PHYSICAL PROPERTY HOLDINGS, INC. - FORM 10-K

Attached files

file	filename
EX-32 - EXHIBIT 32 - PHYSICAL PROPERTY HOLDINGS, INC.	ex32.htm
EX-31.1 - EXHIBIT 31.1 - PHYSICAL PROPERTY HOLDINGS, INC.	ex31-1.htm
EX-21.1 - EXHIBIT 21.1 - PHYSICAL PROPERTY HOLDINGS, INC.	ex21-1.htm
EX-31.2 - EXHIBIT 31.2 - PHYSICAL PROPERTY HOLDINGS, INC.	ex31-2.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2009

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [No Fee Required]

For the transition period from ____________ to ____________

Commission file number 026573

PHYSICAL PROPERTY HOLDINGS INC.

(Exact name of issuer in its charter)

DELAWARE		98-0203281
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

23/F AIA Tower,

No. 183 Electric Road, North Point

Hong Kong

(Address of principal executive offices)

(011) (852) 2917-0000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

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

Common Stock, $.001 par value

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

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 o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) 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. Yes xNo o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o

Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of March 31, 2010 was $495 as computed by reference to the price at which the common equity was last sold, which was $0.0001 on January 20, 2010.

The number of shares outstanding of the registrant's common stock as of March 31, 2010: 28,329,353 shares, $.001 Par Value.

DOCUMENTS INCORPORATED BY REFERENCE: NONE

TABLE OF CONTENTS

PART I

Item 1.	Business	4

Item 2.	Properties	10

Item 3.	Legal Proceedings	10

Item 4.	Removed and Reserved	11

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11

Item 6.	Selected Financial Data	12

Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12

Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	14

Item 8.	Financial Statements and Supplementary Data	16

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	29

Item 9A.	Controls and Procedures	29

Item 9B.	Other Information	29

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	29

Item 11.	Executive Compensation	32

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	33

Item 13.	Certain Relationships and Related Transactions, and Director Independence	34

Item 14.	Principal Accounting Fees and Services	34

Item 15.	Exhibits, Financial Statement Schedules	34

	Signatures	36

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PART I

ALL FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE DEEMED BY THE COMPANY TO BE COVERED BY AND TO QUALIFY FOR THE SAFE HARBOR PROTECTION PROVIDED BY THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SHAREHOLDERS AND PROSPECTIVE SHAREHOLDERS SHOULD UNDERSTAND THAT SEVERAL FACTORS GOVERN WHETHER ANY FORWARD-LOOKING STATEMENT CONTAINED HEREIN WILL BE OR CAN BE ACHIEVED. ANY ONE OF THOSE FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED HEREIN. THESE FORWARD-LOOKING STATEMENTS INCLUDE PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS, INCLUDING PLANS AND OBJECTIVES RELATING TO THE PRODUCTS AND THE FUTURE ECONOMIC PERFORMANCE OF THE COMPANY. ASSUMPTIONS RELATING TO THE FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE ECONOMIC, COMPETITIVE AND MARKET CONDITIONS, FUTURE BUSINESS DECISIONS, AND THE TIME AND MONEY REQUIRED TO SUCCESSFULLY COMPLETE DEVELOPMENT PROJECTS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND MANY OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. ALTHOUGH THE COMPANY BELIEVES THAT THE ASSUMPTIONS UNDERLYING THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE REASONABLE, ANY OF THOSE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE, THERE CAN BE NO ASSURANCE THAT THE RESULTS CONTEMPLATED IN ANY OF THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN WILL BE REALIZED. BASED ON ACTUAL EXPERIENCE AND BUSINESS DEVELOPMENT, THE COMPANY MAY ALTER ITS MARKETING, CAPITAL EXPENDITURE PLANS OR OTHER BUDGETS, WHICH MAY IN TURN AFFECT THE COMPANY'S RESULTS OF OPERATIONS. IN LIGHT OF THE SIGNIFICANT UNCERTAINTIES INHERENT IN THE FORWARD LOOKING STATEMENTS INCLUDED THEREIN, THE INCLUSION OF ANY SUCH STATEMENT SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE COMPANY OR ANY OTHER PERSON THAT THE OBJECTIVES OR PLANS OF THE COMPANY WILL BE ACHIEVED.

ITEM 1. BUSINESS

BACKGROUND OF THE COMPANY

Physical Property Holdings Inc. (formerly known as Physical Spa & Fitness Inc.) (the “Company”), through its predecessor companies and its subsidiaries, had been an established commercial operator of fitness and spa centers in Hong Kong and China since 1986. The Company operated seventeen facilities: thirteen in Hong Kong and five in China (including one in Macau). In addition, the Company was appointed by an outside investor to manage a fitness and spa center in Dalian, China. The Company also granted the use of the trade name to a third party for operating a fitness and spa center in Hangzhou, China.

The Company was incorporated on September 21, 1988 in the state of Delaware under the name of "Foreclosed Realty Exchange, Inc", a development stage company seeking acquisitions with no material assets or liabilities. Prior to acquisition of Physical Beauty & Fitness Holdings Limited, a British Virgin Islands corporation ("Physical Limited"), the Company had no revenue producing operations, but planned to enter into joint ventures and/or acquisitions originally in the area of real estate, to expand its operations. In October, 1996, the Company closed a transaction with Ngai Keung Luk (“Mr. Luk”), a 100% shareholder of Physical Limited, whereby the Company entered into a Share Exchange Agreement with Mr. Luk, pursuant to which the Company issued 8,000,000 pre-split (6,000,000 post-split) shares of its Common Stock to Mr. Luk in exchange for all of the outstanding shares of Physical Limited (the "Closing"). At the Closing, the then current management of the Company resigned and was replaced by the current management of the Company.

On October 31, 2006, the Company entered into two material definitive agreements: (a) a Share Exchange Agreement (the “Share Exchange Agreement”) with Mr. Luk, the Chairman, CEO, and a majority shareholder of the Company, pursuant to which Mr. Luk agreed to transfer 100% of the shares which he owned of Ableforce International Limited, a British Virgin Islands corporation (“Ableforce”), to the Company in exchange for the issuance by the Company to Mr. Luk of 12,000,000 shares of common stock, $0.001 par value, and the issuance of an additional 3,328,070 shares of common stock as the repayment of amounts due to Mr. Luk on Ableforce’s books and records as of September 30, 2006, or a total of 15,328,070 shares of common stock. Ableforce is primarily engaged in the real estate business in Hong Kong, and through Good Partner Limited, its wholly-owned subsidiary, owns five residential apartments that it leases to tenants; and (b) a Disposal Agreement (the “Disposal Agreement”), with Mr. Luk, pursuant to which the Company agreed to transfer to Mr. Luk the sole outstanding common shares of Physical Limited, which is a holding company for subsidiaries that operate fitness and spa centers located in Hong Kong and the People’s Republic of China (including one in Macau), in exchange for the indemnification of the Company by Mr. Luk for all liabilities associated with the operations and assets of Physical Limited. The transactions contemplated by the Share Exchange Agreement were consummated on February 5, 2007 and the transactions contemplated by the Disposal Agreement were consummated on February 27, 2007. As a result of the transactions contemplated by the Disposal Agreement, including the sale of the stock of Physical Limited, the Company is no longer engaged in the fitness and spa center business, and owns and operates residential apartments. Mr. Luk continues to own 100% of the stock of Physical Limited and plans to continue to operate the spa and fitness centers. In addition, the Company changed its name to Physical Property Holdings Inc. on March 5, 2007. Reference is made to a Definitive Information Statement on Schedule 14C, which was filed with the Commission on February 2, 2007 for additional details concerning these matters.

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The Company continued to engage in the spa and fitness business during the first quarter of fiscal 2007, until February 27, 2007, when the transactions contemplated by the Disposal Agreement were consummated.

On February 5, 2007, the transactions contemplated by the Share Exchange Agreement were consummated, resulting in the Company’s acquisition of all of the issued and outstanding shares of common stock of Ableforce. As discussed above, Ableforce, through its wholly-owned subsidiary Good Partner Limited, owns five residential apartments located in Hong Kong.

The Company had twenty-seven subsidiaries (including Ableforce International Limited and Good Partner Limited) organized under the laws of Hong Kong, Mainland China, Macau and the British Virgin Islands until the closing of the Disposal Agreement on February 27, 2007. At such time, it had and currently has two subsidiaries, which are Ableforce International Limited and its wholly-owned subsidiary Good Partner Limited. Ableforce is organized and existing under the laws of the British Virgin Islands, and Good Partner is organized and existing under the laws of Hong Kong.

In accordance with the requirements of the Statement of Financial Accounting Standards No. 141 and indication from SEC staff as referred to EITF Abstracts Issue No.02-05, the acquisition of the stock of Ableforce pursuant to the Share Exchange Agreement has been accounted for as a merger of the Company with Ableforce since the business combination is being effected through the transfer of assets to the Company in a share exchange.

In accordance with the requirements of generally accepted accounting practices, the transactions contemplated by the Disposal Agreement have been accounted for in the accounting records of the Company as a contribution from the majority stockholder. As a result, the Company recorded a credit to additional paid-in capital to the extent that the consideration received by the Company relating to these transactions was higher than the net book values of these assets as reflected in the accounting records of the Company as at the date of the Disposal Agreement.

THE COMPANY'S BUSINESS

BUSINESS DEVELOPMENT

Upon consummation of the two definitive agreements as mentioned above, the Company engages in the business of buying, investing in, selling, renovating, and renting real estate, exclusively in the Hong Kong SAR of the People’s Republic of China. The Company has never been the subject of any bankruptcy or receivership proceeding. It has had no material reclassification, merger, consolidation, or purchase or sale of a significant amount of assets except the purchase of five residential units located in The Metropolis Residence, No. 9 Metropolis Drive, Hunghom, Hong Kong.

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THE APARTMENTS AT THE METROPOLIS RESIDENCE

The properties were acquired on September 8, 2003 at a total consideration of HK$12,435,000, with an average purchase price of approximately HK$2.5 million for each unit. They have been held for investment purposes.

Currently all of the five units have been leased on a term of two years. Monthly rentals vary from HK$10,800 to HK$15,000. The tenants have a variety of occupations, including merchants and senior executives.

The units are managed by Citybase Property Management Ltd., which is a wholly-owned subsidiary of Cheung Kong (Holdings) Limited, an unrelated public company listed on the Hong Kong Stock Exchange.

OVERVIEW OF MARKET AREA

The properties occupy a preeminent position in the Kowloon traffic hub. They are located opposite to the Mass Transit Railway Station in Hunghom, providing the tenants with convenient access to other Kowloon districts and Mainland China.

The city of Hunghom, Hong Kong lies on the outskirts of Kowloon peninsula, near the exit of the Cross Harbour Tunnel. The estimated population of Hunghom in 2009 was approximately 15,000, and the estimated population of Hong Kong in 2009 was approximately 7 million.

The economy in the Company’s primary market area enjoys the presence of large employers such as Hutchison Estate Agents Limited, a member of the Hutchison Whampoa Property Group. Other employment and economic activity is provided by The Cross-Harbour Tunnel, The Hong Kong Polytechnic University, and a variety of wholesale and retail trade businesses.

The Company estimated that total floor area under potential development to the Hunghom district could reach at least 4 million square feet including the area of The Metropolis Residence. The development could be a complex consisting of an exhibition stadium, shopping mall, hotel, and office which collectively maximize the opportunities of business between Hong Kong and Mainland China. However, there is no assurance that such plan will be implemented.

These market factors form the setting in which the Company plans to execute its business model.

THE COMPANY’S PLAN TO ACQUIRE OTHER RENTAL PROPERTIES

The Company’s business plan is to buy more rental properties that management believes are undervalued, compared to their cash flows and estimated resale value. Its strategy is to identify rental properties with a favorable purchase price relative to their market value, as well as positive cash flow. The Company plans to buy properties primarily leased to residential tenants. It is prepared to make some improvements to its properties, so that it can increase occupancy, improve cash flows, and enhance potential resale value.

The success of the Company will be dependent upon implementing its plan of operations and the risks associated with its business plans. The Company operates primarily in the Hong Kong SAR of the People’s Republic of China. It plans to strengthen its position in this market. It also plans to expand its operations through its acquisition and improvement of real estate.

The Company presently owns five residential rental units in the Metropolis Residence. The Chairman of the Company, Mr. Luk, has previously owned and operated other residential real estate properties, and he is also the Chairman of Physical Beauty & Fitness Holdings Limited, a company that leases premises for the provision of spa and fitness facilities to the public. He has experience in the real estate business. The Company anticipates that it will continue to locate and negotiate for the purchase of additional properties. It hopes to acquire additional real estate in the next 12 months, and to utilize the proceeds from the resale of those properties, along with their revenues, to pay its operating costs for the next twelve months; however, there are no assurances that this revenue will be sufficient to cover the Company’s operating costs. Accordingly, if its revenues are not sufficient, the Company will rely upon capital infusions from Mr. Luk, however, there are no assurances that Mr. Luk will have sufficient funds to provide such capital infusions. He has made no assurance of the minimum or maximum he could provide.

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The Company plans to acquire a critical mass of residential real estate properties first, and then consider entry on an opportunistic basis into other segments of the real estate market, such as the office market or the industrial/office market.

PROPERTY LOCATION PROCEDURES

The Company plans to conduct a preliminary analysis that consists of:

●

Reviewing real estate sales information provided by local realtor associations. The information that would weigh in favor of proceeding with a property acquisition would be:

º	High volume of real estate sales within the specific area
º	New schools and major commercial developments in the area
º	Improved state and city roads in the area

The information that would weigh against the Company’s proceeding with a property acquisition would be:

º	Hazardous waste in the area
º	High crime in the area
º	Overcrowding in the area

The data that it analyzes to determine whether to purchase properties are:

●

Demographic data that suggests increased demand in a specific area. The data that would weigh in favor of the Company’s proceeding with a purchase would be:

º	Increase in industrial activity such as a major corporation moving into the area creating new jobs and increasing residential housing demand
º	Increase in the population’s median income levels for a certain area
º	Low crime rate in the area

●

Demographic data that would weigh against a purchase would be:

º	Migration of industrial companies outside the area
º	Decrease in income levels
º	High crime rate in the area

In order to determine and evaluate the fastest growing areas, the Company will obtain reports from report surveys and reporting companies. These reports will provide detailed information that the Company will then study to determine where the good areas of growth are.

DETAILED MARKET AND FINANCIAL ANALYSIS

The Company will perform detailed market and financial analysis regarding each property it decides to review for purchase so as to determine whether the specific location is appropriate for acquisition and development. That detailed information will include the following:

●

Number of properties on the market.

●

Number of properties sold in the past 12 months.

●

Sales prices asked per property.

●

Sales price sold per property.

●

Total square footage and acreage per property

●

Total number of units per property.

●

Total number of pending closings per property.

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PURCHASE PROCEDURES

Once the Company has located a property that it may want to purchase, it will ascertain whether the owner is willing to sell the property. The Company will then negotiate a purchase price and ask the following questions of the prospective seller and/or obtain answers from third parties:

●

When does the owner want to sell and close? Favorable conditions the Company will look for regarding this factor are:

º	The seller is willing and able to sell within a six-month period.
º	Typically, the timing and motivation of sellers to enter into contract to sell may include several factors such as: estate planning, gifts to family, age, health and other personal factors.

●

How much will the owner sell the property for? Favorable conditions the Company will look for regarding this factor are:

º	The price is below market value. The Company determines market value through appraisals and comparable sales reports in the area.
º	With respect to price, the Company would also consider value trends, such as historical yearly increases in property values.

●

Are there any defects on the title? Favorable conditions the Company will look for regarding this factor are:

º	No liens and/or encumbrances.
º	The buyer is able to deliver a clean title within the time the Company would like to close.

●

Does the landlord have title insurance on the property? Favorable conditions the Company will look for regarding this factor are:

º	The landlord has title insurance on the property.
º	The landlord is able to secure title insurance on the property.
º	The Company would be able to obtain title insurance on the purchased property.

The Company will obtain the following documents from the seller during its due diligence on the property:

●

General maps;

●

Environmental reports;

●

Copies of existing zoning maps and regulations;

●

Conduct land inspection procedures;

●

Proposed zoning regulations;

●

Deeds;

●

Title insurance; and

●

Tax bills.

The Company will then verify the accuracy of these documents and determine how the information contained in the documents impacts the property that it is considering to purchase.

THE COMPANY’S FINANCING PROCEDURES

The Company will attempt to obtain financing from local banks doing business within the area where it is attempting to purchase property. The Chairman, Mr. Luk, has, in the past, personally guaranteed repayment of debt for property purchases along with necessary corporate guarantees, and the Company plans to use such guarantees in the future, if necessary; however, there are no assurances that Mr. Luk, or the Company, will be in a financial position to do so. Despite the fact that Mr. Luk has confirmed in writing his intention to provide financial support to maintain the Company as a going concern, the Company does not have any written agreements now or in the past with Mr. Luk, obligating him to guarantee repayment of future debt or any other obligations. Mr. Luk is not otherwise under any legal obligation to provide the Company with capital. The Company hopes to leverage the property with a financial institution or private lender so that funds are available for additional purchases, based on using the property as collateral.

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The procedures for obtaining financing are as follows:

1.	File loan application.
2.	Credit checks, property appraisal done.
3.	Loan documents drafted.
4.	Down payment made that is typically approximately 5 to 10% of the appraised value.
5.	Institution lends funds for the balance, less certain transaction fees that are typically between approximately 2 to 3%.
6.	A lien is then filed with the appropriate recorder’s office.

There are no assurances that the Company’s financing procedures will be adequate to secure the funds needed to sustain its operations.

DISTRIBUTION

The Company has no distribution agreements in place with anyone. It plans to sell the properties it acquires primarily through direct selling efforts involving established real estate brokers and property managers and corporations that may have a need for residential and/or commercial real estate. The Company plans to contract with real estate brokers, sub-contractors and other agents to assist in it on a project-by-project basis.

NEW PRODUCTS OR SERVICES

The Company currently has no new products or services announced to the public. It will make public announcements in the future upon entering into material contracts to acquire any new real estate projects.

COMPETITIVE BUSINESS CONDITIONS

The Company faces significant competition both in acquiring rental properties and in attracting renters. The Company’s primary market area of residential multi-family unit rentals is highly competitive, and the Company faces direct competition from a significant number of landlords, many with a local or regional presence and, in some cases, an international presence. Many of these landlords are significantly larger and have greater financial resources than the Company. The Company’s competition for renters comes from newer built apartment complexes as well as older apartment buildings.

In addition, the Company faces significant competition from home builders and land developers, because some renters have moved out of the rental market into single-family homes due to recent mortgage interest rates, which have reached lows in some cases. Throughout Hong Kong and Mainland China there are over 10 major land developers. These developers have greater financial resources than the Company and are better poised for market retention and expansion than the Company is. Specifically, the Company’s competition with regional and international homebuilders is as follows:

●	Cheung Kong (Holdings) Limited – Completed in 2006 the largest twin-design hotel in Hong Kong located along the Hunghom Waterfront, offering long staying package as low as HK$9,990 (US$1,281).
●	Henderson Land – Founded in 1976, it is one of the largest producers of new homes in Hong Kong.
●	Sun Hung Kai Properties – Incorporated in 1972, it has established itself as Hong Kong’s largest producer of private homes.

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These regional and international homebuilders purchase land or lots of vacant land parcels to build multi-family buildings, housing condominiums and apartments, often in connection with nearby shopping centers and commercial buildings. These homebuilders have substantial resources to enable them to buy the land and build multi-family buildings for resale.

These builders engage in new construction and have greater financial resources than the Company does. In addition, these companies have greater operational resources because they are able to perform a variety of development tasks themselves. These companies purchase vacant land tracts and perform all the work necessary to construct the buildings, such as land clearing and road development and then construct the buildings themselves. In contrast, the Company does not have the financial or operational resources to perform these tasks. These regional and international builders are better equipped to acquire tracts of land equipped with these capabilities due to their operational and financial superiority over the Company.

The Company has no competitive advantages over any of the individuals and/or companies against whom it competes. It has significantly less capital, assets, revenues, employees and other resources than its local and/or national competition. There are no barriers to entry into this market.

INTELLECTUAL PROPERTY

At present, the Company does not have any patents, trademarks, licenses, franchises, concessions, and royalty agreements, labor contracts or other proprietary interests.

GOVERNMENT REGULATION ISSUES

None.

RESEARCH AND DEVELOPMENT

The Company has spent no funds on research and development.

EMPLOYEES

Presently, the Company has no employees, other than its Chairman, Mr. Luk. It does not have an employment agreement with Mr. Luk. The Company does not anticipate hiring any additional employees in the next 12 months.

ITEM 2. PROPERTIES

As mentioned above, the Company controls five residential units located in The Metropolis Residence, No. 9 Metropolis Drive, Hunghom, Hong Kong. They are rental units.

The Company’s office occupies space at 23/F, AIA Tower, No. 183 Electric Road, North Point, Hong Kong. In the past years, the rental expense was waived by the tenant, namely Global Fitness Management Limited (“Global”), which is a company owned by Mr. Luk. During the year of 2009, the Company reimbursed HK$468,000 (US$60,000) to Global for its share of office rental, equipment, clerical staff and general support.

Management believes that the existing facility of the Company is adequate to meet its current needs and that suitable additional or alternative space will be available in the future on commercially reasonable terms, although there is no assurance that future terms would be as favorable as the current terms.

ITEM 3. LEGAL PROCEEDINGS

There are no pending material legal proceedings to which the Company or any of its properties is subject, nor to the knowledge of the Company, are any such legal proceedings threatened, except as described below.

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On or about October 22, 2007, the Securities and Exchange Commission (the “SEC”) sent a “voluntary request letter” seeking certain information and documents about the Company and another company known as Score One, Inc, in connection with an investigation into alleged spam e-mail campaigns and potential securities fraud violations.

Subsequently, on or about January 11, 2008, the SEC sent a subpoena to the Company for additional information and documents concerning the Company and Score One, Inc. in furtherance of its investigation into potential spam e-mail campaigns and securities fraud violations. Management of the Company has retained counsel and responded to the subpoena in May 2008. The Company has not received any objections or requests for supplemental information since that time.

ITEM 4. REMOVED AND RESERVED

PART II

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

The Company's Common Stock has been listed on the Bulletin Board of the NASDAQ's over-the-counter market under the symbol PPYH (formerly known as PFIT), since December, 1996, but has been traded only sporadically. As of December 31, 2009, the 52-week trading range was $0.00013 to $0.01 per share. The last reported sale was on January 20, 2010 at $0.0001 per share. The reported sporadic sales in the fiscal year 2009 are set forth below. Quotations reflect inter-dealer prices, without retail mark-up, markdown, or commission and may not represent actual transactions.

Date	High	Low

Jan – Mar 2009	0.01	0.01
Apr – Jun 2009	0.01	0.01
Jul – Sep 2009	0.01	0.01
Oct – Dec 2009	0.01	0.00013

Jan – Mar 2008	0.32	0.01
Apr – Jun 2008	0.10	0.01
Jul – Sep 2008	0.25	0.001
Oct – Dec 2008	0.10	0.01

[SOURCE: Reuters]

As of December 31, 2009, there were approximately 571 shareholders of record of the Company's Common Stock.

The Company’s common stock was the subject of an Order of Suspension of Trading commencing on December 19, 2007 and terminated on January 3, 2008. The SEC was of the opinion that the public interest and the protection of investors required a suspension of trading in the securities of the Company due to the adequacy and accuracy of press releases and other publicly disseminated information concerning the Company.

DIVIDEND POLICY

The Company has never paid any cash dividends on its Common Stock and does not anticipate paying any cash dividends in the future. The Company currently intends to retain future earnings, if any, to fund the development and growth of its business.

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

None.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

None.

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ITEM 6. SELECTED FINANCIAL DATA

Not applicable.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto appearing elsewhere in this report.

Overview

The Company had historically been an established commercial operator through its subsidiaries of fitness and spa centers in Hong Kong and China since 1986. The Company operated seventeen facilities: thirteen in Hong Kong and four in China (including one in Macau). In addition, the Company was appointed by an outside investor to manage a fitness and spa center in Dalian, China. The Company also granted the use of the trade name to a third party for operating a fitness and spa center in Hangzhou, China.

On October 31, 2006, the Company entered into two material definitive agreements: (a) a Share Exchange Agreement (the “Share Exchange Agreement”) with Mr. Ngai Keung Luk, the Chairman, CEO, and a majority shareholder of the Company (“Mr. Luk”), pursuant to which Mr. Luk agreed to transfer 100% of the shares which he owned of Ableforce International Limited, a British Virgin Islands corporation (“Ableforce”), to the Company in exchange for the issuance by the Company to Mr. Luk of 12,000,000 shares of our common stock, $0.001 par value, and the issuance of an additional 3,328,070 shares of common stock as the repayment of amounts due to Mr. Luk on Ableforce’s books and records as of September 30, 2006, or a total of 15,328,070 shares of common stock. Ableforce is primarily engaged in the real estate business in Hong Kong, and through Good Partner Limited, its wholly-owned subsidiary, owns five residential apartments that it leases to tenants; and (b) a Disposal Agreement (the “Disposal Agreement”), with Mr. Luk, pursuant to which the Company agreed to transfer to Mr. Luk the sole outstanding common share of Physical Limited, which is a holding company for subsidiaries that operate fitness and spa centers located in Hong Kong and the People’s Republic of China (including one in Macau), in exchange for the indemnification of the Company by Mr. Luk for all liabilities associated with the operations and assets of Physical Limited. The transactions contemplated by the Share Exchange Agreement were consummated on February 5, 2007 and the transactions contemplated by the Disposal Agreement were consummated on February 27, 2007. As a result of the transactions contemplated by the Disposal Agreement, including the sale of the stock of Physical Limited, the Company is no longer engaged in the fitness and spa center business, and owns and operates residential apartments. Mr. Luk continues to own 100% of the stock of Physical Limited and plans to continue to operate the spa and fitness centers. In addition, the Company changed its name to Physical Property Holdings Inc. on March 5, 2007. Reference is made to a Definitive Information Statement on Schedule 14C, which was filed with the Commission on February 2, 2007 for additional details concerning these matters.

RESULTS OF OPERATIONS

Subsequent to entering into and consummation of the two material definitive agreements as mentioned above, the Company’s principal activities changed from fitness and spa businesses to properties investments.

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The following table sets forth selected income data as a percentage of total operating revenue for the periods indicated.

	Years Ended December 31,
	2009			2008

Operating revenues		100.00	%		100.00	%

Total operating expenses		212.13	%		237.79	%

Loss from operations		(112.13	%)		(137.79	%)

Loss before income taxes		(149.34	%)		(178.97	%)

Provision for income taxes		0.00	%		0.00	%

Net loss		(149.34	%)		(178.97	%)

FISCAL YEAR ENDED DECEMBER 31, 2009 COMPARED TO FISCAL YEAR ENDED DECEMBER 31, 2008

OPERATING REVENUES. Operating revenues for the fiscal year ended December 31, 2009 totaled HK$602,000 (US$77,000) compared to HK$680,000 (US$87,000) of last year. This represented a decrease of 11% mainly due to vacancy of certain properties in the first seven months of 2009.

OPERATING EXPENSES. The Company's operating expenses totaled HK$1,277,000 (US$163,000), or 212% of operating revenues, for the fiscal year ended December 31, 2009, compared to HK$1,617,000 (US$207,000), or 238% of operating revenues, for the year of 2008. This represented a decrease of HK$340,000 (US$44,000), or 21%, resulting from the full amortization of prepaid management consultancy fees in June 2008 while there was no such amortization in the year of 2009.

TOTAL NON-OPERATING EXPENSES. Total non-operating expenses for the fiscal year ended December 31, 2009 totaled HK$224,000 (US$29,000) compared to HK$280,000 (US$36,000) in 2008. This represented a decrease of 20% due to reduction in interest expenses attributable to the decrease in interest rate and average loan balances as a result of progress repayment.

PROVISION FOR INCOME TAXES. The Company did not make any tax provision for the fiscal year ended December 31, 2009 in view of the losses incurred.

NET LOSS AND TOTAL COMPREHENSIVE LOSS. The Company has recorded a net loss and total comprehensive loss of HK$899,000 (US$115,000) for the fiscal year ended December 31, 2009, compared to a net loss and total comprehensive loss of HK$1,217,000 (US$156,000) for 2008. This represented a decrease of HK$318,000 (US$41,000) mainly due to less operating expenses incurred than last year.

LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its operations primarily through cash generated from operations and long-term bank loans.

Cash and cash equivalent balances for the fiscal years ended December 31, 2009 and December 31, 2008 were HK$22,000 (US$3,000) and HK$1,255,000 (US$161,000), respectively.

Net cash used in operating activities were HK$398,000 (US$51,000) and HK$275,000 (US$35,000) for fiscal years 2009 and 2008, respectively, which mainly resulted from the net loss incurred. The Company's operating activities are historically financed by cash flows from operations.

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Net cash used in investing activities were HK$300,000 (US$38,000) and HK$2,000 (US$256) for fiscal years 2009 and 2008, respectively, primarily as a result of expenditures for property, plant and equipment.

Net cash used in financing activities, which mainly included settlement of bank loans and amounts due to a stockholder, were HK$535,000 (US$69,000) and HK$1,017,000 (US$130,000) for fiscal years 2009 and 2008, respectively.

During the fiscal year ended December 31, 2009, the Company did not enter into any transactions using derivative financial instruments or derivative commodity instruments nor held any marketable equity securities of publicly traded companies.

Consistent with the general practice of lessors of residential apartments, the Company receives monthly rentals which are due on the first day of each billing period and are non-refundable. This practice creates working capital that the Company generally utilizes for working capital purposes.

The Company did not have a trade receivable balance at December 31, 2009. The Company obtains rental deposits from its tenants and has never experienced any significant problems with collection of accounts receivable. No provision for doubtful receivables is therefore made for the year under review.

Capital expenditures for fiscal years 2009 and 2008 were HK$300,000 (US$38,000) and HK$Nil, respectively.

Management believes that cash flow generated from the operations of the Company, the tight cost and cash flow control measures and the existing and additional credit facilities to be sought should be sufficient to satisfy the working capital requirement of the Company for at least the next 12 months.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Although the operations of the Company are solely in Hong Kong, they are subject to similar considerations and risks typically associated with investments in the real estate market of United States and Western European companies. These include risks associated with, among others, interest rate and liquidity risk. These are described further in the following:

INTEREST RATE RISK

The Company’s exposure to the risk of changes in market interest rates relates primarily to its long term debt obligations with a floating interest rate. The Company monitors the movement of interest rates on an ongoing basis.

LIQUIDITY RISK

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of its available cash and banking facilities.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“GAAP”) and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes. Note 3, “Summary of Significant Accounting Policies” of Notes to Consolidated Financial Statements in this Form 10-K describes the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates and such differences may be material.

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Management believes the Company’s critical accounting policies and estimates are those related to revenue recognition and impairment assessment on property, plant and equipment. Management considers these policies critical because they are both important to the portrayal of the Company’s financial condition and operating results, and they require management to make judgments and estimates about inherently uncertain matters. The management has reviewed these critical accounting policies and related disclosures.

Revenue Recognition

Rental income is recognized when the properties are let out and on the straight-line basis over the lease term.

Impairment of Property, plant and equipment

The Company reviews property, plant and equipment for impairment. Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If property, plant and equipment are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair market value. The Company did not record any material impairment loss during 2009 and 2008.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements of the Company required to be included in Item 8 are set forth in the Financial Statements Index.

	Page

Report of Independent Registered Public Accounting Firm	17

Consolidated Statements of Operations for the years ended December 31, 2009 and 2008	18

Consolidated Balance Sheets as of December 31, 2009 and 2008	19

Consolidated Statements of Cash Flows for the years ended December 31, 2009 and 2008	20

Consolidated Statements of Stockholders' Equity for the years ended December 31, 2009 and 2008	21

Notes to Financial Statements	22 – 28

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Physical Property Holdings Inc.

We have audited the accompanying consolidated balance sheets of Physical Property Holdings Inc. (a Delaware Corporation) and its subsidiaries (collectively, the “Company”) as of December 31, 2009 and 2008 and the related consolidated statements of operations, stockholders' equity and cash flows for each of the years in the two-year period ended December 31, 2009. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing auditing procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits also included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management and 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 position of the Company as of December 31, 2009 and 2008 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2009 in conformity with United States generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 (b) to the financial statements, the Company had a negative working capital as of December 31, 2009 and incurred loss for the year then ended, which raised substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3 (b). The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Mazars CPA Limited

MAZARS CPA LIMITED

Certified Public Accountants

Hong Kong

Date: March 31, 2010

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Physical Property Holdings Inc. and Subsidiaries

Consolidated Statements of Operations

(Amounts in thousands, except share and per share data)

		Year ended December 31,
		2009			2009			2008
	Note	US$			HK$			HK$
Operating revenues
Rental income			77			602			680

Operating expenses
Rent and related expenses			(12	)		(93	)		(93	)
Depreciation			(43	)		(334	)		(284	)
Other selling and administrative expenses			(108	)		(850	)		(1,240	)

Total operating expenses			(163	)		(1,277	)		(1,617	)

Loss from operations			(86	)		(675	)		(937	)

Non-operating income (expenses)
Other income, net			-			-			2
Interest expenses			(29	)		(224	)		(282	)

Total non-operating expenses			(29	)		(224	)		(280	)

Loss before income taxes			(115	)		(899	)		(1,217	)

Provision for income taxes	6		-			-			-

Net loss and total comprehensive loss			(115	)		(899	)		(1,217	)

Loss per share of common stock (in cents) - Basic and diluted			(0.41	)		(3.17	)		(4.30	)

Weighted average number of shares of common stock outstanding			28,329,353			28,329,353			28,329,353

The financial statements should be read in conjunction with the accompanying notes.

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Physical Property Holdings Inc. and Subsidiaries

Consolidated Balance Sheets

(Amounts in thousands, except share and per share data)

		As of December 31,
		2009			2009			2008
		US$			HK$			HK$
ASSETS

Current assets
Cash and bank balances			3			22			1,255
Rental and utility deposits			3			23			25
Other current assets			-			-			90

Total current assets			6			45			1,370

Bank deposits, collateralized			11			82			82
Property, plant and equipment, net	4		1,396			10,893			10,927

Total assets			1,413			11,020			12,379

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Long-term bank loans - current portion	5		69			538			527
Other payables	7		30			234			159
Due to a stockholder			-			-			7

Total current liabilities			99			772			693

Long-term bank loans – non-current portion	5		1,295			10,101			10,640

Commitments and contingencies	8

Stockholders' equity
Common stock, par value of US$0.001 each,
100 million shares of stock authorized;
28,329,353 shares of stock issued and outstanding			28			221			221
Additional paid-in capital			9,437			73,608			73,608
Accumulated losses			(9,446	)		(73,682	)		(72,783	)

Total stockholders’ equity			19			147			1,046

Total liabilities and stockholders' equity			1,413			11,020			12,379

The financial statements should be read in conjunction with the accompanying notes.

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Physical Property Holdings Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Amounts in thousands, except share and per share data)

	Year ended December 31,
	2009			2009			2008
	US$			HK$			HK$
Cash flows from operating activities:
Net loss		(115	)		(899	)		(1,217	)

Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		43			334			284

Changes in working capital:
Trade receivables		-			-			22
Deposits and other current assets		11			92			690
Other payables		10			75			(54	)

Net cash used in operating activities		(51	)		(398	)		(275	)

Cash flows from investing activities:
Acquisition of property, plant and equipment		(38	)		(300	)		-
Increase in bank deposits, collateralized		-			-			(2	)

Net cash used in investing activities		(38	)		(300	)		(2	)

Cash flows from financing activities:
Repayment of long-term bank loans		(68	)		(528	)		(493	)
Net repayment to a stockholder		(1	)		(7	)		(524	)

Net cash used in financing activities		(69	)		(535	)		(1,017	)

Net decrease in cash and cash equivalents		(158	)		(1,233	)		(1,294	)

Cash and cash equivalents at beginning of year		161			1,255			2,549


C Cash and cash equivalents at end of year, represented by cash and bank balances		3			22			1,255

The financial statements should be read in conjunction with the accompanying notes.

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Physical Property Holdings Inc. and Subsidiaries

Consolidated Statements of Stockholders' Equity

(Amounts in thousands, except share and per share data)

	Common stock		Additional paid in capital	Accumulated losses		Accumulated other comprehensive losses	Total
	Number	HK$	HK$	HK$		HK$	HK$		US$

Balance (Deficit) as of January 1, 2008	28,329,353	221	73,608	(71,566	)	-	2,263		290

Net loss	-	-	-	(1,217	)	-	(1,217	)	(156	)

Balance (Deficit) as of December 31, 2008	28,329,353	221	73,608	(72,783	)	-	1,046		134

Net loss	-	-	-	(899	)	-	(899	)	(115	)

Balance (Deficit) as of December 31, 2009	28,329,353	221	73,608	(73,682	)	-	147		19

The financial statements should be read in conjunction with the accompanying notes.

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Physical Property Holdings Inc. and Subsidiaries

Notes to Financial Statements

(Amounts in thousands, except share and per share data)

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

Physical Property Holdings Inc. (“Physical Property”) (formerly known as Physical Spa & Fitness Inc.) was incorporated on September 21, 1988 under the laws of the United States of America. The Company was incorporated with authorized share capital of 100 million common stocks with par value of US$0.001 each. 83% of the Company’s issued and outstanding common stocks were held by a stockholder (the "Principal Stockholder"). The Company is a U.S. public company listed on the National Association of Securities Dealers Automated Quotation Over-the-Counter Bulletin Board. Physical Property and its subsidiaries are collectively referred to as the Company.

The Company, through its subsidiaries, engaged in the real estate business by holding five residential apartments in Hong Kong which 100% of the Company’s income was generated from the tenants in these five apartments for the years ended December 31, 2009 and 2008.

2. BASIS OF PRESENTATION

The financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America.

The financial statements are presented in Hong Kong dollars which is the Company’s functional currency because the Company’s operations are primarily located in Hong Kong. For illustrative purposes, the exchange rate adopted for the presentation of financial information as of and for the year ended December 31, 2009 has been made at HK$7.8 to US$1.00. No representation is made that the HK$ amount could have been, or could be, converted into United States Dollars at that rate on December 31, 2009 or at any other date.

The Company has evaluated subsequent events after the balance sheet date of December 31, 2009 through the date this annual report is filed on [March 31, 2010].

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Principles of consolidation

The consolidated financial statements include the financial information of Physical Property and its subsidiaries. All intercompany balances and transactions have been eliminated on consolidation.

b) Preparation of financial statements

The Company had negative working capital of HK$727,000 as of December 31, 2009 and incurred losses of HK$899,000 and HK$1,217,000 for the years ended December 31, 2009 and 2008 respectively. These conditions raised substantial doubt about the Company’s ability to continue as a going concern.

Continuation of the Company as a going concern is dependent upon attaining profitable operations in the future, exercising tight cost and cash flow controls measures, and obtaining additional banking facilities and adequate finance as and when required. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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The Principal Stockholder has undertaken to make available adequate funds to the Company as and when required to maintain the Company as a going concern. Having taken into consideration the undertaking provided by the Principal Stockholder, management believes that the Company will be able to settle its liabilities when they become due.

c) Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment loss.

The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its present working condition and location for its intended use. Expenditure incurred after the assets have been put into operation, such as repair and maintenance expenses, is normally recognized as an expense in the period in which it is 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 assets, the expenditure is capitalized.

When assets are sold or retired, their costs and accumulated depreciation are eliminated from the accounts and any gain or loss resulting from their disposal is included in the statement of operations.

Depreciation is provided to write off the cost of property, plant and equipment over their estimated useful lives from the date on which they become fully operational and after taking into account their estimated residual values, using the straight-line method at the following rates per annum:

Leasehold land held under long-term lease		Over the lease term
Buildings		20 to 50 years

The Company recognizes an impairment loss on property, plant and equipment when evidence, such as the sum of expected future cash flows (undiscounted and without interest charges), indicates that future operations will not produce sufficient revenue to cover the related future costs, including depreciation, and when the carrying amount of asset cannot be realized through sale. Measurement of the impairment loss is based on the fair value of the assets.

d) Cash equivalents

The Company considers all short-term, highly liquid investments with an original maturity date of three months or less to be cash equivalents.

e) Revenue recognition

Revenue represents rental income in connection with the leasing of five residential apartments located in Hong Kong, of which five tenants accounted for 100% of the total revenue for the years ended December 31, 2009 and 2008. The Company’s leases are regarded as operating leases where substantially all the rewards and risks of ownership of assets remain with the leasing company and are accounted for as operating leases.

Rental income is recognized when the properties are let out and on the straight-line basis over the lease term.

f) Income taxes

The Company accounts for income tax under the provision of Accounting Standards Codification (“ASC”) Topic 740. Provision for income and other related taxes have been provided in accordance with the tax rates and laws in effect in the various places of operations.

The Company provides for deferred income taxes using the liability method, by which deferred income taxes are recognized for all significant temporary differences between the tax and financial statements bases of assets and liabilities. The tax consequences of those differences are classified as current or non-current based upon the classification of the related assets or liabilities in the financial statements.

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g) Related parties

Parties are considered to be related if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests, those parties are related parties. Another party is also a related party if it can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Related parties include an enterprise and its principal owners, management or members of their immediate families.

h) Loss per share

Basic loss per share exclude dilution and are computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the periods.

Diluted loss per share are computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding adjusted to reflect potentially dilutive securities. There were no potentially dilutive securities outstanding during any of the years and, accordingly, basic and diluted loss per share are the same.

h) Uses of estimates

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires the Company’s management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual amounts could differ from those estimates.

i) New accounting pronouncements

In February 2010, the FASB issued ASU No. 2010-08, Technical Corrections to Various Topics, thereby amending the FASB Accounting Standards Codification (Codification). This ASU resulted from a review by the FASB of its standards to determine if any provisions are outdated, contain inconsistencies, or need clarifications to reflect the FASB’s original intent. The FASB believes the amendments do not fundamentally change U.S. GAAP. However, certain clarifications on embedded derivatives and hedging reflected in Topic 815, Derivatives and Hedging, may cause a change in the application of the guidance in Subtopic 815-15 . Accordingly, the FASB provided special transition provisions for those amendments.

The ASU contains various effective dates. The clarifications of the guidance on embedded derivatives and hedging (Subtopic 815-15) are effective for fiscal years beginning after December 15, 2009. The amendments to the guidance on accounting for income taxes in a reorganization (Subtopic 852-740) applies to reorganizations for which the date of the reorganization is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. All other amendments are effective as of the first reporting period (including interim periods) beginning after the date this ASU was issued on February 2, 2010. The adoption of this ASU will not have a material impact on the Company’s financial statements.

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4. PROPERTY, PLANT AND EQUIPMENT, NET

	As of December 31,
	2009			2009		2008
	US$			HK$		HK$

Land and buildings		1,601		12,488		12,488
Leasehold improvement		38		300		-
		1,639		12,788		12,488
Less: Accumulated depreciation		(243	)	(1,895	)	(1,561	)

Net book value		1,396		10,893		10,927

The above property, plant and equipment are held for use under operating leases to third party tenants for the years ended December 31, 2009 and 2008. No property, plant and equipment is held under capital lease as of December 31, 2009 and 2008.

5. LONG-TERM BANK LOANS

The outstanding loan balances as of December 31, 2009 and 2008 were analyzed as follows:

End of maturity	Interest rate	Principal
		2009		2009		2008
		US$		HK$		HK$
2026	2.1% per annum		1,364		10,639		11,167

Payables during the following periods	Principal
	2009		2009		2008
	US$		HK$		HK$

2010 / 2009		69		538		527
2011 / 2010		70		542		538
2012 / 2011		71		554		549
2013 / 2012		72		565		560
2014 / 2013		74		579		572
Thereafter		1,008		7,861		8,421

		1,364		10,639		11,167

The collaterals of the long-term bank loans include:

(i)	leasehold properties in Hong Kong with a net book value of HK$10,643;
(ii)	fixed deposits of HK$82; and

(iii)

joint and several guarantee provided by Mr. Luk and his spouse.

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6. INCOME TAXES

Under the provision of ASC Topic 740, the Company has analyzed its filing position in the jurisdictions where it is subject to income taxes. The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which they are domiciled and operate. As of December 31, 2009 and 2008, the Company has identified its operations in the United States and Hong Kong are subject to income taxes. Based on the evaluations noted above, no income taxes have been provided for by the Company as they have incurred losses for taxation purposes in the years ended December 31, 2009 and 2008.

Reconciliation to the expected statutory tax rate in Hong Kong is as follows:

	Year ended December 31,
	2009			2008
	%			%

Statutory rate		16.5		16.5
Non-deductible expenses		(14.0	)	(15.8	)
Valuation allowance in respect of net operating losses		(3.5	)	(2	)
Valuation allowance in respect of temporary differences		1.0		1.3

Effective rate		-		-

Since the Hong Kong subsidiary incurred losses for Hong Kong profits tax purposes, no provision for current tax has been made for the years ended December 31, 2009 and 2008. As of December 31, 2009 and 2008, the Company has operating losses carry forward in respect of Hong Kong subsidiaries of HK$892 and HK$943, respectively.

Recognized deferred tax assets (liabilities) comprised of the following:

	As of December 31,
	2009			2009			2008
	US$			HK$			HK$

Deductible (taxable) temporary differences in respect of property, plant and equipment		(1	)		(5)			(2	)
Operating losses carry forward		3			24			34
Valuation allowance (Note)		(2	)		(19	)		(32	)

Net deferred tax liabilities		-			-			-

Note:

Valuation allowance was made for deferred tax assets arisen from tax benefit in respect of tax losses carried forward amounting to HK$146 (US$19) and HK$197 as of December 31, 2009 and 2008, respectively, as it is more likely than not that the assets will not be realized. The net change in valuation allowance for the year ended December 31, 2009 and 2008 was a decrease of HK$10 (US$1) and a decrease of HK$55 (US$7), respectively.

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7. OTHER PAYABLES

	As of December 31,
	2009		2009		2008
	US$		HK$		HK$

Deposits received		17		134		98
Other creditors		13		100		61

		30		234		159

8. COMMITMENT AND CONTINGENCIES

Capital expenditure commitment

	As of December 31,
	2009		2009		2008
	US$		HK$		HK$

Contracted but not provided for net of deposit paid		-		-		210

Operating lease commitment

The Company leases out its properties under operating leases with average lease term of 2 years. The future aggregate minimum rental receivables under non-cancellable operating leases are as follows:

	As of December 31,
	2009		2009		2008
	US$		HK$		HK$

Within 2010 / 2009		79		616		412
Within 2011 / 2010		27		213		244

		106		829		656

9. RELATED PARTY TRANSACTIONS

The Company had the following transactions with related parties:

	Year ended December 31,
	2009		2009		2008
	US$		HK$		HK$

Rental and other expenses paid to a related company		60		468		-

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During the year ended December 31, 2009, a related company which is controlled by the Principal Stockholder of the Company provided office space and general support for the Company’s activities with an aggregate charge of HK$468 (2008 – For free), respectively.

In addition, during the years ended December 31, 2009 and 2008, the Company has made a net repayment of HK$7 and HK$524 to the Principal Stockholder. The movements of the amount due to the Principal Stockholder, which is unsecured, interest-free and repayable on demand, are analyzed as follows:

	Year ended December 31,
	2009			2009			2008
	US$			HK$			HK$

Balance as of January 1		1			7			531

Advance from the Principal Stockholder		850			6,636			8,730
Repayment to the Principal Stockholder		(855	)		(6,676	)		(9,316	)
Expenses paid by the Principal Stockholder on behalf of the Company		4			33			62

Net repayment to the Principal Stockholder		(1	)		(7	)		(524	)

Balance as of December 31		-			-			7

10. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

	Year ended December 31,
	2009		2009		2008
	US$		HK$		HK$

Cash paid for:
Interest expenses		29		224		282

11. STOCK OPTION PLAN

The Company has a Stock Option Plan (the “Plan”) which was adopted by the Company’s stockholders and its Board of Directors on April 23, 1997. Under the Plan, the Company may issue incentive stock options, non-qualified options, restricted stock grants, and stock appreciation rights to selected directors, officers, advisors and employees of the Company. A total of 500,000 shares of Common Stock of the Company are reserved for issuance under the Plan. Stock options may be granted as non-qualified or incentive options. Incentive stock options may not be granted at a price less than the fair market value of the stock as of the date of grant while non-qualified stock options may not be granted at a price less than 85% of the fair market value of the stock as of the date of grant. The plan will be administered by an option committee which is to be composed of two or more disinterested directors of the Board of Directors (the “Committee”). The option can be exercised during a period of time fixed by the Committee subject to the condition that no option may be exercised ten years after the date of grant or three years after death or disability, whichever is later. As of the date of this report, no stock options have been granted by the Company under the Plan.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures (as defined under Rule 13a-15(e) or 15d-15(e) under the Exchange Act) are effective.

(b) Management's Report on Internal Control over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company in accordance with Rules 13a-15(f) and 15d-15(f) under the Exchange Act, as amended. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

There were no significant changes in the Company's internal controls or in other factors that could significantly affect the Company's disclosure controls and procedures subsequent to the Evaluation Date, nor were there any significant deficiencies or material weaknesses in such disclosure controls and procedures requiring corrective actions. As a result, no corrective actions were taken.

The Company's management, including its Chief Executive Officer and Chief Financial Officer, does not expect that the Company's disclosure controls and procedures or its internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

The officers and directors of the Company, their ages and present positions held with the Company are as follows:

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NAME	AGE	POSITIONS WITH THE COMPANY

Ngai Keung Luk	53	Chairman of the Board of Directors, Chief Executive Officer

Yuk Wah Ho	54	President and Director

Darrie Lam	46	Chief Financial Officer and Secretary, Director

Yat Ming Lam	52	Director

Allan Wah Chung Li	52	Director

The following is a brief summary of the background of each director and executive officer of the Company:

NGAI KEUNG LUK, CHIEF EXECUTIVE OFFICER, CHAIRMAN. Mr. Luk has been the Chairman of the Board of Directors and Chief Executive Officer of the Company since October, 1996. He is the founder of its predecessor companies and has over eighteen years' experience in the real estate market. Mr. Luk was previously employed as a trader on the floor of the Hong Kong gold exchange. Mr. Luk is a controlling shareholder of the Company and beneficially owns approximately 82.52% of the Company's Common Stock.

YUK WAH HO, PRESIDENT, DIRECTOR. Ms. Ho has been a Director of the Company since October, 1996. She has over twenty years' experience in professional aesthetics. Ms. Ho is currently responsible for the business development of the Company. She is the wife of Mr. Luk.

DARRIE LAM, CHIEF FINANCIAL OFFICER, SECRETARY, DIRECTOR. Ms. Lam has been a Vice-President and Secretary of the Company since October, 1996 and was appointed as Chief Financial Officer in July, 2005. Ms. Lam is a fellow member of the Hong Kong Institute of Certified Public Accountants and a fellow member of the Chartered Association of Certified Accountants (UK). She is responsible for the Company's secretarial affairs, finance and administration functions. Ms. Lam received an MBA degree from the University of Manchester, U.K.

YAT MING LAM, DIRECTOR. Mr. Lam has been a Director of the Company since August, 1997. In the recent years, Mr. Lam has run his own business in China.

ALLAN WAH CHUNG LI, DIRECTOR. Mr. Li has been a Director of the Company since June, 1998. Mr. Li is a solicitor qualified to practice law in Canada, England and Hong Kong. He had practiced law in Vancouver, Toronto and Hong Kong for ten years and also worked for the Listing Division of the Stock Exchange of Hong Kong. He received B.Comm. and L.L.B degrees from the University of British Columbia, Canada. Mr. Li is currently serving as a vice-president of a company listed in Hong Kong.

Family Relationships

There are no familial relationships between our officers and directors, other than Yuk Wah Ho, who is the wife of Mr. Luk, our Chairman and CEO.

Meetings of Our Board of Directors

The Registrant’s Board of Directors took all actions by unanimous written consent without a meeting during the fiscal year ended December 31, 2009.

Audit Committee

The Board of Directors established an Audit Committee, composed of the two outside directors and the Chief Financial Officer. The principal functions of the Audit Committee will include making recommendations to the Board regarding the selection of independent public accountants to audit annually the books and records of the Company, reviewing the proposed scope of each audit and reviewing the recommendations of the independent public accountants as a result of their audit of the Company. The Audit Committee will also periodically review the activities of the Company's accounting staff and the adequacy of the Company's internal controls.

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Code of Business Conduct and Ethics

The Company has adopted a code of business conduct and ethics to guide all directors, officers and employees, a copy of which is included as Exhibit 14 to the Company’s Form 10-K for the fiscal year ended December 31, 2006.

Compensation of Directors

The Company reimburses each Director for reasonable expenses (such as travel and out-of-pocket expenses) in attending meetings of the Board of Directors. Directors are not separately compensated for their services as Directors.

Significant Employees

Other than the directors and officer described above, we do not expect any other individuals to make a significant contribution to our business.

Involvement in Legal Proceedings

None of our directors, executive officers, promoters or control persons has been involved in any of the following events during the past five years:

●	any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

●	any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

●	being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

●	being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Section 16(A) Beneficial Ownership Reporting Compliance

Under Section 16(a) of the Exchange Act, all executive officers, directors, and each person who is the beneficial owner of more than 10% of the common stock of a company that files reports pursuant to Section 12 of the Exchange Act, are required to report the ownership of such common stock, options, and stock appreciation rights (other than certain cash-only rights) and any changes in that ownership with the Commission. Specific due dates for these reports have been established, and the Company is required to report, in this Form 10-K, any failure to comply therewith during the fiscal year ended December 2009. The Company believes that all of these filing requirements were satisfied by its executive officers, directors and by the beneficial owners of more than 10% of the Company’s common stock. In making this statement, the Company has relied solely on copies of any reporting forms received by it, and upon any written representations received from reporting persons that no Form 5 (Annual Statement of Changes in Beneficial Ownership) was required to be filed under applicable rules of the Commission.

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ITEM 11. EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The Company maintains a peer-based executive compensation program comprised of fixed and performance variable elements. The design and operation of the program reflect the following objectives:

–	Recruiting and retaining talented leadership.
–	Implementing measurable performance targets.
–	Correlating compensation directly with shareowner value.
–	Emphasizing performance based compensation, progressively weighted with seniority level.
–	Adherence to high ethical, safety and leadership standards.

Designing a Competitive Compensation Package

Recruitment and retention of leadership to manage the Company requires a competitive compensation package. The Board of Directors emphasizes (i) fixed compensation elements of base salary that compare with its compensation peer group of companies, and (ii) variable compensation contingent on above-target performance. The compensation peer group consists of those companies in the Hong Kong S.A.R. which the Company deems to compete with it for executive talent. Individual compensation will vary depending on factors such as performance, job scope, abilities, tenure and retention risk.

Fixed Compensation

The principal element of fixed compensation not directly linked to performance targets is base salary. The Company targets the value of fixed compensation generally at the median of its compensation peer group to facilitate a competitive recruitment and retention strategy.

Incentive Compensation

The Company’s incentive compensation programs are linked directly to earnings growth, cash flow, and total shareowner return. Annual bonuses are tied to the current year’s performance of our company. Restrictive stock awards are tied to an individual’s success in exceeding targeted results set by management.

The following table sets forth all compensation awarded to, earned by, or paid for all services rendered to the Company during the fiscal years 2009 and 2008 by those persons who served as Chief Executive Officer and Chief Financial Officer, and any Named Executive Officer who received compensation in excess of US$100,000 during such years.

SUMMARY COMPENSATION TABLE (US$)

Name and Principal Position	Year		Salary (1)		Bonus (2)		Stock Awards		Option Awards		Non-Equity Incentive Plan Compensation (3)		Nonqualified Deferred Compensation		All Other Compensation		Total

Ngai Keung Luk, CEO, Chairman		2009 2008 2007		-- -- --		-- -- --		-- -- --		-- -- --		-- -- --		-- -- --		-- -- --		-- -- --

Darrie Lam, CFO		2009 2008 2007		-- -- --		-- -- --		-- -- --		-- -- --		-- -- --		-- -- --		-- -- --		-- -- --

Yuk Wah Ho, President, COO		2009 2008 2007		-- -- --		-- -- --		-- -- --		-- -- --		-- -- --		-- -- --		-- -- --		-- -- --

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(1) No officers received or will receive any salaries, bonus or other annual compensation during fiscal year 2009. Management believes that the value of other non-cash benefits and compensation distributed to executive officers of the Company individually or as a group during fiscal year 2009 did not exceed the lesser of US$50,000 or ten percent of such officers' individual cash compensation or, with respect to the group, US$50,000 times the number of persons in the group or ten percent of the group's aggregate cash compensation.

(2) Bonus awarded based on performance.

(3) No officers received or will receive any long term incentive plan (LTIP) payouts or other payouts during fiscal year 2009.

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

The Company’s executives do not have the typical employment agreements that specify compensation or length of employment. These matters are left to the discretion of the Board of Directors and the employee. There are no employment agreements with any executives or key employees at this time.

Limitation of Liability of Directors

The laws of the State of Delaware and the Company's By-laws provide for indemnification of the Company's directors for liabilities and expenses that they may incur in such capacities. In general, directors and officers are indemnified with respect to actions taken in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the Company, and with respect to any criminal action or proceeding, actions that the indemnitee had no reasonable cause to believe were unlawful.

The Company has been advised that in the opinion of the Securities and Exchange Commission, indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of December 31, 2009, the stock ownership of all persons known to beneficially own five percent or more of the Company's Common Stock and all directors and officers of the Company, individually and as a group. Each person has sole voting and investment power over the shares indicated, except as noted. Unless otherwise indicated, the address for each stockholder is 23/F., AIA Tower, No. 183 Electric Road, North Point, Hong Kong.

DIRECTORS, OFFICERS AND 5% STOCKHOLDERS

NAME AND ADDRESS OF BENEFICIAL OWNER	AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1)		PERCENTAGE ENEFICIALLY OWNED (2)

NGAI KEUNG LUK		23,378,071		82.52%
YUK WAH HO, PRESIDENT (3)		23,378,071		82.52%
DARRIE LAM, CHIEF FINANCIAL OFFICER		0		0.00%
YAT MING LAM, DIRECTOR		0		0.00%
ALLAN WAH CHUNG LI, DIRECTOR		0		0.00%

ALL OFFICERS AND DIRECTORS AS A GROUP (5 PERSONS)		23,378,071		82.52%

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(1) Except as otherwise indicated, the Company believes that the beneficial owners of Common Stock listed below, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of Common Stock subject to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage of the person holding such options or warrants, but are not deemed outstanding for purposes of computing the percentage of any other person.

(2) Based upon 28,329,353 shares of Common Stock outstanding.

(3) Ms. Ho is the wife of Ngai Keung Luk. Accordingly Ms. Ho is the beneficial owner of shares owned by Mr. Luk under Rule 13d-3 of the Exchange Act.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The Company had transactions with related companies as provided in the Financial Statements, Note 9.

Director Independence

Our securities are quoted on the OTC Bulletin Board, which does not have any director independence requirements. Once we engage further directors and officers, we will develop a definition of independence and scrutinize our Board of Directors with regard to this definition.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Set forth below are fees paid to the Company's independent accountants for the past two years for the professional services performed for the Company.

Audit Fees: The Company paid Mazars CPA Limited HK$159,000 (US$20,000) and HK$150,000 (US$19,000) respectively in the year 2009 and 2008, in connection with the annual audit, to review the quarterly filings made on form 10-Q and for services that are normally provided in connection with statutory and regulatory filings or engagements.

Audit Related Fees: NONE.

Tax Fees: NONE.

All Other Fees: NONE.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

See "Table of Contents to Consolidated Financial Statements" set forth on page 14.

(a)(2) Financial Statement Schedules

None. The financial statement schedules are omitted because they are inapplicable or the requested information is shown in our financial statements or related notes thereto.

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(a)(3) Exhibits

The following exhibits of the Company are included herein.

2.1	Share Exchange Agreement between Foreclosed Realty Exchange, Inc. and Ngai Keung Luk, together with amendments (1)
3.1	Articles of Incorporation of Physical Spa & Fitness Inc., a Delaware Corporation (1)
3.2	Certificate of Amendment of Articles of Incorporation changing the number of directors (1)
3.3	Certificate of Amendment of Articles of Incorporation changing the Company's name (1)
3.4	Certificate of Amendment of Articles of Incorporation changing the authorized capital (1)
3.5	By-Laws of Physical Spa & Fitness Inc. (1)
3.6	Amended By-Laws of Physical Spa & Fitness Inc. (1)
10.7	Repayment Agreement between the Company and Ngai Keung Luk (1)
10.8	Pledge Agreement between the Company and Ngai Keung Luk (1)
10.9	1997 Stock Option Plan and form of Stock Option Agreement (1)
10.10	Share Exchange Agreement dated October 31, 2006 (3)
10.11	Disposal Agreement dated October 31, 2006 (4)
14	Code of Ethics (5)
16	Letter on changes in certifying accountant (2)
21	Subsidiaries of the Registrant (6)
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (6)
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (6)
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (6)

(1)	Filed with the Commission as exhibit to the Registration Statement filed on October 24, 1997 or amendments to the Registration Statement
(2)	Filed with the Commission as exhibit 16 to Form 8-K, filed on July 10, 2007
(3)	Filed with the Commission as exhibit 10.1 to Form 8-K filed November 6, 2006
(4)	Filed with the Commission as exhibit 10.2 to Form 8-K filed November 6, 2006
(5)	Filed with the Commission as exhibit 14 to Form 10-K filed April 16, 2007
(6)	Filed herewith

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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 on March 31, 2010.

	PHYSICAL PROPERTY HOLDINGS INC.

By:	/s/ Ngai Keung Luk
	Ngai Keung Luk
	Chairman and Chief Executive Officer

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.



/s/ Ngai Keung Luk	Chairman and Chief Executive Officer	Date: 3/31/2010
Ngai Keung Luk	(Principal Executive Officer)



/s/ Yuk Wah Ho	President and Director	Date: 3/31/2010
Yuk Wah Ho



/s/ Darrie Lam	Chief Financial Officer, Secretary and Director	Date: 3/31/2010
Darrie Lam	(Principal Accounting and Financial Officer)



/s/ Yat Ming Lam	Director	Date: 3/31/2010
Yat Ming Lam



/s/ Allan Wah Chung Li	Director	Date: 3/31/2010
Allan Wah Chung Li

Attached files

PHYSICAL PROPERTY HOLDINGS, INC. Reports

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