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 March 31, ~~2009~~2010

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 0–27229

WORLDSTAR ENERGY, CORP.
(Exact name of registrant as specified in its charter)

Nevada	88–0409163
(State or other jurisdiction of incorporation or	(IRS Employer Identification No.)
organization)

Rm 803, 8/F, Jubilee Centre
No. 42 Gloucester Road
Wanchai, Hong Kong, China	__________
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (852) 2790-5157

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, par value $0.001 per share
(Title of class)

Indicate by check mark if the registrant is a well–known seasoned issuer, as defined in Rule 405 of the Securities Act.
[ ] Yes [X] No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act
[ ] Yes [X] No

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S–K 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.
[X]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ ] No [ ]

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 the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b–2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non–accelerated filer [ ] (do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act).
[X] Yes [ ] No

The registrant’s common stock ceased to be eligible for quotation on the OTC Bulletin Board effective August 19, 2008, for failure to comply with NASD (now FINRA) Rule 6530. There is currently no public market for the registrant’s common stock. However, as reported in its current report on Form 8-K filed with the SEC on July 14, 2011, the registrant has acquired an exclusive sublicense dated June 29, 2011 from Fire Block Technologies Inc. to use and apply, in Southeast Asia, including China, the patent-pending processes and solutions licensed by Fire Block Technologies Inc. from Fire Block International Inc., a private Canadian company, for the manufacture of engineered construction products from palm oil tree waste material with zero ignition and zero flame spread properties. The registrant intends to pay a CAD$150,000 acquisition fee to Fire Block Technologies Inc. by way of the issuance of 10,000,000 fully paid shares of common stock in the capital of the registrant (at a deemed issue price per share of CAD$1.15, or $1.16 based on the noon exchange rate on September 6, 2011, as published by the Bank of Canada, of CAD$1.00: $0.9898) to Fire Block Technologies Inc. Accordingly, the aggregate market value of the registrant’s common stock held by non–affiliates of the registrant as of September 6, 2011, not including the deemed issue price at which such stock might be issued to Fire Block Technologies Inc., was approximately $31,623,373.

The registrant had 57,761,834 shares of common stock outstanding as of September 1520, 2011.

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WORLDSTAR ENERGY, CORP.
Form 10–K

ITEM 1.		BUSINESS	2
ITEM 1A.		RISK FACTORS	4
ITEM 1B.		UNRESOLVED STAFF COMMENTS	98
ITEM 2.		PROPERTIES	9
		PROPERTIES	9
	PRINCIPAL MINERAL PROPERTY		9
	MONGOLIA		11
ITEM 3.		LEGAL PROCEEDINGS	13
ITEM 4.		(REMOVED AND RESERVED)	1413
ITEM 5.		MARKET FOR COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	14
	MARKET INFORMATION		14
	RECENT SALES OF UNREGISTERED SECURITIES		14
	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS		15
ITEM 6.		SELECTED FINANCIAL DATA	15
ITEM 7.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	15
	OVERVIEW OF OUR BUSINESS		15
	OUR PLAN OF OPERATIONS		1716
	RESULTS OF OPERATIONS – YEARS ENDED MARCH 31, 2009 AND 2008		19
	RESULTS OF OPERATIONS – YEARS ENDED MARCH 31, 2010 AND 2009		18
	CRITICAL ACCOUNTING POLICIES AND ESTIMATES		2120
	OFF–BALANCE SHEET ARRANGEMENTS		2826
ITEM 7A.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2827
ITEM 8.		FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	2927
ITEM 9.		CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE	2927
ITEM 9A.		CONTROLS AND PROCEDURES	2927
	EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES		2927
	INTERNAL CONTROL OVER FINANCIAL REPORTING		2927
	MANAGEMENT REPORT ON ASSESSMENT OF INTERNAL CONTROL OVER FINANCIAL REPORTING		3028
	INHERENT LIMITATION OF THE EFFECTIVENESS OF INTERNAL CONTROL		3028
	CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING		3028
ITEM 9A(T).		CONTROLS AND PROCEDURES	3028
ITEM 9B.		OTHER INFORMATION	3028
ITEM 10.		DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	3029
	DIRECTORS AND EXECUTIVE OFFICERS		3029
	TERM OF OFFICE		3230
	SIGNIFICANT EMPLOYEES		3230
	FAMILY RELATIONSHIPS		3230
	BOARD INDEPENDENCE		3230
	COMMITTEES OF THE BOARD OF DIRECTORS		3231
	INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS		3331
	COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT		3432
	CODE OF ETHICS		3432

- iii -

ITEM 11.		EXECUTIVE COMPENSATION	3533
	SUMMARY COMPENSATION TABLE		3533
	OUTSTANDING EQUITY AWARDS AS OF MARCH 31, 2009		35
	OUTSTANDING EQUITY AWARDS AS OF MARCH 31, 2010		34
	EQUITY COMPENSATION PLANS		3534
	COMPENSATION OF DIRECTORS		3534
	EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE–IN–CONTROL ARRANGEMENTS		3634
ITEM 12.		SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	3634
ITEM 13.		CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	3735
	WHERE YOU CAN FIND MORE INFORMATION		3736
	GLOSSARY OF TECHNICAL TERMS		3836
ITEM 14.		PRINCIPAL ACCOUNTING FEES AND SERVICES	3837
	AUDIT FEES		3937
	AUDIT RELATED FEES		3937
	TAX FEES		3937
	ALL OTHER FEES		3938
	AUDIT COMMITTEE PRE–APPROVAL OF AUDIT AND PERMISSIBLE NON–AUDIT SERVICES OF INDEPENDENT AUDITORS		3938
PART IV			4038
ITEM 15.		EXHIBITS	4038
FINANCIAL STATEMENTS FILED AS PART OF THIS ANNUAL REPORT ON FORM 10–K			4240
SIGNATURES			43I

- iv -

FORWARD–LOOKING STATEMENTS

The information in this annual report contains forward–looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward–looking statements involve risks and uncertainties, including statements regarding our capital needs, business plans and expectations. Such forward–looking statements involve risks and uncertainties regarding the success of our business plan, availability of funds, government regulations, operating costs, our ability to achieve significant revenues, our business model and products, and other factors. Forward–looking statements are made, without limitation, in relation to operating plans, property exploration and development, availability of funds, environmental reclamation, operating costs and mineral exploration rights acquisition. Any statements contained herein that are not statements of historical facts may be deemed to be forward–looking statements. In some cases, you can identify forward–looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology.

Forward–looking statements in this annual report include, but are not limited to, statements with respect to the following:

our future financial or operating performances;
estimates related to costs and expenditures; and
requirements for additional capital.

These forward–looking statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, including, the risks and uncertainties outlined under the sections titled “Risk Factors”, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. If one or more of these risks or uncertainties materialize, or our underlying assumptions prove incorrect, our actual results may vary materially from those expressed or implied by our forward–looking statements anticipated, believed, estimated or expected.

For further information, you should carefully read and consider the section of this annual report entitled “Risk Factors” beginning on page 4.

We caution readers not to place undue reliance on any such forward–looking statements, which speak only to a state of affairs as of the date made. We disclaim any obligation subsequently to revise any forward–looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. We qualify all the forward–looking statements contained in this annual report by the foregoing cautionary statements.

PART I

ITEM 1. BUSINESS

Overview

As used in this annual report, the terms “we”, “us”, “our” and “WorldStar” mean WorldStar Energy, Corp., unless otherwise indicated.

We were incorporated on November 8, 1996 under the laws of the State of Nevada under the name “Flintrock Financial Services, Inc.” Concurrent with the reverse merger with Tysa Corporation on March 1, 2000 we changed our name to “Auteo Media, Inc.” effective March 14, 2000. On April 1, 2005 we changed our name to “WorldStar Energy, Corp.” and amended our articles of incorporation to increase our authorized share capital to 100,000,000 shares of common stock, each with a par value of $0.001.

Our principal executive offices are located at Rm 803, 8/F, Jubilee Centre, No. 42 Gloucester Road, Wanchai, Hong Kong, China.

We became a “shell” company as defined in Rule 12b–2 of the Exchange Act upon the sale of substantially all of our assets in July 2002.

Abortive Acquisition of WorldStar Energy Corp. (British Columbia)

On January 26, 2005, we entered into a share exchange agreement with WorldStar Energy Corp. (“WEC”), a private British Columbia company, whereby we agreed to acquire all of WEC’s outstanding shares of common stock in consideration for 31,000,000 shares of our common stock. At the time, WEC had an 80% interest in a methanol joint venture project in Indonesia, held through an 80% owned subsidiary, the remaining 20% of which was owned by an Indonesian state-owned company. On March 27, 2006, we announced that we would not be moving forward with the acquisition of WEC due principally to a lack of financing for the proposed methanol joint venture project. During the year ended March 31, 2008, we issued 431,700 shares of our common stock to certain investors in WEC in settlement of any potential claims related to our proposed acquisition of WEC. We also completed the issuance of 500,000 shares of our common stock to a company controlled by our director and CFO, Michael Kinley, in satisfaction of US$179,705 owing to him for consulting fees accrued through September 30, 2006, and which was agreed to be settled for shares in December, 2006.

Acquisition of National Base Investment Limited

On August 14, 2007, we completed the acquisition of all of the issued and outstanding shares of National Base Investment Limited (“National Base”), a company incorporated pursuant to the laws of the British Virgin Islands on November 28, 2006, from Jewel Star Group Limited (“Jewel”), also incorporated pursuant to the laws of the British Virgin Islands and the principal of which was our then President and Chief Executive Officer. The acquisition was completed in accordance with a share purchase agreement dated February 12, 2007 (the “Share Purchase Agreement”) among our Company, Jewel and National Base, in consideration of 30,000,000 fully paid shares of our common stock with an agreed value of $0.25 per share, plus $1,300,000 in cash, for a total consideration of $8,860,000.

At the time of the acquisition, National Base owned interests in 50 mineral exploration licenses in Mongolia. As part of the transaction, we lent $3,700,000 to a 51% owned subsidiary of National Base in order to discharge its liabilities in connection with acquiring the Mongolian licenses. In addition, on August 14, 2007, we completed a private placement of 22,000,000 shares of common stock to a group of overseas investors for gross proceeds of $5,500,000 which we used to fund the cash portion of the transaction and to provide working capital. We issued 2,200,000 shares of fully paid common stock to an overseas company in satisfaction of a finder’s fee in respect of the private placement. We also issued 2,000,000 fully paid shares of our common stock to a company located outside of the United States in consideration of services rendered in connection with the acquisition of National Base.

National Base owns 98% of Bulgan Gold Investment Ltd. (“BGI”), a Hong Kong corporation, which in turn owns 52% of Bulgan Gold (HK) Limited (“BGHK”). The other 48% of BGHK shares are owned by a Hong Kong businessman as to 18% and a Mongolian businessman as to 30%. They currently remain minority shareholders in the Company. BGHK owns 100% of Bulgan Gold LLC (“BGL”), a Mongolian corporation. BGL owned the 50 mineral exploration licenses over properties in Mongolia.

The Mongolian licenses covered an aggregate of some 817,000 hectares (8,200 square kilometers) of lands believed to be prospective for base and precious minerals based on certain data gathered during the Soviet era in the 1960s and 1970s, and subsequently into the late 1990s. The properties contained no known reserves of any type of minerals. At the time of our acquisition of National Base, our plan was to organize the Mongolian licenses and prioritize exploration targets, as exploration work was required to further delineate and expand the known mineralization on the properties. As well, prospecting work and database reviews of other historical work were to be undertaken.

We filed a Current Report on Form 8-K with the SEC on August 27, 2007 which provides, among other things, further information relating to the acquisition of National Base and the properties we had planned to explore, including risk factors relating to our business.

We also filed a current report on December 20, 2007 disclosing that National Base, as the legal subsidiary, is treated as the acquiring company with the continuing operations. As National Base constitutes the operations of the Company, the Company has changed its fiscal year end to March 31, thereby adopting the same fiscal year end as National Base. In accordance with SEC guidance, as National Base constitutes the accounting acquirer, no transition report is required in connection with this change in year end.

Current Status

As at March 31, 2009, we had not engaged in any exploration activities on the properties covered by the Mongolian licenses, as we had not yet completed our analysis of the existing database nor prioritized our exploration targets.

Due in large part to the economic recession that commenced in the United States in December 2007, and the general worldwide economic downturn that followed, we were unable to raise sufficient financing to commence our planned exploration activities on the properties covered by the Mongolian licenses. As a result, during the year ended March 31, 2009, our Company was forced to cease operations in Mongolia, and we were unable to maintain our interests in the Mineral Exploration License Certificates issued by the Minerals and Petroleum Authority of Mongolia. Accordingly, the exploration rights represented by the Mongolian licenses were forfeited, our Company wrote off the remaining book value of $7,317,739 as of March 31, 2008, and we once again became a “shell” company as defined in Rule 12b–2 of the Exchange Act.

As reported in our current report on Form 8-K filed with the SEC on July 14, 2011, we have acquired an exclusive sublicense dated June 29, 2011 from Fire Block Technologies Inc. to use and apply, in Southeast Asia, including China, the patent-pending processes and solutions licensed by Fire Block Technologies Inc. from Fire Block International Inc., a private Canadian company, for the manufacture of engineered construction products from palm oil tree waste material with zero ignition and zero flame spread properties.

Our sublicense is for a 10 year term, and is renewable for successive periods of 10 years each. The sublicense agreement represents a key step in our reactivation; however, our strategic plan is still contingent on, among other things, the successful completion of all documents required under a letter of intent that we have signed with the owners of Palm Oil Plantations in Indonesia for the supply of palm oil tree waste material, as well as raising financing on acceptable terms to fund the construction of the required facilities to process palm oil tree waste material and manufacture our planned products, and to fund the start-up of operations. In addition, we will have to establish relationships with suppliers and distributors in South East Asia. Accordingly, we currently remain a “shell company” as defined in Exchange Act Rule 12b-2, as we have nominal assets and nominal operations.

Zeroignition^TM and Zi^TM, referred to in this annual report, are trademarks controlled by Fire Block International Inc.

Incorporation and Principal Business Offices

We were formed under the laws of the State of Nevada on November 8, 1996. Our principal business offices are located at Rm 803, 8/F, Jubilee Centre, No. 42 Gloucester Road, Wanchai, Hong Kong, China, and our telephone number is (852) 2790-5157.

Accounting Treatment

The closing of the acquisition of National Base represented a change in control of our Company. For accounting purposes, this change in control constitutes a recapitalization of the Company, and the acquisition has been accounted for as a reverse merger whereby we, as the legal acquirer, are treated as the acquired entity, and National Base, the legal subsidiary, is treated as the acquiring company with the continuing operations. Accordingly, the consolidated results of operations and cash flows of the Company set forth in this Annual Report include those of National Base for all periods presented and those of the Company subsequent to the date of the acquisition of National Base.

ITEM 1A. RISK FACTORS

Much of the information included in this Annual Report includes or is based upon estimates, projections or other “forward looking statements”. Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions, or other future performance suggested herein. We undertake no obligation to update forward looking statements to reflect events or circumstances occurring after the date of such statements.

Such estimates, projections or other “forward looking statements” involve various risks and uncertainties as outlined below. We caution readers of this Annual Report that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other “forward looking statements”. In evaluating us, our business and any investment in our business, readers should carefully consider the following factors.

Risks Related to Our Company

We have no operations and only nominal assets.

Given the forfeiture of our exploration rights represented by the Mongolian licenses, and despite our acquisition of an exclusive sublicense to use and apply, in Southeast Asia, certain patent-pending processes and solutions for the manufacture of engineered construction products from palm oil tree waste material with zero ignition and zero flame spread properties, we currently have no operations and only nominal assets. Our strategic plan remains contingent on, among other things, financing, the successful completion of all documents required under a letter of intent we have signed with the owners of Palm Oil Plantations in Indonesia, the construction of processing and manufacturing facilities, and our ability to establish relationships with suppliers and distributors in South East Asia, none of which can be assured.

We have a history of losses, and there is no assurance of future profitability.

Our Company has no history of earnings and there can be no assurance that our Company will ever be profitable. We have not paid dividends on our shares since incorporation and we do not anticipate doing so in the foreseeable future. At present, it is impossible to determine what amounts of additional funds, if any, may be required. Failure to raise such additional capital could put the continued viability of the Company at risk.

We had net loss of $5107,~~100~~746 for the year ended March 31, ~~2009 and~~2010 and a net loss of $105,~~217,305~~100 for the year ended March 31, ~~2008~~2009. As of March 31, ~~2009~~2010, we had a working capital deficiency of $5,~~155~~237,~~904~~894. This deficiency includes current liabilities of $5,324,023 representing payables and accrued expenses, loans from minority stockholders, amount due to related companies, amount due to a minority stockholder, amount due to a former stockholder, related party payable and short-term loans. In addition, in order to preserve our rights under our sublicense agreement with Fire Block Technologies Inc., we are under obligations to pay a continuing royalty to Fire Block Technologies Inc., and to purchase certain escalating minimum quantities of ZeroignitionTM Solution from Fire Block Technologies Inc. during each year of the term of the sublicense agreement.

We do not presently have sufficient financial resources to fund the construction of our planned processing and manufacturing facilities or the start-up of operations.

We do not presently have sufficient financial resources to fund the construction of the required facilities to process palm oil tree waste material and manufacture our planned products, or to fund the start-up of operations. Accordingly, our success will depend on our ability to raise funds on terms that are acceptable to us through private placement financing, public financing or other means. There can be no assurance that we will be successful in obtaining the required financing. Failure to raise such additional capital could put the continued viability of our Company at risk.

Our indebtedness, as well as the current global recession and disruption in financial markets, could, among other things, impede our access to capital or increase our cost of capital, which would have an adverse effect on our ability to fund our working capital and other capital requirements.

As of March 31, ~~2009~~2010, the outstanding principal and unpaid interest amount of our debt was $5,324,023. The widely reported domestic and global recession, and the unprecedented levels of disruption and continuing illiquidity in the credit markets have had an adverse effect on our financial condition, and if sustained or worsened, such adverse effects could continue or deteriorate. Disruptions in the credit and financial markets have adversely affected financial institutions, inhibited lending and limited access to capital and credit for many companies, including ours. These conditions have made it difficult for us to obtain capital and financing and have limited our flexibility to plan for acquisitions of any business or assets that we may identify. If these conditions persist or deteriorate, they could, among other things, make it difficult for us to finance our working capital requirements and service our existing debt.

If future financing is not available to us when required, as a result of limited access to the credit markets or otherwise, or is not available on acceptable terms, we may not have sufficient working capital to permit us to identify and evaluate businesses and assets for possible acquisition. We may also be unable to respond to competitive pressures. Any of these circumstances could have an adverse effect on our financial condition.

Our reactivation plan is based on several key assumptions which, if proved to be invalid, could seriously impact the success of our plan

The success of our Company will depend upon numerous factors, many of which are beyond our Company’s control, including (i) our ability to consummate the transactions contemplated by our letter of intent with the owners of Palm Oil Plantations in Indonesia; (ii) our ability to develop a network of suppliers and distributors in Southeast Asia; (iii) our ability to successfully integrate and carry on our planned business operations; and (iv) our ability to attract and retain additional key personnel to run and expand our planned business. Our reactivation plan will be seriously impacted if we are unable to execute any of these steps.

We are dependent on our key personnel, and the loss of any such personnel could adversely affect our Company.

The success of our Company’s operations will depend upon numerous factors, many of which are beyond our Company’s control, including (i) the ability of our Company to enter into strategic alliances through a combination of one or more joint ventures, mergers or acquisition transactions; and (ii) the ability to attract and retain additional key personnel in plant construction, manufacturing, sales, marketing, technical support and finance. These and other factors will require the use of outside suppliers as well as the talents and efforts of our Company. There can be no assurance of success with any or all of these factors on which our Company’s operations will depend. We have relied, and may continue to rely, upon consultants and others for operating expertise.

Our directors and officers are involved in other projects, and there is the potential that such directors will encounter conflicts of interest with our company.

Until we acquire a new business or assets, and then likely only until we are able to ramp up operations, our directors and officers will only be able devote a limited portion of their time to the affairs of the Company, and some of them are or will be engaged in other projects or businesses such that conflicts of interest may arise from time to time. In accordance with the laws of Nevada, the directors of the Company are required to act honestly, in good faith and in the best interests of the Company. In determining whether or not we will acquire a new business or assets that we may identify, the directors will primarily consider the potential benefits to our Company, the degree of risk to which our Company may be exposed and its financial position at that time.

We currently do not maintain any insurance coverage, and, in the future, we may be unable to obtain or maintain insurance to cover all of the risks associated with our activities at economically feasible premiums. Losses from an uninsured event may cause us to incur significant costs that could have a material adverse effect upon our financial condition.

We currently do not maintain any insurance coverage and, in the future, we may be unable to obtain or maintain insurance to cover all of the risks that may arise in the course of our activities at economically feasible premiums. The nature of the risks that we will face in the future will depend, in turn, upon the nature of any business that we may embark upon following the identification, evaluation and acquisition of any business or assets. Insurance coverage may not be available or may not be adequate to cover any resulting liability. Moreover, we expect that insurance against certain risks such as environmental pollution may be prohibitively expensive to obtain for a company of our size and financial means. We might also become subject to liability for pollution or other hazards for which insurance may not be available or for which we may elect not to insure against because of premium costs or other reasons. Losses from these events may cause us to incur significant costs that could have a material adverse effect upon our financial condition and any future results of operations.

Certain legislation, including the Sarbanes–Oxley Act of 2002, may make it difficult for us to retain or attract officers and directors.

We may be unable to attract and retain qualified officers, directors and members of committees of the board of directors required to provide for our effective management as a result of the recent changes in the rules and regulations that govern publicly–held companies. In particular, the Sarbanes–Oxley Act of 2002 has resulted in a series of rules and regulations by the United States Securities and Exchange Commission (SEC) that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes, together with the risks associated with our business, may deter qualified individuals from accepting these roles.

There are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected.

We are now subject to the ongoing internal control provisions of Section 404 of the Sarbanes–Oxley Act of 2002. These provisions provide for the identification of material weaknesses in internal controls over financial reporting, which is a process to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our internal controls and disclosure controls will prevent all errors 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. In addition, the design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be 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, in our Company have been detected. These inherent limitations include the realities that judgments in decision–making can be faulty and that breakdowns can occur because of simple errors or mistakes. Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may be inadequate because of changes in conditions, such as growth of the company or increased transaction volume, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost–effective control system, misstatements due to error or fraud may occur and not be detected.

In addition, discovery and disclosure of a material weakness, by definition, could have a material adverse impact on our financial statements. If we are unable to assert that our internal control over financial reporting are adequate, future customers or suppliers may be discouraged from doing business with us, cause downgrades in any future debt ratings for our Company leading to higher borrowing costs and affect how our stock trades. This could, in turn, negatively affect our ability to access public debt or equity markets for capital. Further, such an occurrence could make it more difficult for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage and/or to incur substantially higher costs to obtain the same or similar coverage. It could also make it more difficult for us to attract and retain qualified personnel to serve on our board of directors, on committees of our board of directors, or as executive officers.

Future sales of our common stock may depress our stock price thereby decreasing the value of your investment.

We anticipate that we will be required to effect an offering of securities in connection with the build out of our infrastructure and the start-up of our planned business operations. Since we have no operations and only nominal assets, the safe harbor provided for in Rule 144 under the Securities Act of 1933, as amended, is not available to our security holders to facilitate the resale of any restricted securities of our Company, which could adversely affect the ability of our Company to obtain private placement financing without accompanying registration rights. The price of our common stock on any market that may develop for such stock could decline as a result of sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur. In addition, these factors could make it more difficult for us to raise funds through future offerings of common stock.

There is currently no organized market for our common stock, and our investors may be unable to sell their shares.

We currently have no organized trading market for our common stock, although certain market makers make market in or common stock on the Pink OTC Market. As a result, investors may not be able to sell the shares of our common stock that they have purchased and may lose all of their investment.

Our common stock is subject to the “penny stock” rules of the SEC, which will make transactions in our common stock cumbersome and may reduce the value of an investment in our common stock.

Our common stock is not currently traded on any organized securities market, which may cause difficulty in obtaining future financing. Further, our securities are subject to the "penny stock rules" adopted pursuant to Section 15(g) of the Securities Exchange Act of 1934, as amended. The penny stock rules apply generally to companies whose common stock trades at less than US $5.00 per share, subject to certain limited exemptions. Such rules require, among other things, that brokers who trade "penny stock" to persons other than "established customers" complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade "penny stock" because of the requirements of the "penny stock rules" and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. In the event that we remain subject to the "penny stock rules" for any significant period, there may develop an adverse impact on the market, if any, for our securities. Because our securities are subject to the "penny stock rules", investors will find it more difficult to dispose of our securities. Further, it is more difficult: (i) to obtain accurate quotations, (ii) to obtain coverage for significant news events because major wire services, such as the Dow Jones News Service, generally do not publish press releases about such companies, and (iii) to obtain needed capital.

Our independent auditors have expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.

Our ~~company~~Company's consolidated financial statements include a statement that our consolidated financial statements are prepared on a going concern basis, and therefore that certain reported carrying values are subject to our company receiving the future continued support of our stockholders, obtaining additional financing and generating revenues to cover our operating costs. The going concern assumption is only appropriate provided that additional financing continues to become available.

ITEM 1B. UNRESOLVED STAFF COMMENTS

We are a smaller reporting company as defined by Rule 12b–2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 2. PROPERTIES

As indicated above, due in large part to the economic recession that commenced in the United States in December 2007, and the general worldwide economic downturn that followed, we were unable to raise sufficient financing to commence our planned exploration activities on the properties covered by the Mongolian licenses. As a result, in June of 2009, we were forced to cease operations in Mongolia, and we were unable to maintain our interests in the Mineral Exploration License Certificates issued by the Minerals and Petroleum Authority of Mongolia. Accordingly, the exploration rights represented by the Mongolian licenses were forfeited, our Company wrote off the remaining book value of $7,317,739 as of March 31, 2008, and we once again became a “shell” company as defined in Rule 12b–2 of the Exchange Act.

In light of the above, the following disclosure is of historic interest only, and relates to interests in properties held by our Company during the period covered by this annual report.

Principal Mineral Property

Description and Location

The Bulgan Licenses which we indirectly controlled until forfeiture consisted of 50 mineral exploration licenses located in 16 provinces throughout Mongolia in different geological settings with potential for a wide variety of mineral targets.

The following is a description of License 11326X (the "Principal License"), which we identified as our material property on which we intended to initially focus our exploration efforts.

The discussion below of the Principal License is based upon information provided by BulganAlt, the original vendor of the Principal Property. Because Jewel acquired the Principal License in January 2007, the information provided below is the only information that we were able to obtain without unreasonable effort or expense.

The Principal License comprised 29,094 hectares located in the Tsagaanlchairkhan and Khyargas counties of Uvs Province in Western Mongolia. The Principal License is believed to be prospective for copper, gold and iron, with three occurrences of special interest, namely the Borts Uul Copper Section, the Khyargas Gold Section and the Tumurchuluut Iron Section, which are discussed individually below.

The Principal License was first issued April 6, 2004 and s capable of renewal for up to nine years from its issue date.

Uvs province is located in western Mongolia, 1,336 km from the capital city of Ulaanbaatar. Its capital city is Ulaangom. The counties of Tsagaankhairkhan and Khyargas are located in the central-eastern part of Uvs province.

This region has good road access, but poor developed infrastructure. The nearest administration center and town is the center of Tsagaankhairkhan Sum. It has a population of 3,000 and a diesel station, hospital, secondary school and post office. The main industry is animal husbandry.

The region has a sharply continental climate, with long, cold, dry winters and brief, mild, and relatively wet summers. Average annual temperatures range from lows down to -30°C in winter to highs up to +22°C in summer. Precipitation is relatively low and average rainfall is not more than 100-150 mm a year. The geological exploration season is from April to October.

Borts Uul Copper Section

The Borts Uul copper section is located in the west part of the Baishint River, in Tsagaankhairkhan County, in Uvs province, 1,350 kilometers to the north-west of Ulaanbaatar.

Geographically, it is located in the Baishint River basin, to the north-east coast of Hyargas Lake and to the south west of Khankliuhii Mountain in the Khangai Mountain Range.

The field is located in a high, mountainous region with spur ridges and deep truncation. The exploration field soil is semi-arid, dominated by sandy soil. The area has a well-developed interstream area and the Baishint River runs right through the exploration field.

The Borts Uul copper section has been explored by Soviet and Mongolian geologists since the 1950s, and through the 1960s, 1970s and 1990s, with work including reconnaissance survey and sampling, geological mapping, general and detailed exploration works, including geochemical sampling and spectra-analysis.

The Borts Uul copper section has not been fully investigated and potential areas of mineralization exist. While moderate amounts of mineral exploration work have been undertaken to date on the Borts Uul copper section, significant further geological work needs to be completed to determine whether economic quantities of mineralization are present.

Khyargas Gold Prospective Section

The Khyargas gold prospective area is located in the north-west part of Khankhukhii Mountain in hilly terrain. The exploration field soil is semi-arid, dominated by sandy soil.

The Khyargas gold prospective area was first discovered in the late 1970s when anomalous levels of gold occurrences were noted, and general exploration works on it were carried out between 1978-1981. Work done included geological mapping, trenching and sampling, spectra analysis, geochemical sampling, geophysical surveying, magnetic surveying and electric surveying.

In an effort to assess the economic potential of the Khyargas gold prospective area significant additional geological work needs to be done.

Tumurchuluut Iron Section

Written references to the Tumurchuluut Iron Section date back to the late 19^th century. A reconnaissance survey was carried out in 1941, and occurrences of copper, sulphur, asbestos, salt and talc and mineralization points were explored.

In 1950, geological mapping geological surveys were carried out and in the early 1960s, further geological exploration was carried out by Soviet and Polish geologists, including trenching and sampling electric prospecting and geophysical works.

Between 1974 and 1975 and between 1978-1981, general geological mapping, surveying and exploration were carried out on the property.

In an effort to assess the economic potential of the Tumurchuluut iron section, significant additional geological work needs to be done.

Mongolia

General Information

Mongolia is a landlocked country bordered by China to the south and Russia to the north. The country is approximately 1.5 million km2 in size. The capital city is Ulaanbaatar. The climate is similar to that of southern Alberta, Canada.

Mongolia's population of approximately 2.7 million is relatively homogenous in terms of ethnicity, language and religion. The official national language is Mongolian and the primary religion is Buddhism. Approximately one third of the Mongolian population lives in the capital city of Ulaanbaatar with a large portion of the remainder living as nomads throughout the country.

During the recent past Mongolia was part of the Soviet Union and much of its mineral exploration was conducted under the direction of Soviet trained geologists. Since 1990, the country has been transitioning to democracy and a free market economic system. There are many other active mineral exploration companies currently active in Mongolia.

Government

The country had its first multi-party elections in 1990 and adopted a new constitution in 1992. These changes were followed by periods of political and economic instability, but they also led to privatization of state assets, liberalization of trade and promotion of foreign investment.

The new constitution established a legislature and a directly elected President. The Prime Minister is nominated by and serves on behalf of the majority party in the parliament. The constitution respects the concepts of democracy, freedom of speech, and judicial independence, and like principles.

The first multiparty elections were held in July of 1990, at which time the Mongolian People's Revolutionary Party (the "MPRP") won a strong majority in the legislature. In June 2004 elections were held and as a result a coalition government was formed between the MPRP and the Democrats. In January 2006 the coalition government dissolved and a National Unity Government was formed. The National Unity Government was formed by all parties except the Democrats and the Civil Courage Party.

Mining Industry

There is a long history of gold mining in Mongolia dating back to the Middle Ages. There has been a significant increase in mineral exploration in Mongolia in the past few years following the discovery of the Oyu Tolgoi coppergold deposit by Ivanhoe and the commencement of gold production at the Boroo mine owned and operated by Centerra Gold Inc.

Mongolia is a major producer and user of copper and molybdenum, as well as a leading world producer of fluorspar.

A significant proportion of the country's exports come from the Erdenet copper deposit operated by a Mongolian-Russian joint venture. Erdenet is one of the largest copper reserves in the world.

Mongolia is also known to host significant coal deposits. The Tavan Tolgoi coal deposit is widely regarded as the largest undeveloped coking coal deposit in Asia. There are several small coal deposits currently in production in Mongolia with most of the coal being sold into the Chinese market.

Minerals Law and Taxation

Mongolian minerals legislation is principally governed by the Minerals Law of Mongolia (the "Minerals Law"). The Minerals Law provides that all mineral resources in the country are the property of the state and that the state, through its agency the Mineral Resources and Petroleum Authority of Mongolia ("MRPAM"), has the right to grant exploration and mining (exploitation) licenses. The body responsible for governing rights related to all minerals related licenses is the MRPAM's Office of Geological and Mining Cadastre ("OGMC").

On July 8, 2006, the Mongolian Parliament enacted a new Minerals Law, which became effective as of August 26, 2006. The provisions of the Minerals Law apply to activities and relationships with respect to the exploration for and mining of all types of mineral resources other than water, petroleum and natural gas. The key legislative changes approved by the Mongolian Parliament are summarized below.

The amendments introduced a definition of strategic mineral deposits. Mineral deposits that have a potential impact on national security, economic and social development, or deposits that have a potential of producing above 5% of the country's GDP may be designated as mineral deposits of strategic importance. Parliament may designate a deposit as a strategic deposit on its own initiative or by referral from the Government. The amendments provide that the state may acquire up to a 50% interest in the exploitation of a minerals deposit of strategic importance where state-funded exploration was used to determine proven reserves and up to a 34% interest in a mineral deposit of strategic importance where proven reserves were determined through funding sources other than the state's budget.

The percentage of the state's share will be determined by an agreement made with the license holder on exploitation of the deposit, considering the amount of investment made by the state.

Under the new Minerals Law, a legal person duly formed and operating under the laws of Mongolia, who holds a mining license for a mineral deposit of strategic importance, is required to sell no less than 10% of its shares through the Mongolian Stock Exchange.

The new Minerals Law also contemplates the entering into of investment agreements (formerly referred to as stability agreements) between the Government and investors with respect to mineral properties. Investment agreements provide increased protection to investors making large, long-term commitments. Projects involving an investment of $50 to $100 million will have 10-year terms; $100 to 300 million projects will have 15-year terms; and projects involving more than $300 million will have 30-year terms.

The new Minerals Law contains a new single-rate royalty for all metals of 5%. This doubles the 2.5% rate that previously applied to hard-rock minerals. There is also a 5% royalty on exported coal. Several changes were also made to the tax regime, including:

the tax rate on corporate income was reduced from 30% to 25% for annual income above three billion tugrugs (approximately US$2.6 million) and to 10% for annual incomes up to three billion tugrugs;
the value-added tax (VAT) was reduced from 15% to 10%;

a loss-carry-forward provision, improved depreciation allowances and a re-investment tax credit were included to compensate for the elimination of tax holidays that had been previously available to foreign owned companies.

Under the new Minerals Law, tender is used in virtually all cases of license issuance and re-issuance. Where an area has not been previously licensed and explored, the new Minerals Law allows for the issuance of the exploration license for that area on a first-come, first-served basis. In situations where the exploration license has been revoked or surrendered by the holder, or where state-funded exploration has been conducted, the license will be re-issued by tender. An exploration license holder continues to have the exclusive right to obtain the mining license resulting from its exploration, subject to the approval of the local authorities. Exploration license fees have increased to 10 times what they were under the previous law. Exploration license holders must provide the OGMC with information annually on both their past and proposed exploration activities.

Mineral exploration and mining licenses are granted to legal persons duly formed and operating under the laws of Mongolia who are Mongolian taxpayers. These entities may be foreign-owned. Under the new Minerals Law, the initial term of a mining license is 30 years and may be extended two times for a period of twenty years each.

Existing license holders will be required to convert their licenses within five months to bring them in conformance with the periods specified by the new Minerals Law. The Minerals Law provides that the holder of an exploration license has an absolute right to obtain a mining license covering all or any portion of the exploration license area subject to the approval of the provincial governor. The holder of a mining license must prepare an environmental impact assessment and environmental protection plan either before or as soon as possible after receiving a license and must comply with certain reporting requirements to the OGMC.

Windfall Profits Tax

On May 14, 2006 the Mongolian Parliament passed a new law that imposes a windfall profits tax on sales of mineral products over a certain price.

Environmental Regulations

Under the Environmental Protection Law of Mongolia, mining companies are required to:

	i.	comply with the legislation and the requirements of State inspectors,

	ii.	keep records on toxic substance disposal and waste discharges as well as the operation of any monitoring equipment,

	iii.	include provisions for reclamation and restoration in annual budgets,

	iv.	keep the "ecological passport" of the area, and

	v.	carry out environmental impact assessments that identify possible adverse effects from production.

The law gives details of the type of information that is required for these studies.

ITEM 3. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 4. (Removed and Reserved)

PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock commenced trading on the OTC Bulletin Board in United States dollars, under the symbol “WSTR” (formerly “AUOM” and “AUTM”) on March 31, 2000. Our common stock ceased to be eligible for quotation on the OTC Bulletin Board effective August 19, 2008, for failure to comply with NASD (now FINRA) Rule 6530. Commonly known as the “Eligibility Rule”, FINRA Rule 6530 requires that an issuer be current in its required periodic financial reports under the Securities Exchange Act of 1934, as amended, in order to be eligible for quotation on the OTC Bulletin Board.

The following table set forth, for the calendar periods indicated, the high and low closing sale price of our common stock on the OTC Bulletin Board.

OTC Bulletin Board

	2009	2008
	2010	2009
1st Quarter	$0.9420 – 21.0001	$20.2094 – 32.3000
2nd Quarter	0.5020 – 10.2055	0.7550 – 21.9520
3rd Quarter	0.2030 – 0.5139	10.0020 – 30.0051
4th Quarter	0.2015 – 0.2030	10.0120 – 50.5020

Holders

The number of record holders of our common stock, $0.001 par value, as of September 622, 2011 was 102.

Dividends

We have not, since the date of our incorporation, declared or paid any dividends on our common shares. Therefore, we anticipate that we will retain future earnings and other cash resources for the operation and development of our business for the foreseeable future. The payment of dividends in the future will depend on our earnings, if any, and our financial condition and such other factors as our board of directors considers appropriate.

Equity Compensation Plans

As of the date of our most recently completed fiscal year, we did not have any compensation plans, including individual compensation plans, under which our equity securities are authorized for issuance.

Recent Sales of Unregistered Securities

During the fiscal years ended December 31, 2004 and 2005, we did not issue any of our securities.

14We have reported sales of securities without registration under the Securities Act of 1933 during our fiscal year ended March 31, 2010 on the following reports, as filed with the Securities and Exchange Commission. No securities were issued during this period.

We have reported sales of securities without registration under the Securities Act of 1933 during our fiscal year ended March 31, 2009 on the following reports, as filed with the Securities and Exchange Commission. No securities were issued during this period.

Report	Date of Filing with SEC
Quarterly Report on Form 10– Q for the quarterly period ended June 30, 2009	September 22, 2011

Report	Date of Filing with SEC
Quarterly Report on Form 10– Q for the quarterly period ended June 30, 2008	September 15, 2011
Quarterly Report on Form 10– Q for the quarterly period ended September 30, 2008	September 15, 2011
Quarterly Report on Form 10– Q for the quarterly period ended December 31, 2008	September 15, 2011

All of the stock issuances described above under this heading constitute restricted shares, as defined in the Securities Act, and have been endorsed with a legend confirming that the shares cannot be resold or transferred unless registered under the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act.

Quarterly Report on Form 10– Q for the quarterly period ended September 30, 2009	September 22, 2011
Quarterly Report on Form 10– Q for the quarterly period ended December 31, 2009	September 22, 2011

~~Purchases~~All of ~~Equity~~the ~~Securities~~stock byissuances described above under this heading constitute restricted shares, as defined in the ~~Issuer~~Securities Act, and ~~Affiliated~~have been ~~Purchasers~~endorsed with a legend confirming that the shares cannot be resold or transferred unless registered under the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act.

WePurchases ~~did not purchase any~~ of ~~our~~Equity ~~shares~~Securities ofby ~~common~~the ~~stock~~Issuer orand ~~other~~Affiliated ~~securities~~Purchasers ~~during the year ended March 31, 2009.~~

We did not purchase any of our shares of common stock or other securities during the year ended March 31, 2010.

ITEM 6. SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b–2 of the Exchange Act and are not required to provide the information required under this item.

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

The following discussion of our financial condition, changes in financial condition and results of operations for the years ended March 31, ~~2009~~2010 and ~~2008~~2009 should be read in conjunction with our most recent audited consolidated financial statements for the years ended March 31, ~~2009~~2010 and ~~2008~~2009, which are included in this annual report, and the related notes to the consolidated financial statements. This discussion contains forward–looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward–looking statements as a result of many factors, including, but not limited to, those set forth under “Risk Factors” and elsewhere in this annual report.

Overview of Our Business

Our principal executive offices are located at Rm 803, 8/F, Jubilee Centre, No. 42 Gloucester Road Wanchai, Hong Kong, China.

15We became a “shell” company as defined in Rule 12b–2 of the Exchange Act upon the sale of substantially all of our assets in July 2002.

WeAcquisition ~~became a “shell” company as defined in Rule 12b–2~~ of ~~the Exchange~~National ~~Act~~Base ~~upon~~Investment ~~the~~Limited ~~sale of substantially all of our assets in July 2002.~~

~~Acquisition~~On August 14, 2007, we completed the acquisition of all of the issued and outstanding shares of National Base, ~~Investment~~a ~~Limited~~company incorporated pursuant to the laws of the British Virgin Islands on November 28, 2006, from Jewel, also incorporated pursuant to the laws of the British Virgin Islands and the principal of which was our then President and Chief Executive Officer. The acquisition was completed in accordance with the Share Purchase Agreement dated February 12, 2007 among our Company, Jewel and National Base.

OnAt ~~August~~the ~~14,~~time ~~2007,~~of ~~we completed~~ the acquisition, ofNational ~~all~~Base ofowned ~~the~~interests in ~~issued~~ 50 ~~and~~mineral ~~outstanding~~exploration ~~shares~~licenses ofin Mongolia. National Base, aowns ~~company~~98% ~~incorporated~~of ~~pursuant~~BGI, a to Hong ~~the~~Kong ~~laws~~corporation, ofwhich ~~the~~in ~~British~~turn ~~Virgin~~owns ~~Islands~~52% onof ~~November~~BGHK. ~~28,~~The ~~2006,~~other ~~from~~48% ~~Jewel,~~of ~~also~~BGHK ~~incorporated~~ shares ~~pursuant~~are toowned ~~the~~by ~~laws~~a ofHong ~~the~~Kong ~~British~~businessman ~~Virgin~~as ~~Islands~~to 18% and ~~the~~a Mongolian ~~principal~~ businessman ofas ~~which~~to ~~was~~30%. ~~our~~They ~~then~~currently ~~President~~remain ~~and~~minority ~~Chief~~shareholders ~~Executive~~in ~~Officer~~the Company. ~~The acquisition~~BGHK ~~was~~owns ~~completed~~100% inof ~~accordance~~BGL, ~~with~~a ~~the~~Mongolian ~~Share~~corporation. ~~Purchase~~BGL ~~Agreement~~owned ~~dated~~the 50 ~~February~~ mineral ~~12,~~exploration ~~2007~~licenses ~~among~~over ~~our~~properties ~~Company,~~in ~~Jewel and National Base~~Mongolia.

At15 the time of the acquisition, National Base owned interests in 50 mineral exploration licenses in Mongolia. National Base owns 98% of BGI, a Hong Kong corporation, which in turn owns 52% of BGHK. The other 48% of BGHK shares are owned by a Hong Kong businessman as to 18% and a Mongolian businessman as to 30%. They currently remain minority shareholders in the Company. BGHK owns 100% of BGL, a Mongolian corporation. BGL owned the 50 mineral exploration licenses over properties in Mongolia.

The Mongolian licenses covered an aggregate of some 817,000 hectares (8,200 square kilometers) of lands believed to be prospective for base and precious minerals. The properties contained no known reserves of any type of minerals. At the time of our acquisition of National Base, our plan was to organize the Mongolian licenses and prioritize exploration targets, as exploration work was required to further delineate and expand the known mineralization on the properties. As well, prospecting work and database reviews of other historical work were to be undertaken.

We filed a Current Report on Form 8 K with the SEC on August 27, 2007 which provides, among other things, further information relating to the acquisition of National Base and the properties we had planned to explore, including risk factors relating to our business.

Forfeiture of Mineral Exploration Licenses

AsDue atin ~~March~~large 31part to the economic recession that commenced in the United States in December 2007, ~~2009~~and the general worldwide economic downturn that followed, we ~~had~~were ~~not~~unable ~~engaged~~to inraise ~~any~~sufficient ~~exploration~~financing to commence our planned exploration activities on the properties covered by the Mongolian licenses. As a result, asduring wethe ~~had~~year ~~not~~ended March 31, 2010, our Company was ~~yet~~forced ~~completed~~to cease operations in Mongolia, and we were unable to maintain our interests ~~analysis~~in the Mineral Exploration License Certificates issued by the Minerals and Petroleum Authority of Mongolia. Accordingly, the ~~existing~~exploration ~~database~~rights represented ~~nor~~by ~~prioritized~~the Mongolian licenses were forfeited, our Company wrote off the ~~exploration~~remaining ~~targets~~book value of $7,317,739 as of March 31, 2008, and we once again became a “shell” company as defined in Rule 12b–2 of the Exchange Act.

~~Due~~Our inPlan large part to the economic recession that commenced in the United States in December 2007, and the general worldwide economic downturn that followed, we were unable to raise sufficient financing to commence our planned exploration activities on the properties covered by the Mongolian licenses. As a result, during the year ended March 31, 2009, our Company was forced to cease operations in Mongolia, and we were unable to maintain our interests in the Mineral Exploration License Certificates issued by the Minerals and Petroleum Authority of ~~Mongolia.~~Operations Accordingly, the exploration rights represented by the Mongolian licenses were forfeited, our Company wrote off the remaining book value of $7,317,739 as of March 31, 2008, and we once again became a “shell” company as defined in Rule 12b–2 of the Exchange Act.

16 Overview

~~Our~~As ~~Plan~~reported in our current report on Form 8-K filed with the SEC on July 14, 2011, we have acquired an exclusive sublicense dated June 29, 2011 from Fire Block Technologies Inc. to use and apply, in Southeast Asia, including China, the patent-pending processes and solutions licensed by Fire Block Technologies Inc. from Fire Block International Inc., a private Canadian company, for the manufacture of ~~Operations~~engineered construction products from palm oil tree waste material with zero ignition and zero flame spread properties.

~~Overview~~16

~~As reported in our current report on Form 8-K filed with the SEC on July 14, 2011, we have acquired an exclusive sublicense dated June 29, 2011 from~~ Fire Block Technologies Inc. tois ~~use~~a ~~and~~private ~~apply,~~Barbados incompany ~~Southeast Asia,~~that ~~including~~controls ~~China,~~ the ~~patent-pending~~exclusive ~~processes~~worldwide ~~and~~license ~~solutions~~outside ~~licensed~~of byCanada ~~Fire Block~~for ~~Technologies~~the ~~Inc. from Fire Block International Inc.~~sale, ~~a private Canadian~~ ~~company,~~marketing ~~for~~and ~~the~~distribution ~~manufacture~~ of ~~engineered~~ZeroignitionTM ~~construction~~Solution ~~products~~together ~~from palm oil~~with ~~tree~~the ~~waste~~sub-licensing ~~material~~rights ~~with~~for ~~zero~~the ~~ignition~~patent-pending ~~and~~ZeroignitionTM ~~zero~~New Materials ~~flame spread properties~~Technology.

~~Fire~~ZeroignitionTM ~~Block~~Solution ~~Technologies~~is ~~Inc.~~a proprietary formula, which when used in conjunction with the patent pending ZeroignitionTM New Materials Technology, is capable of creating a ~~private~~wide ~~Barbados~~range ~~company~~of ~~that~~wood-based ~~controls~~products ~~the~~with ~~exclusive~~non-combustible ~~worldwide~~characteristics ~~license~~(“ZeroignitionTM Products”). ~~outside~~These ofnew ~~Canada~~and ~~for~~unique ~~the~~revolutionary ~~sale~~technologies and products, which ~~marketing~~demonstrate ~~and~~extreme ~~distribution~~flame ofresistance ~~ZeroignitionTM~~and ~~Solution~~highly ~~together~~efficient ~~with~~thermal protection, ~~the~~are ~~sub~~non-~~licensing~~toxic, ~~rights~~pH ~~for~~neutral, ~~the~~environmentally ~~patent~~friendly, non-~~pending~~corrosive ~~ZeroignitionTM~~and ~~New~~have ~~Materials~~withstood ~~Technology~~direct heat in excess of 18,000 degrees Fahrenheit without ignition or flame spread. Extensive testing to ASTM standards by INTERTEK Laboratories (Vancouver, Canada) and EMERCOM of Russia (Moscow) has resulted in achieving “Class A” fire ratings on wood fiber, cellulose, and textile products treated with ZeroignitionTM Solution.

~~ZeroignitionTM~~Siempelkamp ~~Solution~~GmbH is& aCo, ~~proprietary~~(“Siempelkamp”) ~~formula~~(Krefeld, Germany), ~~which~~under ~~when~~contract ~~used in conjunction~~ with the ~~patent~~owner ~~pending~~of ZeroignitionTM ~~New~~ ~~Materials~~technology ~~Technology,~~and isFire Block ~~capable~~Technologies ofInc., ~~creating~~has asuccessfully ~~wide~~completed ~~range~~product oftesting ~~wood-based~~on OSB ~~products~~(oriented ~~with~~strand ~~non-combustible~~board), ~~characteristics~~MDF (~~“ZeroignitionTM Products”~~medium density fiberboard)., ~~These~~particle ~~new~~board and “ZeroignitionTM ~~unique~~Wallboard” ~~revolutionary~~(a ~~technologies~~sheetrock ~~and~~replacement) ~~products, which~~manufactured ~~demonstrate~~using ~~extreme~~the ~~flame~~ZeroignitionTM ~~resistance~~New ~~and~~Materials ~~highly~~Technology, ~~efficient~~both ~~thermal protection,~~for ~~are~~traditional ~~non-toxic,~~wood pHfiber ~~neutral,~~boards ~~environmentally~~and ~~friendly,~~EFB ~~non-corrosive~~(or ~~and~~“empty ~~have withstood~~fruit ~~direct~~basket”) ~~heat~~waste inmaterial boards. ~~excess~~Siempelkamp, ofa 18leader in lumber,~~000~~ ~~degrees~~cellulose ~~Fahrenheit~~fiber ~~without~~and ~~ignition~~wood orproducts ~~flame~~equipment ~~spread.~~manufacture ~~Extensive~~and ~~testing~~factory todesign, ~~ASTM~~was ~~standards~~established byin ~~INTERTEK~~1883 ~~Laboratories (Vancouver, Canada)~~ and ~~EMERCOM~~holds ofa 70% ~~Russia~~global ~~(Moscow)~~market ~~has~~share ~~resulted~~ in ~~achieving “Class~~this A”industry, ~~fire~~which ~~ratings~~represents on1,400 ~~wood~~of ~~fiber,~~the ~~cellulose~~2,000 OSB and ~~textile~~MDF ~~products~~plants ~~treated with~~in ~~ZeroignitionTM~~the ~~Solution~~world.

~~Siempelkamp~~Our ~~GmbH~~sublicense &is ~~Co,~~for ~~(“Siempelkamp”)~~a ~~(Krefeld~~10 year term, ~~Germany)~~and is renewable for successive periods of 10 years each. We have paid a CAD$150,000 acquisition fee ~~under~~to ~~contract~~Fire ~~with~~Block Technologies Inc. by way of the ~~owner~~issuance of ~~ZeroignitionTM~~10,000,000 ~~technology~~fully ~~and~~paid shares of our common stock to Fire Block Technologies Inc., ~~has~~We ~~successfully~~have ~~completed~~also ~~product~~agreed to ~~testing~~pay ona ~~OSB (oriented~~continuing ~~strand~~royalty ~~board),~~to ~~MDF~~Fire ~~(medium~~Block ~~density~~Technologies ~~fiberboard~~Inc. of: (a), ~~particle~~1% ~~board~~of the net invoice price from sales of Zeroignition™ Products by our Company and any of ~~“ZeroignitionTM~~our ~~Wallboard”~~sublicensees; and (ab) ~~sheetrock~~3% ~~replacement)~~of ~~manufactured using~~our ~~the~~Company’s ~~ZeroignitionTM~~net ~~New~~invoice ~~Materials~~price ~~Technology,~~from ~~both~~sales ~~for~~of ~~traditional~~any ~~wood~~palm ~~fiber~~waste ~~boards~~material ~~and~~that ~~EFB~~has ~~(or~~been processed into pulp fibre (“~~empty~~ZiTM-Pulp”) ~~fruit~~or ~~basket~~chips (“ZiTM-Chips”) ~~waste~~and ~~material~~treated with ~~boards.~~ZeroignitionTM ~~Siempelkamp,~~Solution afor ~~leader~~use inas ~~lumber,~~a ~~cellulose~~raw ~~fiber~~material for the manufacture and production of engineered wood products. The 3% royalty relates to our ~~equipment~~Company’s obligation under the sublicense agreement to manufacture ZiTM-Pulp and ~~factory~~ZiTM-Chips ~~design~~for sale to our own future sublicensees, ~~was~~as ~~established~~well inas ~~1883~~to ~~and~~certain ~~holds~~existing amanufacturers of Zeroignition™ ~~70%~~Products ~~global~~in ~~market~~the ~~share~~territory incovered ~~this~~by ~~industry,~~the ~~which~~sublicense. ~~represents~~In 1addition,~~400~~ we have agreed to purchase from Fire Block Technologies Inc. certain minimum quantities of ZeroignitionTM Solution during each year of the 2term of the sublicense agreement, as follows: year 1 – CAD$5,000,000; year 2 - ~~OSB~~CAD$25,000,000; ~~and~~year ~~MDF~~3 ~~plants~~- inCAD$75,000,000; ~~the~~year ~~world~~4 and each subsequent year - CAD$100,000,000.

~~Our~~The sublicense isagreement ~~for~~represents a 10key ~~year~~step ~~term,~~in ~~and is renewable for~~our ~~successive~~reactivation; ~~periods~~however, ofour 10strategic ~~years~~plan ~~each.~~is Westill ~~have~~contingent ~~paid a CAD$150~~on,~~000~~ ~~acquisition~~among ~~fee~~other tothings, ~~Fire~~the ~~Block~~successful ~~Technologies~~completion ~~Inc. by way~~ of ~~the~~all ~~issuance~~documents ofrequired ~~10,000,000~~under ~~fully~~a ~~paid shares~~letter of intent ~~our~~that ~~common~~we ~~stock to Fire Block Technologies Inc. We~~ have ~~also~~signed ~~agreed to~~with ~~pay a continuing royalty to Fire Block Technologies Inc. of: (a) 1% of~~ the ~~net~~ ~~invoice~~owners ~~price from sales~~ of ~~Zeroignition™~~Palm ~~Products~~Oil byPlantations ~~our~~in ~~Company and any of~~Indonesia ~~our~~for ~~sublicensees;~~the ~~and~~supply ~~(b) 3%~~ of ~~our~~palm ~~Company’s~~oil ~~net~~tree ~~invoice price from sales of any palm~~ waste material, ~~that~~as ~~has~~well ~~been~~as ~~processed~~raising ~~into~~financing ~~pulp fibre~~on ~~(“ZiTM-Pulp”)~~acceptable orterms ~~chips~~to ~~(“ZiTM-Chips”)~~fund ~~and treated with ZeroignitionTM Solution for use as a raw material for~~ the ~~manufacture and~~construction ~~production~~ of ~~engineered~~the ~~wood~~required ~~products.~~facilities ~~The 3% royalty relates~~ to ~~our~~process ~~Company’s~~palm ~~obligation~~oil ~~under~~tree ~~the~~waste ~~sublicense~~material ~~agreement~~and to manufacture ~~ZiTM-Pulp~~ ~~and ZiTM-Chips for sale to~~ our ~~own~~planned ~~future sublicensees~~products, asand ~~well as~~ to ~~certain existing manufacturers of Zeroignition™~~fund ~~Products in~~ the ~~territory~~start-up ~~covered~~of ~~by the sublicense~~operations. In addition, we will have ~~agreed~~ to ~~purchase~~establish ~~from~~relationships with ~~Fire~~suppliers ~~Block~~and ~~Technologies~~distributors ~~Inc.~~in ~~certain~~South ~~minimum~~East ~~quantities~~Asia. ~~of ZeroignitionTM~~Accordingly, ~~Solution~~we ~~during~~currently remain ~~each~~a ~~year~~“shell ofcompany” ~~the term of the sublicense agreement,~~ as ~~follows:~~defined ~~year~~in 1Exchange –Act ~~CAD$5,000,000;~~Rule ~~year 2~~ 12b- ~~CAD$25~~2,~~000,000;~~ ~~year~~as 3we -have nominal ~~CAD$75,000,000;~~assets ~~year 4~~ and ~~each~~nominal ~~subsequent~~operations ~~year - CAD$100,000,000.~~

~~The~~Liquidity sublicense agreement represents a key step in our reactivation; however, our strategic plan is still contingent on, among other things, the successful completion of all documents required under a letter of intent that we have signed with the owners of Palm Oil Plantations in Indonesia for the supply of palm oil tree waste material, as well as raising financing on acceptable terms to fund the construction of the required facilities to process palm oil tree waste material and ~~manufacture~~Financial our planned products, and to fund the start-up of operations. In addition, we will have to establish relationships with suppliers and distributors in South East Asia. Accordingly, we currently remain a “shell company” as defined in Exchange Act Rule 12b-2, as we have nominal assets and nominal operations Resources

17We had cash of $8,872 and a working capital deficiency of $5,237,894 at March 31, 2010.

~~Liquidity and Financial Resources~~17

WeOur ~~had~~Company’s continuation as a going concern is dependent upon our ability to generate sufficient cash offlow $9to meet our obligations on a timely basis,~~466~~ to pay off existing debt and aprovide ~~working~~sufficient ~~capital~~funds ~~deficiency~~for ofgeneral $5corporate purposes,~~155,904~~ atall ~~March~~of 31which is uncertain. Our consolidated financial statements contain additional note disclosures to this effect, ~~2009~~and the consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~Our~~Given ~~Company’s~~the ~~continuation~~forfeiture asof aour ~~going~~exploration ~~concern~~rights isrepresented ~~dependent upon~~by ~~our~~the ~~ability~~Mongolian tolicenses, ~~generate~~and ~~sufficient~~despite ~~cash~~our ~~flow~~acquisition of an exclusive sublicense to ~~meet~~manufacture ~~our~~ZeroignitionTM ~~obligations~~Products onfrom apalm ~~timely~~oil tree waste ~~basis,~~material tofor ~~pay~~distribution ~~off~~in ~~existing~~Southeast ~~debt~~Asia, ~~and~~we ~~provide~~currently ~~sufficient~~have ~~funds~~no ~~for~~operations ~~general~~and ~~corporate~~only ~~purposes,~~nominal ~~all~~assets. ofFurthermore, ~~which~~we ispresently ~~uncertain.~~do ~~Our~~not ~~consolidated~~have sufficient financial ~~statements~~resources ~~contain~~to ~~additional~~fund ~~note~~the ~~disclosures~~construction toof ~~this~~the ~~effect,~~required ~~and~~facilities ~~the consolidated~~to ~~financial~~process ~~statements~~palm oil dotree ~~not~~waste ~~include~~material ~~any~~and ~~adjustments~~manufacture ~~that~~our ~~might~~planned ZeroignitionTM ~~result~~Products, ~~from~~or to fund the ~~outcome~~start-up of ~~this uncertainty~~operations.

~~Given~~During the ~~forfeiture~~next of12 ~~our~~months ~~exploration~~we ~~rights~~anticipate ~~represented~~that ~~by the~~we ~~Mongolian~~will ~~licenses,~~be in the start-up phase and ~~despite~~that ~~our~~we ~~acquisition~~therefore ofwill annot ~~exclusive~~generate ~~sublicense~~any revenue. Accordingly, towe ~~manufacture~~anticipate ~~ZeroignitionTM~~that ~~Products~~we ~~from~~will ~~palm~~require ~~oil~~additional ~~tree~~financing ~~waste~~during the next 12 ~~material~~months ~~for~~to ~~distribution~~meet inour ~~Southeast~~anticipated ~~Asia,~~capital wecosts and start-up expenses, currently estimated ~~have~~at $4,500,000. However, there can be no ~~operations~~assurance ~~and~~that we will be able ~~only~~to ~~nominal~~obtain ~~assets~~such financing. ~~Furthermore,~~We webelieve ~~presently~~that debt financing will not be an alternative at this time as we do not have ~~sufficient~~tangible ~~financial resources~~assets to ~~fund~~secure any debt financing. We anticipate that additional funding will be in the ~~construction~~form of equity financing from the ~~required~~sale ~~facilities~~of toour ~~process~~common ~~palm~~stock. We cannot provide investors with ~~oil~~any ~~tree~~assurance ~~waste~~that ~~material~~we ~~and~~will ~~manufacture~~be ~~our~~able ~~planned~~to ~~ZeroignitionTM~~raise sufficient funding from the sale of ~~Products,~~our orcommon stock to fund ~~the~~our anticipated capital costs and start-up expenses. In the absence of such financing, we will not be able to execute upon our plan of operations.

~~During~~Cash ~~the next 12 months we anticipate that we will be in the start-up phase~~ and ~~that~~Working weCapital therefore will not generate any revenue. Accordingly, we anticipate that we will require additional financing during the next 12 months to meet our anticipated capital costs and start-up expenses, currently estimated at $4,500,000. However, there can be no assurance that we will be able to obtain such financing. We believe that debt financing will not be an alternative at this time as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our anticipated capital costs and start-up expenses. In the absence of such financing, we will not be able to execute upon our plan of operations.

~~Cash~~The following table sets forth our cash and ~~Working~~cash ~~Capital~~equivalents and working capital as of March 31, 2010 and 2009:

The following table sets forth our cash and cash equivalents and working capital as of March 31, 2009 and 2008:

		As of			As of
		March 31,			March 31,
		2010			2009

Cash and cash equivalents	$	8,872		$	9,466

Working capital surplus (deficiency)	$	(5,237,894	)	$	(5,155,904	)

		As of			As of
		March 31,			March 31,
		2009			2008
Cash and cash equivalents	$	9,466		$	9,908
Working capital surplus (deficiency)	$	(5,155,904	)	$	(5,155,462	)

Results of Operations – Years Ended March 31, 2010 and 2009

~~Acquisition~~The offollowing ~~National~~table ~~Base~~sets forth our consolidated loss from operations during the fiscal years ended March 31, 2010 and 2009.

18Consolidated Loss From Operations

On August 14, 2007, the Company issued 30,000,000 shares pursuant to the Acquisition to acquire a 100% interest in National Base, together with an additional 2,000,000 shares issued in facilitation of this transaction.

		Year Ended			Year Ended
		March 31,			March 31,
		2010			2009

Depreciation of property, plant and equipment		(4,658	)		(4,658	)
General and administrative expenses		(594	)		(442	)
Termination of Mongolian project		(102,494	)		–
Loss from operations	$	(107,746	)	$	(5,100	)

~~Private~~18 ~~Placement~~

~~The~~Depreciation ~~Company also completed a private placement financing~~ of ~~22,000,000~~ ~~at a price of US$0.25 per share for gross proceeds of US$5~~Property,~~500,000~~ ~~on August~~Plant ~~14,~~and ~~2007. A financing fee of 2,200,000 shares was also paid.~~ Equipment

~~Debt~~Our ~~settlement~~depreciation expense did not change between the year ended March 31, 2010 and 2009. As of April 1, 2009, this account comprised only of accumulated depreciation of property, plant and equipment as the mineral exploration rights were written-off to $Nil at March 31, 2008, amortization of mineral exploration rights were no longer recorded.

~~Upon~~General ~~closing of the Acquisition, 931,700 shares were issued for debt~~ and ~~other~~Administrative ~~settlements.~~ Expenses

~~Results~~Our ofgeneral ~~Operations~~and –administrative ~~Years~~expenses ~~Ended~~increased ~~March~~to ~~31,~~$594 during 2010 as compared to $442 during 2009. ~~and~~The ~~2008~~Company was basically inactive beginning April 1, 2008.

~~The~~Termination ~~following~~of ~~table~~Mongolian ~~sets~~project ~~forth our consolidated loss from operations during the fiscal years ended March 31, 2009 and 2008.~~

~~Consolidated~~The ~~Loss~~Company ~~From~~wrote-off ~~Operations~~all its remaining assets in Mongolia at March 31, 2010, including $21,098 in property, plant and equipment and $81,396 in prepaid expenses, and terminated its operations in Mongolia.

		Year Ended			Year Ended
		March 31,			March 31,
		2009			2008
Amortization of mineral exploration rights and depreciation of property, plant and equipment	$	(4,658	)	$	(1,323,133	)
Property exploration and maintenance		–			(419,836	)
General and administrative expenses		(442	)		(1,153,801	)
Loss from operations	$	(5,100	)	$	(2,896,770	)

Net Loss

~~Write–off~~The offollowing ~~Mineral~~table ~~Exploration~~reflects ~~Rights~~our net loss for the years ended March 31, 2010 and 2009, after taking into account the amounts recognized as other income or expenses.

Effective June 30, 2008, the Company ceased active mineral exploration operations in Mongolia and was not able to fund sufficient activities in order to maintain its interests in the Mineral Exploration License Certificates issued by the Minerals and Petroleum Authority of Mongolia. Accordingly, the exploration rights represented by those licenses were forfeited and the Company wrote off the remaining book value of $7,317,739 as of March 31, 2008.

		Year Ended			Year Ended
		March 31,			March 31,
		2010			2009
Loss from operations	$	(5,252	)	$	(5,100	)
Termination of Mongolian project		(102,494	)		–
Net loss	$	(107,746	)	$	(5,100	)

~~Amortization~~We recorded a net loss of ~~Mineral~~$107,746 ~~Exploration~~for ~~Rights~~the ~~and~~year ended March 31, ~~Depreciation~~2010 as compared to a net loss of ~~Property~~$5,100 ~~Plant~~for ~~and~~the ~~Equipment~~year ended March 31, 2009.

~~Our~~Cash ~~amortization~~Flows ~~and~~From ~~depreciation~~Operating expenses decreased to $4,658 in 2009, as compared to $1,323,133 in 2008. The decrease was primarily due to the amortization of mineral exploration rights of $Nil in 2008 compared to $1,318,475 in 2008. Activities

~~Property~~Our ~~Exploration~~cash flows from operating activities during 2010 were $(594). Our cash flows from operating activities for 2010 include net loss of $107,746, $4,658 of depreciation and ~~Maintenance~~$102,494 in termination costs of our Mongolian project.

~~Property~~Our ~~exploration~~cash ~~and~~flows ~~maintenance~~from ~~decreased~~operating toactivities ~~$Nil~~during in 2009 as ~~compared to~~ were $~~419,836 in 2008~~(442). ~~The~~Our ~~decrease~~cash ~~was~~flows ~~due~~from tooperating ~~the~~activities ~~write-off~~for ~~of mineral~~2010 ~~exploration~~include ~~rights~~net toloss of $~~Nil~~5,100 atand ~~March 31~~$4,658 ~~2008~~in depreciation.

19Cash Flows From Investing Activities

~~General~~Our cash flows from investing activities during 2010 and ~~Administrative~~2009 were ~~Expenses~~$Nil.

~~Our~~Cash ~~general~~Flows ~~and~~From ~~administrative~~Financing expenses decreased to $442 during 2009 as compared to $1,153,801 during 2008. The decrease in general and administrative expenses is primarily due to decrease in activities of the Company beginning April 1, 2008. Activities

~~Consolidated~~Our ~~Other~~cash ~~Income~~flows ~~(Expenses)~~from financing activities during 2010 and 2009 were $Nil.

		Year Ended		Year Ended
		March 31,		March 31,
		2009		2008
Write-off of mineral exploration rights		–		(7,317,739	)
Finance Costs		–		(8,199	)
Other income		–		5,403
Total other expenses	$	–	$	(7,320,535	)

~~Write–off~~Critical ofAccounting ~~Mineral~~Policies ~~Exploration~~and ~~Rights~~Estimates

~~During~~Our ~~the~~financial ~~year~~statements ~~ended~~and ~~March~~accompanying ~~31,~~notes ~~2009,~~have ~~the~~been prepared ~~Company~~in ~~ceased~~accordance ~~active mineral~~with ~~exploration~~United ~~operations~~States ingenerally ~~Mongolia~~accepted ~~and~~accounting principles ~~was~~(“US ~~not~~GAAP”) ~~able~~applied toon ~~fund~~a ~~sufficient activities~~consistent inbasis. ~~order~~The topreparation ~~maintain~~of financial ~~its~~statements ~~interests~~ in ~~the~~conformity ~~Mineral~~with ~~Exploration~~US ~~License Certificates~~GAAP ~~issued~~requires bymanagement ~~the~~to ~~Minerals~~make estimates and ~~Petroleum~~assumptions ~~Authority~~that affect the reported amounts of ~~Mongolia.~~assets and ~~Accordingly~~liabilities, the ~~exploration~~disclosure ~~rights~~of ~~represented~~contingent byassets ~~those~~and ~~licenses~~liabilities ~~were~~at ~~forfeited and~~the date of the ~~Company~~financial ~~wrote~~statements ~~off~~and the ~~remaining~~reported ~~book~~amounts ~~value~~ of ~~$7,317,739~~revenues asand ofexpenses during ~~March~~the ~~31, 2008~~reporting periods.

~~Finance~~In ~~Costs~~the opinion of the management of the Company, the consolidated financial statements for the periods presented include all adjustments, including normal recurring adjustments, necessary to fairly present the results of such periods and the financial position as of the end of said periods.

~~Finance~~We ~~costs~~regularly ~~are~~evaluate ~~primarily~~the ~~attributable~~accounting policies and estimates that we use to ~~the~~prepare ~~Acquisition~~our ~~of National~~consolidated ~~Base~~financial statements. ~~This~~In ~~decreased~~general, management’s estimates are based on historical experience, on information from third $8party professionals,~~199~~ inand ~~2008~~on various other assumptions that are believed to be ~~$Nil~~reasonable inunder ~~2009~~the facts and circumstances. Actual results could differ from those estimates made by management.

~~Net~~We ~~Loss~~believe that our critical accounting policies and estimates include the accounting for allowance for doubtful accounts, useful lives of property, plant and equipment and mineral exploration rights, asset retirement obligation estimates, accrued liabilities , and the determination of the valuation allowance for future income taxes.

~~The~~Basis ~~following~~of ~~table~~Presentation ~~reflects our net loss for the years ended March 31, 2009 and 2008, after taking into account the amounts recognized as other income or expenses.~~

		Year Ended			Year Ended
		March 31,			March 31,
		2009			2008
Loss from operations	$	(5,100	)	$	(2,896,770	)
Other expenses		–			(7,320,535	)
Net loss	$	(5,100	)	$	(10,217,305	)

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material. The Company’s continuation as a going concern is dependent upon the continued financial support of its creditors and its ability to obtain financing to repay its current obligations, fund working capital and overhead requirements, fund the development of the Company’s mineral exploration rights and the Company’s ability to achieve profitable operations. Management plans to obtain financing through future common share private placements. The Company’s continued existence is dependent upon its ability to achieve its operating plan. There can be no assurance provide the Company will be able to raise sufficient debt or equity capital from sources described above, on satisfactory terms. If management is unsuccessful in obtaining financing or in achieving long-term profitable operations, the Company will be required to cease operations.

WePrinciples ~~recorded a net loss~~ of ~~$5,100~~Consolidation ~~for the year ended March 31, 2009 as compared to a net loss of $10,217,305 for the year ended March 31, 2008. The decrease in net loss between these periods is primarily related to:~~

AThe ~~decrease~~accompanying inconsolidated ~~write-off~~financial statements include the accounts of ~~mineral~~the ~~exploration~~Company ~~rights~~and inits ~~the~~subsidiaries. ~~amount~~All ofsignificant inter-company ~~$7,317,739~~accounts and transactions have been eliminated.

A20 ~~decrease in general and administrative expenses due to decrease in activities of $1,153,359.~~

AUse ~~decrease in amortization~~ of ~~mineral~~Estimates ~~exploration rights of $1,318,475.~~

AIn ~~decrease~~preparing of financial statements in ~~property~~conformity ~~exploration~~with US GAAP requires management to make estimates and ~~maintenance~~assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant areas requiring management estimates relate to allowance for doubtful accounts, useful lives of property, ~~$419~~plant and equipment and mineral exploration rights,~~836~~ asset retirement obligation estimates, accrued liabilities, and the determination of the valuation allowance for future income taxes. While management believes the estimates are reasonable, actual results could differ from those estimates and could impact future results of operations and cash flows.

20Foreign Currency Translation

~~Cash~~The ~~Flows~~functional ~~From~~currency ~~Operating~~of ~~Activities~~the Company is the United States dollar (“US dollar”). Amounts recorded in foreign currency are translated into US dollars as follows:

~~Our~~i. ~~cash~~Monetary ~~flows~~assets ~~from~~and ~~operating~~liabilities, ~~activities~~at ~~during~~the ~~2009~~rate ~~were $(442)~~of exchange in effect as at the balance sheet date; ii. ~~Our~~Non-monetary ~~cash~~assets ~~flows~~and ~~from~~liabilities, ~~operating~~at ~~activities~~the ~~for~~exchange ~~2009~~rates ~~include~~prevailing ~~net~~at ~~loss~~the time of ~~$5,100~~ the acquisition of the assets or assumption of the liabilities; and $4iii. Interest income and expenses (excluding amortization,~~658~~ inwhich ~~depreciation.~~is translated at the same rate as the related asset), at the rate of exchange on the transaction date.

~~Our~~Gains ~~cash flows from operating activities during 2008 were $49,252. Our cash flows from operating activities for 2008 include net loss of $10,217,305, $1,323,133 in amortization~~ and ~~depreciation,~~losses ~~write-off~~arising ~~of mineral exploration rights of $7,317,739, an increase in amount due~~ from athis ~~minority stockholder~~translation of ~~$188,984, a decrease in prepaid expenses of $77,772, and increase~~foreign incurrency ~~other~~are ~~payables~~included ~~and accrued expenses of $20,298, an increase~~ in ~~amount~~the ~~due~~consolidated ~~to related~~statements ~~companies~~ of ~~$869,385, and an increase in amount due to a minority stockholder of $624,790~~operations.

Cash ~~Flows~~and ~~From~~Cash ~~Investing~~Equivalents ~~Activities~~

~~Our~~Cash and cash ~~flows~~equivalents ~~from~~include ~~investing~~all ~~activities~~cash, ~~during~~deposits ~~2009~~in ~~were~~banks and ~~$Nil~~other highly liquid investments with initial maturities of three months or less to be cash equivalents. As of March 31, 2010 most of the cash and cash equivalents were denominated in US dollars and were placed with banks in Mongolia, Hong Kong and Canada.

~~Our~~Concentrations ~~cash flows from investing activities during 2008 were $16,482 primarily due to $24,346 cash inflow on the Acquisition~~ of ~~National Base.~~Credit ~~This~~Risk ~~amount was offset by the purchase of equipment of $7,864.~~

~~Cash~~Financial ~~Flows~~instruments ~~From~~that ~~Financing~~potentially ~~Activities~~subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and amounts due from related parties. As of March 31, 2010, substantially all of the Company and related companies’ cash and cash equivalents and related companies were held by major financial institutions located in Mongolia, Hong Kong, and Canada which management believes are of high credit quality.

~~Our cash flows from financing activities during 2009 were $Nil compared to ($77~~Property,~~227)~~ ~~for~~Plant ~~2008.~~and Equipment

~~During 2008~~Property, weplant ~~received~~and ~~$15,873~~equipment inare ~~advances~~stated ~~from~~at ~~related~~cost less ~~parties,~~accumulated ~~$34,000~~depreciation. inCost ~~proceeds~~includes ~~from~~expenditures ~~short-term~~that ~~loans.~~are ~~This~~directly attributable ~~was~~to ~~offset~~the byacquisition ~~$127,100~~of the asset and other costs directly inattributable ~~repayment~~to bringing the asset to working condition for its intended use. The cost of ~~short~~self-~~term~~constructed ~~loans~~assets includes the cost of materials and direct labour. Depreciation is provided on straight-line basis over their estimated useful lives. The principal depreciation rates are as follows:

~~Critical~~21 ~~Accounting Policies and Estimates~~

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles (“US GAAP”) applied on a consistent basis. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

	Annual rate

Furniture	10%
Computer software	10%
Computers	33.33%

InMaintenance ~~the~~or ~~opinion~~repairs ofare ~~the~~charged ~~management~~to ofexpense ~~the~~as ~~Company~~incurred. Upon sale or disposition, the applicable amounts of asset cost and accumulated ~~consolidated~~depreciation ~~financial~~are ~~statements~~removed ~~for~~from the ~~periods~~accounts ~~presented~~and ~~include~~the ~~all adjustments,~~net ~~including~~amount ~~normal~~less ~~recurring~~proceeds ~~adjustments,~~from disposal ~~necessary~~is charged or credited to ~~fairly~~income. ~~present~~During the year ended March 31, 2010, the ~~results~~Company wrote-of ~~such~~all ~~periods~~their property, plant and ~~the~~equipment ~~financial~~due ~~position~~to asthe termination of the ~~end~~Mongolian ~~of said periods~~project.

WeMineral ~~regularly~~Exploration ~~evaluate~~Rights the accounting policies and estimates that we use to prepare our consolidated financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

WeMineral ~~believe~~exploration ~~that~~rights ~~our~~are ~~critical~~stated ~~accounting~~at ~~policies~~cost ~~and~~less ~~estimates~~accumulated ~~include~~amortization ~~the~~and ~~accounting~~are ~~for~~amortized ~~allowance~~on ~~for~~the ~~doubtful~~straight-line ~~accounts,~~basis ~~useful~~over ~~lives~~the tenure of the ~~property,~~lease. ~~plant~~Exploration and ~~equipment~~related costs and ~~mineral~~costs ~~exploration~~to ~~rights,~~maintain ~~asset~~mineral ~~retirement obligation~~rights ~~estimates, accrued liabilities ,~~ and ~~the determination of the~~ ~~valuation~~leases ~~allowance~~are ~~for~~expensed ~~future~~as ~~income taxes~~incurred.

21Impairment of Long-Lived Assets

~~Basis~~Long-lived assets are tested for impairment in accordance with SFAS No. 144. The Company periodically evaluates potential impairment whenever events or changes in circumstances indicate that the carrying amount of ~~Presentation~~the assets may not be recoverable. The Company recognizes impairment of long-lived assets in the event that the net book values of such assets exceed the future undiscounted cash flows attributable to such assets. During the reporting period, the Company has not identified any indicators that would require testing for impairment.

~~The~~Asset ~~accompanying~~Retirement ~~consolidated~~Obligations ~~financial~~(“ARO”) statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material. The Company’s continuation as a going concern is dependent upon the continued financial support of its creditors and its ability to obtain financing to repay its current obligations, fund working capital and overhead requirements, fund the development of the Company’s mineral exploration rights and the Company’s ability to achieve profitable operations. Management plans to obtain financing through future common share private placements. The Company’s continued existence is dependent upon its ability to achieve its operating plan. There can be no assurance provide the Company will be able to raise sufficient debt or equity capital from sources described above, on satisfactory terms. If management is unsuccessful in obtaining financing or in achieving long-term profitable operations, the Company will be required to cease operations.

~~Principles~~The Company recognizes an estimate of ~~Consolidation~~the liability associated with an ARO in the consolidated financial statements at the time the liability is incurred. The estimated fair value of the ARO is recorded as a long-term liability, with a corresponding increase in the carrying amount of the related asset. The capitalized amount will be depleted on a straight-line basis over the estimated life of the asset. The liability amount is increased each reporting period due to the passage of time and the amount of accretion is charged to earnings in the year. The ARO can also increase or decrease due to changes in the estimates of timing of cash flows or changes in the original estimated undiscounted cost. Actual costs incurred upon settlement of the ARO are charged against the ARO to the extent of the liability recorded.

~~The~~Basic ~~accompanying consolidated financial statements include the accounts of the Company~~ and ~~its~~Diluted ~~subsidiaries.~~Loss ~~All~~per ~~significant~~Share ~~inter-company accounts and transactions have been eliminated.~~

~~Use~~Basic loss per common share is calculated by dividing net loss by the weighted average number of ~~Estimates~~common shares outstanding during the period. Diluted loss per common share is calculated by dividing the net loss by the sum of the weighted average number of common shares outstanding and the dilutive common equivalent shares outstanding during the period. Common equivalent shares consist of the shares issuable upon exercise of stock options and warrants calculated using the treasury stock method. Common equivalent shares are not included in the calculation of the weighted average number of shares outstanding for diluted loss per common shares when the effect would be anti-dilutive.

In22 preparing of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant areas requiring management estimates relate to allowance for doubtful accounts, useful lives of property, plant and equipment and mineral exploration rights, asset retirement obligation estimates, accrued liabilities, and the determination of the valuation allowance for future income taxes. While management believes the estimates are reasonable, actual results could differ from those estimates and could impact future results of operations and cash flows.

~~Foreign~~Income ~~Currency~~Taxes ~~Translation~~

The ~~functional~~Company ~~currency~~uses the asset and liability method of accounting for income taxes pursuant to SFAS No. 109 “Accounting for Income Taxes”. Under the ~~Company~~asset isand liability method of SFAS 109, deferred tax assets and liabilities are recognized for the ~~United~~future ~~States~~tax consequences attributable to temporary ~~dollar~~differences ~~(“US~~between ~~dollar”)~~the financial statements carrying amounts of existing assets and liabilities and loss carry-forwards and their respective tax bases. ~~Amounts~~Deferred tax ~~recorded~~assets and liabilities are measured using enacted tax rates expected to apply to taxable income in ~~foreign~~the ~~currency~~years ~~are~~in ~~translated~~which ~~into~~those temporary differences are USexpected ~~dollars~~to asbe ~~follows:~~recovered or settled.

i.Financial ~~Monetary~~Instruments ~~assets~~ and ~~liabilities,~~Comprehensive at the rate of exchange in effect as at the balance sheet date; ii. Non-monetary assets and liabilities, at the exchange rates prevailing at the time of the acquisition of the assets or assumption of the liabilities; and iii. Interest income and expenses (excluding amortization, which is translated at the same rate as the related asset), at the rate of exchange on the transaction date.Income

~~Gains~~All ~~and~~financial ~~losses~~instruments ~~arising~~are ~~from~~classified ~~this~~as ~~translation~~one of ~~foreign~~the ~~currency~~following: held-to-maturity, loans and receivables, held-for-trading, available-for-sale or other financial liabilities. Financial assets and liabilities held-for- trading are ~~included~~measured at fair value with gains and losses recognized in net income (loss). Financial assets held-to-maturity, loans and receivables, and other financial liabilities are measured at amortized cost using the ~~consolidated~~effective ~~statements~~interest ofmethod. ~~operations~~Available-for-sale instruments are measured at fair value with unrealized gains and losses recognized in other comprehensive income (loss) and reported in shareholders’ equity. Any financial instrument may be designated as held-for-trading upon initial recognition.

22Transaction costs that are directly attributable to the acquisition or issue of financial instruments that are classified as other than held-for-trading, which are expensed as incurred, are included in the initial carrying value of such instruments and amortized using the effective interest method.

~~Cash~~Comprehensive income or loss is defined as the change in equity from transactions and ~~Cash~~other ~~Equivalents~~events from sources other than the Company’s stockholders. Other comprehensive income or loss refers to items recognized in comprehensive income or loss that are excluded from operations calculated in accordance with US GAAP. The Company has no items of other comprehensive income in any period presented. Therefore, net loss as presented in the Company’s consolidated statements of operations equals comprehensive loss.

~~Cash~~Recently ~~and~~Adopted ~~cash~~Accounting ~~equivalents~~Pronouncements include all cash, deposits in banks and other highly liquid investments with initial maturities of three months or less to be cash equivalents. As of March 31, 2009 most of the cash and cash equivalents were denominated in US dollars and were placed with banks in Mongolia, Hong Kong and Canada.

~~Concentrations~~Effective July 1, 2009, the FASB’s Accounting Standards Codification (“ASC”) became the single official source of ~~Credit~~authoritative, nongovernmental ~~Risk~~generally accepted accounting principles (“GAAP”) in the U.S. The historical GAAP hierarchy was eliminated and the ASC became the only level of authoritative GAAP, other than guidance issued by the Securities and Exchange Commission. The Codification is required to be applied to financial statements issued for interim and annual periods ending after September 15, 2009. The Codification does not change GAAP and did not impact the Company’s consolidated financial statements.

~~Financial~~In ~~instruments~~December ~~that~~2007, ~~potentially~~the ~~subject~~FASB ~~the~~issued ~~Company~~Accounting toStandards ~~significant~~Codification ~~concentrations~~805, of“Business ~~credit~~Combinations” ~~risk~~(“ASC ~~consist~~805”) ~~principally~~(formerly SFAS No. 141(R)), which establishes principles and requirements for how the acquirer of ~~cash~~a business recognizes and ~~cash~~measures in its financial statements the identifiable ~~equivalents~~assets acquired, the liabilities assumed, and ~~amounts~~any ~~due~~non-controlling ~~from~~interest ~~related~~in the ~~parties~~acquiree. AsThe amendments of ~~March~~ASC 31805 are effective for financial statements issued for fiscal years beginning on or after December 15, ~~2009~~2008. Prior to the adoption of ASC 805, in process research and development costs were immediately ~~substantially~~expensed and acquisition costs were capitalized. Under ASC 805 all ofacquisition costs are expensed as incurred. The standard also provides guidance for recognizing and measuring the ~~Company~~goodwill acquired in the business combination and determines ~~related~~what ~~companies’~~information ~~cash~~to disclose to enable users of financial statements to evaluate the nature and ~~cash~~financial effects of the business combination. In ~~equivalents~~April 2009, the FASB updated ASC 805 to amend the provisions for the initial recognition and measurement, ~~related~~subsequent ~~companies~~measurement ~~were~~and ~~held~~accounting, byand ~~major~~disclosures ~~financial~~for ~~institutions~~assets ~~located~~liabilities arising from contingencies in ~~Mongolia,~~business ~~Hong~~combinations. ~~Kong,~~This update also eliminates the distinction between contractual and ~~Canada~~non-contractual contingencies. ~~which~~The ~~management~~Company ~~believes~~adopted ~~are~~ASC of805 ~~high~~effective April 1, 2009 and considers ~~credit~~the ~~quality~~adoption had no material impact on the Company’s consolidated financial statements.

~~Property,~~23 ~~Plant and Equipment~~

~~Property,~~In ~~plant~~December ~~and~~2007, ~~equipment~~the ~~are~~FASB ~~stated~~issued atAccounting ~~cost less~~Standards ~~accumulated~~Codification ~~depreciation.~~810-10, ~~Cost~~“Non-controlling ~~includes~~Interests ~~expenditures~~in ~~that~~Consolidated ~~are directly~~Financial ~~attributable~~Statements-an toamendment ~~the~~of ~~acquisition~~ARB ofNo. ~~the~~51” ~~asset~~(“ASC ~~and~~810-10”) ~~other~~(formerly ~~costs~~SFAS ~~directly~~No. 160). ~~attributable~~ASC to810-10 ~~bringing~~establishes accounting and reporting standards for the non-controlling ~~asset~~interest toin ~~working~~a ~~condition~~subsidiary and for ~~its~~the ~~intended~~deconsolidation ~~use.~~of a subsidiary. The ~~cost~~guidance ofwill ~~self-constructed~~become ~~assets~~effective ~~includes~~for the ~~cost~~Company’s offiscal ~~materials~~year beginning ~~and~~on ~~direct labour~~or after December 15, 2008. ~~Depreciation~~The isCompany ~~provided~~adopted onASC ~~straight~~810-~~line~~10 effective ~~basis~~April ~~over~~1, ~~their~~2009 ~~estimated useful~~and ~~lives.~~considers ~~The~~the ~~principal~~adoption ~~depreciation~~had ~~rates~~no ~~are~~material asimpact ~~follows:~~on its consolidated financial statements.

	Annual rate
Furniture	10%
Computer software	10%
Computers	33.33%

In March 2008, the FASB issued Accounting Standards Codification 815, “Disclosures about Derivative Instruments and Hedging Activities” (“ASC 815”). ASC 815 changes the disclosure requirements for derivative instruments and hedging activities. The guidance will become effective for the Company’s fiscal year beginning on or after November 15, 2008. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including any financial statements for an interim period within that fiscal year. This statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The Company adopted ASC 815 effective April 1, 2009 and considers the adoption had no material impact on its consolidated financial statements.

~~Maintenance~~In orApril ~~repairs~~2008, ~~are~~the ~~charged~~FASB toissued ~~expense~~SFAS ~~as incurred~~No. ~~Upon~~142-3 (“SFAS 142-3”) to ~~sale~~amend the factors that should be considered in developing renewal or ~~disposition,~~extension assumptions used to determine the ~~applicable~~useful ~~amounts~~life of a recognized intangible asset under ~~cost~~SFAS No. 142, “Goodwill and ~~accumulated~~Other Intangible Assets” (“SFAS 142”). The ~~depreciation~~intent ~~are~~of ~~removed~~SFAS ~~from~~142-3 is to improve the ~~accounts~~consistency between the useful life of a recognized intangible asset under SFAS 142 and the ~~net~~period ~~amount~~of ~~less~~expected ~~proceeds~~cash ~~from~~flows ~~disposal~~used isto ~~charged~~measure orthe ~~credited~~fair value of the asset under SFAS 141(R) Business Combinations, and other US GAAP. SFAS 142-3 is not expected to ~~income~~have a material impact on the Company’s consolidated financial statements.

~~Mineral~~In ~~Exploration~~June ~~Rights~~2008, the FASB issued FASB SP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities” (“SP-EITF 03-6-1”). SP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the computation of earnings per share under the two-class method as described in SFAS No. 128, “Earnings per Share”. SP EITF 03-6-1 is effective for financial statements issued for the Company’s fiscal years beginning on or after December 15, 2008 and earlier adoption is prohibited. The Company adopted SP EITF 03-6-1 effective April 1, 2009 and considers SP EITF 03-6-1 had no material impact on the Company’s consolidated financial statements.

~~Mineral~~In ~~exploration~~April ~~rights~~2009, the FASB issued three FASB Staff Positions (FSP’s) that are ~~stated~~intended atto ~~cost~~provide ~~less~~additional ~~accumulated~~application guidance and enhance ~~amortization~~disclosures about fair value measurements and ~~are~~impairments ~~amortized~~of onsecurities. ~~the~~FSP ~~straight~~No. 157-~~line~~4, ~~basis~~“Determining ~~over~~Fair Value When the ~~tenure~~Volume and Level of Activity for the ~~lease~~Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (FSP 157-4), clarifies the objective and method of fair value measurement even when there has been a significant decrease in market activity for the asset being measured. ~~Exploration~~FSP No. 115-2 and ~~related~~FSP ~~costs~~No. 124-2, “Recognition and ~~costs~~Presentation of Other-Than-Temporary Impairments”, (FSP 115-2 and FSP 124-2), establish a new model for measuring other-than-temporary impairments for debt securities, including criteria for when to ~~maintain~~recognize ~~mineral~~a write-down ~~rights~~through earnings versus other comprehensive income. FSP No. 107-1 and ~~leases~~APB 28-1, “Interim Disclosures About Fair Value of Financial Instruments”, expand the fair value disclosures required for all financial instruments within the scope of SFAS, No. 107, “Disclosures about Fair Value of Financial Instruments” (FSP 107-1 and APB 28-1) to interim periods. All of these FSP’s are effective ~~expensed~~for asinterim ~~incurred~~and annual periods ending after June 15, 2009, our quarter ended June 30, 2009. The adoption of these FSP’s will not have a material impact on our consolidated results of operations and financial condition. However, adoption of FSP 107-1 and APB 28-1 during the quarter ended June 30, 2009 resulted in increased disclosures in our consolidated financial statements.

~~Impairment~~ 24 ~~of Long-Lived Assets~~

~~Long-lived~~In ~~assets~~April ~~are~~2009, ~~tested~~the ~~for~~FASB ~~impairment~~issued inAccounting ~~accordance with~~Standards Codification 825-10, “Financial Instruments” (formerly SFAS 107-1 and Accounting Principles Board Opinion No. ~~144.~~28-1, ~~The~~“Interim ~~Company~~Disclosures ~~periodically~~about ~~evaluates~~Fair ~~potential~~Value ~~impairment~~of Financial ~~whenever~~Instruments”) (“ASC 825-10”). This statement amends SFAS 107, ~~events~~“Disclosures orabout ~~changes~~Fair inValues ~~circumstances~~of ~~indicate~~Financial ~~that~~Instruments”, ~~the~~to ~~carrying~~require ~~amount~~disclosures about fair value of ~~the~~financial instruments in interim financial statements as ~~assets~~well ~~may~~as ~~not~~in beannual ~~recoverable~~financial statements. The ~~Company~~statement ~~recognizes~~also ~~impairment~~amends ofAPB ~~long-lived~~28, ~~assets~~“Interim inFinancial ~~the~~Reporting”, ~~event~~to ~~that~~require ~~the~~those ~~net~~disclosures ~~book~~in ~~values~~all ofinterim financial ~~such~~statements. ~~assets~~This ~~exceed~~statement ~~the~~is ~~future undiscounted~~effective ~~cash~~for ~~flows~~interim ~~attributable~~periods toending after ~~such~~June ~~assets~~15, 2009. ~~During~~The Company adopted ASC 825-10 during the ~~reporting~~quarter ending on ~~period~~June 30, ~~the~~2009 ~~Company~~and ~~has~~considers ~~not~~the ~~identified~~adoption ~~any~~had ~~indicators~~no ~~that~~material ~~would~~impact ~~require~~on ~~testing~~the Company’s ~~for~~consolidated ~~impairment~~financial statements.

~~Asset~~In ~~Retirement~~May ~~Obligations~~2009, the FASB issued Accounting Standards Codification 855-10, “Subsequent Events” (formerly SFAS No. 165, “~~ARO~~Subsequent Events”) (“ASC 855-10”). This statement is consistent with existing auditing standards in defining subsequent events as events or transactions that occur after the balance sheet date but before the financial statements are issued or are available to be issued, but it also requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. The new guidance defines two types of subsequent events: “recognized subsequent events” and “non-recognized subsequent events”. Recognized subsequent events provide additional evidence about conditions that existed at the balance sheet date and must be reflected in the company’s financial statements. Non-recognized subsequent events provide evidence about conditions that arose after the balance sheet date and are not reflected in the financial statements of a company. Certain non-recognized subsequent events may require disclosure to prevent the financial statements from being misleading. The new guidance was effective on a prospective basis for interim or annual periods ending after June 15, 2009. The Company adopted ASC 855-10 during the quarter ending on June 30, 2009 and considers the adoption had no material impact on the Company’s consolidated financial statements.

~~The~~In ~~Company~~June ~~recognizes~~2009, anthe ~~estimate~~FASB ofissued ~~the~~ASU ~~liability~~No. ~~associated with~~2009-01, an“FASB ~~ARO~~Accounting Standards inCodification and the ~~consolidated~~Hierarchy ~~financial~~of ~~statements~~Generally atAccepted ~~the~~Accounting Principles” ~~time~~(“ASU ~~the~~2009-01”). ~~liability~~This update provides amendment to ASC 105-10 is(formerly ~~incurred~~SFAS No. 168, The ~~estimated~~FASB ~~fair~~Accounting ~~value~~Standards ofCodification and the Hierarchy ~~ARO~~of isGenerally ~~recorded~~Accepted asAccounting aPrinciples”). ~~long~~ASU 2009-~~term~~01 ~~liability~~establishes the “FASB Accounting Standards Codification” (“Codification”), ~~with~~which aofficially launched ~~corresponding~~July ~~increase~~1, in2009, to become the ~~carrying amount~~source of ~~the~~authoritative ~~related~~US ~~asset.~~GAAP ~~The~~recognized by ~~capitalized~~the ~~amount~~FASB ~~will~~to be ~~depleted~~applied onby ~~a straight-line~~nongovernmental ~~basis~~entities. ~~over~~Rules and interpretive releases of the ~~estimated~~SEC ~~life~~under authority of ~~the~~federal ~~asset.~~securities ~~The~~laws ~~liability~~are ~~amount~~also sources isof ~~increased~~authoritative ~~each~~US ~~reporting~~GAAP ~~period~~for ~~due~~SEC toregistrants. ~~the~~The ~~passage~~subsequent issuances of ~~time~~new standards ~~and~~will be in the ~~amount~~form of ~~accretion~~ isAccounting ~~charged~~Standards toUpdates ~~earnings~~that will be included in the ~~year~~Codification. ~~The~~Generally, ~~ARO~~the ~~can~~Codification ~~also~~is ~~increase~~not orexpected to ~~decrease~~change ~~due~~US toGAAP. ~~changes~~All inother accounting literature excluded from the ~~estimates~~Codification will ofbe ~~timing~~considered ofnon-authoritative. ~~cash~~ASU ~~flows~~2009-01 oris ~~changes~~effective infor financial ~~the~~statements ~~original~~issued ~~estimated~~for ~~undiscounted~~interim ~~cost.~~and ~~Actual~~annual ~~costs~~periods ~~incurred~~ending ~~upon~~after ~~settlement~~September 15, of2009. ~~the~~The ~~ARO~~Company ~~are~~adopted ~~charged~~ASU ~~against~~2009-01 during the ~~ARO~~quarter toending on September 30, 2009 and considers the ~~extent~~adoption ofhad no material impact on the ~~liability~~Company’s consolidated ~~recorded~~financial statements.

23In August 2009, the FASB issued ASU No. 2009-05, “Measuring Liabilities at Fair Value” (“ASU 2009-05”). This update provides amendments to ASC Topic 820, “Fair Value Measurements and Disclosure”, for the fair value measurement of liabilities when a quoted price in an active market is not available. ASU 2009-05 is effective for reporting periods beginning after August 28, 2009. The Company adopted ASU 2009-05 during the quarter ending on December 31, 2009 and considers the adoption had no material impact on the Company’s consolidated financial statements.

~~Basic~~In ~~and~~September ~~Diluted~~2009, ~~Loss~~the FASB issued ASU No. 2009-12, “Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)” (“ASU 2009-12”). ASU permits, as a practical expedient, a reporting entity to measure the fair value of an investment that is within the scope of this ASU on the basis of the net asset value per share of the investment (or its equivalent) if the net asset value of the investment (or its equivalent) is calculated in a manner consistent with the measurement principles of Topic 946 as of the reporting entity’s measurement date. The ASU also requires disclosures by major category of investment about the attributes of investments within the scope of the Update. ASU 2009-12 is effective for interim and annual periods ending after December 15, 2009. The Company adopted ASU 2009-12 during the quarter ending on December 31, 2009 and considers the adoption had no material impact on the Company’s consolidated financial statements.

~~Basic~~25 loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share is calculated by dividing the net loss by the sum of the weighted average number of common shares outstanding and the dilutive common equivalent shares outstanding during the period. Common equivalent shares consist of the shares issuable upon exercise of stock options and warrants calculated using the treasury stock method. Common equivalent shares are not included in the calculation of the weighted average number of shares outstanding for diluted loss per common shares when the effect would be anti-dilutive.

~~Income~~In ~~Taxes~~January 2010, the FASB issued ASU No. 2010-06 (“ASU 2010-06”) applicable to ASC Topic 820-10, Fair Value Measurements and Disclosures. The guidance requires entities to disclose significant transfers in and out of fair value hierarchy levels and the reasons for the transfers and to present information about purchases, sales, issuances and settlements separately in the reconciliation of fair value measurements using significant unobservable inputs (Level 3).

~~The~~Additionally, ~~Company uses~~ the ~~asset~~guidance ~~and~~clarifies ~~liability~~that ~~method~~a ofreporting ~~accounting~~entity ~~for~~should ~~income~~provide ~~taxes~~fair ~~pursuant~~value tomeasurements ~~SFAS~~for ~~No.~~each ~~109~~class ~~“Accounting~~of ~~for~~assets ~~Income~~and ~~Taxes”. Under~~liabilities and disclose the ~~asset~~inputs and ~~liability~~valuation ~~method~~techniques ofused ~~SFAS~~for ~~109,~~fair ~~deferred~~value measurements ~~tax~~using ~~assets~~significant other observable inputs (Level 2) and ~~liabilities~~significant ~~are~~unobservable ~~recognized~~inputs ~~for~~(Level ~~the~~3). ~~future~~This ~~tax~~guidance ~~consequences~~is ~~attributable~~effective tofor ~~temporary~~interim and annual ~~differences~~periods ~~between~~beginning ~~the~~after ~~financial~~December ~~statements~~15, ~~carrying~~2009, ~~amounts~~except offor ~~existing~~the ~~assets~~disclosures about ~~and~~purchases, ~~liabilities~~sales, issuances and ~~loss~~settlements ~~carry-forwards~~in ~~and~~the ~~their~~Level ~~respective~~3 ~~tax~~reconciliation, ~~bases. Deferred~~which ~~tax~~will ~~assets~~be ~~and~~effective ~~liabilities~~for ~~are~~interim ~~measured~~and ~~using~~annual ~~enacted~~periods ~~tax~~beginning ~~rates~~after ~~expected~~December to15, ~~apply~~2010. toAs ~~taxable~~this ~~income~~guidance inprovides only disclosure requirements, the ~~years~~adoption inof this ~~which~~standard ~~those~~by ~~temporary~~the ~~differences~~Company ~~are expected~~effective toJanuary be1, ~~recovered~~2011 orwill ~~settled~~not impact the Company’s consolidated financial statements.

~~Financial~~In ~~Instruments~~February 2010, the FASB issued ASU No. 2010-09, “Subsequent Events: Amendments to Certain Recognition and ~~Comprehensive~~Disclosure ~~Income~~Requirements” (“ASU 2010-09”), which amends ASC Topic 855 to address certain implementation issues related to an entity’s requirement to perform and disclose subsequent events procedures. The amendments in ASU 2010-09 remove the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements. The new guidance did not have an impact on the Company’s consolidated financial statements.

~~All~~Recently ~~financial~~Issued ~~instruments~~Accounting ~~are~~Pronouncements classified as one of the following: held-to-maturity, loans and receivables, held-for-trading, available-for-sale or other financial liabilities. Financial assets and liabilities held-for- trading are measured at fair value with gains and losses recognized in net income (loss). Financial assets held-to-maturity, loans and receivables, and other financial liabilities are measured at amortized cost using the effective interest method. Available-for-sale instruments are measured at fair value with unrealized gains and losses recognized in other comprehensive income (loss) and reported in shareholders’ equity. Any financial instrument may be designated as held-for-trading upon initial recognition.

~~Transaction~~In ~~costs~~April ~~that~~2010, ~~are~~the ~~directly~~FASB ~~attributable~~issued toASU ~~the~~2010-13, “Compensation—Stock ~~acquisition~~Compensation or(ASC ~~issue~~Topic 718): Effect of ~~financial~~Denominating ~~instruments~~the ~~that~~Exercise ~~are~~Price ~~classified~~of asa Share-Based ~~other~~Payment ~~than~~Award in the Currency of the Market in Which the Underlying ~~held~~Equity Security Trades” (“ASU 2010-~~for~~13”). ASU 2010-~~trading,~~13 ~~which~~provides ~~are~~amendments ~~expensed~~to asASC Topic ~~incurred,~~718 ~~are~~to ~~included~~clarify that an employee share-based payment award with an exercise price denominated in currency of a market in which a substantial portion of the entity’s ~~initial~~equity securities trades should not be considered to contain a ~~carrying~~condition ~~value~~that ofis not a market, performance or service condition. Therefore, an entity would not classify such ~~instruments~~an award as liability if it otherwise qualifies as equity. The amendments in this update are effective for fiscal years, and interim ~~amortized~~periods ~~using~~within those fiscal years, beginning on or after December 15, 2010. The Company does not expect the adoption of this ASU effective ~~interest~~April 1, ~~method~~2011 to have a material impact on the Company’s consolidated financial statements.

~~Comprehensive~~Off–Balance ~~income~~Sheet or loss is defined as the change in equity from transactions and other events from sources other than the Company’s stockholders. Other comprehensive income or loss refers to items recognized in comprehensive income or loss that are excluded from operations calculated in accordance with US GAAP. The Company has no items of other comprehensive income in any period presented. Therefore, net loss as presented in the Company’s consolidated statements of operations equals comprehensive loss. Arrangements

24We have no off–balance sheet arrangements.

~~Recently~~26 ~~Adopted Accounting Pronouncements~~

In December 2006, the FASB issued Staff Position No. EITF 00-19-2, “Accounting for Registration Payment Arrangement” (“SP EITF 00-19-2”). SP EITF 00-19-2 specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or other agreement, should be separately recognized and measured in accordance with SFAS No. 5, “Accounting for Contingencies” and FASB Interpretation No. 14, “Reasonable Estimation of the Amount of a Loss”. This guidance is effective for financial statements issued for fiscal years beginning on or after December 15, 2006. The Company adopted SP EITF 00-19-2 effective April 1, 2007 and considers the adoption had no material impact on its consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Entities that elect the fair value option will report unrealized gains and losses in earnings at each subsequent reporting date. The fair value option may be elected on an instrument-by-instrument basis, with few exceptions. SFAS 159 also establishes presentation and disclosure requirements to facilitate comparisons between companies that choose different measurement attributes for similar assets and liabilities. The requirements of SFAS 159 are effective for the Company’s fiscal year on or after November 15, 2007. The Company adopted SFAS 159 effective April 1, 2008 and considers the adoption of SFAS 159 had no material impact on its consolidated financial statements.

Recently Issued Accounting Pronouncements

Effective July 1, 2009, the FASB’s Accounting Standards Codification (“ASC”) became the single official source of authoritative, nongovernmental generally accepted accounting principles (“GAAP”) in the U.S. The historical GAAP hierarchy was eliminated and the ASC became the only level of authoritative GAAP, other than guidance issued by the Securities and Exchange Commission. The Codification is required to be applied to financial statements issued for interim and annual periods ending after September 15, 2009. The Codification does not change GAAP and did not impact the Company’s consolidated financial statements.

In December 2007, the FASB issued Accounting Standards Codification 805, “Business Combinations” (“ASC 805”) (formerly SFAS No. 141(R)), which establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree. The amendments of ASC 805 are effective for financial statements issued for fiscal years beginning on or after December 15, 2008. Prior to the adoption of ASC 805, in process research and development costs were immediately expensed and acquisition costs were capitalized. Under ASC 805 all acquisition costs are expensed as incurred. The standard also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of financial statements to evaluate the nature and financial effects of the business combination. In April 2009, the FASB updated ASC 805 to amend the provisions for the initial recognition and measurement, subsequent measurement and accounting, and disclosures for assets liabilities arising from contingencies in business combinations. This update also eliminates the distinction between contractual and non-contractual contingencies. The Company adopted ASC 805 effective April 1, 2009 and considers the adoption had no material impact on the Company’s consolidated financial statements.

In December 2007, the FASB issued Accounting Standards Codification 810-10, “Non-controlling Interests in Consolidated Financial Statements-an amendment of ARB No. 51” (“ASC 810-10”) (formerly SFAS No. 160). ASC 810-10 establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance will become effective for the Company’s fiscal year beginning on or after December 15, 2008. The Company adopted ASC 810-10 effective April 1, 2009 and considers the adoption had no material impact on its consolidated financial statements.

In April 2008, the FASB issued SFAS No. 142-3 (“SFAS 142-3”) to amend the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”). The intent of SFAS 142-3 is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R) Business Combinations, and other US GAAP. SFAS 142-3 is not expected to have a material impact on the Company’s consolidated financial statements.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS 162”). SFAS 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with US GAAP for non-governmental entities. SFAS 162 is not expected to have a material impact on the Company’s consolidated financial statements, beyond its current disclosure.

In June 2008, the FASB issued FASB SP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities” (“SP-EITF 03-6-1”). SP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the computation of earnings per share under the two-class method as described in SFAS No. 128, “Earnings per Share”. SP EITF 03-6-1 is effective for financial statements issued for the Company’s fiscal years beginning on or after December 15, 2008 and earlier adoption is prohibited. The Company adopted SP EITF 03-6-1 effective April 1, 2009 and considers SP EITF 03-6-1 had no material impact on the Company’s consolidated financial statements.

In April 2009, the FASB issued three FASB Staff Positions (FSP’s) that are intended to provide additional application guidance and enhance disclosures about fair value measurements and impairments of securities. FSP No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (FSP 157-4), clarifies the objective and method of fair value measurement even when there has been a significant decrease in market activity for the asset being measured. FSP No. 115-2 and FSP No. 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments”, (FSP 115-2 and FSP 124-2), establish a new model for measuring other-than-temporary impairments for debt securities, including criteria for when to recognize a write-down through earnings versus other comprehensive income. FSP No. 107-1 and APB 28-1, “Interim Disclosures About Fair Value of Financial Instruments”, expand the fair value disclosures required for all financial instruments within the scope of SFAS, No. 107, “Disclosures about Fair Value of Financial Instruments” (FSP 107-1 and APB 28-1) to interim periods. All of these FSP’s are effective for interim and annual periods ending after June 15, 2009, our quarter ended June 30, 2009. The adoption of these FSP’s will not have a material impact on our consolidated results of operations and financial condition. However, adoption of FSP 107-1 and APB 28-1 during the quarter ended June 30, 2009 resulted in increased disclosures in our consolidated financial statements.

In April 2009, the FASB issued Accounting Standards Codification 825-10, “Financial Instruments” (formerly SFAS 107-1 and Accounting Principles Board Opinion No. 28-1, “Interim Disclosures about Fair Value of Financial Instruments”) (“ASC 825-10”). This statement amends SFAS 107, “Disclosures about Fair Values of Financial Instruments”, to require disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements. The statement also amends APB 28, “Interim Financial Reporting”, to require those disclosures in all interim financial statements. This statement is effective for interim periods ending after June 15, 2009. The Company adopted The Company adopted ASC 825-10 during the quarter ending on June 30, 2009 and considers the adoption had no material impact on the Company’s consolidated financial statements.

In May 2009, the FASB issued Accounting Standards Codification 855-10, “Subsequent Events” (formerly SFAS No. 165, “Subsequent Events”) (“ASC 855-10”). This statement is consistent with existing auditing standards in defining subsequent events as events or transactions that occur after the balance sheet date but before the financial statements are issued or are available to be issued, but it also requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. The new guidance defines two types of subsequent events: “recognized subsequent events” and “non-recognized subsequent events”. Recognized subsequent events provide additional evidence about conditions that existed at the balance sheet date and must be reflected in the company’s financial statements. Non-recognized subsequent events provide evidence about conditions that arose after the balance sheet date and are not reflected in the financial statements of a company. Certain non-recognized subsequent events may require disclosure to prevent the financial statements from being misleading. The new guidance was effective on a prospective basis for interim or annual periods ending after June 15, 2009. The Company adopted ASC 855-10 during the quarter ending on June 30, 2009 and considers the adoption had no material impact on the Company’s consolidated financial statements.

In June 2009, the FASB issued ASU No. 2009-01, “FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles” (“ASU 2009-01”). This update provides amendment to ASC 105-10 (formerly SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles”). ASU 2009-01 establishes the “FASB Accounting Standards Codification” (“Codification”), which officially launched July 1, 2009, to become the source of authoritative US GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative US GAAP for SEC registrants. The subsequent issuances of new standards will be in the form of Accounting Standards Updates that will be included in the Codification. Generally, the Codification is not expected to change US GAAP. All other accounting literature excluded from the Codification will be considered non-authoritative. ASU 2009-01 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company adopted ASU 2009-01 during the quarter ending on September 30, 2009 and considers the adoption had no material impact on the Company’s consolidated financial statements.

In August 2009, the FASB issued ASU No. 2009-05, “Measuring Liabilities at Fair Value” (“ASU 2009-05”). This update provides amendments to ASC Topic 820, “Fair Value Measurements and Disclosure”, for the fair value measurement of liabilities when a quoted price in an active market is not available. ASU 2009-05 is effective for reporting periods beginning after August 28, 2009. The Company adopted ASU 2009-05 during the quarter ending on December 31, 2009 and considers the adoption had no material impact on the Company’s consolidated financial statements.

In September 2009, the FASB issued ASU No. 2009-12, “Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)” (“ASU 2009-12”). ASU permits, as a practical expedient, a reporting entity to measure the fair value of an investment that is within the scope of this ASU on the basis of the net asset value per share of the investment (or its equivalent) if the net asset value of the investment (or its equivalent) is calculated in a manner consistent with the measurement principles of Topic 946 as of the reporting entity’s measurement date. The ASU also requires disclosures by major category of investment about the attributes of investments within the scope of the Update. ASU 2009-12 is effective for interim and annual periods ending after December 15, 2009. The Company adopted ASU 2009-12 during the quarter ending on December 31, 2009 and considers the adoption had no material impact on the Company’s consolidated financial statements.

In January 2010, the FASB issued ASU No. 2010-06 (“ASU 2010-06”) applicable to ASC Topic 820-10, Fair Value Measurements and Disclosures. The guidance requires entities to disclose significant transfers in and out of fair value hierarchy levels and the reasons for the transfers and to present information about purchases, sales, issuances and settlements separately in the reconciliation of fair value measurements using significant unobservable inputs (Level 3).

Additionally, the guidance clarifies that a reporting entity should provide fair value measurements for each class of assets and liabilities and disclose the inputs and valuation techniques used for fair value measurements using significant other observable inputs (Level 2) and significant unobservable inputs (Level 3). This guidance is effective for interim and annual periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances and settlements in the Level 3 reconciliation, which will be effective for interim and annual periods beginning after December 15, 2010. As this guidance provides only disclosure requirements, the adoption of this standard by the Company effective January 1, 2011 will not impact the Company’s consolidated financial statements.

In February 2010, the FASB issued ASU No. 2010-09, “Subsequent Events: Amendments to Certain Recognition and Disclosure Requirements” (“ASU 2010-09”), which amends ASC Topic 855 to address certain implementation issues related to an entity’s requirement to perform and disclose subsequent events procedures. The amendments in ASU 2010-09 remove the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements. The new guidance did not have an impact on the Company’s consolidated financial statements.

In April 2010, the FASB issued ASU 2010-13, “Compensation—Stock Compensation (ASC Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades” (“ASU 2010-13”). ASU 2010-13 provides amendments to ASC Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance or service condition. Therefore, an entity would not classify such an award as liability if it otherwise qualifies as equity. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The Company does not expect the adoption of this ASU effective April 1, 2011 to have a material impact on the Company’s consolidated financial statements.

Off–Balance Sheet Arrangements

We have no off–balance sheet arrangements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b–2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our audited consolidated financial statements as of March 31, ~~2009~~2010 and ~~2008~~2009 for the years ended March 31, ~~2009~~2010 and ~~2008~~2009, and the related notes to the consolidated financial statements, are filed as part of this annual report beginning on page F–1 below, and are incorporated by reference in this Item 8.

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

None.

ITEM 9A. CONTROLS AND PROCEDURES ~~Evaluation of Disclosure Controls and Procedures~~

~~Disclosure~~Evaluation ~~controls and procedures, as such term is defined in Rule 13a-15(e)~~ of the Exchange Act, are controls and other procedures that are designed to ensure that information required to be disclosed by our Company is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure ~~controls~~ ~~and~~Controls ~~procedures include, without limitation, controls~~ and procedures designed to ensure that information required to be disclosed by our Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our Company’s management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our Chief Executive Officer, Rudi Azali, and our Chief Financial Officer, Michael Kinley, are responsible for establishing and maintaining disclosure controls and procedures for our Company.Procedures

~~Our~~Disclosure ~~management~~controls ~~has~~and ~~evaluated~~procedures, ~~the~~as ~~effectiveness~~such ofterm ~~our~~is defined in ~~disclosure~~Rule 13a-15(e) of the Exchange Act, are controls and other procedures asthat ofare designed ~~March~~to ~~31,~~ensure ~~2009~~that ~~(under~~information ~~the~~required ~~supervision and~~to ~~with~~be ~~the~~disclosed ~~participation~~by ofour ~~the~~Company ~~Chief~~is recorded, ~~Executive~~processed, ~~Officer~~summarized and reported, within the ~~Chief Financial~~time ~~Officer),~~periods ~~pursuant~~specified in tothe ~~Rule~~rules ~~13a–15(b)~~and ~~promulgated~~forms ~~under~~of the Securities and Exchange ~~Act~~Commission. ofDisclosure controls ~~1934,~~and asprocedures ~~amended.~~include, Aswithout ~~part~~limitation, ofcontrols ~~such~~and ~~evaluation,~~procedures ~~management~~designed ~~considered~~to ~~the~~ensure ~~matters~~that ~~discussed~~information ~~below~~required ~~relating~~ to ~~internal~~be ~~control over~~disclosed ~~financial~~by ~~reporting,~~our ~~however,~~Company ~~our~~in the ~~filings~~reports ~~have~~that ~~been~~it ~~delinquent~~files ~~during~~or ~~the period~~submits ~~from~~under ~~March~~the ~~31,~~Exchange ~~2009~~Act tois ~~date~~accumulated asand communicated ~~the~~to our Company’s ~~did~~management, ~~not~~including ~~have~~our ~~the~~Chief ~~financial~~Executive Officer ~~resources~~and toour ~~fund~~Chief ~~the~~Financial ~~costs~~Officer, ~~involved~~as inappropriate ~~completing~~to ~~these~~allow ~~filings.~~timely ~~Based on this~~decisions ~~evaluation,~~regarding ~~our~~required ~~Company’s~~disclosure. Our Chief Executive Officer, Rudi Azali, and our Chief Financial Officer ~~have~~, ~~concluded~~Michael ~~that~~Kinley, ~~our~~are ~~Company’s~~responsible for establishing and maintaining disclosure controls and procedures ~~were effective~~for asour ~~of March 31, 2009~~Company.

~~Internal~~Our ~~Control~~management has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2010 (under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer), pursuant to Rule 13a–15(b) promulgated under the Securities Exchange Act of 1934, as amended. As part of such evaluation, management considered the matters discussed below relating to internal control over financial reporting, however, our filings have been delinquent during the period from March 31, 2010 to date as the Company did not have the financial resources to fund the costs involved in completing these filings. Based on this evaluation, our Company’s Chief Executive Officer and Chief Financial ~~Reporting~~Officer have concluded that our Company’s disclosure controls and procedures were effective as of March 31, 2010.

~~The~~Internal ~~term~~Control ~~“internal control~~ over ~~financial~~Financial ~~reporting”~~Reporting is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

~~pertain~~The toterm “internal control over financial reporting” is defined as a process designed by, or under the ~~maintenance~~supervision of, ~~records~~the ~~that~~registrant’s principal inexecutive ~~reasonable~~and ~~detail~~principal ~~accurately~~financial officers, or persons performing similar functions, and ~~fairly~~effected ~~reflect~~by the ~~transactions~~registrant’s board of directors, management and ~~dispositions~~other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the ~~assets~~preparation of ~~the~~financial statements ~~registrant;~~for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

~~provide~~pertain ~~reasonable assurance that transactions are recorded as necessary~~ to ~~permit~~ ~~preparation~~the maintenance of ~~financial~~records ~~statements~~that in ~~accordance~~reasonable ~~with~~detail ~~generally~~accurately ~~accepted~~and ~~accounting~~fairly ~~principles,~~reflect ~~and~~the ~~that~~transactions ~~receipts~~ and ~~expenditures~~dispositions of the ~~registrant~~ ~~are~~assets ~~being made only in accordance with authorizations~~ of ~~management~~the ~~and directors of the~~ registrant; ~~and~~

2927

provide reasonable assurance ~~regarding~~that ~~prevention~~transactions orare ~~timely~~recorded ~~detection~~as necessary to permit preparation of financial statements in accordance with generally ~~unauthorized~~accepted ~~acquisition~~accounting principles, ~~use~~and orthat ~~disposition~~receipts and expenditures of the registrant’s ~~assets~~are ~~that could~~being ~~have~~made aonly ~~material~~in ~~effect~~accordance onwith authorizations of management and directors of the ~~financial~~registrant; ~~statements.~~and
~~Management~~provide ~~Report~~reasonable onassurance ~~Assessment~~regarding prevention or timely detection of unauthorized ~~Internal~~acquisition, ~~Control~~use ~~Over~~or disposition of the registrant’s assets that ~~Financial~~ could ~~Reporting~~have a material effect on the financial statements.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a–15(f) Securities Exchange Act of 1934, as amended. Management ~~(under~~ ~~the~~Report ~~supervision~~on ~~and~~Assessment ~~with the participation~~ of the Chief Executive Officer and the Chief Financial Officer), assessed the effectiveness of our internal control over financial reporting as of March 31, 2009. In making this assessment, management used the framework set forth in Internal Control –Over ~~Integrated~~Financial ~~Framework~~Reporting issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under this framework, our management concluded that our internal control was effective as of March 31, 2009.

~~This~~Our ~~annual~~management ~~report~~is ~~does~~responsible ~~not~~for ~~include~~establishing anand ~~attestation~~maintaining adequate ~~report~~internal control over financial reporting as such term is defined in Rule 13a–15(f) Securities Exchange Act of 1934, as amended. Management ~~our~~(under ~~Company’s~~the ~~registered~~supervision ~~public~~and ~~accounting~~with ~~firm~~the ~~regarding~~participation ~~internal~~of the Chief Executive Officer and the Chief Financial Officer), assessed the effectiveness of our internal control over financial reporting as of March 31, 2010. ~~Our~~In making this assessment, management’s ~~report~~used ~~was~~the ~~not~~framework ~~subject~~set toforth ~~attestation~~in byInternal Control – ~~our~~Integrated ~~Company’s~~Framework ~~registered~~issued ~~public~~by ~~accounting~~the ~~firm~~Committee ~~pursuant~~of toSponsoring ~~rules~~Organizations of the ~~Securities~~Treadway ~~and~~Commission, ~~Exchange~~however, ~~Commission~~our ~~that~~filings ~~permit~~have been delinquent during the ~~company~~period from March 31, 2010 to ~~provide~~date ~~only~~as the Company did not have the financial resources ~~management’s~~to ~~report~~fund the costs involved in completing these filings. Based on our evaluation under this ~~annual~~framework, ~~report~~our management concluded that our internal control was not effective as of March 31, 2010.

~~Inherent~~This ~~Limitation~~annual report does not include an attestation report of our ~~the~~Company’s ~~Effectiveness~~registered public accounting firm regarding internal control over financial reporting. Our management’s report was not subject to attestation by our Company’s registered public accounting firm pursuant to rules of ~~Internal~~the Securities ~~Control~~and Exchange Commission that permit the company to provide only the management’s report in this annual report.

~~Our~~Inherent ~~internal~~Limitation ~~control system is designed to provide reasonable assurance to our management and board~~ of ~~directors regarding~~ the ~~preparation~~Effectiveness ~~and fair presentation~~ of ~~published~~Internal ~~financial statements. All internal control~~Control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Further, because of changes in conditions, the effectiveness of internal control may vary over time.

~~Changes~~Our internal control system is designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Further, because of changes in ~~Internal~~conditions, ~~Control~~the ~~Over~~effectiveness ~~Financial~~of ~~Reporting~~internal control may vary over time.

~~During~~Changes ~~the year ended March 31, 2009, there was no change~~ in ~~our~~ ~~internal~~Internal ~~control~~Control ~~over~~Over ~~financial~~Financial ~~reporting or in other factors that has~~Reporting ~~materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.~~

~~ITEM~~During ~~9A(T). CONTROLS~~the ~~AND~~year ended March 31, 2010, there was no change in ~~PROCEDURES~~our internal control over financial reporting or in other factors that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

~~Not~~ITEM ~~applicable~~9A(T). CONTROLS AND PROCEDURES

Not applicable.

ITEM 9B. OTHER INFORMATION

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE ~~Directors and Executive Officers~~

~~The~~Directors ~~following table~~ and ~~information~~Executive ~~that~~Officers ~~follows sets forth the names and positions of our directors and executive officers:~~

30The following table and information that follows sets forth the names and positions of our directors and executive officers:

Name and Municipality of Residence	Age	Office	Director Since	Date Ceased as Director/Officer
Name and Municipality				Date Ceased as
of Residence	Age	Office	Director Since	Director/Officer
Rudijanto Azali(1)	41	President, Chief Executive Officer and Director	July 8, 2011	Not applicable
Supriadi(2) Surabaya, East Java Indonesia	46	Director	June 6, 2011	Not applicable
Michael Kinley(4) Halifax, NS, Canada	61	Chief Financial Officer	December 2, 2003	Note 4
Richard Tay(3) Beijing, China	56	President, Chief Executive Officer and Director as at March 31, 2008	February 4, 2007	July 15, 2011
Richard Tay(3)Beijing, China	56	President, Chief Executive Officer and Director as at March 31, 2008	February 4, 2007	July 15, 2011

Notes

(1)	Mr. Azali was appointed as our President and a Director on July 8, 2011.
(2)	Mr. Supriadi was appointed as a Director on June 6, 2011.
(3)	Mr. Tay replaced Mr. Kinley as our President on February 4, 2007. Mr. Tay resigned from all positions with our Company on July 15, 2011.
(4)	Mr. Kinley was first appointed as our President and a director on December 2, 2003, and from June 30, 2004 until February 4, 2007, served as the sole director and officer. Mr. Kinley continued to serve as our Chief Financial Officer and a director from February 4, 2007 until his resignation from all positions with our Company on January 30, 2009. He was re-appointed as Chief Financial Officer on July 15, 2011.

The following is a description of the business background of the persons named in the immediately preceding table:

Rudijanto Azali – Mr. Azali was appointed as our President and Chief Executive Officer and a Director on July 8, 2011. He graduated from Oregon State University with a BSc in computer science in 1996 and has since worked the NEC Submarine Division (“NEC”) as a bid manager, Manager – Indonesia, and most recently as an independent consultant to NEC as President of PT Dwi Bumi Eka Mandiri Jakarta Indonesia, a company controlled by Mr. Azali. [Mr. Azali has not previously served as a director of a reporting company.]

Supriadi – Mr. Supriadi was appointed a Director on June 6, 2011. He graduated from the University of Widya Mandala, Surabaya, Indonesia in 1988. He has held positions in the chemical industry in Indonesia (manufacturing of unsaturated polyester resin and polymer emulsion), as well as home construction. [Mr. Supriadi has not previously served as a director of a reporting company.]

Thai Seng (Richard) Tay – Mr. Tay was our President and Chief Executive Officer, and also a member of our Board of Directors, during the year ended March 31, 2008. He has engineering and transportation diplomas from institutions in Malaysia, Singapore and the United Kingdom, as well as a Bachelor of Business (Finance) from RMIT University in Australia and a MBA from the University of Dubuque, Iowa, USA. Mr. Tay has taken post-graduate courses in ~~business~~ business strategy at INSEAD and is multilingual.

~~After~~29 an almost thirty-year career throughout Asia in various capacities with DaimlerChryslter and its predecessor Daimler-Benz AG, culminating in his roles as Vice President, Project Leader for Chrysler Passenger Car Sales and Distribution Network for the People’s Republic of China, Mr. Tay is now an independent businessman and entrepreneur based in Beijing.

~~Mr.~~After ~~Tay~~an ~~had~~almost ~~not~~thirty-year ~~previously~~career ~~served~~throughout Asia in various capacities with Daimler Chrysler and its predecessor Daimler-Benz AG, culminating in his roles as aVice ~~director~~President, ofProject aLeader ~~reporting~~for Chrysler ~~company~~Passenger Car Sales and Distribution Network for the People’s Republic of China, Mr. Tay is now an independent businessman and entrepreneur based in Beijing.

31Mr. Tay had not previously served as a director of a reporting company.

Michael W. Kinley – Mr. Kinley was first appointed as our President and a director on December 2, 2003, and from June 30, 2004 until February 4, 2007, served as the sole director and officer. Mr. Kinley continued to serve as our Chief Financial Officer and a director from February 4, 2007 until his resignation from all positions with our Company on January 30, 2009. He was re-appointed as Chief Financial Officer on July 15, 2011. He received his Chartered Accountant designation in 1973, was admitted to the Chartered Accountants of Nova Scotia in 1980 and the Chartered Accountants of British Columbia in 2003 and was a partner with a large national accounting firm.

Mr. Kinley is currently the President of Winslow Associates Management & Communications Inc., a private business and financial management consulting firm, a position he has held since March 1993. Mr. Kinley has extensive public company experience, including his roles with the following reporting companies: President, CEO, CFO and Director of GFK Resources Inc. (formerly Noise Media Inc.) since February 1997; Director of Indico Resources Ltd. since January 2005 (resigned as CFO in October 2010); CFO of Wealth Minerals Ltd. from July 2005 to October 2010; CFO of Cardero Resources Corp. since August 2005; CFO of International Tower Hill Mines Ltd. from September 2006 to August 2011; CFO of Trevali Resources Corp. from May 2008 to May 31, 2011; CFO of Dorato Resources Inc. from June 2009 to July 2011and CFO of Corvus Gold Inc. from August 2010 to May 31, 2011.

Term of Office

All of our directors hold office until the next annual general meeting of the shareholders or until their successors are elected and qualified. Our officers are appointed by our board of directors and hold office until their earlier death, retirement, resignation or removal.

Significant Employees

There are no significant employees other than our executive officers.

Family Relationships

There are currently no family relationships between any of the members of our board of directors or our executive officers.

Board Independence

The board of directors determined that none of the directors is independent as that term is generally understood.

~~Committees~~30 ~~of the Board of Directors~~

~~Audit~~Committees ~~Committee~~of the Board of Directors

~~Our~~Audit ~~Company~~Committee currently does not have an audit committee. Our board of directors is currently comprised of only two members and believes that the functions of the audit committee can be adequately performed by the board of directors. We hope to recruit a sufficient number of independent directors on our board and establish various board committees in the 2012 fiscal year. There can be no certainty we will be successful in recruiting additional directors so that conventional corporate governance standards can be met.

32Our Company currently does not have an audit committee. Our board of directors is currently comprised of only two members and believes that the functions of the audit committee can be adequately performed by the board of directors. We hope to recruit a sufficient number of independent directors on our board and establish various board committees in the 2012 fiscal year. There can be no certainty we will be successful in recruiting additional directors so that conventional corporate governance standards can be met.

Involvement in Certain Legal Proceedings

Except as disclosed in this annual report, during the past ten years none of the following events have occurred with respect to any of our directors or executive officers:

1.	A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
2.	Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
3.	Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
	i.	Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
	ii.	Engaging in any type of business practice; or
	iii.	Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

4. Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (3)(i) above, or to be associated with persons engaged in any such activity; 5. Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; 6. Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; 7. Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

	4.	Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (3)(i) above, or to be associated with persons engaged in any such activity;

	5.	Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

i.31 ~~Any Federal or State securities or commodities law or regulation; or~~

6.	Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

7.	Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

	i.	Any Federal or State securities or commodities law or regulation; or

	ii.	Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

	iii.	Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

8.	Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

~~ii.~~There ~~Any~~are ~~law~~currently orno ~~regulation~~legal ~~respecting~~proceedings ~~financial institutions or insurance companies including, but not limited~~ to, awhich ~~temporary~~any ~~or permanent injunction, order~~ of ~~disgorgement~~our directors or ~~restitution,~~officers ~~civil~~is ~~money~~a ~~penalty~~party oradverse ~~temporary~~to orus ~~permanent cease-and-desist order,~~ or ~~removal~~in orwhich ~~prohibition~~any ~~order;~~of orour ~~iii. Any law~~ directors or ~~regulation~~officers ~~prohibiting~~has ~~mail~~a ormaterial ~~wire~~interest ~~fraud~~adverse orto ~~fraud in connection with any business entity; or~~us.

8.Compliance ~~Such~~with ~~person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in~~ Section ~~3(a)(26)~~16 of the ~~Exchange~~Securities ~~Act), any registered entity (as defined in Section 1(a)(29) of the Commodity~~ Exchange Act~~), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.~~

~~There~~Section ~~are~~16(a) ~~currently~~of nothe ~~legal~~Securities ~~proceedings~~Exchange toAct ~~which any~~ of ~~our~~1934 ~~directors~~requires orthe executive officers isand adirectors, ~~party~~and ~~adverse~~persons towho usbeneficially orown more inthan ~~which~~ten ~~any~~percent of our ~~directors~~equity securities, to file reports of ownership and orchanges ~~officers~~in ~~has~~ownership awith ~~material~~the ~~interest~~Securities ~~adverse~~and toExchange usCommission. During the fiscal year ended March 31, 2009, except as disclosed below, these filings were made on a timely basis:

Compliance with Section 16 of the Securities Exchange Act

Reporting Person	No. of Late Reports During the Fiscal Year Ended March 31, 2010	No. of Late Reports During the Year Ended March 31, 2009
Richard Tay	Nil	Nil
Michael Kinley	Nil	Nil

~~Section~~Code ~~16(a)~~ of ~~the~~Ethics Securities Exchange Act of 1934 requires the executive officers and directors, and persons who beneficially own more than ten percent of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. During the fiscal year ended March 31, 2009, except as disclosed below, these filings were made on a timely basis:

Reporting Person	No. of Late Reports During the Fiscal Year Ended March 31, 2009	No. of Late Reports During the Year Ended March 31, 2008
Richard Tay	Nil	Nil
Michael Kinley	Nil	Nil

Effective July 22, 2011 we adopted a Code of Ethics that applies to all of our directors and officers. This code summarizes the legal, ethical and regulatory standards that we must follow and is a reminder to our directors and officers of the seriousness of that commitment. Compliance with this code and high standards of business conduct is mandatory for each of our directors and officers. As adopted, our Code of Ethics sets forth written standards that are designed to deter wrongdoing and to promote:

~~Code~~1) honest and ethical conduct, including the ethical handling of ~~Ethics~~actual or apparent conflicts of interest between personal and professional relationships;

~~Effective~~32 July 22, 2011 we adopted a Code of Ethics that applies to all of our directors and officers. This code summarizes the legal, ethical and regulatory standards that we must follow and is a reminder to our directors and officers of the seriousness of that commitment. Compliance with this code and high standards of business conduct is mandatory for each of our directors and officers. As adopted, our Code of Ethics sets forth written standards that are designed to deter wrongdoing and to promote:

~~1) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;~~ 2) compliance with applicable governmental laws, rules and regulations; 3) the prompt internal reporting of violations of the Code of Ethics to an appropriate person or persons identified in the Code of Ethics; and 4) accountability for adherence to the Code of Ethics.

We will provide a copy of the Code of Ethics to any person without charge, upon request. Requests can be sent to: WorldStar Energy, Corp., Room 803, 8/F, Jubilee Centre, No. 42 Gloucester Road, Wanchai, Hong Kong, China.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

Particulars of compensation awarded to, earned by or paid during the last two fiscal periods to:

(a)

the person(s) serving as our Company’s principal executive officer during the year ended March 31, 2009;

(individually a “Named Executive Officer” and collectively the “Named Executive Officers”) are set out in the summary compensation table below.

Name and Principal Position During Year Ended March 31, 2008	Year or Period	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)(1)	Non– Equity Incentive Plan Compen– sation ($)	Non– qualified Deferred Compen– sation Earnings ($)	All Other Compen– sation Compen– sation ($)	Total ($)
Richard Tay(2) President and CEO	2010 2009 2008	- - -	- - -	- - -	- - -	- - -	- - -	- - -	- - -
Michael Kinley(3) CFO and Former President and CEO	2010 2009 2008 2007	- – –	- – –	- – –	- – –	- – –	- – –	- - 60,000(4) –	- - 60,000(5) –

Notes:

(1)	We have not granted options to acquire shares of our common stock or made any stock awards to any of our directors or officers.
(2)	Mr. Tay was appointed President and CEO effective February 4, 2007. He resigned from all positions with our Company on July 15, 2011.
(3)	Mr. Kinley was the sole director and officer of the Company from June 30, 2004 to February 4, 2007. Mr. Kinley was replaced by Mr. Tay as President and CEO effective February 4, 2007. He resigned from all positions with our Company on January 30, 2009, but was re-appointed as Chief Financial Officer on July 15, 2011.
(4)	Represents the dollar amount of the professional services accrued and unpaid owing to Winslow Associates Management & Communications Inc., a company of which Michael Kinley is President.

~~Outstanding~~33 ~~Equity Awards as of March 31, 2009~~

(4)	Represents the dollar amount of the professional services accrued and unpaid owing to Winslow Associates Management & Communications Inc., a company of which Michael Kinley is President.

Outstanding Equity Awards as of March 31, 2010

As of the date of our most recently completed fiscal year, we did not have any outstanding equity awards.

Equity Compensation Plans

Compensation of Directors

Except as outlined under Summary of Compensation Table above, there was no other compensation paid to directors of the Company for the year ended March 31, ~~2009~~2010.

Employment Contracts and Termination of Employment and Change–In–Control Arrangements

We currently have no employment or consulting agreements with our directors and officers.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information as of September 620, 2011 regarding the beneficial ownership of our common stock by:

each person who is known by us to beneficially own more than 5% of our shares of common stock;
each named executive officer, each director and all of our directors and executive officers as a group; and
each person who, as of March 31, ~~2009~~2010, was a named executive officer or a director, and all persons who were directors or executive officers as of March 31, ~~2009~~2010, as a group.

The number of shares beneficially owned and the percentage of shares beneficially owned are based on 57,761,834 shares of common stock outstanding as of September 620, 2011.

		~~As of September 6, 2011~~	As of September 6, 2011
~~Name and Address of Beneficial Owner(1)~~	Name and Address of Beneficial Owner(1)	~~Shares~~	Shares	~~Percent~~	Percent
~~Named Executive Officers and Directors(2)~~	Named Executive Officers and Directors(2)
Rudijanto Azali(3)
	Rudijanto Azali(3) President, CEO and Director		Nil		Nil
President, CEO and Director		Nil		Nil
	Supriadi(4) Director		Nil		Nil
Supriadi(4)
	Michael Kinley CFO		500,000		0.0086%
Director		Nil		Nil
	Directors and Executive Officers as a Group (Three Persons)		500,000		0.0086%
Michael Kinley
CFO		500,000		0.0086%
Directors and Executive Officers as a Group (Three Persons)		500,000		0.0086%
Richard Tay(5)
Former President, CEO and Director		30,000,000	(4)	51.93%
Michael Kinley(6)
Former CFO and Director		500,000		0.0086%
Directors and Executive Officers as at March 31, 2008, as a Group (Two Persons)		30,500,000		52.8%
Major Shareholders (Greater than 5%)
Jewel Star		30,000,000	(7)	51.93%

~~Notes~~34

(1) Under Rule 13d–3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of common shares actually outstanding on September 6, 2011.

	As of September 6, 2011
Name and Address of Beneficial Owner⁽¹⁾	Shares		Percent

Richard Tay⁽⁵⁾ Former President, CEO and Director	30,000,000	⁽⁴⁾	51.93%

Michael Kinley⁽⁶⁾ Former CFO and Director	500,000		0.0086%

*Directors and Executive Officers as at March 31, 2008, as a Group* *(Two Persons)*	30,500,000		52.8%

*Major Shareholders (Greater than 5%)*

Jewel Star	30,000,000	⁽⁷⁾	51.93%

36Notes

	(2)	The address of the executive officers and directors is c/o WorldStar Energy, Corp., Rm 803, 8/F, Jubilee Centre, No. 42 Gloucester Road, Wanchai, Hong Kong, China.
(1)	Under Rule 13d–3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of common shares actually outstanding on September 6, 2011.
	(3)	Mr. Azali was appointed as President, Chief Executive Officer and a Director on July 8, 2011. Accordingly, he is not, by definition, a Named Executive Officer as of the year ended March 31, 2011.
(2)	The address of the executive officers and directors is c/o WorldStar Energy, Corp., Rm 803, 8/F, Jubilee Centre, No. 42 Gloucester Road, Wanchai, Hong Kong, China.
	(4)	Mr. Supriadi was appointed as a Director on June 6, 2011.
(3)	Mr. Azali was appointed as President, Chief Executive Officer and a Director on July 8, 2011. Accordingly, he is not, by definition, a Named Executive Officer as of the year ended March 31, 2011.
	(5)	Mr. Tay was appointed Chief Executive Officer and director on February 4, 2007. He resigned from all positions with our Company on July 15, 2011.
(4)	Mr. Supriadi was appointed as a Director on June 6, 2011.
	(6)	Mr. Kinley resigned from all positions with our Company on January 30, 2009, but was re-appointed as Chief Financial Officer on July 15, 2011 .
(5)	Mr. Tay was appointed Chief Executive Officer and director on February 4, 2007. He resigned from all positions with our Company on July 15, 2011.
	(7)	These shares are held by Jewel Star of which Mr. Tay is the sole director and shareholder. Accordingly, Mr. Tay may be deemed to be the beneficial owner of these shares.
(6)	Mr. Kinley resigned from all positions with our Company on January 30, 2009, but was re-appointed as Chief Financial Officer on July 15, 2011 .
(7)	These shares are held by Jewel Star of which Mr. Tay is the sole director and shareholder. Accordingly, Mr. Tay may be deemed to be the beneficial owner of these shares.

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

Except as described below, none of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:

any of our directors or officers;
any person proposed as a nominee for election as a director;
any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock;
any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the above persons.

~~Michael~~35 ~~Kinley~~

~~On December 21, 2006, we arranged to settle $179,705 of indebtedness to a company controlled by~~ Michael Kinley, at that time our sole director and officer and our current CFO and a director, for the issuance of 500,000 shares in our capital stock. These shares, which are restricted stock, were issued to Mr. Kinley in connection with the closing of the Acquisition.

~~Jewel~~On ~~Star~~December 21, 2006, we arranged to settle $179,705 of indebtedness to a company controlled by Michael Kinley, at that time our sole director and officer and our current CFO and a director, for the issuance of 500,000 common shares in our capital stock. These shares, which are restricted stock, were issued to Mr. Kinley in connection with the closing of the Acquisition.

~~Upon closing of the Acquisition, we issued to~~ Jewel Star 30 million shares of our common stock pursuant to the Share Purchase Agreement. These shares were issued by us in consideration for the transfer to us of all the issued and outstanding shares of National Base, through which we acquired the Bulgan Licenses. Jewel Star is a company controlled by Richard Tay, our President, CEO and director. Richard Tay was appointed as our President, CEO and director in anticipation of signing of the Share Purchase Agreement and completion of the Acquisition. Richard Tay and Jewel Star were at arms' length to us when the terms of the Acquisition were negotiated.

~~Where~~Upon ~~You~~closing ~~Can~~of ~~Find~~the ~~More~~Acquisition, ~~Information~~we issued to Jewel Star 30 million shares of our common stock pursuant to the Share Purchase Agreement. These shares were issued by us in consideration for the transfer to us of all the issued and outstanding shares of National Base, through which we acquired the Bulgan Licenses. Jewel Star is a company controlled by Richard Tay, our President, CEO and director. Richard Tay was appointed as our President, CEO and director in anticipation of signing of the Share Purchase Agreement and completion of the Acquisition. Richard Tay and Jewel Star were at arms' length to us when the terms of the Acquisition were negotiated.

~~Statements~~Where ~~contained~~You inCan ~~this~~Find ~~annual~~More ~~report~~Information as to the contents of any contract, agreement or other document referred to include those terms of such documents that we believe are material. Whenever a reference is made in this annual report to any contract or other document of ours, you should refer to the exhibits that are a part of the annual report for a copy of the contract or document.

37Statements contained in this annual report as to the contents of any contract, agreement or other document referred to include those terms of such documents that we believe are material. Whenever a reference is made in this annual report to any contract or other document of ours, you should refer to the exhibits that are a part of the annual report for a copy of the contract or document.

You may read and copy all or any portion of the annual report or any other information that WorldStar Energy, Corp. files at the SEC~~’~~’s public reference room at One Station Place, 100 F Street, NE, Washington, DC 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1~~–~~–800~~–~~–SEC~~–~~–0330 for further information on the operation of the public reference room. Our SEC filings, including the annual report, are also available to you on the SEC~~’~~’s website at www.sec.gov.

Glossary of Technical Terms

SEC Industry Guide 7 Definitions

reserve The term “reserve” refers to that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Reserves must be supported by a feasibility study done to bankable standards that demonstrates the economic extraction. (“Bankable standards” implies that the confidence attached to the costs and achievements developed in the study is sufficient for the project to be eligible for external debt financing.) A reserve includes adjustments to the in–situ tons and grade to include diluting materials and allowances for losses that might occur when the material is mined. proven reserve The term “proven reserve” refers to reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape depth and mineral content of reserves are well–established. mineralized material The term “mineralized material” refers to material that is not included in the reserve as it does not meet all of the criteria for adequate demonstration for economic or legal extraction. exploration stage An “exploration stage” prospect is one which is not in either the development or production stage. production stage A “production stage” project is actively engaged in the process of extraction and beneficiation of mineral reserves to produce a marketable metal or mineral product.

mineralized material	The term “mineralized material” refers to material that is not included in the reserve as it does not meet all of the criteria for adequate demonstration for economic or legal extraction.

exploration stage	An “exploration stage” prospect is one which is not in either the development or production stage.

production stage	A “production stage” project is actively engaged in the process of extraction and beneficiation of mineral reserves to produce a marketable metal or mineral product.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

We engaged Smythe Ratcliffe LLP as our principal independent accountant effective February 23, 2007. In connection with this appointment, Telford Sadovnick PLLC ("TS") resigned as our principal independent registered public accounting firm, effective February 21, 2007. We made this change because TS's Chinese affiliate firm was not registered with the Public Company Accounting Oversight Board, and accordingly TS was not able to provide the audit services for National Base and its subsidiary companies required by the SEC to be included in this Current Report and future filings.

InWe ~~June~~have ~~2011,~~not weretained ~~appointed~~the services of any other independent auditors. Smythe Ratcliffe LLP toperformed ~~serve~~the asservices ~~our~~listed below and the fees ~~independent~~listed ~~auditors~~below were paid or accrued for the fiscal years ended March 31, ~~2009~~2010 and ~~2008. We have not~~ ~~retained~~2009: ~~the services of any other independent auditors.~~

Smythe Ratcliffe LLP performed the services listed below and the fees listed below were paid or accrued for the fiscal years ended March 31, 2009 and 2008:

Audit Fees

2009	2008
2010	2009
None	~~$32,516~~None

Audit Related Fees

2009	2008
2010	2009
None	None

Audit Fees, of which 100% thereof were approved by the Company’s board of directors, consist of fees billed for professional services rendered for the audits of our financial statements, reviews of interim financial statements included in quarterly reports, services performed in connection with filings with the Securities and Exchange Commission and related comfort letters and other services that are normally provided by Smythe Ratcliffe LLPin connection with statutory and regulatory filings or engagements.

Tax Fees

2009	2008
2010	2009
None	None

Tax Fees consist of fees billed for professional services for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and local tax compliance and consultation in connection with various transactions and acquisitions.

All Other Fees

2009	2008
2010	2009
None	None

Audit Committee Pre–Approval of Audit and Permissible Non–Audit Services of Independent Auditors

Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before an independent registered public accounting firm is engaged by us to render any auditing or permitted non–audit related service, the engagement be:

approved by our audit committee; or
entered into pursuant to pre–approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee’s responsibilities to management.

Our Company currently does not have an audit committee. Our board of directors is currently comprised of only two members and believes that the functions of the audit committee can be adequately performed by the board of directors. Our board of directors has assumed responsibility for the pre–approval of audit and permitted non–audit services to be performed by our Company’s independent auditor. The board of directors will, on an annual basis, consider and, if appropriate, approve the provision of audit and non–audit services by Smythe Ratcliffe LLP. Thereafter, the board of directors will, as necessary, consider and, if appropriate, approve the provision of additional audit and non–audit services by Smythe Ratcliffe LLP which are not encompassed by the board of directors’ annual pre–approval and are not prohibited by law. The board of directors has delegated to the chair of the board of directors the authority to pre–approve, on a case–by–case basis, non–audit services to be performed by Smythe Ratcliffe LLP.

PART IV

ITEM 15. EXHIBITS

Exhibit
Number	Description
Plan of Acquisition, Reorganization, Arrangement, Liquidation, or Succession
2.1	Post Transaction Schematic of Corporate Structure(1)
Articles of Incorporation and By–laws
3.1	Certificate of Incorporation of WorldStar Energy, Corp.(2)
3.2	Bylaws of WorldStar Energy, Corp.(2)
Material Contracts
10.1	Share Purchase Agreement among WorldStar, Jewel Star Group Limited and National Base Investment Limited, dated February 12, 2007(1)
10.2	Form of Subscription Agreement for private placement pursuant to Regulation S(1)
10.3	Finder’s Fee Agreement for private placement pursuant to Regulation S(1)
10.4	Debt Settlement Agreement with Winslow Associates Management & Communications Inc.(1)
Consents of Experts and Counsel
23.1	Consent of Smythe Ratcliffe LLP(3)
Certifications
31.1	Certification of Chief Executive Officer pursuant to Rule 13a–14 and Rule 15d– 14(a), promulgated under the Securities and Exchange Act of 1934, as amended(3)
31.2	Certification of Chief Financial Officer pursuant to Rule 13a–14 and Rule 15d– 14(a), promulgated under the Securities and Exchange Act of 1934, as amended(3)
32.1	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(3)

10.3	Finder’s Fee Agreement for private placement pursuant to Regulation S⁽¹⁾

10.4	Debt Settlement Agreement with Winslow Associates Management & Communications Inc.⁽¹⁾

Consents of Experts and Counsel

23.1	Consent of Smythe Ratcliffe LLP⁽³⁾

Certifications

31.1	Certification of Chief Executive Officer pursuant to Rule 13a–14 and Rule 15d– 14(a), promulgated under the Securities and Exchange Act of 1934, as amended⁽³⁾

31.2	Certification of Chief Financial Officer pursuant to Rule 13a–14 and Rule 15d– 14(a), promulgated under the Securities and Exchange Act of 1934, as amended⁽³⁾

32.1	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⁽³⁾

Notes

(1) Incorporated by reference from our Current Report on Form 8K filed with the SEC on August 24, 2007.

(1)	Incorporated by reference from our Current Report on Form 8K filed with the SEC on August 24, 2007.

(2)	Incorporated by reference from our Registration Statement on Form SB–2 filed with the SEC on September 3, 1999.

(3)	Filed herewith.

4039

(2)	Incorporated by reference from our Registration Statement on Form SB–2 filed with the SEC on September 3, 1999.
(3)	Filed herewith.

FINANCIAL STATEMENTS FILED AS PART OF THIS ANNUAL REPORT
ON FORM 10–K

Index

Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm	F–1
Consolidated Balance Sheets as of March 31, 2009 and 2008	F–2
Consolidated Balance Sheets as of March 31, 2010 and 2009	F–2
Consolidated Statements of Operations for the Years Ended March 31, 2009 and 2008	F–3
Consolidated Statements of Operations for the Years Ended March 31, 2010 and 2009	F–3
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended March 31, 2009 and 2008	F–4
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended March 31, 2010 and 2009	F–4
Consolidated Statements of Cash Flows for the Years Ended March 31, 2009 and 2008	F–5
Consolidated Statements of Cash Flows for the Years Ended March 31, 2010 and 2009	F–5
Notes to the Consolidated Financial Statements	F–6 – F–20
Notes to the Consolidated Financial Statements for the Years Ended March 31, 2010 and 2009	F–6 – F–21

4240

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of WorldStar Energy, Corp.

We have audited the accompanying consolidated balance sheets of ~~WoldStar~~WorldStar Energy, Corp. as of March 31, ~~2009~~2010 and ~~2008~~2009, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for each of the years ended March 31, ~~2009~~ ~~and~~2010 ~~2008~~ and ~~the consolidated statements of changes in stockholders’ equity for the years ended March 31~~2009, ~~2009~~ and ~~2008 and~~ the cumulative period from inception (on November 28, 2006) through March 31, ~~2009~~2010. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated 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 audit 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 audit included consideration of internal control over financial reporting as a basis for designing audit 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. An audit also includes 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, as well as 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 WorldStar Energy, Corp. as of March 31, ~~2009~~2010 and ~~2008~~2009 and the results of their operations and their cash flows for the years ended March 31, ~~2009~~2010 and ~~2008~~2009, and the cumulative period from inception (on November 28, 2006) through March 31, ~~2009~~2010 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As shown in the consolidated financial statements, the Company reported a net loss of $5107,~~100~~746 during the year ended March 31, ~~2009~~2010 and a net loss of $105,~~217,305~~100 during the ~~year~~ year ended March 31, ~~2008~~2009. In addition, as of March 31, ~~2009~~2010 and ~~2008~~2009, the ~~Company~~ Company reported a deficit in net working capital of $5,~~155~~237,~~904~~894 and $5,155,~~462~~904, respectively~~, and reported net cash provided by (used in) operating activities of $(442) and $49,252 for the years ended March 31, 2009 and 2008, respectively~~. As discussed in note 1 to the consolidated financial statements, the Company’s significant historical operating losses, lack of liquidity, and inability to make the principal and interest payment to its debtors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in note 1. The consolidated ~~financial~~ financial statements do not include any adjustments related to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

As described in note 19, in ~~August~~September 2011, the Company sold ~~its~~ its 100% interest in National Base Investment Limited and has currently acquired an an exclusive sublicense for new technology in construction material.

“Smythe Ratcliffe LLP” (signed)

Chartered Accountants

Vancouver, British Columbia, Canada September 1522, 2011

WORLDSTAR ENERGY, CORP.
CONSOLIDATED BALANCE SHEETS

		At March 31,
		2009			2008
		2010			2009
ASSETS
Current Assets:
Cash and cash equivalents	$	98,~~466~~872		$	9,~~908~~466
Amount due from a director (note 15)		77,257			77,257
Amount due from a director (note 14)		77,257			77,257
Prepaid expenses		81,396			81,396
Prepaid expenses (note 18)		–			81,396
Total Current Assets		~~168~~86,~~119~~129			168,~~561~~119
Property, plant and equipment, net (note 8)		25,756			30,414
Property, plant and equipment, net (notes 8 and 18)		–			25,756
Total Assets	$	~~193~~86,~~875~~129		$	~~198~~193,~~975~~875
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
Current Liabilities:
Accounts payable	$	219,529		$	219,529
Loans from directors (notes 10 and 15)		3,433,571			3,433,571
Loans from directors (notes 9 and 14)		3,433,571			3,433,571
Amount due to related companies (notes 7 and 15)		1,012,738			1,012,738
Amount due to related companies (notes 7 and 14)		1,012,738			1,012,738
Amount due to a director (notes 7 and 15)		624,133			624,133
Amount due to a director (notes 7 and 14)		624,133			624,133
Short-term loans (note 11)		34,052			34,052
Short-term loans (note 10)		34,052			34,052
Total Liabilities		5,324,023			5,324,023
Stockholders’ Equity (Deficiency):
Capital stock (57,761,834 common shares issued (note 12))		57,762			57,762
Capital stock (57,761,834 common shares issued (note 11))		57,762			57,762
Additional paid-in capital		7,119,843			7,119,843
Share issue costs (note 12)		(556,875	)		(556,875	)
Share issue costs		(556,875	)		(556,875	)
Accumulated other comprehensive income		244			244
Deficit accumulated during the development stage		(11,~~751~~858,~~122~~868	)		(11,~~746~~751,~~022~~122	)
Total Stockholders’ Equity (Deficiency)		(5,130,148	)		(5,125,048	)
Total Stockholders’ Deficiency		(5,237,894	)		(5,130,148	)
Total Liabilities and Stockholders’ Equity (Deficiency)	$	193,875		$	198,975
Total Liabilities and Stockholders’ Equity	$	86,129		$	193,875
Nature of Operations and Going Concern (note 1)
Commitment and Contingencies (note 12)
Subsequent events (note 19)

Nature of Operations and Going Concern (note 1) Commitment and Contingencies (note 13) Subsequent events (note 19)

The accompanying notes are an integral part of these consolidated financial statements.

F-2

WORLDSTAR ENERGY, CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS

		Year Ended			Year Ended			Cumulative
		March 31,			March 31,			Total Since
		2009			2008			Inception
		2010			2009			Inception
Operating expenses
Amortization of mineral exploration rights and depreciation of property, plant and equipment	$	4,658		$	1,323,133		$	1,328,054
Depreciation of property, plant and equipment	$	4,658		$	4,658		$	1,332,712
Property exploration and maintenance		–			~~419,836~~–			419,836
General and administrative expenses		~~442~~594			~~1,153,801~~442			1,174,~~263~~857
Loss before other expenses		(5,~~100~~252	)		(25,~~896,770~~100	)		(2,~~922~~927,~~153~~405	)
Other income (expenses):
Write-off of mineral exploration rights		–			~~(7,317,739~~–	)		(7,317,739	)
Finance costs		–			(8,199	)		(9,011	)
Termination of Mongolian project (note 18)		(102,494	)		–			(102,494	)
Other income		–			5,403			5,403
Finance costs		–			–			(9,011	)
Total other expenses		–			(7,320,535	)		(7,321,347	)
Other income		–			–			5,403
Income (loss) before minority interests		(5,100	)		(10,217,305	)		(10,243,500	)
Total other expenses		(102,494	)		–			(7,423,841	)
Loss before minority interests		(107,746	)		(5,100	)		(10,351,246	)
Minority interest in net loss of subsidiaries		–			–			5
Net loss and comprehensive loss	$	(5107,~~100~~746	)	$	(105,~~217,305~~100	)	$	(10,~~243~~351,~~495~~241	)
Loss per basic and diluted share of common stock:
Weighted average number of basic and diluted common shares outstanding		57,761,834			4757,~~754~~761,~~240~~834
Basic and diluted loss per share of common stock	$	(0.00	)	$	(0.2100	)

The accompanying notes are an integral part of these consolidated financial statements.

F-3

WORLDSTAR ENERGY, CORP. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED MARCH 31, ~~2009~~2010 AND ~~2008~~2009

																Deficit
													Accumulated			Accumulated
							Additional						Other			During the			Total
							Paid-in			Share			Comprehensive			Development			Stockholders’
	Capital Stock						Capital			Issue Costs			Income			Stage			Equity
	Shares			Amount
Inception at November 28, 2006 (legal subsidiary National Base Investment Limited (“NB”))	1		$	1		$	–		$	-–		$	–		$	-–		$	1
Loss for the period	–			–			–			–			–			(21,090	)	$	(21,090	)
Balance at March 31, 2007	1			1			–			–			–			(21,090	)		(21,089	)
Capital stock of NB eliminated on reverse acquisition	(1	)		(1	)		–			–			–			1			–
Balance of legal parent WorldStar Energy, Corp. (“legal parent’) stockholders’ equity before reverse acquisition	630,134			630			821,433			–			5,209			(1,834,900	)		(1,007,628	)
Reversal of legal parent’s stockholders’ equity at reverse acquisition	–			(630	)		(821,433	)		–			(5,209	)		827,272			–
Shares issued on acquisition of NB	30,000,000			–			–			–			–			–			–
Facilitation fee for reverse acquisition	2,000,000			2,000			498,000			–			–			(500,000	)		–
Private placement	22,000,000			22,000			5,478,000			(6,875	)		–			–			5,493,125
Shares issued for finders’ fee	2,200,000			2,200			547,800			(550,000	)		–			–			–
Shares issued to settle debt	931,700			932			626,673			–			–			–			627,605
Adjustment due to difference in par value of shares of NB and legal parent	–			30,630			(30,630	)		–			–			–			–
Foreign currency translation	–			–			–			–			244			–			244
Loss for the year	–			–			–			–			–			(10,217,305	)		(10,217,305	)
Balance at March 31, 2008	57,761,834			57,762			7,119,843			(556,875	)		244			(11,746,022	)		(5,125,048	)
Loss for the year	–			–			–			–			–			(5,100	)		(5,100	)
Balance at March 31, 2009	57,761,834		$	57,762		$	7,119,843		$	(556,875	)	$	244		$	(11,751,122	)	$	(5,130,148	)
Loss for the year	–			–			–			–			–			(107,746	)		(107,746	)
Balance at March 31, 2010	57,761,834		$	57,762		$	7,119,843		$	(556,875	)	$	244		$	(11,858,868	)	$	(5,237,894	)

The accompanying notes are an integral part of these consolidated financial statements.

F-4

WORLDSTAR ENERGY, CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS

		Year Ended			Year Ended			Cumulative
		March 31,			March 31,			Total Since
		2009			2008			Inception
		2010			2009			Inception
Cash Flows From Operating Activities:
Net loss	$	(5107,~~100~~746	)	$	(105,~~217,305~~100	)	$	(10,~~243~~351,~~495~~241	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and depreciation		4,658			1,323,133			1,328,054
Depreciation		4,658			4,658			1,332,712
Termination of Mongolian project		102,494			–			102,494
Interest		–			–			812
Minority interest in net loss of subsidiaries		–			–			(5	)
Write-off of mineral exploration rights		–			~~7,317,739~~–			7,317,739
Changes in operating assets and liabilities
Amount due from a minority stockholder		–			~~188,984~~–			(110,976	)
Prepaid expenses		–			~~(77,772~~–	)		(77,772	)
Other payables and accrued expenses		–			~~20,298~~–			(52,802	)
Amount due to related companies		–			~~869,385~~–			869,385
Amount due to a minority stockholder		–			~~624,790~~–			624,790
Net Cash Flows Provided by (Used in) Operating Activities		(442	)		49,252			(344,270	)
Net Cash Flows Used in Operating Activities		(594	)		(442	)		(344,864	)
Cash Flows From Investing Activities:
Purchase of equipment		–			~~(7,864~~–	)		(7,864	)
Cash inflow on reverse take-over		–			~~24,346~~–			24,346
Cash inflow from BGI and BGHK		–			–			424,120
Cash advance to BGHK before acquisition on
Cash advance to BGHK before acquisition on February 27, 2007		–			–			(3,714,286	)
February 27, 2007		–			–			(3,714,286	)
Net Cash Flows Used in Investing Activities		–			–			(3,273,684	)
Net Cash Flows Provided by (Used in) Investing Activities		–			16,482			(3,273,684	)
Cash Flows From Financing Activities:
Amount advanced from ultimate holding company		–			–			3,540,000
Amount advanced from related parties		–			~~15,873~~–			15,873
Amount advanced from a former stockholder		–			–			74,286
Proceeds from short-term loans		–			~~34,000~~–			127,100
Repayment of short-term loans		–			~~(127,100~~–	)		(127,100	)
Proceeds from minority stockholders in
Proceeds from minority stockholders in subscribing subsidiaries’ allotted shares		–			–			5
subscribing subsidiaries’ allotted shares		–			–			5
Proceeds from issuance of shares		–			–			1
Net Cash Flows Provided by (Used in) Financing
Net Cash Flows Provided by Financing Activities		–			–			3,630,165
Activities		–			(77,227	)		3,630,165
Foreign Exchange Effect on Cash		–			–			(2,745	)
Foreign Exchange Effect on Cash		–			(2,745	)		(2,745	)
Net Increase (Decrease) in Cash and Cash Equivalents		(594	)		(442	)		8,872
Net Increase (Decrease) in Cash and Cash Equivalents		(442	)		(14,238	)		9,466
Cash and Cash Equivalents at Beginning of Period		9,466			9,908			–
Cash and Cash Equivalents at Beginning of Period		9,908			24,146			–
Cash and Cash Equivalents at End of Period	$	8,872		$	9,466		$	8,872
Cash and Cash Equivalents at End of Period	$	9,466		$	9,908		$	9,466

The accompanying notes are an integral part of these consolidated financial statements.

F-5

WORLDSTAR ENERGY, CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, ~~2009~~2010 AND ~~2008~~2009

1. NATURE OF OPERATIONS AND GOING CONCERN

WorldStar Energy, Corp. (the “Company”) was incorporated in the State of Nevada, United States of America, on November 8, 1996. Through a reverse take-over transaction completed on August 14, 2007, the Company became the legal parent of National Base Investment Limited (“NB”), a company incorporated in the British Virgin Islands on November 28, 2006.

On January 20, 2007, NB acquired 98% equity interest in Bulgan Gold Investment Limited (“BGI”), a limited liability company incorporated in Hong Kong. On February 27, 2007, through the acquisition of 52% equity interest in a limited liability company incorporated in Hong Kong namely Bulgan Gold (HK) Limited (“BGHK”) by BGI, the Company indirectly owns 50.96% effective equity interest in Bulgan Gold LLC (“BGL”), a company established in Mongolia.

As a result of the reverse takeover transaction described in Note 5, the Company has changed its year end to March 31 to conform with the year end of the accounting acquirer. The Company is a development stage company and commenced initial mineral exploration activities in Mongolia during the period.

The Company is a holding company that only operates through its subsidiaries. Through its indirectly owned subsidiary, BGL, the Company is principally engaged in the exploration and the development of mineral deposits. BGL owns Mineral Exploration License Certificates issued by the Minerals and Petroleum Authority of Mongolia. ~~These~~During ~~are~~the ~~rights~~year toended ~~conduct~~March ~~mineral~~31, ~~exploration~~2009, the onCompany ~~selected~~ceased ~~territory~~active ~~within~~mineral ~~Mongolia~~exploration ~~and~~operations ~~have~~in aMongolia ~~specific~~and ~~tenure~~was ~~for~~not able ~~BGL~~ to ~~conduct~~ ~~its~~fund ~~exploration~~sufficient onactivities ~~reserves~~in ~~such~~order asto ~~gold,~~maintain ~~copper,~~its ~~iron,~~interests ~~cola~~in ~~and other~~the ~~rare~~Mineral ~~minerals.~~Exploration AsLicense atCertificates ~~March~~issued ~~31,~~by ~~2009,~~the weMinerals ~~had~~and ~~not~~Petroleum Authority ~~engaged~~of inMongolia. ~~any~~Accordingly, ~~exploration activities on~~ the ~~properties~~exploration ~~covered~~rights represented by ~~the Mongolian~~ those licenses, aswere weforfeited ~~had~~and ~~not yet~~the ~~completed~~Company ~~our~~wrote ~~analysis~~off of the ~~existing~~remaining ~~database~~book ~~nor~~value ~~prioritized our~~of ~~exploration~~$7,317,739 ~~targets~~as ~~(Note~~of 19March ~~(a))~~31, 2008. Subsequent to the year end, the Company sold its 100% interest in NB and acquired an exclusive sublicense from a private Canadian company for the manufacture of engineered construction products from palm oil tree waste material (notes 19 (ba) and (cb)). Our strategic plan remains contingent on, among other things, financing, the successful completion of all documents required under a letter of intent we have signed with the owners of Palm Oil Plantations in Indonesia, the construction of processing and manufacturing facilities, and our ability to establish relationships with suppliers and distributors in South East Asia, none of which can be assured.

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) on a going-concern basis, which presumes the realization of assets and the discharge of liabilities and commitments in the normal course of operations for the foreseeable future.

Several adverse conditions cast substantial doubt on the validity of this assumption. The Company has incurred significant losses since inception (~~2009~~2010 - $5107,~~100~~746; ~~2008~~2009 - $105,~~217,305~~100), is currently unable to self-finance its operations, has a working capital deficiency of $5,~~155~~237,~~904~~ 894 (~~2008~~2009 - $5,155,~~462~~904), a deficit accumulated during the development stage of $11,~~751~~858,~~122~~ 868 (~~2008~~2009 - $11,~~746~~751,~~022~~122), limited resources, no source of operating cash flow, no assurance that sufficient funding will be available to conduct further operations, debts comprised of other payables and accrued expenses, loans from directors, related companies,, and short-term loans totaling $5,324,023 ~~currently~~ currently due or considered delinquent, no assurance that the Company will not ~~face~~ face additional legal actions from those creditors, ~~regarding~~and ~~delinquent~~there ~~accounts~~is no assurance that ~~payables~~the ~~and~~Company’s ~~accrued~~business ~~liabilities,~~plans ~~loans~~will ~~from~~become ~~directors,~~commercially ~~amounts~~viable ~~due~~or toprofitable. ~~ultimate~~Any ~~holding~~one ~~company,~~or ~~related~~a ~~companies,~~combination aof ~~director,~~these ~~and~~above ~~short-term~~conditions ~~loans,~~could ~~and~~result ~~there~~in failure of the isbusiness noand require the Company to cease operations.

F-6

WORLDSTAR ENERGY, CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, ~~2009~~2010 AND ~~2008~~2009

1. NATURE OF OPERATIONS AND GOING CONCERN (Cont’d)

assurance that the Company’s business plans will become commercially viable or profitable. Any one or a combination of these above conditions could result in failure of the business and require the Company to cease operations.

The Company's ability to continue as a going-concern is dependent upon the continued financial support of its creditors and its ability to obtain financing to repay its current obligations, fund working capital and overhead requirements, fund the development of the Company’s mineral exploration rights and the Company’s ability to achieve profitable operations. Management plans to obtain financing through future common share private placements. The Company’s continued existence is dependent upon its ability to achieve its operating plan. There can be no assurance provided the Company will be able to raise sufficient debt or equity capital from the sources described above, on satisfactory terms. If management is unsuccessful in obtaining financing or in achieving long-term profitable operations, the Company will be required to cease operations.

All of the Company's debt is either due on demand or is overdue and is now due on demand. The Company will seek to obtain creditors' consents to delay repayment of the outstanding promissory notes payable and related interest thereto, until it is able to replace this financing with funds generated by operations, replacement debt or from equity financings through private placements. While the Company's creditors have agreed to extend repayment deadlines in the past, there is no assurance that they will continue to do so in the future. If the Company is unsuccessful in obtaining financing to cover any potential verdicts or settlements, the Company will be required to cease operations.

If the going concern assumption were not appropriate for these consolidated financial statements then adjustments may be necessary to the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used. Such adjustments could be material.

2. BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) and the rules and regulations of the Securities and Exchange Commission. The Company believes that the disclosures are adequate to make the information presented not misleading.

In the opinion of the management of the Company, the consolidated financial statements for the periods presented include all adjustments, including normal recurring adjustments, necessary to fairly present the results of such periods and the financial position as of the end of said periods.

3. SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company balances and transactions have been eliminated.

F-7

WORLDSTAR ENERGY, CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2009 AND 2008

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Use of Estimates

In preparing of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

F-7

WORLDSTAR ENERGY, CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2010 AND 2009

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Use of Estimates (Cont’d)

Significant areas requiring management estimates relate to allowance for doubtful accounts, useful lives of property, plant and equipment and mineral exploration rights, asset retirement obligation estimates, accrued liabilities, and the determination of the valuation allowance for future income taxes. While management believes the estimates are reasonable, actual results could differ from those estimates and could impact future results of operations and cash flows.

Foreign Currency Translation

The functional currency of the Company is the United States dollar (“US dollar”). Amounts recorded in foreign currency are translated into US dollars as follows:

	i.	Monetary assets and liabilities, at the rate of exchange in effect as at the balance sheet date;

	ii.	Non-monetary assets and liabilities, at the exchange rates prevailing at the time of the acquisition of the assets or assumption of the liabilities; and

	iii.	Interest income and expenses (excluding amortization, which is translated at the same rate as the related asset), at the rate of exchange on the transaction date.

Gains and losses arising from this translation of foreign currency are included in the consolidated statements of operations.

Cash and Cash Equivalents

Cash and cash equivalents include all cash, deposits in banks and other highly liquid investments with initial maturities of three months or less to be cash equivalents. As of March 31, ~~2009~~2010 most of the cash and cash equivalents were denominated in US dollars and were placed with banks in Mongolia, Hong Kong and Canada.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and amounts due from related parties. As of March 31, ~~2009~~2010, substantially all of the Company and related companies’ cash and cash equivalents and related companies were held by major financial institutions located in Mongolia, Hong Kong, and Canada which management believes are of high credit quality.

F-8

WORLDSTAR ENERGY, CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, ~~2009~~2010 AND ~~2008~~2009

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Cost includes expenditures that are directly attributable to the acquisition of the asset and other costs directly attributable to bringing the asset to working condition for its intended use. The cost of self-constructed assets includes the cost of materials and direct labour. Depreciation is provided on straight-line basis over their estimated useful lives. The principal depreciation rates are as follows:

	Annual rate

Furniture	10%
Computer software	10%
Computers	33.33%

Maintenance or repairs are charged to expense as incurred. Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

Mineral Exploration Rights

Mineral exploration rights are stated at cost less accumulated amortization and are amortized on the straight-line basis over the tenure of the lease. Exploration and related costs and costs to maintain mineral rights and leases are expensed as incurred.

Impairment of Long-Lived Assets

Long-lived assets, including mineral exploration rights, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets and is charged to earnings. Assets to be disposed of are reported at the lower of the carrying amount or fair value less the costs to sell.

Asset Retirement Obligations (“ARO”)

The Company recognizes a legal liability for obligations related to the retirement of property and equipment and mineral exploration rights, and obligations arising from the acquisition, construction, development or normal operations of those assets. Such asset retirement costs must be recognized at fair value when a reasonable estimate of fair value can be estimated in the period in which the liability is incurred. A corresponding increase to the carrying amount of the related asset, where one is identifiable, is recorded and amortized over the life of the asset. Where a related future value is not easily identifiable with a liability, the change in fair value over the course of the year is expensed. The amount of the liability is subject to re-measurement at each reporting period. The estimates are based principally on legal and regulatory requirements.

F-9

WORLDSTAR ENERGY, CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, ~~2009~~2010 AND ~~2008~~2009

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Basic and Diluted Loss per Share

Basic loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share is calculated by dividing the net loss by the sum of the weighted average number of common shares outstanding and the dilutive common equivalent shares outstanding during the period. Common equivalent shares consist of the shares issuable upon exercise of stock options and warrants calculated using the treasury stock method. Common equivalent shares are not included in the calculation of the weighted average number of shares outstanding for diluted loss per common shares when the effect would be anti-dilutive. The Company computes the weighted-average number of common shares outstanding in accordance with SFAS 141 –Business Combination, which states that in calculating the weighted average shares when a reverse merger takes place in the middle of the year, the number of common shares outstanding from the beginning of that period to the acquisition date shall be computed on the basis of the weighted average number of common shares of the legal acquiree (the accounting acquirer) outstanding during the period multiplied by the exchange ratio established in the merger agreement. The number of common shares outstanding from the acquisition date to the end of that period shall be the actual number of common shares of the legal acquirer (the accounting acquiree) outstanding during that period.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes pursuant to SFAS No. 109 “Accounting for Income Taxes”. Under the asset and liability method of SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry-forwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Financial Instruments and Comprehensive Income

All financial instruments are classified as one of the following: held-to-maturity, loans and receivables, held-for-trading, available-for-sale or other financial liabilities. Financial assets and liabilities held-for- trading are measured at fair value with gains and losses recognized in net income (loss). Financial assets held-to-maturity, loans and receivables, and other financial liabilities are measured at amortized cost using the effective interest method. Available-for-sale instruments are measured at fair value with unrealized gains and losses recognized in other comprehensive income (loss) and reported in shareholders’ equity. Any financial instrument may be designated as held-for-trading upon initial recognition.

Transaction costs that are directly attributable to the acquisition or issue of financial instruments that are classified as other than held-for-trading, which are expensed as incurred, are included in the initial carrying value of such instruments and amortized using the effective interest method.

Comprehensive income or loss is defined as the change in equity from transactions and other events from sources other than the Company’s stockholders. Other comprehensive income or loss refers to items recognized in comprehensive income or loss that are excluded from operations calculated in accordance with US GAAP.

F-10

WORLDSTAR ENERGY, CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, ~~2009~~2010 AND ~~2008~~2009

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Recently Adopted Accounting Pronouncements

InEffective ~~February~~July ~~2007~~1, 2009, the FASB’s ~~issued~~Accounting ~~SFAS~~Standards Codification ~~No. 159,~~ (“~~The~~ASC”) ~~Fair~~became ~~Value Option~~the ~~for~~single ~~Financial~~official ~~Assets~~source ~~and~~of ~~Financial Liabilities - Including an Amendment~~authoritative, ofnongovernmental ~~FASB~~generally ~~Statement~~accepted ~~No.~~accounting ~~115”~~principles (“~~SFAS 159~~GAAP”). ~~SFAS~~in ~~159~~the ~~permits~~U.S. The ~~entities~~historical toGAAP ~~choose~~hierarchy ~~to measure~~was ~~many~~eliminated ~~financial instruments~~ and ~~certain~~the ~~other~~ASC ~~items~~became atthe ~~fair~~only ~~value.~~level ~~Entities~~of ~~that~~authoritative ~~elect~~GAAP, ~~the~~other ~~fair~~than ~~value~~guidance ~~option~~issued ~~will~~by ~~report~~the ~~unrealized~~Securities ~~gains~~ and ~~losses~~ ~~in earnings at each subsequent reporting date~~Exchange Commission. The ~~fair~~Codification ~~value~~is ~~option~~required ~~may~~ to be ~~elected~~applied onto anfinancial ~~instrument-by-instrument basis, with few exceptions. SFAS 159~~statements ~~also~~issued ~~establishes presentation and disclosure requirements to facilitate comparisons between companies that choose different measurement attributes~~ for ~~similar~~ ~~assets~~interim and ~~liabilities.~~annual ~~The~~periods ~~requirements~~ending ~~of SFAS 159 are effective for the Company’s fiscal year on or~~ after ~~November~~September 15, ~~2007~~2009. The ~~Company adopted~~ ~~SFAS~~Codification ~~159~~does ~~effective~~not ~~April~~change 1,GAAP ~~2008~~ and ~~considers~~did ~~the~~not ~~adoption of SFAS 159 had no material~~ impact onthe ~~its~~Company’s consolidated financial statements.

~~Recently~~In March 2008, the FASB issued ~~accounting~~Accounting ~~pronouncements~~Standards Codification 815, “Disclosures about Derivative Instruments and Hedging Activities” (“ASC 815”). ASC 815 changes the disclosure requirements for derivative instruments and hedging activities. The guidance will become effective for the Company’s fiscal year beginning on or after November 15, 2008. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including any financial statements for an interim period within that fiscal year. This statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The Company adopted ASC 815 effective April 1, 2009 and considers the adoption had no material impact on its consolidated financial statements.

~~(i)~~ In ~~December~~April ~~2007~~2008, the FASB issued SFAS No. ~~141(R),~~142-3 (“~~Business~~SFAS ~~Combinations~~142-3”) ~~(SFAS~~to amend ~~141(R)),~~the ~~which~~factors ~~replaces~~that ~~SFAS~~should ~~141.~~be ~~SFAF~~considered ~~141(R)~~in ~~requires~~developing ~~assets~~renewal ~~and~~or ~~liabilities~~extension assumptions ~~acquired~~used into adetermine ~~business~~the ~~combination,~~useful ~~contingent~~life ~~consideration~~of ~~and~~a ~~certain~~recognized ~~acquired~~intangible ~~contingencies~~asset under toSFAS beNo. ~~measured~~142, at“Goodwill ~~their~~and ~~fair~~Other ~~values~~Intangible asAssets” of(“SFAS ~~the~~142”). ~~date~~The intent of ~~acquisition.~~ SFAS ~~141(R)~~142-3 ~~also~~is ~~requires~~to ~~that~~improve ~~acquisition-related~~the ~~costs~~consistency ~~and~~between ~~restructuring~~the ~~costs~~useful belife of a recognized ~~separately~~intangible ~~from~~asset ~~the~~under ~~business combination.~~ SFAS ~~141(R)~~142 isand ~~effective~~the ~~for~~period ~~fiscal~~of ~~years~~expected ~~beginning~~cash ~~after~~flows used ~~December~~to ~~15,~~measure ~~2008~~the ~~and~~fair ~~will~~value beof ~~effective~~the ~~for~~asset ~~business~~under ~~combinations~~SFAS ~~entered~~141(R) ~~into~~Business Combinations, ~~after~~and ~~January~~other 1,US ~~2009~~GAAP. ~~The~~SFAS ~~Company~~142-3 ~~believes~~is ~~there~~not ~~will~~expected beto nohave a material impact on the Company’s consolidated financial statements.

F-11

WORLDSTAR ENERGY, CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, ~~2009~~2010 AND ~~2008~~2009

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Recently ~~issued~~Adopted ~~accounting~~Accounting ~~pronouncements~~ Pronouncements (Cont’d)

~~(ii)~~ In ~~December~~June 2007, the FASB issued SFAS No. 160, “Non-Controlling Interests in Consolidated Financial Statements, an Amendment of ARB No. 51” (SFAS 160). SFAS 160 clarifies the accounting for non- controlling interests and establishes accounting and reporting standards for the non-controlling interest in a subsidiary, including classification as a component of equity. SFAS 160 is effective for fiscal years beginning after December 15, 2008~~. The Company does not currently have any minority interests~~, ~~therefore this pronouncement will have no impact on~~ the ~~Company’s consolidated financial statements. (iii) In March 2008, the~~ FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS 161"). SFAS 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance and cash flows. SFAS 161 achieves these improvements by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity's liquidity by requiring disclosure of derivative features that are credit risk-related. Finally, it requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. SFAS 161 will be effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, and will be adopted by the Company beginning in the first quarter of 2009. The Company does not expect there to be any significant impact of adopting SFAS 161 on its consolidated financial statements. (iv) In May 2008, the FASB ~~issued~~SP FASB FSB Accounting Principles Board (“APB”) Opinion No. 14-1, “Accounting for Convertible Debt Instruments that may be settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSB APB 14-1”). The FSP will require cash settled convertible debt to be separated into debt and equity components at issuance and a value to be assigned to each. The value assigned to the debt component will be the estimated fair value, as of the issuance date, of a similar bond without the conversion feature. The difference between the bond cash proceeds and this estimated fair value will be recorded as a debt discount and amortized to interest expense over the life of the bond. FSP APB 14-1 will become effective January 1, 2009. The Company does not expect that FSB APB 14 -1 will have a material impact on the Company’s consolidated financial statements. (v) In June 2008, the FASB issued FSP EITF 03 -6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities” (“~~FSP~~ SP-EITF 03-6-1”). ~~FSP~~SP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the computation ~~earnings~~of ~~allocation in computing~~ earnings per share under the two-class method as described in SFAS No. 128, “Earnings per Share”. ~~Under~~SP ~~the guidance in FSP~~ EITF 03-6-1, ~~unvested~~is ~~share-based~~effective ~~payment~~for ~~awards~~financial statements ~~that~~issued ~~contain~~for ~~non-forfeitable~~the ~~rights~~Company’s tofiscal ~~dividends~~years orbeginning ~~dividend~~on ~~equivalents (whether paid~~ or ~~unpaid)~~after ~~are~~December 15, ~~participating~~2008 ~~securities~~ and ~~shall~~earlier beadoption ~~included~~is inprohibited. ~~the~~The ~~computation~~Company ofadopted ~~earnings~~SP ~~per share pursuant to the two-class method. FSP~~ EITF 03-6-1 is effective ~~for~~April ~~fiscal years beginning after December 15~~1, ~~2008,~~2009 and ~~interim~~considers ~~periods~~SP ~~within those fiscal years. All prior period earnings per share amounts presented shall be adjusted retrospectively. The Company does not expect that FSP~~ EITF 03-6-1 ~~will~~had ~~have~~no a material impact on the Company’s consolidated financial statements.

In April 2009, the FASB issued Accounting Standards Codification 825-10, “Financial Instruments” (formerly SFAS 107-1 and Accounting Principles Board Opinion No. 28-1, “Interim Disclosures about Fair Value of Financial Instruments”) (“ASC 825-10”). This statement amends SFAS 107, “Disclosures about Fair Values of Financial Instruments”, to require disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements. The statement also amends APB 28, “Interim Financial Reporting”, to require those disclosures in all interim financial statements. This statement is effective for interim periods ending after June 15, 2009. The Company adopted ASC 825-10 during the quarter ending on June 30, 2009 and considers the adoption had no material impact on the Company’s consolidated financial statements.

F-12

WORLDSTAR ENERGY, CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, ~~2009~~2010 AND ~~2008~~2009

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Recently ~~issued~~Adopted ~~accounting~~Accounting ~~pronouncements~~ Pronouncements (Cont’d)

~~(vi)~~ In June ~~2008~~2009, the FASB ~~ratified~~issued ~~the~~ASU ~~consensus reached by the EITF on Issue~~ No. 072009-501, “~~Determining~~FASB ~~Whether~~Accounting Standards anCodification ~~Instrument~~and ~~(or~~the ~~Embedded~~Hierarchy ~~Feature)~~of isGenerally ~~Indexed~~Accepted ~~to an Entity’s Own Stock~~Accounting Principles” (“~~EITF~~ASU ~~No. 07~~ 2009-501”). ~~EITF~~This ~~No.~~update ~~07-5~~ provides ~~guidance~~amendment ~~for~~to ~~determining~~ASC ~~whether an equity~~105- ~~linked financial instrument~~ 10 (orformerly ~~embedded~~SFAS ~~feature) is indexed to an entity’s own stock. EITF~~ No. ~~07-5~~168, ~~applies~~The toFASB ~~any~~Accounting ~~freestanding~~Standards ~~financial~~Codification ~~instrument~~and ~~or embedded feature that has all of~~ the Hierarchy ~~characteristics~~ of aGenerally ~~derivative~~Accepted orAccounting ~~freestanding~~Principles”). ~~instrument~~ASU ~~that~~2009-01 isestablishes the ~~potentially~~“FASB ~~settled~~Accounting inStandards anCodification” ~~entity’s own stock~~ (~~with~~“Codification”), ~~the~~which ~~exception~~officially launched ofJuly ~~share-based~~1, ~~payment~~2009, ~~awards~~to ~~within~~become the ~~scope~~source of ~~SFAS~~authoritative ~~123(R)).~~US ToGAAP ~~meet~~recognized by the ~~definition~~FASB ofto ~~“indexed~~be toapplied ~~own~~by ~~stock,”~~nongovernmental anentities. ~~instrument’s~~Rules ~~contingent~~and ~~exercise~~interpretive releases ~~provisions~~of ~~must~~the ~~not~~SEC beunder ~~based~~authority onof ~~(a)~~federal ansecurities ~~observable~~laws ~~market,~~are ~~other~~also ~~than~~sources of ~~the~~authoritative ~~market~~US GAAP for ~~the~~SEC ~~issuer’s~~registrants. ~~stock~~The ~~(if~~subsequent ~~applicable),~~issuances orof ~~(b)~~new standards anwill ~~observable~~be ~~index,~~in ~~other~~the ~~than~~form anof ~~index~~Accounting ~~calculated~~Standards orUpdates ~~measured~~that ~~solely~~will bybe included ~~reference~~in to the ~~issuer’s~~Codification. ~~own operations~~Generally, ~~and~~ the ~~variables~~Codification ~~that~~is ~~could~~not ~~affect~~expected ~~the settlement amount must be inputs~~ to change ~~the~~US ~~fair~~GAAP. ~~value~~All ofother aaccounting ~~“fixed-for-fixed”~~literature ~~forward~~excluded orfrom ~~option~~the onCodification will ~~equity~~be ~~shares.~~considered ~~EITF No~~non-authoritative. 07ASU 2009-01 5 is effective for ~~fiscal~~financial statements ~~years~~issued ~~beginning~~for ~~after~~interim ~~December 15, 2008,~~ and ~~interim~~annual periods ~~within~~ending ~~those~~after ~~fiscal~~September ~~years~~15, 2009. The Company ~~does~~adopted ~~not~~ASU ~~expect~~2009-01 during the ~~adoption~~quarter ofending ~~EITF~~on ~~No.~~September ~~07-5~~30, 2009 toand ~~change~~considers the ~~classification~~adoption orhad ~~measurement~~no ofmaterial ~~its~~impact on the Company’s consolidated financial ~~instruments~~statements.

F-13

WORLDSTAR ENERGY, CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2010 AND 2009

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Recently Issued Accounting Pronouncements

4. FINANCIAL INSTRUMENTS AND RISKS

The Company has classified its financial instruments as follows:

Cash and cash equivalents – as held-for-trading
Amount due from a director – as loans and receivables
Accounts payable and accrued liabilities, loans from directors, amount due to ultimate holding company (pre-acquisition), amount due to related companies, amount due to a director, amount due to a former stockholder and short-term loans – as other financial liabilities

(a) Fair ~~value~~Value

The carrying amounts of cash and cash equivalents, accounts payable and short-term loans approximate their respective fair values because of the short-term maturities of those instruments. The fair values of amounts due to related companies, loans from directors, ,and amount due to a director have ~~not~~ not been disclosed as their fair values cannot be reliably measured since the parties are not at arm’s length.

(b) Credit ~~risk~~Risk

Credit risk is the risk that a counter-party to a financial instrument will fail to discharge its contractual obligations.

The Company mitigates credit risk, in respect of cash and cash equivalents, by purchasing highly liquid, short-term investments with maturities of less than three months, held at a high-credit quality Hong Kong, Canadian and Mongolian financial institutions.

With respect to the amount due from a director, the credit risk has been assessed as low by management as the Company has strong working relationship with the party involved.

F-1314

WORLDSTAR ENERGY, CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, ~~2009~~2010 AND ~~2008~~2009

4. FINANCIAL INSTRUMENTS AND RISKS (Cont’d)

(b) Credit ~~risk~~Risk (Cont’d)

The Company’s concentration of credit risk and maximum exposure thereto is as follows:

		2009		2008
		2010		2009
Cash	$	98,~~435~~841	$	9,~~877~~435
Short-term investments		31		31
Amount due from a director		77,257		77,257
	$	86,~~723~~129	$	8786,~~165~~723

Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due. The Company’s approach to managing liquidity risk is to provide reasonable assurance that it will have sufficient funds to meet liabilities when due. The Company manages its liquidity risk by forecasting cash flows required for operations and anticipated investing and financing activities. The Company’s cash and cash equivalents at March 31, ~~2009~~2010 totalled $98,~~466~~872 (~~2008~~2009 - $9,~~908~~466) which will not be sufficient to meet its obligations related to its accounts payable and accrued liabilities of $219,529 (~~2008~~2009 - $219,529) and a total of $5,104,494 (~~2008~~2009 - $5,104,494) for loans from directors, amounts due to ultimate holding company (pre-acquisition); related companies; a director; and a former stockholder, due to related companies and short-term loans.

All its non-derivative financial liabilities are made up of accounts payable and accrued liabilities which are due within the first fiscal quarter of ~~2010~~2011 and loans from directors, ; due to related companies; due to a director; and short-term loans are due on demand.

(d) Market ~~risk~~Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices. Market risk comprises two types of risk: interest rate risk and foreign currency risk.

(i)	Interest rate risk

	Interest rate risk consists of two components:

	(a)	To the extent that payments made or received on the Company’s monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate cash flow risk.

	(b)	To the extent that changes in prevailing market interest rates differ from the interest rate in the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk.

F-1415

WORLDSTAR ENERGY, CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, ~~2009~~2010 AND ~~2008~~2009

4. FINANCIAL INSTRUMENTS AND RISKS (Cont’d)

(d) Market ~~risk~~Risk (Cont’d)

	(i)	Interest rate risk (Cont’d)
		The Company is exposed to interest rate cash flow risk on its loans from directors with a variable interest rate as the interest on the loans will fluctuate during the term of the loans as interest rates fluctuate. The Company is exposed to interest rate price risk on its short- term loans debt with fixed interest rates as the prevailing interest rate can differ from the interest rate of the loans.
		The Company’s cash and cash equivalents consist of cash held in bank accounts and short-term investments. Due to the short-term nature of these financial instruments, fluctuations in market interest rates do not have a significant impact on estimated fair values and on cash flows as of March 31, 2009.
		The Company’s cash and cash equivalents consist of cash held in bank accounts and short-term investments. Due to the short-term nature of these financial instruments, fluctuations in market interest rates do not have a significant impact on estimated fair values and on cash flows as of March 31, 2010.
	(ii)	Foreign currency risk
		The Company is exposed to foreign currency risk as certain monetary financial instruments are denominated in Mongolian Tugrug (“MNT”). The Company has US$1,127,000 (2008 - $1,127,000) of net monetary liabilities in MNT and the Company’s sensitivity analysis suggests that a change in absolute rate of exchange in MNT by 10% (2008 – 10%) would increase or decrease net loss by $112,700 (2008 - $112,700) in these consolidated financial statements. The Company has not entered into any foreign currency contracts to mitigate this risk.
		The Company is exposed to foreign currency risk as certain monetary financial instruments are denominated in Mongolian Tugrug (“MNT”). The Company has US$1,127,000 (2009 - $1,127,000) of net monetary liabilities in MNT and the Company’s sensitivity analysis suggests that a change in absolute rate of exchange in MNT by 10% (2009 – 10%) would increase or decrease net loss by $112,700 (2009 - $112,700) in these consolidated financial statements. The Company has not entered into any foreign currency contracts to mitigate this risk.

5. REVERSE TAKEOVER AND RECAPITALIZATION

Effective August 14, 2007, the Company completed the acquisition of all of the issued and outstanding common shares of National Base Investment Limited (“National Base”) in exchange for 30,000,000 common shares issued from treasury and the payment of $1,360,000 to its shareholder, Jewel Star Group Ltd. A private placement of 22,000,000 shares at $0.25 per share for gross proceeds of $5,500,000 was a condition of this transaction and was also completed as of that date.

Legally, the Company is the parent of National Base. However, as a result of the share exchange described above, control of the combined companies passed to the former shareholders of National Base. This type of share exchange is referred to as a “reverse takeover”. A reverse takeover involving a non-public enterprise and a non-operating public enterprise with nominal net non-monetary assets is a capital transaction in substance, rather than a business combination. That is, the transaction is equivalent to the issuance of shares by National Base for the net assets of the Company, accompanied by a recapitalization of National Base. The net asset (deficiency) of the Company totaled ($1,007,628) at the date of acquisition, based upon the Company’s capital and accumulated deficit as at August 14, 2007, which was transferred to the continuing deficit, and has been allocated as follows:

F-1516

WORLDSTAR ENERGY, CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, ~~2009~~2010 AND ~~2008~~2009

5. REVERSE ACQUISITION AND RECAPITALIZATION (Cont’d)

of National Base. The net asset (deficiency) of the Company totaled ($1,007,628) at the date of acquisition, based upon the Company’s capital and accumulated deficit as at August 14, 2007, which was transferred to the continuing deficit, and has been allocated as follows:

Assets acquired:
Cash and cash equivalents	$	24,346
Advances receivable from the Jewel Star Group of companies		5,300,000
		5,324,346
Less liabilities assumed:
Accounts payable and accrued liabilities		(211,244	)
Obligation to issue shares		(627,605	)
Share subscriptions received in advance of the transaction, net of costs		(5,493,125	)

Net purchase price deficiency	$	(1,007,628	)

Legal parent capital transferred to continuing deficit	$	827,272

Legal parent deficit transferred to continuing deficit		(1,834,900	)

Net purchase price deficiency	$	(1,007,628	)

The consolidated statements of operations and cash flows for the year ended March 31, 2008 include National Base’s operations and the Company’s results of operations from August 14, 2007, the date of acquisition, to March 31, 2008.

The consolidated balance sheet at March 31, ~~2009~~2010 and the consolidated statements of operations and cash flows for the year ended March 31, ~~2009~~2010 include National Base`s operations and the Company`s results of operations for the year ended March 31. ~~2009~~2010. The number of common shares outstanding as at March 31, ~~2009~~2010 are those of the Company’s.

The results of operations of the Company for the period from April 1, 2007 to August 14, 2007 were as follows:

Expenses
Management fees	$	20,000
Professional fees		48,719
Transfer agent and filing fees		2,884
Foreign exchange		1,148
Office		131
Write-off of Indonesian project costs		159,000

Loss for the period	$	231,882

6. INCOME TAXES

United States

The Company is subject to income tax at the rate of 35% on income earned in the United States. As of March 31, ~~2009~~2010, all of the Company’s operations were carried on outside the US and the Company had accumulated losses for income tax purposes of approximately $2,400,000, however, utilization of any such losses against future taxable income is limited under the Internal Revenue Code as a result of corporate reorganizations in 2002 and 2007 involving separate changes in control which substantially restrict tax loss utilization.

F-1617

WORLDSTAR ENERGY, CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, ~~2009~~2010 AND ~~2008~~2009

6. ~~INCOME~~ INCOME TAXES (Cont’d)

BVI

The Company’s subsidiary was incorporated in the BVI and, under the current laws of the BVI, is not subject to income taxes.

Hong Kong

No provision for Hong Kong profits tax has been made in these consolidated financial statements as BGI and BGHK did not carry on any business in Hong Kong during the reporting period.

Mongolia

BGL is subject to Mongolia income tax at a rate of 10%. No provision of Mongolia income tax has been made in these financial statements as BGL has no taxable income during the reporting period.

7.	AMOUNT DUE TO DIRECTORS, AMOUNT DUE TO RELATED COMPANIES, AMOUNT DUE ULTIMATE HOLDING COMPANY (PRE-ACQUISITION) AND AMOUNT DUE TO A FORMER STOCKHOLDER

These amounts are interest-free, unsecured and repayable on demand.

8. PROPERTY, PLANT AND EQUIPMENT, NET

		At March 31,
		2009			2008
		2010			2009
Costs:
Furniture	$	497		$	497
Computer software		34,830			34,830
Computers		361			361
		35,688			35,688
Accumulated depreciation		(914,~~932~~590	)		(59,~~274~~932	)
Net	$	25,756		$	30,414
		21,098			25,756
Termination of Mongolian project (note 18)		(21,098	)		–
Net	$	–		$	25,756

9. ~~MINERAL~~ ~~EXPLORATION~~LOANS ~~RIGHTS~~FROM DIRECTORS

		At March 31,
		2009		2008
Cost	$	-	$	8,636,214
Accumulated amortization		-		(1,318,475	)
		-		7,317,739
Write-off of mineral exploration rights		-		(7,317,739	)
Net	$	–	$	–

F-17

WORLDSTAR ENERGY, CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2009 AND 2008

9. MINERAL EXPLORATION RIGHTS

The amount represents the mineral exploration rights within Mongolia in the form of 50 minerals exploration license certificates issued by the Minerals and Petroleum Authority of Mongolia. These are rights to conduct mineral exploration on selected territory within Mongolia and have a specific tenure for the Company to conduct its exploration.

During the year ended March 31, 2009, the Company ceased active mineral exploration operations in Mongolia and was not able to fund sufficient activities in order to maintain its interests in the Mineral Exploration License Certificates issued by the Minerals and Petroleum Authority of Mongolia. Accordingly, the exploration rights represented by those licenses were forfeited and the Company wrote off the remaining book value of $7,317,739 as of March 31, 2008.

10. LOANS FROM DIRECTORS

These amounts are interest-free, unsecured and repayable on demand.

1110. SHORT-TERM LOANS

As of March 31, ~~2009~~2010 the unsecured loans granted from a third party bear interest at 12% per annum ~~with~~and aare ~~term~~due ofon ~~maturity less than 1 year~~demand.

1211. CAPITAL STOCK

The authorized common stock of the Company consists of 100,000,000 shares (previously 25,000,000 shares) with a par value of $0.001, following the approval by stockholders of an amendment to the Company’s Articles of Incorporation effective April 1, 2005.

F-18

WORLDSTAR ENERGY, CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2010 AND 2009

11. CAPITAL STOCK (Cont’d)

On August 14, 2007, the Company issued 30,000,000 common shares pursuant to the reverse takeover transaction (Note 5) to acquire a 100% interest in National Base Investment Limited, together with an additional 2,000,000 shares issued in facilitation of this transaction.

Concurrently, the Company also completed a private placement financing of 22,000,000 common shares at a price of $0.25 per share for gross proceeds of $5,500,000. A financing fee of 2,200,000 common shares at a price of $0.25 per share and $6,875 in cash were also paid.

Additionally, 931,700 shares were issued for debt settlement.

During the year ended March 31, 2008, 500,000 shares, valued at a market price of $0.31, were issued for debt settlement of $179,705 to a company whose principal is a director of the Company. This transaction resulted in a gain on debt settlement of $24,705 in the 124 day-period ended March 31, 2007. During the year ended March 31, 2008, 272,700 shares at market value of $1.15 per share and 159,000 shares at a market value of $1.00 per share were issued by the Company to its certain non-related shareholders for debt settlement.

No share issuances occurred during the year ended March 31, ~~2009~~2010.

1312. COMMITMENT ~~AND~~ AND CONTINGENCIES

The Company had no commitments or contingent liabilities as of March 31, ~~2009~~2010.

~~F-18~~13. MINORITY INTERESTS

~~WORLDSTAR~~Minority ~~ENERGY,~~interests ~~CORP~~result from the consolidation of 98% owned subsidiary of BGI and 50.96% owned subsidiaries of BGHK and BGL. As of March 31, ~~NOTES~~2010, TOBGI, ~~CONSOLIDATED~~BGHK and BGL recorded a net liability. As a result, the minority ~~FINANCIAL~~interests ~~STATEMENTS~~in the net loss of these subsidiaries is $Nil for the year ended March ~~YEARS~~31, ~~ENDED~~2010 ~~MARCH~~due to the minority stockholders’ equity balance being $Nil at March 31, ~~2009~~2010. ~~AND~~Such ~~2008~~minority interests in the net losses of the subsidiaries have not been recorded, the minority interests in future profits will not be recognized until the aggregate of such profits equal the aggregate unrecognized losses.

14. ~~MINORITY~~ RELATED PARTY ~~INTERESTS~~TRANSACTIONS

~~Minority~~Apart ~~interests result~~ from the ~~consolidation~~transactions ofas ~~98%~~disclosed ~~owned subsidiary~~in ofnotes ~~BGI~~7, 9 and ~~50.96%~~11 to ~~owned~~the ~~subsidiaries~~consolidated offinancial ~~BGHK~~statements, ~~and~~during ~~BGL.~~the Asyears ofended March 31, ~~2009,~~ ~~BGI, BGHK~~ 2010 and ~~BGL recorded a net liability. As a result~~2009, the ~~minority interests~~Company inhad ~~the~~no ~~net~~other ~~loss~~material oftransactions ~~these~~with ~~subsidiaries~~its isrelated parties ~~$Nil~~during ~~for~~ the ~~year~~reporting ~~ended~~periods. ~~March 31,~~Amounts ~~2009~~ due to ~~the~~related ~~minority~~parties ~~stockholders’~~are non-interest ~~equity~~bearing ~~balance~~and ~~being $Nil at March 31, 2008~~unsecured. ~~Such~~These ~~minority~~transactions ~~interests~~were in the ~~net~~normal ~~losses~~ course of ~~the~~operations ~~subsidiaries~~and ~~have~~were ~~not been~~measured ~~recorded,~~at the ~~minority~~exchange ~~interests~~amount, inwhich ~~future~~is ~~profits~~the ~~will~~amount ~~not be recognized~~of ~~until~~consideration ~~the~~established ~~aggregate~~and ofagreed ~~such~~to ~~profits~~by ~~equal~~ the ~~aggregate~~related ~~unrecognized losses~~parties.

15. ~~RELATED PARTY~~ SEGMENT ~~TRANSACTIONS~~INFORMATION

~~Apart~~The ~~from the transactions as disclosed in notes 7, 10 and 12 to the consolidated financial statements, during the years ended March 31, 2009 and 2008, the~~ Company ~~had~~operated ~~no other material transactions with its related parties during the reporting periods. Amounts due to related parties are non-interest bearing and unsecured. These transactions were~~ in ~~the~~a ~~normal~~single ~~course of operations and were measured at the exchange amount~~segment, ~~which~~being ~~is the amount of~~conducting ~~consideration~~mineral ~~established~~exploration ~~and~~on ~~agreed~~selected toterritory bywithin ~~the related parties~~Mongolia.

16. SEGMENT INFORMATION

The Company operated in a single segment, being conducting mineral exploration on selected territory within Mongolia (note 8).

17. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

						Cumulative
						Total Since
		2009		2008		Inception
Cash paid for:
Interest	$	–	$	8,199	$	9,011
Income taxes	$	–	$	–	$	–
Shares issued for debt settlement	$	–	$	627,605	$	627,605

18. RISK AND CAPITAL MANAGEMENT

The Company manages its capital structure, and makes adjustments to it, based on the funds available to the Company in order to support future business opportunities. The Company defines its capital as shareholders’ equity. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business.

The Company currently has no source of revenues; as such, the Company is dependent upon external financings or the sale of assets (or an interest therein) to fund activities. In order to carry future projects and pay for administrative costs, the Company will spend its existing working capital and raise additional funds as needed. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company’s approach to capital management during the year ended March 31, 2009. The Company is not subject to externally imposed capital requirements.

F-19

WORLDSTAR ENERGY, CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED MARCH 31, ~~2009~~2010 AND ~~2008~~2009

16. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

						Cumulative
						Total Since
		2010		2009		Inception

Cash paid for:
Interest	$	–	$	–	$	9,011
Income taxes	$	–	$	–	$	–
Shares issued for debt settlement	$	–	$	–	$	627,605

17. RISK AND CAPITAL MANAGEMENT

The Company currently has no source of revenues; as such, the Company is dependent upon external financings or the sale of assets (or an interest therein) to fund activities. In order to carry future projects and pay for administrative costs, the Company will spend its existing working capital and raise additional funds as needed. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company’s approach to capital management during the year ended March 31, 2010. The Company is not subject to externally imposed capital requirements.

18. TERMINATION OF MONGOLIAN PROJECT

During the year ended March 31, 2010, the Company wrote-off all its remaining assets in Mongolia, including $21,098 in property, plant and equipment and $81,396 in prepaid expenses, and terminated its operations in Mongolia.

19. SUBSEQUENT EVENTS

a)	Effective September 8, 2011, the Company sold its 100% interest in NB to an arm’s length party in exchange for $10 and an indemnification in favor of the Company against all present and future obligations of NB. As a result of the sale, the Company will cease consolidating NB on that date, which will result in reductions of assets and liabilities. On a pro-forma basis (as if the sale of NB had occurred on March 31, 2009), the assets would be reduced by $189,231, the total liabilities would be reduced by $5,095,628 with a resultant gain of $4,906,397.
	As at March 31, 2009, pro-forma continuing operations would consist of assets of $4,644 and liabilities of $228,395. Operations for the year ended March 31, 2009 would have amounted to a net loss of $442 and a loss per share of $0.00.
b)	Subsequent to the year end, the Company acquired an exclusive sublicense to use and apply, in Southeast Asia, including China, the patent-pending processes and solutions licensed by a private Canadian company (the “vendor’), for the manufacture of engineered construction products from palm oil tree waste material with zero ignition and zero flame spread properties. This sublicense is for a 10 year term, and is renewable for successive periods of 10 years each. The Company has agreed to pay a CAD$150,000 acquisition fee to the vendor, to be paid by the issuance of 10,000,000 fully paid shares of common stock in the capital of the Company and to pay a continuing royalty to the vendor . The Company must, in order to preserve the license rights, purchase from the vendor certain escalating minimum quantities of a certain solution during each year of the term of the sublicense agreement.

a)	Effective September 8, 2011, the Company sold its 100% interest in NB to an arm’s length party in exchange for $10 and an indemnification in favor of the Company against all present and future obligations of NB. As a result of the sale, the Company will cease consolidating NB on that date, which will result in reductions of assets and liabilities. On a pro-forma basis (as if the sale of NB had occurred on March 31, 2010), the assets would be reduced by $ 82,079, the total liabilities would be reduced by $5,095,628 with a resultant gain of $5,013,549.

	As at March 31, 2010, pro-forma continuing operations would consist of assets of $4,050 and liabilities of $228,395. Operations for the year ended March 31, 2010 would have amounted to a net loss of $107,746 and a loss per share of $0.00.

F-20

WORLDSTAR ENERGY, CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2010 AND 2009

19. SUBSEQUENT EVENTS (Cont’d)

Subsequent to the year end, the Company acquired an exclusive sublicense to use and apply, in Southeast Asia, including China, the patent-pending processes and solutions licensed by a private Canadian company (the “vendor’), for the manufacture of engineered construction products from palm oil tree waste material with zero ignition and zero flame spread properties. This sublicense is for a 10 year term, and is renewable for successive periods of 10 years each. The Company has agreed to pay a CAD$150,000 acquisition fee to the vendor, to be paid by the issuance of 10,000,000 fully paid shares of common stock in the capital of the Company and to pay a continuing royalty to the vendor . The Company must, in order to preserve the license rights, purchase from the vendor certain escalating minimum quantities of a certain solution during each year of the term of the sublicense agreement.

F-21

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

WORLDSTAR ENERGY, CORP.

By:	/s/ Rudijanto Azali
	Rudijanto Azali
	President, Chief Executive Officer and Director
	Date: September 15, 2011
	Date: September 22, 2011

In accordance with the Securities Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ Rudijanto Azali Rudijanto Azali (Principal Executive Officer) President, Chief Executive Officer and Director Date: September 1522, 2011 By: /s/ Michael Kinley Michael Kinley (Principal Financial Officer) Chief Financial Officer Date: September 1522, 2011 By: /s/ Supriadi Supriadi Director Date: September 1522, 2011

Filing Compare · WORLDSTAR ENERGY, CORP.