SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported): September 5, 1999
OPAL TECHNOLOGIES, INC.
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(Exact name of Registrant as specified in its charter)
33-18834-LA
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(Commission file number)
Nevada 87-0306464
- ---------------------------------------------- -------------------------
(State or other jurisdiction of incorporation) (I.R.S. Employer
Identification Number)
Suite 4704, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong
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(Address of principal executive offices) (Zip code)
011-852-2541-1999
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On September 5, 1999 the Registrant acquired all of the issued and
outstanding shares of China Can Holdings, Inc. (the "Company") in exchange
for 25,000,000 shares of the Registrant's common stock. The Company owns
65% of the equity of Shijianzhuang Huake Metal Packing Products Co.
Limited, a PRC company being established to produce tops for metal beverage
cans. This company anticipates commencing operations in 2000.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OPAL TECHNOLOGIES, INC.
By: /s/ John Koon
---------------------------
John Koon, President
Date: February 15, 2000
3
<PAGE>
CHINA CAN HOLDINGS INC.
REPORTS AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1998
CONTENT PAGES(S)
DIRECTORS' REPORT 1
AUDITORS' REPORT 2
CONSOLIDATED PROFIT AND LOSS ACCOUNT 3
CONSOLIDATED BALANCE SHEET 4
BALANCE SHEET 5
NOTES TO THE FINANCIAL STATEMENTS 6-9
<PAGE>
CHINA CAN HOLDINGS INC.
DIRECTORS' REPORT
The directors have pleasure in submitting their annual report and audited
financial statements for the year ended December 31, 1998.
PRINCIPAL ACTIVITIES
The Company acts an investment holding company. The subsidiary has not commenced
its business during the year.
SUBSIDIARIES
Details of the Company's subsidiary at December 31, 1998 are set out in note 6
to the financial statements.
RESULTS
The results of the Group for the year ended December 31, 1998 are set out in the
consolidated profit and loss account on page 3. The director does not recommend
the payment of a dividend.
TANGIBLE FIXED ASSETS
Details of movements in tangible fixed assets of the Group during the year are
set out in note 5 to the financial statements.
DIRECTORS
During the financial year and up to the date of this report, Mr. Koon King
Chung, John was the sole director of the Company.
There being no provision to the contrary to Memorandum and Articles of
Association of the Company, the sole director continues in office.
DIRECTORS' INTERESTS IN CONTRACTS
No contracts of significance to which the Company, its holding company and its
subsidiary was a party and in which a director of the Company had a material
interest, whether directly or indirectly, subsisted at the end of the year or at
any time during the year.
SHARE ARRANGEMENT
At no time during the year were the Company, its holding company and its
subsidiary a party to any arrangements to enable the director of the Company to
acquire benefits by means of acquisition of shares in or debentures of, the
Company or any other body corporate.
AUDITORS
A resolution to re-appoint Messrs. Allan Ho & Partners as auditors of the
Company will be proposed at the forthcoming annual general meeting.
On Behalf of the Board
/s/ Koon King Chung, John
- -------------------------
Koon King Chung, John
Hong Kong, July 30, 1999
1
<PAGE>
AUDITORS' REPORT
TO THE MEMBERS OF CHINA CAN HOLDINGS INC.
(Incorporated in British Virgin Islands with limited liability)
We have audited the financial statements on pages 3 to 9 which have been
prepared in accordance with accounting principles generally accepted in Hong
Kong.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The Company's director is responsible for the preparation of financial
statements which give a true and fair view. In preparing financial statements
which give a true and fair view it is fundamental that appropriate accounting
policies are selected and applied consistently.
It is our responsibility to form an independent opinion, based on our audit on
those statements and to report our opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Statements of Auditing Standards
issued by Hong Kong Society of Accountants. An audit includes examination, on a
test basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and
judgments made by the director in the preparation of the financial statements
and of whether the accounting policies are appropriate to the Company's and
Group's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all of the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance as to whether the financial
statements are free from material misstatement. In forming our opinion we also
evaluated the overall adequacy of the presentation of information in the
financial statements. We believe that our audit provides a reasonable basis for
our opinion.
OPINION
In our opinion the financial statements give a true and fair view of the state
of the Group's and of the Company's affairs as at December 31 1998 and the loss
of the Group for the year then ended.
/s/ Allan Ho & Partners
- -----------------------
Allan Ho & Partners
Certified Public Accountants
Hong Kong, July 30, 1999
2
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CHINA CAN HOLDINGS INC.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED DECEMBER 31, 1998
NOTE 1998 1997
HK$ HK$
-------
Revenue - -
Other Income - 215,486
Staff Costs (184,993) (708,967)
Depreciation and amortization expense (11,187,727) (10,886,184)
Other operating expenses (440,255) (3,226,830)
-------------- -------------
Loss from operations (11,812,975) (14,106,495)
Minority interest 4,122,689 4,271,755
-------------- -------------
Net loss for the year/period 3 (7,690,286) (9,334,740)
Accumulated deficit brought forward (9,834,740) -
-------------- -------------
Accumulated deficit carried forward (17,525,026) (9,834,740)
============== =============
There were no recognized gains or losses, other than the net loss for the year
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<PAGE>
CHINA CAN HOLDINGS INC.
CONSOLIDATED BALANCE SHEET
AT DECEMBER 31, 1998
NOTES 1998 1997
HK$ HK$
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ASSETS
Non-Current Assets 5
Fixed Assets 119,710,991 93,464,914
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Current Assets
Prepayment & other debtors 4,163,355 4,112,876
Cash at bank 41,071 135,355
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4,204,426 4,248,231
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Total Assets 123,915,417 97,713,145
============== ==============
EQUITY AND LIABILITIES
Capital and Reserves
Share capital 7 101,400,000 101,400,000
Profit and loss account (17,525,026) (9,834,740)
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83,874,974 91,565,260
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Minority Interest 32,332,498 (1,004,765)
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Current Liabilities
Accruals and other creditors 122,323 218,263
Amount due to holding company 7,585,622 6,934,387
============== ==============
7,707,945 7,152,650
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Total Equity and Liabilities 123,915,417 97,713,145
============== ==============
The financial statements on pages 3 to 9 were approved by the sole director on
July 30, 1999
/s/ Koon Kong Chung, John
- -------------------------
Koon King Chung, John
4
<PAGE>
CHINA CAN HOLDINGS INC.
BALANCE SHEET
AT DECEMBER 31, 1998
NOTES 1998 1997
HK$ HK$
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ASSETS
Non-Current Assets
Interest in subsidiary 6 107,040,443 106,391,751
Current Assets
Cash at bank 26,380 51,155
--------------- -------------
Total Assets 107,066,823 106,442,906
=============== =============
EQUITY AND LIABILITIES
Capital and Reserves
Share capital 7 101,400,000 101,400,000
Profit and loss account (1,935,343) (1,901,481)
--------------- -------------
99,464,657 99,498,519
=============== =============
Current Liabilities
Accruals and other creditors 16,544 10,000
Amount due to holding company 7,585,622 6,934,387
--------------- -------------
7,602,166 6,944,387
--------------- -------------
Total Equity and Liabilities 107,066,823 106,442,906
=============== =============
The financial statements on pages 3 to 9 were approved by the sole director on
July 30, 1999
/s/ Koon King Chung, John
- --------------------------
Koon King Chung, John
5
<PAGE>
CHINA CAN HOLDINGS INC.
NOTES TO THE FINANCIAL STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1998
1. GENERAL
The Company is a private limited company incorporated in British Virgin
Islands. Its ultimate holding company is Bestalong Inc., a company also
incorporated in British Virgin Islands.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies which have been adopted in preparing
these financial statements and which conform with accounting principles
generally accepted in Hong Kong, are as follows:
Basis of consolidation The consolidated financial statements incorporate
the financial statements of the Company and enterprises controlled by the
Company (its subsidiaries) made up to December 31 each year. Control is
achieved where the Company has the power to govern the financial and
operating policies of an investee enterprise so as to obtain benefits from
its activities.
On acquisition, the assets and liabilities of the relevant subsidiaries are
measured at their fair values at the date of acquisition. The interest of
minority shareholders is stated at the minority's proportion of the fair
values of the assets and liabilities recognized.
The results of subsidiaries acquired or disposed of during the year are
included in the consolidated income statement from the effective date of
acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those
used by other members of the group.
All significant inter-company transactions and balances between group
enterprises are eliminated on consolidation.
Taxation
--------
The charge for taxation is based on the results for the period as adjusted
for the items which are non-assessable or disallowed. Timing differences
arise from the recognition for tax purposes of certain items of income and
expense in a different accounting period from that in which they are
recognized in the financial statements. The tax effect of timing
differences, computed under the liability method, is recognized as deferred
taxation in the financial statements to the extent that it is probably that
a liability or asset will crystallize in the foreseeable future, if
significant.
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Operating Losses
----------------
Rental payable under operating losses is charged to the profit and loss
account on a straight line basis over the term of relevant lease.
Foreign currencies
------------------
Transactions in foreign currencies are translated at the rates of exchange
ruling on the dates of the transactions or at the contracted settlement
rate. Monetary assets and liabilities denominated in foreign currencies are
translated at the rates ruling on the balance sheet date. Profits and
losses arising on exchange are dealt with in the profit and loss account.
On consolidation, the assets and liabilities of the Group's overseas
operation are translated at exchange rates ruling on the balance sheet
date. Income and expense items are translated at the average exchange rates
for the period. Exchange differences arising, if any, are classified as
equity and transferred to the Group's translation reserve. Such translation
differences are recognized as income or as expenses in the period in which
the operation is disposed of.
Tangible fixed assets and depreciation
--------------------------------------
Tangible fixed assets, other than property under development, are stated at
cost less depreciation. The cost of an asset comprises its purchase price
and any directly attributable costs of bringing the asset to working
condition and location for its intended use. Expenditure incurred after the
tangible fixed assets have been put into operation, such as repairs and
maintenance and overhaul costs, are normally charged to the profit and loss
account in the period in which they are incurred. In situations where it
can be clearly demonstrated that the expenditure has resulted in an
increase in the future economic benefits expected to be obtained from the
use of the tangible fixed assets, the expenditure is capitalized as an
additional cost of the tangible fixed asset. When assets are sold or
retired, their cost and accumulated depreciation are removed from the
accounts and any gain or loss resulting from their disposal is included in
the profit and loss account.
Depreciation is provided to write off the cost of tangible fixed assets
over their estimated useful lives by using the straight-line method, at the
following rate per annum:
Leasehold land and building 47 years
Equipment, furniture & fixtures 20%
Plant and machinery 10%
Motor vehicle 20%
Properties in the course of construction for production, rental or
administrative purposes, or for purposes not yet determined, are carried at
cost, less any impairment loss where the recoverable amount of the assets
is estimated to be lower than its carrying value. Cost includes
professional fees and, for qualifying assets, borrowing costs dealt with in
accordance with the group's accounting policy. Depreciation of these
assets, on the same basis as other property assets, commences when the
assets are ready for their intended use.
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3. NET LOSS FOR THE YEAR/PERIOD
Net loss for the year/period was arrived at after charging and after
crediting:
1998 1997
HK$ HK$
Directors' remuneration
- -fees - -
- -other emoluments - -
Auditors' remuneration 5,000 10,000
Preliminary expenses - 13,500
Operating lease charges in respect of rented premises - 746,985
======== ========
4. TAXATION
No profits tax has been provided, as there was no estimated assessable
profits derived during the year.
No provision for deferred taxation has been made as the amount of timing
differences involved is significant.
5. FIXED ASSETS
<TABLE>
Leasehold Property Equipment
Land and under Plant & furniture & Motor
building development machinery fixtures vehicle Total
----------- ----------- ---------- ----------- ----------- -------
HK$ HK$ HK$ HK$ HK$
<S> <C> <C> <C> <C> <C> <C>
Cost: - 820,812 102,198,732 220,024 611,530 103,851,098
At 4/1/1997 37,347,210 29,439 12,058 - 37,433,804
45,097
-------------- ----------- --------------- ------------- ------------ ---------------
At 3/31/1998 37,347,210 850,251 102,243,829 232,082 611,530 141,284,902
-------------- ----------- --------------- ------------- ------------ ---------------
Aggregate
depreciation:
At 4/1/1997 - - 10,219,874 44,005 122,305 10,386,184
Charge for year 794,622 - 10,224,383 46,416 122,306 11,187,727
-------------- ----------- --------------- ------------- ------------ ---------------
At 3/31/1998 794,622 - 20,444,257 90,421 244,611 21,573,911
-------------- ----------- --------------- ------------- ------------ ---------------
Net book value:
At 3/31/1998 36,552,588 850,251 81,799,572 141,661 366,919 119,710,991
============== =========== =============== ============= ============ ===============
At 3/31/1997 - 820,812 91,978,858 176,019 489,225 93,464,914
============== =========== =============== ============= ============ ===============
</TABLE>
Property under development, leasehold land and buildings are situated in The
People's Republic of China under a medium term land use right.
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6. INTEREST IN SUBSIDIARY
1998 1997
HK$ HK$
Unlisted shares, at cost 59,217,6000 59,217,600
Amount due from subsidiary 47,822,843 47,174,151
------------------ -----------------
107,040,443 106,391,751
================== =================
The Company holds 65% of the equity of Shijiazhuang Huale Metal Packing Products
Co. Limited., a company incorporated in The People's Republic of China with a
registered capital of US$11,680,000. The Subsidiary has not commenced its
business during the year.
7. SHARE CAPITAL
1998 1997
HK$ HK$
Authorized, issued and fully paid:
13,000,000 ordinary shares of US$ 1 each 101,400,000 101,400,000
================= =============
8. CAPITAL COMMITMENTS
At the balance sheet date, the Company has contracted to make a capital
commitment of US$ 11,388,000, which has not been provided in the financial
statements.
