**U.S.
        Securities and Exchange Commission**
 **Washington,
        D.C. 20549**
  **FORM
        10-QSB**
  (Mark
        One)
  **x**
              **Quarterly
                  Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                  Act of
                  1934**
  For
        the
        quarterly period ended September 30, 2005
  or
  ** ̈**
              **Transition
                  Report Pursuant to Section 13 of 15(d) of the Securities Exchange
                  Act of
                  1934**
  For
        the
        Transition Period From  to
  Commission
        File number 000-50601
  
  **SYNUTRA
        INTERNATIONAL, INC.**
 **** **(Exact
        name of small business issuer as specified in its charter)**
  DELAWARE
              
              N/A**(State
                  or other jurisdiction of**
                **incorporation
                  or organization)**
              
              **(IRS
                  Employer Identification
                  No.)**
  15200
        Shady Grove Road, Suite 350
 Rockville,
        Maryland 20850
 **** **(Address
        of principal executive offices)**
  (301)
        840-3888
 **(Issuer’s
        telephone number)**
  Vorsatech
        Ventures, Inc.
 **Former
        Name, Former Address and Former Fiscal Year, if Changed Since Last
        Report**
  Check
        whether the Registrant (1) has filed all reports required to be filed by
        Section
        13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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  ̈
  As
        of
        November 10, 2005, there were 50,000,713 **** shares
        of
        Common Stock outstanding.
  Transitional
        Small Business Disclosure Format
  Yes  ̈ No x
  
 
  **INDEX**
 PART
                  I. FINANCIAL INFORMATIONItem
                  1.
                
                Financial
                    Statements: (unaudited)
                
                F-1Consolidated
                    Balance Sheets as of September 30, 2005 and March 31, 2005
                    (unaudited)
                
                F-2Statements
                        of Operations for three months ended September 30, 2005 and
                        2004 and six
                        months ended September 30, 2005 and 2004
                        (unaudited)
                
                F-3Consolidated
                        Statements of Changes in Stockholders' Equity September 30,
                        2005
                        (unaudited)
                
                F-4Consolidated
                      Statements of Cash Flows for the six-months ended September
                      30, 2005 and
                      2004 (unaudited)
                
                F-5Notes
                    to Financial Statements (unaudited)
                
                F-6
                    - F-9Item
                  2.
                
                Management's
                    Discussion and Analysis or Plan of Operations
                
                10Item
                  3.
                
                Controls
                    and Procedures
                
                24PART
                  II. OTHER INFORMATIONItem
                  1.
                
                Legal
                    Proceedings
                
                24Item
                  2.
                
                Unregistered
                    Sales of Equity Securities and Use of Proceeds
                
                24Item
                  3.
                
                Defaults
                    Upon Senior Securities
                
                24Item
                  4.
                
                Submission
                    Of Matters To a Vote of Security Holders
                
                24Item
                  5.
                
                Other
                    Information
                
                24Item
                  6.
                
                Exhibits
                
                24SIGNATURES
                
                25
 
 2
  **PART
        I**
 **FINANCIAL
        INFORMATION**
  **Item
        1.** **Financial
        Statements.**
  F-1
  **SYNUTRA,
        INC.**
  **Rockville,
        MD**
  **CONSOLIDATED
        BALANCE SHEETS**
  **September
                  30, 2005**
              
              **March
                  31, 2005****ASSETS**
              
              **USD**
              
              **USD****Current
                  Assets**Cash
                  and Cash Equivalents
              
              
              **18,668,290**
              
              
              16,085,403Short
                  Term Investment - at Market
              
              
              **37,805**
              
              
              45,237Trade
                  Receivables, Net of Provisions
              
              
              **2,365,950**
              
              
              1,968,235Other
                  Receivables, Net of Provisions
              
              
              **2,770,987**
              
              
              1,745,985Notes
                  Receivable
              
              
              —
              
              
              27,790Inventory
              
              
              **6,940,879**
              
              
              6,757,021Prepaid
                  Expenses
              
              
              **453,839**
              
              
              721,623Due
                  from Related Companies
              
              
              **8,092,176**
              
              
              8,082,451Deferred
                  Costs
              
              
              **1,750,437**
              
              
              383,869**Total
                  Current Assets**
              
              
              **41,080,363**
              
              
              35,817,613**Property,
                  Plant and Equipment, Net of Accumulated
                  Depreciation**
              
              
              **13,791,605**
              
              
              13,887,012**Other
                  Assets**Intangible
                  Assets, Net of Accumulated Amortization
              
              
              **299,157**
              
              
              334,392Construction
                  In Progress
              
              
              **19,606,113**
              
              
              14,152,518**Total
                  Assets**
              
              
              **74,777,238**
              
              
              64,191,535
 
 F-2
 
 **SYNUTRA,
        INC.**
  **Rockville,
        MD**
  **CONSOLIDATED
        BALANCE SHEETS**
  **September
                  30, 2005**
              
              **March
                  31, 2005****LIABILITIES
                  AND SHAREHOLDERS’ EQUITY**
              
              **USD**
              
              **USD****Current
                  Liabilities**Accounts
                  Payable
              
              
              **6,762,480**
              
              
              4,966,997Other
                  Payables
              
              
              **5,079,337**
              
              
              4,400,130Notes
                  Payable
              
              
              **21,393,342**
              
              
              19,821,180Deposit
                  Received from Customers
              
              
              **671,578**
              
              
              540,843Bank
                  Loans
              
              
              **13,785,450**
              
              
              12,299,885Accrued
                  Expenses
              
              
              **1,729,432**
              
              
              899,555Due
                  to Related Companies
              
              
              **8,312,469**
              
              
              8,808,904**Total
                  Current Liabilities**
              
              
              **57,734,087**
              
              
              51,737,494**Long
                  Term Liabilities**Bank
                  Loans
              
              
              **4,932,182**
              
              
              4,832,961**Total
                  Liabilities**
              
              
              **62,666,270**
              
              
              56,570,455**Minority
                  Interest**
              
              
              —
              
              
              (576
              )**Shareholders’
                  Equity**Registered
                  Capital
              
              
              **10,000**
              
              
              10,000Additional
                  Paid-in Capital
              
              
              **7,417,793**
              
              
              7,200,409Reserve
              
              
              **45,804**
              
              
              45,804Accumulated
                Comprehensive Income (Loss)
              
              
              425,847
              
              
              (218,158
              )Retained
                  Earnings
              
              
              **4,211,524**
              
              
              583,603**Total
                  Shareholders’ Equity**
              
              
              **12,110,968**
              
              
              7,621,658**Total
                  Liabilities and Shareholders’ Equity**
              
              
              **74,777,238**
              
              
              64,191,535
 
 F-3
  **SYNUTRA,
        INC.**
  **Rockville,
        MD**
  **STATEMENT
        OF OPERATIONS** **AND
        COMPREHENSIVE INCOME**
  **Three
                  Months Ended**
                **September
                  30**
                **USD**
              
              **Six
                  Months Ended**
                **September
                  30**
                **USD****2005**
              
              **2004**
              
              **2005**
              
              **2004****Sales**
              
              
              **25,838,851**
              
              
              13,000,754
              
              
              **43,775,778**
              
              
              22,775,028Cost
                  of Sales
              
              
              **10,965,478**
              
              
              6,215,673
              
              
              **19,421,618**
              
              
              11,428,376**Gross
                  Profit**
              
              
              **14,873,373**
              
              
              6,785,081
              
              
              **24,354,160**
              
              
              11,346,652Selling
                  Expenses
              
              
              **3,910,023**
              
              
              3,036,702
              
              
              **5,725,000**
              
              
              4,978,785Advertising
                  and Sales Promotion
              
              
              **6,824,110**
              
              
              3,091,012
              
              
              **12,617,091**
              
              
              6,911,289General
                  and Administrative Expenses
              
              
              **2,065,390**
              
              
              641,055
              
              
              **2,924,891**
              
              
              1,182,386**Income
                  (Loss) from Operations**
              
              
              **2,073,850**
              
              
              16,312
              
              
              **3,087,178**
              
              
              (1,725,808
              )Other
                  Income
              
              
              **425,184**
              
              
              (198,166
              )
              
              **1,667,222**
              
              
              (36,961
              )**Other
                  Expenses**Interest
                  Expenses
              
              
              **304,261**
              
              
              304,293
              
              
              **719,547**
              
              
              560,376Other
                  Expenses
              
              
              **11,622**
              
              
              31,658
              
              
              **101,356**
              
              
              234,681**Total
                  Other Expenses**
              
              
              **315,884**
              
              
              335,951
              
              
              **820,904**
              
              
              795,057**Income
                  (Loss) from Operations Before Provisions for Income
                  Taxes**
              
              
              **2,183,150**
              
              
              (517,804
              )
              
              **3,933,496**
              
              
              (2,557,825
              )Income
                  Taxes - Current
              
              
              **279,433**
              
              
              22,806
              
              
              **304,999**
              
              
              37,794**Net
                  Income (Loss) Before Minority Interest**
              
              
              **1,903,717**
              
              
              (540,610
              )
              
              **3,628,497**
              
              
              (2,595,619
              )Minority
                  Interest
              
              
              —
              
              
              884,905
              
              
              **576**
              
              
              (454,039
              )**Other
                  Transfer**
              
              
              
              
              
              (134,285
              )
              
              
              
              
              (134,285
              )**Net
                  Income (Loss)**
              
              
              **1,903,717**
              
              
              (1,559,800
              )
              
              **3,627,921**
              
              
              (2,275,865
              )**Comprehensive
                  Income (Loss)**Foreign
                  Currency Translation
              
              
              **617,128**
              
              
              363,275
              
              
              **652,197**
              
              
              363,275Unrealized
                  Loss on Investment
              
              
              —
              
              
              —
              
              
              **(8,192**
              **)**
              
              (12,542
              )**Comprehensive
                  Income (Loss)**
              
              
              **2,520,845**
              
              
              (1,196,525
              )
              
              **4,271,926**
              
              
              (1,925,132
              )**Earnings
                  Per Share (EPS)****EPS
                  Basic and Diluted**
              
              
              **0.04**
              
              
              (0.03
              )
              
              **0.07**
              
              
              (0.05
              )Weighted
                  Average Shares Basic and Diluted
              
              
              **50,000,713**
              
              
              50,000,713
              
              
              **50,000,713**
              
              
              50,000,713
 
 F-4
  **SYNUTRA,
        INC.**
  **Rockville,
        MD**
  **CONSOLIDATED
        STATEMENTS OF CASH FLOWS (UNAUDITED)**
  **Six
                  Months Ended September 30****2004**
                **USD**
              
              **2005**
                **USD****Cash
                  Flows from Operating Activities****Net
                  Income**
              
              
              (2,275,865
              )
              
              **3,627,921****Adjustments
                  to Reconcile Net Income to Net Cash****Provided
                  by (Used in) Operating Activities**Minority
                  Interest
              
              
              (454,039
              )
              
              **576**Depreciation
                  and Amortization
              
              
              734,156
              
              
              **745,816**Bad
                  Debts
              
              
              2,199
              
              
              **4,214****(Increase)
                  Decrease in Assets:**Inventory
              
              
              (1,201,999
              )
              
              **(183,858**
              **)**Trade
                  Receivables, Net of Provisions
              
              
              (1,198,957
              )
              
              **(401,870**
              **)**Other
                  Receivables, Net of Provisions
              
              
              9,945,812
              
              
              **(1,025,058**
              **)**Intangible
                  Assets
              
              
              18,852
              
              
              **35,235**Prepaid
                  Expenses,
              
              
              786,142
              
              
              **267,784**Deferred
                  Costs and Other Assets
              
              
              (869,818
              )
              
              **(1,366,568**
              **)****Increase
                  (Decrease) in Liabilities:**Accounts
                  Payable
              
              
              (301,307
              )
              
              **1,795,483**Other
                  Payables
              
              
              945,816
              
              
              **679,208**Accrued
                  Expenses
              
              
              (1,164,589
              )
              
              **829,878**Deposit
                  Received from Customers
              
              
              185,614
              
              
              **130,735****Net
                  Cash Provided By (Used in) Operating Activities**
              
              
              **5,152,017**
              
              
              **5,139,496**
  F-5
  **SYNUTRA,
        INC.**
  **Rockville,
        MD**
  **CONSOLIDATED
        STATEMENTS OF CASH FLOWS (UNAUDITED) Continued**
  **Six
                  Months Ended September 30****2004**
                **USD**
              
              **2005**
                **USD****Cash
                  Flows from Investing Activities**Cash
                  Purchase of Short Term Investments
              
              11,330
              
              **7,431**Acquisition
                  of Property, Plant and Equipment
              
              
              (939,521
              )
              
              **(650,411**
              **)**Cash
                  Used for Construction in Progress
              
              
              (3,137,952
              )
              
              **(5,453,595**
              **)**Notes
                  Receivable - Cash Received (Cash Paid)
              
              
              200,782
              
              
              **27,790**Due
                  from Related Companies - Cash Paid
              
              
              (24,108,445
              )
              
              **(9,725**
              **)****Net
                  Cash Used in Investing Activities**
              
              
              **(27,973,806**
              **)**
              
              **(6,078,510**
              **)****Cash
                  Flows from Financing Activities**Proceeds
                  from Bank Loans
              
              
              2,906,265
              
              
              **1,584,787**Proceeds
                  from (Repayment of) Notes Payable
              
              
              1,211,776
              
              
              **1,572,161**Capital
                  Contributions - Stockholders
              
              
              (1,174,434
              )
              
              **217,385**Due
                  to Related Companies - Cash Received (Cash Paid)
              
              
              17,856,840
              
              
              **(496,435**
              **)****Net
                  Cash Provided by Financing Activities**
              
              
              **20,800,447**
              
              
              **2,877,897****Effect
                  of Exchange Rate Changes on Cash and Cash
                  Equivalents**
              
              
              **242,383**
              
              
              **644,005**Net
                  Change in Cash and Cash Equivalents
              
              
              (1,778,959
              )
              
              **2,582,888**Cash
                  and Cash Equivalents - Beginning of Period
              
              
              13,737,303
              
              
              **16,085,403****Cash
                  and Cash Equivalents - End of Period**
              
              
              **11,958,344**
              
              
              **18,668,290****SUPPLEMENTARY
                  CASH FLOW DISCLOSURES**Interest
                  Paid
              
              
              560,376
              
              
              **719,547**Taxes
                  Paid
              
              
              37,074
              
              
              **304,999**
  F-6
  **SYNUTRA,
        INC.**
  **Rockville,
        MD**
  **CONSOLIDATED
        STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY**
  **In
                  USD**
              
              **Registered
                  Capital**
              
              **Additional
                  Paid-In Capital**
              
              **Reserve**
              
              **Retained
                  Earnings(Deficit)**
              
              **Accumulated
                  Comprehensive Income(Loss)**
              
              **Total
                  Stockholder’s Equity****Balance**
                **December
                  31, 2004**
              
              
              **10,000**
              
              
              **6,996,158**
              
              
              **45,804**
              
              
              **(3,852,561**
              **)**
              
              **(209,054**
              **)**
              
              **2,990,347**Net
                  Income(Loss)
              
              
              —
              
              
              —
              
              
              —
              
              
              4,436,164
              
              
              —
              
              
              4,436,164Other
                  Comprehensive Income (Loss)
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (9,104
              )
              
              (9,104
              )Capital
                  Contributions
              
              
              —
              
              
              204,251
              
              
              —
              
              
              —
              
              
              —
              
              
              204,251**Balance**
                **March
                  31, 2005**
              
              
              **10,000**
              
              
              **7,200,409**
              
              
              **45,804**
              
              
              **583,603**
              
              
              **-218,158**
              
              
              **7,621,658**Net
                  Income(Loss)
              
              
              —
              
              
              —
              
              
              —
              
              
              1,724,204
              
              
              —
              
              
              1,724,204Other
                  Comprehensive Income (Loss)
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              26,877
              
              
              26,877Capital
                  Contributions
              
              
              —
              
              
              470,985
              
              
              —
              
              
              —
              
              
              —
              
              
              470,985**Balance**
                **June
                  30, 2005**
              
              
              **10,000**
              
              
              **7,671,394**
              
              
              **45,804**
              
              
              **2,307,807**
              
              
              **(191,281**
              **)**
              
              **9,843,724**Net
                  Income(Loss)
              
              
              —
              
              
              —
              
              
              —
              
              
              1,903,717
              
              
              —
              
              
              1,903,717Other
                  Comprehensive Income (Loss)
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              617,128
              
              
              617,128Shareholder
                  Distributions
              
              
              —
              
              
              (253,601
              )
              
              —
              
              
              —
              
              
              —
              
              
              (253,601
              )**Balance**
                **September
                  30, 2005**
              
              
              **10,000**
              
              
              **7,417,793**
              
              
              **45,804**
              
              
              **4,211,524**
              
              
              **425,847**
              
              
              **12,110,968**
 
 F-7
  **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
  **NOTE
        1**  **ORGANIZATION/SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES**
  **Basics
        of Presentation**
  The
        unaudited condensed consolidated financial statements of Synutra International,
        Inc. (the “Company”), have been prepared in accordance with generally accepted
        accounting principles for interim financial information and pursuant to the
        requirements for reporting on Form 10-QSB and Item 310(b) of Regulation S-B.
        Accordingly, they do not include all the information and footnotes required
        by
        accounting principles generally accepted in the United States of America
        for
        complete financial statements. However, such information reflects all
        adjustments (consisting solely of normal recurring adjustments), which are,
        in
        the opinion of management, necessary for a fair statement of results for
        the
        interim periods. Results shown for interim periods are not necessarily
        indicative of the results to be obtained for a full fiscal year. The condensed
        consolidated balance sheet information as of December 31, 2004 was derived
        from
        the audited consolidated financial statements. These interim financial
        statements should read in conjunction with that report.
  **Description
        of Business**
  The
        Company is a Delaware corporation that at September 30, 2005 owns 100% of
        six
        subsidiary companies in the People’s Republic of China (“PRC” or “China”). These
        six subsidiaries are all principally engaged in different stages of the
        production, distribution, and sales of dairy based infant formulas and other
        nutritional products. The Company’s extensive sales network covers 24 provinces,
        227 cities, and more than 800 countries throughout China. In 2004, the Company’s
        infant formula market share was rated number eight among international
        manufacturers and number three among domestic manufacturers in China. The
        Company’s fiscal year end is March 31.
  **SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES**
  **Accounting
        method**
  The
        Company uses the accrual method of accounting for financial statement. The
        accrual method of accounting recognizes revenues when earned and expenses
        when
        incurred.
  **Principles
        of Consolidation**
  The
        consolidated financial statements as of September 30, 2005, the related
        consolidated statements of income for the three-month and six-month periods
        ended September 30, 2005 and 2004, and the related consolidated statements
        of
        cash flows and stockholders’ equity statement for the six-month periods ended
        September 30, 2005 and 2004 are unaudited. All significant inter-company
        balances and transactions have been eliminated in the
        consolidation.
  8
  The
        following companies are consolidated for financial statement
        presentation:
  **Company**
              
              **Incorporation
                  Date**Qingdao
                  St. George Dairy Co. Ltd.
              
              September
                  2001Qingdao
                  Shengyuan Dairy Co., Ltd.
              
              January
                  1998Chabei
                  Shengyuan Dairy Co., Ltd.
              
              February
                  2002Heilongjiang
                  Luobei Shengyuan Food Co. Ltd.
              
              April
                  2001Bei’an
                  Yipin Dairy Co. Ltd.
              
              June
                  2004Qingdao
                  Women and Children Nutrition Research Co. Ltd.
              
              April
                  2004Zhangjiakou
                  Shengyuan Co. Ltd.
              
              March
                  2004
 
 **Income
        taxes**
  Taxation
        authorities in China grant long term registered foreign investment companies
        engaged in manufacturing with preferential tax relief programs that include
        a
        2-year tax holiday and a 3-year 50% tax abatement, applicable from the first
        profit-making year in operation. For example, a company would receive a tax
        holiday in the first 2 years of operation from the date of its first consecutive
        profit-making year, and a 50% tax abatement for the 3rd through 5th year
        in
        operation. When a company commences its operation during a year where the
        profit-making period is shorter than 6 months, the company may choose to
        start
        counting the period of the tax holiday and abatement years from the following
        year, but the net profit of that year becomes taxable.
  During
        the 2005 tax year, the taxation responsibilities of the Company’s subsidiaries
        in China are each described as follows:
  **Chabei
        Shengyuan Dairy Co. Ltd:** not
        liable to levy in years before 2005. Net profit is taxable at a 33% rate
        in
        2005.
  **Zhangjiakou
        Shengyuan Co. Ltd** :
        subject
        to 33% income tax for year 2005, and elected to apply for a tax holiday and
        abatement for year 2006.
  **Heilongjiang
        Luobei Shengyuan Dairy Co. Ltd** :
        subject
        to 33% income tax in current year and elected to apply for a tax holiday
        and
        abatement for 2006.
  **Qingdao
        St George Dairy Co. Ltd** :
        subject
        to 24% income tax, accorded tax holiday and abatement for 2004.
  **Qingdao
        Shengyuan Dairy Co. Ltd:** subject
        to 30% income tax.
  **Bei’an
        Yipin Dairy Co. Ltd:** subject
        to 33% income tax currently, accorded tax holiday and abatement for
        2004.
  **Qingdao
        Women and Children Nutrition Research Co. Ltd** :
        subject
        to 33% income tax.
  **Foreign
        currency translation** -
        The
        reporting currency of the Company is U.S. dollars and the financial records
        are
        maintained and the financial statements are prepared in Renminbi (“RMB”).
        Transactions in other currencies are translated into the reporting currencies
        at
        exchange rates prevailing at the time of the transactions. Monetary assets
        and
        liabilities denominated in other currencies at the balance sheet date are
        re-translated at exchange rates prevailing at that date. Non-monetary assets
        and
        liabilities in other currencies are translated at historical rates. Exchange
        differences are recognized in the income statement in the period in which
        they
        arise. In recent months the RMB has been under growing pressure to appreciate
        against a basket of foreign currencies, including the USD. As of September
        30,
        2005, the exchange rate was approximately USD $1.00 to RMB 8.11, about a
        2%
        appreciation from the year end 2004 exchange rate of about 8.3 RMB yuan to
        1 US
        dollar.
  9
  **Recently
        Issued Accounting Standards**
  In
        May
        2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial
        Instruments with Characteristics of both Liabilities and Equity,” which
        establishes standards for how an issuer classifies and measures certain
        financial instruments with characteristics of both liabilities and equity.
        It
        requires that an issuer classify a financial instrument that is within its
        scope
        as a liability (or an asset in some circumstances). This Statement is effective
        for financial instruments entered into or modified after May 31, 2003, and
        otherwise is effective at the beginning of the first interim period beginning
        after September 15, 2003. It is to be implemented by reporting the cumulative
        effect of a change in an accounting principle for financial instruments created
        before the issuance date of the Statement and still existing at the beginning
        of
        the interim period of adoption. Restatement is not permitted. This statement
        does not affect the Company.
  In
        December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment” (“SFAS
        123R”). SFAS 123R revises FASB Statement No. 123 “Accounting for Stock-Based
        Compensation” and supersedes APB Opinion No. 25 “Accounting for Stock Issued to
        Employees”. SFAS 123R requires all public and non-public companies to measure
        and recognize compensation expense for all stock-based payments for services
        received at the grant-date fair value, with the cost recognized over the
        vesting
        period (or the requisite service period). SFAS 123R is effective for small
        business issuers for all interim periods beginning after December 15, 2005.
        As
        such, the Company is required to adopt these provisions at the beginning
        of the
        fiscal quarter ended September 30, 2006. Retroactive application of the
        provisions of SFAS 123R to the beginning of the fiscal year that includes
        the
        effective date is permitted, but not required. The Company is currently
        evaluating the impact of SFAS 123R on its financial statements.
  In
          May
          2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections
          -
          a replacement of APB Opinion No. 20 and FASB Statement No. 3" (“SFAS 154”). SFAS
          154 changes the requirements for the accounting for and reporting of a
          change in
          accounting principle. These requirements apply to all voluntary changes
          and
          changes required by an accounting pronouncement in the unusual instance
          that the
          pronouncement does not include specific transition provisions. SFAS 154
          is
          effective for fiscal years beginning after December 15, 2005. As such,
          the
          Company is required to adopt these provisions at the beginning of the fiscal
          year ended December 31, 2006. The Company is currently evaluating the impact
          of
          SFAS 154 on its consolidated financial statements.
  **Intangible
        assets** -
        Intangible assets represent technology know-how. Intangible assets are measured
        initially at cost. Intangible assets are recognized if it is probable that
        the
        future economic benefits that are attributable to the asset will flow to
        the
        enterprise and the cost of the asset can be measured reliably. After initial
        recognition, intangible assets are measured at cost less any impairment losses.
        Intangible assets with definite useful lives are amortized on a straight-line
        basis over their useful lives.


**Trade
        receivables and allowance for bad debts** - The
        Company presents trade, net of allowances for doubtful accounts and returns,
        to
        ensure accounts receivable are not overstated due to uncollectibility. Trade
        receivables generated from credit sales have general credit terms of 45 to
        60
        days. The allowances are calculated based on detailed review of certain
        individual customer accounts, historical rates and an estimation of the overall
        economic conditions affecting the Company's customer base. The Company reviews
        a
        customer's credit history before extending credit. If the financial condition
        of
        its customers were to deteriorate, resulting in an impairment of their ability
        to make payments, additional allowances may be required.
 
 **Revenue
        recognition** -
        Revenues from the sale of goods is recognized when the risks and rewards
        of
        ownership of the goods have transferred to the buyer. Revenues consist of
        the
        invoice value for the sale of goods and services net of value-added tax ("VAT"),
        rebates and discounts. The Company is subject to the following surtaxes,
        which
        are recorded as deductions from gross sales: 5% City Construction Tax and
        Education Supplementary Tax (levied at 3 - 4% of net VAT payable).
 
 **Shipping
        and handling fees** -
        Shipping and handling fees are expensed as incurred and are classified as
        selling expenses.
  **Research
        and development expenses** -
        Research and development costs are classified as general and administrative
        expenses and are expensed as incurred.
 
 **Advertising
        costs** -
        Advertising costs are expensed as incurred and are classified as selling
        expenses.
 
 **Income
        taxes** - The
        Company accounts for income taxes under the provision of Statement of Financial
        Accounting Standards ("SFAS" No. 109), "Accounting for Income Taxes," whereby
        deferred income tax assets and liabilities are computed for differences between
        the financial statements and tax bases of assets and liabilities that will
        result in taxable or deductible amounts in the future, based on enacted tax
        laws
        and rates applicable to the periods in which the differences are expected
        to
        affect taxable income. Valuation allowances are established when necessary;
        to
        reduce deferred income tax assets to the amount expected to be
        realized.
  **NOTE
        2 - SUPPLEMENT OF FINANCIAL INFORMATION**
  **RELATED
        PARTY TRANSACTIONS**
  The
        following related party transactions occurred during the three months ended
        September 30, 2005 and March 31, 2005:
  **September
                  30**
                **USD**
              
              **March
                  31**
                **USD****Sales
                  to Related Companies**Beijing
                  Kelqin Dairy Company, Ltd.
              
              
              1,603,378
              
              
              122,199Sheng
                  Zhi Da Dairy Group Corp.
              
              
              103,894
              
              
              550,042Heilongjiang
                  Baoquanling Shengyuan Dairy Company, Ltd.
              
              
              1,387,668
              
              
              806,289St.
                  Angel (Beijing Business Service)
              
              
              375,508
              
              
              113,443Beijing
                  Ao Naier Feed Stuff LLC
              
              
              —
              
              
              16,523Beijing
                  Honnete Dairy Corporation, Ltd.
              
              
              175,614
              
              
              1,495,053Beijing
                  luding Dairy Company, Ltd.
              
              
              153,609
              
              
              —**Total
                  Sales to Related Companies**
              
              
              3,799,670
              
              
              3,103,549
  10
  **NOTE
        3 - COMMON STOCK**
  **The
        Share Exchange** -
        On July
        15, 2005, the Company issued 48,879,500 shares of its common stock in exchange
        for all of the issued and outstanding shares of Synutra, Inc., an Illinois
        corporation (“Synutra Illinois”) that owns all the registered capital of six
        companies organized under the laws of the People’s Republic of China (the
“Exchange”).
  As
        a
        result of this Exchange, Synutra Illinois became a wholly owned subsidiary
        of
        the Company.
  The
        Exchange occurred pursuant to a Share Exchange Agreement dated as of June
        14,
        2005 among the Company, Thomas Braun, Beams Power Investment Limited, Strong
        Gold Finance Ltd and Synutra Illinois.
  Immediately
        prior to the Exchange, the Company had 2,638,713 outstanding shares of common
        stock and no outstanding shares of preferred stock. The Company’s Certificate of
        Incorporation provides for authorized capital of two hundred and seventy
        million
        shares (270,000,000) of which two hundred and fifty million (250,000,000)
        are
        $0.0001 par value common stock and twenty million (20,000,000) are $0.0001
        par
        value preferred stock. Prior to the Exchange, Thomas Braun, the sole director
        and officer of the Company, and his affiliates owned 2,200,000 shares of
        the
        Company common stock. Pursuant to the Exchange, the Company cancelled
        approximately 1,517,500 shares of common stock owned by Mr. Braun and his
        affiliates reducing their ownership to 682,500 shares, resulting in the total
        issued and outstanding shares of the Company common stock equaling 1,121,213
        shares.
  Pursuant
        to the Exchange, the Company issued 46,000,000 shares of its common stock
        in
        exchange for all of the outstanding capital stock of Synutra Illinois held
        by
        Beams Power Investment Limited and Strong Gold Finance Ltd., 2,844,500 shares
        were issued to various financial consultants and/or their designees and 35,000
        shares to a finder. Therefore, the total issued and outstanding shares of
        the
        Company’s common stock were 50,000,713 shares after giving effect to the
        Exchange.
  As
        a
        result of the Exchange, the stockholders of the Company immediately prior
        to the
        Exchange owned approximately 1,121,213 shares, or approximately 2% of the
        issued
        and outstanding shares of the Company’s common stock and the Company is now
        controlled by the former stockholders of Synutra Illinois.
  The
        Share
        Exchange Agreement was determined through arms’-length negotiations between the
        Company and Synutra Illinois.
  Immediately
        following the completion of the Exchange, all of the existing members of
        the
        Company’s board of directors and all of its executive officers resigned and new
        appointees were elected to the Company’s board of directors.
  On
        September 9, 2005 the Company changed its name to Synutra International,
        Inc.
  Although
        the Company acquired Synutra Illinois pursuant to the Exchange, the Exchange
        was
        treated as a “reverse merger” whereby Synutra Illinois is considered to be the
        accounting acquirer. As such, the results of operations are those of Synutra
        Illinois.
  **Item
        2.** **Management
        Discussion and Analysis or Plan of Operation.**
  **Overview**
  Through
        its wholly owned subsidiary, Synutra Inc., an Illinois corporation (“Synutra
        Illinois”), Synutra International, Inc. (the “Company” or “Synutra”) owns all of
        the equity interests of six companies in the People’s Republic of China,
        (“China” or the “PRC”), each engaged in different stages of the production,
        marketing, packaging and development of dairy based nutritional products
        in
        China for infants, children and pregnant women and nursing mothers under
        the
        brand name of “Sheng Yuan”, and for adults under the brand name of “YiPin”, each
        contributed 89% and 11% of 2004’s revenue. In September 2005, Synutra launched a
        new rice cereal product line. As supplemental foods to infant and children
        formula products, rice cereal products possess significant growth potential.
        At
        the same time, Synutra also began to make and sell non-fat dry milk as well
        as
        anhydrous milk-fat.
  11
  Synutra
        Illinois was incorporated in the State of Illinois in 2000. At that time,
        Synutra Illinois was wholly owned by companies controlled by Mr. Liang Zhang,
        Synutra’s Chairman of the Board and Chief Executive Officer. Mr. Zhang formed
        Synutra Illinois to become a holding company for the six companies in China
        that
        he and his affiliates controlled that have been engaged in the production,
        marketing, packaging and development of dairy based nutritional products
        for
        infants, children and adults beginning in 1998. Since the incorporation of
        Synutra Illinois in 2000, it has increased its investment in these subsidiaries
        and Mr. Zhang has transferred all of his and his affiliates’ ownership in the
        six companies directly to Synutra Illinois, which transfer was completed
        at the
        end of March 2005. Synutra Illinois currently owns 100% of the following
        subsidiaries:
  Qingdao
        Sheng Yuan Dairy Co., Ltd. is engaged in the sales and marketing of dairy
        based
        nutritional products for infants, children and adults under the brand name
        of
“Sheng Yuan” (primarily for infants and child nutritional products) and “YiPin”
        for adult dairy based nutritional products. Qingdao Sheng Yuan Dairy Co.,
        Ltd.
        was formed in 1998 by Beijing Honnete Dairy Co., Ltd., an affiliate of Mr.
        Liang
        Zhang. In 2003, Mr. Zhang transferred 40% of his ownership to Synutra, and
        then
        transferred the balance of the ownership to Synutra in 2005.
  Qingdao
        ST George Dairy Co., Ltd. is engaged in the packaging, shipping and distribution
        of all of Synutra’s products. Qingdao ST George Dairy Co., Ltd. was formed in
        2001 by Sheng Zhi Da Dairy Group, Co., Ltd., an affiliate of Mr. Liang Zhang,
        and Synutra where 60% of the company was owned by Sheng Zhi Da Dairy Group,
        Co.,
        Ltd. and 40% by Synutra. In 2005, Mr. Zhang transferred the 60% of Qingdao
        ST
        George Dairy Co., Ltd. owned by Sheng Zhi Da Dairy Group Co., Ltd. to
        Synutra.
  Beian
        Yi
        Pin Dairy Co., Ltd. (“Beian”) is engaged in the production and processing of
        adult dairy based nutritional products under the brand name of “Yipin”. In 2004,
        Mr. Liang Zhang acquired 100% of the interest of Beian Olisong Dairy Co.,
        Ltd.
        which changed its name to Beian. In 2005, Mr. Zhang transferred 100% of his
        ownership in Beian to Synutra.
  Luobei
        Sheng Yuan Dairy Co., Ltd. (“Loubei”) is engaged in the production and
        processing Synutra’s products for infants and children under the brand name of
“Sheng Yuan.” Loubei was formed in 2001 by Mr. Liang Zhang. In 2003, Mr. Zhang
        transferred 33% of his ownership to Synutra and then transferred the balance
        of
        the ownership to Synutra in 2005.
  Quindao
        Mother and Infant Nutrition Research Company Limited is engaged in the research
        and development of various nutritional products for both infants and children
        as
        well as pregnant and lactating women. Quindao Mother and Infant Nutrition
        Research Company Limited was formed in 2004 by Mr. Liang Zhang. In 2005,
        Mr.
        Zhang transferred 100% of his ownership to Synutra.
  Zhangjiakou
        Sheng Yuan Dairy Co., Ltd. (“Zhangjiakou”) is engaged in the production and
        processing of all of Synutra’s products. Zhangjiakou Sheng Yuan Dairy Co., Ltd.
        was formed in 2004 by Chaibei Sheng Yuan Diary Co., Ltd., an affiliate of
        Mr.
        Zhang and Synutra as a joint venture. In 2005, Chaibei Sheng Yuan Diary Co.,
        Ltd. was merged into Zhangjiakou resulting in Synutra owing 100% of Zhangjiakou.
  On
        July
        15, 2005, the Company issued 48,879,500 shares of its common stock in exchange
        for all of the issued and outstanding shares of Synutra Illinois (the
“Exchange”).
  As
        a
        result of this Exchange, Synutra Illinois became a wholly owned subsidiary
        of
        the Company.
  12
  The
        Exchange occurred pursuant to a Share Exchange Agreement dated as of June
        14,
        2005 among the Company, Thomas Braun, Bearns Power Investment Limited, Strong
        Gold Finance Ltd and Synutra Illinois.
  Immediately
        prior to the Exchange, the Company had 2,638,713 outstanding shares of common
        stock and no outstanding shares of preferred stock. The Company’s Certificate of
        Incorporation provides for authorized capital of two hundred and seventy
        million
        shares (270,000,000) of which two hundred and fifty million (250,000,000)
        are
        $0.0001 par value common stock and twenty million (20,000,000) are $0.0001
        par
        value preferred stock. Prior to the Exchange, Thomas Braun, the sole director
        and officer of the Company, and his affiliates owned 2,200,000 shares of
        the
        Company common stock. Pursuant to the Exchange, the Company cancelled
        approximately 1,517,500 shares of common stock owned by Mr. Braun and his
        affiliates reducing their ownership to 682,500 shares, resulting in the total
        issued and outstanding shares of the Company common stock equaling 1,121,213
        shares.
  Pursuant
        to the Exchange, the Company issued 46,000,000 shares of its common stock
        in
        exchange for all of the outstanding capital stock of Synutra Illinois held
        by
        Beams Power Investment Limited and Strong Gold Finance Ltd., 2,844,500 shares
        were issued to various financial consultants and/or their designees and 35,000
        shares to a finder. Therefore, the total issued and outstanding shares of
        the
        Company’s common stock were 50,000,713 shares after giving effect to the
        Exchange.
  As
        a
        result of the Exchange, the stockholders of the Company immediately prior
        to the
        Exchange owned approximately 1,121,213 shares, or approximately 2% of the
        issued
        and outstanding shares of the Company’s common stock and the Company is now
        controlled by the former stockholders of Synutra Illinois.
  The
        Share
        Exchange Agreement was determined through arms’-length negotiations between the
        Company and Synutra Illinois.
  Immediately
        following the completion of the Exchange, all of the existing members of
        the
        Company’s board of directors and all of its executive officers resigned and new
        appointees were elected to the Company’s board of directors.
  On
        September 9, 2005 the Company changed its name to Synutra International,
        Inc.
        (OCTBB: SYUT).
  Although
        the Company acquired Synutra Illinois pursuant to the Exchange, the Exchange
        was
        treated as a “reverse merger” whereby Synutra Illinois is considered to be the
        accounting acquirer. As such, the results of operations are those of Synutra
        Illinois.
  **CRITICAL
        ACCOUNTING POLICIES AND ESTIMATES**
  The
        Company prepares its financial statements in accordance with accounting
        principles generally accepted in the United States of America. The preparation
        of these financial statements requires the use of 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.
        Management periodically evaluates the estimates and judgments made. Management
        bases its estimates and judgments on historical experience and on various
        factors that are believed to be reasonable under the circumstances. Actual
        results may differ from these estimates as a result of different assumptions
        or
        conditions.
  The
        following critical accounting policies affect the more significant judgments
        and
        estimates used in the preparation of the Company’s financial
        statements.
  For
        certain of the Company's financial instruments, including cash and cash
        equivalents, trade receivables and payables, prepaid expenses, deposits and
        other current assets, short-term bank borrowings, and other payables and
        accruals, the carrying amounts approximate fair values due to their short
        maturities.
  13
  A
        related
        party is generally defined as (i) any person that holds 10% or more of the
        Company's securities and their immediate families, (ii) the Company's
        management, (iii) someone that directly or indirectly controls, is controlled
        by
        or is under common control with the Company, or (iv) anyone who can
        significantly influence the financial and operating decisions of the Company.
        A
        transaction is considered to be a related party transaction when there is
        a
        transfer of resources or obligations between related parties.
  The
        Company is exposed to the following risk factors:
 
 (i)
        Credit risks - The Company has policies in place to ensure that sales of
        products are made to customers with an appropriate credit history. The Company
        also has a concentration of credit risk due to geographic sales as a majority
        of
        its products are marketed and sold in the PRC.
 
 (ii)
        Liquidity risks - Prudent liquidity risk management implies maintaining
        sufficient cash, the availability of funding through an adequate amount of
        committed credit facilities and ability to close out market
        positions.
 
 (iii)
        Interest rate risk - The interest rate and terms of repayments of short-term
        and
        long-term bank borrowings are approximately 5% per annum. The Company's income
        and cash flows are substantially independent of changes in market interest
        rates. The Company has no significant interest-bearing assets. The Company's
        policy is to maintain all of its borrowings in fixed rate
        instruments.
 
 **Cash
        and cash equivalents** - The
        Company considers all highly liquid instruments purchased with an original
        maturity of three months or less to be cash equivalents.
 
 **Short
        Term Investments** -
        The
        Company has classified its short term investment as Available-for-Sale.
        Available-for-Sale securities are stated at fair value with unrealized gains
        and
        losses included as a separate component of stockholders’ equity. Realized gains
        and losses are included in income (expense). The cost of securities sold
        is
        based on the specific identification method.
 
 **Inventories** -
        Inventories are stated at the lower of cost or net realizable value, with
        cost
        computed on a weighted-average basis. Cost includes all costs of purchase,
        cost
        of conversion and other costs incurred in bringing the inventories to their
        present location and condition. Net realizable value is the estimated selling
        price in the ordinary course of business less the estimated costs of completion
        and the estimated costs necessary to make the sale. .
 
 **Property,
        plant and equipment** -
        Property, plant and equipment are stated at cost less accumulated depreciation
        and impairment losses. The initial cost of the asset comprises its purchase
        price and any directly attributable costs of bringing the asset to its working
        condition and location for its intended use. Depreciation is provided using
        the
        straight-line method over the assets estimated useful life for periods ranging
        from five to fifty years. Significant improvements and betterments are
        capitalized where it is probable that the expenditure resulted in an increase
        in
        the future economic benefits expected to be obtained form the use of the
        asset
        beyond its originally assessed standard of performance. Routine repairs and
        maintenance are expensed when incurred. Gains and losses on disposal of fixed
        assets are recognized in the income statement based on the net disposal proceeds
        less the carrying amount of the assets.
 
 **Impairment
        of long-lived assets** -
        Long-lived assets, such as property, plant and equipment and other non-current
        assets, including intangible assets, are reviewed for impairment whenever
        events
        or changes in circumstances indicate that the carrying value of an asset
        may not
        be recoverable. An impairment loss is recognized when the estimated undiscounted
        cash flows associated with the asset or group of assets is less than their
        carrying value. If impairment exists, an adjustment is made to write the
        asset
        down to its fair value, and a loss is recorded as the difference between
        the
        carrying value and fair value. Fair values are determined based on quoted
        market
        values, discounted cash flows or internal and external appraisals, as
        applicable. Assets to be disposed of are carried at the lower of carrying
        value
        or estimated net realizable value.
 
 14
  **RESULTS
        OF OPERATIONS**
  **Three
        Months Ended September 30, 2005 Compared to Three Months Ended September
        30,
        2004.**
  **Sales**
  Sales
        increased by $12,838,097 or 98.75% to $25,838,851 for the three months ended
        September 30, 2005 as compared to $13,000,754 for the three months ended
        September 30, 2004. Sales increased due to greater market penetration as
        a
        result of various measures including changes made by management to incentive
        structures and policies affecting the Synutra sales force. Such changes
        strengthened promotional efforts in the medium-sized city markets and rural
        markets of China by modifying sales force incentive programs through aligning
        bonuses with sales performance. The increase in sales also reflects the overall
        industry growth acceleration in the current year. Management estimates that
        the
        infant formula industry in China has grown faster than its traditional natural
        growth due to increased consumer recognition and acceptance of the products,
        especially Synutra’s name-brand product. Management believes Synutra name brand
        product lines have gained recognition in the marketplaces where it operates
        and
        thus has captured a greater portion of the increased growth experienced by
        the
        industry. In addition, management believes premium products with a higher
        margin
        have grown faster in the period across the industry. Since September 2004,
        Synutra has launched entire lines of premium product and introduced new product
        packaging along with significant price increases. The sales increases are
        attributable to the following components: from a volume increase of 1,851
        tons
        year on year, resulting in an increase of $8,736,922 in gross sales; from
        average selling price increases of $393 per ton year on year, resulting in
        an
        increase of $1,080,865 in gross sales; sales growth attributable to combination
        of volume and price increases year on year is $726,600; and new product launches
        for $2,291,010 in gross sales increase.
  **Cost
        of Sales**
  Cost
        of
        sales for the three months ended September 30, 2005 increased to $10,965,478
        from $6,215,673 for the three months ended September 30, 2004. The increase
        in
        cost of sales was a result of increases in purchases of raw materials and
        other
        ingredients, as well as increases in processing expenses, all in proportion
        to
        the production volume increases. Corresponding to volume increase of 1,851
        tons
        of products in gross sales, the cost of sales increased by $4,178,422 year
        on
        year. Due to the reduction in unit cost of sales, the average selling cost
        decreased by $271 per metric ton year on year, resulting in a cost of sales
        reduction of $744,866. Due to a combination of sales volume increases and
        unit
        cost of sales reductions, the cost of sales decreased by $500,728. New products
        accounted for $1,816,977 in the total cost of sales for the period.
  **Gross
        Profit**
  Gross
        profit was $14,873,373 or 57.56% of sales for the three months ended September
        30, 2005. Comparable gross profit was $14,399,340 or 61.15% of sales for
        the
        three months ended September 30, 2005, as compared to gross profit of $6,785,081
        or 52.19% of sales for the three months ended September 30, 2004, an increase
        of
        $7,614,259. Non-comparable product lines produced a gross profit of $474,033
        this quarter. With sales increasing in 2005 compared to 2004, the Company
        experienced an increase in both gross profit and gross margin, exceeding
        the
        gross margin target of 50% the management set for its operations for calendar
        year 2005. This increase was primarily a result of increased sales and gross
        margins at the same time. Due to implementation of targeted sales incentive
        programs, higher margin lines of products increased more, resulting in the
        increase in gross margin.
  15
  **Selling
        Expenses**
  Selling
        expenses increased by $873,321 to $3,910,023 for the three months ended
        September 30, 2005, as compared to $3,036,702 for the three months ended
        September 30, 2004. The increase in selling and distribution expenses in
        2005 as
        compared to 2004 was a result of reduced transportation and management expenses.
        The major components of selling expenses are wages, transportation, and
        supermarket expenses. The increase in average compensation to the sales force
        constitutes most of the increase in selling expenses.
  **Advertising
        and Sales Promotion**
  Advertising
        and sales promotion increased by $3,733,099 or 120.77% to $6,824,110 for
        the
        three months ended September 30, 2005, as compared to $3,091,012 for the
        three
        months ended September 30, 2004 as a result of increased advertising and
        promotional activity expenses. The major components of advertising and sales
        promotion are placement of advertising with media outlets and points of sale
        and
        community promotional activities.
  **General
        and Administrative Expenses**
  General
        and administrative expenses increased by $1,424,335 or 222.19% to $2,065,390
        for
        the three months ended September 30, 2005, as compared to $641,055 for the
        three
        months ended September 30, 2004, as a result of increased consulting and
        advisory service expenses. The major components of general and administrative
        expenses are wages, depreciation and management expenses.
  **Income
        from Operations**
  As
        a
        result of the aforementioned factors, income from operations was $2,073,850
        for
        the three months ended September 30, 2005, as compared to $16,312 for the
        three
        months ended September 30, 2004.
  **Non-Operating
        Income**
  Non-operating
        income was $425,184 for the three months ended September 30, 2005, as compared
        to $(198,166) for the three months ended September 30, 2004. None-operating
        income was generated through manufacturing of by-products such as anhydrous
        milk
        fat and non fat dry milk, as well as private label manufacturing, including
        toll
        drying of formulated powder products or toll packaging.
  **Interest
        Expense**
  Interest
        expense was $304,261, for the three months ended J September 30, 2005, as
        compared to $304,293 for the three months ended September 30, 2004.
  **Non-Operating
        Expense**
  Non-operating
        expense was $11,622 for the three months ended September 30, 2005, as compared
        to $31,658 for the three months ended September 30, 2004.
  **Provision
        for Income Taxes**
  The
        provision for income taxes, which is computed on a per subsidiary basis,
        was
        $279,433 and $22,806 for the three months ended September 30, 2005 and 2004,
        respectively. The difference in income tax provisions was due to election
        of
        preferential tax relief treatment periods for 2006 by Heilongjiang Luobei
        Shengyuan Dairy Co. Ltd and Zhangjiakou Shengyuan Dairy Co. Ltd as elaborated
        above.
  16
  **Net
        Income**
  Net
        income for the three months ended September 30, 2005 increased by $3,463,517
        to
        $ 1,903,717 from ($1,559,800) for the three months ended September 30, 2004
        due
        to the factors discussed above.
  **Earnings
        Per Share**
  Earnings
        per share were $0.04 for the three months ended September 30, 2005.
  **Six
        Months Ended September 30, 2005 Compared to Six Months Ended September 30,
        2004.**
  **Sales**
  Sales
        increased by $21,000,750 or 92.21% to $43,775,778 for the six months ended
        September 30, 2005 as compared to $22,775,028 for the six months ended September
        30, 2004. Sales increased due to greater market penetration as a result of
        various measures including changes made by management to incentive structures
        and policies affecting the Synutra sales force. Such changes strengthened
        promotional efforts in medium-sized city markets and rural markets by modifying
        sales force incentive programs through aligning bonuses with sales performance.
        The increase in sales also reflects the overall industry growth acceleration
        in
        the current year. Management estimates that the infant formula industry in
        China
        has grown faster than its traditional natural growth due to increased consumer
        recognition and acceptance of the Company’s products, especially its name-brand
        products. Management believes Synutra name brand product lines have gained
        recognition in the marketplaces where it operates and has captured a greater
        portion of the increased growth experienced by the industry. In addition,
        the
        management believes premium products with a higher margin have grown faster
        in
        the period across the industry. Since September 2004, Synutra has launched
        entire lines of premium products and introduced new product packaging along
        with
        significant price increases. The sales increases are attributable to the
        following components: from a volume increase of 2,491 tons year on year,
        resulting in increase of $9,999,205 in gross sales; from average selling
        price
        increases of $1,067 per ton year on year, resulting in an increase of $
        6,053,007 in gross sales; sales growth attributable to combination of volume
        and
        price increases year on year is $ 2,657,528; and new product launches for
        $2,291,010 in gross sales increase.
  **Cost
        of Sales**
  Cost
        of
        sales for the six months ended September 30, 2005 increased to $19,421,618
        from
        $11,428,376 for the six months ended September 30, 2004. The increase in
        cost of
        sales was a result of increase in purchase of raw materials and other
        ingredients, as well as increases in processing expenses, all in proportion
        to
        the production volume increase. Corresponding to volume increase of 2,491
        tons
        of products in gross sales, the cost of sales increased by $5,017,543 year
        on
        year. Due to reduction in unit cost of sales, the average selling cost decreased
        by $142 per metric ton year on year, resulting in a cost of sales reduction
        of
        $805,204. Due to a combination of sales volume increase and unit cost of
        sales
        reduction, the cost of sales decreased by $353,519. New products accounted
        for
        $1,816,977 in the total cost of sales for the period.
  **Gross
        Profit**
  Gross
        profit was $24,354,160 or 55.63% of sales for the six months ended September
        30,
        2005. Comparable gross profit was $23,880,127 or 57.56% of sales for the
        six
        months ended September 30, 2005, as compared to gross profit of $11,346,652
        or
        49.82% of sales for the six months ended September 30, 2004, an increase
        of
        $12,533,475. Non-comparable product lines produced a gross profit of $474,033
        in
        the period. With sales increasing in 2005 compared to 2004, the Company
        experienced an increase in both gross profit and gross margin, exceeding
        the
        gross margin target of 50% the management set for its operations for calendar
        year 2005. This increase was primarily a result of increased sales and gross
        margins at the same time. Due to implementation of targeted sales incentive
        programs, higher margin lines of products increased more, resulting in the
        increase in gross margin.
  17
  **Selling
        Expenses**
  Selling
        expenses increased by $746,215 to $5,725,000 for the six months ended September
        30, 2005, as compared to $4,978,785 for the six months ended September 30,
        2004.
        The increase in selling and distribution expenses in 2005 as compared to
        2004
        was a result of increased transportation and management expenses. The major
        components of selling expenses are wages, transportation, and supermarket
        expenses. Increase in average compensation to the sales force constitute
        of the
        increase in selling expenses.
  **Advertising
        and Sales Promotion**
  Advertising
        and sales promotion increased by $5,705,803 or 82.56% to $12,617,091 for
        the six
        months ended September 30, 2005, as compared to $6,911,289 for the six months
        ended September 30, 2004 as a result of increased promotional activity expenses.
        The major components of advertising and sales promotion are placement of
        advertising with media outlets and points of sale and community promotional
        activities.
  **General
        and Administrative Expenses**
  General
        and administrative expenses increased by $1,724,505 or 147.37% to $2,924,891
        for
        the six months ended September 30, 2005, as compared to $1,182,386 for the
        six
        months ended September 30, 2004, as a result of increased consulting and
        advisory service expenses. The major components of general and administrative
        expenses are wages, depreciation and management expenses.
  **Income
        from Operations**
  As
        a
        result of the aforementioned factors, income from operations was $3,087,178
        for
        the six months ended September 30, 2005, as compared to loss from operations
        of
        $1,725,808 for the six months ended September 30, 2004.
  **Non-Operating
        Income**
  Non-operating
        income was $1,667,222 for the six months ended September 30, 2005, as compared
        to ($36,961) for the six months ended September 30, 2004. None-operating
        income
        was generated through manufacturing of by-products such as anhydrous milk
        fat
        and non fat dry milk, as well as private label manufacturing, including toll
        drying of formulated powder products or toll packaging.
  **Interest
        Expense**
  Interest
        expense was $719,547 for the six months ended September 30, 2005, as compared
        to
        $560,376 for the six months ended September 30, 2004.
  **Non-Operating
        Expense**
  Non-operating
        expense was $101,356 for the six months ended September 30, 2005, as compared
        to
        $234,681 for the six months ended September 30, 2004.
  **Provision
        for Income Taxes**
  The
        provision for income taxes, which is computed on a per subsidiary basis,
        was
        $304,999 and $37,794 for the six months ended September 30, 2005 and 2004,
        respectively. The variance in income tax provisions are due to election of
        preferential tax relief treatment periods for 2006 by Heilongjiang Luobei
        Shengyuan Dairy Co. Ltd and Zhangjiakou Shengyuan Dairy Co. Ltd as elaborated
        above.
  18
  **Net
        Income**
  The
        net
        income for the six months ended September 30, 2005 increased by $5,903,787
        to a
        net income of $3,627,921 from a net loss of $2,275,865 for the six months
        ended
        September 30, 2004 due to the factors discussed above.
  **Earnings
        Per Share**
  Earnings
        per share were $0.07 for the six months ended September 30, 2005.
  **Financial
        Condition - September 30, 2005:**
  **Liquidity
        and Capital Resources**
  **Operating**
  The
        Company’s operations generated cash resources of $5,139,496 for the six months
        ended September 30, 2005, as compared to utilizing cash resources of $5,152,017
        for the six months ended September 30, 2004, primarily as a result of cash
        generated in 2005 from sales and decreases to accounts receivable. At September
        30, 2005, the Company had cash and cash equivalents of $18,668,290 as compared
        to cash and cash equivalents of $16,085,403 at March 31, 2005. The Company
        had a
        working capital deficit of $16,653,724 at September 30, 2005, as compared
        to a
        working capital deficit of $15,919,880 at March 31, 2005, reflecting current
        ratios of 71.15% and 69.23%, respectively.
  Since
        2004, growth of the Company’s pretax earnings continues to outpace by an average
        factor of about 10 times the interest payments over current liabilities,
        demonstrating the Company’s ability to meet interest payment of current
        liabilities with cash from operations. In addition, management believes much
        of
        the bank loans and notes payables booked as current liabilities are readily
        extended in revolving terms.
  Net
        accounts receivable increased to $2,365,950 at September 30, 2005, as compared
        to $1,968,235 at March 31, 2005, an increase of $397,715.
  Inventories
        increased to $6,940,879 at September 30, 2005, as compared to $6,757,021
        at
        March 31, 2005, an increase of $183,858 or 2.72%, primarily as a result of
        increase in raw material purchases.
  The
        Company anticipates that its working capital resources are adequate to fund
        anticipated costs and expenses for the remainder of the fiscal year ending
        March
        31, 2006 by net cash provided by operating activities (or surplus from operating
        cash flow).
  **Investing**
  During
        the six months ended September 30, 2005, the Company utilized $6,078,510
        in
        investing activities, the major components of which were the acquisition
        of
        property and equipment of $650,411, investment in construction in progress
        of
        $5,453,595, and cash paid to related companies of $9,725 During the six months
        ended September 30, 2004, the Company utilized $27,973,806 in investing
        activities, the major components of which were the acquisition of property
        and
        equipment of $939,521, investment in construction in progress of $3,137,952
        and
        cash paid to related companies of $24,108,445.
  **Financing**
  During
        the six months ended September 30, 2005, the Company generated $2,877,897
        in
        financing activities, the major components of which were proceeds from bank
        loans of $1,584,787, and proceeds from notes payable of $1,572,161. During
        the
        six months ended September 30, 2004, the Company generated $20,800,447 in
        financing activities, the major components of which were proceeds from bank
        loans of $2,906,265 and proceeds from notes payable of $17,856,840.
  19
  As
        of
        September 30, 2005, the Company does not have any material commitments for
        capital expenditures or have any transactions, obligations or relationships
        that
        could be considered off-balance sheet arrangements.
  **Macroeconomic
        Conditions and Currency Matters**
  In
        the
        most recent decade, the Chinese economy has experienced sustained periods
        of
        rapid growth as well as occasional elevated rates of inflation or deflation,
        which in turn has resulted in the periodic adoption by the Chinese government
        of
        various corrective measures designed to regulate growth and stabilize consumer
        prices. The success of the Company depends in substantial part on the continued
        growth and development of the Chinese economy.
  Foreign
        operations are subject to certain risks inherent in conducting business abroad,
        including price and currency exchange controls, and fluctuations in the relative
        value of currencies. The RMB is not yet freely convertible into foreign
        currencies, and the ability to convert the RMB is subject to the availability
        of
        foreign currencies. The Company conducts virtually all of its business in
        China
        and, accordingly, the sale of its products is settled primarily in RMB. As
        a
        result, currency fluctuation of the RMB against the USD mainly affect the
        Company’s financial performance when measured in USD. In the event of a
        significant devaluation of the RMB against the USD, the Company’s numbers will
        likely appear proportionally lower than would otherwise, whereas a RMB currency
        appreciation will make these numbers appear larger as measured in
        USD.
  Although
        in the previous decade the RMB experienced significant devaluation against
        the
        USD, the RMB has remained fairly stable since then. In recent months, actually,
        the RMB has been under growing pressure to appreciate against a basket of
        foreign currencies, including the USD. As of September 30, 2005, the exchange
        rate was approximately USD $1.00 to RMB 8.11, about a 2% appreciation from
        the
        year end 2004 exchange rate of about 8.3 RMB yuan to 1 US dollar.
  **Quantitative
        and Qualitative Disclosures about Market Risk**
  The
        Company does not have any market risk with respect to such factors as commodity
        prices, equity prices, and other market changes that affect market risk
        sensitive investments. A 10 point basis change in the Company’s average debt
        interest rate would not have a material effect on the Company’s results of
        operations.
  With
        respect to foreign currency exchange rates, the Company does not believe
        that a
        devaluation or fluctuation of the RMB against the USD would have a detrimental
        effect on the Company’s operations, since the Company conducts virtually all of
        its business in China, and the sale of its products and the purchase of raw
        materials and services are settled in RMB. The effect of a devaluation or
        fluctuation of the RMB against the USD would affect the Company’s results of
        operations, financial position and cash flows, when presented in USD (based
        on a
        current exchange rate) as compared to RMB.
  As
        the
        Company’s debt obligations are primarily short-term in nature, with fixed
        interest rates, the Company does not have any risk from an increase in market
        interest rates. However, to the extent that the Company arranges new borrowings
        in the future, an increase in market interest rates would cause a commensurate
        increase in the interest expense related to such borrowings.
  20
  **OVERVIEW**
  **Item
        2.** **Controls
        and Procedures**
  (a) Evaluation
        of Disclosure Controls and Procedures .
  Our
        management evaluated, with the participation of our Chief Executive and
        Financial Officer, the effectiveness of our disclosure controls and procedures
        as of the end of the period covered by this Quarterly Report on Form 10-QSB.
        Based on this evaluation, our Chief Executive and Financial Officer has
        concluded that our disclosure controls and procedures (as defined in Rules
        13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Exchange
        Act)) are inadequate to ensure that information required to be disclosed
        by us
        in reports that we file or submit under the Exchange Act is recorded, processed,
        summarized and reported within the time periods specified in SEC rules and
        forms. We are developing a plan to ensure that all information will be recorded,
        processed, summarized and reported on a timely basis. This plan is dependent,
        in
        part, upon reallocation of responsibilities among various personnel, possibly
        hiring additional personnel and additional funding. It should also be noted
        that
        the design of any system of controls is based in part upon certain assumptions
        about the likelihood of future events, and there can be no assurance that
        any
        design will succeed in achieving its stated goals under all potential future
        conditions, regardless of how remote.
  (b) Changes
        in Internal Controls .
  During
        the period covered by the Quarterly Report on Form 10-QSB, there were no
        significant changes in our internal controls over financial reporting or
        in
        other factors that have materially affected, or are reasonably likely to
        materially affect, our internal controls over financial reporting.
  **PART
        II**
 **OTHER
        INFORMATION**
  **Item
        1.** **Legal
        Proceedings.**
  None.
  **Item
        2.** **Unregistered
        Sales of Equity Securities and Use of Proceeds**
  On
        July
        15, 2005, pursuant to a Share Exchange Agreement dated as of June 14, 2004
        by
        and among the Company, Thomas Braun, Berlin Capital Investments, Inc, Beams
        Power Investment Limited, Strong Gold Finance Ltd. and Synutra (the “Share
        Exchange Agreement”), the Company issued 48,879,500 shares of its common stock
        in exchange for all of the issued and outstanding shares of Synutra, Inc.,
        an
        Illinois corporation (“Synutra”). Of these, 36,000,000 shares were issued to
        Beams Power Investment Limited and 10,000,000 shares were issued to Strong
        Gold
        Finance Ltd. Beams Power Investment Limited and Strong Gold Finance Ltd.
        previously owned all the shares of Synutra. 2,844,500 shares were issued
        to
        various financial consultants and/or
        their designees. 35,000
        shares were issued to a finder. These securities were issued by the Company
        in
        reliance upon an exemption from registration under Section 4(2) of the
        Securities Act of 1933, as amended.
  **Item
        3.** **Defaults
        Upon Senior Securities.**
  None.
  **Item
        4.** **Submission
        of Matters to a Vote of Security Holders.**
  On
        August 18, 2005, the stockholders of the Company, acting by consent,
        approved a name change of the Company from Vorsatech Ventures, Inc. to Synutra
        International, Inc.
  21
  **Item
        5.** **Other
        Information.**
  None.
  **Item
        6.** **Exhibits**
  31.1  Certification
        pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  32.1  Certification
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  **SIGNATURES**
  Pursuant
        to the requirements of the Securities Exchange Act of 1934, the Registrant
        has
        duly caused this report to be signed on its behalf by the undersigned thereunto
        duly authorized.
  SYNUTRA
                INTERNATIONAL, INC.Dated:November
                  10, 2005
              By:
              /s/ Liang
                ZhangName: Liang
                ZhangTitle:Chief
                  Executive Officer
  22