Anhui Wonder University of Information Engineering

Balance Sheet

as at December 31, 2012

(In RMB)

ASSETS
Current Assets:
Cash			5,511,583
Accounts receivable			59,731,064
Total current assets			65,242,647

Fixed Assets:
Land			1,505,000,000
Buildings			719,866,669
Equipment			58,050,485
Infrastructure engineering			15,324,562
Books			6,163,463
Construction in progress			258,597,732
Total fixed assets			2,563,002,911

Goodwill			1,000,000,000

Total Assets			3,628,245,558

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short term loan			48,000,000
Accounts payable			15,066,996
Taxes payable			25,558
Dividend payable			3,729,309
Total current liabilities			66,821,863

Long Term Loan			55,000,000

Total Liabilities			121,821,863

Stockholders' Equity:
Paid in capital			280,200,000
Additional paid in capital			2,935,404,757
Retained earnings			290,818,938
Total stockholders' equity			3,506,423,695

Total Liabilities and Stockholders' Equity			3,628,245,558

Anhui Wonder University of Information Engineering

Statement of Income

For the Year Ended December 31, 2012

(In RMB)

Revenue			104,656,059

Operating Expenses			16,279,609
Management Fee			27,188,893
Total Expenses			43,468,502

Operating Income			61,187,557

Interest Expense			7,139,604

Net Profit			54,047,953

Anhui Wonder University of Information Engineering

Statement of Changes in Stockholders' Equity

For the Years Ended December 31, 2012 and 2011

(In RMB)

	Paid In Capital		Additional Paid In Capital		Retained Earnings			TOTAL
Balance, 12/31/11		280,200,000		2,935,404,757		240,500,294			3,456,105,051

2012 Profit						54,047,953			54,047,953
2012 Dividend						(3,729,309	)		(3,729,309	)

Balance, 12/31/12		280,200,000		2,935,404,757		290,818,938			3,506,423,695

Anhui Wonder University of Information Engineering

Statement of Cash Flows

For the Year Ended December 31, 2012

(In RMB)

Cash Flows From Operating Activities:
Net income	54,047,953
Adjustments to reconcile net income with net
cash provided by operating activities:
Charges not involving the use of cash:

Changes in assets and liabilities:
Decrease in other accounts receivable	9,110,698
Reduction in other accounts payable	(6,028,703	)
Reduction in taxes payable	(9,785	)
Reduction in other current liabilities	(5,229,016	)
Cash Provided by Operating Activities	51,891,147

Cash Flows From Investing Activities:
Acquisitions of fixed assets	(77,185,629	)
Cash Consumed by Investing Activities	(77,185,629	)

Cash Flows From Financing Activities:
Proceeds of bank loans	30,000,000
Cash Provided by Financing Activities	30,000,000

Net change in cash	4,705,518
Cash balance, beginning of period	806,065
Cash balance, end of period	5,511,583

Anhui Wonder University of Information Engineering

Reconciliation of Financial Statements to U.S. Standards

December 31, 2012

A. Reconciliation of Balance Sheet To U.S. Standards

B. Reconciliation of Statement of Income To U.S. Standards

C. Reconciliation of Statement of Changes in Stockholders' Equity To U.S. Standards

D. Reconciliation of Statement of Cash Flows To U.S. Standards

E. Notes To Reconciliation of Financial Statements To U.S. Standards

Anhui Wonder University of Information Engineering

Reconciliation of Balance Sheet To U.S. Accounting Standards

as at December 31, 2012

(In RMB)

	As Originally Reported			Adjustments			Restated To U.S. Standards
ASSETS
Current Assets:
Cash		5,511,583						5,511,583
Accounts receivable		59,731,064	(A)		(52,607,876	)		7,123,188
Allowance for doubtful accounts			(B)		(535,380	)		(535,380	)
Total current assets		65,242,647			(53,143,256	)		12,099,391

Fixed Assets:
Land use rights		1,505,000,000	(C)		(1,417,533,800	)		87,466,200
Buildings		719,866,669	(C)		(517,546,444	)		202,320,225
Equipment		58,050,485						58,050,485
Infrastructure engineering		15,324,562						15,324,562
Books		6,163,463						6,163,463
Construction in progress		258,597,732						258,597,732
Total fixed assets		2,563,002,911			(1,935,080,244	)		627,922,667
Less accumulated depreciation and amortization		—	(D)(H)		(101,423,768	)		(101,423,768	)
Net fixed assets		2,563,002,911			(2,036,504,012	)		526,498,899

Other Assets:
Related party receivables		—	(A)		52,607,876			52,607,876
Goodwill		1,000,000,000	(C)		(1,000,000,000	)		—
Total other assets		1,000,000,000			(947,392,124	)		52,607,876

Total Assets		3,628,245,558			(3,037,039,392	)		591,206,166

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short term loan		48,000,000	(G)		10,000,000			58,000,000
Accounts payable		15,066,996						15,066,996
Taxes payable		25,558						25,558
Dividend payable		3,729,309						3,729,309
Deferred revenue		—	(F)		69,770,704			69,770,704
Total current liabilities		66,821,863			79,770,704			146,592,567

Long Term Loan		55,000,000	(G)		(10,000,000	)		45,000,000

Total Liabilities		121,821,863			69,770,704			191,592,567

Stockholders' Equity:
Paid in capital		280,200,000						280,200,000
Additional paid in capital		2,935,404,757	(C)		(2,935,080,244	)		324,513
Retained earnings		290,818,938	(B)		(567,684	)		93,899,997
			(E)		(54,047,953	)
			(D)		(76,318,550	)
			(F)		(55,268,374	)
			(H)		(10,716,380	)
Current earnings		—	(E)		54,047,953			25,189,089
			(D)		(12,639,514	)
			(F)		(14,502,330	)
			(B)		32,304
			(H)		(1,749,324	)
Total stockholders' equity		3,506,423,695			(3,106,810,096	)		399,613,599

Total Liabilities and Stockholders' Equity		3,628,245,558			(3,037,039,392	)		591,206,166

Anhui Wonder University of Information Engineering

Reconciliation of Statement of Income To U.S. Accounting Standards

For the Year Ended December 31, 2012

(In RMB)

	As Originally Reported			Adjustments			Restated To U.S. Standards
Revenue		104,656,059	(F)		14,502,330			90,153,729

Operating Expenses		16,279,609	(D)(H)		14,388,838			30,668,447
Management Fee		27,188,893	(B)		(32,304	)		27,156,589
Total Expenses		43,468,502			14,356,534			57,825,036

Operating Income		61,187,557			28,858,864			32,328,693

Interest Expense		7,139,604			—			7,139,604

Net Income		54,047,953			28,858,864			25,189,089

Anhui Wonder University of Information Engineering

Reconciliation of Statement of Changes in Stockholders' Equity To U.S. Accounting Standards

For the Year Ended December 31, 2012

(In RMB)

	Paid In Capital			Additional Paid In Capital				Retained Earnings			TOTAL
Balance, December 31, 2011:
As originally presented		280,200,000			2,935,404,757				240,500,294			3,456,105,051
Adjustments		—	(C)		(2,935,080,244	)						(2,935,080,244	)
							(B)		(567,684	)		(567,684	)
							(F)		(55,268,374	)		(55,268,374	)
							(D)(H)		(87,034,930	)		(87,034,930	)
Balance, December 31, 2011, as adjusted to U.S. Standards		280,200,000			324,513				97,629,306			378,153,819

2012 net income:
As originally presented									54,047,953			54,047,953
Adjustments - net									(28,858,864	)		(28,858,864	)
2012 dividend									(3,729,309	)		(3,729,309	)

Balance, December 31, 2012:
As originally presented		280,200,000			2,935,404,757				290,818,938			3,506,423,695
Adjustments - above		—			(2,935,080,244	)			(171,729,852	)		(3,106,810,096	)
Balance, December 31, 2012, as adjusted to U.S. Standards		280,200,000			324,513				119,089,086			399,613,599

Anhui Wonder University of Information Engineering

Reconciliation of Statement of Cash Flows To U.S. Standards

For the Year Ended December 31, 2012

(In RMB)

	As Originally Reported				Adjustments			Restated To U.S. Standards
Cash Flows From Operating Activities:
Net income		54,047,953				(28,858,864	)		25,189,089
Adjustments to reconcile net income with net cash provided by operating activities:
Charges not involving the use of cash:
Depreciation and amortization		—		(D)		14,388,838			14,388,838
Increase in revenue deferral		—		(F)		14,502,330			14,502,330
Reduction in provision for doubtful accounts		—		(B)		(32,304	)		(32,304	)

Changes in assets and liabilities:
Decrease in other accounts receivable		9,110,698		(A)		3,594,351			12,705,049
Reduction in other accounts payable		(6,028,703	)						(6,028,703	)
Reduction in taxes payable		(9,785	)						(9,785	)
Reduction in other current liabilities		(5,229,016	)						(5,229,016	)
Cash Provided by Operating Activities		51,891,147				3,594,351			55,485,498

Cash Flows From Investing Activities:
Acquisitions of fixed assets		(77,185,629	)						(77,185,629	)
Increase in Related Party receivables		—		(A)		(3,594,351	)		(3,594,351	)
Cash Consumed by Investing Activities		(77,185,629	)			(3,594,351	)		(80,779,980	)

Cash Flows From Financing Activities:
Proceeds of bank loans		30,000,000							30,000,000
Cash Provided by Financing Activities		30,000,000				—			30,000,000

Net change in cash		4,705,518				—			4,705,518
Cash balance, beginning of period		806,065				—			806,065
Cash balance, end of period		5,511,583				—			5,511,583

Anhui Wonder University of Information Engineering

Notes to Reconciliation of Financial Statements to U.S. Accounting Standards

December 31, 2012

(A) Reclassification of related party receivables. Prior to December 31, 2011, the Company made advances to three companies which are controlled by the Company president. At December 31, 2011, the outstanding balance of these advances totaled RMB49,013,525; these balances were increased by RMB3,594,351 during the year 2012 and totaled RMB53,607,876 at December 31, 2012. These advances are due on demand and do not bear interest.

(B) To provide for doubtful accounts.

(C) To restore asset account balances to historical cost. An appraisal of the company assets was made during the year 2011 and, as permitted by Chinese accounting standards, the book balances of several assets were increased to the appraised amounts. U.S. accounting standards do not permit such an increase, so these write-ups have been eliminated.

(D) To provide for depreciation. The University does not routinely provide for depreciation. Company assets have been depreciated by the straight line method over lives of 50 years for buildings, 8 years for vehicles, and 5 years for furniture, equipment, books, and the cost of infrastructure.

(E) To reclassify current earnings.

(F) To recognize revenue deferral. Revenue is recognized as tuition is collected. This adjustment was made to recognize revenue when product is delivered to customers. All students prepay in September each year for courses they plan to take during the next school year. Revenue has been adjusted so that it is recognized ratably over the period during which classes occur. No provision has been made for any right of return that may exist as the payments are non-refundable.

(G) To reclassify bank loan due currently.

(H) To provide for amortization of land use rights. The University has rights to use four parcels of land on which the University is situated. These rights were granted under four separate leases, each for 50 years, with rights of renewal for additional 50 year terms. The original cost of these leases is being amortized by the straight line method over the original lease terms.

INCOME TAXES

The Company is exempt from filing income tax returns in China under the provisions of a Notice of the Anhui Ministry of Finance and State Administration of Taxation. The Notice providing the exemption specifies among other things that income taxes will not be collected for the income earned by schools and funds gained by schools for their enterprise development. This exemption was granted to encourage further development of schools.

Anhui Wonder University of Information Engineering

Notes to Reconciliation of Financial Statements to U.S. Accounting Standards

December 31, 2012

LONG TERM BANK LOANS

The Company had seven bank loans outstanding at December 31, 2012, as follows:

	Due Date	Interest Rate			Amount		Due Currently		Long Term
Huishang Bank	February 28, 2013		6.972	%		10,000,000		10,000,000
Hefei Science & Technology Bank	June 29, 2013		8.203	%		10,000,000		10,000,000
Feixi Rural Commercial Bank	October 14, 2013		10.490	%		28,000,000		28,000,000
China Construction Bank	November 23, 2013		6.220	%		10,000,000		10,000,000
China Construction Bank	June 15, 2017		6.972	%		27,450,000				27,450,000
China Construction Bank	July 2, 2017		6.972	%		17,550,000				17,550,000

Totals						103,000,000		58,000,000		45,000,000

EARNINGS PER SHARE

The Company does not calculate earnings per share since, as is customary in China, there are no shares outstanding. Equity ownership in China is determined by the relative amounts of capital contributions made by each of the equity owners.

SUPPLEMENTARY DISCLOSURES OF CASH FLOWS INFORMATION

Cash paid for interest during 2012 was RMB7,139,604. There was no cash payment for income taxes during 2012. There were no non cash investing or financing activities during 2012.

WONDER INTERNATIONAL EDUCATION & INVESTMENT GROUP Corp 10-K/A