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Brief Instruction of the Company DONGGUAN BAOFENG METAL INDUSTRY CO., LTD is approved by Foreign Economic Trade Committee of DongGuan City with the approval document No. “Dong W.J.M. (2005) 2478” and invested by BowShing Metal Manufacturing LTD. The number of the certificate is “(2005) 0538”. The company registered on September 29, 2005 and the number of Business License for Legal Person is 441900400021283 .The total investment amount is HKD22,160,000.00 and the registered capital is HKD22,160,000.00. The business scopes of the company is to product and sell metal products and wood products, wire (except related certificate or limited). The registered address is: Yinhu Industrial park, Xiegang Town, Dongguan City, Guangdong Province, China. The operating period is from September 29, 2005 to September 29, 2025. Principal Accounting Policies and Estimates Accounting System The financial statements are prepared in accordance with the Peoples Republic of China accounting standards for business enterprises and its supplementary provisions. Fiscal Year Accounting period begins on January 1st and ends on December 31st of the Gregorian calendar. Bookkeeping Base Currency The company selects Chinese Yuan (RMB) as the base bookkeeping currency. Booking Principle and Valuation Basis The company complies with the accrual principle and uses the cost as the valuation basis. Method for Inventory Valuation Inventories are stated on historical cost. Material-out cost and finished good-out cost are calculated on weighted-averaged method. 3. Significant Accounting Policies: The financial statements have been prepared in accordance with all applicable P.R.C Accounting Standards for Business Enterprises. The financial statements have been prepared under the historical basis. A summary of the significant accounting policies adopted by the company is set out below: Foreign Currency Translation The foreign currency amounts of the transaction during the accounting yea