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EX-31.1 - CERTIFICATION - Grand China Energy Group Ltdexhibit31-1.htm
EX-32.1 - CERTIFICATION - Grand China Energy Group Ltdexhibit32-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: March 31, 2010

or

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________

Commission file number: 000-53490

SGB INTERNATIONAL HOLDINGS INC.
(Exact name of registrant as specified in its charter)

British Columbia N/A
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)

909 – 6081 No. 3 Road, Richmond, BC Canada V6Y 2B2
(Address of principal executive offices and Zip Code)

Registrant's telephone number, including area code: (604) 484-3127

N/A
(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act

Title of Each Class Name of each Exchange on which registered
Nil N/A

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

Common Stock, no par value
(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 [   ]    No [X]

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

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 
Yes [X]    No [   ]


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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Yes [   ]    No [X]

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 Act).
Yes [X]    No [   ]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

8,314,167 shares of common stock at a price of $0.16 per share for an aggregate market value of $1,330,267.1

1 The aggregate market value of the voting stock held by non-affiliates is computed by reference to the price of the last business day of our most recently completed second fiscal quarter.

Note. – If a determination as to whether a particular person or entity is an affiliate cannot be made without involving unreasonable effort and expense, the aggregate market value of the common stock held by non-affiliates may be calculated on the basis of assumptions reasonable under the circumstances, provided that the assumptions are set forth in this Form.

APPLICABLE ONLY TO CORPORATE REGISTRANTS

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 22,820,446 shares of common stock are issued and outstanding as of July 12, 2010.

DOCUMENTS INCORPORATED BY REFERENCE

Not Applicable

ii


TABLE OF CONTENTS

PART I 1
ITEM 1. BUSINESS 1
ITEM 1A. RISK FACTORS 2
ITEM 1B. UNRESOLVED STAFF COMMENTS 5
ITEM 2. PROPERTIES 5
ITEM 3. LEGAL PROCEEDINGS 5
ITEM 4. [REMOVED AND RESERVED] 5
PART II 6
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 6
ITEM 6 SELECTED FINANCIAL DATA 7
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION 7
ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 10
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 10
Stan J.H. Lee, CPA 11
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL MATTERS 11
ITEM 9A(T). CONTROLS AND PROCEDURES 11
ITEM 9B OTHER INFORMATION 13
PART III 13
ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 13
ITEM 11. EXECUTIVE COMPENSATION 15
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. 17
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 18
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 19
PART IV 20
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES. 20
SIGNATURES 21

iii


PART I

ITEM 1. BUSINESS

Forward-Looking Statements

This report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “intends” “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in section 1A entitled “Risk Factors” on page 2, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

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. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares in our capital stock.

As used in this report, the terms “we”, “us”, “our company”, and “SGB” mean SGB International Holdings Inc. and the term “Orca” means Orca International Language Schools Inc., unless otherwise indicated.

Corporate Overview

We were incorporated in the province of British Columbia, Canada under the name “Slocan Valley Minerals Ltd.” on November 6, 1997 with an authorized share capital of 10,000,000 common shares without par value. Following our incorporation we were not actively engaged in any business activities. On June 1, 2004 we increased our authorized share capital from 10,000,000 common shares without par value to an unlimited number of common shares without par value. On June 11, 2004 we changed our name to “Orca International Language Schools Inc.”

Effective March 3, 2009, we filed a Notice of Alteration with the Registrar of Companies in British Columbia and made several changes to our Notice of Articles as follows:

  1.

we changed our name from “Orca International Language Schools Inc.” to “SGB International Holdings Inc.” and

     
  2.

we created a new class of preferred stock. As a result, our authorized capital consists of an unlimited amount of common stock without par value and an unlimited amount of preferred stock without par value. We have not issued any preferred stock.

Pursuant to the Special Resolutions approved by the shareholders at our Annual and Special General Meeting held on January 14, 2009, we effected on March 4, 2009, a 4.5 for one forward stock split of our issued and outstanding common stock.

1


Our Business

Our goal originally was to provide management services to schools in the international education industry based on the principles of: improving their administrative, operational, marketing, sales and human resources functions; building links with other schools worldwide to foster student exchange; and repositioning the schools to concentrate their curriculum on preparing students for one of the three major English proficiency tests. We have been searching for a school as the initial client but we have not been successful in finding any such school. Since we have incurred losses since November 6, 1997, our board of directors has decided to explore the possibility of adopting a different business plan to protect our shareholders value.

We are defined as a "shell company" under the Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act because we have nominal operations and nominal assets. Research and Development Expenditures

We did not incur expenditures in research and development over the last fiscal year.

Employees

At present, we have no employees, other than our directors and officers, who devote their time as required to our business operations. Our President does not have an employment agreement with us. We have entered into a management service agreement with one of our significant shareholders, SGB C&C Investment Ltd., for them to provide management services to our company. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, may adopt such plans in the future. There are presently no personal benefits available to any officers or directors.

Subsidiaries

We do not have any subsidiaries.

Intellectual Property

We do not own, either legally or beneficially, any patent or trademark.

ITEM 1A. RISK FACTORS

An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this quarterly report in evaluating our company and its business before purchasing shares of our company’s common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. You could lose all or part of your investment due to any of these risks.

Risks Associated with our Company

We have a limited operating history and if we are not successful in operating our business, then investors may lose all of their investment in our company.

We have a limited operating history. Our business is subject to the risks and expenses encountered by start up companies, such as uncertainties regarding our level of future revenues and our inability to budget expenses and manage growth accordingly and our inability to access sources of financing when required and at rates favorable to us. Our limited operating history and the highly competitive nature of the business in which we plan to operate will make it difficult or impossible to predict future results of our operations. If we are not successful in operating our business, then investors may lose all of their investment in our company.

2


We have a history of losses and have a deficit, which raises substantial doubt about our ability to continue as a going concern.

We have not generated any revenues since our date of inception and we will continue to incur operating expenses without revenues until we acquire school(s) as clients, commence our business and finally, achieve a profitable level of operations. Our net loss since inception to March 31, 2010 was $408,340. We had cash in the amount of $43,494 as of March 31, 2010. We currently do not have any operations and we have no income. We estimate our average monthly operating expenses to be approximately $13,000 each month. We cannot provide assurances that we will be able to successfully develop our business. These circumstances raise substantial doubt about our ability to continue as a going concern as described in an explanatory paragraph to our independent auditors’ report on our audited financial statements, dated June 22, 2010. If we are unable to continue as a going concern, investors will likely lose all of their investments in our company.

Our future is dependent upon our ability to obtain financing and if we do not obtain such financing, we may have to cease our exploration activities and investors could lose their entire investment.

There is no assurance that we will operate profitably or will generate positive cash flow in the future. We will require additional financing in order to proceed beyond the first few months of our plan of operations. We will require additional financing to sustain our business operations if we are not successful in earning revenues. We currently do not have any arrangements for further financing and we may not be able to obtain financing when required. Our future is dependent upon our ability to obtain financing. If we do not obtain such financing, our business could fail and investors could lose their entire investment.

Because we may never earn revenues from our operations, our business may fail.

We anticipate that we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from our business, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide no assurance that we will generate any revenues or ever achieve profitability. If we are unsuccessful in addressing these risks, our business will fail and investors may lose all of their investment in our company.

Because our directors, executive officers, and principal shareholders control a large percentage of our common stock, such insiders have the ability to influence matters affecting our shareholders.

Our directors and executive officers, in the aggregate, beneficially own over 63.56% of the issued and outstanding shares of our common stock with a principal shareholder beneficially owns 63.56% of the issued and outstanding shares of our common stock. As a result, they have the ability to influence matters affecting our shareholders, including the election of our directors, the acquisition or disposition of our assets, and the future issuance of our shares. Because our directors, executive officers and principal shareholders control such shares, investors may find it difficult to replace our management if they disagree with the way our business is being operated. Because the influence by these insiders could result in management making decisions that are in the best interest of those insiders and not in the best interest of the investors, you may lose some or all of the value of your investment in our common stock.

Our directors and executive officers are engaged in other business activities and accordingly may not devote sufficient time to our business affairs, which may affect our ability to conduct operations and generate revenues.

Our directors and executive officers are involved in other business activities. Xin Li, our President, Chief Executive Officer, Chief Financial Officer and Director spends approximately 20 hours, or 50%, of his business time on the management of our company and our other director, Stuart Wooldridge, spends approximately 10 hours, or 20%, of his business time on the management of our company. As a result of their other business endeavors, they may not be able to devote sufficient time to our business affairs, which may negatively affect our ability to conduct our ongoing operations and our ability to generate revenues. In addition, the management of our company may be periodically interrupted or delayed as a result of their other business interests.

3


All of our assets and all of our directors and executive officers are outside the United States, with the result that it may be difficult for investors to enforce within the United States any judgments obtained against us or any of our directors or officers.

All of our assets are located outside the United States and we do not currently maintain a permanent place of business within the United States. In addition, all of our directors and executive officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against us or our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Consequently, you may be effectively prevented from pursuing remedies under U.S. federal securities laws against them.

Risks Associated with Our Common Stock

Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations.

Although our common stock is currently listed for quotation on the OTC Bulletin Board, none of our shares have yet been purchased or sold on that market. Even when a market is established and trading begins, trading through the OTC Bulletin Board is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in our stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

We do not intend to pay dividends on any investment in the shares of stock of our company.

We have never paid any cash dividends and currently do not intend to ever pay any cash dividends. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may prohibit the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock’s price. This may never happen and investors may lose all of their investment in our company.

Our common stock is a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations, which may limit a shareholder’s ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

4


FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker or dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, brokers or dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for brokers or dealers to recommend that their customers buy our common stock, which may prevent you from reselling your shares and may cause the price of the shares to decline.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not Applicable.

ITEM 2. PROPERTIES

Executive Offices and Address for Service

Our principal executive office is located at 909 – 6081 No. 3 Road, Richmond, BC Canada V6Y 2B2. We pay monthly rent fee of CDN$750 to an unrelated company. We believe our current premises are adequate for our current operations and we do not anticipate that we will require any additional premises in the foreseeable future. When and if we require additional space, we intend to move at that time.

Our address for service is our registered and records office, which is located at 800-885 West Georgia Street, Vancouver BC Canada, V6C 3H1.

Properties

We do not currently own any properties.

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]

5


PART II

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

Market information

Our common shares are quoted on the OTC Bulletin Board of the Financial Industry Regulatory Authority, Inc. Our symbol is “SGBHF” and our CUSIP number is 78417V 104. There were no trades of our shares of common stock made through the facilities of the OTC Bulletin Board for each quarterly period within the two most recent fiscal years.

Transfer Agent

The transfer agent and registrar for our common stock is Pacific Stock Transfer Company 500 E. Warm Springs Road, Suite 240, Las Vegas NV 89119 (702) 361-3033

Holders of Common Stock

As of June 28, 2010, there were 42 holders of record of our common stock. As of such date, 22,820,446 shares were issued and outstanding.

Dividends

We have not declared any dividends on our common stock since the inception of our company. There is no restriction in our articles of incorporation and bylaws that will limit our ability to pay dividends on our common stock. However, we do not anticipate declaring and paying dividends to our shareholders in the near future.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

On November 12, 2008, we issued 1,500,000 common shares at a price of CDN$0.10 per share for gross proceeds of CDN$150,000 to one non-U.S. person (as that term is defined in Regulation S promulgated under the Securities Act of 1933) in an offshore transaction. In issuing these common shares, we relied on Regulation S and/or Section 4(2) of the Securities Act of 1933. We used the proceeds for general working capital purpose.

Securities authorized for issuance under equity compensation plans.

As at March 31, 2010, we had not adopted any equity compensation plan and no stock, options, or other equity securities were awarded to our principal executive officer or two other most highly compensated executive officers.







Plan category



Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights



Weighted-average
exercise price of
outstanding options,
warrants and rights
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
  (a) (b) (c)
Equity compensation plans approved by security holders Nil Nil Nil
Equity compensation plans not approved by security holders Nil Nil Nil
Total Nil Nil Nil

6


Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table is a summary of purchases made by or on behalf of our company or any “affiliated purchaser,” of shares or other units of any class of the our equity securities that is registered by the issuer pursuant to section 12 of the Exchange Act.

  (a) (b) (c) (d)






Period




Total number of
shares (or units)
purchased





Average price paid
per share (or unit)


Total number of
shares (or units)
purchased as part of
publicly announced
plans or programs
Maximum number
(or approximate
dollar value) of
shares (or units) that
may yet be
purchased under the
plans or programs
None        

ITEM 6 SELECTED FINANCIAL DATA

Not applicable.

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

The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this annual report on Form 10-K.

Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Overview

The following discussion should be read in conjunction with audited financial statements of our company and the related notes that appear elsewhere in this annual report.

The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to; those discussed below and elsewhere in this annual report, particularly in the section entitled “Risk Factors” beginning on page 5.

Liquidity & Capital Resources

Our financial condition for the12 months ended March 31, 2010 and 2009 and the changes between those periods for the respective items are summarized as follows:

Working Capital

    March 31  
    2010     2009  
Current Assets $  43,760   $  59,144  
Current Liabilities   177,493     33,186  
Working Capital $  (133,733 ) $  25,958  

7


As of March 31, 2010 our working capital decreased significantly because we have not generated any revenues and we continued to incur and accrue management service fees. We have incurred recurring losses from inception. Our ability to meet our financial obligations and commitments is primarily dependent upon continued financial support of our shareholders, directors and the continued issuance of equity to new and existing shareholders.

Management believes that our company’s cash will not be sufficient to meet our working capital requirements for the next 12-month period. Should this prove to be the case, our company plans to raise the capital required to satisfy our immediate short-term needs and additional capital required to meet our estimated funding requirements for the next 12 months primarily through the private placement of our equity securities. There is no assurance that our company will be able to obtain further funds required for our continued working capital requirements.

Cash Flows

    Year Ended March 31  
    2010     2009  
Net cash (used for) by operating activities $  (156,128 ) $  (36,616 )
Net cash (used for) investing activities   -     -  
Net cash provided by financing activities   146,849     91,071  
Net increase (decrease) in cash $  (13,236 ) $  53,138  

Results of Operations

Revenues

We have not earned any revenues since our inception. We are still in the development stage and do not anticipate earning any revenues until such time as we can establish an alliance with targeted companies to market or distribute the results of our research projects.

The following summary of our results of operations should be read in conjunction with our audited financial statements.

Expenses

Our expenses for the 12 months ended March 31, 2010 and 2009 were as follows:

    Year     Year  
    Ended     Ended  
    March 31,     March 31,  
    2010     2009  
Revenue $  -   $  -  
             
Expenses:            
   Amortization   140     645  
   Automobile   247     660  
   General & administrative   6,867     4,946  
   Interest   79     1,060  
   Director fee   22,228     -  
   Management fees   88,022     23,949  
   Professional fees   24,763     65,366  
   Rent   8,331     5,322  
   Travel   4,040     461  
Total Expenses   154,717     102,409  

In the 12 months ended March 31, 2010 our expenses increased 51.08% relative to the 12 month period ended March 31, 2009 because of increased amount of management service fees and directors fees paid and incurred.

8


Cash Requirements

We anticipate our operating expenses will increase as we undertake our plan of operations. The increase will be attributable to the retention of consultant experts, travelling expenses, and development expenses as we explore opportunities to adopt a business plan other than the current business of providing management services to schools in the international education industry. We anticipate our ongoing operating expenses will also increase as a result of our ongoing reporting requirements under the Exchange Act.

We estimate our general administrative expenses and working capital requirements for the next 12-month period to be as follows:

Automobile $  1,000  
Office Expenses   8,000  
Telephone and Communications   2,000  
Travel   5,000  
Accounting   20,000  
Legal   20,000  
Management Fees   90,000  
Directors Fees   24,000  
Total $  170,000  

There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to scale down or perhaps even cease the operation of our business.

Off-Balance Sheet Arrangements

We have not entered into any transactions with unconsolidated entities whereby we have financial guarantees or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations that provide financing, liquidity, market risk or credit risk support to us

Going Concern

Our financial statements have been prepared on a going concern basis, which implies we will continue to realize our assets and discharge our liabilities in the normal course of business. We have not generated revenues since inception and have never paid any dividends and are unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of our company as a going concern is dependent upon the continued financial support from our shareholders, our ability to obtain equity financing to continue operations, and the attainment of profitable operations. As at March 31, 2010, we have working capital deficit of $133,733 and accumulated losses of $407,933 since inception. These factors raise substantial doubt regarding our ability to continue as a going concern.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses in the reporting period. We regularly evaluate our estimates and assumptions related to impairment of long-lived assets, donated expenses and deferred income tax asset valuation allowances. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses that are not readily apparent from other sources. The actual results experienced by us may differ materially and adversely from our estimates. To the extent there are material differences between our estimates and the actual results, our future results of operations will be affected.

9


We believe the following are either (i) critical accounting policies that require us to make significant estimates or assumptions in the preparation of our consolidated financial statements or (ii) other key accounting policies that generally do not require us to make estimates or assumptions but may require us to make difficult or subjective judgments:

Long-Lived Assets

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life.

Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109 “Accounting for Income Taxes” as of its inception. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

10


SGB INTERNATIONAL HOLDINGS INC.
(Formerly Orca International Language Schools Inc.)
(A Development Stage Company)

March 31, 2010

  Index
   
Report of Independent Registered Public Accounting Firm F-1
   
Balance Sheets F-2
   
Statements of Operations F-3
   
Statements of Shareholders’ Equity (Deficit) F-4
   
Statements of Cash Flows F-5
   
Notes to the Financial Statements F-6

11


Stan J.H. Lee, CPA

2160 North Central Rd. Suite 203 • Fort Lee • NJ 07024
P.O. Box 436402 • San Ysidro • CA 92143-9402
619-623-7799 • Fax 619-564-3408 • E-mail) stan2u@gmail.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
SGB International Holdings Inc.
(A Development Stage Company)

We have audited the accompanying balance sheet of SGB International Holdings Inc. (the “Company”) (a development stage enterprise) as of March 31, 2010 and the related statements of operations, stockholders’ deficit and cash flows for the fiscal year then ended and for the period beginning November 6, 1997 (inception) through March 31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. The financial statements of SGB International Holdings Inc. as of March 31, 2009, were audited by other auditors whose report dated June 17, 2009, expressed an unqualified opinion on those statements. Their report included an explanatory paragraph regarding going concern.

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 audits 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 financial statements referred to above present fairly, in all material respects, the financial position of SGB International Holdings Inc. as of March 31, 2010 and the results of its operations and its cash flows for the fiscal year then ended and for the period beginning November 6, 1997 (inception) through March 31, 2010. in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company would continue as a going concern. As discussed in Note 1 to the financial statements, the Company has not generated profits to date and has a working capital deficit which raises substantial doubt as to its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Stan J.H. Lee, CPA

___________________________
Stan J.H. Lee, CPA
June 22, 2010

F-1


SGB INTERNATIONAL HOLDINGS INC.
(Formerly Orca International Language Schools Inc.)
(A Development Stage Company)
Balance Sheets
(Expressed in US dollars)

          As of  
          March 31,     March 31,  
          2010     2009  
ASSETS:                  
Current Assets                  
Cash     $ 43,494   $  56,730  
Current assets of discontinued operations   (Note 9 )   -     731  
GST receivable         266     1,683  
Total Current Assets         43,760     59,144  
Property and Equipment   (Note 3 )   -     121  
                 
Total Assets     $ 43,760   $ 59,265  
                   
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT):                  
Current Liabilities                  
Accounts payable     $ -   $  396  
Accrued liabilities   (Note 4 )   5,951     8,097  
Due to related parties   (Note 5 )   171,542     24,693  
Notes payable   (Note 6 )   -     -  
Total Liabilities         177,493     33,186  
Commitments and Contingencies   (Note 10 )            
Stockholders’ Equity (Deficit)                  
Common Stock, Unlimited shares authorized, without par value
22,820,445 shares issued and outstanding
        198,857     198,857  
Donated Capital   (Note 5 & 7 )   71,435     71,435  
Accumulated Other Comprehensive Loss         3,908     9,003  
Deficit Accumulated During the Development Stage         (407,933 )   (253,216 )
                   
Total Stockholders’ Equity (Deficit)         (133,733 )   26,079  
                 
Total Liabilities and Stockholders’ Equity (Deficit)     $ 43,760   $ 59,265  

See Notes to Financial Statements

F-2


SGB INTERNATIONAL HOLDINGS INC.
(Formerly Orca International Language Schools Inc.)
(A Development Stage Company)
Statements of Operations
(Expressed in US dollars)

                      Accumulated  
                      from  
          For the     For the     Nov 6,1997  
          Fiscal Year     Fiscal Year     (Date of  
          Ended     Ended     Inception) to  
          March 31,     March 31,     March 31,  
          2010     2009     2010  
Revenue     $ -   $  -   $  -  
                         
Expenses:                        
                         
Amortization         140     645     1,994  
Automobile         247     660     907  
General and administrative         6,867     4,946     43,255  
Interest         79     1,060     2,249  
Director fee   (Note 5 )   22,228     -     22,228  
Management fees   (Note 5 )   88,022     23,949     126,692  
Professional fees         24,763     65,366     143,039  
Rent   (Note 8 )   8,331     5,322     24,052  
Travel         4,040     461     4,501  
                         
Total Expenses         154,717     102,409     368,917  
                         
Net Loss from Continuing Operations         (154,717 )   (102,409 )   (368,917 )
                         
Other Income                        
                         
Gain on Disposal of Temporary Investments         -     -     946  
 Forgiveness of debt               7,095     7,095  
                         
Net Loss before Discontinued Operations         (154,717 )   (95,314 )   (360,876 )
                         
Discontinued Operations         -     (785 )   (47,058 )
                         
Net Loss         (154,717 )   (96,099 )   (407,933 )
Other Comprehensive Income (Loss)                        
                         
Foreign currency translation adjustment         (5,096 )   8,562     3,907  
                         
Comprehensive Loss     $ (159,813 ) $  (87,537 ) $  (404,026 )
                         
Net Loss Per Share – Basic and Diluted         (0.01 )   (0.00 )   N/A  
                         
Weighted Average Shares Outstanding         22,820,445     21,210,000     N/A  

See Notes to Financial Statements

F-3


SGB INTERNATIONAL HOLDINGS INC.
(Formerly Orca International Language Schools Inc.)
(A Development Stage Company)
Statement of Stockholders' Equity (Deficit)
(Expressed in US dollars)

                                  Deficit              
                                  Accumulated     Accumulated        
    Common Stock           Common           During     Other        
          Par     Subscriptions     Stock     Donated     Development     Comprehensive        
    Shares     Value     Receivable     Subscribed     Capital     Stage     Income(Loss)     Total  
                                                 
    #     $     $     $     $     $     $     $  
                                                 
Balance - March 31, 2008   28,220,445     81,072     -     4,722     16,208     (157,118 )   441     (54,675 )
                                                 
Shares cancelled without consideration   (12,150,000 )   -     -     -     -     -     -     -  
                                                 
Issuance of Common shares for cash at CDN$0.10 per share   6,750,000     121,245     -     -     -     -     -     121,245  
                                                 
Common stock issuance costs   -     (3,460 )   -     -     -     -     -     (3,460 )
                                                 
Donated rent and services   -     -     -     -     4,388     -     -     4,388  
                                                 
Forgiven debt   -     -     -     -     45,962     -     -     45,962  
                                                 
Common stock subscribed at CDN$0.10 per share   -     -     -     (4,722 )   -     -     -     (4,722 )
                                                 
Donated stock subscriptions   -     -     -     -     4,876     -     -     4,876  
                                                 
Foreign currency translation   -     -     -     -     -     -     8,562     8,562  
                                                 
Net loss for the year   -     -     -     -     -     (96,098 )   -     (96,098 )
                                                 
Balance - March 31, 2009   22,820,445     198,857     -     -     71,435     (253,216 )   9,003     26,079  
                                                 
Foreign currency translation   -     -     -     -     -     -     (5,095 )   (4,688 )
                                                 
Net loss for the year   -     -     -     -     -     (154,717 )   -     (155,124 )
                                                 
Balance - March 31, 2010   22,820,445     198,857     -     -     71,435     (407,933 )   3,908     (133,733 )

See Notes to Financial Statements

F-4


SGB INTERNATIONAL HOLDINGS INC.
(Formerly Orca International Language Schools Inc.)
(A Development Stage Company)
Statements of Cash Flows
(Expressed in US dollars)

                Accumulated  
    For the     For the     From  
    Fiscal Year     Fiscal Year     Nov 6, 1997  
    Ended     Ended     (Date of  
    March 31,     March 31,     Inception) to  
    2010     2009     March 31, 2010  
                   
Cash flows from operating activities                  
Net loss $  (154,717 ) $  (96,098 ) $  (407,933 )
Adjustment to reconcile net loss to net cash used in operating activities:            
Amortization   140     645     1,994  
Donated services         50,231     66,439  
Forgiven debt         (7,096 )   (7,096 )
Gain on sale of temporary investment         -     (946 )
Changes in operating assets and liabilities:                  
 Prepaid expenses         -     (1,329 )
 Accounts receivable   2,730     (1,717 )   232  
 Accounts payable and accrued liabilities   (4,592 )   (2,564 )   5,817  
 Due to related party         19,984     32,631  
                   
Net Cash (Used for) by Operating Activities   (156,439 )   (36,616 )   (310,191 )
                   
Cash flows from investing activities                  
 Disposal of assets from discontinued operation   -     -     (1,785 )
 Proceeds from sale of temporary investment   -     -     2,795  
 Purchase of property and equipment   -     -     (1,957 )
                   
Net Cash (Used for) Provided by Investing Activities   -     -     (947 )
                   
Cash flows from financing activities                  
 Proceeds from notes payable         (22,204 )   12,867  
 Advances from related parties   140,889     (4,510 )   217,451  
 Proceeds from common stock subscribed         117,785     122,507  
                   
Net Cash (Used for) Provided by Financing Activities   140,889     91,071     352,825  
                   
Effect of exchange rate changes on cash   2,314     (1,318 )   1,807  
                   
Increase (Decrease) In Cash   (13,236 )   53,138     43,494  
                   
Cash – Beginning of Period   56,730     3,592     -  
                   
Cash – End of Period $  43,494   $  56,730   $  43,494  
                   
Supplemental Disclosures                  
Interest paid $     $  363   $  363  
Income taxes paid $     $  -   $  -  

See Notes to Financial Statements

F-5


SGB INTERNATIONAL HOLDINGS INC.
(Formerly Orca International Language Schools Inc.)
(A Development Stage Company)
Notes to the Financial Statements
(Expressed in US dollars unless otherwise stated)
March 31, 2010

1.

Development Stage Company

     

Orca International Language Schools Inc. (the “Company”) was incorporated in British Columbia, Canada on November 6, 1997. It changed its name to SGB International Holdings Company on March 3, 2009. The Company is a Development Stage Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No. 7 “Accounting and Reporting by Development Stage Enterprises”. During the third quarter of 2008, the Company changed its principal business from the language education business to energy investment.

     

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at March 31, 2010, the Company has working capital deficit of $133,733 and accumulated losses of $404,026 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

     
2.

Summary of Significant Accounting Policies

     
a)

Basis of Presentation

     

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company’s fiscal year-end is March 31.

     
b)

Use of Estimates

     

The preparation of financial statements in conformity with United States generally accepted accounting principles 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. The Company regularly evaluates estimates and assumptions related to useful life and recoverability of long-lived assets, donated expenses, and deferred income tax valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

     
c)

Basic and Diluted Net Income (Loss) Per Share

     

The Company computes net income (loss) per share in accordance with SFAS No. 128, "Earnings per Share". SFAS No. 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. As at March 31, 2010, there are no dilutive potential common shares.

     
d)

Comprehensive Loss

     

SFAS No. 130, “Reporting Comprehensive Income,” establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at March 31, 2010, the Company’s component of comprehensive loss consisted of loss from operations and foreign currency translation adjustments.

F-6



  e)

Cash and Cash Equivalents

     
 

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

     
  f)

Property and Equipment

     
 

Property and equipment consists of computer hardware, is recorded at cost, and is depreciated on a straight line basis over an estimated useful life of three years.

     
  g)

Website Development Costs

     
 

The Company recognizes the costs associated with developing a website in accordance with the American Institute of Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) No. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”. The Company also follows the guidance pursuant to the Emerging Issues Task Force (EITF) No. 00-2, “Accounting for Website Development Costs” for website development costs incurred. The Company capitalizes website development costs that meet the capitalization criteria contained in SOP No. 98-1 unless recoverability of costs is not assured. To date the Company has charged all website development costs to operations.

     
  h)

Long-Lived Assets

     
 

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life.

     
 

Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

     
  i)

Financial Instruments and Fair Value Measures

SFAS No. 157 “Fair Value Measurements” requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. SFAS No. 157 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. SFAS No. 157 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Our financial instruments consist principally of cash, accounts receivable, accrued liabilities, accounts payable, and amounts due to a related party. Pursuant to SFAS No. 157, the fair value of our cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

F-7



 

The Company’s operations are in Canada and the United States, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

     
  j)

Income Taxes

     
 

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109 “Accounting for Income Taxes” as of its inception. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

     
  k)

Foreign Currency Translation

     
 

The Company’s functional currency is the Canadian dollar. The financial statements are translated to United States dollars in accordance with SFAS No. 52 “Foreign Currency Translation” using period-end rates of exchange for assets and liabilities, and average rates of exchange for the year for revenues and expenses. Translation gains (losses) are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ equity (deficit). Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in United States dollars. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

     
  l)

Stock-based Compensation

     
 

The Company records stock-based compensation in accordance with SFAS No. 123R “Share Based Payments”, using the fair value method. The Company has not issued any stock options and has had no unvested share based payments since inception.

     
  m)

Recent Accounting Pronouncements

On April 1, 2009, the Company implemented the provisions of ASC 805 “Business Combinations” (“ASC 805”) which provides revised guidance for recognizing and measuring identifiable assets and goodwill acquired. The standard now requires the assets acquired, liabilities assumed, and any non-controlling interest to be measured at their fair values as of the acquisition date. ASC 805 also requires expensing of acquisition related costs and restructuring costs, and re-measurement of earn out provisions at fair value. This standard is effective for any of the Company’s business combinations on or after April 1, 2009. The adoption of this standard did not have any effect on the Company’s consolidated financial statements.

On April 1, 2009, the Company implemented the provisions ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 provides a consistent definition of fair value that focuses on exit price, prioritizes the use of market-based inputs over entity-specific inputs for measuring fair value and establishes a three-level hierarchy for fair value measurements. The Provisions of ASC 820, as issued, are effective for the fiscal years beginning after November 15, 2007. In February 2008, the Financial Accounting Standards Board, or FASB delayed the effective date for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (that is, at least annually) to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years for items within the scope. The adoption of this standard did not have any effect on the Company’s consolidated financial statements.

In June 2009, the FASB, issued ASC 105 which is the single source of authoritative nongovernmental U.S. generally accepted accounting principles, or GAAP, superseding existing FASB, American Institute of Certified Public Accountants, or AICPA, Emerging Issues Task Force, or EITF, and related accounting literature. This standard reorganizes the thousands of GAAP pronouncements into roughly 90 accounting topics and displays them using a consistent structure. Also included is relevant Securities and Exchange Commission guidance organized using the same topical structure in separate sections. This standard was effective for financial statements issued for reporting periods that end after September 15, 2009. The Company adopted this standard for the interim period ending September 26, 2009. The adoption of this standard did not have a material impact on our financial statements, however, it did change our references to GAAP in our consolidated financial statements.

In June 2009, the FASB issued authoritative guidance that eliminates the quantitative approach previously required for determining the primary beneficiary of a variable interest entity and requires on-going qualitative reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. This guidance is effective for fiscal years beginning after November 15, 2009. The adoption of this guidance is not anticipated to have a material impact on the Company’s consolidated financial statements.

F-8


Effective September 15, 2009, the Company adopted a new accounting standard that establishes the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) as the exclusive reference to be applied in the preparation of financial statements in conformity with GAAP. Accordingly, all references to legacy guidance issued under previously recognized authoritative literature have been removed in the third quarter of fiscal 2009. The Company’s adoption of this authoritative guidance changed how it references GAAP in its disclosures.

In October 2009, the FASB issued guidance on the accounting for multiple-deliverable revenue arrangements. This guidance establishes a selling price hierarchy for determining the selling price of a deliverable; eliminates the residual method of allocation and requires arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method; and requires a vendor to determine its best estimate of selling price in a manner consistent with that used to determine the selling price of the deliverable on a stand-alone basis. This guidance also expands the required disclosures related to a vendor’s multiple-deliverable revenue arrangements. The guidance is effective beginning February 1, 2011 with early adoption permitted. The Company does not believe the adoption of this standard will have a material impact on our consolidated results of operations, financial condition, cash flows, or disclosures.

In October 2009, the FASB issued ASU No. 2009-13, “Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements (a consensus of the FASB Emerging Issues Task Force),” which amends ASC 605-25, “Revenue Recognition: Multiple-Element Arrangements.” ASU No. 2009-13 addresses how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting and how to allocate consideration to each unit of accounting in the arrangement. This ASU replaces all references to fair value as the measurement criteria with the term selling price and establishes a hierarchy for determining the selling price of a deliverable. ASU No. 2009-13 also eliminates the use of the residual value method for determining the allocation of arrangement consideration. Additionally, ASU No. 2009-13 requires expanded disclosures. This ASU will become effective for us for revenue arrangements entered into or materially modified on or after April 1, 2011. Earlier application is permitted with required transition disclosures based on the period of adoption. We are currently evaluating the impact of this standard on our consolidated financial statements.

In October 2009, the FASB issued ASU No. 2009-14, “Software (Topic 985): Certain Revenue Arrangements That Include Software Elements (a consensus of the FASB Emerging Issues Task Force).” ASU No. 2009-14 amends ASC 985-605, “Software: Revenue Recognition,” such that tangible products, containing both software and non-software components that function together to deliver the tangible product’s essential functionality, are no longer within the scope of ASC 985-605. It also amends the determination of how arrangement consideration should be allocated to deliverables in a multiple-deliverable revenue arrangement. This ASU will become effective for us for revenue arrangements entered into or materially modified on or after April 1, 2011. Earlier application is permitted with required transition disclosures based on the period of adoption. We are currently evaluating the impact of this standard on our consolidated financial statements. Both ASU No. 2009-13 and ASU No. 2009-14 must be adopted in the same period and must use the same transition disclosures.

In January 2010, the FASB issued an update that improves the requirements related to fair value measurements and disclosures about transfers between Level 1, Level 2 and Level 3 assets and the disaggregated activity in the roll forward for Level 3 fair value measurements. These new disclosures are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The Company does not expect the adoption of these expanded disclosures to have a material impact on its consolidated financial statements.

In February 2010, the FASB issued Accounting Standards Update (“ASU”) No. 2010-09 (“ASU 2010-09”), which amends ASC 855 to address certain implementation issues related to an entity’s requirement to perform and disclose subsequent-events procedures. The new guidance clarifies that management must evaluate, as of each reporting period, events or transactions that occur after the balance sheet date through the date that the financial statements are issued. Management must perform its assessment for both interim and annual financial reporting periods. ASU 2010-09 also exempts SEC filers from disclosing the date through which subsequent events have been evaluated. The adoption of this amended standard did not have a material impact on the company’s consolidated financial statements.

F-9


IMPACT OF NEW ACCOUNTING STANDARDS

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position, or cash flow.

3.     Property and Equipment

                  March 31,     March 31,  
                  2010     2009  
            Accumulated     Net Carrying     Net Carrying  
      Cost     Amortization     Value     Value  
      $     $     $     $  
                           
  Computer equipment   2,126     2,126     -     121  

4.

Accrued Liabilities

     

Accrued liabilities as at March 31, 2010, consist of $ 5,951 bill payable.

     
5.

Related Party Transactions

     
a)

On January 1, 2010 the Company entered into a service agreement with Xin Lenny LI, the director of the Company. Pursuant to this agreement, the Company agreed to accrue $984 monthly as director fee. On March 31, 2010, Mr. Li agreed to convert the accrued director fee of $2,952 for the period from January 1 to March 31, 2010 and the accrued director fee of $12,403 for the period from July 1 to September 30, 2009 owed by the Company to shareholder’s loan.

     
b)

On December 31, 2009, Xin Lenny LI, the director of the Company agreed to convert the accrued director fee of $ 8,269 owed by the Company for the period of May to June 2009 to shareholder’s loan. And, Xin Lenny LI voluntarily to waive the director fee of this quarterly from October to December 2009.

     
c)

From April 1, 2009 to March 31, 2010, the company incurred four quarterly management fee total of $88,022 to the significant shareholder, SGB C&C Investment Ltd.

     
d)

To year ended March 31, 2010, the significant shareholder, SGB C&C Investment Ltd. loaned the Company $171,542 (CDN$174,260) for expenses and management fee to be incurred by the Company. The amount is non-interest bearing, unsecured, and due on demand.

     
e)

Until December 31, 2008, the former President of the Company provided donated office premises to the Company valued at $ 229 per month. During the year ended March 31, 2009, donated rent of $1,463 was charged to operations. During the year ended March 31, 2009, the Company also recognized $2,926 for donated management services at CDN$500 per month provided by the former President of the Company.

     
f)

As at March 31, 2009, amounts owing to the former President of the Company of $45,962 (CDN$47,131) were donated to the Company and recorded as donated capital. At March 31, 2010 the Company owed $nil to the President of the Company.

     
6.

Notes Payable

     
a)

Notes payable as at March 31, 2010 was nil.

     
b)

During the year ended March 31, 2009, two unsecured non-interest bearing loans with no specified terms of repayment totalling $7,096 (CDN$8,000) were forgiven. During the period, the Company recorded a gain on forgiveness of debt of $7,096.

     
7.

Common Stock

     

Company is authorized to issue no-par unlimited shares and has 22,820,445 shares issued and outstanding as of March 31, 2010 and 2009, respectively.

     
a)

On March 4, 2009, the Company approved a 4.5 for one forward stock split of the issued and outstanding common stock. As a result, the issued and outstanding capital has increased from 5,071,210 shares of common stock with no par value to 22,820,445 shares of common stock with no par value.

     
b)

On March 3, 2009, the Company created a new class of preferred stock. As a result, the authorized capital consists of an unlimited amount of common stock without par value and an unlimited amount of preferred stock without par value. The Company has not issued any preferred stock.

F-10



 

On November 12, 2008, the Company entered into a subscription agreement with the significant shareholder, SGB C &C Investment Ltd. for the sale of 6,750,000 split-adjusted common shares for gross proceeds of

     
c)

$121,245 (CDN$150,000). Subsequent to the sale, SGB C &C Investment Ltd. owns 18,607,500 split- adjusted common shares which represent 81.54% of the issued and outstanding shares of the Company

     
d)

On November 12, 2008, the former President of the Company voluntarily returned 6,750,000 split-adjusted common shares to the Company for cancellation

     
e)

On July 24, 2008, pursuant to a share acquisition agreement, the former President of the Company transferred 11,857,500 split adjusted common to the significant shareholder, SGB C &C Investment Ltd. in consideration for $308,750. The transferred shares represent 51.96% of the issued and outstanding common share capital resulting in a change of control of the Company.

     
f)

On April 8, 2008, three shareholders returned for cancellation an aggregate of 5,400,000 split adjusted shares of common stock to treasury for no consideration.

     
8.

Rent

     

From April 1, 2009 to March 31, 2010, the Company paid monthly rent fee of $ 729 to an unrelated company.

     
9.

Discontinued Operations

     

On December 31, 2008, the Company discontinued all operations related to the language education business. The results of discontinued operations are summarized as follows:


    Accumulated              
    from November 6,              
    1997(Date of    The Year     The Year  
    Inception) to     Ended     Ended  
    March 31,     March 31,     March 31,  
    2010     2010     2009  
    $     $     $  
                   
Expenses                  
   Automobile   25,414     -     324  
   Travel   21,644     -     461  
                   
Total Expenses   47,058     -     785  
                   
Net Loss   (47,058 )   -     (785 )

As at March 31, 2010 and March 31, 2009, the results of operations, assets and liabilities of the language education business have been reported as discontinued operations.

  March 31,     March 31,    
  2010     2009  
  $      
             
GST receivable   -     731  
             
Current assets of discontinued operations   -     731  

10.

Commitments and Contingencies

   

On January 1, 2010 the Company entered into a service agreement with Xin Lenny LI, the director of the Company. Pursuant to this agreement, the Company agreed to accrue $ 984 monthly as director fee.

   

On January 15, 2009 the Company entered into a service agreement with SGB C&C Investment Ltd. a related party. Pursuant to this agreement, the Company agreed to pay $ 22,006 quarterly.

   

On April 3, 2009, the Company entered into a lease agreement for office premises with an unrelated party. Pursuant to this agreement, the Company agreed to pay $ 729 per month for a term expiring on June 30, 2010.

   
11.

Incomes Taxes

   

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109, “Accounting for Income Taxes”, as of its inception. The Company has incurred non-capital losses as scheduled below:


F-11



Year of Loss   Amount      Year of Expiration  
2005 $ 18,251     2015  
2006   18,043     2026  
2007   28,375     2027  
2008   73,240     2028  
2009   40,636     2029  
2010   149,295     2030  
$ 327,840        

Pursuant to SFAS No. 109, the Company is required to compute tax asset benefits for non-capital losses carried forward. Potential benefit of non-capital losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the losses carried forward in future years.

The reconciliation of income tax attributable to continuing operations to income tax expense computed at the statutory tax rates of 34% is:

    2010     2009  
    $     $  
Income tax benefit computed at statutory rates   54,293     32,789  
Permanent differences   -     (18,843 )
Temporary differences   (42 )   (80 )
Unrecognized tax losses   (54,251 )   (13,866 )
Provision for income taxes        

Significant components of the Company’s deferred tax assets and liabilities, after applying enacted corporate income tax rates, are as follows:

    2009     2009  
    $     $  
Deferred income tax assets            
 Net losses carried forward   111,859     60,920  
 Other   424     425  
   Valuation allowance   (112,283 )   (61,345 )
Net deferred income tax asset        

12.     Subsequent events

Management has evaluated subsequent events up to and including June 22, 2010 which is the date the financial statements were available for issuance and determined there is no subsequent event to disclose.

F-12


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

On July 31, 2009, we dismissed Manning Elliott LLP as our principal independent accountant, and on July 31, 2009, we engaged Stan Jeong-Ha Lee as our principal independent accountant. The decision to dismiss Manning Elliott and to appoint Stan Lee was recommended by our board of directors.

Manning Elliott’s report on our financial statements for either of the two previous fiscal years ended March 31, 2009 and 2008 did not contain an adverse opinion or disclaimer of opinion, or qualification or modification as to uncertainty, audit scope, or accounting principles, except that such report on our financial statements contained an explanatory paragraph in respect to the substantial doubt about our ability to continue as a going concern.

During our two previous fiscal years ended March 31, 2009 and 2008 and in the subsequent interim period through the date of resignation, there were no disagreements, resolved or not, with Manning Elliott on any matter of accounting principles or practices, financial statement disclosure, or audit scope and procedures, which disagreement(s), if not resolved to the satisfaction of Manning Elliott, would have caused Manning Elliott to make reference to the subject matter of the disagreement(s) in connection with its report.

During our two pervious fiscal years ended March 31, 2009 and 2008 and in the subsequent interim period through the date of resignation, there were no reportable events as described in Item 304(a)(1)(v) of Regulation S-K.

We provided Manning Elliott with a copy of this Current Report on Form 8-K prior to its filing with the Securities and Exchange Commission, and requested that it furnish us with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the statements made in this Current Report on Form 8-K, and if not, stating the respects with which it does not agree. A copy of the letter provided from Manning Elliott is filed as an exhibit to this Current Report on Form 8-K.

During our two previous fiscal years ended March 31, 2009 and 2008 and in the subsequent interim period through the date of appointment, we have not consulted with Stan Lee regarding either the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, nor has Stan Lee provided to us a written report or oral advice that Stan Lee concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue. In addition, during such periods, we have not consulted with Stan Lee regarding any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) and the related instructions) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).

ITEM 9A(T). CONTROLS AND PROCEDURES

Disclosure controls and procedures

We maintain “disclosure controls and procedures”, as that term is defined in Rule 13a-15(e), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company's reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal accounting officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, our management, with the participation of our principal executive officer and principal financial officer, evaluated our company’s disclosure controls and procedures as of the end of the period covered by this annual report on Form 10-K. Based on this evaluation, our management concluded that as of the end of the period covered by this annual report on Form 10-K, our disclosure controls and procedures were not effective.

11


Internal control over financial reporting

Management's annual report on internal control over financial reporting

Our management, including our principal executive officer, our principal financial officer and our principal accounting officer and our Board of Directors, is responsible for establishing and maintaining a process 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.

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our internal control over financial reporting as of March 31, 2010. Our management’s evaluation of our internal control over financial reporting was based on the framework in Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of March 31, 2010 due to material weaknesses in our internal control over financial reporting as follows:

  • material post closing audit adjustments relating to recording of accrued expenses;

  • lack of segregation of duties;

  • inadequate security; and

  • lack of internal control processes over procurement.

Our management continues to review processes and will make necessary changes to strengthen our system of internal controls over financial reporting

A material weakness is a deficiency or a combination of control deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

This annual report does not include an attestation report of our company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our company’s independent registered public accounting firm pursuant to temporary rules of the SEC that permit our company to provide only management’s report in this annual report.

Limitations on Effectiveness of Controls

Our principal executive officer and principal financial officer do not expect that our disclosure controls or our internal control over financial reporting 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. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within 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 a simple error or mistake. Additional controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is 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, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

12


Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the period ended March 31, 2010 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

Certifications

Certifications with respect to disclosure controls and procedures and internal control over financial reporting under Rules 13a-14(a) or 15d-14(a) of the Exchange Act are attached to this annual report on Form 10-K.

ITEM 9B OTHER INFORMATION

None

PART III

ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers, Promoters and Control Persons

As at July 12, 2010, our directors and executive officers, their age, positions held, and duration of such, are as follows:

Name Position Held with our Company Date First Elected or Appointed
Xin Li President, Chief Executive Officer, Chief Financial Officer and Director September 9, 2008
Stuart Wooldridge Corporate Secretary and Director May 2, 2003
Jun Huang Director January 14, 2009

Family Relationships

There are no family relationships between any director or executive officer.

Business Experience

The following is a brief account of the education and business experience of directors and executive officers during at least the past five years, indicating their principal occupation during the period, and the name and principal business of the organization by which they were employed

Xin Li

Mr. Li has served as a director of China National Resources Development Holdings Ltd. from 2003 to 2006. He is also the President and CEO of SGB C&C Investments Ltd. from July 2008 to present.

Stuart Wooldridge

Mr. Wooldridge obtained his Bachelor of Commerce from the University of British Columbia in 1984 and his Masters of Business Administration from the University of British Columbia in 1992. Mr. Wooldridge has been a director of 555155 B.C. Ltd., a private consulting company, since 1990. Mr. Wooldridge was a director of VendTek Systems Inc. (VSI:TSXV) and is currently a director of Yuntone Capital Corp. (YTC:TSXV) and Changyu MedTech Ltd. (CYQ:TSXV).

13


Jun Huang

Mr. Huang served as the general manager of Guangzhou Xinbo Investment Consultant Ltd. from 1999 to 2001. He has also served as the President of Hubei Wuhan Dianjing Investment Consulting Ltd. from 2002 to present. He has also served as the executive director of Beijing Tianshengtianshi Culture & Media Co., Ltd. from 2007 to present and as the President of Shenzhen Tianshengrenhe Economic Consultant Ltd. from 2007 to present.

Involvement in Certain Legal Proceedings

Our directors, executive officers, or control persons have not been involved in any of the following events during the past five years:

  1.

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

     
  2.

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

     
  3.

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

     
  4.

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

Compliance with section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended March 31, 2010, all filing requirements applicable to its officers, directors and greater than ten percent beneficial owners were complied with.

Code of Ethics

We have not yet adopted a Code of Ethics.

Corporate governance

Committees of the Board

Our board of directors held no formal meetings during the year ended March 31, 2010. All proceedings of our board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the corporate laws of the Province of British Columbia and our Articles, as valid and effective as if they had been passed at a meeting of our directors duly called and held.

We currently do not have nominating or compensation committees or committees performing similar functions nor do we have a written nominating or compensation committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes that the functions of such committees can be adequately performed by our board of directors.

14


We do not have any defined policy or procedure requirements for shareholders to submit recommendations or nominations for directors. We do not currently have any specific or minimum criteria for the election of nominees to our board of directors and we do not have any specific process or procedure for evaluating such nominees. Our board of directors assesses all candidates, whether submitted by management or shareholders, and makes recommendations for election or appointment.

A shareholder who wishes to communicate with our board of directors may do so by directing a written request to the address appearing on the first page of this annual report.

Audit Committee and Audit Committee Financial Expert

We do not have a standing audit committee at the present time. Our board of directors has determined that we do not have a board member that qualifies as an “audit committee financial expert” as defined in Item 401(h) of Regulation S-K, nor do we have a board member that qualifies as “independent” as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.

We believe that our board of directors is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The board of directors of our company does not believe that it is necessary to have an audit committee because we believe that the functions of an audit committee can be adequately performed by the board of directors. In addition, we believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated any revenues from operations to date.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation

The particulars of compensation paid to the following persons:

  • our principal executive officer;

  • each of our two most highly compensated executive officers who were serving as executive officers at the end of the year ended March 31, 2010; and

  • up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the most recently completed financial year,

who we will collectively refer to as the named executive officers, for our years ended March 31, 2010 and 2009 are set out in the following summary compensation table:






Name and
principal
position







Year






Salary
($)






Bonus
($)





Stock
awards
($)





Option
awards
($)




Non-equity
incentive plan
compensation
($)
Change in
pension value
and
nonqualified
deferred
compensation
earnings
($)





All other
compensation
($)






Total
($)
Xin Li(1)
President, CEO,
CFO
2010
2009
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$14,497(3)
$Nil
$14,497
$Nil
Stuart
Wooldridge(2)
Secretary
2010
2009
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil

15


1.           Mr. Li was appointed President on September 9, 2008, then appointed CEO and CFO on January 14, 2009;
2.           Mr. Wooldridge resigned as President on September 9, 2008 and is currently serving as Secretary and a director.
3.           From April 1, 2009 to March 31, 2010, our company incurred quarterly management service fees totaled $88,022 to SGB C&C Investment Ltd. and Mr. Li and a 16.47% owner of SGB C&C Investment Ltd.

Employment Agreements

We have not entered into any employment agreement or consulting agreement with our directors and executive officers.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth for each named executive officer certain information concerning the outstanding equity awards as of March 31, 2010.

















Name
Option awards Stock awards









Number of
securities
underlying
unexercised
options
(#)
exercisable









Number of
securities
underlying
unexercised
options
(#)
unexercisable





Equity
incentive
plan
awards:
Number of
securities
underlying
unexercised
unearned
options
(#)












Option
exercise
price
($)













Option
expiration
date








Number
of shares
or units
of stock
that
have not
vested
(#)








Market
value of
shares of
units of
stock that
have not
vested
($)


Equity
incentive
plan
awards:
Number
of
unearned
shares,
units or
other
rights
that have
not vested
(#)
Equity
incentive
plan
awards:
Market
or payout
value of
unearned
shares,
units
or other
rights
that
have not
vested
($)
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
Xin Li Nil Nil Nil Nil Nil Nil Nil Nil Nil
Stuart Wooldridge Nil Nil Nil Nil Nil Nil Nil Nil Nil

Compensation of Directors

Our board of directors has received no compensation to date and there are no plans to compensate them in the near future, unless and until we begin to realize revenues and become profitable in our business operations.

The table below shows the compensation of our directors for our last completed fiscal year ended March 31, 2010:





Name
Fees
earned or
paid in
cash
($)


Stock
awards
($)


Option
awards
($)
Non-equity
incentive
plan
compensation
($)
Nonqualified
deferred
compensation
earnings
($)


All other
compensation
($)



Total
($)
(a) (b) (c) (d) (e) (f) (g) (h)
Xin Lenny Li 23,624 Nil Nil Nil Nil Nil 23,624

16


Long-Term Incentive Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers, except that our directors and executive officers may receive stock options at the discretion of our board of directors. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors.

We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.

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

In the following tables, we have determined the number and percentage of shares beneficially owned in accordance with Rule 13d-3 of the Exchange Act based on information provided to us by our controlling shareholders, executive officers and directors, and this information does not necessarily indicate beneficial ownership for any other purpose. In determining the number of shares of our common stock beneficially owned by a person and the percentage ownership of that person, we include any shares as to which the person has sole or shared voting power or investment power, as well as any shares subject to warrants or options held by that person that are currently exercisable or exercisable within 60 days.

Security ownership of management


Title of class
(2) Name and address of
beneficial owner
(3) Amount and nature
of beneficial ownership
(4) Percent of
class (1)
common stock



Jun Huang
New World Trade Center Building
634 Hankou Jiefang Road
Floor 22, Suite C
Wuhan, China 51806
2,000,000    Direct



8.76%



common stock

Xin Li
909-6081 No. 3 Road
Richmond, BC Canada V6Y 2B2
       12,185,833    Indirect(3)

53.40%

common stock

Stuart Woolridge
1685 – 58A Street
Delta, BC Canada V4L 1X5
   320,446   Direct

1.4%

common stock Directors and officers as a group 14,506,279 63.56%

1 Percentage of ownership is based on 22,820,446 common shares issued and outstanding as of June 28, 2010. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

2 These shares are held by SGB C&C Investment Ltd., a British Columbia company owned by Ming Li (13.16%), Jing Li (14.23%), Xin Li (16.47%) and Debbie Tin (7.14%)

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Changes in Control

On July 24, 2008, pursuant to the terms of a share transfer agreement dated July 2, 2008 among Stuart Wooldridge, SGB C&C Investment Ltd. and our company, SGB C&C Investment Ltd. acquired 2,635,000 shares of our common stock from Mr. Wooldridge. The 2,635,000 shares of our common stock acquired by SGB C&C Investment Ltd. represented 51.96% of our total issued and outstanding share capital based on 5,071,210 of common shares issued and outstanding as of July 24, 2008. Accordingly, we included in our current report on Form 8-K (filed on August 6, 2008) information on the business of Orca International Language Schools, Inc. that would be required if we were filing a general form for registration of securities on Form 10.

On September 9, 2008, we appointed Mr. Xin Li to be a director of our company. Also on September 9, 2008, Paul Clark, Qiang Benjamin Han and Sherri Ann Macdonald resigned as directors of our company and Stuart Wooldridge resigned as our president and secretary. Xin Li will act as our president, CEO, secretary, and treasurer.

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

Transactions with related persons

Except as listed 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, other than as noted in this section:

  (i)

Any of our directors or officers;

     
  (ii)

Any person proposed as a nominee for election as a director;

     
  (iii)

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;

     
  (iv)

Any of our promoters; and

     
  (v)

Any member of the immediate family (including spouse, parents, children, siblings and in- laws) of any of the foregoing persons.

  • From April 1, 2009 to March 31, 2010, we incurred four quarterly management fee total of $88,022 to one of our significant shareholders, SGB C&C Investment Ltd.

  • In the year ended March 31, 2010, the significant shareholder, SGB C&C Investment Ltd., loaned our company $171,542 (CDN$174,260) for expenses and management fee to be incurred by us The amount is non-interest bearing, unsecured, and due on demand.

  • Until December 31, 2008, our former President provided donated office premises to us valued at $ 229 per month. During the year ended March 31, 2009, donated rent of $1,463 was charged to operations. During the year ended March 31, 2009, we also recognized $2,926 for donated management services at CDN$500 per month provided by our former President.

  • As at March 31, 2009, amounts owing to our former President of $45,962 (CDN$47,131) were donated to our company and recorded as donated capital. At March 31, 2010 we owed $Nil to our former President.

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Pension, Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.

We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.

Director Independence

We currently act with three directors consisting of Xin Li, Stuart Wooldridge and Jun Huang. We have determined that Jun Huang is an independent director as defined by Nasdaq Marketplace Rule 4200(a)(15).

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Audit Fees

Our principal accountant Stan Jeong-Ha Lee and Manning Elliott, Chartered Accountants, rendered invoices to us during the fiscal periods indicated for the following fees and services:

Audit Fees and Audit Related Fees

The aggregate fees billed for the two most recently completed fiscal years ended March 31, 2009 and 2010 for professional services rendered by the principal accountant for the audit of our annual financial statements and for the review of the financial statements included our quarterly reports on Form 10-Q were as follows:

    Year Ended March 31  
    2010     2009  
Audit Fees and Audit Related Fees $ 12,000   $ 18,250  
Tax Fees   Nil     Nil  
All Other Fees   Nil     Nil  
Total $ 12,000   $ 18,250  

Policy on Pre-Approval by the Board of Services Performed by Independent Auditors

Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before Stan Jeong-Ha Lee or Manning Elliott LLP is engaged by us to render any auditing or permitted non-audit related service, the engagement be:

  • approved by our board of directors; or,

  • entered into pursuant to pre-approval policies and procedures established by the board of directors, provided the policies and procedures are detailed as to the particular service, the board of directors is informed of each service, and such policies and procedures do not include delegation of the board of directors' responsibilities to management.

The board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.

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The board of directors has considered the nature and amount of fees billed by Stan Jeong-Ha Lee or Manning Elliott LLP and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independence.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Exhibits required by Item 601 of Regulation S-K:

Exhibit
Number

Description

3.1

Articles of Incorporation (attached as an exhibit to our registration statement on Form SB-2 filed on August 7, 2007)

3.01

Notice of Alteration filed with the Ministry of Finance, BC Registry Services effective March 3, 2009 (attached as an exhibit to our current report on Form 8-K filed on March 5, 2009)

3.02

Amended and Restated Articles of Incorporation of SGB International Holdings Inc. (attached as an exhibit to our current report on Form 8-K filed on March 5, 2009)

10.1

Share transfer agreement dated July 2, 2008 among Stuart Wooldridge, SGB C&C Investment Ltd. and our company (attached as an exhibit to our current report on Form 8-K filed on August 6, 2008).

10.2

Form of Private Placement Subscription Agreement between SGB C&C Investment Ltd. and our company (attached as an exhibit to our current report on Form 8-K filed on November 18, 2008)

16.1

Letter from Manning Elliott LLP dated July 31, 2009 (attached as an exhibit to our current report on Form 8-K filed on August 8, 2009)

31.1*

Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

32.1*

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SGB INTERNATIONAL HOLDINGS INC.

By
              /s/ Xin Li                            
Xin Li
President, CEO, CFO and Director
Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
Date: July 12, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By
              /s/ Xin Li                            
Xin Li
President, CEO, CFO and Director
Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
Date: July 12, 2010

By
              /s/ Jun Huang                      
Jun Huang
Director
Date: July 12, 2010

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