PREPAYMENTS AND OTHER CURRENT ASSETS

Prepayments and other current assets consist of the following:


	As at December 31,
	2011			2012			2012
	RMB			RMB			US$
Deposits to a hospital*		15,000			-			-
Prepayments to suppliers**		1,490			769			123
Due from suppliers**		9,661			9,559			1,534
Advances to hospitals***		25,598			32,632			5,238
Advances to employees****		5,987			13,442			2,158
Deferred costs		6,200			6,200			995
Others		6,949			15,140			2,430

		70,885			77,742			12,478
Reserve for unrecoverable deposits		(10,619	)		(10,270	)		(1,648	)

		60,266			67,472			10,830


	For the Years Ended December 31,
	2010		2011		2012			2012
	RMB		RMB		RMB			US$

Movement in reserve for unrecoverable deposits:
Balance at beginning of the year		-		706		10,619			1,704
Provisions for the year		706		9,913		-			-
Foreign currency translation		-		-		(349	)		(56	)

Balance at end of the year		706		10,619		10,270			1,648

Provisions are charged directly to the statement of comprehensive income. The related expense is included in the caption "asset impairment".

*	The amount represents an interest-free cash deposit paid to a customer hospital pursuant to the management service contract to which the deposit is repayable at the termination of the service contract.

Prepayments and amounts due from suppliers represent interest-free non-refundable payments in connection with purchase contracts the Group enters into for future delivery of medical equipment and supply materials for external sales and returnable deposits of cancelled orders from suppliers respectively. The risk of loss arising from non-performance by or bankruptcy of suppliers is assessed prior to order equipment.

***

The amount represents interest-free advances to a hospital. Management has assessed the impact of such advances on revenue recognition at the outset of the arrangement. The risk of loss arising from any failure by hospital customers to fulfill their financial obligations is assessed prior to making the advances and is monitored for recoverability on a regular basis by management. A charge to cost of revenue is recorded in the period in which a loss is incurred.

****

The amount represents interest-free advance to hospitals held by the Company's employees to cover expenses incurred by centers. A formal loan agreement is in place binding the employees as to the uses of advances and terms and conditions of repayment. The risk of loss arising from inadequate or failure of operation of internal process is assessed prior to making the advances and is monitored on a regular basis by management. To date, the Company has not experienced any loss of such advances.