`U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                               Annual Report Under
                           Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                            For the fiscal year ended
                                December 31, 2002

                        Commission file number 000-33119

                               YI WAN GROUP, INC.
             (Exact name of registrant as specified in its charter)

                 Florida                                  33-0960062
(State or other jurisdiction of incorporation) (IRS Employer Identification No.)

        No. 189 Middle Min Zhu Road
         Jiaozuo, Henan, P.R. China                    86-391-262-3227
    (Address of principal executive offices)    (Registrant's telephone number,
                                                      including area code)

                             All communications to
                          Brenda Lee Hamilton, Esquire
                         Hamilton, Lehrer & Dargan, P.A.
                          2 E. Camino Real, Suite 202
                            Boca Raton, Florida 33432
                                 (561) 416-8956

          (Former name and former address if changed since last report)

           Securities registered pursuant to Section 12(g) of the Act:

    Title of each class                Name of each exchange on which registered
 Common Stock, $.__ Par Value                           None

     Check whether the issuer (1) 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 |_|

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation is not contained herein, and will not 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-K. |_|

     The issuer's revenues for its most recent fiscal year were $13,901,421.

     As of December 31, 2002, there were 16,506,250 shares of our common stock
issued and outstanding.

     We have incorporated by reference, our Form 10 Registration Statement.







                       TABLE OF CONTENTS TO ANNUAL REPORT
                                  ON FORM 10-K
                          YEAR ENDED DECEMBER 31, 2002

                                     PART I

Item 1.     Description of Business..........................................3
Item 2.     Description of Property.........................................48
Item 3.     Legal Proceedings...............................................51
Item 4.     Submission of Matters to a Vote of Security Holders.............51

                                     PART II

Item 5.     Market for Common Equity and Related Stockholder Matters........52
Item 6.     Selected Financial Data.........................................53
Item 7.     Management's Discussion and Analysis of
               Financial Condition and Results of Operation.................54
Item 7A.    Quantitative and Qualitative Disclosures about Market Risk......60
Item 8      Financial Statements and Supplementary Data.....................61
Item 9      Changes in and Disagreements on Accounting and Financial
               Disclosure...................................................83

                                    PART III

Item 10.    Directors and Executive Officers of the Registrant..............84
Item 11.    Executive Compensation..........................................89
Item 12.    Security Ownership of Certain Beneficial Owners and Management..91
Item 13.    Certain Relationships and Related Transactions..................93
Item 14.    Controls and Procedures.........................................94
Item 15.    Exhibits, Financial Schedules, and Reports on Form 8-K..........95


                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)



                                       2


Forward-Looking Statements This annual report on Form 10-K contains forward
looking statements. The words or phrases "would be," "will allow," "intends to,"
"will likely result," "are expected to," "will continue," "is anticipated,"
"estimate," "project," or similar expressions are intended to identify
"forward-looking statements". Actual results could differ materially from those
projected in the forward looking statements as a result of a number of risks and
uncertainties. Statements made herein are as of the date of the filing of this
Form 10-K with the Securities and Exchange Commission and should not be relied
upon as of any subsequent date. Unless otherwise required by applicable law, we
do not undertake, and we specifically disclaim any obligation to update any
forward-looking statements to reflect occurrences, developments, unanticipated
events or circumstances after the date of such statement.

                                     PART I

Item 1. Description of Business

General

HOW WE ARE ORGANIZED
We were incorporated in Florida in May 1999. We are authorized to issue
50,000,000 shares of common stock, of which 16,506,250 shares of common stock
are issued and outstanding. We are authorized to issue 20,000,000 shares of
preferred stock, of which no shares are issued and outstanding.

We were incorporated to explore the feasibility of acquiring interests in
several businesses located in China in which our president, Mr. Cheng Wan Ming,
had an ownership interest. On January 1, 2000, we acquired controlling equity
interests in three such China registered companies, which had ongoing business
operations in the hotel, agriculture, and communications industries in China.
Since our inception, neither we, nor any of our three subsidiaries, have ever
been subject to any bankruptcy, receivership or similar proceedings. Our former
agriculture subsidiary and our hotel and communications subsidiaries are
described below:

Jiaozuo Yi Wan Hotel Co., Ltd.
On January 1, 2000, we acquired a 90% controlling interest in Jiaozuo Yi Wan
Hotel Co. Ltd., a Sino-Foreign Joint Venture company that was originally formed
in China in 1996. The remaining 10% equity interest in our hotel subsidiary is
owned by Shun'ao Industry and Commerce Company, a company registered in China.
Our president has a 41.7% ownership interest in Shun'ao Industry and Commerce
Company. Our hotel subsidiary provides upscale lodging, food and beverage,
entertainment, and conference and meeting services at:

Jiaozuo Yi Wan Hotel Co., Ltd.
No.189. Middle Min Zhu Road
Jiaozuo, Henan - P.R. China 454150
Tel: 86-391-262-3227
Fax: 86-391-262-3767
Email: YIWAN@PUBLIC2.LYPTT.HA.CN



                                       3


Quinyang Yi Wan Hotel Co., Ltd. On March 20, 2001, we entered into a joint
venture agreement with the Qinyang Hotel. This agreement provides for the
establishment of a Joint Venture Limited Liability Company, the Qinyang Yi
Wan Hotel Co., Ltd., which operates the Quinyang Yi Wan Hotel in Qing Yang
City, Henan Province, China. The joint venture agreement provides that the
joint venture will provide up-scale lodging, food and beverage,
entertainment and meeting and conference facility services. We entered into
this joint venture agreement with Qinyang Hotel (OLD QINYANG), a third
party to set up Qinyang Yi Wan Hotel Co., Ltd. According to the joint
venture agreement, the registered capital of QINYANG is approximately
$2,413,389 (RMB(Y)20,000,000). YWG will contribute approximately $1,930,711
(RMB(Y)16,000,000) in exchange for an 80% equity interest in QINYANG. OLD
QINYANG will contribute approximately $361,906 (RMB(Y)3,000,000) in the
form of a building and land use right and $120,672 (RMB(Y)1,000,000) in
cash, in exchange for a 20% equity interest in Quinyang Yi Wan Hotel Co.
Ltd. The registered capital amount of $2,413,389 (RMB(Y)20,000,000) has
been contributed by each joint venture partner. We have contributed our
share of capital of $1,930,711 (RMB(Y)16,000,000) from funds generated by
our Jiaozuo Yi Wan Hotel Division and proceeds generated from the sale of
the assets of our agriculture subsidiary.

On June 3, 2002, the Jiaozuo Foreign Trade and Economy Cooperative Bureau issued
a temporary license to Qinyang Yi Wan Hotel Co., Ltd; however, the official
license will not be issued until the Jiaozuo Foreign Trade and Economy
Cooperative Bureau completes an audit of the capital contribution to verify
whether the full capital requirement of $2,413,389 (RMB 20,000,000) has been
met. Quinyang Yi Wan Hotel Co., Ltd or the Qinyang Hotel are located at:

Quinyang Yi Wan Hotel Co., Ltd./Qinyang Hotel
53 West Huai Fu Road Road
Qing Yang City
Henan Province, Cbina
Tel: 86-391-566-9000
Fax: 86-391-566-9006
Email: yiwan@public2.lyptt.ha.cn



Yi Wan Maple Leaf High Technology Agriculture Developing Ltd. Co.
Maying Village, Zhandian Town, Wuzhi County
Jiaozuo, Henan - P.R. China 454971
Tel:  86-391-759-1632
Fax: 86-391-759-1632
Email: YWCWM1@PUBLIC2.LYPTT.HA.CN


                                       4


As described in more detail on page 8 of this Form 10K, our agriculture
subsidiary ceased operations in December 2001. In December 2002, we sold our
agriculture subsidiary to a third party.

Shun de Yi Wan Communication Equipment Plant Co. Ltd. On January 1, 2000,
we acquired 100% of the equity interest in Shun de Yi Wan Communication
Equipment Plant Company, Ltd., which in 1993 was originally established as
a foreign investment joint venture in China. Our telecommunications
subsidiary, manufactures exchange distribution frames equipment, and is
located at:

Shun de Yi Wan Communication Equipment Plant Co. Ltd.
No 3., 5th Street Fengxiang Road, Daliang Town
Shun de, Guangdong - P.R. China 528300
Tel: 86-765-222-0984, 222-2097
Fax: 86-765-223-8363
Email: gzsdywt1@pub.sdnet.gd.cn

Our wholly owned foreign telecommunications subsidiary is classified in China as
a Wholly Foreign Owned Enterprise company. Both Foreign Invested Enterprise
Joint Ventures and Wholly Foreign Owned Enterprise companies in China are
referred to as Foreign Invested Enterprise companies.

Each of our subsidiaries is registered as independent Chinese registered limited
liability companies, with legal structures similar to regular corporations and
limited liability companies organized under state laws in the United States. The
respective Articles of Association of our two Foreign Invested Enterprise hotels
and agriculture subsidiaries provide for a 30 year term while our
telecommunications company provides for a 15 year term. The term of our
agreements and business licenses for our two joint venture hotel companies are
30 years. The term can be extended or terminated prior to the date of expiration
if unanimously decided by the board of directors of those subsidiaries and
approved by the original examination and approval authority in China. We control
the board of directors for our joint venture hotel companies. In addition, we
have the ability to select six of the seven board members for our hotel
subsidiaries. The operational, management and corporate governance decisions of
the board are by a simple majority, except for the revision of the Articles of
Association, the increase or assignment of the registered capital, the business
combination of the joint venture and, with certain limitations, the termination
of the joint venture, which require a unanimous vote.

The term of our business license for our Wholly Foreign Owned Enterprise
telecommunications company is 15 years. The term of this venture may be
terminated prior to the date of expiration if unanimously decided by the board
of directors and approved by the original examination and approval authority. We
own 100% of the equity interests of the subsidiary and control the selection of
its board of directors.


                                       5


Our subsidiaries operate as a separate division, as well as a separate business
segment, as defined by generally accepted accounting principles. Detailed
financial information concerning the revenues, income and assets of each of our
business segments is provided in our financial statements and accompanying
notes. Accordingly, we conveniently refer to the subsidiaries as:
o    hotel division or hotel company;
o    agriculture division or agriculture company; and
o    Telecommunications Division  or telecommunications company.

ORGANIZATIONAL HISTORIES OF OUR SUBSIDIARY COMPANIES

Prior to our acquisition of our hotel, former agriculture, and
telecommunications companies, these companies were owned by:
o    Shun'ao Industry and Commerce Company, a company established under the laws
     of the People's Republic of China;
o    Canadian Maple Leaf International, Inc., a company established under the
     laws of Canada and which had an ownership only in our agriculture company;
o    Marco Wan Da Construction, a company established under the laws of Macao, a
     Portuguese overseas territory located in the South China area; and
o    Shun De Zhiyuan Developing Co. (relating to Telecommunications only), a
     company established under the laws of the People's Republic of China.

As a result of the below-described transactions, all of the individual owners of
Shun'ao Industry and Commerce Company are also our shareholders. In addition, as
a result of the below-described transactions we have the following ownership
interests in our subsidiaries:
o    90% ownership in our Jiaozuo Yi Wan hotel company;
o    until December 2002, a 90% ownership in our agriculture company; and
o    100% ownership in our telecommunications company.
O    80% ownership in our Qinyang Yi Wan Hotel company.

Jiaozuo Yi Wan Hotel Co., Ltd. Our Jiaozuo Yi Wan Hotel division was originally
formed in December 1996, as a Foreign Invested Enterprise Joint Venture in the
Jiaozuo City region of Henan Province, China. Originally, Shun'ao Industry and
Commerce Company, a China based company, owned a 70% equity interest in the
hotel company, and Marco Wan Da Construction, a company established under the
laws of Macao, owned a 30% equity interest. All of the individual owners of the
China and Macao based companies are also our shareholders. In November 1999, the
China and Macao based companies agreed to transfer 90% of their total equity in
the hotel company to us, with 60% being transferred by the China based company
and 30% being transferred by the Macao based investor. The amended articles of
association, the joint venture contract and the equity transfer agreement among
the original joint venture parties and us provide that we assume the total
capital contribution requirement of the foreign investor in the amount of RMB
7,500,000, approximately US $906,000, and a portion of the China based company's
capital contribution requirement in the amount of RMB 15,000,000, approximately
US $1.8 million. In addition, the joint venture contract, the articles and the
equity transfer agreement require that an additional investment of approximately
US $3 million be made into the hotel company above and beyond the joint
venture's registered capital and that we pay our share of the total investment
(approximately US $2.7 million) within six months of the issuance of a new
business license for the joint venture. These transfers were approved by the
Chinese approval authorities; thereafter, the equity split has been 10% for the
China based company, while we have a 90% interest. The original parties in the
Hotel joint venture made the required total investment and registered capital
contributions to the joint venture. Accordingly, our obligations to contribute
to registered capital and the total investment in the Hotel joint venture have
been satisfied by our assumption of 90% of the equity interests of the original
partners. Our obligations to the original parties under the equity transfer
agreement, however, amount to RMB 22,500,000 or approximately US $2.7 million
owed to the original partners to the Hotel joint venture for their transfer to
us of 90% of the joint venture equity interests.


                                       6



The Hotel joint venture has recorded a payable of RMB 49,000,000 or
approximately US $5.2 million to the original parties in the joint venture. This
payable is the result of the reduction of the total investment in the joint
venture from the original RMB 99,000,000 or approximately $11.9 million, which
was paid in full, to RMB 50,000,000 or approximately US $6 million in the
amended joint venture.

Qinyang Yi Wan Hotel Co., Ltd. On March 20, 2001 we entered into a joint venture
agreement with Qinyang Hotel providing for the establishment of a Joint Venture
Limited Liability company, the Qinyang Yi Wan Hotel Co., Ltd., which operates
the Quinyang Yi Wan Hotel in Qing Yang City, Henan Province, China. On June 3,
2002, the Jiaozuo Foreign Trade and Economy Cooperative Bureau issued a
temporary license to Qinyang Yi Wan Hotel Co., Ltd; however, the official
license will not be issued until the Qinyang Yi Wan Hotel Co., Ltd. meets the
registered capital requirement of $2,413,389 (RMB 20,000,000). Although the full
registered capital requirement of $2,413,389 (RMB 20,000,000) has already been
made, a verification report on the capital contribution must be made by the
Jiaozuo Foreign Trade and Economy Bureau, which is not expected until
approximately May 2003.

Jiaozuo Yi Wan Maple Leaf High Technology Agriculture Developing Ltd. Co. Our
former agriculture company was originally formed in April 1997, as a Foreign
Invested Enterprise Joint Venture, by Shun'ao Industry and Commerce Company, a
China based company, and Canadian Maple Leaf International Inc., a company
established under the laws of Canada, in the Jiaozuo City region of Henan
Province, China. The China based company and the Canada based company originally
received a 51% and 49% equity interest, respectively. In November 1999, both
equity owners agreed to transfer 90% of the total equity of the agriculture
company to us, with 41% and 49% transferred by the China based company and the
Canada based company, respectively. The amended articles of association, the
joint venture contract and the equity transfer agreement among the original
joint venture parties and us at the time provided that we assume the total
capital contribution requirement of the Canada based company in the amount of
RMB 20,000,000, or approximately US $2.42 million, which was not paid by the
Canadian party to the Farm joint venture. In addition, the equity transfer
agreement required us to pay to the China based company a portion of the
contribution to registered capital made by that company in the amount of RMB
16,900,000, or approximately US $2 million. The equity transfer agreement
requires that we pay our share of the registered capital (approximately US $2.4
million) within one year of the issuance of a new business license for the joint
venture. The articles and the joint venture contract, which reflect the equity
transfers, were approved by the appropriate Chinese approval authorities;
thereafter, the equity split of this company has been 10% for the China based
investor, Shun'ao Industry and Commerce Company, while we have a 90% interest.


                                       7


A new business license was issued for the agriculture company on June 7, 2000.
Until June 6, 2001, we failed to make any contribution payments towards our
share of the registered capital. On June 7, 2001, in accordance with a unanimous
written resolution of our agriculture company's board of directors, we received
an extension to June 7, 2002 to make the required payments.

During approximately October 2001, as a result of highway construction, the farm
operated by our then agriculture company, had lost it sources of natural water
necessary to raise and grow the farm's products. The farm ceased its operations
in December 2001. In December 2002, we completed the sale of the farms assets to
a third party and recorded a loss of $1,323,359. This sale transaction was
approved by the Jiaozuo Foreign Trade Economic Cooperative Bureau. In connection
with the sale, the parties from which we originally purchased the agriculture
company were paid in full and we received $522,339 in cash and a note receivable
of $1,218,792. On December 26, 2002, the agriculture subsidiary ceased to exist
as one of our subsidiaries.

Shun de Yi Wan Communications Equipment Plant Co., Ltd.
Our telecommunications company was originally formed in Shun de City, Guangdong
Province, China, as a Foreign Invested Enterprise Joint Venture in September
1993, by Shun de Zhiyuan Developing Co., a China based company, and Marco Wan Da
Construction, a Macao based company. In March 2000, both the China based
investor and the Macao based company agreed to transfer 100% of the equity in
the telecommunications company to us, with 35% and 65% being transferred by the
China based company and the Macao based company, respectively. The articles of
association provide that we assume the total capital contribution requirements
of the enterprise in the amount of US $1,500,000, approximately RMB 12,4000,000.
In addition, the articles require that an additional investment of approximately
$500,000 be made into the telecommunications company, above and beyond that
company's registered capital, and that we pay our share of the total investment
within one year of the issuance of a new business license for the joint venture.
The articles, which reflect the transfers and establish our telecommunications
company as a Wholly Foreign Owned Enterprise, were approved by the appropriate
Chinese approval authorities; thereafter, we own 100% of the telecommunications
company.

The original parties in the Telecommunications joint venture made the required
and registered capital contributions of US $1,500,000 to the joint venture.
Accordingly, the obligation to contribute to registered capital in this joint
venture has been satisfied. Pursuant to the articles of association, we have an
obligation to contribute an additional investment of US $500,000 to the joint
venture.


                                       8


A new business license was issued for our telecommunications company on June 22,
2000. Until approximately June 21, 2001, we failed to make the required
additional investment contribution to our telecommunications company. On June
22, 2001, in accordance with a unanimous written resolution of our
Telecommunications Company's board of directors, we received an extension to
June 22, 2002 to make this payment. On June 22, 2002, in accordance with a
unanimous written resolution of our Telecommunications Company's Board of
Directors, we received another extension to June 22, 2003.

BUSINESS

DESCRIPTION OF OUR BUSINESS OPERATIONS BY DIVISION

THE JIAOZUO YI WAN HOTEL CO., LTD.
The Jiaozuo Yi Wan Hotel Co., Ltd., our hotel division, manages and operates an
upscale hotel conference and entertainment facility in Jiaozuo City, Henan
province. This division focuses on providing lodging, food and beverage,
entertainment, and conference and meeting products and services.

The significant events relating to the hotel company's history include:
o    In September 1996, the hotel company purchased the Tengfei Hotel located in
     the center of Jiaozuo City from the city government of Jiaozuo

o    In  September 1996, the hotel company began extensive renovation and
     remodeling of its hotel's main building and construction of a 150,695
     square foot lobby, commercial and common space addition to the main
     building. All renovation and construction was completed in October 1996.

o    In 1997, the hotel company began recruiting personnel and developing
     western style operational and management training systems.

o    In 1997, the Jiaozuo Yi Wan Hotel received certification from the China
     National Tourism board.

Products and Services
Our hotel has the following primary product and service offerings:
o    Lodging operations (including conference and meeting facilities);
o    Food and beverage operations; and
o    Entertainment operations.

The hotel also has an on-site travel agency, bank, business center, and sundries
and gift store.


                                       9


Lodging Operations. The hotel has a total of 158 guest-sleeping rooms on 22
floors consisting of 131 standard guestrooms and 27 suites. All guest rooms are
equipped with either double or queen size beds, two telephones, remote
controlled television, full mini-bar, work station, large closets, in-room
climate control, sitting area and large working desk. Bathrooms include shower
and tub, western style toilet, spacious vanity, and complimentary travel
sundries. Suites include larger sitting and work areas, a second television, and
turn-down service. Executive suites feature all of the above as well as large
partitioned living room-style sitting area, two bathrooms, including one with a
Jacuzzi tub, fruit baskets, and two daily fresh flower arrangements.

The hotel also has 12 rooms dedicated to meeting and conference space. These
rooms service small, medium, and large sized conferences and meetings, and
include:
o    Nine small meeting rooms capable of seating up to 20 people. Seven of these
     rooms have multi-functional seating configurations.  Two rooms have large,
     fixed position oval conference tables with side gallery space for
     individual chairs.  All rooms have climate control and private bathrooms.

o    Two conference rooms within the hotel suitable for medium sized meetings of
     up to 60 people. These rooms feature large fixed positioned conference
     tables, built-in amplification equipment, and ample side gallery space for
     additional meeting attendees or small group break-out space.  These rooms
     also have climate control and private bathrooms.

o    One large, 8,180 square foot, meeting room capable of seating 460 people is
     configured in an auditorium style with a sloping floor and large front
     presentation stage.  The room features built-in sound system, lighting
     capabilities, built-in multi-lingual interpretation equipment, and rear and
     front screen projection capability.  The room has an attached large
     reception room and a separate, smaller, private VIP reception room. We
     believe that this meeting room is the largest non-government room of its
     kind in the province.


                                       10


Food and Beverage Operations. The hotel has four food and beverage facilities:
two full service restaurants, a buffet coffee shop, and a lobby bar. The
combined capacity of all food and beverage service facilities is 1,500 people,
which we believe to be the largest single location of food and beverage
facilities in the city of Jiaozuo. All food and beverage facilities are open to
the public.
o    Main Floor Restaurant. The main floor restaurant serves 700 people. Its
     decor is considered traditional Chinese and it is comprised of a large main
     dining room with performance stage, stand-alone bar, two separate banquet
     rooms and 15 private suite dining rooms. All suites have deluxe stereo and
     karaoke equipment and a private bathroom. Each banquet room has a
     performance stage and sound system. The restaurant specializes in serving a
     unique blend of Cantonese and Henan style cuisine. Additionally, the
     restaurant has a separate dining area serving 150 people with facilities
     for private table hot pot dining, a style of dining that requires a table
     with a center gas flame burner, and overhead table exhaust fan.

o    17th Floor VIP Restaurant. We completed construction of a new restaurant in
February 2002 at which time it became operational. This restaurant is located at
the 17th floor of the main building of the Jiaozuo Yi Wan Hotel and offers a
city view to dining guests. This restaurant is a VIP dining facility with 5
private suites ranging in capacity from 10 to 16 people. Each suite contains
separate sitting areas, large color television, stereo system, karaoke
equipment, and a private bathroom. Its decor is traditional Chinese. The
restaurant specializes in the creation and presentation of haute culture,
gourmet cuisine that is fresh, and showcases the hotel's signature culinary
style of blended Cantonese and Henan flavors, with special attention to artistic
and theatrical presentation of each dish.

o    VIP Restaurant.  The second floor restaurant is a VIP dining facility with
     24 private suites ranging in capacity from 10 to 30 people.  Each suite
     contains a separate sitting area, large color television, high quality
     stereo system, karaoke equipment, and private bathroom.  The restaurant
     specializes in the creation and presentation of haute couture, gourmet
     cuisine that is fresh; and showcases the hotel's signature culinary style
     of blended Cantonese and Henan flavors.  Special attention is given to
     artistic and theatrical presentation of each dish.  Each course of the meal
     is presented and served to each guest individually.

o    Buffet Coffee Shop.  The buffet coffee shop is located on the main floor
     adjacent to the hotel lobby and serves 50 people.  The decor is western
     style, with the restaurant open 24 hours a day. It offers full breakfast,
     lunch, and dinner buffets of western and Asian style dishes for each meal.


                                       11


Entertainment Operations. Our hotel division operates the following three
entertainment facilities, which are open to the public:

o    Night Club. The nightclub is designed in a Las Vegas club style format with
     a large floor show performance area and a moveable front stage. The
     facility has computerized light show capabilities as well as a sound system
     with special effects capabilities. The floor show viewing area seats 330
     people through a combination of floor seating, private booth seating, and
     private balcony deluxe booth seating. The nightclub is located on the third
     floor of the main building and specializes in floor show entertainment as
     well as celebrity entertainment events, which change weekly. The club
     offers 19 private karaoke suites suitable for 4-10 people. Each suite
     includes a serving area, karaoke equipment, and private bathroom.

o    Bowling Alley-Game Room. A 10 lane, Canadian hardwood bowling alley is
     located on the second floor. The bowling alley system has automatic
     computerized scoring and overhead display screens for each lane.  The
     bowling alley sponsors corporate and public tournaments; and provides
     lessons and items for purchase through a pro-shop. In conjunction with the
     bowling alley is a large game room offering snooker, pool, and ping-pong
     tables, and a wide variety of computer simulation games. A small snack bar
     provides pre-packaged food and beverage items. The bowling alley and game
     rooms are open 24 hours a day, seven days a week.

o    Sauna-Health Center. The sauna-health center is located on the second floor
     of the main building.  It offers beauty salon, acupuncture, and massage
     services, as well as self-guided health relaxation activities, such as
     soaking tubs, whirlpools, and saunas. The facility includes a beauty salon,
     waiting lounge, changing facilities, shower area, three large 15-person
     soaking pools, two large Jacuzzis, wet and dry multi-person saunas, 20
     private resting rooms, 20 semi-private massage rooms, large quiet room, 30
     private massage suites, and five executive suites consisting of private
     toilet and shower, sauna, Jacuzzi, massage area, and resting area. The
     sauna-health center has 100 massage beds and a total capacity of 150
     people.

                                       12



Suppliers The raw materials that our Yi Wan hotel division uses are many and
varied and common to all hotel and entertainment facilities. A general sampling
of these items and their sources are as follows:

------------------------------------------ -----------------------------------------------------
               Item                                     Source

------------------------------------------ -----------------------------------------------------

HOTEL DIVISION

Cigarette/beverage                         Dong Hui Wholesale Shop, Jiaozuo City
------------------------------------------ -----------------------------------------------------
------------------------------------------ -----------------------------------------------------
Seafood                                    Xingli Haiyang Seafood Shop, Zhengzhou City
------------------------------------------ -----------------------------------------------------
------------------------------------------ -----------------------------------------------------
Seafood                                    Jianwei Seafood Shop, Zhengzhou City
------------------------------------------ -----------------------------------------------------
------------------------------------------ -----------------------------------------------------
General cooking ingredients                Guangdong Lawei Shop, Zhengzhou City
------------------------------------------ -----------------------------------------------------
------------------------------------------ -----------------------------------------------------
Gas                                        Jiaozuo Branch Office of Henan Province Petroleum
                                           Company. Jiaozuo city
------------------------------------------ -----------------------------------------------------
------------------------------------------ -----------------------------------------------------
Wines/Beer                                 Henan Jinfeng Jiuhang Corporation Ltd.Zhengzhou city

------------------------------------------ -----------------------------------------------------
------------------------------------------ -----------------------------------------------------
Seafood                                    Haiyang Da Shi Jie Shop, Jiaozuo City
------------------------------------------ -----------------------------------------------------
------------------------------------------ -----------------------------------------------------
General cooking ingredients                Yongsheng Ganxian Shop, Jiaozuo City
------------------------------------------ -----------------------------------------------------
------------------------------------------ -----------------------------------------------------
Seafood and cooking ingredients            Nu's Shell Fish Company, Henan Province. Jiaozuo
                                           city
------------------------------------------ -----------------------------------------------------
------------------------------------------ -----------------------------------------------------
Wine/Beer                                  Jinshan Brewery, Henan Province. Zhengzhou city
------------------------------------------ -----------------------------------------------------
------------------------------------------ -----------------------------------------------------
Cigarette/beverage                         Zhenhua Shop, Jiaozuo City
------------------------------------------ -----------------------------------------------------
------------------------------------------ -----------------------------------------------------
General cooking ingredients                Maoyuan Gahuo Shop. Jiaouao city
------------------------------------------ -----------------------------------------------------
------------------------------------------ -----------------------------------------------------
General cooking ingredients                Jiaonan Market, Jiaozuo City
------------------------------------------ -----------------------------------------------------
------------------------------------------ -----------------------------------------------------
Seafood                                    Wuyang Seafood Wholesale, Zhengzhou City
------------------------------------------ -----------------------------------------------------

The above suppliers to materials to our hotel division are located within an
approximately 200 mile radius of the hotel

Our hotel division maintains a 10-day supply of common consumable goods, such as
alcohol products, guest room sundries and similar products, which is considered
standard industry practice. We believe that there are a number of alternative
suppliers for all of these products.


                                       13


Seasonal Variations
Our hotel division experiences minor seasonal variations in overall revenue:

o    Lodging Operations.  Lodging revenue peaks during the period of April
     through October. This time coincides with peak vacation travel season and
     the period of April through June when many Chinese companies hold bi-annual
     company meetings.

o    Food and Beverage Operations.  Food and beverage revenues peak during the
     period of January through April. This is the time in the lunar calendar
     traditionally associated with the Chinese New Year.

o    Entertainment Operations.  Entertainment revenues experience no seasonal
     variations.

o    Conference and Meeting Operations.  Conference and meeting revenues peak
     during the periods from April through June and November through December.
     These periods coincide with the times when many Chinese companies hold
     their biannual meetings and product shows.


Prior future growth plans pertaining to the Jiaozuo Yi Wan Hotel no longer being
pursued from our inception until approximately June 2002, our Jiaozuo Yi Wan
Hotel Division was going to become involved in the following projects:
o    Athletic Club. Our hotel division was researching the construction within
     the existing space of the main building fifth floor, a full-service,
     state-of-the-art western-style athletic club, which would have included:
     o    Handball and racquetball courts
     o    Indoor lap pool, locker room facilities
     o    Aerobics room with shock resistant flooring
     o    Resistance weight training equipment
     o    Aerobic conditioning equipment
     o    Training center
     o    Lounge area
     o    Athletic pro-shop
     o    Cafe style juice bar

o    Penthouse Suite. Our hotel division was researching design options for
     constructing within the existing space of the 21st and 22nd floors of the
     main building a high quality Presidential Suite. The suite would have
     included:
     o    Indoor pool
     o    Atrium
     o    Meeting conference room
     o    Roof garden
     o    Living room and dining rooms suitable for reception style entertaining
     o    Deluxe kitchen
     o    Jacuzzi
     o    Wet and dry saunas
     o    Private secured access
     o    Private balcony
     o    Two guest rooms

o    Training Center.  Our hotel division was researching the feasibility of
     creating a hotel and restaurant management and operation training center.
     The program would have utilized the proven training techniques of the Yi
     Wan developed training systems.


                                       14


In approximately June 2002, based on our research, we decided not to further
pursue any plans to construct or operate an athletic club, penthouse suite, or
establish a training center, and we have no current plans to do so. We decided
that in light of the costs involved in these plans and the potential returns
from such operations, or lack thereof, our future growth plans were better
served by: (a) establishing and thereafter operating what is now our 17th Floor
VIP restaurant; and (b) pursuing the future plans detailed below under Potential
Future Growth and Operations.

Potential Future Growth and Operations

Our Jiaozuo Yi Wan Hotel is involved in a number or projects scheduled for
completion within the next two years. These projects are in the development
stage and are subject to further research, and accordingly, may never be
completed. These include:

O    New Hotel Restaurant - We are in the process of constructing a new
     restaurant on the 16th floor of the Jiaozuo Yi Wan Hotel.  We intend to
     complete the construction of this restaurant and begin its operations by
     December 2003.  This restaurant will serve only traditional Chinese food.

o    Restaurant Expansion. Our Jiaozuo Hotel Division is researching the
     feasibility of opening one restaurant in Zhengzhuo City and one restaurant
     in Beijing. Our hotel division is researching, and has discussed with a
     number of interested parties, the terms of site specific management and
     ownership, including acquisition, franchise, partnership, and management
     agreement, regarding these possible restaurant openings. Both restaurants
     would bear the Yi Wan name and specialize in a unique blend of Guangdong
     and Henan style cuisine. Both restaurants would target up-scale, urban
     customers. We have not entered into any specific agreements regarding a
     restaurant opening and there are no assurances that we will be successful
     in securing any agreements relating to any such opening.

o    Lodging Expansion. Our hotel division is researching the feasibility of
     hotel expansion through franchising the Yi Wan name and our
     hotel-restaurant operating systems. The Jiaozuo Industrial Institute is
     working with hotel management to draft the initial franchise offering
     framework. The target market for franchise operations would be formerly
     government owned hotel properties in the northern central provinces.

o    Lodging Association. Our hotel division is researching the feasibility of
     joining an international hotel association such as "Leading Luxury Hotels
     of the World" or similar association to increase the recognition of our
     hotels and our business to other countries.


                                       15


If we are successful in completing these projects and implementing them into our
operations, we will be required to hire the following additional employees:

Restaurant Expansion:
5 managers
60 employees

Lodging Expansion:
3 managers
3 employees

Our Market
Our hotel is located in the metropolitan city of Jiaozuo, Henan province, and
considers the city of Jiaozuo and all communities within a 30-mile radius to be
its primary market. Information regarding this metropolitan area is contained in
the Market Section relating to our Agricultural Division described above.

Our Jiaozuo hotel division has two primary target markets:
o    Travelers
o    Local professionals.

Our "travelers" market includes individual business travelers, individual
leisure travelers, and group professional travelers. Our "local professionals"
market includes local individual business and government professionals, and
groups of professionals. In China, there are many conferences involving various
groups to exchange ideas and share study results, including marketing seminars
and fairs and exhibitions from different industries, city-wide, province-wide
and nationwide.


                                       16


Examples of conferences which were held at our Jiaozuo Yi Wan Hotel are:

Meeting held by government agencies:

o        Software Development Group of the National Department of Taxation
         Conference, 300 people

o        Northern China Postal and Telecommunication Conference, 450 people

Meetings held by companies:

o        New Products News Conference by Henan Tire Corporation, 420 people

o        Jiaozuo Commercial Bank Board of Directors Meeting, 80 people

Product exhibit and sales meeting:

o        Guangdong Bu Bu Gao Company Products Promotion Conference, 200 people

o        Henan Province Bi He Tian Yuan Company Products Sales Meeting, 350
         people

Seminars:

o        Henan Jin Bo Electric Cable Factory Technological Research Conference,
         120 people

o        Health Organization of Jiaozuo City Research Conference, 90 people

Our Jiauzuo Yi Wan Hotel Division uses a variety of methods to reach its
customers, including advertising and promotional events as described below.

Advertising. Our hotel division conducts extensive product promotional
advertising in several venues:
o    Local television advertising
o    Airport and train station billboards
o    City promotional materials
o    Local print media
o    On-site point-of-purchase

Promotional Events. Promotional events are chiefly coordinated through our
Jiauzuo Yi Wan Hotel Division's sales department in conjunction with its
entertainment and food and beverage operations. Primary on-going promotional
events include city league bowling tournaments, corporate bowling tournaments,
big name celebrity entertainment event ticket give-away, regional or national
cuisine tasting, and other culinary events.

Charitable Giving and Sponsorship. Our Jiauzuo Yi Wan Hotel Division promotes
its hotel by corporate sponsorship of charity events and donations to local
philanthropic efforts.


                                       17


Competition
The hotel industry in China and, in particular, the Henan province is highly
competitive. Within the primary market, there are nine hotels licensed by the
government to accept foreign guests. Hotels are rated by the National Tourism
Administration in the following areas: fitness, maintenance of fitness,
sanitation, service level, and guest satisfaction. The highest rank is five
stars. The Jiaozou Yi Wan Hotel is the only four-star-rated hotel in the primary
area. There are two three-star-rated hotels in the primary area. For example,
Hilton and Holiday Inn Grand are rated as five stars, which meet the
international highest standard. Three star hotels are similar to Holiday Inn
Express. Hotels rated with three stars and above are permitted to accept foreign
tourists. The Jiaozou Yi Wan Hotel obtained the title Appointed Tourist Unit
issued by the Travel & Tourism Bureau of Henan Province as early as January
1997, thereby permitting it to receive foreign travelers.

Competition Relating to our Lodging Operations
Our Jiaozuo Yi Wan Hotel Division's two main competitors are the Jiaozuo Yueji
Hotel and Jiaozuo Shanyang Hotel. The Jiaozuo Yueji Hotel has 110 guest rooms
and the Jiaozuo Shanang Hotel has 148 guest rooms. Both of these hotels are
government owned and operated and have received a three-star rating. These
hotels offer the following services and products:
o    Full service restaurant (less than 200 person capacity)
o    Beauty parlor, business center
o    Sundries and gift store
o    Night club and karaoke suites (150-200 person capacity)
o    Massage service
o    Small and medium sized meeting and conference rooms (less than 100 person
     capacity)

These competitors engage in some advertising efforts and compete primarily for
price sensitive travelers, including budget business, leisure, and group
travelers. We also believe that our Hotel Division has the ability to favorably
compete against these hotels within its primary markets for the following
reasons:
o    Higher quality guest room physical condition, due to recent renovation
o    We believe that these competing hotels are in need of overhaul and
     renovation
o    Cleaner guest rooms
o    Higher number of in-guest room amenities
o    Higher quality peripheral hotel services (restaurants, entertainment,
     meeting rooms)

Our Jiaozuo Yi Wan Hotel Division believes that it would take substantial effort
for these competitions to match our lodging product.


                                       18


Competition Relating to our Food and Beverage Operations
Our Jiaozuo Yi Wan Hotel Division offers what it considers to be a fresh and
innovative fusion blend of Cantonese and Henan style cuisines. This style has
become its culinary signature and all menus in each of the three food and
beverage facilities reflect this central theme.

To support this strategy, this division has hired 12 chefs from Guangdong
and 16 from Henan. Two chefs are designated solely for the production of dim
sum, a Guangdong specialty.

To stimulate the generation of new menu items, this hotel division requires each
chef to create one new menu item each month and to daily meet and greet a
specific number of guests. This program is known as the Chef New Product
Development Program. Chefs are motivated to create new menu items through a
bonus system and promotion options. To our knowledge, no other competitor has a
similar program.

Our Jiaozuo Yi Wan Hotel Division places heavy emphasis on the purchase of
natural raw ingredients and operates a special purchasing program to source
these raw ingredients. This division owns the only industrial size fruit juicer
machine in the primary area and is the only facility to offer a wide selection
of fresh fruit juices.

Competition Relating to our Entertainment Operations Night Club. Our Jiaozuo Yi
Wan Hotel Division faces competition from the two- and three-star hotel
nightclubs in our primary market, the Jiaozuo Yueji Hotel and Jiaozuo Hotel,
respectively. Both of these competitors are physically smaller and configured in
a social club format featuring a center dance area. Both of these competitors
offer occasional live local entertainment. Neither of the competitors engages in
wide promotion effort.

We believe that our hotel division has the ability to compete because
the hotel has:
o    Higher quality lighting and special effects capabilities;
o    Higher quality sound system;
o    Distinctive atmosphere created through internal architectural detail and
     decoration;
o    Larger physical size;
o    Greater seating variations, including floor table, booth, and the deluxe
     balcony booth;
o    Unique floor show offering;
o    Greater variety entertainment (weekly changing floor show programs);
o    Unique "big name" celebrity entertainment events (no other entity in the
     province offers these events;and
o    Higher quality karaoke suites;


                                       19


Trademarks, Licenses and Concessions
Our Jiaozuo Yi Wan Hotel Division has registered the Jiaozuo Yi Wan Hotel Co.,
Ltd. name and the Yi Wan hotel operations logo with the Ministry of
Administration and Trademarks. Our hotel division has a business license in
China, which currently expires in December 2027. The trademark is registered in
perpetuity provided yearly fees are paid.

Our Jiaozuo Yi Wan Hotel Division is considered to be a foreign investment joint
venture by the government in China and receives special income tax treatment
from both the provisional (Jiaozuo City) and central government in China, which
concessions were granted in 1997. Under the special tax treatment, the hotel
company was exempt from central and provincial government income tax for the
years ended December 31, 1997 and 1998, followed by a 50% reduction in the
central and provincial government income tax for the next three years ended
December 31, 1999, 2000, and 2001. Because this status has expired, our hotel
subsidiary will be subject to central government income tax at a rate of 30% and
a 3% provincial government income tax.

The China National Tourism Board is the central government agency in China that
establishes regulations and requirements for the entire nation. The Travel and
Tourism Board of Henan Province is a legal government agency that governs
compliance to the central government's regulations and requirements that a hotel
must meet to be qualified to receive foreign travelers, as follows:
o    A high standard operating facility, including building and equipment;
o    A qualified management and service team;
o    A facility equipped to provide service to tourist groups; and
o    A facility that meets the health and fire safety standards.

An initial certification and annual review is conducted by the Travel and
Tourism Board of Henan Province to be qualified to receive foreign travelers. If
a hotel fails to meet the above standards, the certification may be withheld.
Our hotel received its certification on January 1, 1997 which has been renewed
every year up to and including January 2003. Our next annual inspection is
scheduled for approximately January 2004.

Employees
As of December 31, 2002, our hotel division employed a total of 650 full-time
employees, comprised of approximately 52 management personnel and 598 employees.


                                       20


Qinyang Yi Wan HOTEL
Products and Services

Our Qinyang Yi Wan Hotel has the following primary product and service
offerings:

o    lodging operations (including conference and meeting facilities);
o    Food and beverage operations; and
o    Entertainment operations.

Lodging Operations. The hotel has a total of 58 guest-sleeping rooms consisting
of 54 standard guestrooms and 4 suites. All guest rooms are equipped with double
or queen size beds, two telephones, remote controlled television, full mini-bar,
work station, large closets, in-room climate control, sitting area and large
working desk. Bathrooms include shower and tub, western style toilet, spacious
vanity, and complimentary travel sundries. Suites include larger sitting and
work areas, a second television, and turn-down service.

The Qinyang Yi Wan Hotel also has 2 conference rooms dedicated to meeting and
conference space, including:

o    One small meeting rooms, 99.3 square foot, capable of seating up to 20
     people, which has multi-functional seating configurations, climate control
     and private bathrooms.

o    One large, 391.8 square foot, meeting room capable of seating 300 people
     which is configured in an auditorium style with a sloping floor and large
     front presentation stage.

Food and Beverage Operations. The Quig Yang Hotel has four food and beverage
facilities composed of two Chinese restaurants, a Muslim restaurant and lobby
bar.

o    Main Floor Restaurant.  The main floor restaurant serves 150 people.  Its
     decor is considered traditional Chinese.

o    VIP Restaurant.  The second floor restaurant is a VIP dining facility with
     20 private suites and serves 50 people.

o    Muslim restaurant. The Muslim restaurant includes one large banquette room
     located on the main floor adjacent to the hotel lobby and serves 80 people
     and 9 VIP rooms located on the 2nd floor serving 100 people.

                                       21


Entertainment Operations.  Our Quig Yang Hotel operates the following three
entertainment facilities, which are open to the public:

o    Sauna-Health Center. The sauna-health center is located on the second floor
     of the main building. It offers beauty salon, acupuncture, and massage
     services, as well as self-guided health relaxation activities, such as
     soaking tubs, whirlpools, and saunas. The facility includes a beauty salon,
     waiting lounge, changing facilities, shower area, soaking pools, large
     Jacuzzis, wet and dry multi-person saunas, 33 private resting rooms,
     semi-private massage rooms, large quiet room, private massage suites and 9
     executive suites consisting of private toilet and shower, sauna, Jacuzzi,
     massage area, and resting area. The sauna-health center has a total
     capacity of 250 people.

o    Karaoke Rooms. The hotel offers 16 private karaoke suites suitable for 4-10
     people. Each suite includes a serving area, karaoke equipment, and private
     bathroom.

Suppliers

----------------------------------- ---------------------------------------------------------
                       Item                                  Source
----------------------------------- ---------------------------------------------------------
----------------------------------- ---------------------------------------------------------
Wine/Beer
                                    Jiaozuo City Fang Da Department Store, Jiaozuo city
----------------------------------- ---------------------------------------------------------
----------------------------------- ---------------------------------------------------------
Seafood                             Shanghai Lu Xi Seafood Trading Market. Shanghai city
----------------------------------- ---------------------------------------------------------
----------------------------------- ---------------------------------------------------------
Coal                                Wang Zhong Liang. Qinyang City
----------------------------------- ---------------------------------------------------------
----------------------------------- ---------------------------------------------------------
Seafood                             Liu San. Qinyang City
----------------------------------- ---------------------------------------------------------
----------------------------------- ---------------------------------------------------------
Seafood                             Qiu Feng. Qinyang City
----------------------------------- ---------------------------------------------------------
----------------------------------- ---------------------------------------------------------
Beverage                            Jiaozuo City Hua Hua Dairy Products. Jiaozuo City
----------------------------------- ---------------------------------------------------------
----------------------------------- ---------------------------------------------------------
General cooking ingredients         Song Bao Chang.  Qinyang City
----------------------------------- ---------------------------------------------------------
----------------------------------- ---------------------------------------------------------
General cooking ingredients         Shang Da Jun.  Qinyang City
----------------------------------- ---------------------------------------------------------
----------------------------------- ---------------------------------------------------------
Daily use lodging items             Ding Xiang Yang.  Qinyang City
----------------------------------- ---------------------------------------------------------

The above suppliers to materials to our hotel division are located within an
approximately 200 mile radius of the hotel

                                       22



Our Qinyang Yi Wan Hotel maintains a 10-day supply of common consumable goods,
such as alcohol products, guest room sundries and similar products, which is
considered standard industry practice. We believe that there are a number of
alternative suppliers for all of these products.

Seasonal Variations

Our hotel division experiences minor seasonal variations in overall revenue;
however, because this hotel has only 59 room and has been fully occupied since
it was open, it has not experienced any major seasonal variations. The hotel's
Food and Beverage Operations and Conference and Meeting revenues peak during the
periods from March through July and October through December. These periods
coincide with the times when many government organizations and companies hold
their annual and biannual meetings and product shows.

Potential Future Growth
In order to satisfy the increasing demands for the rooms, restaurants, we plan
to expand this hotel by adding 60 standard rooms and 11 suites to accommodate
210 guests. The rooms expansion will occupy 3.5acres. This expansion is
contingent upon receiving financing of 15 million RMB (US$1.8 million); there are
no assurances that we will be successful in obtaining such financing. If we are
successful in this expansion, we will be required to hire 37 employees and 3
managers.

Market

Qinyang Yi Wan Hotel has two primary target markets:
o    Travelers
o    Local professionals.

Our "travelers" market includes individual business travelers, individual
leisure travelers and group professional travelers. Our "local professionals"
market includes local individual business and government professionals, and
groups of professionals. In Qinyang City, there are conferences involving
various groups to exchange ideas and share study results, including marketing
seminars and fairs and exhibitions from different industries, city-wide,
province-wide and nationwide.


                                       23


Examples of  conferences that have been held at the Qinyang Yi Wan Hotel are:

Meetings held by government agencies:

o        Conference by the Electricity Supply Bureau of Qinyang City, 220 people

o        Year 2002 Annual Meeting by Qinyang City Government, 180 people

Meeting held by companies:

o        Qinyang Yong Wei Group, Ltd. Products Assessment Meeting, 60 people

o        Year 2002 Annual Meeting by Qinyang Branch office of China Life
           Insurance Company, 330 people

Product exhibit and sales meeting:

o        Jiangxi Jisheng Pharmaceutical Products Exhibit Conference, 350 people

o        Amway Company Exhibit and Sales Meeting, 400 people

Seminars:

o        Qinyang City Hospital Research Conference, 80 people

o        Guangdong Shufeng Pharmaceutical Research Conference, 270 people


Our Qinyang Yi Wan Hotel uses a variety of methods to reach its customers,
including advertising and promotional events as described below.

Advertising. Our Qinyang Yi Wan Hotel Division conducts extensive product
promotional advertising in several venues:
o    Local television advertising
o    Airport and train station billboards
o    City promotional materials
o    Local print media
o    On-site point-of-purchase

Promotional Events. These promotional events are chiefly coordinated through our
hotel division's sales department in conjunction with its entertainment and food
and beverage operations. Primary on-going promotional events include celebrity
entertainment event ticket give-aways, regional or national cuisine tasting, and
other culinary events.

Charitable Giving and Sponsorship. Our hotel division promotes its hotel by
corporate sponsorship of charity events and donations to local philanthropic
efforts.

                                       24


Competition

Competition Relating to our Lodging Operations
----------------------------------------------

Qinyang Yi Wan Hotel's two main competitors are the Qinyang Guesthouse and
Yinsha Hotel, both of which are located in Qinyang city. The Qinyang guest house
is approximately two miles form the Quinyang Yi Wan Hotel, and the Yinsha Hotel
is approximately 0.3 miles from the Qinyang Yi Wan Hotel. The Qinyang Guesthouse
has 54 guest rooms and the Yinsha Hotel has 48 guest rooms. Both of these hotels
are government owned and operated and have received a two-star rating.

These competitors engage in some advertising efforts and compete primarily fo
price sensitive travelers, including budget business, leisure, and group
travelers. We also believe that Qinyang Yi Wan Hotel Division has the ability to
favorably compete against these hotels within its primary markets for the
following reasons:

o    Higher quality guest room physical condition due to recent construction of
       the hotel, its guest rooms and parking structure in October 2001
o    Higher number of in-guest room amenities.
o    Higher quality peripheral hotel services, including restaurants,
       entertainment, and meeting rooms.

Competition Relating to our Food and Beverage Operations

The Qinyang Yi Wan Hotel offers what it considers to be a fresh and innovative
fusion blend of Cantonese and Henan style cuisines. This style has become its
culinary signature and all menus in each of the three food and beverage
facilities reflect this central theme. To support this strategy, our Qinyang Yi
Wan Hotel has hired 9 chefs specializing in Guangdong cuisine and 13 chefs
specializing in Henan cuisine. Two chefs are designated solely for the
production of dim sum, a Guangdong specialty. To stimulate the generation of new
menu items, our Qinyang Yi Wan Hotel requires each chef to create one new menu
item each month and to daily meet and greet a specific number of guests. This
program is known as the Chef New Product Development Program. Chefs are
motivated to create new menu items through a bonus system and promotion options.
To our knowledge, no other competitor has a similar program.

Our Qinyang Yi Wan Hotel places heavy emphasis on the purchase of natural raw
ingredients and operates a special purchasing program to source these raw
ingredients. The Qinyang Yi Wan Hotel owns the only industrial size fruit juicer
machine in the primary area of the hotel and is the only facility to offer a
wide selection of fresh fruit juices.


                                       25


Competition Relating to our Entertainment Operations
----------------------------------------------------

Night Club.
Our Qinyang Yi Wan Hotel Division faces competition from the two-star hotel
nightclubs in our primary market, the Qinyang Guesthouse and Yinsha Hotel. Both
competitors are physically smaller and configured in a social club format
featuring a center dance area. Both offer occasional live local entertainment.
Neither of the competitors engages in wide promotion effort.

We believe that our hotel division has the ability to favorably compete because
the hotel has:
o    Higher quality lighting and special effects capabilities
o    Higher quality sound system
o    Distinctive atmosphere created through internal architectural detail and
     decoration
o    Larger physical size
o    Greater seating variations, including floor table, booth, and the deluxe
     balcony booth
o    Higher quality karaoke suites

Trademarks, Licenses and Concessions
------------------------------------

Our Qinyang Yi Wan Hotel Division has registered the Qingyang Yi Wan Hotel Co.,
Ltd. with the Ministry of Administration and Trademarks. The trademark is
registered in perpetuity provided yearly fees are paid.

The China National Tourism Board is the central government agency in China that
establishes regulations and requirements for the entire nation. The Travel and
Tourism Board of Henan Province is a legal government agency that governs
compliance to the central government's regulations and requirements that a hotel
must meet to be qualified to receive foreign travelers, as follows:
o    A high standard operating facility, including building and equipment;
o    A qualified management and service team;
o    A facility equipped to provide service to tourist groups; and
o    A facility that meets the health and fire safety standards.

An initial certification and annual review is conducted by the Travel and
Tourism Board of Henan Province to be qualified to receive foreign travelers. If
a hotel fails to meet the above standards, the certification may be withheld.
Our hotel received its certification on October 2001 that has been renewed
every year up to and including October 2002.


                                       26


Employees
As of December 31, 2002, our Qinyang Yi Wan Hotel Division employed a total of
265 full-time employees, comprised of approximately 18 management personnel and
247 employees.

For accounting purposes, our Hotel Operations are divided into three operating
segments:
o    Food and Beverage also known as restaurant operations;
o    Lodging; and
o    Entertainment.

Set forth below for each of the last three fiscal years is the percentage of
total revenue from each such segment within our Hotel Divisions, which
collectively, accounted for more than approximately 70% of our consolidated
revenues during these fiscal years.

2000:
Food and Beverage Operations                                 47.66%
Lodging Operations                                           25.10%
Entertainment Operations                                     27.24%
Total of our consolidated revenues                      $7,794,439

2001:
Food and Beverage Operations                                  48.5%
Lodging Operations                                            25.5%
Entertainment Operations                                      26.0%
Total of our consolidated revenues                       $7,752,916

2002:
Food and Beverage Operations                                  52.3%
Lodging Operations                                            24.7%
Entertainment Operations                                      22.9%
Total of our consolidated revenues                       $9,890,845


                                       27


Yi Wan Maple Leaf High Technology Agriculture Developing Ltd. Co.
History
From January 2000 until October 2001, Yi Wan Maple Leaf High Technology
Agriculture Developing Ltd. Co., our then agriculture division, raised and sold
specialty aquatic products, such as perch, shrimp, crab, and soft-shelled
turtles. In 1997, this agriculture company acquired a land use permit from the
Jiaozuo City government for three parcels of land comprising 231 acres located
near the southeastern perimeter of Jiaozuo. In 1997 and the first quarter of
1998, our then technology agriculture company recruited technical staff and
constructed farming facilities. In 1998, the agriculture company entered into
several research and development and training agreements with Henan Agricultural
College, Zhanjiang Sea Products College, and the Shenzhen Sea Products
Institute. In 1997, the agriculture company began limited cultivation of a wide
variety of seasonal land-based vegetable crops.

Within our agriculture division, the following products accounted for the
following percentage of revenues from 1999 to 2001:

                                   1999         2000      2001      2002

Crab                                37%          29%      21 %      0%
Shrimp                              31%          33%      28 %      0%
Perch                               15%          15%      16%       0%
Soft-shell turtle                    9%          13%      35%       0%
Vegetables                           8%          10%       0        0%


Discontinued Operations/Sale of Farm Assets
During 2001, as a result of highway construction, the farm had lost its source
of natural water necessary to raise and grow the farm's products. The farm has
ceased its operations during December 2001 and in December 2002 the farm
operations were disposed of by selling our agriculture subsidiary to a third
party.

Number of Employees
Because we have discontinued our Farm operations in December 2001 and sold the
Farm assets in December 2002, none of our employees are employed what previously
was our agriculture subsidiary. Until we discontinued our Farm operations in
December 2001, we had 20 full-time employees employed by our agriculture
subsidiary. Those employees consisted of 5 managers and 15 employees.

                                       28



Shun Di Yi Wan Communication Equipment Plant Co. Ltd.
The business of Shun de Yi Wan Communication Equipment Plant Company, our
Telecommunications Division , focuses on:
o    Designing and manufacturing telephone network switching component parts for
     use in telephone main distribution frames; and

o    Manufacturing and selling assembled telephone main distribution frames.

A telephone main distribution frame connects a company's or an individual's
internal telephone system to the telephone company's external lines.

Our Telecommunications Division's initial design and production efforts focused
on developing analog switching component parts and the manufacture of a series
of analog main distribution frames. Recent design and production efforts have
expanded to include digital switching component parts and the manufacture of
digital telephone main distribution frames.

Some of the significant events in our Telecommunications Division's history
include:

o    In 1995, our telecommunications company earned the award for product
     excellence and development from the National Ministry of Post and
     Telecommunications, also known as the Ministry of Information and Industry
     in China.

o    In 1996, our telecommunications company received two patent certificates in
     China from the Ministry of Trademarks and Patents for design of a switching
     component part and a tool used in the assembly and on-going maintenance of
     telephone main distribution frames which provides for patent protection in
     China only.

o    In 1996, our telecommunications company received the public verbal
     commendation for product excellence and contribution to the development of
     the nation from the Vice Minister of the Ministry of Posts and
     Telecommunication, Mr. Xie Gaojue.

o    In 1997, our telecommunications company produced in China the telephone
     switching equipment industry's first intelligent management system software
     used for the monitoring and management of telephone distribution frame
     performance.  Although the main distribution frame management system is not
     proprietary software, our telephone communications manufacturing company
     has encrypted the software to protect its patent on the equipment.


                                       29


Products and Services
Our Telecommunications Division  specializes in producing communication
connecting and distributing equipment called main distribution frames for
telephone exchange systems. A main distribution frame is the main distribution
facility of a network, often described as a main hub or central hub, which is
used as the starting point of a site network. The main distribution facility is
typically used where the outside telephone line connections and internal
telephone line routers converge.

There are three primary types of main distribution frames:
o    Analog - Standard telephone line, some times referred to as plain old
     telephone service.

o    Digital - Often referred to as integrated services digital network or
     referred to as ISDN, a digital line registers the human voice over the
     telephone network using a stream of ones and zeros.  The effectiveness of
     ISDN allows many advanced features to be programmed on these phones,
     including multiple call appearances and data transmission.

o    Optical - Uses fiber optic light cables that have larger capacity, higher
     speed, and wider bandwidth than ISDN.

Our Telecommunications Division manufactures two types of analog and one type of
digital main distribution frames. In addition, this division produces its own
component parts and assembles them into distribution frame configurations at its
manufacturing facility. The component parts and peripheral frame parts are
stored in inventory until an order is received. At the time an order is
received, parts are drawn from inventory and assembled to meet the customer's
specifications within existing product line parameters. The product is then
transported to the customer via third party delivery. Upon arrival at the
customer's site, a sales technician assists the customer in the installation of
the distribution main frame and reviewing operating procedures.

Every model produced by our telephone communications manufacturing company can
be specially designed to have different capacities according to the clients'
requirements for the nature and quantity of the lines. All of the distribution
frames can be combined, coupled, and matched to become a distribution frame
system with a much larger capacity.

Our Telecommunications Division  experiences seasonal variations in revenue from
the sale of its products. Because the majority of this division's customers are
divisions of government ministries, its revenue stream closely follows the
government schedule of planning and procurement. Because ministries plan and
petition the government for funds to purchase equipment during the period from
March through June, revenue is at the lowest point of the year during this
period. During the period of July through December ministries place orders; as a
result, revenue peaks during the months of September through December. During
the period of January through February, final orders are filled and revenue
begins to decline.


                                       30


Suppliers
Our primary suppliers of materials which are used to manufacture our
telecommunications equipment are located within an approximately 1300 mile
radius. Seventy to eighty similar supplier companies are located in the same
area as the above suppliers. Consequently, we do not believe that our telephone
communications manufacturing company would have any difficulty in locating
alternative suppliers. Our telecommunications parts suppliers are:


------------------------------------------------------- -----------------------------------------------------

Suppliers
Yi Wan Telecommunication




Discharging Tube                                        JiangSu ZhangJiaGang Electrical Equipment
                                                        Manufacture, Inc. Zhang Jia Gran city
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
PTC Heat Sensitive Resistor                             ShangHai ShunAn Communication Protector, Ltd.
                                                        Shanghai City
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
Reed, Connecter, cable                                  FoShan No 6 Wireless Communication Manufacture,
                                                        Inc.Fo Shan City
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
Circuit board                                           ZhongShan DongFeng TongFa Electrical Equipment
                                                        Co.Zhong Shan  City
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
Anti-fire ABS, plastic                                  SanShui JinHu Industrial Plastics
                                                        Manufacture.SanShui city
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
Silvering, Tinning                                      ShunDe GuiZhou YuanXinLong DianDu Ltd. ShunDe City
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
Zinc white cpper                                        ShangHai Copper Manufacture Sales Department.
                                                        Shanghai city
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
Electronic components capacitor, Nylon belt             GuangZhou SaiBo Electronic Ltd. Guanzhou city
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
Cold board, Tri-angle Iron, Flat iron                   ShunDe LeCong Steel Trading Ltd. No 30 Sales
                                                        Department. ShunDe City
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
Easy Fusibility annulus                                 GuangZhou Non-Ferrouse Matal Research and
                                                        Development Institution. Guanzhou City
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
Brass board, Bronze                                     NanHai LianXing JinHua Hardware Manufacture. Nan
                                                        Hai City
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
Paint spray                                             Zhongshan KeDe Paint Manufacture. Zhongshan City
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
Cylindric plug                                          ShunDe YongChang Hardware Manufacture. ShunDe City
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
Slide                                                   Foshan LanShi Electrical Equipment Co. Foshan City
------------------------------------------------------- -----------------------------------------------------
------------------------------------------------------- -----------------------------------------------------
Timber                                                  ShunDe LunJiao JieLong Furniture Manufacture.
                                                        ShunDe City
------------------------------------------------------- -----------------------------------------------------


                                       31


Market
The level of telephone network development varies greatly among China's various
regions. Generally, the level of development is highest in the southern and
coastal provinces where the majority of the market for our telecommunications
division is located. At present, large portions of China are not sufficiently
developed from a technological standpoint to utilize telephone network
distribution technologies. However, the national government has acknowledged
that China's central province areas are where the next wave of economic
development will occur. To this end, our Telecommunications Division  has
targeted the northern central provinces as a secondary target market area.

In China all public telephone communication is coordinated by the government's
Ministry of Information and Industry, formerly known as the Ministry of Post and
Telecommunications, through a series of municipal ministry agencies. There are
no private telephone service providers. Additionally, other national ministries
maintain their own separate telephone communication networks.

Our Telecommunications Division's primary customers are municipal agencies of
the national Ministry of Post and Telecommunications, other national government
ministries such as the Ministry of Rail Transportation, Ministry of Electric
Power, the People's Liberation Army, and large government and private
businesses. Its principal customers are either local or national government
entities that could cancel an order or renegotiate the terms of sale at any
time. However, since all production is on a per job basis and there are no
long-term production agreements, the risk of cancellation or renegotiating is no
greater than with any non-government customer.

In order to sell its product to government entities, our telecommunications
division is required to obtain a permit from the Ministry of Information and
Industry. This permit is granted each year and is based on inspection of product
quality and the company's operations. Failure to obtain this permit could reduce
our revenues derived from Shun de Yi Wan Communication Equipment Plant Company.

                                       32


Potential customers in China are primarily obtained through sales calls or
visits from its sales staff. In addition, our Telecommunications Division
undertakes the following activities:
o    Trade Shows. Promotion of its brand name through active participation in
     trade shows throughout China.  Participation often includes keynote seminar
     presentations.

o    Advertising.  Promotion of its brand name through on-going advertising in
     industry trade publications and by maintaining a listing on the Ministry of
     Post and Telecommunication Internet website.

o    Public Relations.  The sales department promotes the telecommunications
     division's brand name by maintaining an active and on-going "client
     focused" public relations effort. This effort includes frequent telephone
     communication, on-site visits, and complimentary entertaining and gifts to
     existing clients.

o    Industry Trade Articles.  Promotion of its brand name by frequently
     contributing to trade publications research articles that highlight
     technological trends and developments.

Our Telecommunications Division  only uses in-house sales persons. Each
individual sales person receives commissions of 1.5 - 2% of total sales.

Licenses, Trademarks, and Patents
Our Telecommunications Division  has registered its name and its logo with the
Ministry of Administration and Trademarks.

The term of our Telecommunications Division's business license is from
September 1993 to September 2019, which permits it to operate as a company in
China for that period. Business licenses in China are granted only for a
specific period of time. Upon a business license expiration date a company must
make a reapplication for a new license.

Our Telecommunications Division  has received two patent registrations from the
Ministry of Administration and Trademarks in China; the patents are registered
in perpetuity, provided yearly fees of $7,300 are paid to the Ministry of
Administration and Trademarks:
1.   A component part used in the assembly of analog telephone main distribution
     frames registered as patent number 235727.
2.   A tool used by customers to simultaneously install two wire clips into a
     distribution frame, registered as patent number 213907.

                                       33


Competition
The business of our Telecommunications Division  is highly competitive. Many
companies that have greater capital resources and more established reputations
provide the same products and services that our Telecommunications Division
provides. If competitors lower their prices or our Telecommunications Division
is forced to lower its prices, our revenues derived from this division may be
reduced.

Moreover, our Telecommunications Division's competitors may be able to respond
more quickly to new or emerging technologies and changes in customer
requirements. In addition, our Telecommunications Division's competitors may be
able to devote greater resources to the development, promotion, and sale of
their products and services.

Nationwide, there are 60 companies in China licensed to produce telephone
distribution switching equipment. Competitors compete chiefly on the basis of
price and technological capabilities. Thirty of the 60 companies licensed by the
government to produce and sell telephone distribution frames in China are
approved by the government in China to be suppliers, one of which is our
Telecommunications Division. Of these 30 companies, the four largest competitors
have a combined market share of 60%. Our Telecommunications Division  has an
approximately 10% market share according to the China Telecommunication Industry
Annual Report for the period from 1996 to 1999 published by the Ministry of Post
and Telecommunications. According to the same publication, the total demand for
telephone distribution switching equipment in China is 21,480,000 lines
nationwide, and our Telecommunications Division's sales are approximately
2,000,000 lines.

Product Research and Development
From January 1999 to December 2001, we conducted research and development in to
the proposed products summarized below. During 2002, our Telecommunications
Division tested tested these products internally. This testing has continued
during 2003 and will continue for the remainder of 2003 and possibly thereafter.
Presently, we cannot determine how long the testing of these proposed products
will continue. To date, we have not decided whether we will bring any of these
products to market

Digital Switching Components
Our Telecommunications Division is involved in research and development projects
concerning production of component parts capable of utilizing digital switching
technologies and the manufacture of digital switching telephone main
distribution frames. We produce a limited line of digital switching components
and manufacture one digital switching telephone main distribution frame. We are
also researching our building an expanded product line of digital switching
telephone main distribution frames.

                                       34


Optical Switching Components
Our Telecommunications Division is involved in a number of research and
development projects concerning the production of component parts of optical
switching telephone main distribution frames. At present, our telecommunications
division does not posses the technology to produce optical switching components
or optical switching telephone main distribution frames.

Conference Language Interpretation System
Our Telecommunications Division  is in its advanced stages of research,
development, and testing of equipment suitable for multi-lingual conference
communication, and audience response tabulation. This product is based on
existing switching component technologies and is capable of five language
channel simultaneous communication, audience voting tabulation, and five
category multi-choice response tabulation. The product utilizes touch pad
technology and is capable of visually communicating information on each audience
member's screen. There are two versions of this machine in the testing phase:
one intended for audience sizes from 1-100 persons and the other intended for
audience sizes from 101-400 persons. The results of these tests have been very
favorable with the results of the smaller unit showing slightly fewer required
modifications than the larger unit. We are proceeding with on going testing and
modification of both units.

Our Telecommunications Division  spent the following funds for research and
development purposes:
1999 - 104,391 RMB or approximately U.S. $12,600

2000 - 61,398 RMB or approximately U.S. $7,400

2001 - 80,000 RMB or approximately U.S. $9,638

2002 - 0 RMB or U.S. $0.

In order to complete these projects, it will need to spend at least:
Digital Switching Components     8,800,000.00 RMB
                                    or approximately U.S. $1,060,000.

Optical Switching Components     6,100,000.00 RMB
                                    or approximately U.S. $736,000.

Conference Language
       Interpretation System     8,000,000.00 RMB
                                    or approximately U.S. $970,000.


                                       35


We anticipate that these funds will be provided from our telecommunications
division's operating cash flow.

We anticipate hiring the following additional employees over the next 12 months
to accomplish our research and development projects: 10 technical employees.

Number of Employees
As of December 31, 2002 we had approximately 137 full-time employees,
consisting of 18 managers and 118 employees.

DOING BUSINESS IN CHINA AND GOVERNMENT REGULATIONS IN CHINA

CHINA'S ENTRY INTO THE WORLD TRADE ORGANIZATION
China became a member of the World Trade Organization (WTO) on December 11,
2001. The WTO is the only international organization dealing with the global
rules of trade between nations. Its main function is to ensure that trade flows
as smoothly, predictable and freely as possible. The WTO is the successor to the
General Agreement on Tariffs and Trade (GATT). China's entrance into the WTO
potentially will bring profits, and challenges as well, particularly for the
following industries:

     Telecommunications  - China  agreed to drop geographic restrictions on
     imports of pagers, mobile/cellular phones and domestic wire-line services
     within six years of entry into the WTO. China will also allow up to 49
     percent foreign ownership of all services and 51 percent foreign ownership
     for value added and paging services within four years of entry.

     Banking - China agreed to allow foreign banks to conduct business in local
     currency within two years.

     Insurance - Foreign ownership of life insurance firms of up to 50 percent
     will be allowed upon WTO entry, increasing to 51 percent after one year.
     Non-life and reinsurance firms will be allowed to take a 51 percent stake
     in a joint venture immediately and be permitted to form wholly-owned
     subsidiaries in two years.

     Technology - By the year 2005, China will eliminate tariffs on
     semiconductors, computers computer equipment, telecommunications equipment
     and other technology products.

     Autos - Reduction in auto tariffs from their current 80-100 percent to 25
     percent in 2005, with auto parts tariffs cut to an average of 10 percent.
     Quotas on auto imports will be phased out by 2005.


                                       36


     Travel and Tourism - China agreed to allow unrestricted access to the
     Chinese market for hotel operators immediately upon WTO entry, with 100
     percent foreign ownership allowed within three years of entry.

     Chemicals - China has pledged to reduce tariffs to the levels of other WTO
     members of around 5.5-6.5 percent.

     Wood and Paper - Tariffs cut from present levels of 12-18 percent for wood
     and 15-25 percent for paper to between 5 and 7 percent.

China's WTO membership brings opportunities to achieve greater market share,
introduce a wider range of products and services, streamline corporate
structures, and gain control over distribution and after-sales services.

China's WTO membership will likely leave far-reaching influences on China's
domestic industries. Chinese enterprises may benefit from multinational
management experience of other countries and, as a result, change their
management structure, possibly leading to business innovation and increased
international business. Some industries that previously enjoyed high tariff
protection, however, such as automobiles, agriculture, oil refining, chemical
fibers and drugs, will experience operational difficulties as tariff rates are
lowered, market access expands and intellectual property protection is tougher.

Telecommunications
According to the terms of WTO membership, tariffs on IT products, such as
computers, semiconductors, and all internet-related equipment will fall from the
current average of 13.5% to 0% by the year 2005. Foreign participation in
China's basic wireline telecom services will be permitted. Foreign participation
in basic telecom services will be allowed from 25% to 49% in about six years
after China's WTO entry, while geographic restrictions on different telecom
services will be phased out within five or six years.

An increase in the number of network operators could bring more business
opportunities to domestic equipment manufactures. Lower tariffs on telecom
equipment could have a limited impact as domestic makers do not count on
protection from high tariffs.

China's domestic telecom equipment manufacturers have as a whole achieved
breakthroughs in their development. The digital switching systems, which enjoy
independent intellectual property rights, have reached advanced international
standards. The signal and command systems, network administration systems, ISDN,
interfaces for various services and software functions are more suitable for the
Chinese telecom network. For these enterprises, such as our Telecommunications
division, China's WTO entry not only clears the way for us to march into the
international market, it also brings us more opportunities for further
development.


                                       37


Hotel and Tourism
The accession into the WTO will provide opportunities for China's tourism
industry. The tourism sector in China will become more proactive in Asia and
play an important part in the global tourism market. China's accession into the
WTO will have a number of positive effects on inbound tourism in China. First,
it will be conducive to optimizing the development of all sectors related to
inbound tourism such as the financial industry, the information industry, and
the auto industry. Second, it also will be conducive to establishing operational
mechanisms that conform to international management practices so as to provide
an ideal situation for the development of inbound tourism. Third, it will be
conducive to increasing international arrivals. By becoming a WTO member, China
agreed to allow unrestricted access to the Chinese market for hotel operators
with the ability to see up 100 per cent foreign-owned hotels in three years,
with majority ownership allowed upon accession. Thus, foreign hotels with modern
management concept, service standards, by virtue of their advantage in scale,
customers, brands and network, will compete with our tourist enterprises and
hotel services.

GOVERNMENTAL REGULATION OF OUR OPERATIONS IN CHINA
All of our subsidiary companies operate from facilities that are located in the
People's Republic of China. Accordingly, our subsidiaries' operations must
conform to the governmental regulations and rules of China.

Environmental Compliance
Our Hotel and Telecommunications Division's are subject to the
People's Republic of China's national Environmental Protection Law, which was
enacted on December 26, 1989, as well as a number of other national and local
laws and regulations regulating air, water, and noise pollution and setting
pollutant discharge standards. Violation of such laws and regulations could
result in warnings, fines, orders to cease operations, and even criminal
penalties, depending on the circumstances of such violation. We believe that all
manufacturing and other operations of our three operating divisions are in
compliance with all applicable environmental laws, including those laws relating
to air, water, and noise pollution.


                                       38


Bureaucratic Review and Approvals and Applicable Laws in China Affecting Our
Subsidiaries:
The Chinese government's involvement and influence in the operation of joint
venture companies is limited to a well defined legal/bureaucratic infrastructure
in three areas operated through three separate State entities:

1. Review by Foreign Investment Commission
Foreign Invested Enterprise joint ventures must be reviewed by the Foreign
Investment Commission, or its delegate, for approval as a Foreign Invested
Enterprise. Changes in ownership identity or registered capital of a Foreign
Invested Enterprise must be reviewed and approved by the Foreign Investment
Commission.

2. Industrial and Commercial Registration Administration Bureau
A Foreign Invested Enterprise must have a business license to operate, which is
issued by the Industrial and Commercial Registration Administration Bureau. In
addition, any change in a Foreign Invested Enterprise's ownership must be
reported to this bureau for a reissue of a business license.

3. Laws Associated with State-Owned Enterprises
The Chinese partners in joint venture Foreign Invested Enterprise companies or
Sino-Foreign Equity Joint Ventures may be State-Owned Enterprises. State-Owned
Enterprises have defined rights and areas of authority regarding a joint venture
as set forth in the joint venture's articles of association and the joint
venture contract. As such, the Foreign Investment Commission and the Industrial
and Commercial Registration Commission have a limited, defined area of
operation, responsibility, and authority. As discussed below, none of these State
entities has the ability to change the laws, the articles, or the contracts
governing the rights, obligations, operation, or existence of joint venture
companies. Further, the minority partners in our joint venture companies are not
State-Owned Enterprises. As a non-State-Owned Enterprise, the minority partners
have no direct relationship with the People's Republic of China government.

Sino-Foreign Invested Enterprise Laws: FIE Laws

Both of our joint venture companies are Sino-Foreign Equity Joint Ventures
established under the law of the People's Republic of China in accordance with
the People's Republic of China Sino-Foreign Equity Joint Ventures Law, or EJV
Law. Article 2 of the EJV Law, which provides as follows:
     The Chinese Government, pursuant to the provisions of agreements,
     contracts, and articles of association that it has approved, shall protect
     in accordance with the law the investments, distributable profits, and
     other lawful rights and interests of foreign investors.

Further, the EJV Law provides:
     The State shall not subject joint ventures to nationalization or
     expropriation.  In special circumstances, however, in order to meet the
     requirements of the public interest, the State may carry out expropriation
     against a joint venture in accordance with legal procedures, but
     corresponding compensation must be made.


                                       39


The first provision set forth above reflects the principle that the State must
protect the interest of the foreign investor based upon an approved Joint
Venture Contract and Articles of Association. This would extend to the control
provisions in the contracts and articles, as control is one of the rights and
interests of the foreign investor in a majority-owned EJV. The second statement
reflects the power that all national governments, including that of the United
States, reserve to them.

In addition, Article 33 of the Implementing Regulations to the Equity Joint
Venture Law provides that "the highest authority of a Joint Venture shall be its
board of directors, which shall decide all major issues concerning the Joint
Venture." Thus, control over the Joint Ventures is vested in the board of
directors, not in the State. While it is true that the State retains ultimate
control of State-Owned Enterprises, Equity Joint Ventures are not State-Owned
Enterprises, but are an entirely separate category of enterprise under the law
of the People's Republic of China. While the State can influence the operations
of a joint venture where a Chinese party is a State-Owned Enterprise, legally it
can do so only through the party's representatives on the Joint Venture board of
directors.

Our wholly-owned subsidiary, Shun de Yi Wan Communication Equipment Plant
Company Co. Ltd., exists in accordance with the People's Republic of China
Wholly Foreign-Owned Enterprise Law, or WFOE Law. Article 8 of the WFOE Law
provides as follows:
     An enterprise with foreign capital meets the conditions for being
     considered a legal person under Chinese law and shall acquire the status of
     a Chinese legal person, in accordance with the law.

Further, the WFOE Law provides in Article 4:
     The investments of a foreign investor in China, the profits it earns and
     its other lawful rights and interests are protected by Chinese law.

And, in Article 5:
     The state cannot nationalize or requisition any enterprise with foreign
     capital. Under special circumstances, when public interest requires,
     enterprises with foreign capital may be requisitioned by legal procedures
     and appropriate compensation shall be made.

As with the Equity Joint Venture Law, the first two provisions set forth above
reflect the principle that the State must protect the interest of the foreign
investor based upon approved Articles of Association. The third statement
reflects the power of all national governments, including the United States that
are reserved to them.


                                       40


Finally, with respect to the potential retroactive effect of any laws passed
concerning existing joint ventures, Article 40 of the Foreign Economic Contract
Law, or FECL, which was adopted in 1985, provides as follows:

     Even if the law makes new provisions, contracts for Sino-Foreign Joint
     Ventures, Sino-Foreign Cooperative Joint Ventures, and for Sino-Foreign
     Cooperative Exploration and Exploitation of natural resources which have
     already been approved by a competent authority of the State, may still be
     performed according to the stipulation of those contracts.

Accordingly, as the above laws indicate, the only realistic method by which the
Chinese Government can effect the operation of these Foreign Invested
Enterprises is provided by the respective Articles of Association. Those
Articles, combined with the Foreign Invested Enterprise laws, provide that the
Chinese Government does not and cannot have an intrusive role in the affairs of
a Foreign Invested Enterprise company. To the contrary, those laws place a
continuing duty on the government to ensure that the rights of foreign investors
in Foreign Invested Enterprise companies, as expressed in the approved
provisions of Articles of Association, are protected and preserved.

Foreign Companies Doing Business in China
There are three standard investment vehicles for foreigners doing business in
China:
o    Equity Joint Venture
o    Cooperative or contract Joint Venture
o    Wholly Foreign-Owned Enterprise

Each of these investment vehicles is known as a Foreign Invested Enterprise.
The applicable legal framework for the establishment and continuation of Foreign
Invested Enterprise laws is as follows:
     General    - People's Republic of China Foreign Economic Contract Law

     Accounting - People's Republic of China Accounting Law
                - Laws Concerning Enterprises with Foreign Investments
                - The General Accounting Standard for Enterprises
                - The Specific Accounting Standards

     Equity Joint
     Venture    - People's Republic of China Sino-Foreign Equity Joint
                     Venture Law
                - People's Republic of China Sino-Foreign Equity Joint
                     Venture Law Implementing Regulations

     Cooperative
     Venture    - People's Republic of China Sino-Foreign Cooperative Joint
                     Venture Law
                - Detailed Rules for the Implementation of the People's Republic
                     of China Sino-Foreign Cooperative Joint Venture
                     Law Regulations

     Wholly Foreign-
     Owned
     Enterprise - People's Republic of China Wholly Foreign-Owned Enterprise Law
                - Implementing Rules of the Wholly Foreign-Owned Enterprise Law
                - Interpretations on Various Provisions Concerning the
                     Implementing Rules of the Wholly Foreign-Owned
                     Enterprise Law


                                       41


The Foreign Invested Enterprise laws specifically referenced in this prospectus
are the People's Republic of China Sino-Foreign Equity Joint Venture Law, the
People's Republic of China Wholly Foreign-Owned Enterprise Law, the People's
Republic of China Foreign Economic Contract Law, and the Accounting Laws.

The Chinese Legal System
The practical effect of the People's Republic of China legal system on our
business operations in China can be viewed from two separate but intertwined
considerations.

First, as a matter of substantive law, the Foreign Invested Enterprise laws
provide significant protection from government interference. In addition, these
laws guarantee the full enjoyment of the benefits of corporate Articles and
contracts to Foreign Invested Enterprise participants. These laws, however, do
impose standards concerning corporate formation and governance, which are not
qualitatively different from the General Corporation Laws of the several states.
Therefore, as a practical matter, a Foreign Invested Enterprise needs to retain
or have ready access to a local Chinese law firm for routine compliance
purposes.

Similarly, the People's Republic of China accounting laws mandate accounting
practices, which are not co-existent with U.S. Generally Accepted Accounting
Principles. The China accounting laws require that an annual "statutory audit"
be performed in accordance with People's Republic of China accounting standards
and that the books of account of Foreign Invested Enterprises are maintained in
accordance with Chinese accounting laws. Article 14 of the People's Republic of
China Wholly Foreign-Owned Enterprise Law requires a Wholly Foreign-Owned
Enterprise to submit certain periodic fiscal reports and statements to designate
financial and tax authorities, at the risk of business license revocation. As a
practical matter, a Foreign Invested Enterprise must retain a local Chinese
accounting firm that has experience with both the Chinese standards and U.S.
Generally Accepted Accounting Principles. This type of accounting firm can serve
the dual function of performing the annual Chinese statutory audit and preparing
the Foreign Invested Enterprise's financial statements in a form acceptable for
an independent U.S. certified public accountant to issue an audit report in
accordance with Generally Accepted Accounting Auditing Standards.

Second, while the enforcement of substantive rights may appear less clear than
United States procedures, the Foreign Invested Enterprises and Wholly Foreign-
Owned Enterprises are Chinese registered companies which enjoy the same status
as other Chinese registered companies in business-to-business dispute
resolution. Because the terms of the respective Articles of Association provide
that all business disputes pertaining to Foreign Invested Enterprises are to be
resolved by the Arbitration Institute of the Stockholm Chamber of Commerce in
Stockholm, Sweden applying Chinese substantive law, the Chinese minority partner
in our joint venture companies will not assume a privileged position regarding
such disputes. Any award rendered by this arbitration tribunal is, by the
express terms of the respective Articles of Association, enforceable in
accordance with the "United Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (1958)." Therefore, as a practical
matter, although no assurances can be given, the Chinese legal infrastructure,
while different in operation from its United States counterpart, should not
present any significant impediment to the operation of Foreign Invested
Enterprises.


                                       42


Earnings and Distributions of the FIE's
Both the Foreign Investment Equity Joint Venture laws and the Wholly Foreign-
Owned Enterprise laws provide for and guarantee the distribution of profits to
foreign investors in Chinese Foreign Invested Enterprises.

Article 7 of the People's Republic of China Sino-Foreign Equity Joint Venture
Law requires that profits of an equity joint venture be distributed among the
parties in proportion to their respective contributions to registered capital.
These distributions are made from net profits after deducting from gross
profits, a reserve fund, a bonus and welfare fund for workers and staff, and a
venture expansion fund, all as stipulated in the venture's Articles of
Association. The Yi Wan joint venture Articles of Association provide in Chapter
7, Article 43, that allocations for these statutory funds be determined by the
Board of Directors each year "...according to the actual business situation and
profitability of the Joint Venture from after-tax profit."

Article 10 of the People's Republic of China Sino-Foreign Equity Joint Venture
Law allows the net profit which a foreign investor receives as its share of the
Foreign Investment Equity Joint Venture profit to be "remitted abroad in
accordance with foreign exchange control regulations...." Logistically, when
the statutory funds are allocated in accordance with Article 43, and any loans
are repaid by the joint venture in accordance with the terms thereof, the
after-tax profits of the joint venture are distributed based upon the ratio of
each party's registered capital. The profits are decided by the board of
directors, whether for distribution or for the expansion of the joint venture's
business; provided, however, that where profits are used for expansion, the
board of directors are required to distribute the profits that are available for
distribution in an amount sufficient to enable each party to pay the tax
liabilities, if any, that they each may incur with respect to the joint
venture's profits.

If the joint venture has incurred losses in previous years, the profits of the
current year must be first used to make up losses. The joint venture cannot
distribute profits until the previous losses are made up. Remaining profits from
previous years may be added to the current year for profits distribution, or for
distribution after making up the current year deficit. The profits of a party
may be used for further investment inside China or may be remitted outside
China.

Where the joint venture has foreign currency available for profit distribution,
each party can receive an amount of foreign currency in proportion to its
respective contribution to registered capital. The joint venture must assist
each party, upon request, in exchanging profits available for distribution in
RMB into United States Dollars using the Foreign Exchange Adjustment Centers and
any other reasonable methods that may be available to the joint venture or any
party. The costs of cash exchanges are the responsibility of the party receiving
the foreign currency profit distribution. All profits distributed to us in
foreign currency are freely remittable outside of China to a bank account
designated by us.


                                       43


Similarly, Article 19 of the People's Republic of China Wholly Foreign Owned
Enterprise Law provides that a foreign investor may remit abroad profits that
are earned by a Foreign Invested Enterprise, as well as other funds remaining
after the enterprise is liquidated.

Because the three Chinese businesses are controlled foreign corporations, for
U.S. federal income tax purposes, we may be required to include in our gross
income for U.S. tax purposes:
o    Those companies' "Subpart F" income, which includes certain passive income
     and income from certain transactions with related persons, whether or not
     this income is distributed to it; and

o    Increases in those companies' earnings invested in certain U.S. property.

Based on the current and expected income, assets, and operations of the three
Chinese businesses, we believe that it will not have significant U.S. federal
income tax consequences under the controlled foreign corporation rules.

Required Statutory Reserve Funds
In accordance with various regulations in China, a Foreign Invested Enterprise,
such as our hotel and agriculture divisions, can distribute their after tax
profit only after making transfers to certain statutory surplus reserves,
collectively referred to as "Surplus Funds." The order of distribution to
investors is:
o    Enterprise or corporate income tax payments;
o    Application to eliminate prior year losses;
o    Transfers to the three statutory funds per regulations;
o    Distribution to investors.

The three statutory reserve funds are:
o          Statutory surplus reserves are to be utilized to offset prior years'
losses, or to increase its share capital. When the statutory surplus reserve
fund of a limited liability company converts its surplus reserves to capital in
accordance with a shareholders' resolution, the company will either distribute
new shares in proportion to the number of shares held by the each shareholder,
or increase the par value of each share. Except for the reduction of losses
incurred, any other usage should not result in this reserve balance falling
below 25% of the registered capital.

o         Enterprise expansion fund is to provide for capital expenditures and
working capital. When the fund is utilized, and amount equal to the lower of
cost of the assets and the balance of the fund is transferred from the expansion
fund to the general surplus reserve. This reserve is non-distributable other
than in liquidation. When the relevant asset are disposed of or written off, the
original transfers from the expansion fund are reversed.

o        Public welfare fund is to be utilized for capital items for the
collective benefits of a company's employees such as the construction of
dormitories, cafeteria and other staff welfare facilities. This fund is
non-distributable other than in liquidation. When the fund is utilized, an
amount equal to the lower of cost of the assets and the balance of the fund is
transferred from the statutory public welfare fund to the general surplus
reserve, This reserve is non-distributable other than in liquidation. When the
relevant assets are disposed of or written off, the original transfers from the
statutory public welfare fund are reversed.


                                       44


The separate allocation to each of the Statutory Surplus Reserve Funds are
either pre-set in the articles of association or joint venture contracts, or can
be determined by the board of directors of each entity. In Foreign Invested
Enterprises the directors determine the separate allocations on an annual basis.
The total allocations to the Surplus Funds required as a percentage of net
profits after income tax is not set by regulations for Foreign Invested
Enterprise joint ventures and is to be determined by the directors on an annual
basis. The allocations for each fund are recorded differently on the Foreign
Invested Enterprise financial statements. The reserve fund, enterprise expansion
fund and statutory public welfare fund are shown on the balance sheets as part
of owners' equity.

For all Foreign Invested Enterprises, once the contributions to the statutory
surplus reserve fund equal 50% of the Foreign Invested Enterprise's registered
capital, no further contributions to that fund need be made. No such limitation
exists for other funds. Foreign Invested Enterprises do not have to set up or
contribute to an enterprise expansion fund.

In wholly-owned Foreign Invested Enterprises, income after the payment of China
income taxes , shall be allocated to the statutory surplus reserves and
statutory public welfare fund for staff and workers. The proportion of
allocation for reserve funds is no less than 10 percent of the profit after tax
until the accumulative amount of allocation for statutory surplus reserve funds
reaches 50 percent of the registered capital, and then no more allocation may be
made. The proportion of allocation for statutory public welfare fund and
enterprise expansion fund is decided by the enterprise itself. A wholly
foreign-owned enterprise does not have to set up or contribute to an enterprise
expansion fund.


Political and Trade Relations with the United States
Political and trade relations between the United States and Chinese governments
within the past five years have been volatile and may continue to be in the
future. Major causes of volatility, the United States' considered revocation of
China's Most Favored Nation trade status, illegal transshipments of textiles
from China to the United States, issues surrounding the sovereignty of Taiwan,
and the United States' bombing of the Chinese embassy in Yugoslavia, have had no
direct connection to our operations; however, other on-going causes of
volatility, including the protection of intellectual property rights within
China and sensitive technology transfer from the United States to China have
closer potential connection to our operations. There can be no assurance that
the political and trade ramifications of these causes of volatility or the
emergence of new causes of volatility will not cause difficulties in our
operations in the China marketplace.


                                       45


Economic Reform Issues
Although the majority of productive assets in China are owned by the Chinese
government, in the past several years the government has implemented economic
reform measures that emphasize decentralization and encourage private economic
activity. Because these economic reform measures may be inconsistent or
ineffectual, there are no assurances that:
o    We will be able to capitalize on economic reforms;
o    The Chinese government will continue its pursuit of economic reform
     policies;
o    The economic policies, even if pursued, will be successful;
o    Economic policies will not be significantly altered from time to time; and
o    Business operations in China will not become subject to the risk of
     nationalization.

Negative impact upon economic reform policies or nationalization could result in
a total investment loss in our common stock.

Since 1978, the Chinese government has reformed its economic systems. Because
many reforms are unprecedented or experimental, they are expected to be refined
and improved. Other political, economic and social factors, such as political
changes, changes in the rates of economic growth, unemployment or inflation, or
in the disparities in per capita wealth between regions within China, could lead
to further readjustment of the reform measures. This refining and readjustment
process may negatively affect our operations.

Our Telecommunications Division  is partially dependent upon the government's
allocation of funds in its budgeting processes. These budgetary processes are
not necessarily subject to fixed time schedules; accordingly, our telephone
communications manufacturing company's operations, quarterly revenues, and
operating results may be adversely affected by extended periods of budgeting
freezes or restraints.

In addition, our Telecommunications Division  is partially dependent upon the
availability of bank credit to its customers as mandated by the government in
China. Recently, in response to inflationary concerns and other economic
factors, the Chinese government imposed restrictions on the funds available for
lending by the banking system. In addition, this company does not know whether
the restrictions on the availability of credit will ease and, if so, the nature
and timing of these changes. These fund restrictions could adversely affect the
operations of each of our subsidiaries.


                                       46


Over the last few years, China's economy has registered a high growth rate.
Recently, there have been indications that rates of inflation have increased. In
response, the Chinese government recently has taken measures to curb this
excessively expansive economy. These measures have included devaluations of the
Chinese currency, the Rennin, restrictions on the availability of domestic
credit, reducing the purchasing capability of certain of its customers, and
limited re-centralization of the approval process for purchases of some foreign
products. These austerity measures alone may not succeed in slowing down the
economy's excessive expansion or control inflation, and may result in severe
dislocations in the Chinese economy. The Chinese government may adopt additional
measures to further combat inflation, including the establishment of freezes or
restraints on certain projects or markets. These measures may adversely affect
our telephone communications manufacturing company's operations.

To date reforms to China's economic system have not adversely impacted our
telephone communications manufacturing company's operations and are not expected
to adversely impact operations in the foreseeable future; however, there can be
no assurance that the reforms to China's economic system will continue or that
we will not be adversely affected by changes in China's political, economic, and
social conditions and by changes in policies of the Chinese government, such as
changes in laws and regulations, measures which may be introduced to control
inflation, changes in the rate or method of taxation, imposition of additional
restrictions on currency conversion and remittance abroad, and reduction in
tariff protection and other import restrictions.

Currency Conversion and Exchange
The currency in China is designated as the Renminbi. Although the
Renminbi/United States dollar exchange rate has been relatively stable in the
past five years there can be no assurance that the exchange rate will not become
volatile or that the Renminbi will not be officially devalued against the United
States dollar by direction of the Chinese government.

Exchange rate fluctuations may adversely affect our financial performance
because of our foreign currency denominated assets and liabilities, and may
reduce the value, translated or converted, as applicable into United States
dollars, of our net fixed assets, our earnings and our declared dividends. We do
not engage in any hedging activities in order to minimize the effect of exchange
rate risks.

Reports to Security Holders
We are subject to the informational requirements of the Securities Exchange Act
of 1934. Accordingly, we file annual, quarterly and other reports and
information with the Securities and Exchange Commission. You may read and copy
these reports and other information we file at the Securities and Exchange
Commission's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. Our filings are also available to the public from commercial
document retrieval services and the Internet world wide website maintained by
the Securities and Exchange Commission at www.sec.gov.


                                       47


Item 2. Properties

The PRC Land Administration Law, initially revised to reflect modern land use
regulation in December 1988 and most recently revised effective January 1999,
governs land use in China. This revised legislation provides for the
transferability of legal term interests in land, otherwise treated under the
regulatory scheme as a fee simple. The government has rights of termination
similar in concept to eminent domain in common law, which can be exercised to
regulate land use to satisfy public need. These term interests in land are
evidenced by "Land Use Certificates" that set forth the location, size,
permitted use and "owner" of the respective parcels.

OUR HOTEL FACILITIES
Our Jiaozuo Yi Wan Hotel Division has a Hotel Land Use Certificate, which
consists of 2.42 acres and has a term of 40 years expiring in January 2037. The
land identified in this Certificate is owned by our joint venture partner Shunao
Industry & Commerce Company, Ltd. and is located in Jiaozuo City. The use
purpose of the land as stated in the Certificate is "commerce"; accordingly the
Certificate enables us to operate hotel, entertainment, food and beverage, and
conference facilities. We have paid the government in China a one-time fee of
13,000,000 RMB, approximately US $1,570,000, for this land use permit.

Our Jiaozuo Yi Wan hotel facilities are located in Jiaozuo City, Henan province
at No. 189, Middle Min Zhu Road. They include:
o    1 main building (approximately 22 stories/230 feet high/110,000 square
     feet)
o    131 standard guest rooms
o    25 guest suites
o    2 executive guest suites
o    1 (one) 500 bed employee dormitory
o    2 full service restaurants (700 person capacity)
o    1 buffet coffee shop (50 person capacity)
o    1 lobby bar (25 person capacity)
o    1 night club (334 person capacity)
o    1 bowling alley (10 lanes) and game room
o    1 sauna-health club (150 person capacity)
o    9 small and medium size conference and meeting rooms (10-60 person
     capacity)
o    1 large conference room (460 person capacity)
o
o    1 business center
o    1 travel agency
o    1 sundries and gift store
o    1 beauty salon (four stations)
o    full facility smoke detectors and water sprinklers


                                       48


Our Qinyang Yi Wan Hotel Division has a Hotel Land Use Certificate, which
consists of 2 acres and has a term of 30 years expiring in January 2031. The use
purpose of the land as stated in the Certificate is "commerce"; accordingly the
Certificate enables us to operate hotel, entertainment, food and beverage, and
conference facilities. The Land Used Certificated was obtained from its 20%
joint venture partner as a capital contribution in the amount of approximately
$316,000.


Our Qinyang Yi Wan hotel facilities are located in Qinyang City at No. 53. West
Huai Fu Road Qinyang City, Henan Province, China. They include:

o        1 main building
o        54 standard guest  rooms
o        5 guest suites

o        1 (one)  200 bed employee dormitory

o        1 Chinese restaurant (150 person capacity) with 20 VIP rooms (200
           person capacity).

o        1 Muslim restaurant (80 person capacity) with 9 VIP rooms (100 person
           capacity).

o        1 sauna-health club (250 person capacity)

o        16 KTV rooms (150 person capacity)

o        1 small meeting room (20 person capacity)

o        1 large conference room (300 person capacity)

o        1 business center

o        1 travel agency

o        sundries and gift store

o        1 beauty salon (four stations)

o        full facility smoke detectors and water sprinklers




                                       49



OUR TELECOMMUNICATIONS DIVISION'S FACILITIES
Our Telecommunication Division has a Land Use Certificate, which consists of
676 acres of land and a building occupying 10,515.21 square feet of land, with
a permitted building size of 32,024 square feet. This Land Use Certificate has a
term of 50 years expiring in February 2045. The land identified in this
Certificate is owned by Cen Minhong, one of our shareholders, and is located in
Daliang Town, Shunde City. The permitted use of the land as stated in the
Certificate is "manufacturing"; accordingly the Certificate enables us to
operate our manufacturing facility. The Communications Land Use Certificate was
originally purchased by Cen Minhong, one of the initial partners of our
telecommunications company who granted the company the right to use the land for
a period of 50 years, beginning in March 1995. The original owner has assigned
the land use right to our Telecommunications Division  for no additional
consideration for the remaining years. The original cost of the land use right
was RMB 2,300,000, or approximately US $280,000.

Our Telecommunications Division's facilities are located in Shun de City,
Guangdong province at No. 3. 5th Street Fengxiang Road, Daliang Town, and
include:
o    1 production, management, and research building, four floors
o    4 floor production facility (approximately 9750 square feet)
o    1 warehouse
o    50 sets of mechanical processing equipment
o    150 sets of various mold and pressure tools
o    40 kinds of testing and inspection equipment
o    3 production lines

OUR AGRICULTURE DIVISION'S FACILITIES

Until December 2002, our agriculture division had a Land Use Certificate, which
consisted of three land parcels. The first two parcels consisted of 213 acres,
with 29,052 square feet being set aside for buildings. The third parcel
consisted of 24.7 acres, with 5,486 square feet being set aside for buildings.
This Land Use Certificate had a term of 50 years, and was due to expire in
September 2046. The land for these parcels as identified in this Certificate was
owned by our joint venture subsidiary, Jiaozuo Yi Wan Hotel, Ltd., and was
located in Maying Village, Zhandian Town, Wuzhi County. The permitted use of the
land as stated in the Certificate is "agriculture"; accordingly the Certificate
enabled us to conduct our agriculture operations. Our then operating agriculture
division paid 28,000,000 RMB, approximately US $3,382,000, to the government to
purchase its land use permit for 50 years.

                                       50


The land was allocated in the following way:
o    12.4 acres crab production
o    8.3 acres soft shell turtle production
o    12.4 acres fish production
o    39.6 acres shrimp production
o    27.2 acres vegetable production
o    131.2 acres idle land

Our then agriculture division's facilities included:
o    3 production areas
o    74 production pools consisting of:
o    40 pools--shrimp
o    10 pools--crab
o    10 pools--turtle
o    8 pools--fish
o    4 pools--fish incubation
o    2 pools--turtle incubation
o    2 research and management buildings
o    1 warehouse and storage facility
o    1 company dormitory, 30 beds

In accordance with the sale of the farm, the land use certificate and rights
attendant to that certificate, were transferred to the third party buyer and we
have no further property rights in the farm land.

Item 3. Legal Proceedings

We are not a party to or aware of any pending or threatened legal lawsuits or
other legal actions against us.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of our security holders during the fourth
quarter of the year ended December 31, 2002.



                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)




                                       51



                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

Market Information
Our common stock become quoted on the OTC Bulletin Board on September 10, 2002.
Below is the market information pertaining to the range of the high and low bid
information of our common stock for each quarter since our common stock has been
quoted on the OTC Bulletin Board. Our common stock is quoted under the symbol
YIWA. The quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission, and may not represent actual transactions.

      2002                    Low               High
Fourth Quarter                $0.00            $0.00
Third Quarter                 $0.00            $0.00

No regular trading market exists for our common stock and there is no assurance
that a regular trading market will develop, or if developed will be sustained. A
shareholder in all likelihood, therefore, will not be able to resell their
securities should he or she desire to do so when eligible for public resales.
Furthermore, it is unlikely that a lending institution will accept our
securities as pledged collateral for loans unless a regular trading market
develops.

Holders
As of December 31, 2002, there were 16,506,250 shares of common stock
outstanding, which were held of record by 63 stockholders.

Options, Warrants
There are no outstanding options or warrants to purchase, or securities
convertible into, our common equity.

Holders of Record
As of December 31, 2001, there were 63 holders of record.

Dividend Policy

Since our inception, we have not declared or paid any dividends on our common
stock, nor do we have any intentions of declaring such a dividend in the
foreseeable future. The payment of dividends, if any, is within the discretion
of the Board and will depend upon our earnings, our capital requirements and
financial condition, and other relevant factors. Our Board of Directors does not
intend to declare any dividends in the foreseeable future, but instead intends
to retain all earnings, if any, for use in our operations.


                                       52


Issuance of Securities
We have had no unregistered securities issuances during our fiscal year 2002.

Item 6  Selected Financial Data

SELECTED FINANCIAL DATA

The following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements contained elsewhere in this prospectus. They
present the results of operations from January 1, 1997 through December 31,
2002.

I.      OVERVIEW
As of December 31, 2002 We have three operating units each producing different
products and services:
o    Our two hotel divisions provide up-scale lodging, food and beverage,
     entertainment, and conference and meeting facility services.
o    Our Telecommunications Division  produces digital and analog telephone
     network main distribution frames and their component parts.
o    .

All of our operating units are located in the People's Republic of China.

YI WAN GROUP. INC. AND SUBSIDIARIES
STATEMENT OF OPERATIONS

                                      Combined            Combined         Consolidated       Consolidated       Consolidated
                                    December 31,       December 31,       December 31,        December 31,       December 31,
                                        1998                1999               2000               2001               2002
                                   ----------------    ---------------    ---------------    ---------------    ---------------
                                         USD                USD                USD                USD                USD
                                   ----------------    ---------------    ---------------    ---------------    ---------------


Net Sales                          14,087,805          14,385,693         14,070,568         12,122,239             13,901,421

Cost of Sales                      5,024,242           5,040,628          5,416,003          4,421,636               5,134,589

Gross profit                       9,063,563           9,345,065          8,654,565          7,700,603               8,766,832

Operating Expenses                 3,684,813           4,038,854          4,068,658          4,043,937               5,087,303

Income From Operations             5,378,750           5,306,211          4,585,907          3,656,666               3,679,529

Other Income (Expense)             (52,597)            (9,364)            57,592             18,560                     28,432

Net Income                         5,108,433           4,675,587          3,361,253          2,530,779               1,086,438

Earnings per share                 0.32                          0.30               0.21               0.16               0.14

BALANCE SHEET
                                   December 31,        December 31,       December 31,       December 31,       December 31,
                                        1998                1999               2000               2001               2002
                                   ----------------    ---------------    ---------------    ---------------    ---------------
                                         USD                USD                USD                USD                USD
                                   ----------------    ---------------    ---------------    ---------------    ---------------

ASSETS


Total Current Assets               3,882,488           5,144,585          5,838,988          5,608,102               6,938,058

Other Assets                       26,060,098          25,114,407         23,713,156         22,412,040             21,244,171

Total Assets                       29,942,586          30,258,992         29,552,144         28,020,142             28,182,229

LIABILITES & STOCKHOLDER'S EQUITY

Current Liabilities:

Accounts Payable & Accrued

Liabilities                        5,514,033           3,429,983          3,567,913          3,453,778               3,795,717
Note Payable -Current

Portion                                                -

Payable to Stockholders/other      2,616,121           4,066,546          10,114,002         5,950,739               4,847,082

Total Current Liabilities          8,130,154           7,496,529          13,681,915         9,404,517               8,642,799


Long Term Liabilities:

Note Payable - Net of
Current Portion

Total Liabilities                  8,130,154           7,496,529          13,681,915         9,404,517               8,746,981


Total Stockholder's Equity         21,812,432          22,762,463         14,609,796         17,151,131             17,730,938

Total Liabilities and

Stockholder Equity                 29,942,586          30,258,992         29,552,144         28,020,142             28,182,229



                                       53


II.     RESULTS OF OPERATIONS

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation



Forward-Looking Statements:

The following discussion of the financial condition and results of operations
should be read in conjunction with the consolidated financial statements and
related notes thereto. The following discussion contains forward-looking
statements. Yi Wan Group, Inc. is referred to herein as "we" or "our." The words
or phrases "would be," "will allow," "intends to," "will likely result," "are
expected to," "will continue," "is anticipated," "estimate," "project," or
similar expressions are intended to identify "forward-looking statements" Such
statements include those concerning our expected financial performance, our
corporate strategy and operational plans. Actual results could differ materially
from those projected in the forward-looking statements as a result of a number
of risks and uncertainties, including: (a) those risks and uncertainties related
to general economic conditions in China, including regulatory factors that may
affect such economic conditions; (b) whether we are able to manage our planned
growth efficiently and operate profitable operations, including whether our
management will be able to identify, hire, train, retain, motivate and manage
required personnel or that management will be able to manage and exploit
existing and potential market opportunities successfully; (c) whether we are
able to generate sufficient revenues or obtain financing to sustain and grow our
operations; (d) whether we are able to successfully fulfill our primary
requirements for cash which are explained below under "Liquidity and Capital
Resources"; and (e) whether worldwide economic conditions and/or the Iraq war or
any other armed conflict will affect the tourist industry in China and thereby
affect revenues of our hotels. Statements made herein are as of the date of the
filing of this Form 10-K with the Securities and Exchange Commission and should
not be relied upon as of any subsequent date. Unless otherwise required by
applicable law, we do not undertake, and we specifically disclaim any
obligation, to update any forward-looking statements to reflect occurrences,
developments, unanticipated events or circumstances after the date of such
statement.



                                       54


General

RESULTS OF OPERATIONS

As of December 31, 2002, we had $1,980,836 of retained earnings. As of
December 31, 2002, we had cash of $2,135,154 and reported total
shareholders' equity of $18,003,894. For this same period of time, we had
revenues of $13,901,421 and general, administrative and sales expenses of
$5,087,303.

Consolidated results

1) SALES. Consolidated sales increased by $1,779,182, or approximately 14.7%,
from $12,122,239 for the year ended December 31, 2001 to $13,901,421 for the
year ended December 31, 2002. The 14.7% increase was a result of a new hotel
operation and a new restaurant added to our existing hotel in 2002, and
increased sales promotions to attract additional customers.


2) COST OF GOODS SOLD. Consolidated cost of goods sold increased by $712,953,
from $4,421,636 for the year ended December 31, 2001 to $5,134,589 for the year
ended December 31, 2002. Cost of goods sold as a percentage of sales increased
to 36.9% for the year ended December 31, 2002, from 36.5% for the year ended
December 31, 2001. The increase was a result of the increase in the cost of
materials and increased operating costs.


(3) GROSS PROFIT. Consolidated gross profit increased by $1,066,229, from
$7,700,603 for the year ended December 31, 2001 to $8,766,832 for the year ended
December 31, 2002. Gross profit as a percentage of sales decreased to 63.06% for
the year ended December 31, 2002 from 63.52% for the year ended December 31,
2001. This decrease in gross profit as a percentage of sales was the result of
the increase in the cost of materials and increased operating costs.

(4) SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative expenses
increased by $1,043,366, from $4,043,937 for the year ended December 31, 2001 to
$5,087,303 for the year ended December 31, 2002. The selling and administrative
expenses as a percentage of sales increased to 36.6% for the year ended December
31, 2002 from 33.4% for the year ended December 31, 2001.The increase in selling
and administrative expenses was due to the increased costs paid to performers,
entertainers and consultants in our hotel operation.

(5) NET INCOME. Consolidated net income decreased $1,279,712, or approximately
20.0%, from $2,551,143 for the year ended December 31, 2001 to $1,271,431 for
the year ended December 31, 2002. The decrease was mainly due to loss on
disposal of operation of $1.3 million.


                                       55


Segmented results

(1) SALES. An itemization of each operating unit's data and an explanation of
significant changes are as follows:

     Hotel operations: Sales increased by $2,137,930, or approximately 27.6%,
from $7,752,915 for the year ended December 31, 2001 to $9,890,845 for the year
ended December 31, 2002. The increase was a result of a new hotel operation and
a new restaurant added to our existing hotel in 2002, and increased sales
promotions to attract additional customers.

     Telecommunication operations: Sales decreased by $358,748, or approximately
8.2%, from $4,369,324 for the year ended December 31, 2001 to $4,010,576
for the year ended December 31, 2002. The decrease was a result of lower
sale prices and sale discount promotions to meet the market competition.


(2) COST OF GOODS SOLD. An itemization of each operating unit's data and an
explanation of significant changes is as follows:

     Hotel operations: Cost of goods sold increased by $964,810, from $2,111,853
for the year ended December 31, 2001 to $3,076,663 for the year ended December
31, 2002.Cost of goods sold as a percentage of sales increased to 31.1% for the
year ended December 31, 2002 from 27.2% for the year ended December 31, 2001.
The increased cost of goods sold as a percentage of sales is attributable to the
increase in the cost of materials and increased operating costs.


     Telecommunication operations: Cost of goods sold decreased by $251,857,
from $2,309,783 for the year ended December 31, 2001 to $2,057,926 for the year
ended December 31, 2002. Cost of goods sold as a percentage of sales decreased
to 51.3% for the year ended December 31, 2002 from 52.9% for the year ended,
2001. The decrease was a result of better management in purchasing of raw
materials for production and better control of our expenses.

(3) GROSS PROFIT. An itemization of each operating unit's data and an
explanation of significant changes is as follows:

     Hotel operations: Gross profit increased by $1,173,120, from $5,641,062 for
the year ended December 31, 2001 to $6,814,182 for the year ended December 31,
2002. As a percentage of sales, gross profit decreased from 72.76% for the year
ended December 31, 2001 to 68.89% for the year ended December 31, 2002. The
decrease in gross profit as a percentage of sales resulted from increased cost
of materials and operating costs.


                                       56


     Telecommunication operations: Gross profit decreased by $106,891, from
$2,059,541 for the year ended December 31, 2001 to $1,952,650 for the
year ended December 31, 2002. As a percentage of sales, gross profit
increased from 47.1% for the year ended December 31, 2001 to 48.7% for
the year ended December 31, 2002. The increase in gross profit as a
percentage of sales was the result of better management of purchasing materials
for production and better control of expenses.


(4) SELLING AND ADMINISTRATIVE EXPENSES. An itemization of each operating unit's
data and an explanation of significant changes are as follows:

     Hotel operations: Selling and administrative expenses increased by
$1,093,120, from $3,126,606 for the year ended December 31, 2001 to $4,219,726
for the year ended December 31, 2002. Selling and administrative expenses as a
percentage of sales increased to 42.66% for the year ended December 31, 2002
from 40.3% for the year ended December 31, 2001. This increase was a result of
increases in: (a) costs paid to performers and entertainers; (b) consulting
expenses; (c) sales taxes; and (d) and wages expenses.

     Telecommunication operations: Selling and administrative expenses increased
by $49,754, from $912,331 for the year ended December 31, 2001 to $862,577 for
the year ended December 31, 2002. Selling and administrative expenses as a
percentage of sales increased to 21.5% for the year ended December 31, 2002 from
20.9% for the year ended December 31, 2001. The increase in selling and
administrative expenses as a percentage of sales was a result of increased
business expenses.


(5) NET INCOME.  An itemization of each operating unit's data and further
explanations of significant changes are as follows:

     Hotel operations: Net income decreased by $395,750, from $2,108,244, or
27.19% of sales, for the year ended December 31, 2001 to $1,712,494, or 17.31%
of sales, for the year ended December 31, 2002. The decrease was a combined
result of an increase in cost of goods sold and increase in selling expense.

     Telecommunications operations: Net income increased by $10,984, from
$771,578, or 17.66% of sales, for the year ended December 31, 2001 to $782,562,
or 19.51% of sales, for the year ended December 31, 2002. The increase was a
result of better management in purchase and in inventory control.


                                       57


LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2002, net cash provided by operating activities was
$5,604,234, net cash used in investing activities was $3,830,682, and net cash
used in financing activities was $945,690.

As of December 31, 2001, net cash provided by operating activities was
$3,747,504, net cash used in investing activities was $140,237, and net cash
used in financing activities was $4,182,696.

Net cash provided by operating activities increased by $1,856,730 to $5,604,234
for the year ended December 31, 2002, representing a decrease of approximately
50%. The increase in cash flow from operating activities reflects sales from our
new hotel operation and a new restaurant added to our existing hotel in 2002.

Net cash used in investing activities increased by $3,690,445 to $3,830,682 for
the year ended December 31, 2002, representing a 260% increase, compared to
$140,237 net cash used for the same period of 2001. The increase was due to a
higher level in the purchasing of improvements and equipment for the new hotel.

Net cash used in financing activities decreased by $3,237,306 to $945,390 for
the year ended December 31, 2002, representing a 77.4% decrease, compared to
$4,182,696 for the same period of 2001. The decrease was primarily due to the
decrease in distributions being paid to the owners of the previous joint
ventures of our subsidiaries.

Going forward, our primary requirements for cash consist of: (1) the continued
implementation of our hotel and Telecommunications Division s' existing business
model in China; (2) general overhead expenses for personnel to support these
business model activities; (3) continued promotional activities pertaining to
our attempt to increase hotel related revenues; 4) the development costs of our
hotel operations in China; (5) the payment of cash contributions to the joint
ventures under the joint venture agreements; and (6) payments due to the former
equity owners of our subsidiaries. We anticipate that our current operating
activities will enable us to meet the anticipated cash requirements for the 2003
fiscal year.


                                       58



Historically, our subsidiary companies have financed operations principally
through cash generated from operations. Initial capital for each operating unit
was generated by contributions of initial shareholders (Hotel operations:
$11,960,000, Telecommunication operations: $1,580,000, Farm operations:
$2,410,000). No bank loans were obtained for this purpose. The cash
contributions required to be made by June 2002 to our subsidiaries for
registered capital and the additional investment requirements of $7,371,730 and
the $9,936,210 due to our former joint venture partners will be funded from the
profits generated from the operations of our subsidiaries and, if necessary,
equity financing; however, there are no assurances that we will be successful in
obtaining equity financing. Management, however, extended the June 2002 payment
date to June 2003 for capital contributions. We intend to fund the capital
improvements to be made to the hotel from positive cash flow generated from
hotel operations.

MANAGEMENT ASSUMPTIONS.

Management anticipates, based on internal forecasts and assumptions relating to
our operations that existing cash and funds generated from operations will be
sufficient to meet working capital and capital expenditure requirements for at
least the next 12 months. In the event that plans change, our assumptions change
or prove inaccurate or if other capital resources and projected cash flow
otherwise prove to be insufficient to fund operations (due to unanticipated
expense, technical difficulties, or otherwise), we could be required to seek
additional financing. There can be no assurance that we will be able to obtain
additional financing on terms acceptable to it, or at all.

EFFECTS OF INFLATION

We are subject to commodity price risks arising from price fluctuations in the
market prices of the various raw materials that comprise our products. Price
risks are managed by each business unit through productivity improvements and
cost-containment measures. Management does not believe that inflation risk is
material to our business or our consolidated financial position, results of
operations or cash flows.

EFFECT OF FLUCTUATION IN FOREIGN EXCHANGE RATES

Our operating subsidiaries are located in China. These companies buy and sell
products in China using Chinese Renminbi as the functional currency. Based on
China government regulation, all foreign currencies under the category of
current accounts are allowed to be freely exchanged with hard currencies. During
the past two years of operation, there were no significant changes in exchange
rates; however, unforeseen developments may cause a significant change in
exchange rates.


                                       59


Item 7A.  Quantitative and Qualitative Disclosures about Market Risk

Not applicable.  We have no investments in market risk sensitive instruments.


Item 8  Financial Statements and Supplementary Data


                          INDEPENDENT AUDITORS' REPORT


The Board of Directors
Yi Wan Group, Inc. and Subsidiaries


We have audited the consolidated balance sheets of Yi Wan Group, Inc. and
subsidiaries as of December 31, 2002 and 2001, and the related consolidated
statements of income and other comprehensive income, shareholders' equity
and cash flows for years then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
consolidated 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 financial positions of Yi Wan
Group, Inc. and subsidiaries as of December 31, 2002 and 2001, and the
results of their operations and their cash flows for the years then ended
in conformity with accounting principles generally accepted in the United
States of America.






February 19, 2003
Walnut, California


                                       60



                       YI WAN GROUP, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS
                                       AND
                          INDEPENDENT AUDITORS' REPORT

                           DECEMBER 31, 2002 AND 2001





                             YI WAN GROUP, INC. AND SUBSIDIARIES
                                CONSOLIDATED BALANCE SHEETS
                               AS OF DECEMBER 31, 2002 AND 2001

                                     ASSETS
                                            2002          2001
                                          -----------    ---------
CURRENT ASSETS:
    Cash                                  $ 2,135,154  $ 1,306,992
    Accounts receivable, net of
      allowance for doubtful accounts
      of $6,455 and $6,950 at
      December 31, 2002 and 2001,
      respectively                          1,284,655      943,687
    Due from related parties                1,686,504    2,584,104
    Note receivable                         1,217,579        -
    Inventories                               568,051      565,539
    Assets of discontinued operations           1,289      186,409
    Prepaid expenses                           44,826       21,371
                                           ----------   ----------
       Total current assets                 6,938,058    5,608,102
                                           ----------   ----------

BUILDINGS, EQUIPMENT AND AUTOMOBILES,
      net                                  19,131,044   17,119,872
                                           ----------   ----------

OTHER ASSETS:
    Intangible asset, net                   1,635,958    1,372,681
    Deferred tax asset                        182,044       97,432
    Assets of discontinued operations
      non-current                                   -    3,477,601
    Other non-current assets                  295,125      344,454
                                           ----------   ----------
       Total other assets                   2,113,127    5,292,168
          Total assets                    $28,182,229  $28,020,142
                                          ===========  ============

                      LIABILITES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                       $370,101     $310,409
    Accounts payable - related party         87,417       10,788
    Accrued liabilities                     763,309      663,001
    Wage and benefits payable               265,580      291,077
    Sales tax payable                       875,510      863,671
    Income taxes payable                  1,279,595    1,059,695
    Due to shareholders                      88,800       88,804
    Due to prior owners of joint
      ventures                             4,932,273    5,773,130
    Notes payable                             83,107       13,649
    Liabilities of discontinued
      operations                               1,289      330,294
                                         ----------   ----------
       Total current liabilities           8,746,981    9,404,518
                                         ----------   ----------

 MINORITY INTEREST                         1,704,310    1,464,493
                                         ----------   ----------

SHAREHOLDERS' EQUITY:
    Common stock, no par value,
      authorized 50,000,000 shares,
      16,506,250 shares issued and
      outstanding                            10,078        5,078
    Paid-in-capital                       5,109,656    5,104,105
    Statutory reserves                   10,832,731    9,113,617
    Retained earnings                     1,707,878    2,945,701
    Accumulated other comprehensive
      income                                 70,595      (17,370)
                                         ----------   ----------
       Total shareholders' equity        17,730,938   17,151,131
                                         ----------   ----------

          Total liabilities and
            shareholders' equity        $28,182,229  $28,020,142
                                        ===========  =============
                                        0.00           0.00



                                       61



                       YI WAN GROUP, INC. AND SUBSIDIARIES
        CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

                                             2002                     2001
                                         ------------           ---------------
NET SALES                                $ 13,901,421            $ 12,122,239

COST OF SALES                               5,134,589               4,421,636
                                         ------------           ---------------

GROSS PROFIT                                8,766,832               7,700,603

SELLING, GENERAL AND ADMINISTRATIVE
    EXPENSES                                5,087,303               4,043,937
                                         ------------           ---------------

INCOME FROM OPERATIONS                      3,679,529               3,656,666
                                         ------------           ---------------

OTHER INCOME (EXPENSE) :
    Interest income                            16,716                  26,017
    Other income (expense)                     11,716                  (7,457)
                                         ------------           ---------------
         Total other income (expense)          28,432                  18,560
                                         ------------           ---------------

INCOME FROM CONTINUING OPERATIONS
    BEFORE PROVISION FOR INCOME TAXES
    AND MINORITY INTEREST                   3,707,961               3,675,226

PROVISION FOR INCOME TAXES                  1,217,905                 800,404
                                         ------------           ---------------

INCOME BEFORE MINORITY INTEREST             2,490,056               2,874,822

MINORITY INTEREST                            (165,446)               (216,022)
                                         ------------           ---------------

NET INCOME FROM CONTINUING OPERATIONS       2,324,610               2,658,800

DISCONTINUED OPERATIONS:
    Income (loss) from operations of
     discontinued operations (net of
      applicable income taxes of $0)        119,745                 (119,619)
    Loss on disposal of operations
      (net of applicable income taxes
         of $0)                           (1,596,317)                   -
    Minority Interest                        150,435                  11,962
                                         ------------           ---------------
             Loss from discontinued
               operations                 (1,326,137)               (107,657)
                                         ------------           ---------------

NET INCOME                                   998,473               2,551,143

OTHER COMPREHENSIVE INCOME:
    Foreign currency translation
      adjustment                              87,965                 (20,364)
                                         ------------           ---------------

COMPREHENSIVE INCOME                      $1,086,438             $ 2,530,779
                                         ============           ===============

EARNINGS (LOSS) PER SHARE -
      BASIC AND DILUTED:
       From continuing operations            0.14                      0.16
       From discontinued operations         (0.08)                    (0.01)
                                         ------------           ---------------

       Earnings per share - basic and
         diluted                          $ 0.06                   $  0.15
                                         ============           ===============

WEIGHTED AVERAGE NUMBER OF SHARES         16,258,990              16,123,373
                                         ============           ===============




                                       62



                       YI WAN GROUP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
                                                                                             Accumulated
                                        Number     Common    Paid-in   Statutory   Retained    other
                                                                                            comprehensive
                                      of shares    stock     capital   reserves    earnings     income         Totals
                                      ----------  --------- ---------  ---------  ---------  ------------    ---------
BALANCE, January 1, 2001             16,006,250  $  78 $    5,098,549 $7,833,412 $1,674,763 $  2,994  $     14,609,796
   Net income                                                                     2,551,143                  2,551,143
   Issuance of common stock             250,000   5,000                                                          5,000
   Additions to paid in capital                                 5,556                                            5,556
   Adjustment to statutory reserves                                    1,280,205 (1,280,205)                         -
   Foreign currency translation
         adjustments                                                                          (20,364)        (20,364)
                                      ----------  --------  ---------  ---------  ---------  ------------    ---------
BALANCE, December 31, 2001           16,256,250   5,078     5,104,105  9,113,617  2,945,701   (17,370)      17,151,131
                                     ===========  ========  ========== ========== ==========  =========    ===========
   Net income                                                                       998,473                    998,473
   Issuance of common stock             250,000   5,000                                                          5,000
   Additions to paid in capital                                 5,551                                            5,551
   Distribution of statutory
    reserves                                                            (517,182)                            (517,182)
   Adjustment to statutory reserves                                    2,236,296  (2,236,296)                     -
   Foreign currency translation
         adjustments                                                                           87,965           87,965
                                     ----------  --------- ---------  ---------  ---------  ------------    ---------
BALANCE, December 31, 2002           16,506,250  $10,078   $5,109,656 $10,832,731 $1,707,878  $70,595 $     17,730,938
                                     ==========  ========  ========== =========== ==========  =========    ===========




                                       63


                           YI WAN GROUP, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                     FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
                                                                                 2002               2001
                                                                           ------------         ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                            $     998,473    $     2,551,143
         Loss from discontinued operations                                    1,326,137            107,657
                                                                           ------------         ------------
           Income from continuing operations                                  2,324,610          2,658,800
    Adjustments to reconcile net income to cash
       provided by operating activities:
         Minority interest                                                       87,149            216,022
         Depreciation                                                         1,503,788          1,269,831
         Amortization                                                            52,445             40,670
         Land use right                                                           5,551              5,556
         Deferred tax assets                                                    (84,612)           (27,547)
         Non-cash stock issuance for consulting and legal fees                    5,000              5,000
         Translation adjustment                                                  87,965            (20,364)
         (Increase) decrease in accounts receivable                            (340,968)            30,606
         Decrease (increase) in due from related parties                        897,600           (804,149)
         (Increase) decrease in inventories                                      (2,512)            55,097
         Increase in prepaid expenses                                           (23,455)           (21,371)
         Increase in note receivable                                         (1,217,579)                 -
         Decrease in due from officers and employees                             49,329             45,570
         Increase in accounts payable                                            59,692             68,359
         Increase (decrease) in accounts payable - related party                 76,629                (11)
         Increase (decrease) in accrued liabilities                             100,308            (19,515)
         (Decrease) increase in wages and benefits payable                      (25,497)            21,146
         Increase in sales tax payable                                           11,839              5,141
         Increase (decrease) in income taxes payable                            219,900            (60,657)
         Decrease in due to shareholders                                             (4)               (92)
    Cash provided by discontinued operations                                  1,643,065            279,412
                                                                           ------------         ------------
           Net cash provided by operating activities                          5,430,243          3,747,504
                                                                           ------------         ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of land use right                                                 (315,722)              -
    Purchase of buildings, equipment and automobiles                         (3,514,960)          (140,237)
                                                                           ------------         ------------
           Net cash used in investing activities                             (3,830,682)          (140,237)
                                                                           ------------         ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Distributions paid to prior owners of joint ventures                       (840,857)        (4,163,080)
    Borrowings (principal payments) on notes payable                             69,458            (19,616)
                                                                           ------------         ------------
           Net cash used in financing activities                               (771,399)        (4,182,696)
                                                                           ------------         ------------
INCREASE (DECREASE) IN CASH                                                     828,162           (575,429)

CASH, beginning of year                                                       1,306,992          1,882,421
                                                                           ------------         ------------
CASH, end of year                                                             2,135,154          1,306,992
                                                                           ==============       =============


                                       64



                      YI WAN GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Summary of significant accounting policies

The reporting entity

The financial statements of Yi Wan Group, Inc. and subsidiaries (referred to as
the Company or YWG in the accompanying financial statements) reflect the
activities and financial transactions of its subsidiaries, which are as follows:

                                                                 Percentage
              Subsidiary                                         Ownership
---------------------------------------------------------     -----------------
Shun De Yi Wan Communication Equipment                              100 %
  Plant Co., Ltd. (TELECOMMUNICATIONS)
Jiao Zuo Yi Wan Hotel Co., Ltd. (HOTEL)                              90
Yi Wan Maple Leaf High Technology                                    90
  Agriculture Developing Ltd. Co. (FARM)
Qinyang Yi Wan Hotel Co., Ltd. (QINYANG)                             80


Yi Wan Group, Inc. was incorporated under the laws of the State of Florida in
the United States in May 1999. Yi Wan Group, Inc. is authorized to issue
50,000,000 shares of no par value common stock and 20,000,000 shares of no par
value preferred stock. The Company's TELECOMMUNICATIONS, HOTEL, FARM and QINYANG
subsidiaries are incorporated under the laws of the People's Republic of China
(PRC).

The Company's subsidiaries are classified as Foreign Invested Enterprises (FIE)
in the PRC and are subject to the FIE laws of the PRC. The HOTEL, FARM and
QINYANG are Foreign Invested Enterprise Joint Ventures, known as FIEJV or
sino-foreign joint venture, and TELECOMMUNICATIONS is a Wholly Foreign Owned
Enterprise company or WFOE. All four of these companies are Chinese registered
limited liability companies, with legal structures similar to regular
corporations and limited liability companies organized under state laws in the
United States. The respective Articles of Association for these FIE subsidiaries
provide a 30-year term for the HOTEL, FARM and QINYANG companies and 15 years
for the TELECOMMUNICATIONS.



                                       65


Basis of presentation

The financial statements represent the activities of Yi Wan Group, Inc. and its
subsidiaries. The consolidated financial statements of YWG include its
subsidiaries HOTEL, FARM, TELECOMMUNICATIONS and QINYANG. All significant
inter-company accounts and transactions have been eliminated in the
consolidation.

Foreign currency translation

The reporting currency of YWG is US dollar. The Company's foreign subsidiaries
use their local currency, Renminbi, as their functional currency. Results of
operations and cash flow are translated at average exchange rates during the
period, and assets and liabilities are translated at the end of period exchange
rates. Translation adjustments resulting from this process are included in
accumulated other comprehensive income in the statement of shareholders' equity.
Transaction gains and losses that arise from exchange rate fluctuations on
transactions denominated in a currency other than the functional currency are
included in the results of operations as incurred. These amounts are not
material to the financial statements.



Note 1 - Summary of significant accounting policies, (continued)

Revenue recognition

The HOTEL's and QINYANG's revenues are recognized when the rooms are occupied or
when the guests utilize the hotel's services.

The FARM recognizes its revenue when the farm products are delivered to its
customers.

The TELECOMMUNICATIONS recognizes its revenue when the risk of loss for the
product sold passes to the customers, which is when goods are installed at the
customers' premises and testing of the product is completed and accepted by the
customers.

Nature of operations and concentration of risk

The HOTEL is a four star rated hotel located in the best area of downtown of
Jiao Zuo City, He Nan Province, People's Republic of China. The Hotel's income
sources include income from rooms, restaurants, sauna, bowling center and
nightclub. The Hotel is a sino-foreign joint venture established under the laws
of the People's Republic of China on December 25, 1996. The expiration date of
the joint venture is December 18, 2027. The term can be extended or terminated
prior to the date of expiration if unanimously decided by the board of directors
and approved by the original examination and approval authority. The board of
directors is controlled by YWG, with YWG electing six of the seven board
members. The operational, management and corporate governance decisions of the
board are by a simple majority, except for the revision of the Articles of
Association, the increase or assignment of the registered capital, the business
combination of the joint venture and, with certain limitations the termination
of the joint venture, which require a unanimous vote.


                                       66


The FARM provides training to local farmers with its advanced technology and
managerial system in farming and is located in Zhan Dian City, Wu Zhi County, He
Nan Province, in the People's Republic of China. The FARM's income sources
include income from the sales of seafood raised and produced in constructed
ponds. The Farm is a sino-foreign joint venture established under the laws of
the People's Republic of China on December 4, 1996. The expiration date of the
joint venture as stated in the joint venture agreement and business license is
August 5, 2028. The term can be extended or terminated prior to the date of
expiration if unanimously decided by the board of directors and approved by the
original examination and approval authority. The board of directors is
controlled by YWG, with YWG electing six of the seven board members. The
operational, management and corporate governance decisions of the board are by a
simple majority, except for the revision of the Articles of Association, the
increase or assignment of the registered capital, the business combination of
the joint venture and, with certain limitations the termination of the joint
venture, which require a unanimous vote. The FARM has discontinued its
operations as of December 31, 2002.

Note 1 - Summary of significant accounting policies, (continued)

Nature of operations and concentration of risk, (continued)

The TELECOMMUNNICATIONS is an electronic equipment manufacturer located in Shun
De City, Guang Dong Province, in the People's Republic of China. The Company's
income sources include income from the manufacturing of communication equipment
systems. The Company is a solely foreign funded company established under the
laws of the People's Republic of China on June 22, 2000. The expiration date of
this agreement and business license is June 22, 2015. The joint venture may be
terminated prior to the date of expiration if unanimously decided by the board
of directors and approved by the original examination and approval authority.
YWG, owning 100% of the equity interests of this company, controls the board of
directors.

The QINYANG is a four star rated hotel located in Qin Yang City, He Nan
Province, People's Republic of China. The QINYANG's income sources include
income from rooms, restaurants and sauna. The QINYANG is a sino-foreign joint
venture established under the laws of the People's Republic of China on June 12,
2002. The expiration date of the joint venture is June 11, 2032. The term can be
extended or terminated prior to the date of expiration if unanimously decided by
the board of directors and approved by the original examination and approval
authority. The board of directors is controlled by YWG, with YWG electing four
of the five board members. The operational, management and corporate governance
decisions of the board are by a simple majority, except for the revision of the
Articles of Association, the increase or assignment of the registered capital,
the business combination of the joint venture and, with certain limitations the
termination of the joint venture, which require a unanimous vote.


                                       67


Buildings, equipment and automobiles

Buildings, equipment, and automobiles are recorded at cost. Depreciation is
computed using the straight-line method over the estimated useful lives of the
assets. Depreciation expense for the years ended December 31, 2002 and 2001
amounted to $1,503,788 and $1,269,831, respectively. Estimated useful lives of
the assets are as follows:

                                                  Estimated Useful Life
                                                  ---------------------
Buildings and improvements                             20 years
Machinery and equipment                                10 years
Computer, office equipment and furniture                5 years
Automobiles                                             5 years


Maintenance, repairs and minor renewals are charged directly to expenses as
incurred. Major additions and betterment to property and equipment are
capitalized.

Long-term assets of the Company are reviewed annually as to whether their
carrying value has become impaired. The Company considers assets to be impaired
if the carrying value exceeds the future projected cash flows from related
operations. The Company also re-evaluates the periods of amortization to
determine whether subsequent events and circumstances warrant revised estimates
of useful lives. As of December 31, 2002, the Company expects these assets to be
fully recoverable.




                                       68


Note 1 - Summary of significant accounting policies, (continued)

Buildings, equipment and automobiles, (continued)

Buildings, equipment and automobiles consist of the following at December 31:

                                             2002                 2001
                                     -------------------   ------------------
Buildings and improvements           $   21,363,578        $  18,563,021
Furniture and equipment                   5,779,747            5,126,109
Automobiles                                 219,264              219,274
Construction in progress                     77,912               17,137
                                     -------------------   ------------------
Totals                                   27,440,501           23,925,541
                                     -------------------   ------------------
Less accumulated depreciation             8,309,457            6,805,669
                                     -------------------   ------------------
    Buildings, equipment and
        automobiles, net             $   19,131,044        $  17,119,872
                                     ===================   ==================

Use of estimates

The preparation of financial statements in conformity with generally accepted
accounting principles of the United States of America requires management to
make estimates and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. Management believes
that the estimates utilized in preparing its financial statements are reasonable
and prudent. Actual results could differ from these estimates.

Recently issued accounting pronouncements

In September 2000, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 140 (FAS 140), "Accounting for
the Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities," which replaces Statement No. 125 (FAS 125) (of the same title).
FAS 140 revises certain standards in the accounting for securitizations and
other transfers of financial assets and collateral, and requires some
disclosures relating to securitization transactions and collateral, but it
carries over most of FAS 125's provisions. FAS 140 will impact the Company's
accounting for any securitization transactions it may enter into the future.
However, there was no material impact at adoption on the Company's financial
statements.


                                       69


During June of 2001, the FASB issued Statement of Financial Accounting Standards
No. 141, "Business Combinations" (FAS 141) and Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets" (FAS 142). FAS 141
requires use of the purchase method of accounting for all business combinations
initiated after June 30, 2001, provides specific guidance on how to identify the
accounting acquirer in a business combination, provides specific criteria for
recognizing intangible assets apart from goodwill and requires additional
financial statement disclosures regarding business combinations. There is no
material impact on the Company's financial statements.

Note 1 - Summary of significant accounting policies, (continued)

Recently issued accounting pronouncements, (continued)

FAS 142 addresses the accounting for goodwill and other intangible assets after
their initial recognition. FAS 142 changes the accounting for goodwill and other
intangible assets by replacing periodic amortization of the asset with an annual
test of impairment of goodwill at either the reporting segment level or one
level below, providing for similar accounting treatment for intangible assets
deemed to have an indefinite life. Assets with finite lives will be amortized
over their useful lives. FAS 142 also provides for additional financial
statement disclosures about goodwill and intangible assets. The Company has
adopted FAS 142 during the year ended December 31, 2002 and the adoption did not
have an impact on the Company's present financial condition or results of
operations.

In June 2001, the FASB issued Statement of Financial Accounting Standards No.
143, "Accounting for Asset Retirement Obligations" (FAS 143). Asset retirement
obligations result from the acquisition, construction, development, or normal
operation of long-lived assets. Examples of obligations that would be subject to
the guidance in this section include decommissioning of nuclear power plants
that have been radioactively contaminated, capping and closing a landfill, and
removal of offshore oil drilling rigs and platforms. FAS 143 changes how the
recorded amount of liabilities associated with asset retirements are computed.
FAS 143 also requires additional disclosure regarding asset retirement
obligations. This statement is effective for fiscal years beginning after June
15, 2002. The adoption of this statement will not have a significant impact on
the financial condition or results of operations of the Company.

In August 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (FAS 144).
FAS 144 retains the existing requirements to recognize and measure the
impairment of long-lived assets to be held and used or to be disposed of by
sale. However, FAS 144 changes the scope and certain measurement requirements of
existing accounting guidance. FAS 144 also changes the requirements relating to
reporting the effects of a disposal or discontinuation of a segment of a
business. This statement is effective for fiscal years beginning after December
15, 2001. The Company has adopted FAS 144 during the year ended December 31,
2002 and the adoption of this statement did not have a significant impact on the
financial condition or results of operations of the Company.


                                       70


In April 2002, the FASB issued Statement of Financial Accounting Standards No.
145 "Rescission of Statements No. 4, 14 and 64, Amendment of FASB Statement No.
13 and Technical Corrections." (FAS 145). This statement rescinds SFAS No. 4,
"Reporting Gains and Losses from Extinguishment of Debt," and an amendment of
that Statement, SFAS No. 64, "Extinguishments of Debt Made to Satisfy
Sinking-Fund Requirements." This statement also rescinds SFAS No. 44,
"Accounting for Intangible Assets of Motor Carriers." This statement amends SFAS
No. 13, "Accounting for Leases," to eliminate any inconsistency between the
required accounting for sale-leaseback transactions and the required accounting
for certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. FAS 145 also amends other existing authoritative
pronouncements to make various technical corrections, clarify meanings, or
describe their applicability under changed conditions. This statement is
effective for fiscal years beginning after May 15, 2002. The Company expects
that the adoption of this statement will not have a material affect on its
consolidated financial statements.



Note 1 - Summary of significant accounting policies, (continued)

Recently issued accounting pronouncements, (continued)

In June 2002, the FASB issued Statement of Financial Accounting Standards No.
146 (FAS 146), "Accounting for Costs Associated with Exit or Disposal
Activities." The standard requires companies to recognize costs associated with
exit or disposal activities when they are incurred rather than at the date of
commitment to an exit or disposal plan. Examples of costs covered by the
standard include lease termination costs and certain employee severance costs
that are associated with restructuring, discontinued operations, plant closing,
or other exit or disposal activity. Previous accounting guidance was provided by
Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for
Certain Costs, Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)." FAS No. 146 replaces
EITF 94-3 and is to be applied prospectively to exit or disposal activities
initiated after December 31, 2002. The Company will comply with this
pronouncement beginning in 2003. The adoption of this statement is not expected
to have a significant impact on the Company's consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45, Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others (FIN 45). FIN 45 requires the recognition of certain
guarantees as liabilities at fair market value and is effective for guarantees
issued or modified after December 31, 2002. The Company has adopted the
disclosure requirement of FIN 45 and does not expect the impact of the fair
market value requirement to have a material impact on its consolidated financial
statements.


                                       71


In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148 "Accounting for Stock-Based Compensation -- Transition and Disclosure".
The statement allows for the Company's current method of accounting for stock
options to continue. Effective for interim periods beginning after December 15,
2002, disclosure will be required for information on the fair value of stock
options and the effect on earnings per share (in tabular form) for both interim
and annual reports. The Company will comply with this pronouncement beginning in
2003.

Cash and concentration of risk

Cash includes cash on hand and demand deposits in accounts maintained with
state-owned banks within the People's Republic of China. Total cash in
state-owned banks at December 31, 2002 and 2001 amounted to $2,135,154 and
$1,306,992, respectively of which no deposits are covered by insurance. YWG has
not experienced any losses in such accounts and believes it is not exposed to
any risks on its cash in bank accounts.

Inventories

Inventories are stated at the lower of cost or market using the first-in,
first-out basis and consist of the following at December 31:
                                          2002                       2001
                                  ------------------         -----------------
Hotel inventories                 $      211,453             $     216,940
Telecommunications inventories           356,598                   348,599
                                  ------------------         -----------------
    Total inventories             $      568,051             $     565,539
                                  ==================         =================



Note 1 - Summary of significant accounting policies, (continued)

Inventories, (continued)

The HOTEL inventories consist of food products, alcohol, beverages and supplies.

The TELECOMMUNICATIONS inventories consist of the following at December 31:

                                       2002                      2001
                                 -------------------       --------------------
Raw materials                    $     97,301              $     92,686
Work in process                       142,249                   113,926
Finished goods                        117,048                   141,987
                                 -------------------       --------------------
    Total inventories            $    356,598              $    348,599
                                 ===================       ====================
Intangible assets


                                       72


All land in the People's Republic of China is owned by the government and cannot
be sold to any individual or company. However, the government grants the user a
"land use right" (the Right) to use the land. The HOTEL has purchased the Right
to use the land for 40 years from the government for a fee in the amount of
$1,570,000. The HOTEL's Right (Land Use Certificate) is registered under the
name of one of the joint venture partners, Shunde Shunao Industry & Commerce
Company, Ltd. The HOTEL is in the process of applying for the name change of the
Right, which has not been finalized as of the date of this report.

QINYANG has obtained its land use rights from its 20% joint venture partner as a
capital contribution in the amount of approximately $228,000 and purchased the
other Right for the amount of approximately $88,000. The Rights to use the land
are for 30 years.

The Rights for both hotels have been classified as an intangible asset on the
accompanying financial statements and are being amortized using the
straight-line method over the life of the Rights. Amortization expense for the
years ended December 31, 2002 and 2001 amounted to $52,445 and $40,670,
respectively.

In March 1995, one of the shareholders of YWG purchased the land use right for
50 years where the TELECOMMUNICATIONS' operating facilities are located. Neither
the title nor the Right has been transferred to TELECOMMUNICATIONS, nor is
TELECOMMUNICATIONS being charged for using the land. However, the owner has
assigned the Right to TELECOMMUNICATIONS for the remaining years. The original
cost of the land use right amounted to $277,800 and is being recognized as an
expense annually and as a capital contribution. The Right is being amortized
over 50 years and the expense for the years ended December 31, 2002 and 2001
amounted to $5,551 and $5,556, respectively.

Note 1 - Summary of significant accounting policies, (continued)

Income taxes

YWG has adopted Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes" (SFAS 109). SFAS 109 requires the recognition of deferred
income tax liabilities and assets for the expected future tax consequences of
temporary differences between income tax basis and financial reporting basis of
assets and liabilities. Provision for income taxes consist of taxes currently
due plus deferred taxes. The deferred tax asset of $182,044 and $97,432 as at
December 31, 2002 and 2001 represents taxes on expenses deducted for financial
statements purposes and not for tax purposes.


                                       73


The HOTEL is considered as a foreign investment joint venture by the government
and receives special income tax treatment. The HOTEL is subject to central
government income tax at a rate of 30% and a 3% provincial government income
tax. The HOTEL is exempt from central and provincial government income tax for a
period of two years (years ended December 31, 1997 and 1998); followed by a 50%
reduction in the central and provincial government income tax for a period of
three years (years ended December 31, 1999, 2000 and 2001). Starting from 2002,
the HOTEL is being taxed at full tax rates (30% for central government income
tax and 3% for provincial government).

The FARM is considered as foreign investment joint venture by the government,
receiving special income tax treatment. The FARM is subject to a central
government income tax at a rate of 30% and 3% provincial government income tax.
However, the FARM is exempt from central and provincial government income tax
for two years, starting with the first year of profitable operations (years
ended December 31, 1997 and 1998), followed by a 50% reduction in central
government income tax and full exemption from provincial government income tax
for the next three years (years ended December 31, 1999, 2000 and 2001).
Starting from 2002, the FARM is being taxed at full tax rates (30% for central
government income tax and 3% for provincial government).

The TELECOMMUNICATIONS and QINYANG are subject to a central government income
tax at a rate of 30% and 3% provincial government income tax.

The provision for income taxes at December 31 consisted of the following:

                                          2002                   2001
                                     ----------------     -----------------
Provision for China Income Tax       $   1,184,112        $     752,794
Provision for China Local Tax              118,410               75,252
Deferred taxes                             (84,617)             (27,642)
                                     ----------------     -----------------
 Total provision for income taxes    $   1,217,905        $     800,404
                                     ================     =================

Certain revenues of the HOTEL, FARM and TELECOMMUNICATIONS
operations are subject to sales and cultural taxes ranging from 3% to 10%. This
tax is shown as a reduction of sales.


                                       74


Note 1 - Summary of significant accounting policies, (continued)

The following table reconciles the U.S. statutory rates to the Company's
effective tax rate:

                                            2002                   2001
                                         -----------           -------------
U.S. Statutory rates                        34   %                  34 %
Foreign income not recognized in U.S.      (34)                    (34)
China Income taxes                          33                      22
                                         -----------           -------------
      Effective tax rate                    33   %                  22 %
                                         ===========           =============

Earnings per share

YWG adopted Statement of Financial Accounting Standards No. 128, "Earnings Per
Share" (SFAS 128). SFAS 128 requires the presentation of earnings per share
(EPS) as Basic EPS and Diluted EPS. There are no differences between Basic and
Diluted EPS at December 31, 2002 and 2001.

Reclassification

Certain prior year amounts have been reclassified in order to conform to the
current year's presentation.

Note 2 - Notes payable

Notes payable represents amounts due to construction contractors. They are due
on demand, normally within one year. Notes payable at December 31, consisted of
the following:
                                            2002               2001
                                        ----------          -----------
Notes payable to various
     vendors, unsecured, due
     on demand, no interes              $  83,107           $   13,649
                                        ==========          ============

Note 3 - Supplemental disclosure of cash flow
information

Income taxes paid amounted to $1,098,607 and $970,155 for the years ended
December 31, 2002 and 2001, respectively. No interest expense payments were made
for the years ended December 31, 2002 and 2001.


                                       75


Note 4 - Accounts receivable and credit risk

YWG's business operations are conducted mainly in the People's Republic of
China. During the normal course of business, YWG extends unsecured credit to its
customers. Management reviews its accounts receivable on a regular basis to
determine if the bad debt allowance is adequate at each year-end.








Note 5 - Fair Value of Financial Instruments

Statement of Financial Accounting Standards No. 107, as amended, "Disclosures
about Fair Value of Financial Instruments," requires the disclosure of fair
value information for certain assets and liabilities for which it is practicable
to estimate that value. The Company's financial instruments include cash,
accounts receivable, other receivables, accounts payable, accrued liabilities
and other payables.

The Company considers the carrying amount of cash, accounts receivable, other
receivables, accounts payable, accrued liabilities and other payables to
approximate their fair values because of the short period of time between the
origination of such instruments and their expected realization and their current
market rate of interest. .

Note 6 - Due from related parties

YWG pays for various expenses, supplies, inventories and other goods on behalf
of a related party, whose shareholders are also the shareholders of YWG. Amounts
due from this related party at December 31, 2002 and 2001 amounted to $1,686,504
and $1,015,325, respectively.

A member of the Board of Directors has been advanced money for investment
opportunities on behalf of the HOTEL. Amounts due from this person at December
31, 2001 amounted to $1,568,779. The balance was paid in full during the year
ended December 31, 2002.

All amounts due from related parties are non-interest bearing and have no fixed
repayment terms.


                                       76


Note 7 - Pension contribution

Regulations in the People's Republic of China require YWG to contribute to a
defined contribution retirement plan for all permanent employees. All permanent
employees are entitled to an annual pension equal to their basic salary at
retirement. The HOTEL and TELECOMMUNICATIONS pay an annual contribution of 33%
and 20%, respectively, of the city's standard salary of their employees to an
insurance company, which is responsible for the entire pension obligation
payable to the retired employees. There were no contributions for the QINYANG
and the FARM's employees due to their non-permanent status. For the years ended
December 31, 2002 and 2001, YWG made pension contributions in the amount of
$51,875 and $48,862, respectively.

Note 8 - Note receivable

At December 31, 2002, the note receivable of $1,096,888 represents the remaining
balance due from the sale of FARM assets. The note receivable is non-interest
bearing and is due in two installments during 2003.

Note 9 - Other non-current assets

Other non-current assets represents cash advances to officers and employees for
cash based business transactions incurred for the payment of operating expenses
and purchases from various vendors.



                                       77


Note 10 - Distribution of income, statutory reserves and restricted retained
earnings

The laws and regulations of the People's Republic of China require that before a
sino-foreign cooperative joint venture enterprise distributes profits to its
partners, it must first satisfy all tax liabilities, provide for losses in
previous years and make allocations, in proportions determined at the discretion
of the board of directors, after the statutory reserve. The statutory reserves
included enterprise fund, employee benefits and general reserve. The enterprise
fund may be used to acquire fixed assets or to increase the working capital in
order to expend the production and operation of the joint venture; employee
benefit reserve is restricted to the payment of bonus and welfare for employees
and the general reserve may be used as a provisional financial cushion against
the possible losses of a joint venture. The minimum percentage to be reserved
for the general reserve is 10%. The board of directors decides upon the
percentage to be reserved for the employee benefit reserve. There is no minimum
provision required for enterprise fund.

As further discussed in Note 13, the Company has discontinued its FARM
operations during 2002 and has sold all the FARM assets. Upon the dissolution of
the FARM operations, statutory reserves of $517,182 was distributed to employees
according to Chinese regulations, with the remaining balances distributed to the
joint venture partners.

Consolidated statutory reserves at December 31, 2002 and 2001 amounted to
$9,113,617 and $10,832,731, respectively. No other dividends or distributions
were declared to the owners for the years ended December 31, 2002 and 2001.

The Chinese government restricts distributions of registered capital and the
additional investment amounts required by the Chinese joint ventures. Approval
by the Chinese government must be obtained before distributions from these
amounts can be returned to their owners. There are no restricted retained
earnings on the accompanying balance sheets at December 31, 2002 and 2001.


                                       78


Note 11 - Due to prior owners of joint ventures

Shun'ao and Marco, were the partners in the original joint ventures from which
YWG acquired its equity interests in the three FIE Chinese subsidiaries. At
December 31, 2002 and 2001, Shun'ao and Marco were owed the following amounts
for their respective equity interests and for the return of additional
investments in the old joint ventures. All amounts due to prior owners of joint
ventures are non-interest bearing and have no fixed repayment terms.

                                               2002              2001
                                         --------------    ----------------
Payment due for acquistion of HOTEL:
       Payable to Shun'ao               $   1,811,529      $   1,811,529
       Payable to Marco                       905,764            905,764
                                         --------------    -----------------
                                            2,717,293          2,717,293
                                         --------------    -----------------
Payment due to Shun'ao for
   acquisition of FARM                      2,040,989          2,040,989
                                         --------------    -----------------
Return of investment by HOTEL:
       Payable to Shun'ao                      -                710,394
       Payable to Marco                        -                304,454
                                         --------------    -----------------
                                               -              1,014,848
                                         --------------    -----------------
Payment due to Shun'ao for return of
   investment                                 173,991
                                         --------------    -----------------
       Totals                           $   4,932,273      $  5,773,130
                                         ==============    =================


                                       79



Note 12 - QINYANG operations

In 2001, YWG entered into a joint venture agreement with Qinyang Hotel (OLD
QINYANG), a third party to set up Qinyang Yi Wan Hotel Co., Ltd. According to
the joint venture agreement, the registered capital of QINYANG is approximately
$2,413,389 (RMB(Y)20,000,000). YWG will contribute approximately $1,930,711
(RMB(Y)16,000,000) in exchange for an 80% equity interest in QINYANG. OLD
QINYANG will contribute approximately $361,906 (RMB(Y)3,000,000) in the form of
building and land use right and $120,672 (RMB(Y)1,000,000) in cash in exchange
for a 20% equity interest of QINYANG. The registered capital amount of
$2,413,389 (RMB(Y)20,000,000) has been contributed by each joint venture
partner. YWG has contributed it share of capital of $1,930,711
(RMB(Y)16,000,000) from funds generated by its HOTEL division and proceeds
generated from the sale of the assets of the FARM.

In the People's Republic of China a business entity can not legally operate
until they are issued a business license. QINYANG obtained a temporary business
license on June 3, 2002. Prior to June 2, 2002, QINYANG had generated minimal
revenues and expenses and the Company did not consider this activity material to
the consolidated financial statements at December 31, 2001. QINYANG's entire net
operating results of $(124,162) from inception (2001) to June 02, 2002 have been
included in the consolidated financial statements for the year ending December
31, 2002. Details are as follows:

Net loss for the period ended December 31, 2001              $  (191,739)
Net income for the period from January 1, 2002
      to June 2, 2002                                             67,577
                                                          -----------------
Net loss through June 2, 2002                                $  (124,162)
                                                          =================

As a percentage of YWG's consolidated net
      income from continuing operations for the year
      ended December 31, 2002                                     (5%)
                                                          =================

Note 13 - Discontinued operations

During 2001, as a result of highway construction, the FARM had lost its source
of natural water necessary to raise and grow the FARM's products. The FARM had
ceased its operations during December 2001. In November 2002, the FARM's Board
of Directors approved management's plan to dispose of all of the FARM's assets.
In December 2002, the Company consummated the sale of the FARM's assets to a
third party and recorded a net loss of $1,596,317. In connection with the sale,
the Company received $522,327 in cash and a note receivable of $1,217,579. The
proceeds from this sale will be used to satisfy YWG's capital contribution for
the QINYANG joint venture.


                                       80


This sale was accounted for as a disposal group under SFAS No. 144. Accordingly,
amounts in the financial statements and related amounts for all periods
presented have been reclassified to reflect SFAS No. 144 treatment.

Note 13 - Discontinued operations, (continued)

Operating results of the discontinued operations are as follows:

                                     2002                       2001
                              ---------------------      ---------------------
External revenue              $        -                   $    944,723
                              =====================      =====================
Intercompany revenue                   -                         75,115
                              =====================      =====================

Income (loss) from
   discontinued operations         119,745                    (119,617)
   before income taxes                 -                          -
                              ---------------------      ---------------------
    Income (loss) from
      discontinued operations      119,745                   (119,617)
Loss on disposal of
  discontinued operations,
  net of income taxes of $0     (1,596,317)                       -
Minority interest                  150,435                     11,962
                              ---------------------      ---------------------
Total loss from discontinued
  operations                   $(1,326,137)               $  (107,655)
                              =====================      =====================

Loss per share from
  discontinued operations      $    (0.08)                $   (0.01)
                              =====================      =====================
Balance sheets of the discontinued operations as of December 31 are as follows:

                                     2002                       2001
                              ---------------------      ---------------------
Cash                          $     1,289                $     84,121
Accounts receivable                   -                       100,889
Due from related parties              -                       396,237
Other current assets                  -                         1,399
                              ---------------------      ---------------------
   Total current assets             1,289                     582,646
                              ---------------------      ---------------------

Building, equipment and
  automobiles, net                    -                       624,249
Intangible assets, net                -                     2,838,408
Other non current asset               -                         1,623
Deferred taxes                        -                        13,321
                              ---------------------      ---------------------
       Total other assets             -                     3,477,601
                              ---------------------      ---------------------
            Total assets      $     1,289                $  4,060,247
                              =====================      =====================

Current liabilities                 1,289                     330,294
Shareholders' equity                  -                     3,729,953
                              ---------------------      ---------------------
    Total liabilities and
     shareholders' equity     $     1,289                $  4,060,247
                              =====================      =====================


                                       81


Note 14 - Segment information

As discussed in Note 13, during the fourth quarter of 2002, the Company sold its
FARM business. Accordingly, the Company realigned its business into the
following four reportable operating segments: restaurant, lodging, entertainment
and telecommunication equipment. YWG evaluates the performance of its segments
based primarily on operating profit before corporate expenses and depreciation
and amortization. As a result of the changes discussed above, historical amounts
previously reported have been restated to conform to the Company's current
operating segment presentation. The following table presents revenues and other
financial information by business segment for the year ended December 31:

                         Restaurant     Lodging      Entertain     Subtotals     Telecommu    Inter-        Totals
                                                      -ment                      nications    segment
2002                                                                                         elimination
                        ------------  -----------  -------------  -----------   ----------- -----------   ------------
Net sales               $ 5,175,531   $ 2,447,761  $ 2,267,553    $ 9,890,845   $ 4,010,576 $    -         $13,901,421
Cost of sales             2,688,609       177,702      210,352      3,076,663     2,057,926      -           5,134,589
                        ------------  -----------  -------------  -----------   ----------- -----------    -----------
Gross profit              2,486,922     2,270,059    2,057,201      6,814,182     1,952,650      -           8,766,832
Operating expenses          748,617       382,728      449,132      1,580,477       861,390                  2,441,867
Depreciation and
    amortization                                                    1,379,759         1,187                  1,380,946
Unallocated expenses                                                1,259,490                                1,259,490
Corporate expenses                                                                                               5,000
                        ------------  -----------  -------------  -----------   ----------- -----------   ------------
Income from operations  $ 1,738,305   $ 1,887,331  $ 1,608,069      2,594,456     1,090,073       -          3,679,529
                        ============  ===========  =============
Interest income                                                        10,156        6,561                     16,717
Other income (expense)                                                (35,968)      47,684                     11,716
Provision for income tax                                             (856,150)    (361,756)                (1,217,906)
                                                                  ------------- ----------- -----------   ------------
Income before minority
     interest                                                     $ 1,712,494   $  782,562  $    -        $ 2,490,056
                                                                  ============= =========== ===========   ============

Total assets                                                      $ 22,900,326  $ 6,433,060 $(2,370,025)  $ 26,963,361
                                                                  ============= =========== ===========   ============
Assets held by parent company                                                                                1,217,579
Assets of discontinued operations                                                                                1,289
                                                                                                          ------------
Total assets - consolidated financial statements                                                          $ 28,182,229
                                                                                                          ============


                                       82


Note 14 - Segment information, (continued)

                         Restaurant     Lodging      Entertain     Subtotals     Telecommu    Inter-        Totals
                                                      -ment                      nications    segment
                                                                                            elimination
                        ------------  -----------  -------------  -----------   ----------- -----------   ------------
2001
Net sales               $ 3,770,925   $ 1,963,345  $ 2,018,645    $ 7,752,915  $ 4,369,324  $    -         $12,122,239
Cost of sales             1,832,804       123,327      155,722      2,111,853    2,309,783       -           4,421,636
                        ------------  -----------  -------------  -----------   ----------- -----------    -----------
Gross profit              1,938,121     1,840,018    1,862,923      5,641,062     2,059,541      -           7,700,603
Operating expenses          436,983       295,734      248,636        981,353       890,504                  1,871,857
Depreciation and
    amortization                                                    1,141,579        21,827                  1,163,406
Unallocated expenses                                                1,003,674                                1,003,674
Corporate expenses                                                                                               5,000
                        ------------  -----------  -------------  -----------   ----------- -----------   ------------
Income from operations  $ 1,501,138   $ 1,544,284  $ 1,614,287      2,514,456     1,147,210       -          3,656,666
                        ============  ===========  =============
Interest income                                                        17,835        8,182                     26,017
Other income (expense)                                                 (7,433)        (24)                     (7,457)
Provision for income tax                                             (416,614)    (383,790)                  (800,404)
                                                                  ------------- ----------- -----------   ------------
Income before minority
     interest                                                     $ 2,108,244   $  771,578  $    -         $ 2,874,822
                                                                  ============= =========== ===========   ============

Total assets                                                     $ 20,072,689   $5,791,885  $(1,508,442)  $ 24,356,132
                                                                  ============= =========== ===========      3,664,010
                                                                                                          ------------
Total assets - consolidated financial statements                                                          $ 28,020,142
                                                                                                          ============


Item 9. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure

There have been no disagreements with accountants on accounting and financial
disclosure.



                                       83




                                    PART III

Item 10  Directors and Executive Officers of the Registrant



DIRECTORS AND EXECUTIVE OFFICERS

The names and ages of Yi Wan Group's executive officers and directors as of
March 31,2003, are as follows:

----------------- -------- --------------------------------- ------------------ -----------------------
        Name        Age                Position                 Held Since         Current term
                                                                                      To expire
----------------- -------- --------------------------------- ------------------ -----------------------
Cheng Wan Ming      42     Chairman of Board and President       May 1999           March 2005
----------------- -------- --------------------------------- ------------------ -----------------------
You Yingliu         62       Director and Vice-president         May 1999           March 2005
----------------- -------- --------------------------------- ------------------ -----------------------
Luo Guanying        57       Director and Vice-president         May 1999           March 2005
----------------- -------- --------------------------------- ------------------ -----------------------
Liang Xiaogen       56                 Director                  May 1999           March 2005
----------------- -------- --------------------------------- ------------------ -----------------------
Wu Zeming           51         Chief Financial Officer           May 1999           March 2005
                              Chief Accounting Officer
                                       Director
----------------- -------- --------------------------------- ------------------ -----------------------
Cheng Manli         40                 Director                  May 1999           March 2005
----------------- -------- --------------------------------- ------------------ -----------------------
Cen Minhong         41                 Director                  May 1999           March 2005
----------------- -------- --------------------------------- ------------------ -----------------------
Cheng Wanqing       34                 Director                  May 1999           March 2005
----------------- -------- --------------------------------- ------------------ -----------------------
Cheng Deqiang       70                 Director                  May 1999           March 2005
----------------- -------- --------------------------------- ------------------ -----------------------



                                       84


The names and ages of our telecommunications company's executive officers and
directors as of March 31,2003, are as follows:

----------------- -------- --------------------------------- --------------------- -----------------------
        Name        Age                Position                   Held Since           Current term
                                                                                        to expire
----------------- -------- --------------------------------- --------------------- -----------------------
Cheng Wan Ming      42       Chairman of Board and President    September 1993         March 2006
----------------- -------- --------------------------------- --------------------- -----------------------
Wu Zeming           51           Vice-Chairman of Board         September 1993         March 2006
----------------- -------- --------------------------------- --------------------- -----------------------
You Yingliu         62                 Director                 September 1993         March 2006
----------------- -------- --------------------------------- --------------------- -----------------------
Luo Guanying        57                 Director                 September 1993         March 2006
----------------- -------- --------------------------------- --------------------- -----------------------
He Lei              36                 Director                   April 2000           March 2006
----------------- -------- --------------------------------- --------------------- -----------------------



DIRECTORS AND EXECUTIVE OFFICERS

The names and ages of Qinyang Yi Wan Hotel's executive officers and directors as
of March 31,2003, are as follows:

------------------ -------- ------------------------------ --------------------- -----------------------
        Name         Age               Position                Held Since            Current term
                                                                                       to expire
------------------ -------- ------------------------------ --------------------- -----------------------
Cheng Wan Ming       42           Chairman of Board           March 2001              March 2004
------------------ -------- ------------------------------ --------------------- -----------------------
Guo Ruxing           41         Vice-Chairman of Board        March 2001              March 2004
------------------ -------- ------------------------------ --------------------- -----------------------
Yang Jianying        46       Director and General Manager    March 2003              March 2006
------------------ -------- ------------------------------ --------------------- -----------------------
Liu Hua              39                Director               March 2001              March 2004
------------------ -------- ------------------------------ --------------------- -----------------------
Chen Hong            38                Director               March 2001              March 2004
------------------ -------- ------------------------------ --------------------- -----------------------



                                       85


Mr. Cheng Wan Ming has been our President and Chairman of the Board from May
1999 until present. Mr. Cheng Wan Ming is also responsible for our accounting
and financial reporting. From September 1993 to April 2000, Mr. Wan Ming was a
member of the Board of Directors and President of our telecommunicationsS
company. Since May 2000, Mr. Wan Ming has served as the Chairman of the Board of
Directors and President of our telecommunications company. Mr. Wan Ming joined
our hotel company in December 1996 and has served as its Chairman of the Board
of Directors and President from December 1996 until present. Mr. Wan Ming joined
our agriculture company in January 1997 and has served as its Chairman of the
Board and President from January 1997 until present. Before September 1993, Mr.
Wan Ming was President of Shunao Industry and Commerce Company, in Guangdong
Province. Mr. Wan Ming received a bachelor degree from Foshan Junior College in
Guangdong province. Mr. Cheng Wan Ming is the husband of Ms. Cen Minhong. Mr.
Cheng Wan Ming is the brother of Mr. Cheng Wanqing and Ms. Cheng Manli.

Mr. You Yingliu has been our Director and Vice President from May 1999 until
present. He joined our telecommunications company in September 1993. Since
September 1993, Mr. Yingliu has been a Director of our telecommunications
company. Mr. Yingliu joined our hotel company in December 1996. Since then, Mr.
Yingliu has been a Director of our hotel company. Mr. Yingliu joined our
agriculture company in January 1997. From January 1997 to present, Mr. Yingliu
has been a Director and Vice-President of our agriculture company.

Mr. Zhang Haoyu has been a member of our Board of Directors since May 1999. Mr.
Haoyu has been a Vice-President of our hotel subsidiary since December 1996.
Mr. Haoyu served as a Director of our telecommunications company from September
1993 until April 2000. From December 1996 to January 2000, Mr. Haoyu was a
Director and Vice-President of our hotel company. Mr. Haoyu served as a Director
of our agriculture company. Mr. Haoyu previously received an associate degree
from the Metallurgical Junior College of Changsha City, Hunan province. From
September 1991 to October 1995, Mr. Haoyu was a department manager of the
Material Bureau of Qinyang City, Henan province. Mr. Zhang Haoyu is the husband
of Ms. Yang Huijuan.

Ms. Yang Huijuan has been a member of our Board of Directors since May 1999. Ms.
Huijuan served as a Director of our telecommunications company from September
1993 until January 2000. From June 1990 to present, Ms. Huijuan has been
employed as a manager in China Agriculture Bank, Jiaozuo Branch, in the Henan
province of China. From December 1996 until January 2000, Ms. Huijuan was a
Director of our hotel company. Ms. Yang Huijuan also served as a Director of our
agriculture company from January 1997 until January 2000. Ms. Huijuan previously
received a bachelor degree from Jiaozuo University in Henan province. Ms. Yang
Huijuan is the wife of Mr. Zhang Haoyu.


                                       86


Ms. Luo Guanying has been a member of our Board of Directors and a
Vice-President since May 1999. Ms. Guanying has been a member of the Board of
Directors of our telecommunications company since September 1993. From December
1996 until January 2000, Ms. Guanying served as a member of the Board of
Directors of our hotel company. Ms. Guanying also served as a Director of our
agriculture company from January 1997 until January 2000. Ms. Guanying also is
presently a Vice-President of Shunao Industry & Commerce Company, in Guangdong
province, a position she has held since April 1993. Ms. Luo Guanying is the wife
of Mr. Liang Xiaogen.

Mr. Liang Xiaogen has been a member of our Board of Directors since May 1999. He
served as a Director of our telecommunications company from September 1993 to
April 2000. From December 1996 until January 2000, Mr. Xiaogen also served as a
Director of our hotel company. In January 1997, Mr. Xiaogen became a Director of
our agriculture company and served in that capacity until January 2000. Mr.
Xiaogen has been the President of Shun de Zhiyuan Developing Company, in
Guangdong province, since March 1991. Mr. Xiaogen is the husband of Ms. Luo
Guanying.

Mr. Wu Zeming has been our Chief Financial Officer and Chief Accounting Officer
anda member of our Board of Directors since May 1999. He served as the Chairman
of the Board of Directors and Vice President of our telecommunications company
from September 1993 until April 2000. Since May 2000, Mr. Zeming has been the
Vice-Chairman of our telecommunications company. Since December 1996, Mr. Zeming
has been a Director of our hotel company. Mr. Zeming has also served as a
Director of our agriculture company from January 1997 to present. Mr. Zeming has
also been the Chairman of the Board of Directors of Wan Da Construction Inc., of
Macao, since June 1991. Mr. Zeming is the husband of Ms. Cheng Manli.

Ms. Cheng Manli has been a member of our Board of Directors since May 1999. Ms.
Manli has been the Representative of the Macao Office of our telecommunications
company since January 1999. She served as a Director of our telecommunications
company from September 1993 until April 2000. Ms. Manli has been a Director of
our hotel company since December 1996. Ms. Manli has also been a Director of our
agriculture company since January 1997. Since June 1991, Ms. Manli has been a
Directors of Wan Da Construction Inc. of Macao. Ms. Manli is the wife of Mr. Wu
Zeming. She is also the sister of Mr. Cheng Wan Ming and Mr. Cheng Wanqing.

Ms. Cen Minhong has been a member of our Board of Directors since May 1999. Ms.
Cen Minhong has been the Director of the Administrative Office of our
telecommunications company since March 2000. She served as a Director of our
telecommunications company from September 1993 until April 2000. Ms. Minhong has
also been a Director of our hotel company since December 1996. Ms. Minhong has
also served as a Director of our agriculture company since January 1997. Ms.
Minhong is the wife of Mr. Cheng Wan Ming.


                                       87


Mr.Cheng Wanqing has been a member of our Board of Directors since May 1999. He
served as a director of our telecommunications company from September 1993 until
April 2000. From December 1996 until January 2000, Mr. Wanqing also served as a
Director of our hotel company. Mr. Wanqing served as a director of our
agriculture company from January 1997 until January 2000. From April 1993 to the
present, Mr. Wanqing has been Vice-President of Shunao Industry & Commerce
Company. Mr. Cheng Wanqing received a bachelor degree from the Television
Broadcasting College, in Guangdong province. Mr. Cheng Wanqing is the brother of
Mr. Cheng Wan Ming and Ms. Cheng Manli.

Mr. Cheng Deqiang has been a member of our Board of Directors since May 1999.
From August 1953 to May 1993, Mr. Deqiang was a department manager of the
Agriculture Bureau of Shun de City, Guangdong province. From June 1993 to the
present, Mr. Deqiang has been Vice-President of Shunao Industry & Commerce
Company, in Guangdong Province. Mr. Deqiang received a bachelor degree from the
Zhongkai Agriculture School in Guangdong province. Mr. Deqiang is the father of
Mr. Cheng Wan Ming, Mr. Cheng Wanqing, and Ms. Cheng Manli.

Mr. Chang Jufeng has been a manager of our hotel company from June 1996 until
December 1999. In January 2000, Mr. Jufeng became the Vice Chairman of the Board
of Directors and the Assistant General Manager of our hotel company. In January
2000, Mr. Jufeng also became the Vice Chairman of the Board of Directors of our
agriculture company. Previously, between March 1992 and May 1996, Mr. Jufeng was
a department manager of the Police Bureau of Jiaozuo City, Henan province. Mr.
Chang Jufeng received a bachelor degree from the Technical College of Jiaozuo
City, Henan province.

Ms. He Lei has been a Director of our hotel company since January 2000. Ms. Lei
also has served as a Director of our agriculture company since January 2000. Ms.
Lei has been a director of our telecommunications company since April 2000.
Previously, from July 1995 until August 1997, Ms. Lei was a manager of the
Gang'ao Entrust Investment Co., Ltd., a financial and investment consulting firm
located in Beijing, P.R.China. Beijing office. Since September 1997 Ms. Lei has
also been a manager of Beijing Zhongyou Huashang Trading Company. Ms. Lei
received a bachelor degree from the Renmin University of China.


                                       88


Item 11. Executive Compensation

The following table sets forth summary information concerning the compensation
received for services rendered during the current year the year ended December
31, 2000 by our President/Chairman of the Board, Cheng Wan Ming. No other
executive officers received aggregate compensation during our last fiscal year
which exceeded, or would exceed on an annualized basis, $100,000.

-------------------------- -------------------------------------------- ------------------------------------------
Summary Compensation Chart Annual Compensation                          Long Term Compensation
-------------------------- -------------------------------------------- ------------------------------------------
Name & Position     Year   Salary (US$)*            Bonus ($) Other ($) Restricted Options ($) L/Tip ($) All Other
                                                                        Stock
                                                                        Awards
------------------- ------ ------------------------ --------- --------- ---------- ----------- --------- ---------
Cheng Wan Ming,     2002   11,595                        0         0          0          0         0         0
Chairman/President         (Hotel Division)
------------------- ------ ------------------------ --------- --------- ---------- ----------- --------- ---------
                           3,333                         0         0          0          0         0         0
                           (Agriculture Division)
------------------- ------ ------------------------ --------- --------- ---------- ----------- --------- ---------
                           0                             0         0          0          0         0         0
                           (Communication Division)
------------------- ------ ------------------------ --------- --------- ---------- ----------- --------- ---------

*Cheng Wan Ming's salary he received from our Hotel and Agriculture Divisions
reflects payment by these Divisions.

Our officers and directors, including Cheng Wan Ming, did not receive any
monetary or security compensation from us during 2002. The only compensation
that our officers and directors received during 2001 was from our hotel and
agriculture subsidiaries, as reflected above.

China's mandatory pension system for its urban labor force is a defined-benefit,
pay-as-you-go system for persons identified as "older workers" and retirees.
"Older workers" are those who retired prior to the period between October and
December 1997 which was the implementation of State Counsel Decision Number 26,
the mandatory pension system. In August 1997, China State Council Decision
adopted this unified, publicly managed system covering all urban workers. The
defined system for younger workers it is designed to be multi-pillar with
individual accounts, consisting of : (1) a basic benefit which is a
pay-as-you-go system entitling retirees to a defined-benefit of 20% of the last
year's average provincial, municipal or otherwise local monthly wage; (2)
individual accounts entitling retirees to a monthly annuity equal to 1/120 of
the account's notional accumulation, plus and indexation factor, (3) voluntary
supplementary individual accounts entitling retirees to a phased-withdrawal.
This Decision set forth the general parameters for contributions, fund accruals,
service recognition for those who have contributed under both the old and new
system, and benefits. In addition, the Decision provides some basis for regional
variation.


                                       89


The Decision mandates one of three benefits according to when the worker begins
contributing to the system: (a) the so called "older men" are those who retired
prior to the implementation of the Decision between October and December 1997.
These workers retain the locally determined level of defined -benefit
entitlements they had been receiving; (b) "middle men" are those who began
contributing prior to the Decision, but who retire afterwards. Such workers are
entitled to the better of the defined-benefit formula applied to "older men" in
their community or the sum of the basic benefit, individual account distribution
and an accrual factor applicable to the years of service prior to the Decision;
and (c) "young men" are those who began contributing after the implementation of
the Decision. These individuals are entitled only to the sum of the basic
benefit and individual account distribution.

The State Counsel Decision and measures to adopt municipal and provincial
pooling represent important steps towards gradually reducing the unfunded
liability of the pension system.

Under the hotel division's pension plan, all other of the hotel's employees who
began contributing after the implementation of the system are entitled only to
the sum of the basic benefit and individual account distribution. This system
sets out general parameters for contributions, fund accruals, and service
recognition for those who have contributed under both old and new systems and
benefits but left some basis for regional variation. As regulated by the local
government, our hotel division pays an annual contribution of 33% of the City's
standard salary, which is approximately $30 per month currently, for all of its
eligible employees, to an insurance company who is responsible for the entire
pension obligation payable to the retired employees.

Term of Employment Agreements.
All of the above individuals have employment agreements with the entity or
entities for which they work. The term of all employment agreements listed in
the tables above is until March, 2004. Salaries are renegotiated each year.

Our agriculture, telecommunications, and hotel subsidiaries each have employment
agreements with our President, Mr. Cheng Wan Ming. The employment agreement with
the agriculture subsidiary provides that Mr. Cheng Wan Ming serve as its
president from December 2001 to December 2002. The employment agreement with the
telecommunications subsidiary provides that Mr. Cheng Wan Ming serve as its
President from September 1999 to September 2002. The employment agreement with
the Jiaozuo Yi Wan hotel subsidiary provides that Mr. Cheng Wan Ming serve as
its President from December 1999 to December 2002. Each employment agreement
provides that monthly salary shall be determined corresponding to the position
and level of work responsibility within the respective corporation and that Mr.
Cheng Wan Ming will be eligible for bonus payments according to the provisions
of the respective corporation's performance and bonus program. The employment
agreement with the Qinyang Yi Wan hotel subsidiary provides that Mr. Cheng Wan
Ming serve as its President from March, 2001 to March, 2004. Each employment
agreement provides that monthly salary shall be determined corresponding to the
position and level of work responsibility within the respective corporation and
that Mr. Cheng Wan Ming will be eligible for bonus payments according to the
provisions of the respective corporation's performance and bonus program.


                                       90


Our telecommunications subsidiary has an employment agreement with our Director,
Ms. Luo Guanying, in her capacity as a Director of our telecommunications
subsidiary. The employment agreement provides that Ms. Guanying shall serve as
the Director of the telecommunications subsidiary from February 1, 2001 to
February 1, 2006. The employment agreement further provides that monthly salary
shall be determined corresponding to the position and level of work
responsibility within the corporation and that Ms. Guanying shall be eligible
for bonus payments according to the corporation's performance and bonus program.

Our agriculture subsidiary has an employment agreement with our Director, Mr.
You Yingliu, in his capacity as a Vice President of our agriculture subsidiary.
The employment agreement provides that Mr. Yingliu shall serve in a
Vice-President of our agriculture subsidiary from December 10, 2001 to December
10, 2002. The employment agreement further provides that monthly salary shall be
determined corresponding to the position and level of work responsibility within
the corporation and that Mr. Yingliu shall be eligible for bonus payments
according to the corporation's performance and bonus program. Mr. You Yingliu,
in his capacity as Representative for Seafood Purchasing, also has an employment
agreement with our hotel subsidiary. The employment agreement provides that Mr.
Yingliu shall serve in this capacity from December 25, 2001 to December 25, 2004
under the same salary and bonus provisions descried in Mr. Yingliu's employment
agreement with our agriculture subsidiary.

Item 12. Security Ownership of Certain Beneficial Owners and Related Stockholder
           Matters

The following table sets forth the ownership of our Common Stock as of the date
of this Form 10K/A by:
     o    Each shareholder known by us to own beneficially more than 5% of our
          common stock;
     o    Each executive officer;
     o    Each director or nominee to become a director; and
     o    all directors and executive officers as a group.


                                       91


No one other than our officers or directors hold in excess of 5% of our issued
shares. The following table sets forth certain information regarding security
ownership of our management as of December 31, 2002:

Security Ownership of Management
------------------------------- ---------------------------- ----------------------------- -----------------------
Title of Class                       Name                        Amount and nature          Percentage of class
                                                               of beneficial ownership
------------------------------- ---------------------------- ----------------------------- -----------------------
Common                               Cheng Wan Ming                    8,462,650                52.1%*
                                                                   (Direct/Indirect)
------------------------------- ---------------------------- ----------------------------- -----------------------
Common                               Cen Minhong                       8,462,650                52.1%*
                                                                   (Direct/Indirect)
------------------------------- ---------------------------- ----------------------------- -----------------------
Common                               You Yingliu                       1,069,250                6.6%
                                                                        (Direct)
------------------------------- ---------------------------- ----------------------------- -----------------------
Common                               Yang Huijuan                      1,527,500                9.3%**
                                                                   (Direct/Indirect)
------------------------------- ---------------------------- ----------------------------- -----------------------
Common                               Zhang Haoyu                       1,527,500                9.3%**
                                                                   (Direct/Indirect)
------------------------------- ---------------------------- ----------------------------- -----------------------
Common                               Wu Zeming                         1,069,250                6.6%
                                                                        (Direct)
------------------------------- ---------------------------- ----------------------------- -----------------------
Common                               Luo Guanying                        763,750                4.7%
                                                                        (Direct)
------------------------------- ---------------------------- ----------------------------- -----------------------
Common                               Chang Wanqing                       763,750                4.7%
                                                                        (Direct)
------------------------------- ---------------------------- ----------------------------- -----------------------
Common                               Cheng Deqiang                       763,750                4.7%
                                                                        (Direct)
------------------------------- ---------------------------- ----------------------------- -----------------------
Common                               All officers and
                                         director                     14,419,600
                                  as a group (9 persons)                (Direct)                88.7%
------------------------------- ---------------------------- ----------------------------- -----------------------


                                       92


This table is based upon information derived from our stock records. Unless
otherwise indicated in the footnotes to this table and subject to community
property laws where applicable, we believe that each of the shareholders named
in this table has sole or shared voting and investment power with respect to the
shares indicated as beneficially owned. Applicable percentages are based upon
16,506,250 shares of common stock outstanding as of December 31, 2002.

There are two married couples in the above list of principal shareholders.
*Mr.Cheng Wan Ming is the husband of Ms. Cen Minhong.  Mr. Cheng Wan Ming
directly owns 6,369,975 shares; his wife, Ms. Cen Minhong, directly owns
2,092,675 shares. Collectively, Mr.Cheng Wan Ming and Ms. Cen Minhong,
beneficially 8,462,650 shares as reflected in the above table.
**Mr. Zhang Haoyu is the husband of Ms. Yang Huijuan.  Mr. Zhang Haoyu directly
owns 763,750 shares; his wife, Ms. Yang Huijuan, directly owns 763,750 shares.
Collectively, Mr. Zhang Haoyu and Ms. Yang Huijuan, beneficially own 1,527,500
shares as reflected in the above table.

There are no pending or anticipated arrangements that we are aware of that may
cause a change in control of our company.

This table is based upon information derived from our stock records. Unless
otherwise indicated in the footnotes to this table, we believe that each of the
shareholders named in this table has sole or shared voting and investment power
with respect to the shares indicated as beneficially owned. Except as otherwise
noted, herein, we are not aware of any arrangements which may result in a change
in control of our company.

Change In Control

We are not currently engaged in any activities or arrangements that we
anticipate will result in a change in our
control.

Item 13. Certain Relationships and Related Transactions

In 2001, and 2002 our Telecommunications Division purchased materials,
supplies, and paid for operating expenses in the amount of $1,686,504,
and $1,015,325 on behalf of Shun'ao Industry and Commerce Company, partner in
our agriculture and hotel divisions. Our Telecommunications Division  verbally
agreed to pay for these expenses at its discretion and there are no fixed
repayment terms. There is no commitment to fund current or future operating
Shun'ao Industry and Commerce Company's expenses.

Our president has a 41.7% ownership interest in Shun'ao Industry and Commerce
Company.


                                       93


At December 31, 2002, Shun'ao Industry and Commerce Company, a partner in our
hotel divisions, is owed $1,811,529 by our for acquisition of their interests in
the hotel There are no repayment terms to pay principal or interest at this
time. Our management intends to negotiate terms of payment and interest at a
later date. These debts have been classified as a current liability and are due
on demand.

At December 31, 2002, Marco Wan Da Construction, a former partner in our hotel
division, is owed $905,764 for its interest in the hotel division. There are no
repayment terms to pay principal or interest at this time. Our management
intends to negotiate terms of payment and interest at a later date. These debts
have been classified as a current liability are due on demand.

Our director, Mr. Wu Zeming, is the president of Marco Wan Da Construction and
has a 51% ownership interest in that company. Our director, Ms. Cheng Manli is a
director of Marco Wan Da Construction and holds a 49% ownership interest in that
company.

In 2001, and 2002, we advanced Cheng Wan Ming, our president, 341,166
and $179,105 as cash advances for cash-based business transactions incurred for
the payment of operating expenses and purchases from vendors. Due to the nature
of conducting business in China many financial transaction are completed in
cash, instead of by check or draft. Customarily, officers, managers and
employees of companies located in China, including our personnel, are advanced
cash on a daily basis to pay for normal business operating expenses. These
advances are accounted for when the officer or employee submits the paid invoice
to the accounting department to support the receipt of goods and services.


Upon formation, we issued our officers, directors, and their affiliates
15,512,500 shares for services in connection with our formation.

Item 14.  Controls and Procedures
Our Principal Executive Officer/Principal Financial Officer evaluated our
disclosure controls and procedures within the 90 days preceding the filing date
of this annual report. Based upon this evaluation, the Principal Executive
Officer/Principal Financial Officer concluded that our disclosure controls and
procedures are effective in ensuring that material information required to be
disclosed is included in the reports that we file with the Securities and
Exchange Commission.

There were no significant changes in our internal controls or, to the knowledge
of our management, in other factors that could significantly affect these
controls subsequent to the evaluation date.



                                       94


Item 15.  Exhibits, Financial Statements, Schedules, and Reports on Form 8-K

Exhibits
     3(i)    Articles of Incorporation of the Registrant*
     3(ii)   Bylaws of the Registrant*
             Organizational Documents of:
     3.1     Jiaozuo Yi Wan Hotel Co., Ltd. Articles of Association*
     3.2     Shunde Yi Wan Communication Equipment Plant Co., Ltd. Articles of
                Association*
     3.3     Yi Wan Maple Leaf High Technology Agriculture Developing Ltd. Co.
                Articles of Association*
     4      Form of common stock Certificate of the Registrant*
     10.1   Form of Employment Agreement Yi Wan Maple Leaf High Technology
                Agriculture Developing Ltd. Co.*
     10.2   Form of Employment Agreement Jiaozuo Yi Wan Hotel Co., Ltd.*
     10.3   Form of Employment Agreement Shunde Yi Wan Communication Equipment
                Plant Co., Ltd.*
     10.4   Land Use Permits of Yi Wan Maple Leaf High Technology Agriculture
                Developing Ltd. Co.*
     10.5   Land Use Permits of Shunde Yi Wan Communication Equipment Plant Co.,
                Ltd.*
     10.6   Land Use Permits of Jiaozuo Yi Wan Hotel Co., Ltd.*
     10.7   Joint Venture Contract Yi Wan Maple Leaf High Technology Agriculture
                Developing Ltd. Co.*
     10.8   Joint Venture Contract Jiaozuo Yi Wan Hotel Co., Ltd.*
     10.9   Agreement of Shunde Yi Wan Communication Equipment Plant
                Co., Ltd.*
     10.10  Agreement of Jiaozuo Yi Wan Maple Leaf High Technology Agriculture
            Development Ltd., Co. on the Transfer of Equity Shares**
     10.11  Agreement of Jiaozuo Yi Wan Hotel Co., Ltd. on the Transfer of
            Equity Shares**
     10.12  Transfer of Stock Rights and Property Rights Agreement of Jiaozuo Yi
                 Wan Maple Leaf High Technology Agriculture Development Co.,Ltd.
     10.13  Qinyang Yi Wan Hotel Co., Ltd. Joint Venture Contract
     10.14  Joint Venture Contract with Qinyang Hotel
     10.15  Jiaozuo Foreign Trade and Economy Cooperation Bureau Reply about
                 Building Qinyang Yi Wan Hotel Co., Ltd.
     10.16  Agreement with Jiaozuo Yi Wan Maple Leaf High Technology
                 Agricultural Development Co., Ltd.
     10.17  Reply To The Transfer Of The Transfer Of The Stock Rights Of Jiaozuo
                 Yi Wan Maple Leaf High Technology Agricultural Development
                 Co., Ltd.
     21     List of Subsidiaries*
     23.1   Consent of MOORE STEPHENS WURTH FRAZER AND TORBET, LLP for Yi Wan
                Group, Inc. and Subsidiaries*
     23.2   Consent of MOORE STEPHENS FRAZER AND TORBET, LLP for Yi Wan Group,
                Inc. Reviewed Financial Statements December 31, 2001 and 2000
     23.3   Consent of MOORE STEPHENS FRAZER AND TORBET, LLP for Yi Wan Group,
                Inc. Audited Financial Statements December 31, 2000 and 1999**
     23.4   Consent of MOORE STEPHENS FRAZER AND TORBET, LLP for Yi Wan Group,
                Inc. Subsidiaries Audited Financial Statements December 31,
                1999 and 1998**
     24.5   Consent of Independent Accountants for Yi Wan Group, Inc.
                Audited Financial Statements December 31, 2002 and 2001
     99     Form 10-12G/A filed on 03/28/02, SEC File No. 000-33119.
     99.1   Application for the Transfer of the Stock Rights of Jiaozuo Yi Wan
                Maple Leaf High Technology Agriculture Developmeetn Co., Ltd.
     99.2   Repy to the the Transfer of the Transfer of the Stock Rights of
                Jiaozuo Yi Wan Maple Leaf High Technology Agriculture
                Development Co., Ltd.
     99.3
     99.4
* Denotes previously filed exhibit, filed with Form 10-12G/A on 11/07/01, SEC
File No. 000-33119.
** Denotes previously filed exhibit, filed with Form 10-12G/A on 5/21/02, SEC
File No. 000-33119

 (b)  Reports on Form 8-K
None


                                       95



                                   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.

                                            YI WAN GROUP, INC.
                                            (Registrant)


                                            By  /s/Cheng Wan Ming
                                                   Cheng Wan Ming
Date: April 15, 2003

     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.

      Signature                   Title                              Date
      ---------                   -----                              ----

  /s/ Cheng Wan Ming   Chairman of Board, President,               04/15/03
 -------------------   Principal Executive Officer
      Cheng Wan Ming

  /s/ Wu Zeming        Chief Financial Officer and Director        04/15/03
 ------------------
      Wu Zeming

  /s/ You Yingliu      Director                                    04/15/03
 -----------------
      You Yingliu

  /s/ Zhang Haoyu      Director                                    04/15/03
 -----------------
      Zhang Haoyu

  /s/ Yang Huijuan     Director                                    04/15/03
 -----------------
      Yang Huijuan


  /s/ Luo Guanying     Director                                    04/15/03
 -----------------
      Luo Guanying


  /s/ Liang Xiaogen    Director                                    04/15/03
 ------------------
      Liang Xiaogen


  /s/ Cheng Manli      Director                                    04/15/03
 ------------------
      Cheng Manli


  /s/ Cen Minhong      Director                                    04/15/03
 ------------------
      Cen Minhong


  /s/ Cheng Wanqing    Director                                    04/15/03
 ------------------
      Cheng Wanqing


  /s/ Cheng Deqiang    Director                                    04/15/03
 ------------------
      Cheng Deqiang



                                       96



   CERTIFICATION ACCOMPANYING PERIODIC REPORT PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002


I, Cheng Wan Ming, certify that:

1. I have reviewed this annual report on Form 10-K of Yi Wan Group, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
     a) designed such disclosure controls and procedures to ensure that material
     information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this annual report is being
     prepared;
     b) evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     annual report (the "Evaluation Date"); and
     c) presented in this annual report our conclusions about the effectiveness
     of the disclosure controls and procedures based on our evaluation as of the
     Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
     a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and
     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: April 15, 2003


/s/Cheng Wan Ming
Cheng Wan Ming
President



                                       97



   CERTIFICATION ACCOMPANYING PERIODIC REPORT PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002

I, Wu Zeming, certify that:

1. I have reviewed this annual report on Form 10-K of Yi Wan Group, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
     a) designed such disclosure controls and procedures to ensure that material
     information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this annual report is being
     prepared;
     b) evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     annual report (the "Evaluation Date"); and
     c) presented in this annual report our conclusions about the effectiveness
     of the disclosure controls and procedures based on our evaluation as of the
     Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
     a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and
     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: April 15, 2003

/s/Wu Zeming
Wu Zeming
Chief Financial Officer and Chief Accounting Officer`