UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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

                                    FORM 10-K

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

(Mark One)

|X|  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934

For the fiscal year ended December 31, 2003

                                       OR

|_|  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from __________________ to _____________________

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                        (I.R.S. Employer
    incorporation or organization)                        Identification No.)

       101 E. 52 Street, 9th Floor
       New York, New York                                         10022
    (Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code:  (212) 752-9700

                              All communications to
                             Arthur S. Marcus, Esq.
                 Gersten, Savage, Kaplowitz, Wolf & Marcus, LLP
                           101 E. 52 Street, 9th Floor
                            New York, New York 10022
                                 (212) 752-9700
<PAGE>


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

     Title of each class         NAme of each exchange on which registered
     -------------------         -----------------------------------------
           None                                    None

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

                           Common stock, no par value
                                (Title of Class)

         Indicate  by check  mark  whether  the  registrant:  (1) has  filed all
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934 during the preceding 12 months (or for such shorter  period that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K 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-K or any
amendment to this Form 10-K. |X|

         Indicate by check mark whether the registrant is an  accelerated  filer
(as defined in Exchange Act Rule 12b-2). Yes |_| No |X|

         The aggregate  market value of the voting and non-voting  common equity
held by  nonaffiliates  computed by  reference  to the price at which the common
equity  was  last  sold as of the last  business  day of the  registrant's  most
recently completed fiscal quarter is $3,570,625.

         The issuer's revenues for its most recent fiscal year were $12,495,189.

         As of December 31,  2003,  there were  16,506,250  shares of our common
stock issued and outstanding.

<PAGE>


                                TABLE OF CONTENTS
                          TO ANNUAL REPORT ON FORM 10-K
                        FOR YEAR ENDED DECEMBER 31, 2003

PART I

Item 1.     Description of Business............................................2
Item 2.     Description of Property...........................................36
Item 3.     Legal Proceedings.................................................38
Item 4.     Submission of Matters to a Vote of Security Holders...............38

PART II

Item 5.     Market for Registrant's Common Equity, Related Stockholder
            Matters and Issuer Purchases of Equity Securities.................39
Item 6.     Selected Financial Data...........................................40
Item 7.     Management's Discussion and Analysis of
            Financial Condition and Results of Operation .....................41
Item 7A.    Quantitative and Qualitative Disclosures about Market Risk .......47
Item 8      Financial Statements and Supplementary Data ......................47
Item 9      Changes in and Disagreements on Accounting and Financial
            Disclosure .......................................................66
Item 9A.    Controls and Procedures ..........................................66

PART III

Item 10.    Directors and Executive Officers of the Registrant ...............66
Item 11.    Executive Compensation ...........................................70
Item 12.    Security Ownership of Certain Beneficial Owners and Management ...73
Item 13.    Certain Relationships and Related Transactions ...................74
Item 14.    Controls and Procedures ..........................................75

PART IV

Item 15.    Exhibits, Financial Schedules, and Reports on Form 8-K ...........76

                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

<PAGE>


                           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.



                                       1
<PAGE>


PART I


ITEM 1.  DESCRIPTION OF BUSINESS

GENERAL

We were incorporated in Florida in May 1999. We are authorized to issue
50,000,000 shares of common stock, no par value, 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, no par value, 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.
Our agriculture subsidiary ceased operations in December 2001. In December 2002,
we sold our agriculture subsidiary to a third party. Since our inception,
neither we, nor any of our three subsidiaries, have ever been subject to any
bankruptcy, receivership or similar proceedings. 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

QINYANG 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 (RMB20,000,000). We will
contribute approximately $1,930,711 (RMB16,000,000) in exchange for an 80%
equity interest in QINYANG. OLD QINYANG will contribute approximately $361,906
(RMB3,000,000) in the form of a building and land use right and $120,672
(RMB1,000,000) in cash, in exchange for a 20% equity interest in Quinyang Yi Wan
Hotel Co. Ltd. The registered capital amount of $2,413,389 (RMB20,000,000) has
been contributed by each joint venture partner. We have contributed our share of
capital of $1,930,711

                                       2
<PAGE>


(RMB16,000,000) 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. The official license,
however, 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. In 2003, the Jiaozuo Foreign Trade and Economy Cooperative Bureau conducted
the audit and issued the official license. Quinyang Yi Wan Hotel Co., Ltd and
the Qinyang Hotel are located at:

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

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
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

                                       3
<PAGE>


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.

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; and

   o  Telecommunications Division or Telecommunications Company.

ORGANIZATIONAL HISTORIES OF OUR SUBSIDIARY COMPANIES

Prior to our acquisition of our hotel 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  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., a company established under the laws of
      the People's Republic of China and which had an ownership interest in only
      our telecommunications company.

As a result of the transactions described below, all of the former individual
owners of Shun'ao Industry and Commerce Company are also our shareholders. In
addition, as a result of the transactions described below we have the following
ownership interests in our subsidiaries:

   o  90% ownership in our Jiaozuo Yi Wan hotel company;

   o  100% ownership in our telecommunications company; and

   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

                                       4
<PAGE>


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 ( 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.

The hotel joint venture has recorded a payable of RMB 49,000,000 (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 (approximately $11.9 million), which was paid in
full, to RMB 50,000,000 (approximately US $6 million) in the amended joint
venture. The payable of RMB 49,000,000 (approximately US$5.2 million) was paid
off as of December 31, 2002.

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. The official license,
however, will not be issued until the Qinyang Yi Wan Hotel Co., Ltd. meets the
registered capital requirement of US$2,413,389 (RMB 20,000,000). Although the
full registered capital requirement of US$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 Cooperative Bureau. In 2003, the Jiaozuo
Foreign Trade and Economy Cooperative Bureau conducted the audit and verified
the capital contribution, and issued the official license.

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 US$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

                                       5
<PAGE>


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. 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 of US $500,000 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, 2003 to make this payment. On June 22, 2003, in accordance with a
unanimous written resolution of our telecommunications company's Board of
Directors, we received another extension to June 22, 2004.

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.

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

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.

FOOD AND BEVERAGE OPERATIONS. The hotel has five food and beverage facilities,
two full service restaurants, a buffet coffee shop, and a lobby bar, which are
described below. 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

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      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  16th Floor VIP Restaurant. We completed construction of a new luxury VIP
      restaurant in December, 2003. The grand opening of the restaurant took
      place on January 15, 2004. The restaurant is located on the 16th floor of
      the main building of the Jianzuo Yi Wan Hotel and offers a city view to
      dining guests. The restaurant is a VIP dining facility with three private
      suites ranging in capacity from 40 to 50 people. Each suite contains
      separate sitting areas, large color television, stereo system, karaoke
      equipment, and a private bathroom. Its decor is traditional Chinese with
      antiques. 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 Henam 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.

ENTERTAINMENT OPERATIONS. Our hotel division operates the following
entertainment facility, which is 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.

SAUNA-HEALTH CENTER. The Sauna-Health Center is located on the second floor of
the main building of the Jianzuo Yi Wan Hotel. Between September and November
2003, we undertook renovations and construction on the Sauna-Health Center. The
newly renovated center was open to the public on November 22, 2003. It includes
both a Men's and Ladies' Section offering services ranging from beauty salon,
massage, acupuncture,

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and pedicure to various self-guided relaxation activities, such as
full-body-massage water therapy, shower, sauna, and steam. The facility at the
Men's Section includes an ancient Egyptian style bath center, which includes a
full-body-massage water therapy pool that can accommodate 150 people, four
10-person soaking pools, 10 jacuzzis, 14 individual showers, one 10-person
sauna, one 10-person steam room, and 20 massage beds. The facility at the
Ladies' Section includes a multi-person water therapy pool, 10 individual
showers, multi-functional wet and dry sauna, and 5 massage beds. The new
Sauna-Health Center also has a luxurious lounge, beauty salon, 70-person resting
lounge, 39 standard rooms, 6 deluxe VIP rooms, kids' playing ground, fitness
room, internet bar, deluxe table tennis room, deluxe billiard room, 12 chess
rooms, and a Japanese style food court that can accommodate 300 people. The new
Sauna-Health Center has a total capacity of 500 people.

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
---------------------------------------- ---------------------------------------
Wine/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 of 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.

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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 bi-annual meetings and product shows.

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  Restaurant Expansion. Our Jiaozuo Hotel Division is researching the
      feasibility of opening one restaurant in Zhengzhou 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.

      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

                                       10
<PAGE>


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.

Our Jiaozuo hotel division has two primary target markets: travelers and 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.

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

Dinner parties:

   1.   Overseas Chinese celebrities visiting group party: 320 people

   2.   Jiao Zuo Mobile Telecommunication Company's Mid-Autumn Festival party:
        260 people.

Conferences:

   1.   Henan Province tour industry development conference: 410 people

   2.   Henan Petroleum Company investment conference: 340 people

Products News Conferences:

   1.   Volkswagon Jetta diesel sedan promotion conference: 390 people

   2.   Jiaozuo City tour products promotion conference: 380 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; and

   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

                                       11
<PAGE>


promotional events include big name celebrity entertainment event ticket
give-aways, 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.

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 and business center;

   o  Sundries and gift store;

   o  Night club and karaoke suites (150-200 person capacity);

   o  Massage service; and

   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; and

   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 competitors to match our lodging product.

                                       12
<PAGE>


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 four 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 engage 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.

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 in China. 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

                                       13
<PAGE>


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 has been subject to central government income
tax at a rate of 30% and a 3% provincial government income tax since 2002.

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 December, 2003. Our next annual inspection is
scheduled for approximately January 2005.

EMPLOYEES

As of December 31, 2003, our hotel division employed a total of 667 full-time
employees, comprised of approximately 105 management personnel and 562 staff.

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 guest rooms 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:

                                       14
<PAGE>


   o  One small meeting room, 99.3 square feet, 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 Qin 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 banquet 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.

ENTERTAINMENT OPERATIONS. Our QinYang 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
---------------------------------------- ---------------------------------------

                                       15
<PAGE>


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

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 bi-annual meetings and product
shows.

POTENTIAL FUTURE GROWTH. In order to satisfy the increasing demands for the
rooms and 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 RMB 15
million (US$1.8 million). We have not received any binding commitments to
provide such financing and 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: travelers and 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.

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

Business conferences:

   o  City of Qinyang Young Entrepreneur Conference - 160 people

   o  City of Qinyang Public Relation Department's New Reporting Discussion
      Conference - 240 people

Meetings held by companies:

   o  City of Qinyang Urban Planning Conference - 90 people

   o  City of Qinyang Health Reform Award Ceremony - 300 people

                                       16
<PAGE>


Product exhibits and sales meetings:

   o  Qinyang Glass Steel New Product Exhibit Conference - 110 people

   o  Qinyang New Leather Product Exhibit Conference - 180 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; and

   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. 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.

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 from 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 for
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 the relatively recent
      construction of the hotel, its guest rooms and parking structure in
      October 2001;

   o  Higher number of in-guest room amenities; and

   o  Higher quality peripheral hotel services, including restaurants,
      entertainment, and meeting rooms.

                                       17
<PAGE>


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.

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 engage in wide promotional 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; and

   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, which we have 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:

                                       18
<PAGE>


   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, which has been renewed
every year up to and including October 2003.

EMPLOYEES

As of December 31, 2003, our Qinyang Yi Wan Hotel Division employed a total of
273 full-time employees, comprised of approximately 41 management personnel and
232 staff.

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 74% of our consolidated
revenues during these fiscal years.

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

2003
Food and Beverage Operations                             54.0%
Lodging Operations                                       26.4%
Entertainment Operations                                 19.6%
Total of our consolidated revenues                       $9,216,576

                                       19
<PAGE>


SHUN DE 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.

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

                                       20
<PAGE>


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, sometimes 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.

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:

                                       21
<PAGE>


---------------------------------------- ---------------------------------------
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 copper                        ShangHai Copper Manufacture Sales
                                         Department, Shanghai city
---------------------------------------- ---------------------------------------
Electronic components capacitor,         GuangZhou SaiBo Electronic Ltd.,
Nylon belt                               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 Metal
                                         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
---------------------------------------- ---------------------------------------

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.

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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. We have been granted a permit for each
year that our telecommunications division has been required to obtain such
permit. Failure to obtain this permit could reduce our revenues derived from
Shun de Yi Wan Communication Equipment Plant Company.

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% to 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.

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Our Telecommunications Division has received two patent registrations from the
Ministry of Administration and Trademarks in China, which are listed below:

   o  A component part used in the assembly of analog telephone main
      distribution frames registered as patent number 235727.

   o  A tool used by customers to simultaneously install two wire clips into a
      distribution frame, registered as patent number 213907.

The patents are registered in perpetuity, provided yearly fees of $7,300 are
paid to the Ministry of Administration and Trademarks through December 31, 2002.
We have made all such payments.

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 50 companies in China licensed to produce telephone
distribution switching equipment. Competitors compete chiefly on the basis of
price and technological capabilities. Thirty-six of the 50 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 36 companies, the four largest competitors
have a combined market share of 50%. Our Telecommunications Division has an
approximately 6% market share according to the China Telecommunication Industry
Annual Report for the period from 2000 to 2003 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 the
proposed products summarized below. During 2002, our Telecommunications Division
tested these products internally. This testing has continued during 2003 and
will continue through 2005. 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

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<PAGE>


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 building an expanded product line of
digital switching telephone main distribution frames.

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:

   o  2001 - RMB 80,000 or approximately US$9,638

   o  2002 - RMB 0 or US$0

   o  2003 - RMB 520,000 or approximately US$ 62,920

In order to complete these projects, it will need to spend at least the
following amounts for the specified items:

   o  Digital Switching Components - RMB 8,800,000.00 or approximately
      US$1,060,000.

   o  Optical Switching Components - RMB 6,100,000.00 or approximately
      US$736,000.

   o  Conference Language Interpretation System - RMB 8,000,000.00 or
      approximately US$970,000.

We anticipate that these funds will be provided from our telecommunications
division's operating cash flow. We anticipate hiring the seven additional
technical employees over the next 12 months to accomplish our research and
development projects.

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<PAGE>


NUMBER OF EMPLOYEES

As of December 31, 2003 we had approximately 123 full-time employees, consisting
of 18 managers and 105 staff.

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% to 100% to 25% in
2005, with auto parts tariffs cut to an average of 10%. Quotas on auto imports
will be phased out by 2005.

      TRAVEL AND TOURISM - China agreed to allow unrestricted access to the
Chinese market for hotel operators immediately upon WTO entry, with 100% 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% to 6.5%.

      WOOD AND PAPER - Tariffs cut from present levels of 12% to 18% for wood
and 15% to 25% for paper to between 5% and 7%.

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.

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<PAGE>


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.

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% 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.

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<PAGE>


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.

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:

   o  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.

   o  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.

   o  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, provides that 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.

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<PAGE>


Further, the EJV Law provides that 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.

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 that 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 that the investments of a foreign
investor in China, the profits it earns and its other lawful rights and
interests are protected by Chinese law. Furthermore, Article 5 of the WFOE Law
states that 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.

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 that 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

                                       29
<PAGE>


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; and

   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

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.

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<PAGE>


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.

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

                                       31
<PAGE>


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 that 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 and 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.

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.

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<PAGE>


REQUIRED STATUTORY RESERVE FUNDS

In accordance with various regulations in China, a Foreign Invested Enterprise,
such as our hotel division, 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; and

   o  Distribution to investors.

The three statutory reserve funds are described below:

   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.

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

                                       33
<PAGE>


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.

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.

                                       34
<PAGE>


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, we do 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.

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.

                                       35
<PAGE>


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.

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 and
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  One 500 bed employee dormitory;

   o  5 full service restaurants (1,500 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 sauna-health club (500 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  1 business center;

   o  1 travel agency;

                                       36
<PAGE>


   o  1 sundries and gift store;

   o  1 beauty salon (four stations); and

   o  full facility smoke detectors and water sprinklers.

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
and 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 Use Certificate was obtained from its 20%
joint venture partner as a capital contribution in the amount of approximately
US$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  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); and

   o  full facility smoke detectors and water sprinklers.

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:

                                       37
<PAGE>


   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

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, 2003.

                                       38
<PAGE>


PART II

Item 5.  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
         MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION

Our common stock became 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.

--------------------------- -------------------------- -------------------------
                                      Low                        High
--------------------------- -------------------------- -------------------------
           2003
--------------------------- -------------------------- -------------------------
Fourth Quarter              $0.40                      $9.00
--------------------------- -------------------------- -------------------------
Third Quarter               $0.15                      $1.50
--------------------------- -------------------------- -------------------------
Second Quarter              $0.10                      $0.15
--------------------------- -------------------------- -------------------------
First Quarter               $0.01                      $2.25
--------------------------- -------------------------- -------------------------

--------------------------- -------------------------- -------------------------
           2002
--------------------------- -------------------------- -------------------------
Fourth Quarter              $0.00                      $0.00
--------------------------- -------------------------- -------------------------
Third Quarter               $0.00                      $0.00
--------------------------- -------------------------- -------------------------

A limited trading market exists for our common stock and there is no assurance
that a more significant 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 more significant
trading market develops.

HOLDERS

As of December 31, 2003, there were 16,506,250 shares of common stock
outstanding, which were held of record by 54 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, 2003, there were 54 holders of record.

                                       39
<PAGE>


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.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

Equity Compensation Plan Information

--------------------------------------------------------------------------------
Plan category     Number of securities   Weighted-average   Number of securities
                   to be issued upon      exercise price    remaining available
                      exercise of         of outstanding    for future issuance
                  outstanding options,  options, warrants       under equity
                  warrants and rights       and rights       compensation plans
--------------------------------------------------------------------------------
Equity
compensation
plans approved by
security holders        None                   - - -                 None
--------------------------------------------------------------------------------
Equity
compensation
plans not
approved by
security holders        None                   - - -                 None
--------------------------------------------------------------------------------
Total                   None                   - - -                 None
--------------------------------------------------------------------------------

RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED
SECURITIES

We have had no unregistered securities issuances during our fiscal years ended
2003, 2002 and 2001.

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, 1999 through December 31,
2003.

                                       40
<PAGE>


I.    OVERVIEW

As of December 31, 2003 we have two 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.

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

II.     RESULTS OF OPERATIONS

YI WAN GROUP. INC. AND SUBSIDIARIES
STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                     Combined     Consolidated   Consolidated   Consolidated   Consolidated
                                   December 31,   December 31,   December 31,   December 31,   December 31,
                                       1999           2000           2001           2002           2003
                                    ----------     ----------     ----------     ----------     ----------
                                        USD            USD            USD            USD            USD
                                    ----------     ----------     ----------     ----------     ----------
<S>                                 <C>            <C>            <C>            <C>            <C>
Net Sales                           14,385,693     14,070,568     12,122,239     13,901,421     12,495,189
Cost of Sales                        5,040,628      5,416,003      4,421,636      5,134,589      4,772,291
Gross profit                         9,345,065      8,654,565      7,700,603      8,766,832      7,722,898
Operating Expenses                   4,038,854      4,068,658      4,043,937      5,087,303      4,371,566
Income From Operations               5,306,211      4,585,907      3,656,666      3,679,529      3,351,332
Other Income (Expense)                  (9,364)        57,592         18,560         28,432       (460,559)
Net Income                           4,675,587      3,361,253      2,530,779      1,086,438      1,662,345
Earnings per share                        0.30           0.21           0.16           0.06           0.10

<CAPTION>
BALANCE SHEET
                                   December 31,   December 31,   December 31,   December 31,   December 31,
                                       1999           2000           2001           2002           2003
                                    ----------     ----------     ----------     ----------     ----------
                                        USD            USD            USD            USD            USD
                                    ----------     ----------     ----------     ----------     ----------
<S>                                 <C>            <C>            <C>            <C>            <C>
ASSETS

Total Current Assets                 5,144,585      5,838,988      5,608,102      6,938,058      9,146,425
Other Assets                        25,114,407     23,713,156     22,412,040     21,244,171     20,523,765
Total Assets                        30,258,992     29,552,144     28,020,142     28,182,229     29,670,190

LIABILITIES & STOCKHOLDER'S EQUITY

Current Liabilities:

Accounts Payable & Accrued
Liabilities                          3,429,983      3,567,913      3,453,778      3,795,717      3,814,708
Note Payable - Current
Portion                                     --
Payable to Stockholders/other        4,066,546     10,114,002      5,950,739      4,847,082      4,932,273
Total Current Liabilities            7,496,529     13,681,915      9,404,517      8,642,799      8,746,981


Long Term Liabilities:

Note Payable - Net of
Current Portion
Total Liabilities                    7,496,529     13,681,915      9,404,517      8,746,981      8,428,143

Total Stockholder's Equity          22,762,463     14,609,796     17,151,131     17,730,938     19,398,849

Total Liabilities and
Stockholder Equity                  30,258,992     29,552,144     28,020,142     28,182,229     29,670,190
</TABLE>

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATION

                           FORWARD-LOOKING STATEMENTS:

The following discussion of our 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 expected financial performance, 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) general economic conditions in China;
(b) regulatory factors in China that may lead to additional costs or otherwise
negatively affect our business; (c) whether we are able to manage our planned
growth efficiently, including whether our management will be able to: (i)
identify, hire, train, retain, motivate and manage required personnel or (ii)
successfully manage and exploit existing and potential market opportunities; (d)
whether we are able to generate sufficient revenues or obtain financing to
sustain and grow our operations; (e) whether we are able to successfully fulfill
our primary cash requirements which are explained below under "Liquidity and
Capital Resources"; (f) although the World Health Organization on June 24, 2003
removed its recommendation that people should postpone all but essential travel
to Beijing, China due to SARS and on July 5, 2003 removed Taiwan, China from the
list of areas with recent local transmission of SARS, whether there will be
continuing negative economic effects upon China and the China hotel and tourist
industries due to possible continuing negative perceptions pertaining to SARS;
and (g) whether worldwide economic conditions will negatively affect the tourist
industry in China and our hotel related revenues. 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.

                                       41
<PAGE>


GENERAL

RESULTS OF OPERATIONS

As of December 31, 2003, we had $3,480,712 of retained earnings. As of December
31, 2003, we had cash of $3,365,842 and reported total shareholders' equity of
$19,398,849. For this same period of time, we had revenues of $12,495,189 and
general, administrative and sales expenses of $4,371,566.

CONSOLIDATED RESULTS

1) SALES. Consolidated sales decreased by $1,406,232, or approximately 10.12%,
from $13,901,421 for the year ended December 31, 2002 to $12,495,189 for the
year ended December 31, 2003. The 10.12% decrease was a result of a decrease in
hotel business due to SARS in China and a decrease in sales price, and increased
sales discount promotions to meet market competition for our telecommunication
operations.

2) COST OF GOODS SOLD. Consolidated cost of goods sold decreased by $362,298, or
approximately 7.01% from $5,134,589 for the year ended December 31, 2002 to
$4,772,291 for the year ended December 31, 2003. Cost of goods sold as a
percentage of sales increased to 38.19% for the year ended December 31, 2003,
from 36.94% for the year ended December 31, 2002. The increase was a result of
an increase in the cost of raw materials and the need to discount sales prices
to promote our hotel business. This increase was also a result of an increase in
cost of raw materials, lower sales prices and additional sales discount
promotions in our telecommunication division to meet the telecommunications
related market competition.

(3) GROSS PROFIT. Consolidated gross profit decreased by $1,043,934, from
$8,766,832 for the year ended December 31, 2002 to $7,722,898 for the year ended
December 31, 2003. Gross profit as a percentage of sales decreased to 61.81% for
the year ended December 31, 2003 from 63.06% for the year ended December 31,
2002. This decrease in gross profit as a percentage of sales was the result of
an increase in the cost of materials and operating costs.

(4) SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative expenses
decreased by $715,737, from $5,087,303 for the year ended December 31, 2002 to
$4,371,566 for the year ended December 31, 2003. The selling and administrative
expenses as a percentage of sales decreased to 34.99% for the year ended
December 31, 2003 from 36.59% for the year ended December 31, 2002.The decrease
in selling and administrative expenses was due to the decrease in the cost of
our administrative and selling expenses in our hotel related operations.

(5) NET INCOME. Consolidated net income increased $597,451, or approximately
59.84%, from $998,473 for the year ended December 31, 2002 to $1,595,924 for the
year ended December 31, 2003. Consolidated net income for the year ended
December 31, 2002 included loss on disposal of operation amounting to
$1,596,317. Consolidated net income from continuing operations decreased
$728,686, or approximately 31.35%, from $2,324,610 for the year ended December
31, 2002 to $1,595,924 for the year ended December 31, 2003. The decrease was
mainly due to a decrease in sales in our hotel business due to SARS in China, an
increase in cost of raw materials, lower sale prices, and additional sales
discount promotions pertaining to our telecommunications division.

                                       42
<PAGE>


SEGMENTED RESULTS

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

      HOTEL OPERATIONS: Sales decreased by $674,269 or approximately 6.82%, from
$9,890,845 for the year ended December 31, 2002 to $9,216,576 for the year ended
December 31, 2003. The decrease was a result of a decrease in our hotel
operations due to SARS in China.

      TELECOMMUNICATION OPERATIONS: Sales decreased by $731,963, or
approximately 18.25%, from $4,010,576 for the year ended December 31, 2002 to
$3,278,613 for the year ended December 31, 2003. The decrease was a result of
lower sale prices and increased sales discount promotions to meet market
competition.

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

      HOTEL OPERATIONS: Cost of goods sold decreased by $137,500, from
$3,076,663 for the year ended December 31, 2002 to $2,939,162 for the year ended
December 31, 2003. Cost of goods sold as a percentage of sales increased to
31.88% for the year ended December 31, 2003 from 31.1% for the year ended
December 31, 2002. The increased cost of goods sold as a percentage of sales is
attributable to an increase in the cost of materials and operating costs.

            TELECOMMUNICATION OPERATIONS: Cost of goods sold decreased by
$224,798, from $2,057,926 for the year ended December 31, 2002 to $1,833,128 for
the year ended December 31, 2003. Cost of goods sold as a percentage of sales
increased to 55.91% for the year ended December 31, 2003 from 51.3% for the year
ended December 31, 2002. The increase was a result of an increase in cost of raw
materials and lower sale prices and additional sales discount promotions to meet
the market competition

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

      HOTEL OPERATIONS: Gross profit decreased by $536,769, from $6,816,182 for
the year ended December 31, 2002 to $6,277,413for the year ended December 31,
2003. As a percentage of sales, gross profit decreased from 68.89% for the year
ended December 31, 2002 to 68.11% for the year ended December 31, 2003. The
decrease in gross profit as a percentage of sales resulted from lower selling
prices and increases in the cost of materials and operating costs.

      TELECOMMUNICATION OPERATIONS: Gross profit decreased by $507,165, from
$1,952,650 for the year ended December 31, 2002 to 1,445,485 for the year ended
December 31, 2003. As a percentage of sales, gross profit decreased from 48.7%
for the year ended December 31, 2002 to 44.09% for the year ended December 31,
2003. The decrease in gross profit as a percentage of sales was the result of an
increase in the cost of raw materials and lower sales prices and an increase in
sales discount promotions to meet the market competition.

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

                                       43
<PAGE>


      HOTEL OPERATIONS: Selling and administrative expenses decreased by
$252,457, from $1,580,477 for the year ended December 31, 2002 to $1,328,020 for
the year ended December 31, 2003. Selling and administrative expenses as a
percentage of sales decreased to 14.41% for the year ended December 31, 2003
from 15.98% for the year ended December 31, 2002. This decrease was a result of
a decrease in promotion expense, such as entertainment expense, due to the
existence of SARS in China during this period.

      TELECOMMUNICATION OPERATIONS: Selling and administrative expenses
decreased by $211,362, from $861,390 for the year ended December 31, 2002 to
$650,028 for the year ended December 31, 2003. Selling and administrative
expenses as a percentage of sales decreased to 19.83% for the year ended
December 31, 2003 from 21.48% for the year ended December 31, 2002. The decrease
in selling and administrative expenses as a percentage of sales was a result of
decrease in 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 $472,826, from $1,712,494, or
17.31% of sales, for the year ended December 31, 2002 to $1,239,668, or 13.45%
of sales, for the year ended December 31, 2003. The decrease was due to a
decrease in sales and loss on equipment disposal.

      TELECOMMUNICATIONS OPERATIONS: Net income decreased by $287,418, from
$782,562, or 19.51% of sales, for the year ended December 31, 2002 to $495,144,
or 15.10% of sales, for the year ended December 31, 2003. The decrease was a
result of an increase in cost of raw materials, lower sale prices, and increased
sales discount promotions to meet the market competition.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2003, net cash provided by operating activities was
$2,599,858, net cash used in investing activities was $1,350,872, and net cash
used in financing activities was $18,298. As of December 31, 2002, net cash
provided by operating activities was $5,430,243, net cash used in investing
activities was $3,830,682, and net cash used in financing activities was
$771,399.

Net cash provided by operating activities decreased by $2,830,385 to $2,599,858
for the year ended December 31, 2003, representing a decrease of approximately
52.12%. The decrease in cash flow from operating activities reflect payment
advances made to related parties for expenses and other items during the year
2003. In 2002, and 2003, we advanced Cheng Wan Ming, our president, $179,105 and
$121,689 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.

Net cash used in investing activities decreased by $2,479,810 to $1,350,872 for
the year ended December 31, 2003, representing a 64.74% decrease, compared to
$3,830,682 net cash used for the same period of 2002. The decrease was due to a
reduction in spending on improvements and equipment.

                                       44
<PAGE>


Net cash used in financing activities decreased by $753,101 to $18,298 for the
year ended December 31, 2003, representing a 97.63% decrease, compared to
$771,399 for the same period of 2002. The decrease was primarily a result of a
decrease in distributions paid to the former equity owners 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 and general overhead and personnel related expenses to support
these activities; (2) continued promotional activities pertaining to our attempt
to increase hotel related revenues; (3) the development costs of our hotel
operations in China; (4) the payment of cash contributions to the joint ventures
under the joint venture agreements; and (5) payments due to the former equity
owners of our subsidiaries. We do not have any material commitments for capital
expenditures as of December 31, 2003. We anticipate that our current operating
activities will enable us to meet the anticipated cash requirements for the 2004
fiscal year.

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, as follows: Hotel
operations - $11,960,000; and (2) Telecommunication operations - $1,580,000. No
bank loans were obtained for the Hotel or Telecommunications operations. We had
cash contributions required to be made by June 2004 to our subsidiaries for
registered capital and the additional investment requirements of $7,371,730 and
the $4,932,273 due to our former joint venture partners. Since our Farm
operation ceased at December 31, 2002, only $500,000 additional investment
requirement for our Telecommunication division remains outstanding to be paid.
The balances are to be funded from the profits generated from the operations of
our subsidiaries and, if necessary, equity financing, although there are no
assurances that we will be successful in ever obtaining equity financing for
those purposes. Our former joint venture partners extended the June 2003 payment
date to June 2004 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.

                                       45
<PAGE>


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.

OFF-BALANCE SHEET ARRANGEMENTS

None.

CONTRACTUAL OBLIGATIONS

Table of Contractual Obligations

--------------------------------------------------------------------------------
                                            PAYMENT DUE BY PERIOD
-------------------------------- -----------------------------------------------
CONTRACTUAL OBLIGATIONS           TOTAL   LESS THAN    1-3     3-5    MORE THAN
                                            1 YEAR    YEARS   YEARS    5 YEARS
-------------------------------- -------- ---------- ------- ------- -----------
Long-Term Debt Obligations        None    --          --      --      --
-------------------------------- -------- ---------- ------- ------- -----------
Capital Lease Obligations         None    --          --      --      --
-------------------------------- -------- ---------- ------- ------- -----------
Operating Lease Obligations       None    --          --      --      --
-------------------------------- -------- ---------- ------- ------- -----------
Purchase Obligations              None    --          --      --      --
-------------------------------- -------- ---------- ------- ------- -----------
Other Long-Term Liabilities
Reflected on the Registrant's
Balance Sheet under GAAP          None    --          --      --      --
-------------------------------- -------- ---------- ------- ------- -----------
Total                             0       --          --      --      --
--------------------------------------------------------------------------------

                                       46
<PAGE>


Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

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, 2003 and 2002,  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,  2003 and 2002,  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.


/s/ Moore Stephens Wurth Frazer and Torbet, LLP
March 4, 2004
Walnut, California


                             YI WAN GROUP, INC. AND SUBSIDIARIES

                                 CONSOLIDATED BALANCE SHEETS
                               AS OF DECEMBER 31, 2003 AND 2002

                                   A S S E T S
                                                           2003          2002
                                                       -----------   -----------
CURRENT ASSETS:
  Cash                                                 $ 3,365,842   $ 2,135,154
  Accounts receivable, net of allowance for
    doubtful accounts of $8,104 and $6,455
    at December 31, 2003 and 2002, respectively          1,612,710     1,284,655
  Due from related parties                               3,599,133     1,686,504
  Note receivable                                               --     1,217,579
  Inventories                                              513,432       568,051
  Assets of discontinued operations                             --         1,289
  Prepaid expenses                                          55,308        44,826
                                                       -----------   -----------
    Total current assets                                 9,146,425     6,938,058
                                                       -----------   -----------

BUILDINGS, EQUIPMENT AND AUTOMOBILES, net               18,002,661    19,131,044
                                                       -----------   -----------

OTHER ASSETS:
  Intangible asset, net                                  1,590,561     1,635,958
  Equipment held for sale                                  529,750            --
  Deferred tax asset                                        31,718       182,044
  Other non-current assets                                 369,075       295,125
                                                       -----------   -----------
    Total other assets                                   2,521,104     2,113,127
                                                       -----------   -----------

      Total assets                                     $29,670,190   $28,182,229
                                                       ===========   ===========

    L I A B I L I T I E S   A N D   S H A R E H O L D E R S'   E Q U I T Y

CURRENT LIABILITIES:
  Accounts payable                                     $   327,862   $   370,101
  Accounts payable - related party                          56,540        87,417
  Accrued liabilities                                      733,261       763,309
  Wage and benefits payable                                301,815       265,580
  Sales tax payable                                        873,208       875,510
  Income taxes payable                                   1,049,331     1,279,595
  Due to shareholders                                       89,044        88,800
  Due to prior owners of joint ventures                  4,932,273     4,932,273
  Notes payable                                             64,809        83,107
  Liabilities of discontinued operations                        --         1,289
                                                       -----------   -----------
    Total current liabilities                            8,428,143     8,746,981
                                                       -----------   -----------

MINORITY INTEREST                                        1,843,198     1,704,310
                                                       -----------   -----------

SHAREHOLDERS' EQUITY:
  Common stock, no par value, authorized
    50,000,000 shares, 16,506,250 shares issued
    and outstanding                                         10,078        10,078
  Paid-in-capital                                        5,115,222     5,109,656
  Statutory reserves                                    10,655,821     9,630,799
  Retained earnings                                      3,480,712     2,909,810
  Accumulated other comprehensive income                   137,016        70,595
                                                       -----------   -----------
    Total shareholders' equity                          19,398,849    17,730,938
                                                       -----------   -----------

      Total liabilities and shareholders' equity       $29,670,190   $28,182,229
                                                       ===========   ===========


The accompanying notes are an integral part of this statement.

                                       47
<PAGE>


                       YI WAN GROUP, INC. AND SUBSIDIARIES

        CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


                                                          2003          2002
                                                      -----------   -----------

NET SALES                                             $12,495,189   $13,901,421

COST OF SALES                                           4,772,291     5,134,589
                                                      -----------   -----------

GROSS PROFIT                                            7,722,898     8,766,832

SELLING, GENERAL AND  ADMINISTRATIVE EXPENSES           4,371,566     5,087,303
                                                      -----------   -----------

INCOME FROM OPERATIONS                                  3,351,332     3,679,529
                                                      -----------   -----------

OTHER INCOME (EXPENSE):
  Interest income                                          25,023        16,716
  Other income (expense)                                 (485,582)       11,716
                                                      -----------   -----------
      Total other income (expense)                       (460,559)       28,432
                                                      -----------   -----------

INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION
  FOR INCOME TAXES AND MINORITY INTEREST                2,890,773     3,707,961

PROVISION FOR INCOME TAXES                              1,155,961     1,217,905
                                                      -----------   -----------

INCOME BEFORE MINORITY INTEREST                         1,734,812     2,490,056

MINORITY INTEREST                                        (138,888)     (165,446)
                                                      -----------   -----------

NET INCOME FROM CONTINUING OPERATIONS                   1,595,924     2,324,610

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

NET INCOME                                              1,595,924       998,473

OTHER COMPREHENSIVE INCOME:
  Foreign currency translation adjustment                  66,421        87,965
                                                      -----------   -----------

COMPREHENSIVE INCOME                                  $ 1,662,345   $ 1,086,438
                                                      ===========   ===========

EARNINGS (LOSS) PER SHARE - BASIC AND DILUTED:
  From continuing operations                                 0.10          0.14
  From discontinued operations                                 --         (0.08)
                                                      -----------   -----------

  Earnings per share - basic and diluted              $      0.10   $      0.06
                                                      ===========   ===========

WEIGHTED AVERAGE NUMBER OF SHARES                      16,506,250    16,258,990
                                                      ===========   ===========

The accompanying notes are an integral part of this statement.

                                       48
<PAGE>


                       YI WAN GROUP, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                                                            Accumulated
                                                                                                            other com-
                                               Number      Common      Paid-in     Statutory    Retained    prehensive
                                             of shares      stock      -capital     reserves    earnings      income       Totals
                                            -----------   ---------   ----------  -----------  ----------  -----------  -----------
<S>                                          <C>          <C>         <C>         <C>          <C>          <C>         <C>
BALANCE, January 1, 2002                     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                                                  1,034,364  (1,034,364)                       --
  Foreign currency translation adjustments                                                                     87,965        87,965
                                            -----------   ---------   ----------  -----------  ----------   ---------   -----------
BALANCE, December 31, 2002                   16,506,250      10,078    5,109,656    9,630,799   2,909,810      70,595    17,730,938
  Net income                                                                                    1,595,924                 1,595,924
  Additions to paid-in-capital                                             5,566                                              5,566
  Adjustment to statutory reserves                                                  1,025,022  (1,025,022)                       --
  Foreign currency translation adjustments                                                                     66,421        66,421
                                            -----------   ---------   ----------  -----------  ----------   ---------   -----------
BALANCE, December 31, 2003                   16,506,250   $  10,078   $5,115,222  $10,655,821  $3,480,712   $ 137,016   $19,398,849
                                            ===========   =========   ==========  ===========  ==========   =========   ===========
</TABLE>


The accompanying notes are an integral part of this statement.

                                       49
<PAGE>


                       YI WAN GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


                                                       2003            2002
                                                  -------------   -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                      $   1,595,924   $     998,473
      Loss from discontinued operations                      --       1,326,137
                                                  -------------   -------------
        Income from continuing operations             1,595,924       2,324,610
  Adjustments to reconcile net income to cash
    provided by operating activities:
      Minority interest                                 138,888          87,149
      Depreciation                                    1,456,348       1,503,788
      Amortization                                       45,397          52,445
      Loss on equipment disposal                        493,157              --
      Land use right                                      5,566           5,551
      Deferred tax assets                               150,326         (84,612)
      Non-cash stock issuance for consulting
        and legal fees                                       --           5,000
      Translation adjustment                             66,421          87,965
      (Increase) decrease in assets:
        Accounts receivable                            (328,055)       (340,968)
        Due from related parties                     (1,912,629)        897,600
        Inventories                                      54,619          (2,512)
        Prepaid expenses                                (10,482)        (23,455)
        Note receivable                               1,217,579      (1,217,579)
        Due from officers and employees                 (73,950)         49,329
      Increase (decrease) in liabilities
        Accounts payable                                (42,239)         59,692
        Accounts payable - related party                (30,877)         76,629
        Accrued liabilities                             (30,048)        100,308
        Wages and benefits payable                       36,235         (25,497)
        Sales tax payable                                (2,302)         11,839
        Income taxes payable                           (230,264)        219,900
        Due to shareholders                                 244              (4)
  Cash provided by discontinued operations                   --       1,643,065
                                                  -------------   -------------
        Net cash provided by operating activities     2,599,858       5,430,243
                                                  -------------   -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of land use right                                 --        (315,722)
  Proceeds from sale of equipment                         3,756              --
  Purchase of buildings, equipment
    and automobiles                                  (1,354,628)     (3,514,960)
                                                  -------------   -------------
        Net cash used in investing activities        (1,350,872)     (3,830,682)
                                                  -------------   -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Distributions paid to prior owners of
    joint ventures                                           --        (840,857)
  Borrowings (principal payments) on
    notes payable                                       (18,298)         69,458
                                                  -------------   -------------
        Net cash used in financing activities           (18,298)       (771,399)
                                                  -------------   -------------

INCREASE IN CASH                                      1,230,688         828,162

CASH, beginning of year                               2,135,154       1,306,992
                                                  -------------   -------------

CASH, end of year                                 $   3,365,842   $   2,135,154
                                                  =============   =============


The accompanying notes are an integral part of this statement.

                                       50
<PAGE>




                                       51
<PAGE>

                      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.

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.

                                       52
<PAGE>


                      YI WAN GROUP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED 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 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, 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.

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 has discontinued its
operations as of December 31, 2002.

The TELECOMMUNICATIONS 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.

                                       53
<PAGE>


                      YI WAN GROUP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (CONTINUED)

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, 2003 and 2002
amounted to $1,456,348 and $1,503,788, 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,
2003, the Company expects these assets to be fully recoverable.

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

                                                         2003            2002
                                                     -----------     -----------
Buildings and improvements                           $21,603,579     $21,363,578
Furniture and equipment                                4,968,773       5,779,747
Automobiles                                              303,234         219,264
Construction in progress                                  49,681          77,912
                                                     -----------     -----------
  Totals                                              26,925,267      27,440,501
Less accumulated depreciation                          8,922,606       8,309,457
                                                     -----------     -----------
  Buildings, equipment and automobiles, net          $18,002,661     $19,131,044
                                                     ===========     ===========

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.

                                       54
<PAGE>


                      YI WAN GROUP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (CONTINUED)

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2001, the FASB issued Statement of Financial Accounting Standards No.
143, "Accounting for Asset Retirement Obligations" ("FAS 143"). FAS 143 changes
the recorded amount of liabilities associated with asset retirements and
requires the accretion of interest expense over the remaining life of the asset.
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 is not expected to 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 adoption of this statement did not have a significant impact on
the financial condition or results of operations of the Company.

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 has adopted this Statement in 2003. The adoption of
this statement did not have a significant impact on the financial condition or
results of operations of the Company.

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 financial condition or
results of operations of the Company.

                                       55
<PAGE>


                      YI WAN GROUP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (CONTINUED)

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS, (CONTINUED)

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 has adopted this statement in 2003. The adoption
of this statement did not have a significant impact on the financial condition
or results of operations of the Company.

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, an Interpretation of ARB No. 51 (FIN No. 46), which
requires the consolidation of certain variable interest entities, as defined.
FIN No. 46 is effective immediately for variable interest entities created after
January 31, 2003, and on July 1, 2003 for investments in variable interest
entities acquired before February 1, 2003; however, disclosures are required
currently if a company expects to consolidate any variable interest entities. As
the Company has no such variable interest entities, the adoption of FIN No. 46
did not have an impact on the Company's results of operations, financial
position or cash flows.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative instruments and Hedging Activities" ("SFAS No. 149"). SFAS No. 149
amends and clarifies financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities under SFAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 149 is effective for
contracts entered into or modified after June 30, 2003 and for hedging
relationships designated after June 30, 2003. The adoption of this statement did
not have a significant impact on the financial condition or results of
operations of the Company.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity." SFAS No. 150
changes the accounting for certain financial instruments that, under previous
guidance, issuers could account for as equity. FASB No. 150 requires that those
instruments entered into or modified after May 31, 2002, and otherwise is
effective at the beginning of the first interim period beginning after June 15,
2003. The adoption of this statement is not expected to have a material impact
on the financial condition or results of operations of the Company.

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, 2003 and 2002 amounted to $3,365,842 and
$2,135,154, 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.

                                       56
<PAGE>


                      YI WAN GROUP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (CONTINUED)

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:

                                               2003        2002
                                             -------     --------
Hotel inventories                           $210,728     $211,453
Telecommunications inventories               302,704      356,598
                                            --------     --------
  Total inventories                         $513,432     $568,051
                                            ========     ========

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


The TELECOMMUNICATIONS inventories consist of the following at December 31:

                                               2003         2002
                                             -------     --------
Raw materials                               $ 80,583     $ 97,301
Work in process                              103,339      142,249
Finished goods                               118,782      117,048
                                            --------     --------
  Total inventories                         $302,704     $356,598
                                            ========     ========

INTANGIBLE ASSETS

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, 2003 and 2002 amounted to $45,397 and $52,445,
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, 2003 and 2002
amounted to $5,566 and $5,551, respectively.

                                       57
<PAGE>


                      YI WAN GROUP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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 $31,718 and $182,044 as at
December 31, 2003 and 2002 represents taxes on expenses deducted for financial
statements purposes and not for tax purposes.

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:

                                               2003            2002
                                             ---------     -----------
Provision for China Income Tax              $  914,214      $1,184,112
Provision for China Local Tax                   91,421         118,410
Deferred taxes                                 150,326         (84,617)
                                            ----------      ----------
  Total provision for income taxes          $1,155,961      $1,217,905
                                            ==========      ==========

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.

                                       58
<PAGE>


                      YI WAN GROUP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (CONTINUED)

INCOME TAXES, (CONTINUED)

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

                                           2003      2002
                                          ------    ------
U.S. Statutory rates                          34%       34%
Foreign income not recognized in U.S.        (34)      (34)
China Income taxes                            40        33
                                          ------    ------
  Effective tax rate                          40%       33%
                                          ======    ======

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, 2003 and 2002.

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:

                                      2003       2002
                                    -------     -------
Notes payable to various
  vendors, unsecured, due on
  demand, no interest               $64,809     $83,107
                                    =======     =======

NOTE 3 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Income taxes paid amounted to $1,235,899 and $1,098,607 for the years ended
December 31, 2003 and 2002, respectively. No interest expense payments were made
for the years ended December 31, 2003 and 2002.

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.

                                       59
<PAGE>


                      YI WAN GROUP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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, 2003 and 2002 amounted to $3,599,133
and $1,686,504, respectively.

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

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, 2003 and 2002, YWG made pension contributions in the amount of
$44,201 and $51,875, respectively.

NOTE 8 - NOTE RECEIVABLE

At December 31, 2002, the note receivable of $1,217,579 represents the remaining
balance due from the sale of FARM assets. The note receivable is non-interest
bearing and was paid off 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.

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

                                       60
<PAGE>


                      YI WAN GROUP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 10 - DISTRIBUTION OF INCOME, STATUTORY RESERVES AND RESTRICTED RETAINED
EARNINGS, (CONTINUED)

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, 2003 and 2002 amounted to
$10,655,821 and $9,630,799, respectively. No other dividends or distributions
were declared to the owners for the years ended December 31, 2003 and 2002.

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, 2003 and 2002.

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, 2003 and 2002, 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.

                                                          2003           2002
                                                       ----------     ----------
Payment due for acquisition 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
Payment due to Shun'ao for return of investment           173,991        173,991
                                                       ----------     ----------
    Totals                                             $4,932,273     $4,932,273
                                                       ==========     ==========

                                       61
<PAGE>


                      YI WAN GROUP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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 its 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.

This sale was accounted for as a disposal group under SFAS No. 144. Accordingly,
amounts in the  financial  statements  and  related  amounts  for 2002 have been
reclassified to reflect SFAS No. 144 treatment.


                                       62
<PAGE>


                      YI WAN GROUP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 13 - DISCONTINUED OPERATIONS, (CONTINUED)

Operating results of the discontinued operations are as follows:

                                                     2003          2002
                                                 -----------   -----------
Income (loss) from discontinued operations
  before income taxes                                     --       119,745
                                                 -----------   -----------
Income (loss) from discontinued operations                --       119,745
Loss on disposal of discontinued operations,
  net of income taxes of $0                               --    (1,596,317)
Minority interest                                         --       150,435
                                                 -----------   -----------
Total loss from discontinued operations          $        --   $(1,326,137)
                                                 -----------   -----------
Loss per share from discontinued operations      $        --   $     (0.08)
                                                 -----------   -----------

Balance sheets of the discontinued operations as of December 31 are as follows:

                                                     2003          2002
                                                 -----------   -----------
Cash                                             $        --   $     1,289
                                                 -----------   -----------
    Total current assets                                  --         1,289
                                                 -----------   -----------

Current liabilities                                       --         1,289
Shareholders' equity                                      --            --
                                                 -----------   -----------
    Total liabilities and shareholders' equity   $        --   $     1,289
                                                 ===========   ===========

HOTEL BOWLING OPERATIONS

The HOTEL has ceased its bowling operation at the end of September 2003. The
Company has sold part of the equipment during 2003 and recognized a loss of
$493,157 on disposal. The Management of HOTEL is in the process of finding
potential buyers and formalizing a plan to sell the remaining equipment. As of
December 31, 2003, the fair market value of the bowling equipment has not been
determined and no impairment of the asset value has been calculated. As of
December 31, 2003, the related equipment with a net book value of $529,750 has
been recorded as equipment held for sale no gain or loss has been recognized in
the current period.

                                       63
<PAGE>


                       YI WAN GROUP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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:

<TABLE>
<CAPTION>
                                                                                                             Inter-
                                                                Entertain -                  Telecommu-     segment
                                  Restaurant       Lodging          ment        Subtotals    nications    elimination     Totals
                                 ------------    -----------    -----------    -----------   ----------   -----------  -----------
<S>                              <C>             <C>            <C>            <C>           <C>          <C>           <C>
2003
----
Net sales                        $  4,974,215    $ 2,439,298    $ 1,803,063    $ 9,216,576   $3,278,613   $        --   $12,495,189
Cost of sales                       2,538,327        179,923        220,913      2,939,163    1,833,128            --     4,772,291
                                 ------------    -----------    -----------    -----------   ----------   -----------   -----------
Gross profit                        2,435,888      2,259,375      1,582,150      6,277,413    1,445,485            --     7,722,898
Operating expenses                    619,177        336,487        372,356      1,328,020      650,028                   1,978,048
Depreciation and amortization                                                    1,313,896       21,975                   1,335,871
Unallocated expenses                                                             1,057,647                                1,057,647
                                 ------------    -----------    -----------    -----------   ----------   -----------   -----------
Income from operations           $  1,816,711    $ 1,922,888    $ 1,209,794      2,577,850      773,482            --     3,351,332
                                 ============    ===========    ===========
Interest income                                                                     13,991       11,032                      25,023
Other income (expense)                                                            (485,582)          --                    (485,582)
Provision for income tax                                                          (866,591)    (289,370)                 (1,155,961)
                                                                               -----------   ----------   -----------   -----------
Income before minority interest                                                $ 1,239,668   $  495,144   $        --   $ 1,734,812
                                                                               ===========   ==========   ===========   ===========

Total assets                                                                   $24,667,327   $6,837,457   $(1,834,594)  $29,670,190
                                                                               ===========   ==========   ===========   ===========
</TABLE>

                                       64
<PAGE>


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


NOTE 14 - SEGMENT INFORMATION, (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                           Inter-
                                                                 Entertain-                 Telecommu-     segment
                                    Restaurant      Lodging         ment        Subtotals    nications   elimination    Totals
                                   ------------   -----------   ------------   -----------  -----------  -----------  -----------
<S>                                <C>            <C>           <C>            <C>          <C>          <C>          <C>
2002
----
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        6,560                    16,716
Other income (expense)                                                             (35,968)      47,684                    11,716
Provision for income tax                                                          (856,150)    (361,755)               (1,217,905)
                                                                               -----------  -----------  -----------  -----------

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
                                                                               ===========  ===========  ===========
                                                                                                                       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
                                                                                                                     ============
</TABLE>

                                       65
<PAGE>


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.

Item 9A.  CONTROLS AND PROCEDURES

With the participation of management, our Chief Executive Officer and Chief
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 Chief Executive Officer and Chief 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 control over financial
reporting to the knowledge of our management, or in other factors that have
materially affected or are reasonably likely to materially affect these internal
controls over financial reporting subsequent to the evaluation date.


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, 2004, are as follows:

----------------- ----- -------------------------- ---------------- ------------
        Name       Age           Position             Held Since    Current term
                                                                      To expire
----------------- ----- -------------------------- ---------------- ------------
Cheng Wan Ming     43        Chairman of Board         May 1999      March 2005
                               and President
----------------- ----- -------------------------- ---------------- ------------
You Yingliu        63          Director and            May 1999      March 2005
                              Vice-president
----------------- ----- -------------------------- ---------------- ------------
Luo Guanying       58          Director and            May 1999      March 2005
                              Vice-president
----------------- ----- -------------------------- ---------------- ------------
Liang Xiaogen      57            Director              May 1999      March 2005
----------------- ----- -------------------------- ---------------- ------------
Wu Zeming          52     Chief Financial Officer      May 1999      March 2005
                         Chief Accounting Officer
                                 Director
----------------- ----- -------------------------- ---------------- ------------
Cheng Manli        41             Director             May 1999      March 2005
----------------- ----- -------------------------- ---------------- ------------
Cen Minhong        42             Director             May 1999      March 2005
----------------- ----- -------------------------- ---------------- ------------
Cheng Wanqing      35             Director             May 1999      March 2005
----------------- ----- -------------------------- ---------------- ------------
Cheng Deqiang      71             Director             May 1999      March 2005
----------------- ----- -------------------------- ---------------- ------------

                                       66
<PAGE>


The names and ages of our telecommunications company's executive officers and
directors as of March 31, 2004, are as follows:

----------------- ----- -------------------------- ---------------- ------------
        Name       Age           Position             Held Since    Current term
                                                                      To expire
----------------- ----- -------------------------- ---------------- ------------
Cheng Wan Ming     43       Chairman of Board       September 1993   March 2006
                              and President
----------------- ----- -------------------------- ---------------- ------------
Wu Zeming          52     Vice-Chairman of Board    September 1993   March 2006
----------------- ----- -------------------------- ---------------- ------------
You Yingliu        63            Director           September 1993   March 2006
----------------- ----- -------------------------- ---------------- ------------
Luo Guanying       58            Director           September 1993   March 2006
----------------- ----- -------------------------- ---------------- ------------
He Lei             37            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, 2004, are as follows:

----------------- ----- -------------------------- ---------------- ------------
        Name       Age           Position             Held Since    Current term
                                                                      To expire
----------------- ----- -------------------------- ---------------- ------------
Cheng Wan Ming     43        Chairman of Board        March 2001     March 2004
----------------- ----- -------------------------- ---------------- ------------
Guo Ruxing         42     Vice-Chairman of Board      March 2001     March 2004
----------------- ----- -------------------------- ---------------- ------------
Yang Jianying      47           Director and          March 2003     March 2006
                              General Manager
----------------- ----- -------------------------- ---------------- ------------
Liu Hua            40             Director            March 2001     March 2004
----------------- ----- -------------------------- ---------------- ------------
Chen Hong          39             Director            March 2001     March 2004
----------------- ----- -------------------------- ---------------- ------------

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 telecommunications
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 former agriculture company in January 1997 and served as its Chairman of the
Board and President from January 1997 until 2002. 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 former
agriculture company in January 1997. From January 1997 to 2002, Mr. Yingliu was
a Director and Vice-President of our former agriculture company.

                                       67
<PAGE>


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
former 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
former 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.

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
former 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 former 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
and a 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 former agriculture company from January 1997 to 2002. 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 was also a Director of our
former agriculture company from January 1997 to 2002. Since June 1991, Ms. Manli
has been a Director of Wan Da

                                       68
<PAGE>


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 was
also a Director of our former agriculture company from January 1997 until 2002.
Ms. Minhong is the wife of Mr. Cheng Wan Ming.

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 former
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
former 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
was also a Director of our former agriculture company from January 2000 until
2002. 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.

AUDIT COMMITTEE FINANCIAL EXPERT

We do not have an audit committee financial expert. We were not able to identify
a suitable nominee and our management is currently diligently pursuing such a
candidate.

                                       69
<PAGE>


COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

      Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and directors, and persons who own more than ten percent of a registered class
of our equity securities, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. Officers, directors and
greater-than-ten-percent shareholders are required by SEC regulation to furnish
us with copies of all Section 16(a) forms they file. Based solely upon our
review of any such reports furnished to us, we believe that during the year
ended December 31, 2003, such persons made all required filings.

CODE OF ETHICS

We have adopted a code of ethics that applies to our principal executive
officer, principal financial officer or persons performing similar functions.
Our code of ethics is exhibited to this annual report on Form 10-K as Exhibit
14.1.

Item 11. Executive Compensation

The following table sets forth summary information concerning the compensation
received for services rendered during the years ended December 31, 2003, 2002
and 2001 by our President/Chairman of the Board, Cheng Wan Ming. No other
executive officers received aggregate compensation during our last two fiscal
years which exceeded, or would exceed on an annualized basis, $100,000.

<TABLE>
<CAPTION>
-------------------------- -------------------------------------------- ----------------------------------------
Summary Compensation Chart Annual Compensation                          Long Term Compensation
-------------------------- -------------------------------------------- ----------------------------------------
Name & Position     Year   Salary (US$)*            Bonus ($) Other ($) Restricted Options ($) L/Tip ($) All Other
                                                                        Stock
                                                                        Awards
------------------- ------ ------------------------ --------- --------- ---------- ----------- --------- -------
<S>                 <C>     <C>                          <C>       <C>        <C>        <C>       <C>       <C>
Cheng Wan Ming,     2003    11,595                        0         0          0          0         0         0
Chairman/President         (Hotel Division)
------------------- ------ ------------------------ --------- --------- ---------- ----------- --------- -------
                           0                              0         0          0          0         0         0
                           (Communication Division)
------------------- ------ ------------------------ --------- --------- ---------- ----------- --------- -------
                    2002   11,595                         0         0          0          0         0         0
                           (Hotel Division)
------------------- ------ ------------------------ --------- --------- ---------- ----------- --------- -------
                           3,333                          0         0          0          0         0         0
                           (Agriculture Division)
------------------- ------ ------------------------ --------- --------- ---------- ----------- --------- -------
                           0                              0         0          0          0         0         0
                           (Communication Division)
------------------- ------ ------------------------ --------- --------- ---------- ----------- --------- -------
                    2001   11,595                         0         0          0          0         0         0
                           (Hotel Division)
------------------- ------ ------------------------ --------- --------- ---------- ----------- --------- -------
                           0                              0         0          0          0         0         0
                           (Agriculture Division)
------------------- ------ ------------------------ --------- --------- ---------- ----------- --------- -------
                           0                              0         0          0          0         0         0
                           (Communication Division)
------------------- ------ ------------------------ --------- --------- ---------- ----------- --------- -------
</TABLE>

*The salary that Cheng Wan Ming received from our Hotel and Agriculture
Divisions reflects payment by these Divisions.

                                       70
<PAGE>


Our officers and directors, including Cheng Wan Ming, did not receive any
monetary or security compensation from us during 2003. The only compensation
that our officers and directors received during 2003 was from our hotel
subsidiaries, as reflected above.

OPTIONS/SAR GRANTS

No options or SAR grants were granted to the named executive officers during
fiscal year ended December 31, 2003.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END

None.

LONG TERM INCENTIVE PLAN ("LTIP") AWARDS

None.

PENSION PLAN

None.

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 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.

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.

                                       71
<PAGE>


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.

COMPENSATION OF DIRECTORS

No Director receives any cash compensation for their service as a Director. All
directors are reimbursed for their reasonable out-of-pocket expenses incurred in
connection with their duties to us.

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

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

Our telecommunications and hotel subsidiaries each have employment agreements
with our President, Mr. Cheng Wan Ming. The employment agreement with the
telecommunications subsidiary provides that Mr. Cheng Wan Ming serve as its
President from September 1999 to September 2004. 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 2005. 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.

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.

Mr. You Yingliu 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 described in Mr. Yingliu's employment agreement with our former
agriculture subsidiary.

                                       72
<PAGE>


REPORT ON REPRICINGS OF OPTIONS/SARS

None.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

      Our officers and directors, including Cheng Wan Ming, did not receive any
monetary or equity compensation from us during 2003. The only compensation that
our officers and directors received during 2003 was from our hotel subsidiaries,
as reflected in the executive compensation table above. We do not have a
compensation committee. Our board of directors and the board of directors of our
subsidiaries determine executive officer compensation. The officers who
participated in the deliberations of our board of directors concerning executive
officer compensation are the officers who are also members of our board of
directors, namely Cheng Wan Ming, You Yingliu, Luo Guanying and Wu Zeming. There
are no officers on the board of directors of Qinyang Yi Wan Hotel.


PERFORMANCE GRAPH

      Our stock did not start trading until the latter half of 2003. As a
result, there is insufficient data for a performance graph.

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 10-K 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.

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, 2003.

                                       73
<PAGE>


Security Ownership of Certain Beneficial Owners and Management
--------------- ------------------------ ------------------------- ------------
Title of Class            Name               Amount and nature      Percentage
                                          of beneficial ownership    of class
--------------- ------------------------ ------------------------- ------------
Common                 Wise Ascent              10,086,296             61.1%
                   Investment Ltd.(1)        (Direct/Indirect)
--------------- ------------------------ ------------------------- ------------
Common             Cheng Wan Ming (1)           10,086,296             61.1%
                                             (Direct/Indirect)
--------------- ------------------------ ------------------------- ------------
Common               Cen Minhong (1)            10,086,296             61.1%
                                             (Direct/Indirect)
--------------- ------------------------ ------------------------- ------------
Common                 You Yingliu               1,026,480             6.2%
                                                 (Direct)
--------------- ------------------------ ------------------------- ------------
Common                  Wu Zeming                1,047,865             6.3%
                                                 (Direct)
--------------- ------------------------ ------------------------- ------------
Common                Luo Guanying                737,019              4.5%
                                                 (Direct)
--------------- ------------------------ ------------------------- ------------
Common                Chang Wanqing               763,750              4.7%
                                                 (Direct)
--------------- ------------------------ ------------------------- ------------
Common                Cheng Deqiang               763,750              4.7%
                                                 (Direct)
--------------- ------------------------ ------------------------- ------------
Common                 Cheng Manli                427,700              2.6%
                                                 (Direct)
--------------- ------------------------ ------------------------- ------------
Common                Liang Xiaogen               422,140              2.6%
                                                 (Direct)
--------------- ------------------------ ------------------------- ------------
Common              All officers and
                        director                15,275,000
                 as a group (9 persons)      (Direct/Indirect)         92.5%
--------------- ------------------------ ------------------------- ------------

(1)   2,579,397 shares of our common stock is owned by Wise Ascent Investments
Limited through its sole officer, director and shareholder, Cheng Wan Ming, who
is also the President, Chairman of the Board of Directors and controlling
shareholder of Yi Wan. Mr.Cheng Wan Ming is the husband of Ms. Cen Minhong. Mr.
Cheng Wan Ming directly owns 5,414,224 shares; his wife, Ms. Cen Minhong,
directly owns 2,092,675 shares. Collectively, Mr.Cheng Wan Ming and Ms. Cen
Minhong, beneficially own 10,086,296 shares as reflected in the above table.

Change In Control

We are not aware of any arrangements which may result in a change in control of
our company. There are no pending or anticipated arrangements that we are aware
of that may cause a change in control of our company. 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 2002, and 2003 our Telecommunications Division purchased materials, supplies,
and paid for operating expenses in the amount of $3,599,133, and $1.686,504 on
behalf of Shun'ao Industry and Commerce Company, a partner in our hotel
divisions. Our Telecommunications Division verbally agreed to pay for these
expenses

                                       74
<PAGE>


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.

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 2002, and 2003, we advanced Cheng Wan Ming, our president, 179,105 and
$121,689 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.

2,579,397 shares of our common stock is owned by Wise Ascent Investments Limited
through its sole officer, director and shareholder, Cheng Wan Ming, who is also
the President, Chairman of the Board of Directors and controlling shareholder of
Yi Wan.


Item 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

      Total annual audit fees billed for professional services rendered by Moore
Stephens Wurth Frazer and Torbet, LLP during the 2003 and 2002 fiscal years for
the audit of our annual financial statements and the review of the financial
statements included in our quarterly reports on Form 10-QSB, or services that
are normally provided by Moore Stephens Wurth Frazer and Torbet, LLP in
connection with statutory and regulatory filings or engagements for those fiscal
years, totaled $100,000 and $115,000, respectively.


TAX FEES

      The total fees billed during the 2003 and 2002 for professional services
rendered by Moore Stephens Wurth Frazer and Torbet, LLP for tax compliance
services were $5,000 and $5,000, respectively. Specifically, these services
involved preparation of the consolidated tax returns.

                                       75
<PAGE>


PART IV

Item 15.  EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K

(a)      Exhibits

   3(i)  Articles of Incorporation of the Registrant*
   3(ii) Bylaws of the Registrant*
   3.1   Jiaozuo Yi Wan Hotel Co., Ltd. Articles of Association*
   3.2   Shunde Yi Wan Communication Equipment Plant Co., Ltd. Articles of
         Association*
   4     Form of common stock Certificate of the Registrant*
  10.1   Form of Employment Agreement Jiaozuo Yi Wan Hotel Co., Ltd.*
  10.2   Form of Employment Agreement Shunde Yi Wan Communication Equipment
         Plant Co., Ltd.*
  10.3   Land Use Permits of Shunde Yi Wan Communication Equipment Plant Co.,
         Ltd.*
  10.4   Land Use Permits of Jiaozuo Yi Wan Hotel Co., Ltd.*
  10.5   Joint Venture Contract Jiaozuo Yi Wan Hotel Co., Ltd.*
  10.6   Agreement of Shunde Yi Wan Communication Equipment Plant Co., Ltd.*
  10.7   Agreement of Jiaozuo Yi Wan Maple Leaf High Technology Agriculture
         Development Ltd., Co. on the Transfer of Equity Shares**
  10.8   Agreement of Jiaozuo Yi Wan Hotel Co., Ltd. on the Transfer of Equity
         Shares**
  10.9   Transfer of Stock Rights and Property Rights Agreement of Jiaozuo Yi
         Wan Maple Leaf High Technology Agriculture Development Co., Ltd.***
  10.10  Qinyang Yi Wan Hotel Co., Ltd. Joint Venture Contract***
  10.11  Joint Venture Contract with Qinyang Hotel***
  10.12  Jiaozuo Foreign Trade and Economy Cooperation Bureau Reply about
         Building Qinyang Yi Wan Hotel Co., Ltd.***
  10.13  Agreement with Jiaozuo Yi Wan Maple Leaf High Technology Agricultural
         Development Co., Ltd.***
  10.14  Reply To The Transfer Of The Transfer Of The Stock Rights Of Jiaozuo Yi
         Wan Maple Leaf High Technology Agricultural Development Co., Ltd.***
  14.1   Code of Ethics
  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**
  23.5   Consent of Independent Accountants for Yi Wan Group, Inc. Audited
         Financial Statements December 31, 2002 and 2001***
  23.6   Consent of Independent Accountants for Yi Wan Group, Inc. Audited
         Financial Statements December 31, 2002 and 2003
  31.1   Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  31.2   Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  32.1   Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to
         Section 906 of the Sarbanes-Oxley Act of 2002

                                       76
<PAGE>


  32.2   Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to
         Section 906 of the Sarbanes-Oxley Act of 2002
  99.1   Application for the Transfer of the Stock Rights of Jiaozuo Yi Wan
         Maple Leaf High Technology Agriculture Development Co., Ltd.
  99.2   Reply to the Transfer of the Transfer of the Stock Rights of Jiaozuo Yi
         Wan Maple Leaf High Technology Agriculture Development Co., Ltd.

----------------
*   Denotes previously filed exhibit, filed with Form 10-12G/A on 11/07/01, SEC
    File No. 000-33119, hereby incorporated by reference.

**  Denotes previously filed exhibit, filed with Form 10-12G/A on 5/21/02, SEC
    File No. 000-33119

*** Denotes previously filed exhibit, filed with Form 10-K on 4/16/03, SEC File
    No. 000-33119, hereby incorporated by reference

We hereby incorporate the following documents by reference: (a) our Form 10
Registration Statement filed on August 24, 2001 and amendments thereto filed on
November 7, 2001, January 7, 2002, February 7, 2002, March 28, 2002, and May 22,
2002; (b) our Form 10Q for the period ended September 30, 2001 filed on December
7, 2001 and an amendment thereto filed on February 6, 2002; (c) our Form 10K for
the period ended December 31, 2001 filed on April 1, 2002 and an amendment
thereto filed on May 22, 2002; (d) our Form 10Q for the period ended March 31,
2002 filed on May 14, 2002; (e) our Form 10Q for the period ended June 30, 2002
filed on August 13, 2002 and an amendment thereto filed on August 13, 2002 and
August 16, 2002; (f) our Form 10Q for the period ended September 30, 2002, filed
on November 14, 2002; (g) our Form 10Q for the period ended March 31, 2003,
filed on May 15, 2003; (h) our Form 10Q for the period ended June 30, 2003,
filed on August 14, 2003 and an amendment thereto filed on September 23, 2003;
(i) our Form 10Q for the period ended September 30, 2003, filed on November 14,
2003 and (j) our Form 10K for the year ended December 31, 2002, filed on April
16, 2003.

(b)      Reports on Form 8-K

None

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<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                               YI WAN GROUP, INC.
                               (Registrant)

                               By  /s/Cheng Wan Ming
                                      Cheng Wan Ming
                                      President
Date: March 30, 2004



         Pursuant to the requirements of the Securities Exchange Act of 1934,
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,            03/30/04
 -------------------      Chief Executive Officer
      Cheng Wan Ming

  /s/ Wu Zeming           Chief Financial Officer and Director     03/30/04
 ------------------
      Wu Zeming

  /s/ You Yingliu         Director                                 03/30/04
 -----------------
      You Yingliu


  /s/ Luo Guanying        Director                                 03/30/04
 -----------------
      Luo Guanying


  /s/ Liang Xiaogen       Director                                 03/30/04
 ------------------
      Liang Xiaogen


  /s/ Cheng Manli         Director                                 03/30/04
 ------------------
      Cheng Manli


  /s/ Cen Minhong         Director                                 03/30/04
 ------------------
      Cen Minhong


  /s/ Cheng Wanqing       Director                                 03/30/04
 ------------------
      Cheng Wanqing


  /s/ Cheng Deqiang       Director                                 03/30/04
 ------------------
      Cheng Deqiang


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