<PAGE>

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

                                   FORM 10-KSB

[X]    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934

                   For the fiscal year ended December 31, 2003

[ ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

             For the transition period from: _________ to _________

             Commission file number: 0-18731

                       FORLINK SOFTWARE CORPORATION, INC.
--------------------------------------------------------------------------------
           (Name of small business issuer as specified in its charter)

                     NEVADA                                84-0438458
--------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or          (IRS Employer
              organization)                             Identification No.)

9/F, Fang Yuan Mansion, No. 56 ZhongGuanCun South Road Yi, Haidian District,
Beijing, China 100044
--------------------------------------------------------------------------------
(Address of principal executive offices)                             (Zip Code)

Issuer's telephone number: 011-8610-88026368

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: Common Stock,
$.001 par value

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [X]
No [ ]

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

         State issuer's revenues for its most recent fiscal year: $9,391,197.

         As of March 18, 2004 the aggregate market value of the Common Stock
held by non-affiliates, approximately 40,473,207 shares of Common Stock, was
approximately $14.2 million based on an average of the bid and ask prices of
approximately $.35 per share of Common Stock on such date.

         The number of shares outstanding of the issuer's Common Stock, $.001
par value, as of March 18, 2004 was 76,773,207 shares.

         DOCUMENTS INCORPORATED BY REFERENCE: None.

         Transitional Small Business Disclosure Format (check one):

         Yes [ ];  No [X]

<PAGE>

                                     PART I

               CAUTIONARY STATEMENT IDENTIFYING IMPORTANT FACTORS
                THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO
            DIFFER FROM THOSE PROJECTED IN FORWARD LOOKING STATEMENTS

         Readers of this document and any document incorporated by reference
herein, are advised that this document and documents incorporated by reference
into this document contain both statements of historical facts and forward
looking statements. Forward looking statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially for those
indicated by the forward looking statements. Examples of forward looking
statements include, but are not limited to (i) projections of revenues, income
or loss, earning or loss per share, capital expenditures, dividends, capital
structure and other financial items, (ii) statements of the plans and objectives
of the Company or its management or Board of Directors, including the
introduction of new products, or estimates or predictions of actions by
customers, suppliers, competitors or regulatory authorities, (iii) statements of
future economic performance, and (iv) statements of assumptions underlying other
statements and statements about the Company or its business.

         This document and any documents incorporated by reference herein also
identify important factors which could cause actual results to differ materially
from those indicated by forward looking statements. These risks and
uncertainties include price competition, the decisions of customers, the actions
of competitors, the effects of government regulation, possible delays in the
introduction of new products and services, customer acceptance of products and
services, the Company's ability to secure debt and/or equity financing on
reasonable terms, and other factors which are described herein and/or in
documents incorporated by reference herein.

         The cautionary statements made above and elsewhere by the Company
should not be construed as exhaustive or as any admission regarding the adequacy
of disclosures made by the Company. Forward looking statements are beyond the
ability of the Company to control and in many cases the Company cannot predict
what factors would cause results to differ materially from those indicated by
the forward looking statements.

ITEM 1. DESCRIPTION OF BUSINESS.

COMPANY HISTORY AND RECENT DEVELOPMENTS

Forlink Software Corporation, Inc. (the "Company" or the "Registrant"), is a
Nevada corporation which was originally incorporated on January 7, 1986 as Why
Not?, Inc. under the laws of the State of Utah and subsequently reorganized
under the laws of Nevada on December 30, 1993. From 1996 until 1999, the Company
continued as an unfunded venture in search of a suitable business acquisition or
business combination.

On November 3, 1999, the Company entered into a Plan of Reorganization with
Beijing Forlink Software Technology Co., Ltd., (hereinafter "BFSTC"), under the
terms of which BFSTC gained control of the Company. Pursuant to the Plan of
Reorganization, the Company acquired 100% of the registered and fully paid-up
capital of BFSTC in exchange for 20,000,000 shares of the Company's authorized,
but unissued, common stock. BFSTC is engaged in the provision of computer
software consultancy and engineering services and the development and sale of
computer software in the PRC. As a part of computer consultancy and engineering
services, BFSTC also is engaged in sale of computer hardware. In June 2001,
BFSTC changed its name to Forlink Technologies Co. Ltd. ("FTCL").

In August 2001, the Company acquired Beijing Slait Science & Technology
Development Limited Co. ("SLAIT") pursuant to a Plan of Reorganization dated
January 11, 2001. The Company issued 59,430,000 shares of its common stock to
SLAIT's original beneficial owners in exchange for 100% of the outstanding
equity of SLAIT. As a result of the share exchange, the former beneficial owners
of SLAIT own approximately 70% of the issued and outstanding shares of the
Company. By virtue of the share exchange,

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SLAIT became a wholly-owned subsidiary of the Company. The Company also agreed
to transfer RMB1,085,000 (approximately US$131,039) to the former owners of
SLAIT. A change in control occurred in which all but one of the officers and
directors of the Company resigned and two former directors (also former owners)
of SLAIT became officers and directors of the Company. SLAIT provides
application system integration technology and specializes in large volume
transaction processing software for network such as mobile phone billing and
band operation. Subsequent to the acquisition, the principal activities of Slait
have been shifted to Forlink Technologies Co., Ltd. ("FTCL") gradually. As of
December 31, 2003, Slait was in the process of deregistration.

On June 18, 2003, Forlink Technologies (Hong Kong) Limited ("FTHK") was
incorporated in Hong Kong as a limited liability company. In December 2003, FTHK
became a wholly owned subsidiary of Forlink. The principal activity of FTHK is
investment holding.

On September 19, 2003, a wholly owned subsidiary, Beijing Forlink Hua Xin
Technology Co. Ltd. ("BFHX") was established in the Peoples' Republic of China
("PRC") as a limited liability company. As of December 31, 2003, BFHX has not
commenced operations since the date of establishment.

OVERVIEW OF OUR BUSINESS.

We have three wholly owned subsidiaries, FTCL, FTHK, and BFHX. Through our
subsidiaries, we are developing innovative products, solutions, project
management skills, and industry expertise necessary for the design and
implementation of large-scale, specifications-intensive integrated application
systems, Software and Information Technology ("IT") outsourcing services
typically required by leading companies in telecom, logistic, finance,
government, and other industry verticals.

Our application solutions are developed on Enterprise Application Integration
(EAI) platforms. Some of our major product offerings include:

-        ForOSS: Our solution for Business & Operation Support Systems (BSS/OSS)
         for telecom carriers, particularly China Mobile; it consists of
         software products designed to support existing and expanding business
         operations of communications companies; ForOSS supports billing,
         customer care, customer relation management, accounting, decision
         support and other internal functionalities.

-        ForRMS: Forlink Resources Management System is an integrated platform
         designed to improve enterprises and organizations' resources management
         systems.

Our head office is located in Beijing, with individual branch offices in
Chengdu, Shenyang, Shanghai and Guangzhou. We also have a R&D center at Chengdu.

As of December 31, 2003, we employ 180 full-time staff. That number includes 110
software and information technology specialists who are engaged in research and
development, maintenance and support activities; the remaining staffs are sales,
marketing and administrative personnel.

MARKET OPPORTUNITIES

Based on our extensive market research and industry insights, we believe that
the major market opportunities for our business include the following:
Application Integration Services; ASP (Application Services Provider); Software
and IT outsourcing.

OUR STRATEGY

Our objective is to be a leading China-based professional company providing
world class Enterprise Application Integration (EAI) solutions, software
services, and IT outsourcing services by continuing to

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enable our customers to build, maintain, operate, manage and continuously
improve their information systems and processes. The key aspects of our strategy
include the following:

MAXIMIZE REVENUE AND REDUCE OVERALL RISK BY APPLYING SHARED CORE TECHNOLOGIES &
PLATFORMS TO DIFFERENT INDUSTRY VERTICALS. By capitalizing on our expertise in
core technologies and utilizing them as share platforms and recourses, we aim to
become a leading IT solution provider for telecom, logistics, finance,
government, and other industry verticals in China. We believe this strategy will
increase our revenue and reduce overall risk.

EXPAND OUR SOFTWARE OUTSOURCING AND ASP (APPLICATION SERVICES PROVIDER) SERVICES
TO ENHANCE OUR VALUE CHAINS. Currently, we are working with University of
Sichuan, a prestigious university in Southern China, to establish and improve
our software factory's outsourcing services and ASP services. We are also
stepping up investments in these areas. As an important milestone, we have
achieved Level 2 (Managed Level of Software Process Maturity) of Capability
Maturity Model(R) Integration (CMMI). The CMMI project is a key technical
initiative at the Software Engineering Institute (SEI). Based on the
internationally recognized Capability Maturity Model (CMM(R)) framework for
software process improvement, CMMI provides an integrated approach to process
improvement. It is a new and more demanding model for assessing a company's
software engineering capability and the maturity of an organization's processes.
As an internationally recognized CMMI Level 2 company, our software factory can
provide trusted software outsourcing services at a lower price for oversea
companies; at the same time, its research and development capabilities will
enhance our value chains by serving as a shared support platform for our other
services, such as EAI, ASP, etc. We believe our investments in the above areas
will enhance our value chains and further consolidate our leading position as a
professional software and IT services provider.

IMPROVED CORPORATE GOVERNANCE AND FINANCIAL STANDING. To maximize our
shareholders' value, we are continuously improving our corporate governance and
financial standing. We have clearly identified areas that need to be improved
and outlined action plans. We are modeling our plans to meet the financial and
corporate governance requirements that will need to be met before the Company
will be eligible to apply to list its common stock on Nasdaq in the future.

STRATEGIC PARTNERS

Partner strategies are essential elements of our business model. At the stage,
we have 4 layers of partners that contribute to a continued success of our
business.

-        Product partners - who provide products and solutions to be integrated
         in our solutions. We are authorized reseller of HP, Sun, EMC, Oracle
         and CISCO systems. We were awarded by HP for The Excellent sales
         achievement prize in 1999 and the Best Co-operation prize in 1999.

-        Technology development partners - who provide technologies (through
         licensing or other arrangement) to our solutions or for joint
         developments; major partners include: Oracle, BEA, IONA, Redhat,
         Turbolinux, Redflag-linux.

-        Marketing & product partners - who provides products/technologies to be
         bundled with our solutions and products for marketing purposes;
         partners including HP, Intel, IBM, Sun, Compaq, Oracle, Informix, CA,
         Legend, Founder, Digital China.

-        Distribution partners - who distributes our solutions and products to
         our customers; partners including Beijing Federal, China Century Net,
         CST-advantage.

COMPETITIVE CONDITIONS

The market for information technology services in China is rapidly growing and
changing. We compete with both international and local companies. Our principal
competitors in application integration services

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are: AsiaInfo, Linkage Technology, Beijing Si-Tech, Legend Group. Our principal
competitors in the ASP (Application Services Provider) fields include: UFSOFT,
MYCRM, HAN Consulting. Our principal competitors in software outsourcing
include: Neusoft, Dalian HaiHui, Shanghai ChangXiang, China Software &
Technology Corporation.

GOVERNMENT REGULATION

The Chinese government has generally encouraged the development of the
information technology industry, and the products and services we offer are not
currently subject to extensive government regulations.

ITEM 2. DESCRIPTION OF PROPERTY.

We currently rent our facilities at 9/F Fang Yuan Mansion, No. 56 Zhongguancun
South Road Yi, Haidian District, Beijing, China and space at 11/F, Bin He Plaza,
No.1 Che Dao Gou Road, Haidian District, Beijing, China.

We own an office in Chengdu, China as a software development center. It is
located at B-16B, WangFuJing Business Mansion, No.5 HuaXingZheng Street,
ChengDu, SiChuan Province, China.

In addition, we have regional field support office in various cities in China,
namely Shanghai, Shenyang, Guangzhou.

ITEM 3. LEGAL PROCEEDINGS.

There are no pending legal proceedings involving the Company.

ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS.

The Company did not submit any matters to a vote of the shareholders in the
fourth quarter of 2003.

                                       4

<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Common Stock of the Company is currently trading on the Over the Counter
Bulletin Board system under the symbol "FRLK". There is no assurance that the
Common Stock will continue to be quoted or that any liquidity exists for the
Company's shareholders.

The following table sets forth the range of high and low bid prices for the
Company's Common Stock for each quarterly period indicated, as reported by the
NASDAQ's Historical Research Department. Quotations reflect inter-dealer prices
without retail markup, markdown or commissions and may not represent actual
trades.

<TABLE>
<CAPTION>
                       Common Stock
Quarter Ended                         High Bid          Low Bid
-------------                         --------          -------
<S>                                   <C>               <C>
December 31, 2003                        $ .45            $ .23
September 30, 2003                       $ .45            $ .10
June 30, 2003                            $ .40            $ .06
March 31, 2003                           $ .06            $ .04

December 31, 2002                        $.065            $.035
September 30, 2002                       $ .10            $.035
June 30, 2002                            $ .10            $.045
March 31, 2002                           $ .19            $ .08
</TABLE>

HOLDERS

As of March 18, 2004, there were 76,773,207 shares of the Company's common stock
outstanding held of record by approximately 758 persons (not including
beneficial owners who hold shares at broker/dealers in "street name").

DIVIDENDS

The Company has never paid cash dividends on its Common Stock and does not
intend to do so in the foreseeable future. The Company currently intends to
retain its earnings for the operation and expansion of its business.

SALES OF UNREGISTERED SECURITIES

Set forth below is information regarding the issuance and sales of securities of
the Company without registration within the past three fiscal years.

On August 27, 2001, the Company issued an aggregate of 59,430,000 shares of its
common stock to Beijing Slait Science & Technology Development Limited Co.'s
("SLAIT") three owners in exchange for 100% of the outstanding equity of SLAIT,
pursuant to a Plan of Reorganization dated January 11, 2001 between the Company
and SLAIT (the "Agreement"). The former owners of SLAIT now own approximately
70% of the 85,073,207 issued and outstanding shares of the Company's common
stock and the Company owns 100% of the fully paid registered capital of SLAIT.
The Company believes that the transaction was exempt from registration pursuant
to Section 4(2) of the Securities Act of 1933.

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<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

GENERAL

Statements contained herein that are not historical facts are forward-looking
statements as that term is defined by the Private Securities Litigation Reform
Act of 1995. Although we believe that the expectations reflected in such
forward-looking statements are reasonable, the forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ
from those projected. We caution investors that any forward-looking statements
made by us are not guarantees of future performance and that actual results may
differ materially from those in the forward-looking statements. Such risks and
uncertainties include, without limitation: well-established competitors who have
substantially greater financial resources and longer operating histories,
regulatory delays or denials, ability to compete as a start-up company in a
highly competitive market, and access to sources of capital.

The following discussion and analysis should be read in conjunction with our
financial statements and notes thereto included elsewhere in this Form 10-KSB.
Except for the historical information contained herein, the discussion in this
Form 10-KSB contains certain forward-looking statements that involve risks and
uncertainties, such as statements of our plans, objectives, expectations and
intentions. The cautionary statements made in this Form 10-KSB should be read as
being applicable to all related forward-looking statements wherever they appear
in this Form 10-KSB. The Company's actual results could differ materially from
those discussed here.

OVERVIEW

We are a leading provider of software solutions and information technology
services in China (the "PRC" or "China"). We focus on providing OSS (Operation
Support System) and NAS (Network Application Software) solutions and products
for telecommunication companies and software and information technology
outsourcing services for companies in other industries.

On August 27, 2001, we completed the acquisition of Beijing Slait Science &
Technology Development Limited Co. ("Slait"). Slait is engaged in the
development and sale of network software systems and provision of enterprise
application system integration services for telecommunication companies and
network services providers in China. Slait is also engaged in the sale of
computer hardware. Subsequent to the acquisition, the principal activities of
Slait have been shifted to FTCL gradually. As of December 31, 2003, Slait was in
the process of deregistration.

On September 19, 2003, a new wholly owned subsidiary Beijing Forlink Hua Xin
Technology Co. Ltd. ("BFHX") was established in the PRC as a limited liability
company. The principal activities of BFHX will be the provision of telecom
value-added services in the PRC.

We believe that there are opportunities for us to expand into new business areas
and to grow our business both organically and through acquisitions. On June 18,
2003, Forlink Technologies (Hong Kong) Limited ("FTHK") was incorporated in Hong
Kong as a limited liability company and subsequently, it became our wholly owned
subsidiary in December 2003. The principal activity of FTHK is investment
holding. On December 18, 2003, FTHK acquired 17.8% All China Logistics Online
Co., Ltd., a leading provider of logistic services in China. Through this
acquisition, we have become the second largest shareholder of All China Online
Logistics Co,. Ltd., and its sole software solution provider.

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REVENUES

Our business includes Forlink brand "For-series" software system sales such as
For-OSS, For-GMS, For-mail and their copyright licensing, "For-series" related
system integration, which consists of hardware sales and other related services
rendered to customers. The following table shows our revenue breakdown by
business line:

<TABLE>
<CAPTION>
                                                   Year Ended December 31,
                                                ----------------------------
                                                   2003              2002
                                                ----------        ----------
<S>                                             <C>               <C>
Sales of For-series software                    $2,223,348        $  609,739
As a percentage of total revenue                      23.7%              6.5%

For-series related system integration           $7,167,849        $8,770,855
As a percentage of total revenue                      76.3%             93.5%
</TABLE>

Generally, we offer our products and services to our customers on a
total-solutions basis. Most of the contracts we undertake for our customers
include revenue from hardware and software sales and professional services.

As indicated in the foregoing table, "For-series" software sales increased 265%
to $2,223,348 in 2003, from $609,739 in 2002, while revenue from system
integration decreased 18% to $7,167,849 in 2003, from $8,770,855 in 2002. These
changes were mainly attributable to our increasing high-end enterprise
application integration projects involving less hardware pass through, and our
increasing sales of "For-series" software solutions and applications.

Major Revenues

Sales of Products

Revenues from sales of products are mainly derived from sales of hardware and
proprietary software products. Normally, sales of hardware and proprietary
software are in connection with total-solutions basis system integration
contracts.

Service Revenue

Service revenue consists of revenue for the professional services we provide to
our customers for network planning, design and systems integration, software
development, modification and installation and related training services.

Software License Revenue

We generate revenue in the form of fees received from customers for licenses to
use our software products in an agreed period of time.

COST OF REVENUES

Our costs of revenue include hardware costs, software-related costs and salary
and other costs, which were directly attributable to the relevant projects.
Hardware cost consists of computer hardware purchased from third parties. We
recognize hardware costs in full upon delivery of the hardware to our customers.
Software-related costs are primarily paid to third-party software providers for
the right to sublicense their products to our customers as part of our solutions
offerings. The costs associated with creating and enhancing our proprietary
software are classified as research and technology development expenses as
incurred and are included in general and administrative expenses.

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OPERATING EXPENSES

Operating expenses are comprised of selling expenses, software and technology
development expenses and other general and administrative expenses.

Selling expenses include salary expenses for employees in our sales and
marketing department, expenses incurred in our sales offices located in
Shanghai, Guangzhou and Shenyang, PRC and third party advertising expenses.

Research and technology development expenses relate to the development of new
software and the enhancement and upgrading of existing software. We expense such
costs as they are incurred.

TAXES

According to the relevant PRC tax rules and regulations, Slait and FTCL, being
recognized New Technology Enterprises operating within a New and High Technology
Development Zone, are entitled to an Enterprise Income Tax ("EIT") rate of 15%.

Pursuant to an approval document dated October 22, 1998 issued by the Beijing
Tax Bureau, Slait being a "New Technology Enterprise", is eligible to full
exemption from PRC EIT for the period from February 1, 1999 to December 31,
2000. Pursuant to an approved document dated September 18, 2001 issued by the
Beijing Tax Bureau, Slait is eligible to 50% tax reduction at the rate of 7.5%
for PRC EIT for the period from January 1, 2001 to December 31, 2003.

Pursuant to approval documents dated September 23, 1999 and August 2, 2000
issued by the Beijing Tax Bureau and State Tax Bureau respectively, FTCL, being
a recognized New Technology Enterprise is eligible to full exemption from EIT
for the fiscal year 1999, 2000, 2001 and 2002. The Company is also eligible to
50% EIT reduction at the rate of 7.5% for the fiscal year 2003, 2004 and 2005.

No provision for EIT was made for BFHX as it has not commenced operations during
the year.

No provision for Hong Kong profits tax was made for FTHK as it had no assessable
profit during the year.

Revenue from the sale of hardware procured in China together with the related
system integration is subject to a 17% value added tax. Although sales of
software in China are subject to a 17% value added tax as well, companies that
develop their own software and have the software registered are generally
entitled to a value added tax refund. If the net amount of the value added tax
payable exceeds 3% of software sales, the excess portion of the value added tax
is refundable upon our application to tax authority. This policy is effective
until 2010. Changes in Chinese tax laws may adversely affect our future
operations.

FOREIGN EXCHANGE

A majority of our hardware procured for system integration contracts and an
operating lease contract are denominated in U.S. dollars, and substantially all
of our revenues and expenses relating to system integration, software and
service components of our business are denominated in Renminbi. Although, in
general, our exposure to foreign exchange risks should be limited, the value of
our shares will be affected by the foreign exchange rate between U.S. dollars
and Renminbi because the value of our business is effectively denominated in
Renminbi, while our shares are traded in U.S. dollars. Furthermore, a decline in
the value of Renminbi could reduce the U.S. dollar equivalent of the value of
the earnings from, and our investment in, our subsidiaries in the PRC.

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<PAGE>

CONSOLIDATED RESULTS OF OPERATIONS

The consolidated financial statements are prepared in accordance with generally
accepted accounting principles in the United States of America and present the
financial statements of Forlink and its wholly owned subsidiaries. All material
inter-company transactions have been eliminated.

YEAR ENDED DECEMBER 31, 2003 COMPARED TO YEAR ENDED DECEMBER 31, 2002

NET SALES.

Our net sales increased 0.1% to $9,391,197 in 2003, from $9,380,594 in 2002. The
relatively small growth was due to our increasing high-end enterprise
application integration projects involving less hardware pass through.

COST OF SALES.

Our cost of sales decreased 7% to $5,912,655 in 2003, from $6,349,271 in 2002.
This decrease was primarily attributable to the decreased hardware pass through
associated with system integration projects, which accounted for 76.3% of net
sales in 2003, as compare to 93.5% in 2002.

GROSS PROFIT.

Gross profit increased 15% to $3,478,542 in 2003, from $3,031,323 in 2002. Gross
profit margin increased to 37% in 2003, as compare to 32% in 2002. These
improvements are primarily resulted from higher gross margins associated our
software solutions sales, which accounted for 23.7% of net sales in 2003, as
compare to 6.5% in 2002.

OPERATING EXPENSES.

Selling expenses increased 31% to $384,364 in 2003, from $294,198 in 2002. This
increase was primarily due to a new sales office we established in Guangzhou,
PRC this year.

General and administrative expenses increased 10% to $2,100,360 in 2003, from
$1,911,766 in 2002. The increase was primarily due to our R&D expenses, which
increased 54% to $888,305 in 2003, from $575,485 in 2002.

OPERATING PROFIT (LOSS).

Our operating profit for 2003 increased to $993,818 from an operating loss of
$6,141,187 in 2002. Our operating profit margin was 10.6% in 2003. Excluding
2002 goodwill impairment charge of $6,966,546, our 2002 operating profit would
have been $825,359; operating margin would have been 8.8%.

OTHER INCOME

Our other income increased 431% to $298,045 in 2003 from $56,100 in 2002. Our
other income comes from value added tax refund associated with software sales.
Software sales in China are subject to a 17% value added tax, however, companies
that develop their own software and have the software registered are generally
entitled to a value added tax refund. If the net amount of the value added tax
payable exceeds 3% of software sales, the excess portion of the value added tax
is refundable upon our application to tax authority. This policy is effective
until 2010.

NET INCOME (LOSS).

We recorded a net income of $1,211,448, or basic and diluted earnings of $0.02
per share, from a net loss of $6,085,137, or basic and diluted loss of $0.07 per
share in 2002. Our net loss in 2002 was due to a goodwill impairment charge of
$6,966,546, which resulted primarily from the industry wide equity devaluations
during that period.

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<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Our capital requirements are primarily working capital requirements related to
cost of sales and costs associated with the expansion of our business. In order
to minimize our working capital requirements, we generally obtain from our
hardware vendors payment terms that are timed to permit us to receive payment
from our customers for the hardware before our payments to hardware vendors are
due. However, we sometimes obtain less favorable payment terms from our
customers, thereby increasing our working capital requirements. In the event we
cannot meet the customers' requirements for the products and services rendered
and/or cannot complete projects on a pre-determined timetable, the sales revenue
can be deferred or even adversely affected. Additionally, liquidity would also
be affected if the major stockholders decided to stop providing additional
financing and called for repayment of their advances due to their own accords.

We have historically financed our working capital and other financing
requirements through careful cash and accounts receivable management, and, to a
limited extent, bank loans, which were guaranteed by Beijing ZhongGuanCun
Sic-Tech Guaranty Co., Ltd, a third party corporation. We have planned to be one
of members of Beijing ZhongGuanCun Enterprises Credit Promotion Association,
which is an organization that can make available corporate guarantee to its
members in Zhongguancun Science Zone to meet their continuing cash requirements
and to successfully implement their growth strategy.

Our accounts receivable balance at December 31, 2003 was $586,819.

At December 31, 2003, our days of sales outstanding were 22 days, as compared to
29 days as of the end of the third quarter. The improvement in our Days Sales
Outstanding as compared to the end of the third quarter is primarily
attributable to our improved billing and collection efforts.

We ended the year with a cash position of $2,837,997, up $2,301,947 from
$536,050 in 2002. This increase was derived from our operating activities. We
generated a net operating cash flow of $3,304,083 in 2003.

Although our revenues and operating results for any period are not necessarily
indicative of future periods, we anticipate that our available funds and cash
flows generated from operations will be sufficient to meet our anticipated needs
for working capital, capital expenditures and business expansion through 2004.
We may need to raise additional funds in the future, however, in order to fund
acquisitions, develop new or enhanced services or products, respond to
competitive pressures to compete successfully for larger projects involving
higher levels of hardware purchases, or if our business otherwise grows more
rapidly than we currently predict. If we do need to raise additional funds, we
expect to raise those funds through new issuances of shares of our equity
securities in one or more public offerings or private placements, or through
credit facilities extended by lending institutions.

CONTRACTUAL OBLIGATIONS

As of December 31, 2003, the Company had commitments under non-cancelable
operating leases, requiring annual minimum rental payments as follows:

January 1, 2004 to December 31, 2004  $95,441
January 1, 2005 to December 31, 2005  $23,531

Purchase Commitment: As of December 31, 2003, the Company had commitments of
$4,080,308 (2002: Nil) under purchase of hardware contracts which hardware would
be used for identified system integration contracts.

RELATED PARTY TRANSACTIONS

On January 11, 2001, the Company entered into a Plan of Reorganization with
Beijing Slait Science & Technology Development Limited Co. (hereinafter
"Slait"), under the terms of which the Company acquired up to 100% of the
outstanding equity of Slait. Pursuant to the Plan of Reorganization (the
"Plan"),

                                       10

<PAGE>

in August 2001, the Company acquired 100% of the registered and fully paid-up
capital of Slait in exchange for 59,430,000 shares of restricted common stock of
the Company. Under the terms of the Plan, three former beneficial owners of
Slait, Yi He, Honkeung Lam and Jing Zeng were issued 25,800,000, 10,500,000 and
5,760,000 of the Company's shares, respectively. Additionally, at closing all of
the Company's officers and directors resigned with the exception of Xiaoxia Zhao
who remains as an officer and director and Yi He was appointed as President and
Director and Honkeung Lam as Director of the Company.

The Company, from time to time, received from or made repayment to two major
stockholders who also are the management of the Company. The amounts due from/to
stockholders do not bear any interest and do not have clearly defined term of
repayment.

As of December 31, 2003 and December 31, 2002, amount due from stockholder
represented travel advances to Mr. Yi He who is a director and stockholder of
the Company.

As of December 31, 2003 and December 31, 2002, the amounts due to stockholders
represented advances from stockholders.

Mr. Yi He, one of the stockholders and directors of the Company purchased the
building located in Chengdu on behalf of the Company. By a stockholders'
resolution passed on March 8, 1999, it was ratified that the title to the
building belonged to the SLAIT. The building has been pledged as collateral for
the mortgage loan granted to Mr. Yi He. The related mortgage still remains in
the name of Mr. Yi He, however the Company has agreed to pay Mr. Yi He amounts
equal to the required mortgage payments. As of December 31, 2003, the amount of
the mortgage loan is $53,010 ($62,067 as of December 31, 2002) and is included
in "Amounts due to stockholders" on the balance sheet.

In the opinions of directors, except for the arrangements in connection with the
purchase of the office in Chengdu, all the above transactions were negotiated at
arm's length and entered into and executed under the normal course of business
with no different from those, which would be negotiated with a clearly
independent party. With respect to the purchase of the office in Chengdu, if Mr.
Yi He would not have been able to obtain a mortgage for the property, the
Company may not have been able to obtain one on its own and the financial
resources may not have been available for the Company to purchase the property
outright.

On December 18, 2003, the Company invested $760,870 in a privately held PRC
company, All China Logistics Online Co., Ltd., for a 17.8% equity interest. The
Company records the investment at cost because it does not have the ability to
exercise significant influence over the investee. During the year, net sales
derived from the affiliate was $184,000 (2002: $117,863). As of December 31,
2003 and 2002, accounts receivable from the affiliate was $0 and $9,088,
respectively.

CRITICAL  ACCOUNTING  POLICIES

We prepare our consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America. The preparation
of those financial statements requires us 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
the reported amount of revenues and expenses during the reporting period. On an
on-going basis, we evaluate our estimates and judgments, including those related
to revenues and cost of revenues under customer contracts, bad debts, income
taxes, long-lived assets, and goodwill. We base our estimates and judgments on
historical experience and on various other factors that we believe are
reasonable. Actual results may differ from these estimates under different
assumptions or conditions. We believe the following critical accounting policies
affect the more significant judgments and estimates used in the preparation of
our consolidated financial statements.

                                       11

<PAGE>

Revenue Recognition

We recognize revenue in accordance with SEC Staff Accounting Bulletin No. 101,
Revenue Recognition in Financial Statements (SAB 101), as amended by SAB 101A
and 101B. SAB 101 requires that four basic criteria must be met before revenue
can be recognized: (1) persuasive evidence of an arrangement exists; (2)
delivery has occurred or services rendered; (3) the fee is fixed and
determinable; and (4) collectibility is reasonably assured. Determination of
criteria (3) and (4) are based on management's judgments regarding the fixed
nature of the fee charged for services rendered and products delivered and the
collectibility of those fees. Should changes in conditions cause management to
determine these criteria are not met for certain future transactions, revenue
recognized for any reporting period could be adversely affected.

Details of revenue recognition policy are as follows:

Revenue from provision of system integration services and other related services
are recognized when services are rendered in stages as separate identifiable
phases of a project are completed and accepted by customers.

Revenue from software sales is recognized when the related products are
delivered and installed, and collection of sales proceeds is deemed probable and
persuasive evidence of an arrangement exists.

Software license revenue is recognized over the accounting periods cover the
term of the relevant agreements.

The sale of computer hardware is recognized as revenue on the transfer of risks
and rewards of ownership, which generally coincides with the time when the goods
are delivered to customers and title has passed.

Computer Software Development Cost

We account for computer software development costs in accordance with SFAS No.
86 "Accounting for the Cost of Computer Software to be Sold, Leased or Otherwise
Marketed". Accordingly, software development costs are expensed as incurred
until technological feasibility in the form of a working model has been
established. Deferred software development costs will be amortized over the
estimated economic life of the software once the product is available for
general release to customers. For the current products, the Company determined
that technological feasibility was reached at the point in time it was available
for general distribution. Therefore, no costs were capitalized.

Long-lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the assets might not be
recoverable. We do not perform a periodic assessment of assets for impairment in
the absence of such information or indicators. Conditions that would necessitate
an impairment assessment include a significant decline in the observable market
value of an asset, a significant change in the extent or manner in which an
asset is used, or a significant adverse change that would indicate that the
carrying amount of an asset or group of assets is not recoverable. For
long-lived assets to be held and used, we measure fair value based on quoted
market prices or based on discounted estimates of future cash flows.

Accounting for goodwill

On January 1, 2002, we adopted Statement of Financial Accounting Standards No.
142 "Goodwill and Other Intangible Assets". SFAS No. 142 addresses financial
accounting and reporting for acquired goodwill and other intangible assets. This
Statement changes the accounting for goodwill from an amortization method to an
impairment-only method. The amortization of goodwill, including goodwill
recorded in past business combinations ceased upon adoption of this Statement,
which began with our fiscal year beginning January 1, 2002. However, goodwill
and intangible assets acquired after June 30, 2001 is

                                       12

<PAGE>

subject to immediate adoption of the Statement. As the Company's acquisition
described in Note 1 to the financial statements was accounted for under SFAS 141
and the transition requirements of SFAS 142, the goodwill arising from such
acquisition has never been amortized. We do not have any other goodwill or
indefinite lived intangible assets.

During the quarter ended June 30, 2002, we completed the first step of the
transitional goodwill impairment test (i.e. comparing the carrying amount of the
net assets, including goodwill, with the fair value of us as of January 1,
2002). Based on the results of the first step of the test, we believe that there
was no impairment of goodwill as of January 1, 2002.

However, in the quarter ended June 30, 2002, the closing trading price of our
common stock had fallen to $0.05 per share, which indicated that there might be
a potential impairment of goodwill since January 1, 2002. Therefore, we
performed an additional impairment test as of June 30, 2002. As a result of the
impairment test performed, which was based on the fair value of the Company as
determined by the trading price of our common stock, an impairment of $5,308,760
was recorded. As the closing trading price of our common stock as of December
31, 2002 had fallen to $0.04 per share, a total impairment of $6,966,546 was
recorded for the year ended December 31, 2002.

As of December 31, 2003, the Company completed the annual impairment test. Based
on the result of the first step of the test, the Company believes that there was
no further impairment of goodwill as of December 31, 2003.

FACTORS AFFECTING OUR OPERATING RESULTS AND COMMON STOCK

In addition to the other information in this report, the following factors
should be considered in evaluating our business and our future prospects:

POLITICAL AND ECONOMIC POLICIES OF THE CHINESE GOVERNMENT COULD AFFECT OUR
INDUSTRY IN GENERAL AND OUR COMPETITIVE POSITION IN PARTICULAR

Since the establishment of the People's Republic of China in 1949, the Communist
Party has been the governing political party in the PRC. The highest bodies of
leadership are the Politburo of the Communist Party, the Central Committee and
the National People's Congress. The State Council, which is the highest
institution of government administration, reports to the National People's
Congress and has under its supervision various commissions, agencies and
ministries, including The Ministry of Information Industry, the
telecommunications regulatory body of the Chinese government. Since the late
1970s, the Chinese government has been reforming the Chinese economic system.
Although we believe that economic reform and the macroeconomic measures adopted
by the Chinese government have had and will continue to have a positive effect
on economic development in China, there can be no assurance that the economic
reform strategy will not from time to time be modified or revised. Such
modifications or revisions, if any, could have a material adverse effect on the
overall economic growth of China and investment in the Internet and the
telecommunications industry in China. Such developments could reduce, perhaps
significantly, the demand for our products and services. There is no guarantee
that the Chinese government will not impose other economic or regulatory
controls that would have a material adverse effect on our business. Furthermore,
changes in political, economic and social conditions in China, adjustments in
policies of the Chinese government or changes in laws and regulations could
affect our industry in general and our competitive position in particular.

THE GROWTH OF OUR BUSINESS IS DEPENDENT ON GOVERNMENT TELECOMMUNICATIONS
INFRASTRUCTURE AND BUDGETARY POLICY, PARTICULARLY THE ALLOCATION OF FUNDS TO
SUSTAIN THE GROWTH OF THE TELECOMMUNICATIONS INDUSTRY IN CHINA

Virtually all of our large customers are directly or indirectly owned or
controlled by the government of China. Accordingly, their business strategies,
capital expenditure budgets and spending plans are largely decided in accordance
with government policies, which, in turn, are determined on a centralized basis
at the

                                       13

<PAGE>

highest level by the National Development and Reform Commission of China. As a
result, the growth of our business is heavily dependent on government policies
for telecommunications and Internet infrastructure. Insufficient government
allocation of funds to sustain the growth of China's telecommunications
industries in the future could reduce the demand for our products and services
and have a material adverse effect on our ability to grow our business.

CURRENCY EXCHANGE RATE RISK DUE TO FLUCTUATIONS IN THE EXCHANGE RATE BETWEEN
U.S. DOLLARS AND RENMINBI

The functional currency of our operations is Renminbi and our financial
statements are expressed in U.S. dollars. As a result, we are subject to the
effects of exchange rate fluctuations between these currencies. Because of the
unitary exchange rate system introduced in China on January 1, 1994, the
official bank exchange rate for translation of Renminbi to U.S. dollars is set
to US$1 to RMB8.28. Any future devaluation of the Renminbi against the U.S.
dollars may have an adverse effect on our reported net income. As our operations
are conducted in the PRC, substantially all our revenues, expenses, assets and
liabilities are denominated in Renminbi, in general, our exposure to foreign
exchange risks should be limited. However, the value in our shares may be
affected by the foreign exchange rate between the U.S. dollars and the Renminbi
because the value of our business is effectively denominated in Renminbi, while
our shares are traded in U.S. dollars. Furthermore, a decline in the value of
the Renminbi could reduce the U.S. dollar value of earnings from, and our
investments in, our subsidiaries in China.

ASSET IMPAIRMENT REVIEWS MAY RESULT IN FUTURE PERIODIC WRITE-DOWNS

On January 1, 2002, we adopted Statement of Financial Accounting Standards No.
142 "Goodwill and Other Intangible Assets" which requires us, among other
things, to review goodwill and other intangible assets for impairment annually.

During the quarter ended June 30, 2002, we completed the first step of the
transitional goodwill impairment test (i.e. comparing the carrying amount of the
net assets, including goodwill, with the fair value of us as of January 1,
2002). Based on the results of the first step of the test, we believe that there
was no impairment of goodwill as of January 1, 2002.

However, in the quarter ended June 30, 2002, the closing trading price of our
common stock had fallen to $0.05 per share, which indicated that there might be
a potential impairment of goodwill since January 1, 2002. Therefore, we
performed an additional impairment test as of June 30, 2002. As a result of the
impairment test performed, which was based on the fair value of the Company as
determined by the trading price of our common stock, an impairment of $5,308,760
was recorded. As the closing trading price of our common stock as of December
31, 2002 had fallen to $0.04 per share, a total impairment of $6,966,546 was
recorded for the year ended December 31, 2002.

There is no assurance that future reviews will not result in further write-downs
to goodwill and other intangible assets.

GENERAL RISK OF FINANCING

In order for the Company to meet its continuing cash requirements and to
successfully implement its growth strategy, the Company will need to rely on
increased future revenues and/or will require additional financing. In the event
additional financing is required, no assurances can be given that such financing
will be available in the amount required or, if available, that it can be on
terms satisfactory to the Company.

                                       14

<PAGE>

ITEM 7.  FINANCIAL STATEMENTS.

The information required by Item 7 and an index thereto commences on page F-1,
which pages follow this page.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

ITEM 8A.  CONTROLS AND PROCEDURES.

Based on their most recent evaluation, which was completed as of the end of the
period covered by this annual report on Form 10-KSB, the Company's Chief
Executive Officer and Chief Financial Officer believe the Company's disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) are
effective to ensure that information required to be disclosed by the Company in
this report is accumulated and communicated to the Company's management,
including its principal executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required disclosure. During the
last fiscal quarter to which this report relates, there were no significant
changes in the Company's internal controls or other factors that could
significantly affect these controls subsequent to the date of their evaluation
and there were no corrective actions with regard to significant deficiencies and
material weaknesses.

                                       15

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS
                               For the years ended
                           December 31, 2003 and 2002

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                     Pages
<S>                                                                <C>
Report of Independent Auditors                                        F-1
Consolidated Balance Sheets                                           F-2
Consolidated Statements of Operations                                 F-3
Consolidated Statements of Stockholders' Equity                       F-4
Consolidated Statements of Cash Flows                                 F-5
Notes to Consolidated Financial Statements                         F-6 - F-18
</TABLE>

<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

To the Board of Directors of
Forlink Software Corporation, Inc.

We have audited the accompanying consolidated balance sheets of Forlink Software
Corporation, Inc. as of December 31, 2003 and 2002, and the related consolidated
statements of operations, stockholders' equity and cash flows for the years
ended December 31, 2003 and 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes 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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Forlink
Software Corporation, Inc. as of December 31, 2003 and 2002 and the results of
its consolidated operations and cash flows for the years ended December 31, 2003
and 2002, in conformity with generally accepted accounting principles in the
United States of America.

BDO MCCABE LO & COMPANY

Hong Kong
March 2, 2004

                                       F-1

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                 DECEMBER 31,      DECEMBER 31,
(Expressed in US Dollars)                                                           2003               2002
                                                                                 ------------      ------------
<S>                                                                              <C>               <C>
ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                                      $ 2,837,997       $    536,050
  Accounts receivable (Note 3)                                                       586,819          1,039,190
  Other receivables, deposits and prepayments (Note 4)                               442,641            156,740
  Inventories (Note 5)                                                             1,145,098            454,131
  Amount due from stockholder (Note 6)                                                14,251             75,024
                                                                                 -----------       ------------
  Total current assets                                                             5,026,806          2,261,135

Property, plant and equipment (Note 7)                                               466,788            464,757
Investment in affiliate (Note 8)                                                     760,870                  -
Goodwill (Note 9)                                                                  1,684,023          1,684,023
                                                                                 -----------       ------------
TOTAL ASSETS                                                                     $ 7,938,487       $  4,409,915
                                                                                 ===========       ============
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                                               $ 1,097,428       $     97,202
  Amounts due to stockholders (Note 6)                                               251,294            244,051
  Customer deposits                                                                1,777,772            350,311
  Other payables and accrued expenses (Note 10)                                      268,806            272,418
  Income tax payable (Note 11)                                                        14,700              3,841
  Other taxes payable (Note 12)                                                      129,911             39,164
                                                                                 -----------       ------------
  Total current liabilities                                                        3,539,911          1,006,987
                                                                                 -----------       ------------
COMMITMENTS AND CONTINGENCIES (NOTE 13)

STOCKHOLDERS' EQUITY
  Common stock, par value $0.001 per share; 100,000,000 shares authorized;
    85,073,207 and 85,073,207 shares issued and 76,773,207 and
      85,073,207 shares outstanding, respectively                                     85,073             85,073
  Treasury stock (Note 14)                                                          (215,800)                 -
  Additional paid-in capital                                                       8,934,812          8,934,812
  Accumulated losses                                                              (4,405,509)        (5,616,957)
                                                                                 -----------       ------------
  Total stockholders' equity                                                       4,398,576          3,402,928
                                                                                 -----------       ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                       $ 7,938,487       $  4,409,915
                                                                                 ===========       ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-2

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                     YEAR ENDED         YEAR ENDED
                                                     DECEMBER 31,       DECEMBER 31,
(Expressed in US Dollars)                               2003               2002
                                                    ------------        ------------
<S>                                                 <C>                 <C>
NET SALES                                           $  9,391,197        $  9,380,594

COST OF SALES                                         (5,912,655)         (6,349,271)
                                                    ------------        ------------
GROSS PROFIT                                           3,478,542           3,031,323

SELLING EXPENSES                                        (384,364)           (294,198)

GENERAL AND ADMINISTRATIVE EXPENSES                   (2,100,360)         (1,911,766)

LOSS ON IMPAIRMENT OF GOODWILL                                 -          (6,966,546)
                                                    ------------        ------------
OPERATING PROFIT/(LOSS)                                  993,818          (6,141,187)

INTEREST INCOME                                            5,948               5,496

OTHER INCOME, NET (NOTE 12)                              298,045              56,100
                                                    ------------        ------------
PROFIT/(LOSS) BEFORE INCOME TAX                        1,297,811          (6,079,591)
INCOME TAX (NOTE 11)                                     (86,363)             (5,546)
                                                    ------------        ------------
NET PROFIT/(LOSS)                                   $  1,211,448        $ (6,085,137)
                                                    ============        ============
EARNINGS/(LOSS) PER SHARE - BASIC AND DILUTED       $       0.02        $      (0.07)
                                                    ============        ============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC AND DILUTED                       77,925,985          85,073,207
                                                    ============        ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-3

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                      COMMON STOCK
                                 -----------------------------------------------------
                                   NUMBER        NUMBER OF      NUMBER OF
                                  OF SHARE        SHARE          TREASURY
(Expressed in US Dollars)          ISSUED       OUTSTANDING       STOCK        AMOUNT
                                 ----------     -----------     ---------     --------
<S>                              <C>            <C>             <C>           <C>
Balance, December 31, 2001       85,073,207      85,073,207             -     $ 85,073

Consultant's compensation
   expenses                               -               -             -            -

Net loss for the year                     -               -             -            -
                                 ----------     -----------     ---------     --------
Balance, December 31, 2002       85,073,207      85,073,207             -     $ 85,073

Purchase back of common
   stock (Note 14)                        -      (8,300,000)    8,300,000            -

Net profit for the year                   -               -             -            -
                                 ----------     -----------     ---------     --------
Balance, December 31, 2003       85,073,207      76,773,207     8,300,000     $ 85,073
                                 ==========     ===========     =========     ========

<CAPTION>
                                                               RETAINED
                                               ADDITIONAL      PROFITS/         TOTAL
                                 TREASURY       PAID-IN      (ACCUMULATED     STOCKHOLDERS'
                                   STOCK        CAPITAL        LOSSES)          EQUITY
                                 ---------    -----------    ------------     -------------
<S>                              <C>          <C>            <C>              <C>
Balance, December 31, 2001       $       -    $ 8,748,090    $    468,180     $   9,301,343

Consultant's compensation
   expenses                              -        186,722               -           186,722

Net loss for the year                    -              -      (6,085,137)       (6,085,137)
                                 ---------    -----------    ------------     -------------
Balance, December 31, 2002       $       -    $ 8,934,812    $ (5,616,957)    $   3,402,928

Purchase back of common
   stock (Note 14)                (215,800)             -               -          (215,800)

Net profit for the year                  -              -       1,211,448         1,211,448
                                 ---------    -----------    ------------     -------------
Balance, December 31, 2003       $(215,800)   $ 8,934,812    $ (4,405,509)    $   4,398,576
                                 =========    ===========    ============     =============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-4

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                (Decrease)/Increase in Cash and Cash Equivalents

<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31,
(Expressed in US Dollars)                                             2003               2002
                                                                  ------------        ------------
<S>                                                               <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income/(loss)                                               $  1,211,448        $ (6,085,137)
      Adjustments to reconcile net income/(loss) to
        net cash provided by/(used in) operating activities
      Depreciation of property, plant and equipment                     83,193              73,447
      Loss on disposal of property, plant and equipment                  8,258                   -
      Non-cash compensation expenses                                         -             186,722
      Loss on impairment of goodwill                                         -           6,966,546
      Change in:
        Accounts receivable                                            452,371            (833,764)
        Other receivables, deposits and prepayments                   (285,901)             64,038
        Inventories                                                   (690,967)           (404,144)
        Accounts payable                                             1,000,226              97,190
        Customer deposits                                            1,427,461            (417,025)
        Other payables and accrued expenses                             (3,612)            127,735
        Income tax payable                                              10,859             (11,242)
        Other taxes payable                                             90,747             (34,405)
                                                                  ------------        ------------
NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES                  3,304,083            (270,039)
                                                                  ------------        ------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Acquisition of property, plant and equipment                       (111,115)           (126,227)
   Proceeds from sale of equipment                                      17,633                   -
   Investment in affiliate                                            (760,870)                  -
                                                                  ------------        ------------
NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES                   (854,352)           (126,227)
                                                                  ------------        ------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Repayments from/(Advances to) stockholder                            60,773             (51,023)
   (Repayments to)/Advances from stockholders                            7,243              (9,761)
   Purchase back of common stock (Note 14)                            (215,800)                  -
                                                                  ------------        ------------
NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES                   (147,784)            (60,784)
                                                                  ============        ============
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                 2,301,947            (457,050)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                         536,050             993,100
                                                                  ------------        ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                          $  2,837,997        $    536,050
                                                                  ============        ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
   Income tax paid                                                      75,504               8,320
                                                                  ============        ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-5

<PAGE>

                       Forlink Software Corporation, Inc.

                   Notes to Consolidated Financial Statements

(Expressed in US Dollars)

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Beijing Slait Science & Technology Development Limited Co. ("Slait") was
established in the People's Republic of China (the "PRC") on January 25, 1998 as
a limited liability company. Slait commenced operations in May 1998. Slait was
beneficially owned by three individual PRC citizens, namely Yi He, Hongkeung Lam
and Jing Zeng. Slait has been granted a ten years operation period which can be
extended with approvals from relevant PRC authorities.

On January 11, 2001, Slait entered into an agreement of Plan of Reorganization
("the Plan") with Forlink Software Corporation, Inc. ("Forlink"). Forlink had
issued to the owners of Slait as individuals 59,430,000 authorized shares of
common stock of Forlink in exchange of 100% of the registered and fully paid up
capital of Slait. In accordance with the terms of the Plan, Forlink transferred
$131,039 (RMB1,085,000) to Slait, the amount was disbursed to the original
owners of Slait. The closing date of this exchange transaction was August 28,
2001.

As a result of the acquisition, the former owners of Slait hold a majority
interest in the combined entity. Generally accepted accounting principles
require in certain circumstances that a company whose stockholders retain the
majority voting interest in the combined business to be treated as the acquirer
for financial reporting purposes. Accordingly, the acquisition has been
accounted for as a "reverse acquisition" whereby Slait is deemed to have
purchased Forlink. However, Forlink remains the legal entity and the Registrant
for Securities and Exchange Commission reporting purposes. The historical
financial statements prior to August 28, 2001 are those of Slait. All shares and
per share data prior to the acquisition have been restated to reflect the stock
issuance as a recapitalization of Slait. Subsequent to the reverse acquisition,
the principal activities of Slait have been shifted to Forlink Technologies Co.,
Ltd. ("FTCL") gradually. As of December 31, 2003, Slait was in the process of
deregistration.

On June 18, 2003, Forlink Technologies (Hong Kong) Limited ("FTHK") was
incorporated in Hong Kong as a limited liability company with an authorized
share capital of $129,032 (HK$1,000,000) divided into 1,000,000 ordinary shares
of $0.129 (HK$1) each. At the time of incorporation, two ordinary shares of HK$1
each were issued to the subscribers. In December 2003, 999,998 ordinary shares
were issued to Forlink, since then FTHK becomes a wholly owned subsidiary of
Forlink. The principal activities of FTHK is investment holding.

On September 19, 2003, a wholly owned subsidiary, Beijing Forlink Hua Xin
Technology Co. Ltd. ("BFHX") was established in PRC as a limited liability
company. The registered capital of BFHX is $120,773 (RMB1,000,000). As of
December 31, 2003, fully paid up capital was $36,232 (RMB300,000). BFHX has not
commenced operations since the date of establishment.

Forlink and its wholly owned subsidiaries, namely, Slait, FTCL, FTHK and BFHX
are collectively referred to as "the Company" hereafter.

The principal activities of the Company are the development and sale of network
software system, provision of enterprise application system integration services
in the PRC. The Company is also engaged in the sale of computer hardware.

                                      F-6

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US Dollars)

NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING AND PRINCIPLES OF CONSOLIDATION

The consolidated financial statements are prepared in accordance with generally
accepted accounting principles in the United States of America and present the
financial statements of Forlink and its wholly owned subsidiaries, namely,
Slait, FTCL, FTHK and BFHX. All material intercompany transactions have been
eliminated.

STOCK BASED COMPENSATION

The Company has adopted the disclosure provisions of Statement of Financial
Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation", but applies Accounting Principles Board Opinion ("APB") No. 25,
"Accounting for Stock Issued to Employees" and related interpretations in
accounting for its plans. Under APB No. 25, when the exercise price of employee
stock options equals the market price for the underlying stock on the date of
grant, no compensation expense is recognised.

FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS

The functional currency of Forlink is US$ and the financial records are
maintained and the financial statements prepared in US$. The functional currency
of FTHK is HK$ and the financial records are maintained and the financial
statements prepared in HK$. The functional currency of Slait, FTCL and BFHX is
Renminbi (RMB) and the financial records are maintained and the financial
statements are prepared in RMB.

Foreign currency transactions during the year are translated into each company's
denominated currency at the exchange rates ruling at the transaction dates. Gain
and loss resulting from foreign currency transactions are included in the
consolidated statement of operations. Assets and liabilities denominated in
foreign currencies at the balance sheet date are translated into each company's
denominated currency at year end exchange rates. All exchange differences are
dealt with in the consolidated statements of operations.

For the purpose of preparing the Company's consolidated financial statements,
the financial statements in HK$ and RMB have been translated into United States
Dollars at US$1.00 = HK$7.75 and US$1.00 = RMB8.28 respectively, translation
adjustments would be included as a component of stockholders' equity.

Exchange rates between US$, HK$ and RMB are fairly stable during the years
presented. The rates ruling as of December 31, 2003 and 2002 are US$1: HK$7.75:
RMB8.28 and US$1: HK$7.75: RMB8.28, respectively. Due to the stability of the
exchange rates, there were no net adjustments in stockholders' equity.

                                      F-7
<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US Dollars)

NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES - CONTINUED

REVENUE RECOGNITION

Revenue from provision of system integration services and other related services
are recognized when services are rendered in stages as separate identifiable
phases of a project are completed and accepted by customers.

Revenue from software sales is recognized when the related products are
delivered and installed and collection of sales proceeds is deemed probable and
persuasive evidence of an arrangement exists.

Software license revenue is recognized over the accounting periods cover the
term of the relevant agreements.

The sale of computer hardware is recognized as revenue on the transfer of risks
and rewards of ownership, which generally coincides with the time when the goods
are delivered to customers and title has passed.

INVENTORIES

Inventories are stated at the lower of cost or market. For inventory used in
system integration services, cost is calculated using the specific
identification method. For the sale of computer hardware, cost is calculated
using first-in, first-out method. Cost includes all costs of purchase, cost of
conversion and other costs incurred in bringing the inventories to their present
location and condition. Market value is determined by reference to the sales
proceeds of items sold in the ordinary course of business after the balance
sheet date or to management estimates based on prevailing market conditions.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include all highly liquid investments with an original
maturity of three months or less.

PROPERTY, PLANT, EQUIPMENT AND DEPRECIATION

Property, plant and equipment are stated at cost. Depreciation is computed using
the straight-line method to allocate the cost of depreciable assets over the
estimated useful lives of the assets as follows:

<TABLE>
<CAPTION>
                               ESTIMATED USEFUL LIFE
                                    (IN YEARS)
                               ---------------------
<S>                            <C>
Building                                20
Computer equipment                       5
Office equipment                         5
Motor vehicle                           10
</TABLE>

                                      F-8

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US Dollars)

NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES - CONTINUED

PROPERTY, PLANT, EQUIPMENT AND DEPRECIATION - CONTINUED

Maintenance, repairs and minor renewals are charged directly to the statement of
operations as incurred. Additions and betterments to office equipment are
capitalized. When assets are disposed of, the related cost and accumulated
depreciation thereon are removed from the accounts and any resulting gain or
loss is included in the statement of operations.

ADVERTISING COSTS

All advertising costs incurred in the promotion of the Company's products and
services are expensed as incurred. Advertising expenses were $127,970 and
$83,213 for 2003 and 2002 respectively.

COMPUTER SOFTWARE DEVELOPMENT COSTS

In accordance with SFAS No. 86 "Accounting for the Cost of Computer Software to
be Sold, Leased or Otherwise Marketed" software development costs are expensed
as incurred until technological feasibility in the form of a working model has
been established. Deferred software development costs will be amortized over the
estimated economic life of the software once the product is available for
general release to customers. For the current software products, the Company
determined that technological feasibility was reached at the point in time it
was available for general distribution. Therefore, no costs were capitalized.

LONG-LIVED ASSETS

Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the assets might not be
recoverable. The Company does not perform a periodic assessment of assets for
impairment in the absence of such information or indicators. Conditions that
would necessitate an impairment assessment include a significant decline in the
observable market value of an asset, a significant change in the extent or
manner in which an asset is used, or a significant adverse change that would
indicate that the carrying amount of an asset or group of assets is not
recoverable. For long-lived assets to be held and used, the Company measures
fair value based on quoted market prices or based on discounted estimates of
future cash flows.

INCOME TAXES

The Company accounts for income taxes in accordance with SFAS No. 109
"Accounting for Income Taxes". Under SFAS No. 109, deferred tax liabilities or
assets at the end of each period are determined using the tax rate expected to
be in effect when taxes are actually paid or recovered. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized.

                                      F-9

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US Dollars)

NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES - CONTINUED

NET EARNINGS PER COMMON SHARE

The Company computes net earnings per share in accordance with SFAS No. 128,
"Earnings per Share" and SEC Staff Accounting Bulletin No. 98 ("SAB 98"). Under
the provisions of SFAS No. 128 and SAB 98, basic net earnings per share is
computed by dividing the net earnings available to common shareholders for the
period by the weighted average number of shares of common stock outstanding
during the period. The calculation of diluted net earnings per share gives
effect to common stock equivalents, however, potential common stock in the
diluted EPS computation are excluded in net loss periods, as their effect is
anti-dilutive.

FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts of certain financial instruments approximate their fair
values as of December 31, 2003 and 2002 because of the relatively short-term
maturity of these instruments.

USE OF ESTIMATES

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities and 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. Actual results
could differ from those estimates.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company records an allowance for doubtful accounts based on specifically
identified amounts that the Company believes to be uncollectible. The Company
has a limited number of customers with individually large amounts due at any
given balance sheet date. Any unanticipated change in one of those customer's
credit worthiness or other matters affecting the collectibility of amounts due
from such customers, could have a material affect on the results of operations
in the period in which such changes or events occur. After all attempts to
collect a receivable have failed, the receivable is written off against the
allowance.

NOTE 3 - ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts receivable are customer obligations due under normal trade terms. The
Company performs continuing credit evaluations of the customers' financial
condition and the Company generally does not require collateral.

Senior management reviews accounts receivable from time to time to determine if
any receivables will potentially be uncollectible. The Company include any
accounts receivable balances that are determined to be uncollectible in the
allowance for doubtful accounts. After all attempts to collect a receivable have
failed, the receivable is written off against the allowance. Based on the
information available to the Company, no allowance for doubtful accounts as of
December 31, 2003 is required.

                                      F-10

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US Dollars)

NOTE 4 - OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

<TABLE>
<CAPTION>
                                     DECEMBER 31,      DECEMBER 31,
                                         2003             2002
                                     ------------      ------------
<S>                                  <C>               <C>
Other receivables                    $     51,822      $     13,968
Deposits                                  344,509            59,479
Prepayments                                46,310            83,293
                                     ------------      ------------
                                     $    442,641      $    156,740
                                     ============      ============
</TABLE>

NOTE 5 - INVENTORIES

<TABLE>
<CAPTION>
                                     DECEMBER 31,      DECEMBER 31,
                                         2003              2002
                                     ------------      ------------
<S>                                  <C>               <C>
Computer hardware and software       $  1,145,098      $    454,131
                                     ============      ============
</TABLE>

All the inventories were purchased for identified system integration contracts.

NOTE 6 - RELATED PARTY

A related party is an entity that can control or significantly influence the
management or operating policies of another entity to the extent one of the
entities may be prevented from pursuing its own interests. A related party may
also be any party the entity deals with that can exercise that control.

AMOUNTS DUE FROM/TO STOCKHOLDERS

The Company, from time to time, received from or made repayment to two major
stockholders who also are the management of the Company. The amounts due from/to
stockholders do not bear any interest and do not have clearly defined term of
repayment.

As of December 31, 2003 and December 31, 2002, amount due from stockholder
represented travel advances to Mr. Yi He who is a director and stockholder of
the Company.

As of December 31, 2003 and December 31, 2002, the amounts due to stockholders
represented advances from stockholders.

RELATED PARTY TRANSACTIONS

During the year, net sales derived from an affiliate (note 8) was $184,000
(2002: $117,863). As of December 31, 2003 and 2002, accounts receivable from the
affiliate was $0 and $9,088, respectively.

                                      F-11

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US Dollars)

NOTE 7 - PROPERTY, PLANT AND EQUIPMENT, NET

<TABLE>
<CAPTION>
                                     DECEMBER 31,      DECEMBER 31,
                                        2003               2002
                                     ------------      ------------
<S>                                  <C>               <C>
Building                             $    155,648      $    155,648
Computer and office equipment             376,132           288,344
Motor vehicles                            165,718           183,725
Leasehold improvements                          -            35,880
                                     ------------      ------------
                                          697,498           663,597
Less: Accumulated depreciation           (230,710)         (198,840)
                                     ------------      ------------
                                     $    466,788      $    464,757
                                     ============      ============
</TABLE>

The building is located in Chengdu, PRC and was purchased on behalf of the
Company by Mr. Yi He, one of the stockholders and directors of the Company. By a
stockholders' resolution passed on March 8, 1999, it was ratified that the title
to the building belonged to the Company. The building has been pledged as
collateral for the mortgage loan granted to Mr. Yi He. The related mortgage
still remains in the name of Mr. Yi He, however, the Company has agreed to pay
Mr. Yi He amounts equal to the required mortgage payments. As of 31 December
2003, the amount of the mortgage loan is $53,010 ($62,067 as of December 31,
2002) and is included in "Amounts due to stockholders" on the balance sheet.

NOTE 8 - INVESTMENT IN AFFILIATE

The Company invested $760,870 in a privately held PRC company for a 17.8% equity
interest. The Company records the investment at cost because it does not have
the ability to exercise significant influence over the investee.

NOTE 9 - GOODWILL

The Company accounted for the acquisition in accordance with SFAS No. 141
"Business Combinations", which resulted in the recognition of goodwill. Goodwill
represents the excess of acquisition cost over the estimated fair value of net
assets acquired as of August 27, 2001 as described in Note 1. The acquisition
cost is based upon a value of $0.34 per share, the closing price of Forlink's
common stock on January 11, 2001 (date of the agreement of Plan of
Reorganization), plus a value of $0.15 per option determined using a Black
Scholes model on January 11, 2001.

                                      F-12

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US Dollars)

NOTE 9 - GOODWILL - CONTINUED

The purchase price, purchase-price allocation, and financing of the transaction
are summarized as follows:

<TABLE>
<S>                                                    <C>
Consideration paid as:
   Common stock of Forlink issued                      $  8,659,800
   Options of Forlink issued                                125,550
                                                       ------------
                                                          8,785,350
   Allocated to historical book value/fair value of
     Forlink's assets and liabilities                      (134,781)
                                                       ------------
   Excess purchase price over allocation to
     identifiable assets and liabilities (goodwill)    $  8,650,569
                                                       ============
</TABLE>

As the acquisition was completed after June 30, 2001, no amortization of
goodwill was necessary in accordance with SFAS No. 142 "Goodwill and other
Intangible Assets".

During the quarter ended June 30, 2002, the Company completed the first step of
the transitional goodwill impairment test (i.e. comparing the carrying amount of
the net assets, including goodwill, with the fair value of the Company as of
January 1, 2002). Based on the results of the first step of the test, the
Company believes that there was no impairment of goodwill as of January 1, 2002.

However, in the quarter ended June 30, 2002, the closing trading price of the
Company's common stock had fallen to $0.05 per share, which indicated that there
might be a potential impairment of goodwill since January 1, 2002. Therefore,
the Company performed an additional impairment test as of June 30, 2002. As a
result of the impairment test performed, which was based on the fair value of
the Company as determined by the trading price of the Company's common stock, an
impairment of $5,308,760 was recorded in the quarter ended 30 June 2002. As the
closing trading price of the Company's common stock as of December 31, 2002 had
fallen to $0.04 per share, a total impairment of $6,966,546 was recorded for the
year ended December 31, 2002.

As of December 31, 2003, the Company completed the annual impairment test. Based
on the result of the first step of the test, the Company believes that there was
no further impairment of goodwill as of December 31, 2003.

NOTE 10 - OTHER PAYABLES AND ACCRUED EXPENSES

<TABLE>
<CAPTION>
                                     DECEMBER 31,      DECEMBER 31,
                                         2003              2002
                                     ------------      ------------
<S>                                  <C>               <C>
Other payables                       $     46,055      $     52,358
Accrued salaries & wages                  155,446           156,395
Other accrued expenses                     67,305            63,665
                                     ------------      ------------
                                     $    268,806      $    272,418
                                     ============      ============
</TABLE>

                                      F-13

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US Dollars)

NOTE 11 - INCOME TAX

According to the relevant PRC tax rules and regulations, Slait and FTCL, being
recognized New Technology Enterprises operating within a New and High Technology
Development Zone, are entitled to an Enterprise Income Tax ("EIT") rate of 15%.

Pursuant to an approval document dated October 22, 1998 issued by the Beijing
Tax Bureau, Slait being a "New Technology Enterprise", is eligible to full
exemption from PRC EIT for the period from February 1, 1999 to December 31,
2000. Pursuant to an approved document dated September 18, 2001 issued by the
Beijing Tax Bureau, Slait is eligible to 50% tax reduction at the rate of 7.5%
for PRC EIT for the period from January 1, 2001 to December 31, 2003.

Pursuant to approval documents dated September 23, 1999 and August 2, 2000
issued by the Beijing Tax Bureau and State Tax Bureau respectively, FTCL, being
a recognized New Technology Enterprise is eligible to full exemption from EIT
for the fiscal year 1999, 2000, 2001 and 2002. The Company is also eligible to
50% EIT reduction at the rate of 7.5% for the fiscal year 2003, 2004 and 2005.

No provision for EIT was made for BFHX as it had not commenced operations during
the year.

No provision for Hong Kong profits tax was made for FTHK as it had no assessable
profit during the year.

Income tax represents current PRC income tax which is calculated at the
statutory income tax rate on the assessable income for the year ended December
31, 2003 and 2002.

The difference between the statutory rate and the effective rate relates
principally to nondeductible expenses and nontaxable income.

The provision for income tax consisted of:

<TABLE>
<CAPTION>
                                     DECEMBER 31,      DECEMBER 31,
                                         2003              2002
                                     ------------      ------------
<S>                                  <C>               <C>
Current PRC corporate income tax     $     86,363      $      5,546
Deferred tax                                    -                 -
                                     ------------      ------------
Provision for income tax             $     86,363      $      5,546
                                     ============      ============
</TABLE>

                                      F-14

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US Dollars)

NOTE 12 - OTHER TAXES PAYABLE

Other taxes payable comprise mainly Valued-Added Tax ("VAT") and Business Tax
("BT"). The Company is subject to output VAT levied at the rate of 17% of its
operating revenue. The input VAT paid on purchases of materials and other direct
inputs can be used to offset the output VAT levied on operating revenue to
determine the net VAT payable or recoverable. BT is charged at a rate of 5% on
the revenue from other services.

In respect of revenue on sales of the Company's self-developed and copyright
registered software, if the net amount of value added tax payable exceeds 3% of
the software sales, the excess portion of value added tax can be refunded upon
the Company's application as part of the government's policy for encouragement
of software development in PRC. The Company therefore enjoys an effective net
value added tax rate of 3% from this kind of revenue. The refund included in
other income was $296,927 and $56,100 for 2003 and 2002 respectively.

NOTE 13 - COMMITMENTS AND CONTINGENCIES

Operating Lease Commitment

During the years ended December 31, 2003 and 2002, the Company incurred lease
expenses amounting to $361,122 and $313,002 respectively. As of December 31,
2003 and 2002, the Company had commitments under non-cancellable operating
leases, requiring annual minimum rentals as follows:

<TABLE>
<CAPTION>
                                       DECEMBER 31,      DECEMBER 31,
                                          2003               2002
                                       ------------      ------------
<S>                                    <C>               <C>
January 1, 2003 to December 31, 2003   $          -      $     54,945
January 1, 2004 to December 31, 2004         95,441
January 1, 2005 to December 31, 2005         23,531                 -
                                       ------------      ------------
                                       $    118,972      $     54,945
                                       ============      ============
</TABLE>

PURCHASE COMMITMENT

As of December 31, 2003, the Company had commitments of $4,080,308 (2002: Nil)
under purchase of hardware contracts which hardware would be used for identified
system integration contracts.

                                      F-15

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US Dollars)

NOTE 14 - PURCHASE BACK OF COMMON STOCK

On February 20, 2003, the Company purchased back 4,300,000 and 4,000,000 shares
of the Company's own common stock from two stockholders respectively, at a
consideration of US$0.026 per share. These transactions were financed by the
Company's cash at bank.

NOTE 15 - STOCK PLAN

On June 1, 2000, the Company adopted a plan of stock-based compensation
incentives for selected eligible participants who are the staff and consultants
of Forlink. This plan is known as the "Forlink Software Corporation, Inc. Stock
Plan" ("the Plan"). The total number of shares of common stock reserved for
issuance by Forlink either directly as stock awards or underlying options
granted under this Plan shall not be more than 1,600,000. Under the terms of
this Plan, options can be issued to purchase shares of Forlink's common stock.
The Board of Directors shall determine the terms and conditions of each option
granted to eligible participants, which terms shall be set forth in writing. The
terms and conditions so set by the Board of Directors may vary from one eligible
participant to another.

The Company will account for the options issued to employees using the intrinsic
value method of accounting prescribed by the Accounting Principle Board Opinion
No. 25, "Accounting for Stock Issued to Employees".

The following table summarizes the activity on stock options under the Plan:

<TABLE>
<CAPTION>
                                                                                  WEIGHTED AVERAGE
                                                            NUMBER OF SHARES       EXERCISE PRICE
<S>                                                         <C>                   <C>
Outstanding at December 31, 2001                               1,337,000                $1.00
Granted                                                        1,968,000                $2.28
Exercised                                                              0                    0
Forfeited or Cancelled                                           631,000                $5.00
Outstanding at December 31, 2002                               1,337,000                $1.00
Outstanding at December 31, 2003                               1,337,000                $1.00
</TABLE>

All outstanding options at December 31, 2003 and December 31, 2002 are
exercisable.

In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, Accounting for Certain Transactions involving Stock
Compensation, an interpretation of APB Opinion No. 25. The Interpretation, which
has been adopted prospectively as of July 1, 2000, requires that stock options
that have been modified to reduce the exercise price be accounted for as
variable. Forlink re-priced 337,000 stock options on September 21, 2000, and
reduced the exercise price to $1 per share, the then-current market price of the
stock. Under the Interpretation, the options are accounted for as variable from
September 21, 2000 until the options are exercised, forfeited or expire
unexercised. Since September 21, 2000, the market price of the Forlink's stock
decreased to a level lower than the exercise price. Accordingly, there are no
effects of adopting the Interpretation for the year ended December 31, 2003.

                                      F-16

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US Dollars)

NOTE 15 - STOCK PLAN - CONTINUED

On June 1, 2000, a fee agreement was entered into between Forlink and Futro and
Trauernicht LLC, the corporate attorneys of Forlink ("the Attorneys"). It is
agreed that the Attorneys would accept as compensation in full for all legal
services provided from the date of September 1, 2000 to April 30, 2001, a fee
consisting of the following:

(a)      100,000 shares of common stock of Forlink; and

(b)      options to acquire 100,000 shares of common stock of Forlink, at an
         exercise price of $5.00 per share.

On July 20, 2000, 100,000 shares of common stock were issued to the Attorneys.
The market value as of that date was $4.00 per share. Expense is recorded based
on the fair value of the stock at grant date and recognized over the service
period of the contract. Up to date, the options have not been issued to the
Attorneys. However, on September 21, 2000, the terms of the agreement were
changed to issue 500,000 options at $1. The value of the options was recognized
as expense over the service period of the contract. As the related services have
been completed on April 30, 2001, no expenses was recognized in the consolidated
statement of operations for 2003 and 2002.

On August 31, 2001, 69,797 shares of common stock were issued to the Attorneys
as compensation in full for settlement of legal fee of $11,866 up to July 31,
2001. The fair value of the common stock as of August 31, 2001 was $0.17 per
share.

On November 6, 2001, 103,410 shares of common stock were issued to the Attorneys
as compensation in full for settlement of legal fee of $10,341 up to October 30,
2001. The fair value of the common stock as of November 6, 2001 was $0.10 per
share.

On June 1, 2000, a consulting agreement was entered into between Forlink and
Netreach Studios, Ltd., a marketing consultant Forlink ("the Consultant"). The
Consultant would accept as compensation in full for all consulting services to
be provided from September 1, 2000 to May 31, 2004, a fee consisting of the
following:

(a)      100,000 shares of common stock of Forlink; and

(b)      options to acquire 100,000 shares of common stock Forlink, at an
         exercise price of $5.00 per share.

On August 22, 2000, 100,000 shares of common stock were issued to the
Consultant. The market value as of that date was $3.00 per share. Expense is
recorded based on the fair value of the stock at grant date and recognized over
the service period of the contract. On September 21, 2000, the terms of the
agreement were changed to issue 500,000 options at $1. Up to date, the options
have not been issued to the Consultant. The value of the options was being
recognized as expense over the service period of the contract. However, as of
September 30, 2002, the Company determined that it was no longer utilising the
services provided by Netreach Studios, Ltd. as described in the contract, and
therefore expensed the remaining value of the stock and options issued during
the quarter ended September 30, 2002. Compensation expense of $186,722 was
recognised during the year ended December 31, 2002.

                                      F-17

<PAGE>

                       FORLINK SOFTWARE CORPORATION, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US Dollars)

NOTE 15 - STOCK PLAN - CONTINUED

On August 16, 2002, the Company established a plan of stock-based compensation
incentives for selected eligible participants of the Company and its affiliated
corporations. This plan is known as the "Forlink Software Corporation, Inc. 2002
Stock Plan" (the "Plan 2002"). The total number of shares of common stock
reserved for issuance by Forlink either directly as stock awards or underlying
options granted under the Plan 2002 shall not be more than 8,000,000. Under the
terms of the Plan 2002, options can be issued to purchase shares of Forlink's
common stock. The Board of Directors shall determine the terms and conditions of
each option granted to eligible participants, which terms shall be set forth in
writing. The terms and conditions so set by the Board of Directors may vary from
one eligible participant to another.

In the quarter ended September 30, 2003, the Board of Directors determined to
grant to the Company's employees 3,457,500 number of stock options to purchase
the Company's shares of common stock, $0.001 par value, at an exercise price of
$0.10 per share. Except for 800,000 number of stock options would be granted to
an employee with 5 years vesting period, 2,657,500 number of stock options would
be granted to employees with 3 years vesting period. As at the latest
practicable date, March 2, 2004, the Company has not completed the documentation
in respect of the options to be issued.

NOTE 16 - CONCENTRATION OF A CUSTOMER

During the year, Customer A accounted for more than 10% of total sales:

<TABLE>
<CAPTION>
                                                                           YEAR ENDED DECEMBER 31,
                                                                         2003                   2002
                                                                     ------------           -----------
<S>                                                                  <C>                    <C>
Net sales derived from Customer A                                    $  8,999,662           $ 8,229,159
                                                                     ============           ===========
% to total net sales                                                           96%                   88%
                                                                     ============           ===========
Account receivable from Customer A                                        536,394               952,244
                                                                     ============           ===========
% to total accounts receivable                                                 91%                   92%
                                                                     ============           ===========
</TABLE>

NOTE 17 - SUBSEQUENT EVENT

On February 13, 2004, the deregistration of Slait was approved by the relevant
PRC authority and accordingly Slait was officially dissolved since then. Slait's
net assets of $185,450, mainly representing cash, were transferred to BFHX
before the date of dissolution.

                                      F-18

<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.

As of December 31, 2003, the directors and executive officers of the Company,
their ages, positions in the Company, the dates of their initial election or
appointment as director or executive officer, and the expiration of the terms as
directors (if applicable) were as follows:

<TABLE>
<CAPTION>
Name                          Age     Position                                           Director Since
--------------                ---     -----------------------------------------          --------------
<S>                           <C>     <C>                                                <C>
Yi He                         37      Chief Executive Officer, Chairman and              August 2001
                                      Director

Honkeung Lam                  51      Chief Financial Officer, Chief Accounting          August 2001
                                      Officer, Secretary and Director

Xiaoxia Zhao *                39      Former President and former Director               November 1999

Guoliang Tian                 64      Director                                           May 2003

Yu Fang                       58      Director                                           May 2003
</TABLE>


*        Subsequent to the end of the period covered by this annual report, on
February 23, 2004, Mr. Xiaoxia Zhao resigned as an officer and director.

As of the date of filing of this report, the current directors and executive
officers of the Company, their ages, positions in the Company, the dates of
their initial election or appointment as director or executive officer, and the
expiration of the terms as directors (if applicable) are as follows:

<TABLE>
<CAPTION>
Name                          Age     Position                                           Director Since
--------------                ---     -----------------------------------------          --------------
<S>                           <C>     <C>                                                <C>
Yi He                         37      Chief Executive Officer, Chairman, President       August 2001
                                      and Director

Honkeung Lam                  51      Chief Financial Officer, Chief Accounting          August 2001
                                      Officer, Secretary and Director

Guoliang Tian                 64      Director                                           May 2003

Yu Fang                       58      Director                                           May 2003
</TABLE>

The Company's directors hold office until their successors are elected and
qualified. The Company's officers are appointed annually by the Board of
Directors and serve at the pleasure of the Board.

Yi He has been a director of the Company since August 2001. From January 1998 to
August of 2001, Mr. He was the Founder, Chairman and President of Beijing SLAIT
Science & Technology Development Limited Co. From March 1993 to January 1998,
Mr. He was the President of Beijing Sunny Computer System Engineering Co. Mr. He
has a Master Degree in Computer Science from Peking University.

Honkeung Lam, has been a director of the Company since August 2001. From July
2000 to August 2001, Mr. Lam has been the Chairman of Beijing Hi Sun In Soft
Information Technology Ltd. From June 1998 to June 2000, Mr. Lam was the
Chairman and President of Beijing Jinshili Information Technology Ltd. From 1992
to February 1998, Mr. Lam was the Manager of Beijing office of Taiwan Acer
Computer (Far East) Co.

                                       16

<PAGE>

Guoliang Tian has been a director since May 2003. Currently, Mr. Tian is a
Professor with the Institute of Remote Sensing Applications at the Chinese
Academy of Sciences, where he has been employed since 1986, in charge of the
study of natural disaster monitoring and assessment. His areas of experience and
interest involve the use of remote sensing data to research and monitor
geographic and atmospheric changes. He has published 105 papers and 4 books. In
1965, Mr. Tian received a degree in physics from Jilin University of China.

Yu Fang has been a director since May 2003. Currently Mr. Fang is a Professor at
Peking University, where he has been employed since 1987. He has served as the
Vice Director of the Institute of Remote Sensing and Geographic Information
System at Peking University since 2001. From 1982 until 2000, he worked in the
Department of Computer Science & Technology at Peking University, and served as
Vice Chairman of the Department of Computer Science & Technology at Peking
University from 1987 to 1999. His areas of experience and interest are software
engineering, geographic information systems, management information systems, and
parallel processing and distribution systems. He has written 68 articles and 5
books. In 1982, Mr. Fang received a Masters Degree in Computer Science at Peking
University after graduating from the Department of Mathematics at Peking
University in 1968.

AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT DISCLOSURE

The Company does not have a separately-designated standing audit committee at
this time because it is not required to do so. Accordingly, the Company does not
have an audit committee financial expert.

CODE OF ETHICS

The Company has not adopted a formal code of ethics because all of its executive
officers are also directors, who are already subject to ethical and fiduciary
standards imposed by law. However, the Company intends to develop a formal code
of ethics that will apply to all of its employees (including its executive
officers). Upon completion, the Company will provide to any person, without
charge, upon request, a copy of the code of ethics. Any such request must be
made in writing to the Company, c/o Investor Relations, 9/F, Fang Yuan Mansion,
No. 56 ZhongGuanCun South Road Yi, Haidian District, Beijing, China, 100044.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). Officers,
directors, and greater than 10% shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on its review of copies of such reports received or written
representations from certain reporting persons, the Company believes that,
during the year ended December 31, 2003, all Section 16(a) filing requirements
applicable to its officers, directors and ten percent shareholders were in
compliance with SEC regulations.

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth information about compensation paid to, or
accrued for the benefit of the Company's Chief Executive Officer during the
years ended December 31, 2003, 2002, and 2001. None of the Company's executive
officers earned more than $100,000 during the years ended December 31, 2003,
2002, and 2001.

                                       17

<PAGE>

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                                                   Annual Compensation
                                                           ---------------------------------------
                  (a)                         (b)            (c)           (d)             (e)
                 Name                        Year                                        Other
                 And                        Ended                                        Annual
               Principal                   December        Salary         Bonus       Compensation
               Position                       31             ($)           ($)            ($)
------------------------------------       --------        -------        -----       ------------
<S>                                        <C>             <C>            <C>         <C>
Yi He, Chief Executive Officer (n1)          2003          $21,739         -0-            -0-
                                             2002          $27,108         -0-            -0-
                                             2001          $ 6,155         -0-            -0-

Xiaoxia Zhao, Former Chief Executive         2003          $32,525         -0-            -0-
Officer (n1)                                 2002          $29,819         -0-            -0-
                                             2001          $21,826         -0-            -0-
</TABLE>

<TABLE>
<CAPTION>
                                                   Long Term Compensation
                                         ----------------------------------------
                                                    Awards                Payouts
                                         --------------------------       -------
           (a)                  (b)          (f)             (g)            (h)            (i)
          Name                 Year      Restricted                                        All
           And                Ended         Stock          Shares          LTIP           Other
        Principal            December     Award(s)       Underlying       Payouts     Compensation
        Position                31           ($)          Options           ($)            ($)
-----------------------      --------    ----------      ----------       -------     ------------
<S>                          <C>         <C>             <C>              <C>         <C>
Yi He, Chief Executive         2003          -0-            -0-             -0-            -0-
Officer (n1)                   2002          -0-            -0-             -0-            -0-
                               2001          -0-            -0-             -0-            -0-

Xiaoxia Zhao, Former           2003          -0-            -0-             -0-            -0-
Chief Executive Officer        2002          -0-            -0-             -0-            -0-
(n1)                           2001          -0-            -0-             -0-            -0-
</TABLE>

(n1)     Yi He replaced Xiaoxia Zhao as the Company's Chief Executive Officer on
         May 15, 2003.

Because no options, stock appreciation rights or Long-Term Incentive Plans have
been granted to any of the executive officers, the information and tables
otherwise required by this Item which relate to such forms of compensation have
been omitted.

EMPLOYMENT CONTRACTS

There are no formal employment agreements with any of the Company's executive
officers.

COMPENSATION OF DIRECTORS

No compensation was paid by the Company to its Directors for any service
provided as a Director during the year ended December 31, 2003. There are no
other formal or informal understandings or arrangements relating to
compensation; however, Directors may be reimbursed for all reasonable expenses
incurred by them in conducting the Company's business. These expenses would
include out-of-pocket expenses for such items as travel, telephone, and postage.

                                       18

<PAGE>

EMPLOYEE BENEFIT AND CONSULTING SERVICES COMPENSATION PLANS

As of December 31, 2003, the Company had two Employee Benefit and Consulting
Services Compensation Plans in effect:

1.       On June 1, 2000, the Company adopted an employee benefit and consulting
services compensation plan entitled the Forlink Software Corporation, Inc. Stock
Plan. The plan covers up to 1,600,000 shares of common stock. The plan has not
previously been approved by security holders.

2.       On August 16, 2002, the Company adopted an employee benefit and
consulting services compensation plan entitled the Forlink Software Corporation,
Inc. 2002 Stock Plan. The plan covers up to 8,000,000 shares of common stock.
The plan has not previously been approved by security holders.

Under each plan, the Company may issue common stock and/or options to purchase
common stock to certain officers, directors and employees and consultants of the
Company and its subsidiaries. The purpose of each plan is to promote the best
interests of the Company and its shareholders by providing a means of non-cash
remuneration to eligible participants who contribute to operating progress and
earning power of the Company. Each plan is administered by the Company's Board
of Directors or a committee thereof which has the discretion to determine from
time to time the eligible participants to receive an award; the number of shares
of stock issuable directly or to be granted pursuant to option; the price at
which the option may be exercised or the price per share in cash or cancellation
of fees or other payment which the Company or its subsidiaries is liable if a
direct issue of stock and all other terms on which each option shall be granted.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth, as of March 17, 2004, the stock ownership of
each person known to the Company to be the beneficial owner of five percent (5%)
or more of the Company's Common Stock, each executive officer and director
individually and all executive and directors of the Company as a group.

<TABLE>
<CAPTION>
                                          Amount and Nature of     Percent Owned
                                               Beneficial        Beneficially and
  Name and Address of                          Ownership             of Record
   Beneficial Owner                               (n1)                 (n2)
---------------------                     --------------------   ----------------
<S>                                       <C>                    <C>
Yi He *                                         25,800,000            33.6%

Honkeung Lam *                                  10,500,000            13.7%

Guoliang Tian *                                        -0-              --

Yu Fang *                                              -0-              --

Jing Zeng                                        5,760,000             7.5%
9/F Fang Yuan Mansion
No. 56 Zhongguancun South Rd Yi Haidian
District, Beijing, China

Xiaoxia Zhao                                     4,490,250             5.8%
231-2-501 Hui Xing Li
Chao Yang District
Beijing, China

All officers and directors of the               36,300,000            47.3%
Company as a group (four persons)
</TABLE>

                                       19

<PAGE>

*        An officer and/or director of the Company. The address for each officer
and director is in care of the Company at 9/F Fang Yuan Mansion, No. 56
Zhongguancun South Rd Yi Haidian District, Beijing, China.

         (n1)     Unless otherwise indicated, all shares are directly owned and
                  investing power is held by the persons named in the table.

         (n2)     Based upon 76,773,207 shares of Common Stock outstanding as of
                  March 18, 2004.

EQUITY COMPENSATION PLAN INFORMATION

         The following information concerning the Company's equity compensation
plan is as of the end of the year ended December 31, 2003:

<TABLE>
<CAPTION>
                                                                                            Number of securities
                                                                                            available for future
                                Number of securities to be          Weighted-average        issuance under equity
                                  issued upon exercise of          exercise price of        compensation plans
                                   outstanding options,          options, warrants and      (excluding securities
                                    warrants and rights                  rights             reflected in column (a))
        Plan category                       (a)                           (b)                         (c)
-----------------------------   --------------------------       ---------------------      ------------------------
<S>                             <C>                              <C>                        <C>
Equity compensation plans
approved by security holders               N/A                             N/A                        N/A

Equity compensation plans not
approved by security holders             1,337,000                       $1.00                      7,819,793

Total                                    1,337,000                       $1.00                      7,819,793
</TABLE>

As of December 31, 2003, the Company had two Employee Benefit and Consulting
Services Compensation Plans in effect:

1.       On June 1, 2000, the Company adopted an employee benefit and consulting
services compensation plan entitled the Forlink Software Corporation, Inc. Stock
Plan. The plan covers up to 1,600,000 shares of common stock. The plan has not
previously been approved by security holders.

2.       On August 16, 2002, the Company adopted an employee benefit and
consulting services compensation plan entitled the Forlink Software Corporation,
Inc. 2002 Stock Plan. The plan covers up to 8,000,000 shares of common stock.
The plan has not previously been approved by security holders.

Under each plan, the Company may issue common stock and/or options to purchase
common stock to certain officers, directors and employees and consultants of the
Company and its subsidiaries. The purpose of each plan is to promote the best
interests of the Company and its shareholders by providing a means of non-cash
remuneration to eligible participants who contribute to operating progress and
earning power of the Company. Each plan is administered by the Company's Board
of Directors or a committee thereof which has the discretion to determine from
time to time the eligible participants to receive an award; the number of shares
of stock issuable directly or to be granted pursuant to option; the price at
which the option may be exercised or the price per share in cash or cancellation
of fees or other payment which the Company or its subsidiaries is liable if a
direct issue of stock and all other terms on which each option shall be granted.

See also Note 15 on page F-16 of the financial statements.

                                       20

<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         During the last two fiscal years, the Company entered into the
following transactions in which an officer, director, or beneficial owner of
more than 5% of the Company's voting securities had a material interest:

On February 20, 2003, the Company purchased back 4,300,000 and 4,000,000 shares
of the Company's own common stock from two stockholders (Liang Che and Wei Song,
respectively), at a consideration of US$0.026 per share. At the time of the
repurchase, each stockholder owned over 5% of the outstanding common stock of
the Company. These transactions were financed by loans from major stockholders
of the Company.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a)      Exhibits

<TABLE>
<CAPTION>
Exhibit
Number            Description
------            -----------
<S>               <C>
 2.3              Plan of Reorganization dated January 11, 2001 between the
                  Corporation and Beijing SLAIT Science & Technology Development
                  Limited Co. (Incorporated by reference to Annex F of the
                  Definitive Information Statement pursuant to Section 14C of
                  the Securities Exchange Act of 1934, as amended, filed July
                  24, 2001.)

 3.1              Articles of Incorporation, as amended and currently in effect.
                  (Incorporated by reference to Exhibit No. 3.1 of the Form
                  10-QSB for the quarter ended March 31, 2000, and filed on May
                  13, 2000.)

 3.2              Bylaws dated May 11, 2000. (Incorporated by reference to
                  Exhibit No. 3.2 of the Form 10-QSB for the quarter ended March
                  31, 2000, and filed on May 13, 2000.)

10.1              Forlink Software Corporation, Inc. Stock Plan dated June 1,
                  2000. (Incorporated by reference to Exhibit 10.1 of the
                  Company's Registration Statement on Form S-8 (file no.
                  333-41700) filed July 19, 2000.)

10.2              Forlink Software Corporation, Inc. 2002 Stock Plan dated
                  August 16, 2002. (Incorporated by reference to Exhibit 10.2 of
                  the Company's Registration Statement on Form S-8 (file no.
                  333-100645) filed October 21, 2002.)

21.1              List of Subsidiaries. (Filed herewith).

31.1              Section 302 Certification by the Corporation's Chief Executive
                  Officer. (Filed herewith).

31.2              Section 302 Certification by the Corporation's Chief Financial
                  Officer. (Filed herewith).

32.1              Section 906 Certification by the Corporation's Chief Executive
                  Officer. (Filed herewith).

32.2              Section 906 Certification by the Corporation's Chief Financial
                  Officer. (Filed herewith).
</TABLE>

(b)      Reports on Form 8-K

         The Company did not file any Current Reports on Form 8-K during the
quarter ended December 31, 2003.

                                       21

<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The Company's board of directors reviews and approves audit and permissible
non-audit services performed by BDO McCabe Lo & Company ("BDO"), as well as the
fees charged by BDO for such services. In its review of non-audit service fees
and its appointment of BDO as the Company's independent accountants, the board
of directors considered whether the provision of such services is compatible
with maintaining BDO's independence. All of the services provided and fees
charged by BDO in 2003 were pre-approved by the board of directors.

AUDIT FEES

The aggregate fees billed for professional services rendered by BDO for the
audit of our annual financial statements and the reviews of the financial
statements included in our quarterly reports on Form 10-QSB for fiscal years
2003 and 2002 were $50,900 and $47,800, respectively.

AUDIT-RELATED FEES

There were no other fees billed by BDO during the last two fiscal years for
assurance and related services that were reasonably related to the performance
of the audit or review of the Company's financial statements and not reported
under "Audit Fees" above.

TAX FEES

The aggregate fees billed for professional services rendered by BDO Seidman for
tax compliance services in fiscal years 2003 and 2002 were $6,500 and $700,
respectively.

ALL OTHER FEES

There were no other fees billed by BDO during the last two fiscal years for
products and services provided by BDO.

                                       22

<PAGE>

                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                FORLINK SOFTWARE CORPORATION, INC.
Dated:  March 30, 2004

                                By: /s/ Yi He
                                    -------------------------------------------
                                    Yi He, Chief Executive Officer

Dated:  March 30, 2004

                                By: /s/ Honkeung Lam
                                    -------------------------------------------
                                    Honkeung Lam, Chief Financial and
                                    Accounting Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

                                By: /s/ Yi He
                                    -------------------------------------------
                                    Yi He, Director

                                Date: March 30, 2004

                                By: /s/ Honkeung Lam
                                    -------------------------------------------
                                    Honkeung Lam, Director

                                Date: March 30, 2004

                                By: /s/ Guoliang Tian
                                    -------------------------------------------
                                    Guoliang Tian, Director

                                Date: March 30, 2004

                                By: /s/ Yu Fang
                                    -------------------------------------------
                                    Yu Fang, Director

                                Date: March 30, 2004

                                       23

<PAGE>

                                  EXHIBIT INDEX

Exhibit Number and Brief Description.

          2.3     Plan of Reorganization dated January 11, 2001 between the
                  Corporation and Beijing SLAIT Science & Technology Development
                  Limited Co. (Incorporated by reference to Annex F of the
                  Definitive Information Statement pursuant to Section 14C of
                  the Securities Exchange Act of 1934, as amended, filed July
                  24, 2001.)

          3.1     Articles of Incorporation, as amended and currently in effect.
                  (Incorporated by reference to Exhibit No. 3.1 of the Form
                  10-QSB for the quarter ended March 31, 2000, and filed on May
                  13, 2000.)

          3.2     Bylaws dated May 11, 2000. (Incorporated by reference to
                  Exhibit No. 3.2 of the Form 10-QSB for the quarter ended March
                  31, 2000, and filed on May 13, 2000.)

         10.1     Forlink Software Corporation, Inc. Stock Plan dated June 1,
                  2000. (Incorporated by reference to Exhibit 10.1 of the
                  Company's Registration Statement on Form S-8 (file no.
                  333-41700) filed July 19, 2000.)

         10.2     Forlink Software Corporation, Inc. 2002 Stock Plan dated
                  August 16, 2002. (Incorporated by reference to Exhibit 10.2 of
                  the Company's Registration Statement on Form S-8 (file no.
                  333-100645) filed October 21, 2002.)

         21.1     List of Subsidiaries. (Filed herewith).

         31.1     Section 302 Certification by the Corporation's Chief Executive
                  Officer. (Filed herewith).

         31.2     Section 302 Certification by the Corporation's Chief Financial
                  Officer. (Filed herewith).

         32.1     Section 906 Certification by the Corporation's Chief Executive
                  Officer. (Filed herewith).

         32.2     Section 906 Certification by the Corporation's Chief Financial
                  Officer. (Filed herewith).