value: 2004 - none
|
||||||||||
Authorized:
2004 - none
|
||||||||||
Issued
and outstanding: 2004 - none issued
|
-
|
-
|
-
|
|||||||
Common
stock
|
||||||||||
Par
value
:
2004 - US$0.0001
|
||||||||||
Authorized:
2004 - 100,000,000 shares
|
||||||||||
Issued
and outstanding: 2004 - 19,454,420 shares
|
2,316
|
1,946
|
(370
|
)
|
||||||
Additional
paid-in capital
|
652,118
|
652,488
|
370
|
|||||||
Accumulated
other comprehensive income
|
412
|
412
|
-
|
|||||||
Retained
earnings
|
639,151
|
591,059
|
(48,092
|
)
|
||||||
TOTAL
STOCKHOLDERS’ EQUITY
|
1,293,997
|
1,245,905
|
(48,092
|
)
|
||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
13,975,561
|
13,866,368
|
(109,193
|
)
|
23. |
Restatement
(continued)
|
2006
|
|
2006
|
|
2006
|
|
|||||
|
|
(As
originally
|
|
(restated)
|
|
(Effect
of
|
|
|||
|
|
reported)
|
|
|
|
adjustments)
|
|
|||
|
|
$
|
|
$
|
|
$
|
|
|||
Cash
flows from operating activities
|
||||||||||
Net
income
|
6,397,978
|
6,319,939
|
(78,039
|
)
|
||||||
Adjustments
to reconcile net income to net cash provided by operating
activities
:
|
||||||||||
Amortization
of intangible assets
|
154,436
|
154,436
|
-
|
|||||||
Amortization
of leasehold lands
|
23,247
|
23,247
|
-
|
|||||||
Depreciation
|
325,995
|
325,995
|
-
|
|||||||
Loss
on disposal of plant and equipment
|
7,715
|
7,715
|
-
|
|||||||
Gain
on disposal of intangible assets
|
(210,594
|
)
|
(210,594
|
)
|
-
|
|||||
Income
taxes
|
1,325,761
|
1,307,728
|
(18,033
|
)
|
||||||
Changes
in operating assets and liabilities
:
|
||||||||||
Accounts
receivable
|
(3,369,347
|
)
|
(3,369,347
|
)
|
-
|
|||||
Prepaid
expenses and other receivables
|
(1,731,789
|
)
|
(1,706,789
|
) A |
25,000
|
|||||
Inventories
|
(52,056
|
)
|
50,990
|
103,046
|
||||||
Accounts
payable
|
(462,658
|
)
|
(462,658
|
)
|
-
|
|||||
Other
payables and accrued liabilities
|
45,445
|
45,445
|
-
|
|||||||
Advance
from related parties
|
4,237
|
-
|
A |
(4,237
|
)
|
|||||
Income
taxes payable
|
(701,921
|
)
|
(701,921
|
)
|
-
|
|||||
Unearned
revenue
|
(1,593,280
|
)
|
(1,593,280
|
)
|
-
|
|||||
Net
cash flows provided by operating activities
|
163,169
|
190,906
|
27,737
|
|||||||
Cash
flows from investing activities
|
||||||||||
Acquisition
of leasehold lands
|
(618,025
|
)
|
(618,025
|
)
|
-
|
|||||
Acquisition
of plant and equipment
|
(544,678
|
)
|
(544,678
|
)
|
-
|
|||||
Proceeds
from disposal of plant and equipment
|
2,031
|
2,031
|
-
|
|||||||
Proceeds
from disposal of intangible assets
|
300,849
|
300,849
|
-
|
|||||||
Net
cash flows used in investing activities
|
(859,823
|
)
|
(859,823
|
)
|
-
|
|||||
Cash
flows from financing activities
|
||||||||||
Proceeds
from issuance of common stocks
|
2,167
|
-
|
B |
(2,167
|
)
|
|||||
Proceeds
from new short-term bank loans
|
1,700,622
|
1,700,622
|
-
|
|||||||
Repayment
of short-term bank loans
|
(525,535
|
)
|
(525,535
|
)
|
-
|
|||||
Repayment
of a capital lease
|
-
|
-
|
-
|
|||||||
Net
advancement of other bank borrowings
|
1,789,269
|
1,789,269
|
-
|
|||||||
Increase
in restricted cash
|
(484,997
|
)
|
(484,997
|
)
|
-
|
|||||
Increase
in bank overdrafts
|
199,893
|
199,893
|
-
|
|||||||
Advance
from a related party
|
-
|
(28,763
|
) A |
(28,763
|
)
|
|||||
Dividends
paid
|
(2,446,373
|
)
|
(2,446,373
|
)
|
-
|
|||||
Net
cash flows provided by financing activities
|
235,046
|
204,116
|
(30,930
|
)
|
||||||
Net
decrease in cash and cash equivalents
|
(461,608
|
)
|
(464,801
|
)
|
(3,193
|
)
|
||||
Effect
of foreign currency translation on cash and cash
equivalents
|
1,332
|
1,332
|
-
|
|||||||
Cash
and cash equivalents - beginning of year
|
780,090
|
780,090
|
-
|
|||||||
Cash
and cash equivalents - end of year
|
319,814
|
316,621
|
(3,193
|
)
|
23. |
Restatement
(continued)
|
2005
|
2005
|
2005
|
||||||||
(As
originally
|
(restated)
|
(Effect
of
|
||||||||
reported)
|
adjustments)
|
|||||||||
$
|
|
$
|
|
$
|
|
|||||
Cash
flows from operating activities
|
||||||||||
Net
income
|
4,201,216
|
4,025,625
|
(175,591
|
)
|
||||||
Adjustments
to reconcile net income to net cash used in operating
activities
:
|
||||||||||
Amortization
of intangible assets
|
154,438
|
154,438
|
-
|
|||||||
Amortization
of leasehold lands
|
7,968
|
7,968
|
-
|
|||||||
Depreciation
|
259,127
|
259,127
|
-
|
|||||||
Loss
on disposal of plant and equipment
|
-
|
-
|
-
|
|||||||
Gain
on disposal of intangible assets
|
-
|
-
|
-
|
|||||||
Income
taxes
|
948,933
|
911,687
|
(37,246
|
)
|
||||||
Changes
in operating assets and liabilities
:
|
||||||||||
Accounts
receivable
|
(1,445,937
|
)
|
(1,445,937
|
)
|
-
|
|||||
Prepaid
expenses and other receivables
|
334,759
|
334,759
|
-
|
|||||||
Inventories
|
(2,633,977
|
)
|
(2,421,140
|
)
|
212,837
|
|||||
Accounts
payable
|
(573,017
|
)
|
(573,017
|
)
|
-
|
|||||
Other
payables and accrued liabilities
|
103,007
|
103,007
|
-
|
|||||||
Advance
from related parties
|
(60,511
|
)
|
-
|
A |
60,511
|
|||||
Income
taxes payable
|
(199,079
|
)
|
(199,079
|
)
|
-
|
|||||
Unearned
revenue
|
(1,603,082
|
)
|
(1,603,082
|
)
|
-
|
|||||
Net
cash flows used in operating activities
|
(506,155
|
)
|
(445,644
|
)
|
60,511
|
|||||
Cash
flows from investing activities
|
||||||||||
Acquisition
of leasehold lands
|
(330,884
|
)
|
(330,884
|
)
|
-
|
|||||
Acquisition
of held-to-maturity investments
|
(301,007
|
)
|
(301,007
|
)
|
-
|
|||||
Acquisition
of intangible assets
|
-
|
-
|
-
|
|||||||
Acquisition
of plant and equipment
|
(243,504
|
)
|
(243,504
|
)
|
-
|
|||||
Proceeds
from disposal of plant and equipment
|
-
|
-
|
-
|
|||||||
Proceeds
from disposal of intangible assets
|
-
|
-
|
-
|
|||||||
Net
cash flows used in investing activities
|
(875,395
|
)
|
(875,395
|
)
|
-
|
23. |
Restatement
(continued)
|
2005
|
2005
|
2005
|
||||||||
(As
originally
|
(restated)
|
(Effect
of
|
||||||||
reported)
|
adjustments)
|
|||||||||
|
|
$
|
$
|
$
|
||||||
Cash
flows from financing activities
|
||||||||||
Proceeds
from new short-term bank loans
|
346,622
|
346,622
|
-
|
|||||||
Repayment
of short-term bank loans
|
(408,211
|
)
|
(408,211
|
)
|
-
|
|||||
Repayment
of a capital lease
|
-
|
-
|
-
|
|||||||
Net
advancement of other bank borrowings
|
2,946,182
|
2,946,182
|
-
|
|||||||
Increase
in restricted cash
|
(755,170
|
)
|
(755,170
|
)
|
-
|
|||||
Increase
in bank overdrafts
|
(250,997
|
)
|
(250,997
|
)
|
-
|
|||||
Advance
from related parties
|
-
|
(60,511
|
) A |
(60,511
|
)
|
|||||
Dividends
paid
|
(642,848
|
)
|
(642,848
|
)
|
-
|
|||||
Net
cash flows provided by financing activities
|
1,235,578
|
1,175,067
|
(60,511
|
)
|
||||||
Net
decrease in cash and cash equivalents
|
(145,972
|
)
|
(145,972
|
)
|
-
|
|||||
Effect
of foreign currency translation on cash and cash
equivalents
|
14,575
|
14,575
|
-
|
|||||||
Cash
and cash equivalents - beginning of year
|
911,487
|
911,487
|
-
|
|||||||
Cash
and cash equivalents - end of year
|
780,090
|
780,090
|
-
|
23. |
Restatement
(continued)
|
2004
|
2004
|
2004
|
||||||||
(As
originally
|
(restated)
|
(Effect
of
|
||||||||
reported)
|
adjustments)
|
|||||||||
|
|
$
|
$
|
$
|
||||||
Cash
flows from operating activities
|
|
|||||||||
Net
income
|
$
|
224,601
|
204,958
|
(19,643
|
)
|
|||||
Adjustments
to reconcile net income to net cash used in operating
activities
:
|
||||||||||
Amortization
of intangible assets
|
35,382
|
35,382
|
-
|
|||||||
Amortization
of leasehold lands
|
-
|
-
|
-
|
|||||||
Depreciation
|
126,225
|
126,225
|
-
|
|||||||
Loss
on disposal of plant and equipment
|
-
|
-
|
-
|
|||||||
Gain
on disposal of intangible assets
|
-
|
-
|
-
|
|||||||
Income
taxes
|
136,117
|
131,951
|
(4,166
|
)
|
||||||
Changes
in operating assets and liabilities
:
|
||||||||||
Accounts
receivable
|
(1,997,310
|
)
|
(1,997,310
|
)
|
-
|
|||||
Prepaid
expenses and other receivables
|
310
|
310
|
-
|
|||||||
Inventories
|
(2,601,377
|
)
|
(2,577,568
|
)
|
23,809
|
|||||
Accounts
payable
|
538,433
|
538,433
|
-
|
|||||||
Other
payables and accrued liabilities
|
370
|
370
|
-
|
|||||||
Advance
from related parties
|
122,571
|
-
|
A |
(122,571
|
)
|
|||||
Income
taxes payable
|
(76,747
|
)
|
(76,747
|
)
|
-
|
|||||
Unearned
revenue
|
3,191,721
|
3,191,721
|
-
|
|||||||
Net
cash flows used in operating activities
|
(299,704
|
)
|
(422,275
|
)
|
(122,571
|
)
|
||||
Cash
flows from investing activities
|
||||||||||
Acquisition
of leasehold lands
|
-
|
-
|
-
|
|||||||
Acquisition
of held-to-maturity investments
|
-
|
-
|
-
|
|||||||
Acquisition
of intangible assets
|
(771,063
|
)
|
(771,063
|
)
|
-
|
|||||
Acquisition
of plant and equipment
|
(781,095
|
)
|
(781,095
|
)
|
-
|
|||||
Proceeds
from disposal of plant and equipment
|
-
|
-
|
-
|
|||||||
Proceeds
from disposal of intangible assets
|
-
|
-
|
-
|
|||||||
Net
cash flows used in investing activities
|
(1,552,158
|
)
|
(1,552,158
|
)
|
-
|
|||||
Cash
flows from financing activities
|
||||||||||
Proceeds
from new short-term bank loans
|
140,937
|
140,937
|
-
|
|||||||
Repayment
of short-term bank loans
|
(11,527
|
)
|
(11,527
|
)
|
-
|
|||||
Repayment
of a capital lease
|
(6,975
|
)
|
(6,975
|
)
|
-
|
|||||
Net
advancement of other bank borrowings
|
4,176,477
|
4,176,477
|
-
|
|||||||
Increase
in restricted cash
|
(2,255,598
|
)
|
(2,255,598
|
)
|
-
|
|||||
Advance
from related parties
|
-
|
122,571
|
A |
122,571
|
||||||
Decrease
in bank overdrafts
|
599,814
|
599,814
|
-
|
|||||||
Dividends
paid
|
-
|
-
|
-
|
|||||||
Net
cash flows provided by financing activities
|
2,643,128
|
2,765,699
|
122,571
|
23. |
Restatement
(continued)
|
2004
|
2004
|
2004
|
||||||||
(As
originally
|
(restated)
|
(Effect
of
|
||||||||
reported)
|
adjustments)
|
|||||||||
|
|
$
|
$
|
$
|
||||||
Net
increase in cash and cash equivalents
|
791,266
|
791,266
|
-
|
|||||||
Effect
of foreign currency translation on cash and cash
equivalents
|
7,242
|
7,242
|
-
|
|||||||
Cash
and cash equivalents - beginning of year
|
112,979
|
112,979
|
-
|
|||||||
Cash
and cash equivalents - end of year
|
911,487
|
911,487
|
-
|
24. |
Events
after balance sheet date
|
24. |
Events
after balance sheet date
(continued)
|
1 Year Asia Time Corp Chart |
1 Month Asia Time Corp Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions