INTERDYNE CO - Quarter Report: 2011 March (Form 10-Q)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2011
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OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from : Not applicable
Commission file number 0-4454
INTERDYNE COMPANY
(Exact name of registrant as specified in its charter)
| CALIFORNIA | 95-2563023 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| 26 Briarwood, Irvine, California | 92604 | |
| (Address of principal executive offices) | (Zip Code) |
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 xNoo
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):
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Largeaccelerated filer
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o | Accelerated filer |
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Non-accelerated filer
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o | Smaller reporting company |
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(do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yesx Noo
As of May 3, 2011, there were 39,999,942 shares of Common Stock, no par value, issued and outstanding.
Exhibit Index Page No.: None
INTERDYNE COMPANY
FINANCIAL INFORMATION
FINANCIAL INFORMATION
INTERDYNE COMPANY
BALANCE SHEETS
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Mar 31, 2011
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Jun 30, 2010
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(Unaudited)
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(Audited)
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ASSETS
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CURRENT ASSETS
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Cash
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$ | 10,835 | $ | 7,807 | ||||
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Due from affiliates
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231,658 | 246,028 | ||||||
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TOTAL CURRENT ASSETS
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$ | 242,493 | $ | 253,835 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES
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Accrued professional fees
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$ | 7,750 | $ | 8,450 | ||||
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Accrued management fees to related party
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14,000 | 18,500 | ||||||
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Other accrued expenses
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1,280 | 4,078 | ||||||
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TOTAL CURRENT LIABILITIES
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$ | 23,030 | $ | 31,028 | ||||
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STOCKHOLDERS' EQUITY
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Preferred stock, no par value, authorized 50,000,000 shares, no shares outstanding
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- | - | ||||||
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Common stock, no par value, 100,000,000shares authorized, 40,000,000 shares issued and to be issued
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$ | 500,000 | $ | 500,000 | ||||
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Deficit since May 29, 1990
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(280,537 | ) | (277,193 | ) | ||||
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TOTAL STOCKHOLDERS' EQUITY
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$ | 219,463 | $ | 222,807 | ||||
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$ | 242,493 | $ | 253,835 | ||||
STATEMENTS OF OPERATIONS
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Quarter Ended
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Nine Months Ended
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Mar 31, 2011
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Mar 31, 2010
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Mar 31, 2011
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Mar 31, 2010
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(Unaudited)
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(Unaudited)
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(Unaudited)
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(Unaudited)
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INCOME
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Interest earned
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5,174 | 5,258 | 15,629 | 16,540 | ||||||||||||
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TOTAL INCOME
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5,174 | 5,258 | 15,629 | 16,540 | ||||||||||||
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EXPENSES
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General and administrative
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4,010 | 6,365 | 13,673 | 14,692 | ||||||||||||
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Management Fees
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1,500 | 1,500 | 4,500 | 4,500 | ||||||||||||
| 5,510 | 7,865 | 18,173 | 19,192 | |||||||||||||
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NET PROFIT
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BEFORE TAXATION
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(336 | ) | (2,607 | ) | (2,544 | ) | (2,652 | ) | ||||||||
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TAXATION
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0 | 0 | (800 | ) | (800 | ) | ||||||||||
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NET PROFIT/(LOSS)
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AFTER TAXATION
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(336 | ) | (2,607 | ) | (3,344 | ) | (3,452 | ) | ||||||||
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EARNING/(LOSS) PER SHARE
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$ | (0.0000 | ) | $ | (0.0001 | ) | $ | (0.0001 | ) | $ | (0.0001 | ) | ||||
INTERDYNE COMPANY
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For Nine Months Ended
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Mar 31, 2011
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Mar 31, 2010
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(Unaudited)
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(Unaudited)
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net loss
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(3,344 | ) | (3,452 | ) | ||||
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Adjustments to reconcile net loss to net cash used in operating activities:
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Change in operating assets and liabilities:
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Due from affiliates
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14,370 | 26,407 | ||||||
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Accrued expenses
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(7,998 | ) | (7,768 | ) | ||||
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Total adjustments
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6,372 | 18,639 | ||||||
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| Net cash generated/(used) in operating activities | 3,028 | 15,187 | ||||||
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CASH, BEGINNING OF PERIOD
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7,807 | 208 | ||||||
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CASH, END OF PERIOD
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10,835 | 15,395 | ||||||
5
INTERDYNE COMPANY
NOTES TO FINANCIAL STATEMENTS
Note 1. Interim Financial Statements
The accompanying financial statements are unaudited, but in the opinion of the management of the Company, contain all adjustments, consisting of only normal recurring accruals, necessary to present fairly the financial position at March 31, 2011 and the results of operations for the quarter and nine months ended March 31, 2011 and 2010 and changes in cash flows for the nine months ended March 31, 2011 and 2010. Certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although management of the Company believes that the disclosures contained in these financial statements are adequate to make the information presented therein not misleading. For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report in Form 10-K as of June 30, 2010, as filed with the Securities and Exchange Commission. The results of operations for the quarter ended March 31, 2011 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending June 30, 2011.
Note 2. Accounting Policies
New Accounting Pronouncements
There are no newly issued accounting pronouncements that the Company expects to have a material effect on the financial statements.
Determination of Fair Value
In January 2010, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2010-06, an update that improves the requirements related to Fair Value Measurements and Disclosures Subtopic 820-10 of the FASB Accounting Standards Codification ("ASC") originally issued as FASB Statement 157. This update requires disclosures about transfers between Level 1, Level 2 and Level 3 assets and the disaggregated activity in the roll forward for level 3 Fair Value measurements. The Company adopted the measurement requirements of this guidance during the year with no impact to the financial statements.
At March 31, 2011, the Company applied fair value to all assets based on quoted market prices, where available. For financial instruments for which quotes from recent exchange transactions are not available, the Company determines fair value based on discounted cash flow analysis and comparison to similar instruments. Discounted cash flow analysis is dependent upon estimated future cash flows and the level of interest rates. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value.
The methods described above may produce a current fair value calculation that may not be indicative of net realizable value or reflective of future fair values. If readily determined market values became available or if actual performance were to vary appreciably from assumptions used, assumptions may need to be adjusted, which could result in material differences from the recorded carrying amounts. The Company believes its methods of determining fair value are appropriate and consistent with other market participants.
However, the use of different methodologies or different assumptions to value certain financial instruments could result in a different estimate of fair value.
FASB ASC 820 establishes a three-level valuation hierarchy for the use of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date:
Level 1. Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 1 assets and liabilities include debt and equity securities and derivative financial instruments actively traded on exchanges, as well as U.S. Treasury securities and U.S. Government and agency mortgage-backed securities that are actively traded in highly liquid over the counter markets.
Level 2. Observable inputs other than Level 1 prices such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs that are observable or can be corroborated, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 assets and liabilities include debt instruments that are traded less frequently than exchange traded securities and derivative instruments whose model inputs are observable in the market or can be corroborated by market observable data. Examples in this category are certain variable and fixed rate non-agency mortgage-backed securities, corporate debt securities and derivative contracts.
Level 3. Inputs to the valuation methodology are unobservable but significant to the fair value measurement. Examples in this category include interests in certain securitized financial assets, certain private equity investments, and derivative contracts that are highly structured or long-dated.
Application of Valuation Hierarchy
A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following is a description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.
Due from Affiliate. Market prices are not available for the Company's loan due from an affiliate. As a result, the Company bases the fair value utilizing an internally-developed discounted cash flow model which includes assumptions regarding prepayment, the risk of default and the LIBOR forward interest rate curve. The loan due from the affiliate is carried at lower of cost or fair value and is classified within Level 3 of the valuation hierarchy.
The following table presents the financial instruments carried at fair value as of March 31, 2011, by caption on the consolidated balance sheet and by FASB ASC 820 valuation hierarchy described above.
| Assets measured at fair
value on a recurring and
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nonrecurring basis
at March 31, 2011:
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Level 1
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Level 2
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Level 3
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Total carrying value
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Nonrecurring:
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Loan held for sale
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- | - | $ | 231,658 | $ | 231,658 | ||||||||||
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Total assets at fair value
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$ | - | $ | - | $ | 231,658 | $ | 231,658 | ||||||||
Level 3 Gains and Losses
The following table sets forth a summary of changes in the fair value of the Company’s Level 3 assets for the nine months ended March 31, 2011:
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LEVEL 3 ASSETS
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Nine Months Ended March 31, 2011
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Due from Affiliate
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Balance - July 1, 2010
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$ | 246,028 | ||
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Advances and (repayments), net
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(14,370 | ) | ||
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Balance - March 31, 2011
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$ | 231,658 | ||
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The Company is at present dormant and is looking for new opportunities.
The cash needs of the Company will be funded by the collection of the amount due from its affiliate.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
N/A
Item 4. Controls and Procedures
Our management, comprising the Chief Executive Officer and the Chief Financial Officer/Principal Accounting Officer, is responsible for establishing and maintaining disclosure controls and procedures for the Company. It has designed such disclosure controls and procedures to ensure that material information is made known to it, particularly during the period in which this report was prepared.
As of the end of the period covered by this report, our management carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (or Exchange Act)). Based on this evaluation, as of the end of the period covered by this report, our management has concluded that our disclosure controls and procedures are effective considering the fact that the Company is dormant.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2011 based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organization of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of March 31, 2011 considering the fact that the Company is dormant.
Our independent auditors have not audited and are not required to audit this assessment of our internal control over financial reporting for the period covered by this report.
During our most recent fiscal quarter, there has not occurred any change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 1A. Risk Factors.
None
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None
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a.
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31.1 Certification of the Company's Chief Executive Officer, Sun Tze Whang, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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b.
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31.2 Certification of the Company's Chief Financial Officer/Principal Accounting Officer, Kit H. Tan, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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c.
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32 Certification of the Company's Chief Executive Officer and Chief Financial Officer/Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| INTERDYNE COMPANY | |||
| (Registrant) | |||
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Date : May 3, 2011
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By:
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/s/Sun Tze Whang | |
| Sun Tze Whang | |||
| Director /Chief Executive Officer | |||
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By:
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/s/Kit H. Tan | |
| Kit H. Tan | |||
| Director /Chief Financial Officer/Principal Accounting Officer | |||
11