Foreword to Financial
Information
Tung Ding Resources acquired, through its
wholly-owned California company Z&W Zhen Ding Corporation,
70% of a Chinese Joint Venture Company Jin Xian Zhen Ding Mining
Co., Ltd.
The following information provides the un-audited financial condition
of this Joint Venture as at December 31, 2006.
Updated financial information reflecting the merger with the Company
will be available shortly.
Click here to see Income statement
JIN XIAN ZHEN DING MINING CO., LTD
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND BASIS OF
PRESENTATION
Jing Xian Zhen Ding Mining Co., Ltd is
organized as a Sino-Foreign Equity Joint Venture company under
the Laws of the People’s
Republic of China governing such ventures, and entered into on
October 12, 2006 between Jing Xian Xin Zhou Huangjin Co,.Ltd oft
Wuxi Village, Langqiao Town, Jing County, Anhui Province, China
and Z&W Zhen Ding Corporation of 8861 W.Katella Ave. Anaheim,
CA 92804.
The current equity participation of each partner is:
Jing Xian Xin Zhou 30%
Z&W Zhen Ding, 70%.
Jing Xian Zhen Ding prepares its financial statements in accordance
with generally accepted accounting principles (GAAP). This basis
of accounting involves the application of accrual accounting; consequently,
revenues and gains are recognized when earned, and expenses and
losses are recognized when incurred. Financial statement items
are recorded at historical cost and may not necessarily represent
current values.
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Management estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities
at the date of the financial statements, and the reported amounts
of revenues and expenses during the reporting period. Certain
amounts included in the financial statements are estimated based
on currently available information and management’s judgment
as to the outcome of future conditions and circumstances. Changes
in the status of certain facts or circumstances could result
in material changes to the estimates used in the preparation
of financial statements and actual results could differ from
the estimates and assumptions. Every effort is made to ensure
the integrity of such estimates.
Fair value of financial instruments:
The carrying amounts reported in the balance sheet for cash and
equivalents, receivables, accounts payable and accrued liabilities
approximate their fair values because of the immediate or short
term maturity of these instruments.
Intangible assets
Intangible assets consist principally of intellectual property
and rights related to the technology to process and dispose of
waste created by pulp and paper companies. Intangible assets
are amortized on a straight line basis over 5 years.
Impairment of long-lived assets:
Long-lived assets held and used by the Company are reviewed for
possible impairment whenever events or changes in circumstances
indicate the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of the assets to the future
net cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be recognized
is measured by the amount by which the carrying amount of the
assets exceeds the fair value of the assets. The fair value of
an asset is the amount at which the asset could be bought or
sold in a current transaction between willing parties, that is,
other than in a forced or liquidation sale. Quoted market prices
in active markets are the best evidence of fair value and shall
be used as the basis for the measurement, if available. If quoted
market prices are not available, the estimate of fair value shall
be based on the best information available in the circumstances.
The estimate of fair value shall consider prices for similar
assets and the results of valuation techniques to the extent
available in the circumstances. Valuation techniques include
the present value of estimated expected future cash flows using
a discount rate commensurate with the risk involved, option-pricing
models, matrix pricing and fundamental analysis.
Cash and cash equivalents:
The Company considers all highly liquid investments with original
maturities of ninety days or less to be cash and cash equivalents.
Such investments are valued at quoted market prices.
Property, equipment and depreciation:
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over
the estimated useful lives as follows when the property and equipment
is placed in service:
Estimate Useful Life
(In Years)
Office Furniture and Equipment 10
Computer Equipment 3
Machinery and Equipment 10
Repairs and maintenance are charged to operations as incurred,
and expenditures for significant improvements are capitalized.
The cost of property and equipment retired or sold, together with
the related accumulated depreciation, are removed from the appropriate
asset and depreciation accounts, and the resulting gain or loss
is included in operations.
Revenue Recognition
The Company’s revenues recognized to date are consultation
services. Revenue from consulting services are recognized when
the services are rendered. In December 1999, the Securities and
Exchange Commission (“SEC”) issued Staff Accounting
Bulletin No. 101 (“SAB 101”), “Revenue Recognition,” which
provides guidance on the recognition, presentation and disclosure
of revenue in financial statements filed with the SEC. SAB 101
outlines the basic criteria that must be met to recognize revenue
and provide guidance for disclosures related to revenue recognition
policies. Management believes that Jing Xian’s revenue recognition
practices are in conformity with the guidelines of SAB 101 .
Earnings (Loss) per share calculation:
Earnings (Loss) per common share are calculated under the provisions
of SFAS No. 128, “Earnings per Share,” which establishes
standards for computing and presenting earnings per share. SFAS
No. 128 requires the Company to report both basic earnings (loss)
per share, which is based on the weighted-average number of common
shares outstanding during the period, and diluted earnings (loss)
per share, which is based on the weighted-average number of common
shares outstanding plus all potential dilutive common shares
outstanding. Options and warrants are not considered in calculating
diluted earnings (loss) per share since considering such items
would have an anti-dilutive effect.
NOTE 3 – REMINBI to US DOLLAR CONVERSION
An average of 7.7 RMB per USD was used.
