Item
1. Identity of Directors, Senior Management and
Advisers
Our
directors and senior management are:
WONG Ka Ming
has served as
President and a director of Dragon Jade International Ltd. since August 2008 and
as President and a director of KASH Strategic Ltd. since inception on October 1,
2003.
HUNG Kwok Wing (“Sonny”)
has
served as a director of Dragon Jade since August 2008 and Vice President of KASH
since March 2008.
KOU Yue (“Ivory”)
has served
as Chief Financial Officer of Dragon Jade since August 2008 and Chief Financial
Officer of KASH since February 2006.
LAM Lai Sheung (“Christine”)
has served as Secretary of Dragon Jade since August 2008 and Secretary of KASH
since inception on October 1, 2003.
Our
principal bankers are:
Fubon
Bank (Hong Kong) Ltd., Shop 31L, Shatin Center, 2-16 Wang Pok Street, Shatin,
Hong Kong
Our
auditors during the three fiscal years ended December 31, 2008.are: Gruber &
Company, LLC, 121 Civic Center Drive, Suite 225, Lake Saint Louis, Missouri
63367.
Item
2. Offer Statistics and Expected Timetable
A.
Selected financial
data
: The following table presents selected
financial
data for the
three
most
recent financial years ended March 31, 2008 (audited) and for the
interim
period ended November 30, 2008 (unaudited):
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
March
31
|
|
November
30
|
|
US$
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales or operating revenues
|
|
$
|
377,497
|
|
|
$
|
221,069
|
|
|
$
|
11,995
|
|
|
$
|
10,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from Operations
|
|
$
|
(6,178
|
)
|
|
$
|
(26,130
|
)
|
|
$
|
(24,561
|
)
|
|
$
|
(12,511
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
(3,530
|
)
|
|
$
|
(15,345
|
)
|
|
$
|
(22,910
|
)
|
|
$
|
(12,412
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) per share
|
|
$
|
(0.35
|
)
|
|
$
|
(1.53
|
)
|
|
$
|
(2.29
|
)
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
154,666
|
|
|
$
|
108,679
|
|
|
$
|
79,562
|
|
|
$
|
93,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets
|
|
$
|
(7,862
|
)
|
|
$
|
(25,654
|
)
|
|
$
|
(48,685
|
)
|
|
$
|
93,201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Stock (1)
|
|
$
|
1,289
|
|
|
$
|
1,289
|
|
|
$
|
1,289
|
|
|
$
|
105,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
of shares (2)
|
|
|
10,000
|
|
|
|
10,000
|
|
|
|
10,000
|
|
|
|
410,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
per share
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
(1)
Excluding long term debt and redeemable preferred stock.
(2)
Adjusted to reflect changes in capital.
Currency Exchange
Rates.
All dollar amounts in this Form 20-F are in
United States dollars (“US$”), except where otherwise indicated. The
following tables present, in Hong Kong dollars (“HK$”), the exchange rates for
US$1.00, based on the noon buying rate in New York City for cable transfers
in HK$, as certified for customs purposes by the Federal Reserve Bank of
New York (the "Noon Buying Rate") for each of the years ended December
31, 2005, 2006, 2007 and 2008. On
January 30, 2009
,
the Noon Buying Rate was US$1.00 equals
HK$7.7544.
|
|
200
8
|
|
|
200
7
|
|
|
200
6
|
|
|
200
5
|
|
High
|
|
|
7.8142
|
|
|
|
7.8289
|
|
|
|
7.7928
|
|
|
|
7.7999
|
|
Low
|
|
|
7.7497
|
|
|
|
7.7497
|
|
|
|
7.7606
|
|
|
|
7.7514
|
|
End
of Period
|
|
|
7.7499
|
|
|
|
7.7984
|
|
|
|
7.7771
|
|
|
|
7.7533
|
|
Average
|
|
|
7.7819
|
|
|
|
7.7893
|
|
|
|
7.7771
|
|
|
|
7.7756
|
|
B.
Capitalization and
indebtedness
:
The
Company is authorized to issue 100,000,000 shares of common stock,, no par
value,. As of January 30, 2009, there were 30,410,000 issued and
outstanding shares of common stock.
C.
Reasons for the offer and use of
proceeds.
Not
applicable.
D.
Risk Factors
. The following risk
factors make our company and our securities speculative and of high risk. Our
business, operating results and financial position may be adversely affected by
these risk factors, some of which we have no control over. Additional
risk factors not presently known by us or that we presently consider immaterial
also could adversely affect our business, operating results and financial
position if any of them were to occur. In addition to these risk factors,
shareholders and prospective investors should read the forward-looking
statements about our future performance and expected results set forth in this
registration statement carefully before deciding to buy or sell our
securities. See “Forward-Looking Statements,” below.
Risks
Related to Our Business
Our consulting services, providing assistance
in business analysis, strategy formulation, operational planning and assisting
in media and investment relations, may not be accepted in the marketplace and
may not help us achieve consistent profitability
. The
consulting services we provide may not be accepted in the marketplace. Our
business strategies, incorporating our senior management’s current,best analysis
of potential markets, opportunities and difficulties, are subject to
reassessment and may not accurately reflect current trends in our industry or
may be changed and/or abandoned from time to time. No assurance can
be given that our senior management’s assessment or reassessment of our
consulting services, accurately did or will reflect current trends,
opportunities or difficulties in our industry; nor can any assurance be given
that any assessment or reassessment of our business strategies did or will
achieve profitability for us, or will be acceptable in the marketplace for our
consulting services.
Our business is difficult to evaluate because
of our limited operating history
. We were incorporated under
the BVI Business Companies Act 2004 on April 14, 2008. We engage in
business by and through KASH, which was incorporated under the laws of Hong Kong
on October 1, 2003. As a result, there is only limited historical
financial and operating information available on which to base an evaluation of
our business. See Item 4, below.
We are dependent on our senior management and
the loss of any one of them could have a material adverse effect upon business,
operating results and financial position
. Our operating
results and future success are dependent upon our ability to retain members of
our senior management or to replace any of them by attracting, hiring, retaining
and motivating other highly skilled consultants who are experienced in
managerial, marketing and customer service. The loss of or inability to replace
any member of our senior management could have a material adverse effect upon
our business, operating results and financial position.
We will require substantial additional
financing or funding in the future
. We have been dependent
upon sales proceeds received from private equity funding and debt financing to
meet our capital requirements in the past. In the future, we likely
will require additional financing or funding to meet our capital requirements
for meeting our current consulting programs or to expand our future consulting
services. If we were unable to meet our future capital requirements
for use as working capital and for general corporate purchases, we could
experience operating losses and fail to expand our future consulting
services. If so, our operating results, our business results and our
financial position would be adversely affected.
We will be dependent upon our senior
management to achieve future profitability
. We have been in
the past dependent upon our senior management to provide and expand our
consulting services. In the future we also will be
dependent upon our senior management to provide and expand our
consulting services to achieve profitability and to effectively deal
with any opportunities, challenges or difficulties that may
arise. The failure of our senior management to satisfy these
requirements, or the loss of any member of senior management, may have a
material adverse effect on our business and financial position, and
adversely affect our ability to operate and/or achieve
profitability.
Our future success is dependent upon our
ability to compete in providing consulting services
. In our
consulting business, there is intense competition among consultants, including
individuals and large and small entities, for consulting
clients. Many of these competitors have substantially greater
financial and marketing resources than we do, stronger name recognition, and
longer-standing relationships with our target customers. Our future
success is dependent upon our ability to compete and our failure to do so could
adversely affect our business, financial condition and results of
operation.
Our operating results may
fluctuate
. Our results of operation may fluctuate
significantly because of a variety of factors, many of which are outside our
control, including: (i) our ability to obtain and retain customers for
consulting services; (ii) our ability to obtain necessary additional financing
at all or on reasonable and acceptable terms; (iii) our ability to retain or
attract members of our senior management; and (iv) general economic conditions
in China and elsewhere in the world, including the United States whose financial
crisis may spread worldwide and adversely affect the operating results of our
current and prospective clients and therefore our operating
results.
Upon effectiveness of this registration
statement, we will be subject to certain requirements of the Sarbanes-Oxley Act
of 2002 and the related rules and regulations adopted by the Securities Exchange
Commission pursuant to that Act. If we are unable to comply timely
with such requirements or if the costs of compliance are too great, our
profitability, market price of our common stock, and our results of operations
and financial condition could be materially adversely affected
. The
requirements, rules and regulations to which we will be subject include: Chief
Executive Officer/Chief Financial Officer certifications of disclosure in
periodic reports and registration statements under the Securities Act of 1933;
disclosure regarding conclusions of evaluation of disclosure controls and
procedures and internal control of financial reporting; conditions for use of
non-GAAP financial measures; disclosure in Management’s Discussion and Analysis
of certain off-balance sheet arrangements and aggregate contractual
arrangements; disclosure of whether or not we have an audit committee financial
expert who is independent and experienced, and if not, why not; disclosure of
whether or not we have adopted a written code of ethics for our chief executive
officer and senior financial officers, and if not, why not.
Risks
Related to Doing Business in China
Any change in government regulations or
administrative practices in China concerning our business may have a negative
impact on our business, operating results and financial
position
. The laws, regulations and policies of the government
in China and administrative practices in China, the principal jurisdiction in
which we provide consulting services, may be changed, applied or interpreted in
a manner that will fundamentally alter our ability to carry on our
business. The laws, regulations and policies of the government and
the administrative practices in China, if changed, may have a detrimental effect
on our business, operating results and financial position, resulting in our
ability to engage in our business and/or to operate profitably.
Our operations in China may be adversely
affected by evolving economic, political and social conditions in
China
. Our operations are subject to risks inherent in doing
business in China. Such risks include the potential adverse effects
resulting from war, international terrorism, civil disturbances, political
instability and governmental activities. Since 1978, the Chinese
government has been reforming its economic and political systems and we expect
this reforming to continue. We believe that these reforms have had a
positive effect on economic development in China and have improved our ability
to do business in China, but no assurances can be given that these reform will
continue or that the Chinese government will not take actions that would impair
our doing business in China.
Our results of operation and liquidity could
be adversely affected by potential currency fluctuations in exchange rates with
foreign countries
. Exchange rates are influenced by political
and/or economic developments in China, the United States and other countries as
well as by macroeconomic factors and speculative actions. In some
countries, local currencies may not be readily converted unto U.S. dollars or
may be converted at government controlled rates. Very limited hedging
transactions are available in China to reduce our exposure to exchange rate
fluctuations and we have not entered into any hedging transactions to
date, but we may do so in the future. While we may decide to enter
into hedging transactions in the future to reduce our exposure to foreign
currency exchange risk, the availability and effectiveness of these hedges may
be limited and we may not be able to successfully hedge our exposure, if at
all.
Regulation of offshore loans and direct
investment by foreign entities in China may delay or prevent us from
receiving loans or capital contributions from foreign entities for our
operations in China could materially and adversely affect our liquidity,
operations and ability to fund and expand our business
.
Any loans
or direct capital contributions by foreign entities to us are subject to Chinese
regulations and approvals. Such loans and direct investments cannot
exceed statutory limits and must be registered with the Chinese State
Administration of Foreign Exchange or its local counterpart; capital
contributions by foreign entities must be approved by the Chinese Ministry of
Commerce or its local counterpart. If we were to fail to get these
required approvals, our ability to use any the proceeds of any loans
or direct investments from foreign entities, including those in the United
States, could be negatively affected and our liquidity, operations and ability
to fund and expand our business could be adversely and materially
affected. KASH, which does business in China, is a Hong Kong company
and funding in the form of loans or capital does not need approval of the
Chinese authorities.
Risks
Related to Our Common Stock
There is no established or liquid trading
market for shares of our common stock
.
Although
we intend to apply for listing of our shares on Nasdaq or the OTC Bulletin Board
after effectiveness of this registration statement, there can be no assurance
that our shares will qualify for listing. If we do not satisfy all
the applicable requirements for listing, we expect that our shares may be quoted
and traded from time to time on the Pink Sheets. Such quotations and
trading may be limited or sporadic and our shareholders may have difficulty in
selling their shares in such an illiquid market.
Our common stock may be considered a “penny
stock” under SEC rules, which would limit the market for our shares and our
ability to raise capital in an equity offering of our
securities
. If shares of our common stock were not listed on a
national securities exchange or Nasdaq and did not have a minimum bid price of
$4 per share, our common stock would be considered a “penny stock,” as defined
in Rule 3a51-1 of the Securities Exchange Act of 1934. SEC rules
impose additional specific disclosure and other requirements on broker-dealers
effecting transactions in penny stocks, which rules may reduce the market
liquidity for our shares
Our three principal shareholders will
continue to be in control
. None of our three principal
shareholders holds a majority of our outstanding shares, the shareholder vote
required for the election of directors and for other corporate action. But any
two of our three principal shareholders, acting together, have a majority of our
outstanding shares and therefore are in a position to elect all of
the members of our board of directors. Any two of our
three principal shareholders, acting together, also are in a position to block
any takeover bid or merger or acquisition proposal that may be beneficial to
other shareholders.
We do not intend to pay cash or other
dividends on our common stock
. We have not paid any cash or
stock dividends on our common stock since inception and do not anticipate paying
any dividends in the future. Rather, we expect that any
earnings will be used in our operations and to finance the expansion of our
business.
Other
Risks
Enforcement of certain civil
liabilities
. We are a British Virgin Islands corporation doing
business outside the United States, in China. KASH is a Hong Kong
corporation doing business in China. All of our officers and
directors are residents of China and Hong Kong. All of our assets and
those of our officers and directors are located outside the United States, in
China or Hong Kong. Under these circumstances, shareholders and
investors may not be able to effect service of process within the United States
upon such foreign persons and may not be able to enforce against such persons
judgments obtained in United States courts predicated upon the civil liability
provisions of the federal securities laws of the United States; moreover, it is
unlikely that foreign courts would enforce, in original actions, liabilities
against such foreign persons predicated solely upon the federal securities laws
of the United States.
Item
4. Other Information
A.
History and Development of the
Company
Dragon
Jade International Limited (“Dragon Jade,” “we,” “our” and similar terms) was
incorporated in the British Virgin Islands with limited liabilities on April 14,
2008. It is an investment holding company with an investment in 100% of KASH
Strategic Ltd. (“KASH”). KASH is a limited company incorporated in
Hong Kong that is principally engaged in the provision of business consultancy
services to its customers in the Greater China region. On November 5, 2008,
Dragon Jade acquired 100% of the total issued shares of KASH from its original
shareholders. Apart from the investment holding in KASH, Dragon Jade does not
have any other business.
KASH
Strategic Ltd. was incorporated in October 2003 in Hong Kong with limited
liabilities. The original shareholders of KASH had identified the
business potential in providing business consultancy services to small-to-medium
sized enterprises in the Greater China region and therefore pooled their
resources together and incorporated KASH to engage in such
business. The senior management of KASH are well experienced in the
field of investment banking, commercial banking, finance and investors
relations, and through their extensive network, the company was able to secure
customers from different industries and origins. Since inception,
KASH has served clients from both Hong Kong and China, with businesses ranging
from traditional manufacturing to industrial equipment to environmental
engineering and high-tech smart card payment systems.
B.
Business Overview
Dragon
Jade engages in the consulting business by and through KASH, which provides
business consultancy services to its customers. The services typically begin
with an analysis of the client’s business, with the findings and recommendations
reported back to client in the form of a business plan. The company would then
assist the client to determine long-term goals and formulate strategic plans to
achieve such goals. In addition, KASH may assist the client in the formulation
and execution of the operational plans. When necessary, KASH may also advise in
the areas of media and investor relations.
C.
Organizational Structure
D.
Property, Plants and Equipment
Except
for some furniture and fixtures and office equipment like computers and fax
machines, neither Dragon Jade nor KASH has any other property or
plants.
Item
4A. Unresolved Staff Comments
Not
applicable.
Item
5. Operating and Financial Review and Prospects.
A.
Operating results
.
Revenue
for the fiscal year ended March 31 2008 decreased 95% to $11,995 from $221,069
for fiscal year 2007, while net loss increased to $22,910 from $15,345 during
the year. In view of the decrease in revenue, the management had made an effort
to cut down on expenses and succeeded in compressing all expenses to $36,556
from $105,150, a decrease of 65% from a year ago. Fiscal year 2008 was a
difficult one for the company. The decrease in revenue was a result of our not
entering into any new consulting contracts. Although there had been
quite a number of referrals and initial contacts with potential clients, we did
not sign any consultancy contract with any new clients.. The revenue recorded
for the year was an extension of some extra work provided to an existing client.
In the interim period from the end of FY 2008 to November 2008, the situation
did not have much improvement. Total revenue of about $10,000 was recorded for
the period. The recent turmoil in the financial markets around the world has
created rather serious problems for a large number of small-to-medium sized
companies in the region. Although the management expects to receive more
enquiries from potential clients for the company’s services, it is also
anticipates that the conclusion of a final contract with a new client would
still be difficult and that any new client will be putting up more effort in
negotiating and bargaining the contract price. We expect these
difficult circumstances to have continued in the fiscal year ending March 31,
2009 and beyond.
B.
Liquidity and capital resources
.
The
original shareholders of KASH, Mr. Wong and Mr. Hung, directors of the company,
had taken up the responsibility to see that the company has sufficient liquidity
and possesses adequate capital resources to carry on its business. It is
expected that they will continue to do so as necessary. In fact, $115,654, an
amount due to directors for funds advanced to the company, was capitalized
subsequent to March 31, 2008. The amount due has no maturity date and
does not bear any interest. Imputed interest had been considered, but
was not deemed required.
C.
Research and development, patents and licenses,
etc.
None/Not
applicable.
D.
Trend information.
We expect
the serious financial crisis in the United States and elsewhere in the world to
continue to adversely affect our prospective clients and therefore our results
of operation during the calendar year 2009 and likely beyond. We anticipate that
we will continue to reduce our expenses and to look to our directors to provide
necessary liquidity to meet our obligations. We also may consider
making a public or private offering of our securities to raise capital, in the
United States and/or in China and Hong Kong.
E.
Off-balance sheet arrangements
None/Not
applicable.
F.
Tabular disclosure of contractual
obligations
None/Not
applicable.
Item
6. Directors, Senior Management and Employees
A.
Directors and senior
management.
Our directors and senior management
are:
WONG Ka Ming,
age 56, has served as President
and a director of Dragon Jade since August 2008 and as President and a director
of KASH since inception on October 1, 2003. Prior thereto, from 2000
to 2001, Mr. Wong was a director of Man Sang Holding Inc., a publicly held
company engaged in the purchasing, processing, assembling, merchandising, and
wholesale distribution of pearls, pearl jewelry products and jewelry
products. In 1999, he was a director of Fidelity Communication
Company, a private company in Hong Kong engaged in public and investors
relations. In 2002, he was a director of Stanford Capital International Ltd., a
private company in Hong Kong engaged in investor relations. From 1997 to 1999,
Mr. Wong was a director of Regal Financial Services Ltd., a private company
which specialized in investments and fund management in
China. Previously, for more than 10 years, he had served as an
executive officer and/or director of several brokerage and investment banking
firms in Hong Kong. Mr. Wong earned B.S. Sci. and M.B.A. degrees from
the Chinese University of Hong Kong.
HUNG Kwok Wing (“Sonny”),
age 45, has served as
a director of Dragon Jade since August 2008 and has served as Vice President of
KASH since March 2008. Mr. Hung served as Assistant to the Chairman
of Man Sang Holding Inc. from March 2002 to January 2008, except in 2002 when he
was an executive officer of ZMGI Corporation; he had joined Man Sang in November
1996 as Vice President. Prior thereto, for more than 10 years, Mr.
Hung had served as an executive and/or executive officer of several banking and
financial institutions based in Hong Kong, Mr. Hung received a B.S. degree in
Finance and Banking from San Francisco State University, an M.B.A. degree from
Baptist University and a Masters degree in Accountancy from the Chinese
University of Hong Kong.
KOU Yue (“Ivory”),
age 34, has served as Chief
Financial Officer of Dragon Jade since August 2008 and as Chief Financial
Officer of KASH since February 2006. Before joining the Company, since 2002, she
was the financial manager of China Broadcasting Holding Ltd., a listed company
in Hong Kong. From 1996 to 2002, she held senior management positions in several
accounting firms in Hong Kong and China. She is a member of
professional accounting groups HKICPA, ACCA and CICPA. Ms. Kou
received a B.S. degree in Business Administration from the Tianjin Finance and
Economic University and a Masters degree in Banking from the City University of
Hong Kong.
LAM Lai Sheung (“Christine”),
age56, has served
as Secretary of Dragon Jade since August 2008 and as Secretary of KASH since
inception on October 1, 2003. She is responsible for the administrative work of
the Company. Before joining KASH, she had worked as Administrative Officer and
Executive Secretary with a number of private and public enterprises like the
Hong Kong Jockey Club, ZMGI Corporation and ABC Communications Ltd. in Hong
Kong.
There is
no family relationship between any of the directors and officers of Dragon Jade
or KASH.
B.
Compensation.
None of
our officers and directors received any compensation from Dragon
Jade. However, all of our officers and directors are entitled to
receive compensation for services rendered to KASH.
Mr. Wong
as President of KASH did not receive any compensation or benefits during the
fiscal year ended March 31, 2008,
Mr. Hung
joined KASH as Vice President in March 2008 and did not receive any compensation
or benefits during the fiscal year ended March 31, 2008.
Ms. Kou
as Chief Financial Officer of KASH did not receive any compensation or benefits
during the fiscal year ended March 31, 2008.
No
amounts were set aside or accrued by KASH to provide pension, retirement or
similar benefits to
senior
management.
C.
Board Practices.
The
current terms of office of the directors expire at the next annual meeting and
when their successors are elected and qualified.
Directors
do not have service contracts providing for benefits upon termination of their
terms.
We
currently do not have an audit committee or a remuneration committee, but intend
to authorize such committees, adopt their policies and procedures and appoint
their members, no later than the fiscal year ending March 31, 2010.
D.
Employees.
We had 4
employees at the end of the last fiscal year ended March 31, 2008, all of whom
were members of senior management, and an average of 3 employees during the past
three fiscal years, all of whom were members of senior management.
E.
Share Ownership.
The
shares of Dragon Jade are beneficially owned by Wong Ka Ming, Hung Kwok Wing and
Metrolink Holdings Limited, who are in a position to “control” Dragon Jade by
virtue of their shareholdings and positions. The following table sets forth, as
of January 30, 2009, the beneficial ownership of shares of the common stock of
Dragon Jade beneficially owned by (1) each person known to be the beneficial
owner of more than 5% of our shares of common stock and (2) each of the members
of senior management identified in Item 6.B., above. (The term
“beneficial owner” of securities refers to any person who, even if not the
record owner of the securities, has or shares the underlying benefits of
ownership. These benefits include the power to direct the voting or the
disposition of the securities or to receive the economic benefit of ownership of
the securities. A person also is considered to be the “beneficial
owner” of securities that the person has the right to acquire within 60 days by
option or other agreement. Beneficial owners include persons who hold
their securities through one or more trustees, brokers, agents, legal
representatives or other intermediaries, or through companies in which they have
a “controlling interest,” which means the direct or indirect power to direct the
management and policies of the entity.)
|
|
Number
of
|
|
|
Percent
of
|
|
Name
|
|
Shares
|
|
|
Shares
(%)
|
|
Wong
Ka Ming
|
|
|
10,500,000
|
|
|
|
34.5
|
|
Hung
Kwok Wing
|
|
|
10,500,000
|
|
|
|
34.5
|
|
|
|
|
-0-
|
|
|
|
-0-
|
|
Metrolink
Holdings Ltd.*
|
|
|
9,000,000
|
|
|
|
29.5
|
|
*Andy Lai
and Lilian Wai are the shareholders of and have a controlling interest in
Metrolink Holdings Ltd.
There is
no arrangement involving any person named in the table that involves the issue
or grant of options for our shares or any shares.
Item
7. Major Shareholders and Related Party Transactions
A.
Major Shareholders.
As of January 30, 2009,
our major shareholders, Wong Ka Ming, Hung Kwok Wing and Metrolink Holdings Ltd.
beneficially own 10,500,000 shares of Dragon Jade common stock, or 34.5%,
10,500,000 shares or 34.5% and 9,000,000 shares or 29.5%,
respectively. See Item 6E, above.
None of
our 30,410,000 of issued and outstanding shares of common stock as of January
30, 2009 is held by persons in the United States. Of the issued and
outstanding shares, 30,410,000, or 100%, are held by 44 holders of record in
Hong Kong. We are not directly or indirectly owned or controlled by another
corporation, by any foreign government, or by any other natural or legal person,
severally or jointly. We know of no arrangement the operation of which may at a
subsequent date result in a change in control.
Our major
shareholders do not have different voting rights.
B.
Related Party Transactions.
Since
April 1, 2005, there has been no related party transaction except (1) the
$115,654, due to directors for funds advanced to the KASH, which amount has no
due date or maturity date and does not bear any interest, and (2) our purchase
of all KASH shares from our major shareholders for $1. (Related party
transactions are transactions or loans between Dragon Jade and: (a)
enterprises directly or indirectly controlled by the company; or (b) associates
of our major shareholders; or (c) our major shareholders ;or (d) our
senior management or (e) entities directly or indirectly controlled by our major
shareholders or senior management.)
Subsequent
to the closing of the interim period ended November 30, 2008, on January 16,
2009, we issued a total of 30,000,000 shares of common stock on the original
shareholders of KASH pursuant to a supplementary agreement dated August 28, 2008
regarding the acquisition of KASH by Dragon Jade. As a result, Mr. WONG Ka Ming,
Mr. HUNG Kwok Wing and Metrolink Holdings Ltd. were issued and hold 10,500,000
shares, 10,500,000 shares and 9,000,000 shares,
respectively. Worldwide Gateway Co. Ltd., one of the original
shareholders of KASH, had assigned its interest in Dragon Jade to
Metrolink.
C.
Interests of experts and
counsel.
No counsel or accountant for the company has been
employed on a contingent basis or owns shares in the company or in
KASH.
Item
8. Financial Information
A. Consolidated
Statements and Other Financial Information
The
following consolidated financial statements and other financial information are
included as part of this registration statement:
Dragon
Jade International Ltd.
Report of
Independent Public Accountant
Consolidated
Balance Sheet (unaudited) as of November 30, 2008
Consolidated
Statements of Income (Loss) (unaudited) for the interim period ended November
30, 2008
Consolidated
Statements of Retained Earnings (Deficit) (unaudited) for the interim period
ended November 30, 2008
Consolidated
Statements of Cash Flows (unaudited) for the interim period ended November 30,
2008
Notes to
Consolidated Financial Statements
Kash
Strategic Ltd.
Report
of Independent Public Accountant
Consolidated
Balance Sheets as of March 31, 2008
Consolidated
Statements of Income (Loss) for the fiscal years ended March 31, 2006, 2007 and
2008
Consolidated
Statements of Retained Earnings (Deficit) for the fiscal years ended March 31,
2006, 2007 and 2008
Consolidated
Statements of Cash Flows for the fiscal years ended March 31, 2006, 2007 and
2008
Notes to
Consolidated Financial Statements
B. Significant
Changes.
KASH has
capitalized a director’s loan of $115,654 and Dragon Jade has acquired 100%
interest in KASH since the date of the annual financial statements.
Item
9. The Offer and Listing
A.
Offer and listing details.
We are
not offering any securities.
There is
no established or liquid trading market for shares of our common stock. Upon
effectiveness of this registration statement, we intend to apply for listing of
our shares on Nasdaq or the OTC Bulletin Board, but there can be no assurance
that our shares will qualify for listing. If we do not satisfy all
the applicable requirements for listing, we expect that our shares may be quoted
and traded from time to time on the Pink Sheets. Such quotations and
trading may be limited or sporadic and our shareholders may have difficulty in
selling their shares in such an illiquid market.
The
initial bid and asked prices submitted for quotation by the sponsoring
broker-dealer will be determined arbitrarily by negotiation between that
broker-dealer and us and may not necessarily bear any relationship to our asset
value, earnings, financial condition or other established criteria of value;
such prices will be subject to change as a result of market conditions and other
factors.
The
transfer agent for our shares is American Stock Transfer & Trust Company,
LLC, 59 Maiden Lane, Plaza Level, New York, NY 10038.
B.
Plan of distribution.
Not
applicable.
C.
Markets.
Upon
effectiveness of this registration statement, we intend to seek admission to
Nasdaq or the OTC Bulletin Board for quotation and trading, but there is no
assurance that our application will be
approved. See
Item 9A, above.
D.
Selling shareholders.
Not
applicable.
E.
Dilution.
Not
applicable.
F.
Expenses of the issue.
Not
applicable.
Item
10. Additional Information
A.
Share
capital.
Pursuant to Section 6.1 of our Memorandum of
Association, we are authorized to issue 100,000,000 no par value of a single
class. As of January 30, 2009, 30,410,000
of our authorized shares
were issued, outstanding and fully paid. Pursuant to Section 7 of our
Memorandum of Association, holders of common stock are entitled to one vote per
share on each matter submitted to a vote of shareholders, the right to an equal
share in any dividend paid by the company and the right to an equal share in the
distribution of surplus assets, if any, on liquidation of the
company.. Holders of common stock do not have preemptive rights to
purchase additional shares or other subscription rights. The common
stock carries no conversion rights and is not subject to redemption or any
sinking fund provisions. All shares of common stock are entitled to
share equally in dividends from legally available sources as determined by the
board of directors. Upon dissolution or liquidation of the company,
whether voluntary or involuntary, holders of common stock are entitled to
receive assets of the company available for distribution to
shareholders.
Since
January 16, 2009, we issued 30,000,000 shares of our common stock to the three
shareholders of KASH to acquire 100% of the issued and outstanding shares of
KASH. See Item 6E.
There
were no changes in voting rights involved in this transaction.
B.
Memorandum and articles of
association.
(1) The
Company was incorporated under the Territory of the British Virgin Islands BVI
Business Companies Act 2004, on April 14, 2008. Section 5.1 of the
Memorandum of Association provides that the Company has full capacity to carry
on or undertake any business or activity, do any act and enter into any
transaction.
(2) Section
8 of the Articles of Association provides that the minimum number of directors
shall be one; there is no maximum number of directors. There are no
limitations or restrictions on the borrowing power of directors; there are no
age limit requirements and no shareholding requirements.
Section
13 of the Articles of Association, concerning conflicts of interest, provides
that a director shall disclose that he is interested in a transaction entered
into or to be entered into by the Company and that such director may vote on a
matter relating to the transaction, attend a meeting of directors relating to
the transaction, and sign a document on behalf of the Company or do anything in
his capacity as a director that relates to the transaction.
(3) Section
18 of the Articles of Association provides that directors may authorize a
distribution by way of dividend at any time if they are satisfied that
immediately after the distribution the value of the Company’s assets will exceed
its liabilities and that the Company will be able to pay its debts as they fall
due. Section 7 of the Memorandum of Association provides that each
share of common stock is entitled: to one vote at a meeting of shareholders or
on any resolution of shareholders; to share equally in any dividend paid by the
Company; and to share equally in the distribution of any surplus assets of the
Company on its liquidation. There are no pre-emptive
rights.
(4) Section
8 of the Articles of Association provides that the rights of shareholders may be
varied with the consent in writing, or by resolution passed at a meeting, by
holders of more than 50% of the issued shares.
(5) Section
7 of the Articles of Association provides that any director may convene meetings
of shareholders and that shareholders entitled to exercise 30% or more of the
voting rights may request directors in writing to convene a meeting of
shareholders.
(6) There
are no limitations or restrictions on the rights of non-resident or foreign
shareholders to own shares or to hold or exercise voting rights.
(7) There
are no provisions that would have an effect of delaying, deferring or preventing
a change in control of the Company.
(8) There
are no provisions governing the threshold above which shareholder ownership must
be disclosed.
C.
Material
contracts.
There have been no material contracts since
inception of Jade Dragon.
D.
Exchange
controls.
Neither the British Virgin Islands nor Hong Kong has
any system of exchange controls and there is no restriction of any kind on the
repatriation of capital or the remittance of dividends, profits, interests,
royalties or other payments to non-resident holders of the Company’s
securities.
E.
Taxation.
Shareholders
will not be subject to taxation, including withholding provisions, in the
British Virgin Islands of in Hong Kong. The Company assumes no
responsibility for the withholding of any tax upon the payment of dividends and
there is no tax treaty between the British Virgin Islands and the United States
regarding such withholding
.
The
Company will be subject to applicable taxes in Hong Kong, but shareholders will
exempt.
There is
no tax treaty between the United States and Hong Kong.
For
United States federal income tax purposes, the gross amount of all
distributions paid with respect to our common shares to a person subject to
United States federal income taxation generally will be treated as foreign
source dividend income to such person. Gain or loss from the sale of
our shares generally will be subject to federal income taxation at a maximum
federal income tax rate of 15% if the shares were held for more than 12 months
or as ordinary income if held for less than 12 months.
G.
Statement by
experts
. The auditors of the Company are
Gruber & Company, LLC
of 121 Civic Center Drive, Suite 225, Lake Saint Louis, Missouri
63367
. The financial statements included as part of this
registration statement have been included herein in reliance upon the authority
of such auditors as experts in accounting and auditing.
H.
Documents on
display
.
Item 19 sets
forth a list of exhibits that are filed as part of this registration statement;
that list is incorporated herein by reference.
I.
Subsidiary
information.
Information
concerning
KASH, our only
subsidiary, is included throughout this registration statement; KASH’s financial
statements also are included.
Item
11. Quantitative and Qualitative Disclosures About Market
Risk
We have
not entered into market ris
k
sensitive
instruments for any purpose.
Item
12. Description of Securities Other than Equity
Securities.
None/Not
applicable.
SIGNATURES
The
registrant hereby certifies that it meets all of the requirements for filing on
Form 20-F and that it has duly caused and authorized the undersigned
to sign this registration statement on its behalf.
DRAGON
JADE INTERNATIONAL LIMITED
CONSOLIDATED
FINANCIAL STATEMENTS
For
the eight months ended
November
30, 2008
(Unaudited)
(Stated
in US dollars)
DRAGON
JADE INTERNATIONAL LIMITED
INDEX
TO CONOLIDATED FINANCIAL STATEMENTS
Consolidated
Balance Sheets
|
F-2
|
|
|
Consolidated
Statements of Operations
|
F-3
|
|
|
Consolidated
Statements of Changes in Stockholders’ Deficit
|
F-5
|
|
|
Consolidated
Statements of Cash Flows
|
F-4
|
|
|
Notes
to Consolidated Financial Statements
|
F-6-F-11
|
DRAGON
JADE INITERNATIONAL LIMITED
Consolidated
Balance Sheets
|
|
(Unaudited)
|
|
|
|
November 30,
|
|
|
|
2008
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash
and Bank Deposits
|
|
$
|
62,605
|
|
Amount
due from Related Company
|
|
|
27,447
|
|
Deposit
& Other receivable
|
|
|
3,100
|
|
Total
current assets
|
|
|
93,152
|
|
|
|
|
|
|
Plant,
machinery and equipment, net
|
|
|
50
|
|
|
|
|
|
|
Total
assets
|
|
|
93,202
|
|
|
|
|
|
|
Liabilities
and stockholders' equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
Payable
|
|
|
0
|
|
Amount
due to Directors
|
|
|
0
|
|
Accruals
& Other payable
|
|
|
1
|
|
Total
current liabilities
|
|
|
1
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Common
stock, 100,000,000 shares authorized and 410,000 shares issued at no par
value
|
|
|
105,609
|
|
Retained
earnings
|
|
|
(12,412
|
)
|
Other
Comprehevsive Income
|
|
|
4
|
|
Total
stockholders' equity
|
|
|
93,201
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
$
|
93,202
|
|
See
accompanying notes to consolidated financial statements
DRAGON
JADE INTERNATIONAL LIMITED
Consolidated
Statement of Operations and Comprehensive Loss
|
|
(Unaudited)
|
|
|
|
For the eight months ended
|
|
|
|
November 30,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
10,277
|
|
|
$
|
11,973
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
Selling,
general and administrative
|
|
|
(22,788
|
)
|
|
|
(32,728
|
)
|
|
|
|
|
|
|
|
|
|
Income/(loss)
from operations
|
|
|
(12,511
|
)
|
|
|
(20,755
|
)
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
|
0
|
|
|
|
72
|
|
Interest
income
|
|
|
99
|
|
|
|
1,268
|
|
Total
other income
|
|
|
99
|
|
|
|
1,340
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations
|
|
|
(12,412
|
)
|
|
|
(19,415
|
)
|
|
|
|
|
|
|
|
|
|
Income
tax
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(12,412
|
)
|
|
$
|
(19,415
|
)
|
|
|
|
|
|
|
|
|
|
Loss
per share
|
|
$
|
(0.030
|
)
|
|
$
|
(0.166
|
)
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding
|
|
|
410,000
|
|
|
|
117,263
|
|
See
accompanying notes to consolidated financial statements
DRAGON
JADE INTERNATIONAL LIMITED
Consolidated
Statements of Cash Flows
|
|
(Unaudited)
|
|
|
|
For the eight months period ended
|
|
|
|
November 30,
|
|
|
|
2008
|
|
|
2007
|
|
Cash
flows from operating activities
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(12,412
|
)
|
|
$
|
(19,415
|
)
|
|
|
|
|
|
|
|
|
|
Adjustments
to reconcile net income/(loss) to
net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
41
|
|
|
|
2,450
|
|
Changes
in assets and liabilities:
|
|
|
|
|
|
|
|
|
Deposits
and other receivables - Related
|
|
|
(27,447
|
)
|
|
|
(7,302
|
)
|
Deposits
and other receivables - Third
|
|
|
(3,092
|
)
|
|
|
8,249
|
|
Accounts
payables
|
|
|
(10,280
|
)
|
|
|
(7,388
|
)
|
Accrued
liabilities and other payables-Third
|
|
|
(2,313
|
)
|
|
|
(334
|
)
|
Net
cash (used in)/provided by operating activities
|
|
|
(55,503
|
)
|
|
|
(23,740
|
)
|
|
|
|
|
|
|
|
|
|
Cash
flow from investing activities
|
|
|
|
|
|
|
|
|
Acquisition
of a subsidiary
|
|
|
(2,359
|
)
|
|
|
0
|
|
Net
cash (used in) investing activities
|
|
|
(2,359
|
)
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
Cash
flow from financing activities
|
|
|
|
|
|
|
|
|
Cash
for private placement
|
|
|
41,000
|
|
|
|
0
|
|
Net
cash provided by financing activities
|
|
|
41,000
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
Cummlative
Translation Adjustment
|
|
|
4
|
|
|
|
(2,449
|
)
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents:
|
|
|
|
|
|
|
|
|
Net
(decrease) increase
|
|
|
(16,858
|
)
|
|
|
(26,189
|
)
|
Balance
at beginning of period
|
|
|
79,463
|
|
|
|
90,702
|
|
Balance
at end of period
|
|
|
62,605
|
|
|
|
64,513
|
|
|
|
|
|
|
|
|
|
|
Supplemental
cash flow information:
|
|
|
|
|
|
|
|
|
Cash
paid for income taxes
|
|
|
0
|
|
|
|
0
|
|
Cash
paid for interest
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
Non-cash
financing sources:
|
|
|
|
|
|
|
|
|
Shareholder
loans converted to common stock
|
|
$
|
115,974
|
|
|
|
0
|
|
See
accompanying notes to financial statements
DRAGON
JADE INTERNATIONAL LIMITED
Conolidated
Statements of Changes in Stockholders' Equity (Deficit)
For the
Eight Months Ended November 30, 2008 (Unaudited) and Year Ended March 31,
2008
|
|
|
|
|
|
|
|
Retained
|
|
|
Other
|
|
|
Total
|
|
|
|
Common
|
|
|
Earnings
|
|
|
Comprehensive
|
|
|
Stockholders'
|
|
|
|
Shares
|
|
|
Stock
|
|
|
(Deficit)
|
|
|
Income
|
|
|
Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
March 31, 2006
|
|
|
10,000
|
|
|
$
|
1,289
|
|
|
$
|
(14,398
|
)
|
|
$
|
5,247
|
|
|
$
|
(7,862
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year
|
|
|
—
|
|
|
|
—
|
|
|
|
(15,345
|
)
|
|
|
—
|
|
|
|
(15,345
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cummlative
translation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,447
|
)
|
|
|
(2,447
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
March 31, 2007
|
|
|
10,000
|
|
|
|
1,289
|
|
|
|
(29,743
|
)
|
|
|
2,800
|
|
|
|
(25,654
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year
|
|
|
—
|
|
|
|
—
|
|
|
|
(22,910
|
)
|
|
|
—
|
|
|
|
(22,910
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cummlative
translation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(121
|
)
|
|
|
(121
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
March 31, 2008
|
|
|
10,000
|
|
|
|
1,289
|
|
|
|
(52,653
|
)
|
|
|
2,679
|
|
|
|
(48,685
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allotment
of shares
|
|
|
900,000
|
|
|
|
115,974
|
|
|
|
—
|
|
|
|
—
|
|
|
|
115,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effects
of reverse merger with Kash of a subsidiary
|
|
|
(910,000
|
)
|
|
|
(52,654
|
)
|
|
|
52,653
|
|
|
|
1
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of shares to founder shareholder
|
|
|
10,000
|
|
|
|
1,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of shares for private placement
|
|
|
400,000
|
|
|
|
40,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
(12,412
|
)
|
|
|
—
|
|
|
|
(12,412
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cummlative
translation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,676
|
)
|
|
|
(2,676
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
November 30, 2008
|
|
|
410,000
|
|
|
$
|
105,609
|
|
|
$
|
(12,412
|
)
|
|
$
|
4
|
|
|
$
|
93,201
|
|
See
accompanying notes to consolidated financial statements
DRAGON
JADE INTERNATIONAL LIMITED
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
1.
The Company
Dragon
Jade International Limited (the “Company”) was incorporated on April 14, 2008 in
the British Virgin Islands. The principal activity of the Company is investment
holding. On November 5, 2008, all outstanding shares of Kash Strategic Limited
were transferred to the Company at consideration of HK$3. Details of the
Company’s subsidiary (which together with the Company are collectively referred
to as the “Group”) and its principal activity as of November 30, 2008 was as
follows:
Name
|
|
Place
of Registration
|
|
Percentage
of equity
interest
attributable to
the
Group
|
|
Principal
Activity
|
Kash
Strategic Ltd. (“KSD”)*
|
|
HK
|
|
100%
|
|
Provide
corporate consultancy and advisory
service
|
*
|
KSD
was incorporated on October 31, 2003 in Hong Kong. It is
subsidiary of the Company and it consolidated into the Company’s financial
statements.
|
2.
Summary of Significant Accounting Policies
(a)
Basis of Consideration
The
accompanying consolidated financial statements of the Company have been prepared
in accordance with generally accepted accounting principles in the United States
of America.
The
consolidated financial statements include the accounts of the Company and its
subsidiary. All significant inter-company accounts and transactions have
been eliminated in consolidation.
(b)
Use of Estimates
In
preparing financial statements in conformity with US GAAP, management is
required to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and revenues and expenses during the
reported periods. Significant estimates include depreciation. Actual results
could differ from those estimates.
(c)
Cash and Cash Equivalents
The
Company considers all highly liquid investments with original maturities of
three months or less at the time of purchase to be cash equivalents. As of
November 30, 2008 and 2007, the Company did not have any cash
equivalents.
(d)
Plant and Equipment
Plant and
equipment is stated at cost. Depreciation is provided principally by use of the
straight-line method over the useful lives of the related assets, except for
leasehold properties, which are depreciated over the terms of their related
leases or their estimated useful lives, whichever is
less. Expenditures for maintenance and repairs, which do not improve
or extend the expected useful life of the assets, are expensed to operations
while major repairs are capitalized.
The
estimated useful lives are as follows:
Furniture
and fittings
|
4
years
|
Computer
equipment
|
4
years
|
The gain
or loss on disposal of property, plant and equipment is the difference between
the net sales proceeds and the carrying amount of the relevant assets, and, if
any, is recognized in the statement of operations.
DRAGON
JADE INTERNATIONAL LIMITED
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(e)
Impairment of Assets
In
accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144,
"Accounting for Impairment or Disposal of Long-Lived Assets", the Company
evaluates its long-lived assets to determine whether later events and
circumstances warrant revised estimates of useful lives or a reduction in
carrying value due to impairment. If indicators of impairment exist and if the
value of the assets is impaired, an impairment loss would be
recognized. As of November 30, 2008 and 2007, no impairment loss has
been recognized.
(f)
Income Taxes
Income
taxes are provided on an asset and liability approach for financial accounting
and reporting of income taxes. Any tax paid by subsidiaries during the
year is recorded. Current tax is based on the profit or loss from ordinary
activities adjusted for items that are non-assessable or disallowable for income
tax purpose and is calculated using tax rates that have been enacted or
substantively enacted at the balance sheet date. Deferred income tax
liabilities or assets are recorded to reflect the tax consequences in future
years of differences between the tax basis of assets and liabilities and the
financial reporting amounts at each year end.
A
valuation allowance is recognized if it is more likely than not that some
portion, or all, of a deferred tax asset will not be realized.
(g)
Revenue Recognition
Revenue
is recognized in accordance with SEC Staff Accounting Bulletin No. 101, “Revenue
Recognition in Financial Statements”. The Company recognizes revenue
when it is probable that economic benefits will follow to the Company and when
revenue can be measured reliably.
The
Company recognized revenue when services are provided or in proportion basis
according as terms of contracts applicable.
(h)
Foreign Currency Transactions
The
consolidated financial statements of the Company are presented in United States
Dollars (“US$”). Transactions in foreign currencies during the period are
translated into US$ at the exchange rates prevailing at the transaction dates.
Monetary assets and liabilities denominated in foreign currencies at the
balance sheet date are translated into US$ at the exchange rates prevailing at
that date. All transaction differences are recorded in the income
statement.
The
Company’s subsidiary in Hong Kong has its local currency, Hong Kong Dollars
(“HK$”), as its functional currency. On consolidation, the financial
statements of the Company’s subsidiary in Hong Kong is translated from HK$ into
US$ in accordance with SFAS No. 52, "Foreign Currency Translation".
Accordingly, all assets and liabilities are translated at the exchange
rates prevailing at the balance sheet dates and all income and expenditure items
are translated at the average rates for each of the period. Translation of
amounts from HK$ into US$ has been made at the following exchanges rates for the
respective periods:
|
|
|
US$0.12886
to HK$1.00
|
Statement
of income and comprehensive income
|
US$0.12846
to
HK$1.00
|
(i)
Fair Value of Financial Instruments
SFAS No.
107, “Disclosures about Fair Values of Financial Instruments”, requires
disclosing fair value to the extent practicable for financial instruments that
are recognized or unrecognized in the balance sheet. The fair value
of the financial instruments disclosed herein is not necessarily representative
of the amount that could be realized or settled, nor does the fair value amount
consider the tax consequences of realization or settlement.
For
certain financial instruments, including cash, accounts and other receivables,
accounts payable, accruals and other payables, it was assumed that the carrying
amounts approximate fair value because of the near term maturities of such
obligations. The carrying amounts of long-term loans approximate fair value as
the interest on these loans is minimal.
DRAGON
JADE INTERNATIONAL LIMITED
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(j)
Earnings/(Losses) Per Share
Basic
losses per share is computed by dividing the earnings for the year by the
weighted average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution of securities by including
other potential common stock, including stock options and warrants, in the
weighted average number of common shares outstanding for a period, if
dilutive.
(k)
Accumulated Other Comprehensive Income
The
Company follows the Statement of Financial Accounting Standard (“SFAF”) No. 130,
“Reporting Comprehensive Income.” Comprehensive income is a more inclusive
financial reporting methodology that includes disclosure of certain financial
information that historically has not been recognized in the calculation of net
income.
(l)
Stock-Based Compensation
In March
2004, the FASB issued a proposed statement, Share-Based Payment, which addresses
the accounting for share-based payment transactions in which an enterprise
receives employee services in exchange for equity instruments of the enterprise
or liabilities that are based on the grant-date fair value of the enterprise's
equity instruments or that may be settled by the issuance of such equity
instruments. The proposed statement would eliminate the ability to account for
share-based compensation transactions using Accounting Principles Board ("APB")
Opinion No. 25, Accounting for Stock Issued to Employees, and generally would
require instead that such transactions be accounted for using a fair-value-based
method. In December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment,
which is a revision of SFAS No. 123. Generally, the approach in SFAS No. 123(R)
is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R)
requires all share-based payments to employees, including grants of employee
stock options, to be recognized in the income statement based on their
grant-date fair values. Pro forma disclosure is no longer an
alternative.
As
permitted by SFAS No. 123, for 2005, the Company accounted for share-based
payments to employees using APB Opinion No. 25's intrinsic value method and, as
such, generally recognized no compensation cost for employee stock
options.
Effective
January 1, 2006, we have adopted SFAS No. 123(R)'s fair value method of
accounting for share based payments. Accordingly, the adoption of SFAS No.
123(R)'s fair value method may have a significant impact on the Company's
results of operations as we are required to recognize the cost of employee
services received in exchange for awards of equity instruments based on the
grant-date fair value of those awards. SFAS No. 123(R) permits public companies
to adopt its requirements using either the "modified prospective" method or the
"modified retrospective" method.
The
Company adopted SFAS No. 123(R) using the modified prospective method. In April
2005, the SEC delayed the effective date of SFAS No. 123(R), which is now
effective for public companies for annual, rather than interim periods that
begin after June 15, 2005. The impact of the adoption of SFAS No. 123(R) cannot
be predicted at this time because it will depend on levels of share-based
payments granted in the future.
(m)
New Accounting Pronouncements
In
September 2006, the FASB issued SFAS No. 157, “Fair Value
Measurements”. This Statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP), and expands disclosures about fair value measurements. The
Statement applies under other accounting pronouncements that require or permit
fair value measurements. SFAS No. 157 is effective for fiscal years
beginning after November 15, 2007, or the Company’s fiscal year ending September
30, 2009. We are currently assessing the impact the adoption of this
pronouncement will have on our financial statements.
DRAGON
JADE INTERNATIONAL LIMITED
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities” and is effective for fiscal years
beginning after November 15, 2007. This Statement permits entities to
choose to measure many financial instruments and certain other items at fair
value. The objective is to
improve
financial reporting by providing entities with the opportunity to mitigate
volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. We are currently assessing the impact the adoption of
this pronouncement will have on our financial statements.
In
December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51” and is effective
for fiscal years beginning after December 5, 2008. This Statement
establishes accounting and reporting standards for the noncontrolling interest
in a subsidiary and for the deconsolidation of a subsidiary. We are
currently assessing the impact the adoption of this pronouncement will have on
our financial statements.
In
December 2007, the FASB issued SFAS No. 141 (Revised) “Business
Combinations”. SFAS 141 (Revised) is effective for fiscal years
beginning after December 13, 2008. This Statement establishes
principles and requirements for how the acquirer of a business recognizes and
measures in its financial statements the
identifiable
assets acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree. The Statement also provides guidance for recognizing and
measuring the goodwill acquired in the business combination and determines what
information to disclose to enable users of the financial statements
to
evaluate the nature and financial effects of the business
combination. We currently assessing the impact the adoption of this
pronouncement will have on our financial statements.
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements which are presented in conformity with
generally accepted accounting principles (“GAAP”) in the United
States. SFAS No. 162 will become effective 60 days following the
SEC’s approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, “The Meaning of
Present Fairly in Conformity With
Generally Accepted Accounting Principles
.” The Company does
not expect the adoption of SFAS No. 162 to have a material impact on its
financial statements.
3.
Reverse Merger
On August
25, 2008, the Company signed an agreement with Mr. Wong Ka Ming, Mr. Hung Kwok
Wing and the representative of Worldwide Gateway Co., Ltd, the former
shareholders of KSD, that the Company acquire 100% shareholding of KSD at
consideration of HK$3.
On
November 5, 2008, all outstanding shares of KSD were transferred to the Company,
KSD thereby became the Company’s wholly owned subsidiary.
DRAGON
JADE INTERNATIONAL LIMITED
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
BRITISH VIRGIN
ISLANDS
The
Company was incorporated in the British Virgin Islands and, under the current
laws of the British Virgin Islands, is not subject to income taxes.
HONG
KONG
No Hong
Kong Profits Tax has been provided in the financial statements as KSD was in a
tax loss position during the period.
5.
|
Retirement
and Welfare Benefits
|
The
employees of the Company are members of the Mandatory Provident Fund operated by
the local government. The company contribute 5% according to the different
payroll range of the employee, and the maximum amount of contribution is up to
HK$1,000.
Cash and
cash equivalents are summarized as follows:
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
Cash
at Bank
|
|
$
|
62,219
|
|
|
$
|
62,445
|
|
Cash
on Hand
|
|
|
386
|
|
|
|
2,068
|
|
Total
|
|
$
|
62,605
|
|
|
$
|
64,513
|
|
7.
|
Related
Party Transactions
|
As of
November 30, 2008, the Group has the following balance with related
party:-
The
balance due to related party is the amount received on behalf of the Company of
$1,000 from the founder shareholder and $40,000 for the private placement by
issuing 400,000 shares of common stock of the Company at $0.1 each to un-related
third parties and the payment of various professional fee paid for the Company
for the listing exercise of $13,553. The balance due is non-interest
bearing.
8.
|
Concentrations
and Credit Risk
|
The
Company operates principally in Hong Kong and grants credit to its customers in
this geographic region. Since Hong Kong is economically stable, it is
always possible that unanticipated events in foreign countries could not disrupt
the Company’s operations.
Financial
instruments that potentially subject the Group to a concentration of credit risk
consist of cash and accounts receivable.
The
Company does not require collateral to support financial instruments that are
subject to credit risk.
DRAGON
JADE INTERNATIONAL LIMITED
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
9.
|
Commitments
and Contingencies
|
As of
November 30, 2008 and 2007, the company did not have any contingent
liabilities.
The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. These consolidated financial
statements show that the Company has sustained losses totaling $12,412 since
inception. The future of the Company is dependent upon its attaining
profitability. The consolidated financial statements do not include
any adjustments relating to recoverability and classification of recorded
assets, or the amounts or classifications of liabilities that might be necessary
in the event the Company cannot achieve profitability and continue in
existence.
Subsequent
to the closing of the interim period ended November 30, 2008, Dragon
Jade had issued a total of 30,000,000 shares of the company's common stock
on January 16, 2009 to the original shareholders of KASH per a supplementary
agreement dated August 28, 2008 regarding the acquisition of KASH by Dragon
Jade. As a result, Mr. Ka Ming Wong, Mr. Kwok wing Hung and Metrolink Holdings
Ltd. respectively holds 10,500,000 shares, 10,500,000 shares and
9,000,000 shares of the company's common stock. Worldwide Gateway Co. Ltd., one
of the original shareholders of KASH, had assigned its interest in Drgaon Jade
to Metrolink.
KASH
STRATEGIC LIMITED
FINANCIAL
STATEMENTS
March
31, 2008, 2007 And 2006
Together
With Report Of
Independent
Registered Public Accounting Firm
KASH
STRATEGIC LIMITED
INDEX
TO FINANCIAL STATEMENTS
Report
of Independent Registered Public Accounting Firm
|
|
F-14
|
|
|
|
Balance
Sheets
|
|
F-15
|
|
|
|
Statements
of Operations
|
|
F-16
|
|
|
|
Statements
of Changes in Stockholders’ Deficit
|
|
F-18
|
|
|
|
Statements
of Cash Flows
|
|
F-17
|
|
|
|
Notes
to Financial Statements
|
|
F-18-F-24
|
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors
Kash
Strategic Limited
We have
audited the accompanying balance sheets of Kash Strategic Limited as of March
31, 2008, 2007 and 2006 and the related statements of operations, stockholders’
deficit, and cash flows for each of the years in the three-year period ended
March 31, 2008. Kash Strategic Limited’s management is responsible for these
financial statements. Our responsibility is to express an opinion on these
financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Kash Strategic Limited as of March
31, 2008, 2007 and 2006, and the results of its operations and its cash flows
for each of the years in the three-year period ended March 31, 2008 in
conformity with accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 8 to the financial
statements, conditions exist which raise substantial doubt about the Company's
ability to continue as a going concern unless it is able to generate sufficient
cash flows to meet its obligations and sustain its operations. Management’s plan
in regard to these matters are also described in Note 8. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Gruber
& Company, LLC
Lake
Saint Louis, Missouri
September
16, 2008
KASH
STRATEGIC LIMITED
Balance
Sheets
March 31,
2008, 2007 and 2006
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
Cash
and Bank Deposits
|
|
$
|
79,463
|
|
|
$
|
90,702
|
|
|
$
|
130,639
|
|
Amount
due from Related Company
|
|
|
0
|
|
|
|
5,966
|
|
|
|
8,580
|
|
Deposit
& Other receivable
|
|
|
8
|
|
|
|
8,257
|
|
|
|
7,015
|
|
Total
current assets
|
|
|
79,471
|
|
|
|
104,925
|
|
|
|
146,234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant,
machinery and equipment, net
|
|
|
91
|
|
|
|
3,754
|
|
|
|
8,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
79,562
|
|
|
|
108,679
|
|
|
|
154,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and stockholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
|
10,280
|
|
|
|
17,661
|
|
|
|
45,106
|
|
Amount
due to Directors
|
|
|
115,654
|
|
|
|
115,182
|
|
|
|
0
|
|
Accruals
& Other payable
|
|
|
2,313
|
|
|
|
1,490
|
|
|
|
117,422
|
|
Total
current liabilities
|
|
|
128,247
|
|
|
|
134,333
|
|
|
|
162,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Capital
|
|
|
1,289
|
|
|
|
1,289
|
|
|
|
1,289
|
|
Retained
earnings
|
|
|
(52,653
|
)
|
|
|
(29,743
|
)
|
|
|
(14,398
|
)
|
Other
Comprehevsive Income
|
|
|
2,679
|
|
|
|
2,800
|
|
|
|
5,247
|
|
Total
stockholders' equity
|
|
|
(48,685
|
)
|
|
|
(25,654
|
)
|
|
|
(7,862
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
$
|
79,562
|
|
|
$
|
108,679
|
|
|
$
|
154,666
|
|
See
accompanying notes to consolidated financial statements
KASH
STRATEGIC LIMITED
Statement
of Operations
For the
Years ended March 31, 2008, 2007 and 2006
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
11,995
|
|
|
$
|
221,069
|
|
|
$
|
377,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of revenue
|
|
|
0
|
|
|
|
(142,049
|
)
|
|
|
(304,832
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
11,995
|
|
|
|
79,020
|
|
|
|
72,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative
|
|
|
(36,556
|
)
|
|
|
(105,150
|
)
|
|
|
(78,843
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss)
from operations
|
|
|
(24,561
|
)
|
|
|
(26,130
|
)
|
|
|
(6,178
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
|
100
|
|
|
|
7,424
|
|
|
|
0
|
|
Interest
income
|
|
|
1,551
|
|
|
|
3,361
|
|
|
|
2,648
|
|
Total
other income
|
|
|
1,651
|
|
|
|
10,785
|
|
|
|
2,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss)
from operations
|
|
|
(22,910
|
)
|
|
|
(15,345
|
)
|
|
|
(3,530
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
|
$
|
(22,910
|
)
|
|
$
|
(15,345
|
)
|
|
$
|
(3,530
|
)
|
See
accompanying notes to consolidated financial statements
KASH
STRATEGIC LIMITED
Statements
of Cash Flows
|
|
For year ended
|
|
|
For year ended
|
|
|
For year ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
Cash
flows from operating activities
|
|
|
|
|
|
|
|
|
|
Net
profit/(loss)
|
|
$
|
(22,910
|
)
|
|
$
|
(15,345
|
)
|
|
|
(3,530
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
to reconcile net income/(loss) to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
3,678
|
|
|
|
3,668
|
|
|
|
4,019
|
|
Loss
on disposal of fixed asset
|
|
|
0
|
|
|
|
1,002
|
|
|
|
0
|
|
Changes
in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivables
|
|
|
0
|
|
|
|
0
|
|
|
|
2,422
|
|
Deposits
and other receivables - Related
|
|
|
5,967
|
|
|
|
2,613
|
|
|
|
(7,046
|
)
|
Deposits
and other receivables - Third
|
|
|
8,250
|
|
|
|
(1,243
|
)
|
|
|
0
|
|
Accounts
payables
|
|
|
(7,383
|
)
|
|
|
(27,445
|
)
|
|
|
45,104
|
|
Accrued
liabilities and other payables-Third
|
|
|
823
|
|
|
|
(115,932
|
)
|
|
|
(6,748
|
)
|
Net
cash (used in)/provided by operating activities
|
|
|
(11,575
|
)
|
|
|
(152,682
|
)
|
|
|
34,221
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flow from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
of assets
|
|
|
0
|
|
|
|
10
|
|
|
|
(1,571
|
)
|
Net
cash (used in) investing activities
|
|
|
0
|
|
|
|
10
|
|
|
|
(1,571
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flow from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
advanced from directors
|
|
|
458
|
|
|
|
115,182
|
|
|
|
0
|
|
Net
cash (used in) financing activities
|
|
|
458
|
|
|
|
115,182
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cummlative
Translation Adjustment
|
|
|
(122
|
)
|
|
|
(2,447
|
)
|
|
|
5,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(decrease) increase
|
|
|
(11,239
|
)
|
|
|
(39,937
|
)
|
|
|
37,901
|
|
Balance
at beginning of period
|
|
|
90,702
|
|
|
|
130,639
|
|
|
|
92,738
|
|
Balance
at end of period
|
|
|
79,463
|
|
|
|
90,702
|
|
|
|
130,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for income taxes
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Cash
paid for interest
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
See
accompanying notes to financial statements
KASH
STRATEGIC LIMITED
Statements
of Changes in Stockholders' Deficit
For the
Years Ended March 31, 2008, 2007 and 2006
|
|
|
|
|
|
|
|
Retained
|
|
|
Other
|
|
|
Total
|
|
|
|
Common
|
|
|
Earnings
|
|
|
Comprehensive
|
|
|
Stockholders'
|
|
|
|
Shares
|
|
|
Stock
|
|
|
(Deficit)
|
|
|
Income
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
April 1, 2005
|
|
|
10,000
|
|
|
$
|
1,289
|
|
|
$
|
(10,868
|
)
|
|
$
|
—
|
|
|
$
|
(9,579
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,530
|
)
|
|
|
5,247
|
|
|
|
1,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
March 31, 2006
|
|
|
10,000
|
|
|
|
1,289
|
|
|
|
(14,398
|
)
|
|
|
5,247
|
|
|
|
(7,862
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year
|
|
|
—
|
|
|
|
—
|
|
|
|
(15,345
|
)
|
|
|
—
|
|
|
|
(15,345
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cummlative
translation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,447
|
)
|
|
|
(2,447
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
March 31, 2007
|
|
|
10,000
|
|
|
|
1,289
|
|
|
|
(29,743
|
)
|
|
|
2,800
|
|
|
|
(25,654
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year
|
|
|
—
|
|
|
|
—
|
|
|
|
(22,910
|
)
|
|
|
—
|
|
|
|
(22,910
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cummlative
translation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(121
|
)
|
|
|
(121
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
March 31, 2008
|
|
|
10,000
|
|
|
$
|
1,289
|
|
|
$
|
(52,653
|
)
|
|
$
|
2,679
|
|
|
$
|
(48,685
|
)
|
See
accompanying notes to consolidated financial statements
KASH
STRATEGIC LIMITED
NOTES
TO FINANCIAL STATEMENTS
1.
The Company
Kash
Strategic Limited (the “Company”) was incorporated on October 31, 2003 in Hong
Kong. The principal activity of the Company is the provision of corporate
consultancy and advisory service.
2.
Summary of Significant Accounting Policies
(a)
Basis of Presentation
The
financial statements are prepared in accordance with the accounting principles
generally accepted in the United States of America (“US GAAP”).
(b)
Use of Estimates
In
preparing financial statements in conformity with US GAAP, management is
required to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and revenues and expenses during the
reported periods. Significant estimates include depreciation. Actual results
could differ from those estimates.
(c)
Cash and Cash Equivalents
The
Company considers all highly liquid investments with original maturities of
three months or less at the time of purchase to be cash equivalents. As of March
31, 2006, 2007 and 2008, the Company did not have any cash
equivalents.
(d)
Plant and Equipment
Plant and
equipment is stated at cost. Depreciation is provided principally by use of the
straight-line method over the useful lives of the related assets, except for
leasehold properties, which are depreciated over the terms of their related
leases or their estimated useful lives, whichever is
less. Expenditures for maintenance and repairs, which do not improve
or extend the expected useful life of the assets, are expensed to operations
while major repairs are capitalized.
The
estimated useful lives are as follows:
|
4
years
|
Computer
equipment
|
4
years
|
The gain
or loss on disposal of property, plant and equipment is the difference between
the net sales proceeds and the carrying amount of the relevant assets, and, if
any, is recognized in the statement of operations.
KASH
STRATEGIC LIMITED
NOTES
TO FINANCIAL STATEMENTS
(e)
Impairment of Assets
In
accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144,
"Accounting for Impairment or Disposal of Long-Lived Assets", the Company
evaluates its long-lived assets to determine whether later events and
circumstances warrant revised estimates of useful lives or a reduction in
carrying value due to impairment. If indicators of impairment exist and if the
value of the assets is impaired, an impairment loss would be
recognized. As of March 31, 2006, 2007 and 2008, no impairment loss
has been recognized.
(f)
Income Taxes
The
Company accounts for income taxes under SFAS No. 109, "Accounting for Income
Taxes". Under SFAS No. 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. Under SFAS No. 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.
(g)
Revenue Recognition
Revenue
is recognized in accordance with SEC Staff Accounting Bulletin No. 101, “Revenue
Recognition in Financial Statements”. The Company recognizes revenue
when it is probable that economic benefits will follow to the Company and when
revenue can be measured reliably.
The
Company recognized revenue when services are provided or in proportion basis
according as terms of contracts applicable.
(h)
Foreign Currency Transactions
The
Company’s functional currency is Hong Kong (“HKD”) and its reporting currency is
U.S. dollars. The Company’s balance sheet accounts are translated into U.S.
dollars at the year-end exchange rates and all revenue and expenses are
translated into U.S. dollars at the average exchange rates prevailing during the
periods in which these items arise. Translation gains and losses are
deferred and accumulated as a component of other comprehensive income in
stockholders’ equity. Transaction gains and losses that arise from
exchange rate fluctuations from transactions denominated in a currency other
than the functional currency are included in the statement of operations as
incurred.
KASH
STRATEGIC LIMITED
NOTES
TO FINANCIAL STATEMENTS
(i)
Fair Value of Financial Instruments
SFAS No.
107, “Disclosures about Fair Values of Financial Instruments”, requires
disclosing fair value to the extent practicable for financial instruments that
are recognized or unrecognized in the balance sheet. The fair value
of the financial instruments disclosed herein is not necessarily representative
of the amount that could be realized or settled, nor does the fair value amount
consider the tax consequences of realization or settlement.
For
certain financial instruments, including cash, accounts and other receivables,
accounts payable, accruals and other payables, it was assumed that the carrying
amounts approximate fair value because of the near term maturities of such
obligations. The carrying amounts of long-term loans approximate fair value as
the interest on these loans is minimal.
(j)
Earnings/(Losses) Per Share
Basic
losses per share is computed by dividing the earnings for the year by the
weighted average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution of securities by including
other potential common stock, including stock options and warrants, in the
weighted average number of common shares outstanding for a period, if
dilutive.
(k)
Accumulated Other Comprehensive Income
Accumulated
other comprehensive income represents the change in equity of the Company during
the periods presented from foreign currency translation
adjustments.
(l)
Stock-Based Compensation
In March
2004, the FASB issued a proposed statement, Share-Based Payment, which addresses
the accounting for share-based payment transactions in which an enterprise
receives employee services in exchange for equity instruments of the enterprise
or liabilities that are based on the grant-date fair value of the enterprise's
equity instruments or that may be settled by the issuance of such equity
instruments. The proposed statement would eliminate the ability to account for
share-based compensation transactions using Accounting Principles Board ("APB")
Opinion No. 25, Accounting for Stock Issued to Employees, and generally would
require instead that such transactions be accounted for using a fair-value-based
method. In December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment,
which is a revision of SFAS No. 123. Generally, the approach in SFAS No. 123(R)
is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R)
requires all share-based payments to employees, including grants of employee
stock options, to be recognized in the income statement based on their
grant-date fair values. Pro forma disclosure is no longer an
alternative.
As
permitted by SFAS No. 123, for 2005, the Company accounted for share-based
payments to employees using APB Opinion No. 25's intrinsic value method and, as
such, generally recognized no compensation cost for employee stock
options.
KASH
STRATEGIC LIMITED
NOTES
TO FINANCIAL STATEMENTS
Effective
January 1, 2006, we have adopted SFAS No. 123(R)'s fair value method of
accounting for share based payments. Accordingly, the adoption of SFAS No.
123(R)'s fair value method may have a significant impact on the Company's
results of operations as we are required to recognize the cost of employee
services received in exchange for awards of equity instruments based on the
grant-date fair value of those awards. SFAS No. 123(R) permits public companies
to adopt its requirements using either the "modified prospective" method or the
"modified retrospective" method.
The
Company adopted SFAS No. 123(R) using the modified prospective method. In April
2005, the SEC delayed the effective date of SFAS No. 123(R), which is now
effective for public companies for annual, rather than interim periods that
begin after June 15, 2005. The impact of the adoption of SFAS No. 123(R) cannot
be predicted at this time because it will depend on levels of share-based
payments granted in the future.
(m)
New Accounting Pronouncements
In
September 2006, the FASB issued SFAS No. 157, “Fair Value
Measurements”. This Statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP), and expands disclosures about fair value measurements. The
Statement applies under other accounting pronouncements that require or permit
fair value measurements. SFAS No. 157 is effective for fiscal years
beginning after November 15, 2007, or the Company’s fiscal year ending September
30, 2009. We are currently assessing the impact the adoption of this
pronouncement will have on our financial statements.
In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities” and is effective for fiscal years
beginning after November 15, 2007. This Statement permits entities to
choose to measure many financial instruments and certain other items at fair
value. The objective is to improve financial reporting by providing
entities with the opportunity to mitigate volatility in reported earnings caused
by measuring related assets and liabilities differently without having to apply
complex hedge accounting provisions. We are currently assessing the
impact the adoption of this pronouncement will have on our financial
statements.
In
December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51” and is effective
for fiscal years beginning after December 5, 2008. This Statement
establishes accounting and reporting standards for the noncontrolling interest
in a subsidiary and for the deconsolidation of a subsidiary. We are
currently assessing the impact the adoption of this pronouncement will have on
our financial statements.
In
December 2007, the FASB issued SFAS No. 141 (Revised) “Business
Combinations”. SFAS 141 (Revised) is effective for fiscal years
beginning after December 13, 2008. This Statement establishes
principles and requirements for how the acquirer of a business recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, and any noncontrolling interest in the
acquiree. The Statement also provides guidance for recognizing and
measuring the goodwill acquired in the business combination and determines what
information to disclose to enable users of the financial statements to evaluate
the nature and financial effects of the business combination. We
currently assessing the impact the adoption of this pronouncement will have on
our financial statements.
KASH
STRATEGIC LIMITED
NOTES
TO FINANCIAL STATEMENTS
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements which are presented in conformity with
generally accepted accounting principles (“GAAP”) in the United
States. SFAS No. 162 will become effective 60 days following the
SEC’s approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, “The Meaning of
Present Fairly in Conformity With
Generally Accepted Accounting Principles
.” The Company does
not expect the adoption of SFAS No. 162 to have a material impact on its
financial statements.
3.
Plant and Equipment, net
|
|
March
31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
US$
|
|
|
US$
|
|
|
US$
|
|
Cost
|
|
|
|
|
|
|
|
|
|
Furniture
and Fittings
|
|
|
14,711
|
|
|
|
14,653
|
|
|
|
14,634
|
|
Computer
Equipment
|
|
|
-
|
|
|
|
-
|
|
|
|
1,443
|
|
|
|
|
14,711
|
|
|
|
14,653
|
|
|
|
16,077
|
|
Accumulated
depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
Furniture
and Fittings
|
|
|
14,620
|
|
|
|
10,899
|
|
|
|
7,285
|
|
Computer
Equipment
|
|
|
-
|
|
|
|
-
|
|
|
|
361
|
|
|
|
|
14,620
|
|
|
|
10,899
|
|
|
|
7,646
|
|
Carrying
value
|
|
|
|
|
|
|
|
|
|
|
|
|
Furniture
and Fittings
|
|
|
91
|
|
|
|
3,754
|
|
|
|
7,349
|
|
Computer
Equipment
|
|
|
-
|
|
|
|
-
|
|
|
|
1,082
|
|
|
|
|
91
|
|
|
|
3,754
|
|
|
|
8,431
|
|
Depreciation
expense for the years ended March 31, 2006, 2007 and 2008 were approximately
$4,000, $3,600 and $3,600 respectively.
4.
Income Taxes
The
Company is subject to Hong Kong Income Tax on an entity basis on income arising
in, or derived from, the tax jurisdiction in which they
operated. Pursuant to the Hong Kong Income Tax Laws, the prevailing
statutory rate of enterprise income tax for fiscal year ended 2006, 2007 and
2008 are 17.5%. Hong Kong profits tax has not been provided as the Company did
not generate assessable profits in Hong Kong during the fiscal year ended 2006,
2007 and 2008. The tax losses could be carried forward to set off future taxable
income.
5.
Retirement and Welfare Benefits
The
employees of the Company are members of the Mandatory Provident Fund operated by
the local government. The company contribute 5% according to the different
payroll range of the employee, and the maximum amount of contribution is up to
HK$1,000.
KASH
STRATEGIC LIMITED
NOTES
TO FINANCIAL STATEMENTS
6. Related
Party Transactions
As of
March 31, 2006, 2007 and 2008, the Company has the following balance with
related party.
(a)
|
Kash
Promotion Limited. (“Kash Promotion”) with common directors and have
controlling interest in the
Company.
|
|
|
March
31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
US$
|
|
|
US$
|
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
Kash
Promotion
|
|
|
-
|
|
|
|
5,966
|
|
|
|
8,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
5,966
|
|
|
|
8,580
|
|
(a)
|
The
balance due represent the amount received after bad debt written off due
to the related company being deregistered in July 2007. The balance due is
unsecured, has no stated terms of repayment and is not interest
bearing.
|
7. Commitments
and Contingencies
As of
March 31, 2006, 2007 and 2008, the company did not have any contingent
liabilities.
8. Going
Concern
The
accompanying financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. As shown in the financial statements, the
Company had a working capital deficit of $48,685 at March 31, 2008 and a
retained earnings deficit of $52,653. The financial statements do not include
any adjustments relating to the recoverability and classification of liabilities
that might be necessary should the Company be unable to continue as a going
concern.