U.S.
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 
 FORM
10-KSB
 
 ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 
 For the
fiscal year ended December 31, 2004
 
 Commission
file number 000-30426
 
 LARGO
VISTA GROUP, LTD.
 (Name of
Small Business Issuer in its charter)
 
 Nevada
    76-0434540(State
      or other jurisdiction of incorporation or organization)
    (I.R.S.
      Employer Identification No.)
 
 
 4570
      Campus Drive
      Newport
      Beach, California
    92660(Address
      of principal executive offices)
    (Zip
      Code)
 
 Issuer's
telephone number (949) 252-2180
 
 Securities
registered under Section 12(b) of the Act: None
 
 Securities
registered under Section 12(g) of the Act: Common Stock
 
 Check
whether the registrant (1) filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the past 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 [
]
 
 Check if
there is no disclosure of delinquent filers pursuant to Item 405 of Regulation
S-B contained in this form, and no disclosure will 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-KSB or any amendment to
this Form 10-KSB. [___]
 
 The
revenues for the year ended December 31, 2004 were $439,436.
 
 The
market value of the voting and non-voting common stock held by non-affiliates of
the registrant as of April 14, 2004 was approximately $3,182,440.
 
 The
number of shares of Common Stock outstanding as of April 14, 2005 was
375,000,000.
  
  LARGO
VISTA GROUP, LTD.
 FORM
10-KSB
 INDEX
 
 Item
    Description
    PagePart
      IItem
      1.
    Description
      of Business
    3Item
      2.
    Description
      of Property
    9Item
      3.
    Legal
      Proceedings
    10Item
      4
    .Submission
      of Matters of a Vote of Security Holders
    10Part
      IIItem
      5.
    Market
      for Common Equity and Related Stockholder Matters
    10Item
      6.
    Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
    13Item
      7.
    Financial
      Statements and Supplementary Data
    18Item
      8.
    Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
    41Item
      8A
    Controls
      and Procedures
    41Part
      IIIItem
      9.
    Directors
      and Executive Officers of the Registrant; Compliance with Section 16(a) fo
      the Exchange Act
    41Item
      10.
    Executive
      Compensation
    42Item
      11.
    Security
      Ownership of Certain Beneficial Owners and Management And Related
      Stockholder Matters
    43Item
      12.
    Certain
      Relationships and Related Transactions
    43Part
      IVItem
      13.
    Exhibits
    44Item
      14.
    Principal
      Accountant Fees and Services
    45Signatures
    46
 
  2
  
 
 **PART
I**
 
 **Item
1. DESCRIPTION OF BUSINESS**
 
 **Business
Development**
 **-----------------------------**
 
 Largo
Vista Group, Ltd. (“Largo Vista” or the "Company") was formed under the laws of
the State of Nevada on January 16, 1987 under the name, "The George Group". On
January 9, 1989, The George Group acquired Waste Service Technologies, Inc.
("WST"), an Oregon corporation, and filed a name change in Nevada and changed
its name to WST, listed its stock, and began trading on OTC bulletin
Board.
 
 On April
15, 1994, WST acquired Largo Vista, Inc., a California corporation, and filed a
name change in Nevada to change WST's name to Largo Vista Group, Ltd., OTC
bulletin Board symbol "LGOV". Largo Vista originally planned to develop housing
in China, but after shipping two factory built homes to China, never fully
implemented plans due to unanticipated financing, environmental and regulatory
complications.
 
 Unless
the context otherwise requires, all references to the Company include its
wholly-owned subsidiaries, Largo Vista, Inc., an inactive California
corporation, Largo Vista Construction, Inc., an inactive Nevada corporation, and
Largo Vista International, Corp., an inactive Panama corporation. Largo Vista
also has operations through Doing Business As (“DBA”) agreements with Zunyi
Shilin Xinmao Petrochemical Industries Co. Ltd, (“Zunyi”) and Jiahong Gas Co.,
Ltd. (“Jiahong”), both registered under the Chinese laws in the Peoples Republic
of China, Guizhou Province.
 
 **Business
of the Issuer**
 **----------------------------**
 
 Through
DBA agreements with Zunyi and Jiahong, Largo Vista is engaged in the business of
purchasing and reselling liquid petroleum gas ("LPG") in the retail and
wholesale markets to both residential and commercial consumers. Largo Vista
operated a storage depot and has an office headquarters in the City of Zunyi.
Largo Vista has found the storage depot operations to be unprofitable; and
therefore has terminated those operations in order to concentrate its resources
on supplying LPG in bottles and through pipelines.
 
 In
February 2002, Largo Vista’s China operations entered into an agreement with the
Zunyi Municipal Government to design and install LPG pipeline systems in
residential areas in the city of Zunyi. In exchange for installing the pipeline,
the agreement provides for the Largo Vista to be the sole LPG supplier for those
households for 40 years. Largo Vista substantially completed the installation of
the LPG pipeline in 2002 and continues to operate the pipeline.
 
 In May
2003, Largo Vista’s China operations entered into its second agreement with
Zunyi Municipal Government to design and install more LPG pipeline systems in
residential areas in the city of Zunyi, China. The pipeline project was
substantially completed in December of 2004. These two pipelines currently serve
approximately 440 customers. When natural gas becomes available to the area,
these pipelines will be in place to deliver that commodity to the same
customers.
 
 In
addition, Largo Vista has contracted with a private developer to construct four
additional pipelines in the same area. Pipeline Number 3 will serve 42
condominiums and is currently under construction, with completion estimated in
July of 2005. Pipeline Number 4 will serve 60 condominiums. Construction
schedules are being developed. Pipeline Number 5 will serve 1,067 condominiums
and is currently under construction, with completion estimated in August of
2005. Pipeline Number 6 will serve 5,000 condominiums and is currently in the
architectural development stage. All of these pipelines will be operated by
Largo Vista under exclusive 40-year supply contracts.
 
  3
  Largo
Vista continues to engage in the petroleum supply business in
Vietnam.
 
 In
addition, Largo Vista has two representative offices in the Far East area, one
in Wuhan, China and another in Ho Chi Minh City, Vietnam, to supervise LPG and
gas oil trading operations in China and Vietnam, respectively. Largo Vista
continues to evaluate the acquisition of other possible business opportunities
in the Far East.
 
 On March
18, 2005, Largo Vista signed an Agreement and Assignment of Certain Contractual
Rights and Benefits (the “Agreement”), with Shanghai Offshore Oil Group (HK)
Co., Ltd. (“Shanghai Oil”). Under the Agreement, Shanghai Oil assigns to Largo
Vista all of its rights under a prior contract with Asiacorp Investment Holding
Ltd. to purchase fuel oil from Russia and deliver it to The People’s Republic of
China (the “Asiacorp Contract”). The Agreement states that deliveries will begin
no later than May 18, 2005 and continue for a period of thirty-six (36) months
at a rate of up to two hundred thousand (200,000) metric tons per month. The
assigned Asiacorp Contract provides that the estimated value of the maximum
potential deliveries over the life of the Agreement, at the market prices in
effect at the time of the signing of the Asiacorp Contract on July 22, 2004, to
be approximately one billion, two hundred thirty million, nine hundred sixty
thousand dollars ($1,230,960,000.00). The Agreement provides that Largo Vista
will be guaranteed a minimum of two dollars ($2.00) profit per metric ton, and
that Shanghai Oil will continue to be responsible for the logistics and
financing of the delivery of the fuel oil. In exchange, Largo Vista will issue
to Shanghai Oil one hundred million (100,000,000) shares of Largo Vista’s common
stock, to be issued in three increments, one-third within ten days of the
signing of the Agreement, the second one-third one year later, and the final
one-third one year later.
 
 **Organizational
Chart**
 **----------------------------**
 
 Largo
Vista Group, Ltd. (LVG)
 
 Owns 100%
of Largo Vista Inc.
 No
current operations
 
 Owns 100%
of Largo Vista International Corp.
 No
current operations
 
 Owns 100%
of Largo Vista Construction Inc.
 No
current operations
 
 **Principal
Products and Their Markets**
 **--------------------------------------------------**
 
 **The
Product**
 **----------------**
 
 LPG is
used by about 500 million people worldwide. As a form of energy, it is
considered a very efficient fuel. Its liquid state provides a significant supply
of energy in a comparatively small volume. LPG is recognized for its
transportability and ease-of-use. It is a clean and environmentally friendly
source of energy that has a variety of residential, commercial, industrial and
transportation uses. It can be used at home for cooking and heating and can
therefore replace wood, kerosene, coal and other environmentally unfriendly
sources of energy. Environmental concerns have caused the outlaw of the use of
coal in most of the larger cities in China. Since LPG is one of the only viable
sources of energy for cooking and heating in Southern China, management believes
the China LPG market is ripe for growth and expansion.
 
 Most
Chinese consumers have used wood and coal all their lives, primarily for
cooking. They are, however, beginning to realize the ease and convenience of
using LPG for cooking and heating water. Most consumers obtain LPG in 15kg.
cylinders, very similar to those used for gas barbecues in the U.S. As LPG
delivery systems, such as pipelines, make use more convenient and simple, LPG
consumption per capita should increase significantly.
 
 4
 **Markets:**
 **------------**
 
 The China
market is broken down in two ways for purposes of analysis:
 
 1.
Distribution
 2. Method
of delivery to the consumer, and
 
 The first
way to view the market is through the distribution method; that is, either
retail-direct or wholesale-indirect. Retail distribution is accomplished by the
three major LPG companies that deal directly with the end user. In Zunyi, Largo
Vista distributes to both retail and wholesale customers, and to both
residential and commercial users. Retail customers, however, are far more
profitable for the Company than wholesale because sales prices are higher and
there are no middleman costs. The Company is implementing strategies to develop
and expand the retail customer base.
 
 The
second way to view the market is through the method of delivery to the user;
such as by bottle or cylinder, by pipeline, or by tank truck.
 
 The
bottle users may be either retail, purchasing directly from a major LPG company,
or wholesale, purchasing from a distributor of a major LPG company. Bottle
customers purchase LPG in 15 kg. cylinders or bottles that must, by law, be
filled to a minimum of 13.5 kg, which is considered full. Bottle users include
residential and commercial customers. Residential consumption is by far the
largest, with commercial restaurants and caterers following second. There has
been little industrial use of LPG to date.
 
 Pipeline
users are considered retail-direct users. LPG flows directly into household via
pipes from a central storage tank that is replenished when necessary by a major
LPG company. Pipeline users are billed according to usage based on a meter in
their living unit. Management is pursuing a policy of expanding into this arena
due to the fact that once the retail customer is captured via a pipeline
connection, they will remain a profit center for the Company. Also, the usage by
a pipeline customer is expected to be greater than a bottle retail customer
because of the expanding uses of LPG, such as heating of the
residence.
 
 Tank
truck or bulk sales are made to wholesale distributors who operate small bottle
filling stations. These distributors represent lower profit margins, but sheer
volume of distribution makes-up some of the difference. Bulk sales are
encouraged to cultivate the small wholesale distributors because of the
potential of acquiring their customer base in the future.
 
 During
the 1990s, world LPG demand has risen on average nearly 3.6% per year, compared
to 1.4% per year for the petroleum industry overall, as the world economy has
grown. LPG demand is expanding worldwide but most dramatically in the developing
countries of Asia. Demand in the region has been growing by an average of more
than 6% per year, as per-capita consumption increases with the increasing
standard of living in the region. For example, per-capita consumption of LPG in
China in the 1990s increased from around 1 kg to more than 6 kg per-capita and
expecting consumption to expand to more than 15 kg per-capita in the next
century.
 
 Asian
markets are expanding rapidly, along with markets in other developing countries
as population continues to grow along with demand for clean-burning LPG. It has
been estimated that y 2020, Asia should account for more than 70 million metric
tons per year of residential and commercial LPG demand, which represents more
than 40% of total world LPG demand. China will account for the greatest
percentage of the growth in overall LPG imports as a result of continued growth
of the domestic Chinese economy and per-capita consumption of LPG.
 
 The
majority of dollars invested in the China LPG market have been invested in large
"mega" depots by the major oil companies. Little to no focus has been placed on
the retail end-user market. Put simply, the LPG "storage" infrastructure is in
place, but it is overbuilt because the retail market has not been cultivated at
the same pace. Management's primary objective is the development of this retail
consumer base.
 
 5
 From the
mega-depots on the east and southeast coast of China, LPG is shipped to smaller
inland storage depots via railroad tank car. LPG is then pumped into large
storage tanks until it is distributed in bottles, pipelines or tank trucks to
end users and distributors.
 
 Inland
infrastructure development has not kept pace with coastal development. Inland
depot storage capacity must be expanded to serve the customers waiting for LPG
service. More efficient distribution methods are also needed. The bottle
exchange system is labor intensive, a factor that currently does not
significantly affect overhead; but will have greater future impact as salaries
increase.
 
 Distribution
of LPG via pipelines directly to end-users is very efficient; but one drawback
is the cost to install pipeline service to each household, which is
approximately $185.00 US per household. Some more affluent customers can afford
to pay the installation fee up front; but most of these have already purchased
pipeline service. Some new construction projects permit the cost of installation
to be incorporated into the cost of the home. Most customers, however, cannot
afford the up-front fee; but are willing and able to pay extra each month based
on usage. Largo Vista has a number of pipeline projects in various planning or
construction phases and it is management's belief that this area is one of the
most profitable in the long term. In November, 2002 Largo Vista’s Pipeline
Project Number 1 was completed and a long term service contract to maintain and
supply LPG to its customers along the pipeline was signed. In December of 2004,
Largo Vista’s Pipeline Project Number 2 was substantially completed. Largo Vista
has also signed contracts for Pipeline Projects Number 3 through Number 6 (terms
and details of some of the contracts are not finalized), all in the same area,
as discussed above under “Business of the Issuer.” It is expected that at least
two of these new pipelines will be completed during 2005.
 
 **Distribution
of LPG**
 **--------------------------**
 
 There are
four primary levels of LPG distribution:
 
 Major LPG
Companies
 Major LPG
Distributors
 Medium
LPG Distributors
 Small
Independent LPG Distributors
 
 The Major
LPG companies are characterized by the following: They purchase LPG directly
from refineries or major oil companies. They must be licensed. They have
railroad tank cars and storage depots. They typically serve over 10,000 retail
customers. These companies depend on distribution networks to get LPG to the
consumers.
 
 Major
distributors are licensed by major LPG companies and generally serve more than
4,000 but less than 10,000 customers directly. They do not typically have any
railroad tank cars, and have little or no storage capacity.
 
 Medium
distributors are also licensed by major LPG companies, generally serve more than
1,500 but less than 4,000 customers directly and do not have any storage
capacity. At this time, Largo Vista would be considered as a medium
distributor.
 
 Small
independent distributors are those who may or may not be licensed, do not have
any relationship or loyalty to any major oil company or distributor and usually
serve less than 1,500 customers.
 
 Since all
of these distributors serve a customer base, Zunyi is actively recruiting them
on an ongoing basis.
 
 The
majority of Largo Vista's customer base is serviced with the help of agents and
entity users. Largo Vista has a number of agents that are independent dealers
who exclusively represent the Company in an outlying county area that is
difficult for the Company to access on a regular basis. The consumers serviced
by the agent pay retail prices. The Company pays the agent a fee for his
services and the agent carries his own overhead expenses. As the LPG market was
developing in the early 1990's, the Company was seeking to develop a customer
base in the most efficient and effective manner possible, and, as a result,
began to cultivate the "entity" user. Entity users were companies in other
industries, already providing housing for their employees who also desired to
provide a convenience to their workers by distributing LPG as an additional
service. These entity users developed into distribution service to consumers who
paid retail prices. As the market further developed, the entity user also began
to be a distribution outlet to other consumers in the local area that were not
affiliated with the entity company. Today, the Company is actively seeking to
cultivate and develop additional entity users to expand the consumer
base.
 
 6
 **Raw
Materials**
 **-------------------**
 
 The
Chinese market is unique compared to other Asian countries. Japan and Korea seek
security of supply through regular term contracts supported by long-term
relationships, but in China, low price and bargaining is the driving force for
LPG purchases.
 
 When
purchasing LPG, Largo Vista must weigh various factors including quality of LPG,
price, and transportation costs. It generally purchases from domestic sources
inside China where prices are very low, but transportation costs are
higher.
 
 Cost of
goods can fluctuate widely and rapidly and can cause cash flow problems.
 
 
 **Competition**
 **-----------------**
 
 The LPG
industry in the city of Zunyi, Guizhou Province, consists of three major LPG
companies with storage facilities that sell LPG in both the retail and wholesale
markets. All three companies depend on a network of distributors to help reach
and service the needs of their customers. Two are privately owned and operated
and the other is state owned. Competition is based principally on price and
service; however relationship and reputation are also important to consumers of
LPG.
 
 LPG
retail market prices have been relatively unstable during recent years,
characterized by oversupply and cutthroat competition.
 
 In the
residential wholesale market, many independent "black market" dealers have been
operating without a license, and have ignored safety regulations. Another
flagrant violation of consumer fairness is the practice of short-filling
bottles. The "black market" dealer typically will fill a bottle with 10kg of
LPG, representing that it has 13.5kg of LPG. Short filling has permitted the
Company's competition to charge lower prices and unfairly compete with Largo
Vista. This practice of cheating the consumer has been prevalent over the past
several years. Largo Vista challenges customers to be aware of what they are
paying for by implementing of a "weight comparison program." The program permits
the consumer to weigh their bottles to expose the "short-fill"
problem.
 
 Largo
Vista competes with others on both reputation and service. To differentiate
itself from its competition, Largo Vista stresses a long-term relationship both
with the residential user and with the distributor to help them bring in and
keep new customers. Its reputation is excellent and is backed up by a record of
good service, with the understanding that Largo Vista can be relied upon to
deliver honest weights and measures.
 
 **Governmental
Regulation**
 **----------------------------------**
 
 Largo
Vista’s operations in China are regulated on a day-to-day basis by the Zunyi
municipal government, which oversees all companies licensed to do business and
enforces rules and regulations in the market place. The Zunyi government faces
many problems in this rapidly emerging chaotic market including the existence of
many unlicensed small distributors, violations of safety regulations and short
filled bottles. Local government is working to correct some of these more
flagrant violations.
 
 7
 
 **Patents,
Trademarks & Licenses**
 **-------------------------------------------**
 
 The
Company does not currently own any patents or trademarks.
 
 **Employees**
 **--------------**
 
 Largo
Vista has no employees in the United States and relies on outside consultants
for legal, accounting and organizational services as needed. Operations in
Zunyi, Wuhan and Ho Chi Minh City have a total of 30 employees, including
management, all of whom are full-time employees.
 
 **Item
1A. CAUTIONARY STATEMENTS REGARDING FUTURE RESULTS, FORWARD-LOOKING INFORMATION
AND CERTAIN IMPORTANT FACTORS**
 
 Largo
Vista makes written and oral statements from time to time regarding its business
and prospects, such as projections of future performance, statements of
management's plans and objectives, forecasts of market trends, and other matters
that are forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Statements containing the words or phrases "will likely result," "are expected
to," "will continue," "is anticipated," "estimates," "projects," "believes,"
"expects," "anticipates," "intends," "target," "goal," "plans," "objective,"
"should" or similar expressions identify forward-looking statements, which may
appear in documents, reports, filings with the Securities and Exchange
Commission, news releases, written or oral presentations made by officers or
other representatives made by Largo Vista to analysts, stockholders, investors,
news organizations and others, and discussions with management and other
representatives of Largo Vista. For such statements, Largo Vista claims the
protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995.
 
 Largo
Vista’s future results, including results related to forward-looking statements,
involve a number of risks and uncertainties. No assurance can be given that the
results reflected in any forward-looking statements will be achieved. Any
forward-looking statement made by or on behalf of Largo Vista speaks only as of
the date on which such statement is made. Largo Vista’s forward-looking
statements are based upon assumptions that are sometimes based upon estimates,
data, communications and other information from suppliers, government agencies
and other sources that may be subject to revision. Except as required by law,
Largo Vista does not undertake any obligation to update or keep current either
(i) any forward-looking statement to reflect events or circumstances arising
after the date of such statement, or (ii) the important factors that could cause
Largo Vista’s future results to differ materially from historical results or
trends, results anticipated or planned by Largo Vista, or which are reflected
from time to time in any forward-looking statement which may be made by or on
behalf of Largo Vista.
 
 In
addition to other matters identified or described by Largo Vista from time to
time in filings with the SEC, there are several important factors that could
cause Largo Vista’s future results to differ materially from historical results
or trends, results anticipated or planned by Largo Vista, or results that are
reflected from time to time in any forward-looking statement that may be made by
or on behalf of Largo Vista. Some of these important factors, but not
necessarily all important factors, include the following:
 
 Largo
Vista has a history of losses, expects to incur additional losses and may never
achieve profitability. During Largo Vista’s fiscal year ended December 31, 2004,
the Company generated only $439,436 of revenue and realized a net loss $276,551.
Largo Vista has yet to generate profits from operations and consequently is
unable to predict with any certainty whether its operations will become a
commercially viable business. In order for Largo Vista to become profitable, it
will need to generate and sustain a significant amount of revenue while
maintaining reasonable cost and expense levels.
 
 Largo
Vista may require additional capital in order to meet its projected operatinig
costs and, if necessary, to finance future losses from operations as it
endeavors to build revenue, but largo vista does not have any commitments to
obtain such capital and cannot assure you that it will be able to obtain
adequate capital as and when required. Should Largo Vista be required to sell
additional equity securities or additional debt securities convertible into
equity, there will be additional dilution to Largo Vista’s
shareholders.
 
 8
 Largo
Vista is dependant on the stability of economic relations with the people’s
republic of china for its current revenues. Nearly all of Largo Vista’s current
revenues are generated in China. Largo Vista cannot predict or guarantee the
stability of economic relations with China; and, therefore the operations of
Largo Vista are subject to disruption from a number of political and economic
causes.
 
 Largo
Vista is owed a substantial portion of its accounts receivable from the single
source of the government of the city of Zunyi, china. Pursuant to the its
agreement with Largo Vista in February 2002, the government of Zunyi paid Largo
Vista 50% of the total contracted installation price, or $154,438. The Zunyi
government also has an obligation to collect the remaining 50% of contract price
from the households obtaining LPG from the pipeline on behalf of the Company.
Management determined that the collectibility and length of time to collect the
amount due can not be reasonably assured. Accordingly, revenues are recognized
as collected for the project. During the years ended December 31, 2004 and 2003,
the Company received and recognized additional $11,171 and $44,233,
respectively, of revenue in connection with the project. In May 2003, the
Company entered into its Second Agreement (“Second Agreement”) with the
government of Zunyi to design and install more LPG pipeline systems in
residential areas in the city of Zunyi, China. Pursuant to the Second Agreement,
the government of Zunyi is obligated to pay to the Company 50% of the total
contract price, or $87,258, which was paid during 2004. The Company has also
received and recognized a total of $8,152 of revenue in connection with the
Second Agreement. Management determined that the collectibility and length of
time to collect the amount due can not be reasonably assured. Accordingly,
revenues are recognized as collected for the project.
 
 Should
Largo Vista choose to grow through acquisitions, it will experience the
uncertainties associated with such a strategy. As part of Largo Vista’s business
strategy in the future, Largo Vista could acquire assets and businesses relating
to or complementary to its operations. Any acquisitions by Largo Vista would
involve risks commonly encountered in acquisitions of companies. These risks
would include, among other things, the following: Largo Vista could be exposed
to unknown liabilities of the acquired companies; Largo Vista could incur
acquisition costs and expenses higher than it anticipated; fluctuations in Largo
Vista's quarterly and annual operating results could occur due to the costs and
expenses of acquiring and integrating new businesses or technologies; Largo
Vista could experience difficulties and expenses in assimilating the operations
and personnel of the acquired businesses; Largo Vista's ongoing business could
be disrupted and its management's time and attention diverted; Largo Vista could
be unable to integrate successfully.
 
 
 **Item
2. DESCRIPTION OF PROPERTY**
 
 **Largo
Vista**
 **----------------**
 
 Largo
Vista has corporate offices in Newport Beach, California. The base rent is $755
per month on a month-to-month lease.
 
 **Wuhan
Representative Office**
 **--------------------------------------**
 
 Largo
Vista maintains a representative office in Wuhan, Hubei Province, China, which
include three offices and access to common areas. The facilities are leased from
Proton Enterprises.
 
 **Ho
Chi Minh City Representative Office**
 **----------------------------------------------------**
 
 Largo
Vista maintains a representative office in Ho Chi Minh City, Vietnam, which
includes an open office type environment. The terms of this Lease are for month
to month at approximately $500 per month.
 
 9
 **Zunyi**
 **--------**
 
 Largo
Vista, through a contract agreement with Jiahong Gas Co., Ltd., operated its
primary service from its depot located in the City of Zunyi, Guizhou Province.
The Company also leases office facilities and four distribution stores in Zunyi
City.
 
 
 
 **Item
3. LEGAL PROCEEDINGS**
 
 At
present, there are no outstanding lawsuits or claims known against our Company
and its subsidiaries.
 
 **Item
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**
 
 None
 
 
 **PART
II**
 
 **Item
5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS**
 
 The
Company's common stock is quoted on the OTC Bulletin Board under the symbol
LGOV.
 
 The
following table sets forth the range of high and low bid information for the
Company's common stock for each quarterly period in 2003 and 2002. These
quotations are believed to be representative inter-dealer prices, without retail
mark-up, markdown or commission, and may not represent actual
transactions.
 
 
 BidHigh
    
    Low4th
      Quarter 2004
    $
      0.08
    
    $
      0.013rd
      Quarter 2004
    $
      0.02
    
    $
      0.012nd
      Quarter 2004
    $
      0.03
    
    $
      0.011st
      Quarter 2004
    $
      0.05
    
    $
      0.014th
      Quarter 2003
    $
      0.03
    
    $
      0.013rd
      Quarter 2003
    $
      0.04
    
    $
      0.022nd
      Quarter 2003
    $
      0.05
    
    $
      0.011st
      Quarter 2003
    $
      0.03
    
    $
      0.01
 
 
 As of
April 14, 2005, the Company had approximately 670 shareholders of
record.
 
 We have
never paid a cash dividend and do not anticipate doing so in the foreseeable
future.
 
 Recent
sales of unregistered securities:
 
 The
company issued unregistered shares of its common stock from January 1, 2003 to
December 31, 2004 as follows:
 
 10
 Fiscal
2003, a total of 17,634,669 shares of common stock valued at $314,767 and in
fiscal 2004, a total of 5,348,576 shares of common stock valued at $97,478 as
follows:
 
 Issued to
officers as compensation:
 
 Number
      of
    
    DollarCommon
      Shares
    Name
      of Persons
    Amount
      ofQuarter
    Issued
    To
      Whom Issued
    Consideration2003:1st
      Quarter
    902,771*
    Deng
      Shan
    25,000*2nd
      Quarter
    None
      Issued3rd
      Quarter
    916,666
    Albert
      Figueroa
    17,5004th
      Quarter
    None
      Issued2004:1st
      Quarter
    664,187
    Albert
      Figueroa
    12,5002nd
      Quarter
    None
      Issued3rd
      Quarter
    None
      Issued4th
      Quarter
    None
      Issued
 *Accrual
from 4th quarter of 2002
 
 
 Issued to
consultants for services:
 
 Number
      of
    
    DollarCommon
      Shares
    Name
      of Persons
    Amount
      ofQuarter
    Issued
    To
      Whom Issued
    Consideration2003:1st
      Quarter
    662,823
    Harold
      Mclenden
    22,500662,823
    Li
      Chuming
    22,500812,500
    Danny
      Nguyen
    22,5001,400,000
    Steve
      Chaussy
    21,0002nd
      Quarter
    None
      Issued3rd
      Quarter
    1,650,000
    Harold
      Mclenden
    31,5001,045,000
    Li
      Chuming
    19,5002,566,666
    Danny
      Nguyen
    49,000584,746
    Steve
      Chaussy
    10,500916,666
    Daniel
      Mendez
    17,5004th
      Quarter
    None
      Issued2004:1st
      Quarter
    945,536
    Harold
      Mclenden
    18,000598,839
    Li
      Chuming
    11,4001,470,833
    Danny
      Nguyen
    28,000664,187
    Daniel
      Mendez
    12,5002nd
      Quarter
    None
      Issued3rd
      Quarter
    None
      Issued4th
      Quarter
    None
      Issued
 
 
 11
 
 
 Issued to
service providers for past services:
 
 Number
      of
    
    DollarCommon
      Shares
    Name
      of Persons
    Amount
      ofQuarter
    Issued
    To
      Whom Issued
    Consideration2003:1st
      Quarter
    None
      Issued2nd
      Quarter
    4,500,000
    Danilo
      Cacciamatta
    45,0001,000,000
    Marcia
      Hein
    10,000171,875(S8
      Option)
    James
      DeOlden
    2,750280,875(S8
      Option)
    Edward
      Deese
    4,4943rd
      Quarter
    None
      issued4th
      Quarter
    None
      issued2004:1st
      Quarter
    None
      Issued2nd
      Quarter
    None
      Issued3rd
      Quarter
    None
      issued4th
      Quarter
    None
      issued
 
 Issued as
loans to officers:
 
 Number
      of
    
    DollarCommon
      Shares
    Name
      of Persons
    Amount
      ofQuarter
    Issued
    To
      Whom Issued
    Consideration2003:
    None
      issued2004:
    None
      issued
 
 Issued to
officers and shareholders for reimbursement of cash advances:
 
 Number
      of
    
    DollarCommon
      Shares
    Name
      of Persons
    Amount
      ofQuarter
    Issued
    To
      Whom Issued
    Consideration2003:1st
      Quarter
    None
      issued2nd
      Quarter
    None
      issued3rd
      Quarter
    14,002
    Steve
      Chaussy
    3164th
      Quarter
    None
      issued2004:1st
      Quarter
    1,004,994
    Danny
      Nguyen
    15,0782nd
      Quarter
    None
      issued3rd
      Quarter
    None
      Issued4th
      Quarter
    None
      issued
 
 All stock
issuances were conducted pursuant to section 4(2) under the 1933 Act without the
involvement of underwriters. Stock issuances other than for cash were valued at
market, generally determined by the low bid quotation.
 
 12
 **Item
6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION**
 
 **Cautionary
Statement Regarding Forward-Looking Information**
 **-----------------------------------------------------------------------------------**
 
 The
following is a discussion of the financial condition and results of operations
of the Company as of the date of this Annual Report. This discussion and
analysis should be read in conjunction with the accompanying audited
Consolidated Financial Statements of the Company including the Notes thereto
which are included elsewhere in this Form 10-KSB.
 
 **Overview**
 **------------**
 
 Largo
Vista is in the business of supplying liquid petroleum gas (LPG) through
pipelines and in bottles to consumers in the People’s Republic of China. Largo
Vista constructs and operates LPG pipelines in the City on Zunyi, China. All of
Largo Vista’a current pipeline projects are under exclusive 40-year supply
contracts. In addition, Largo Vista continues to pursue the supply of petroleum
products in Viet Nam through a representative office located there.
 
 On March
18, 2005, the Largo Vista signed an Agreement and Assignment of Certain
Contractual Rights and Benefits (the “Agreement”), with Shanghai Offshore Oil
Group (HK) Co., Ltd. (“Shanghai Oil”) pursuant to the Agreement in Principle.
Under the Agreement, Shanghai Oil assigns to Largo Vista all of its rights under
a prior contract with Asiacorp Investment Holding Ltd. to purchase fuel oil from
Russia and deliver it to The People’s Republic of China (the “Asiacorp
Contract”). The Agreement states that deliveries will begin no later than May
18, 2005 and continue for a period of thirty-six (36) months at a rate of up to
two hundred thousand (200,000) metric tons per month. The assigned Asiacorp
Contract provides that the estimated value of the deliveries over the life of
the Agreement, at the market prices in effect at the time of the signing of the
Asiacorp Contract on July 22, 2004, to be approximately one billion, two hundred
thirty million, nine hundred sixty thousand dollars ($1,230,960,000.00). The
Agreement provides that Largo Vista will be guaranteed a minimum of two dollars
($2.00) profit per metric ton, and that Shanghai Oil will continue to be
responsible for the logistics and financing of the delivery of the fuel oil. In
exchange, Largo Vista will issue to Shanghai Oil one hundred million
(100,000,000) shares of Largo Vista’s common stock, to be issued in three
increments, one-third within ten days of the signing of the Agreement, the
second one-third one year later, and the final one-third one year
later.
 
 **Basis
of Presentation**
 **---------------------------**
 
 The
accompanying consolidated financial statements, included elsewhere in this
Annual Report on Form 10-KSB, have been prepared in conformity with accounting
principles generally accepted in the United States of America, which contemplate
continuation as a going concern. Largo Vista has incurred a net loss of $276,551
for the year ended December 31, 2004 and as of December 31, 2004, had a working
capital deficiency of $928,301.
 
 These
conditions raise substantial doubt as to Largo Vista’s ability to continue as a
going concern. These financial statements do not include any adjustments that
might result from the outcome of this uncertainty. These financial statements do
not include any adjustments relating to the recoverability and classification of
recorded asset amounts, or amounts and classification of liabilities that might
be necessary should Largo Vista be unable to continue as a going
concern.
 
 13
 **Critical
Accounting Policies and Estimates**
 **-------------------------------------------------------**
 
 The
preparation of our financial statements in conformity with accounting principles
generally accepted in the United States requires us to make estimates and
judgments that affect our reported assets, liabilities, revenues, and expenses,
and the disclosure of contingent assets and liabilities. We base our estimates
and judgments on historical experience and on various other assumptions we
believe to be reasonable under the circumstances. Future events, however, may
differ markedly from our current expectations and assumptions. While there are a
number of significant accounting policies affecting our consolidated financial
statements; we believe the following critical accounting policies involve the
most complex, difficult and subjective estimates and judgments:
 
 **Stock-Based
Compensation**
 -----------------------------------
 
 In
December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148 (“SFAS No. 148”), "Accounting for Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS 123." This
statement amends SFAS No. 123, "Accounting for Stock-Based Compensation,"
to provide alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation. In
addition, this statement amends the disclosure requirements of SFAS No. 123
to require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The Company has chosen to
continue to account for stock-based compensation using the intrinsic value
method prescribed in APB Opinion No. 25 and related interpretations.
Accordingly, compensation expense for stock options is measured as the excess,
if any, of the fair market value of the Company's stock at the date of the grant
over the exercise price of the related option. The Company has adopted the
annual disclosure provisions of SFAS No. 148 in its financial reports for
the year ended December 31, 2004 and 2003 and will adopt the interim
disclosure provisions for its financial reports for the subsequent periods. The
Board of Directors of the Company has approved certain awards of stock-based
employee compensation outstanding as of December 31, 2004; but the grants of
these stock options were not made until January or 2005.
 
 **Revenue
Recognition**
 ---------------------------
 
 For
revenue from product sales, the Company recognizes revenue in accordance with
Staff Accounting Bulletin No. 104, REVENUE RECOGNITION ("SAB104"), which
superceded Staff Accounting Bulletin No. 101, REVENUE RECOGNITION IN FINANCIAL
STATEMENTS ("SAB101"). SAB 101 requires that four basic criteria must be met
before revenue can be recognized: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred; (3) the selling price is fixed and
determinable; and (4) collectibility is reasonably assured. Determination of
criteria (3) and (4) are based on management's judgments regarding the fixed
nature of the selling prices of the products delivered and the collectibility of
those amounts. Provisions for discounts and rebates to customers, estimated
returns and allowances, and other adjustments are provided for in the same
period the related sales are recorded. The Company defers any revenue for which
the product has not been delivered or is subject to refund until such time that
the Company and the customer jointly determine that the product has been
delivered or no refund will be required.
 
 SAB 104
incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"),
MULTIPLE-DELIVERABLE REVENUE ARRANGEMENTS. EITF 00-21 addresses accounting for
arrangements that may involve the delivery or performance of multiple products,
services and/or rights to use assets. The effect of implementing EITF 00-21 on
the Company's consolidated financial position and results of operations was not
significant.
 
 The
Company generally recognizes revenue upon delivery of LPG to the customer.
Revenue associated with shipments of petroleum products is recognized when title
passes to the customer. There are no significant credit transactions.
 
 14
 In
February 2002, the Company entered into an agreement (“Agreement”) with Zunyi
Municipal Government (“Government”) to design and install LPG pipeline systems
in residential areas in the city of Zunyi, China on behalf of Government. In
exchange for installing the pipeline, the Agreement provides for the Company to
be the sole LPG supplier for those households. The Company substantially
completed the installation of the LPG pipeline as of December 31, 2002. Pursuant
to the Agreement, Government had paid to the Company 50% of the total contracted
installation price, and the Company has to collect the remaining 50% of contract
price directly from the customers. The Company’s management has determined that
the collectibility and length of time to collect the amount due from customers
can not be reasonably assured. Accordingly, revenues are recognized as collected
in connection with the portion of the contracted price to be collected from
customers. During the year ended December 31, 2004 and 2003, the Company
received and recognized revenues of $11,171 and $44,233, respectively, in
connection with the installation fees collected from customers.
 
 In May
2003, the Company entered into its Second Agreement (“Second Agreement”) with
Government to design and install more LPG pipeline systems in residential areas
in the city of Zunyi, China on behalf of Government. In exchange for installing
the pipeline, the Second Agreement provides for the Company to be the sole LPG
supplier for those households. Pursuant to the Second Agreement, Government is
obligated to pay to the Company 50% of the total contracted installation price,
and the Company has to collect the remaining 50% of contracted price directly
from the customers. During the year ended December 31, 2003, the Company did not
receive any payments from Government and thus delayed the installation of
pipelines. The Company accounted for installation fees of $5,888 received from
customers during the year ended December 31, 2003 as deferred revenue. During
the year ended December 31, 2004, the Company received 50% of the total
contracted price, or $87,258, from Government and additional $2,264 of payments
from customers. The Company substantially completed the installation of the LPG
pipeline as of December 31, 2004, and accounted for the total receipt of $95,410
from Government and customers as of December 31, 2004 in connection with Second
Agreement as revenues during the year ended December 31, 2004. The Company also
charged to income during the year ended December 31, 2004 the design and
installation costs of $105,903 incurred by the Company for the pipeline project.
Additionally, the Company management has determined that the collectibility and
length of time to collect the remaining contracted price due from customers can
not be reasonably assured. Accordingly, revenues will be recognized as collected
in connection with the portion of contracted price to be collected from
customers.
 
 **Results
of Operations**
 **----------------------------**
 
 The
following selected financial information has been derived from the Company's
consolidated financial statements. The information set forth below is not
necessarily indicative of results of future operations and cash flows and should
be read in conjunction with the consolidated financial statements and notes
thereto appearing elsewhere in this Form 10-KSB.
 
 The
Company's 2004 revenues of $439,436 are attributable to liquid petroleum gas
sales at its Zunyi facility located in South China. This is a 19.9% decrease
from the revenues of $548,304 in 2003. This is primarily attributable to the
decrease in revenues from the unprofitable depot operations closed in
2004.
 
 The
Company incurred costs of sales of $434,864, or 99.0% of sales in connection
with the LPG revenues during 2004, compared to $483,059, or 88.1% in 2003. This
decrease can be attributed to fluctuation in the cost of LPG supplies. This
resulted in a decrease in gross profit to 1.0% in 2004 from 11.9% in
2003.
 
 Selling
and administrative expenses decreased from $647,538 during 2003 to $262,860
during 2004, a decrease of 59.46%. This substantial decrease was due primarily
to further reduction in overhead positions and the closure of the unprofitable
depot operations. Largo Vista continues to operate in that mode and plans to
continue to do so until it becomes profitable.
 
 Interest
expense remained stable at $31,396 in 2004 compared to $31,224 in
2003.
 
 As the
result of Largo’ Vista’s substantial cost cutting, its net loss from operations
decreased to $276,551, or 62.9% in 2004 from $496,752, or 91%, in 2003.
 
 15
 **Currency
Consideration**
 **-------------------------------**
 
 The
Company's LPG operations are conducted in the People's Republic of China whose
currency, the Renminbi (RMB), is pegged to the US Dollar. The exchange rate as
of December 31, 2004 and 2003 and the average rate during each of the periods
presented in the accompanying consolidated financial statements was 8.28 RMBs to
one US Dollar. No representation is made that any RMB amount could have been, or
could be, converted into US dollars at these rates or any other rates of
exchange.
 
 **Liquidity
and Capital Resources**
 **------------------------------------------**
 As of
December 31, 2004, the Company had a working capital deficit of $928,301. We
generated a positive cash flow of $7,216 from operating activities during 2004.
This was a result of our net loss of $276,552, adjusted principally for $15,078
of common stock issued to shareholders in exchange for expenses paid on behalf
of the Company, $46,426 of decrease in accounts receivable, and $160,796 of
increase in accounts payable and accrued liabilities. We also helped to meet our
cash requirements during the year through advances, loans and contributions of
$79,475 from the Company's Chairman and principal shareholder and
officers.
 
 The
Company has experienced significant operating losses from inception and has
financed its activities to date through cash advances from affiliates and sales
of its common stock. Availability, source, amount and terms of any additional
financing are uncertain at this time, and by no means assured.
 
 The
Company believes it will require at least an additional $1,000,000 of new
capital in order to fund its plan of operations over the next 12 months. The
Company expects to fund its working capital requirements over the next 12 months
from additional advances from its affiliates and the sale of its common
stock.
 
 The
Company's independent certified public accountants have stated in their report
included in the Company's December 31, 2004 Form 10-KSB, that the Company has
incurred operating losses and that the Company is dependent upon management's
ability to develop profitable operations. These factors among others may raise
substantial doubt about the Company's ability to continue as a going
concern.
 
 **Recent
accounting pronouncements**
 **----------------------------------------------**
 
 In
November 2004, the Financial Accounting Standards Board (FASB) issued
SFAS 151, Inventory Costs— an amendment of ARB No. 43, Chapter 4. This
Statement amends the guidance in ARB No. 43, Chapter 4, “Inventory
Pricing,” to clarify the accounting for abnormal amounts of idle facility
expense, freight, handling costs, and wasted material (spoilage).
Paragraph 5 of ARB 43, Chapter 4, previously stated that “. . . under
some circumstances, items such as idle facility expense, excessive spoilage,
double freight, and rehandling costs may be so abnormal as to require treatment
as current period charges. . . .” This Statement requires that those items be
recognized as current-period charges regardless of whether they meet the
criterion of “so abnormal.” In addition, this Statement requires that allocation
of fixed production overheads to the costs of conversion be based on the normal
capacity of the production facilities. This Statement is effective for inventory
costs incurred during fiscal years beginning after June 15, 2005.
Management does not believe the adoption of this Statement will have any
immediate material impact on the Company.
 
 In
December 2004, the FASB issued SFAS No.152, “Accounting for Real Estate
Time-Sharing Transactions—an amendment of FASB Statements No. 66 and 67” (“SFAS
152) The amendments made by Statement 152 This Statement amends FASB Statement
No. 66, Accounting for Sales of Real Estate, to reference the financial
accounting and reporting guidance for real estate time-sharing transactions that
is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real
Estate Time-Sharing Transactions. This Statement also amends FASB Statement No.
67, Accounting for Costs and Initial Rental Operations of Real Estate Projects,
to state that the guidance for (a) incidental operations and (b) costs incurred
to sell real estate projects does not apply to real estate time-sharing
transactions. The accounting for those operations and costs is subject to the
guidance in SOP 04-2. This Statement is effective for financial statements for
fiscal years beginning after June 15, 2005. with earlier application encouraged.
The Company does not anticipate that the implementation of this standard will
have a material impact on its financial position, results of operations or cash
flows.
 
 On
December 16, 2004, the Financial Accounting Standards Board (“FASB”)
published Statement of Financial Accounting Standards No. 123 (Revised
2004), Share-Based Payment (“SFAS 123R”). SFAS 123R requires that compensation
cost related to share-based payment transactions be recognized in the financial
statements. Share-based payment transactions within the scope of SFAS 123R
include stock options, restricted stock plans, performance-based awards, stock
appreciation rights, and employee share purchase plans. The provisions of SFAS
123R are effective as of the first interim period that begins after
June 15, 2005. Accordingly, the Company will implement the revised standard
in the third quarter of fiscal year 2005. Currently, the Company accounts for
its share-based payment transactions under the provisions of APB 25, which does
not necessarily require the recognition of compensation cost in the financial
statements. Management is assessing the implications of this revised standard,
which may materially impact the Company’s results of operations in the third
quarter of fiscal year 2005 and thereafter.
 
 16
 On
December 16, 2004, FASB issued Statement of Financial Accounting Standards
No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion
No. 29, Accounting for Nonmonetary Transactions (“ SFAS 153”). This
statement amends APB Opinion 29 to eliminate the exception for nonmonetary
exchanges of similar productive assets and replaces it with a general exception
for exchanges of nonmonetary assets that do not have commercial substance. Under
SFAS 153, if a nonmonetary exchange of similar productive assets meets a
commercial-substance criterion and fair value is determinable, the transaction
must be accounted for at fair value resulting in recognition of any gain or
loss. SFAS 153 is effective for nonmonetary transactions in fiscal periods that
begin after June 15, 2005. The Company does not anticipate that the
implementation of this standard will have a material impact on its financial
position, results of operations or cash flows.
 
 **Off-Balance
Sheet Arrangements**
 **-------------------------------------------**
 
 Largo
Vista currently has no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on its financial condition,
revenue or expenses, results of operations, liquidity, capital expenditures or
capital resources that is material to investors.
 
 
 
  17
  
 ITEM 7.
FINANCIAL STATEMENTS
 
 
 
 
 
 **SECURITIES
AND EXCHANGE COMMISSION**
 
 **WASHINGTON,
D.C. 20549**
 
 
 
 **FINANCIAL
STATEMENTS AND SCHEDULES**
 
 **DECEMBER
31, 2004 AND 2003**
 
 
 
 **FORMING
A PART OF ANNUAL REPORT**
 **PURSUANT
TO THE SECURITIES EXCHANGE ACT OF 1934**
 
 
 **LARGO
VISTA GROUP, LTD.**
 
 
 
 
  18
  **LARGO
VISTA GROUP, LTD.**
 
 **Index
to Financial Statements**
 
 
 
 
 PageReport
      of Independent Registered Certified Public Accounting Firm
    **F-3**Consolidated
      Balance Sheets at December 31, 2004 and 2003
    **F-4**Consolidated
      Statements of Operations for the years
      ended
      December 31, 2004 and 2003
    **F-5**Consolidated
      Statements of Deficiency in Stockholders’ Equity for
      the
      years ended December 31, 2004 and 2003
    **F-6**Consolidated
      Statements of Cash Flows for the years
      ended
      December 31, 2004 and 2003
    **F-7**Notes
      to Consolidated Financial Statements
    **F-8~F-20**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 **F-2** **RUSSELL
BEDFORD STEFANOU MIRCHANDANI LLP**
  19
   **Certified
Public Accountants**
 
 
 
 **REPORT
OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING
FIRM**
 
 
 To the
Board of Directors
 Largo
Vista Group, Ltd.
 Newport
Beach, California
 
 
 
 We have
audited the accompanying consolidated balance sheets of Largo Vista Group, Ltd.
and its wholly-owned subsidiaries (the “Company”) as of December 31, 2004 and
2003 and the related consolidated statements of operations, deficiency in
stockholders’ equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based upon
our audits.
 
 We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatements. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe our audits
provide a reasonable basis for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of the Company as of December
31, 2004 and 2003, and the results of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note K, the
Company is experiencing difficulty in generating sufficient cash flow to meet it
obligations and sustain its operations, which raises substantial doubt about its
ability to continue as a going concern. Management’s plans in regard to this
matter are described in Note K. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
 
 
 /S/
RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
 Russell
Bedford Stefanou Mirchandani LLP
 Certified
Public Accountants ****
 McLean,
Virginia
 April 6,
2005
 
 **F-3**
  20
  **LARGO
VISTA GROUP, LTD.**
 **CONSOLIDATED
BALANCE SHEETS**
 **DECEMBER
31, 2004 AND 2003**
 
 2004
    2003**ASSETS**Current
      assets:Cash
      and cash equivalent
    $
      94,565
    $
      7,874Accounts
      receivable, net
    6,865
    53,291Employee
      advances
    13,532
    49,091Inventories,
      at cost (Note B)
    8,834
    11,990Prepaid
      expenses and other
    12,541
    33,304Total
      current assets
    136,337
    155,550Property
      and equipment, at cost (Note C)
    16,221
    16,221Less:
      accumulated depreciation
    (9,273)
    (6,226)Property
      and equipment, net
    6,948
    9,995Other
      assets:Deposits
    755
    755Total
      assets
    $
      144,040
    $
      166,300**LIABILITIES
      AND DEFICIENCY IN STOCKHOLDERS' EQUITY**Current
      Liabilities:Accounts
      payable and accrued liabilities (Note D)
    $
      467,632
    $
      392,694Deferred
      revenue (Note A)
    -
    5,888Customer
      deposit
    4,831
    -Notes
      payable to related parties (Note E)
    434,782
    449,782Due
      to related parties (Note F)
    157,393
    120,794Total
      current liabilities
    1,064,638
    969,158Commitment
      and contingencies (Note J)
    -
    -Preferred
      stock, $0.001 par value; 25,000,000 shares authorized, none issued and
      outstanding at December 31, 2004 and 2003 (Note G)
    -
    -Common
      stock, $0.001 par value; 400,000,000 shares authorized, 269,963,856 and
      264,615,280 shares issued and outstanding at December 31, 2004 and 2003,
      respectively (Note G)
    269,964
    264,615Additional
      paid-in capital
    15,184,356
    15,049,352Common
      stock subscription payable (Note G)
    18,458
    -Accumulated
      deficit
    (16,397,076)
    (16,120,525)Accumulated
      other comprehensive income:Foreign
      currency translation adjustment
    3,700
    3,700Deficiency
      in stockholders' equity
    (920,598)
    (802,858)Total
      liabilities and deficiency in stockholders’ equity
    $
      144,040
    $
      166,300
 
 See
accompanying notes to consolidated financial statements
 **F-4**
  21/22
  **LARGO
VISTA GROUP, LTD.**
 **CONSOLIDATED
STATEMENTS OF OPERATIONS**
 **FOR
THE YEARS ENDED DECEMBER 31, 2004 AND 2003**
 
 
 2004
    2003Revenue,
      net
    $
      439,436
    $
      548,304Cost
      of sales
    434,864
    483,059Gross
      profit
    4,572
    65,245Operating
      expenses:Selling
      general and administrative
    262,860
    647,538Depreciation
      (Note C)
    3,047
    3,094Total
      operating expenses
    265,907
    650,632Loss
      from operations
    (261,335)
    (585,387)Other
      income (expenses):Other
      income, net (Note J)
    16,180
    11,859Debt
      forgiveness (Note D)
    -
    108,000Interest
      (expenses), net
    (31,396)
    (31,224)Total
      other income (expense)
    (15,216)
    88,635Loss
      from operations before income taxes
    (276,551)
    (496,752)Provision
      for income taxes
    -
    -Net
      loss
    $
      (276,551)
    $
      (496,752)Loss
      per common share (basic and assuming diluted) (Note I)
    $
      (0.00)
    $
      (0.00)Weighted
      average shares outstanding
    269,072,427
    257,506,361
 
 
 
 See
accompanying notes to consolidated financial statements
 
 
 **F-5**
   23
   **LARGO
VISTA GROUP, LTD.**
 **CONSOLIDATED
STATEMENTS OF DEFICIENCY IN STOCKHOLDERS’ EQUITY**
 **FOR
THE YEARS ENDED DECEMBER 31, 2004 AND 2003**
 
 CommonShares
    StockAmount
    Additional
      Paid-InCapital
    Stock
      SubscriptionPayable
    Foreign
      Currency TranslationAdjustment
    AccumulatedDeficit
    Total**Balance
      at December 31, 2002**
    **246,527,860**
    **$
      246,527**
    **$
      14,633,709**
    **$
      -**
    **$
      3,700**
    **$
      (15,623,773)**
    **$
      (739,837)**Shares
      issued to consultants in exchange for services
    18,051,730
    18,052
    303,296
    -
    -
    -
    321,348Shares
      issued in exchange for debt
    17,636
    18
    305
    -
    -
    -
    323Shares
      issued in exchange for expenses paid by shareholders
    18,054
    18
    322
    -
    -
    -
    340Capital
      contributed by related parties
    -
    -
    111,720
    -
    -
    -
    111,720Net
      loss
    -
    -
    -
    -
    -
    (496,752)
    (496,752)**Balance
      at December 31, 2003**
    **264,615,280**
    **$
      264,615**
    **$
      15,049,352**
    **$
      -**
    **$
      3,700**
    **$
      (16,120,525)**
    **$
      (802,858)**Shares
      issued to consultants in exchange for accrued services
fess
    4,343,582
    4,344
    78,056
    -
    -
    -
    82,400Shares
      issued in exchange for expenses paid by shareholders
    1,004,994
    1,005
    14,073
    -
    -
    -
    15,078Common
      stock subscribed in exchange for notes payable and accrued
      interest
    -
    -
    -
    18,458
    -
    -
    18,458Capital
      contributed by related parties
    -
    -
    42,875
    -
    -
    -
    42,875Net
      loss
    -
    -
    -
    -
    -
    (276,551)
    (276,551)**Balance
      at December 31, 2004**
    **269,963,856**
    **$
      269,964**
    **$
      15,184,356**
    **$
      18,458**
    **$
      3,700**
    **$
      (16,397,076)**
    **$
      (920,598)**
 
 See
accompanying notes to consolidated financial statements
 
 **F-6**
   25
   **LARGO
VISTA GROUP, LTD.**
 **CONSOLIDATED
STATEMENTS OF CASH FLOWS**
 **FOR
THE YEARS ENDED DECEMBER 31, 2004 AND 2003**
 
 2004
    2003CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      (loss) from continuing operations
    $
      (276,552)
    $
      (496,752)Adjustments
      to reconcile net (loss) to net cash provided by (used in) operating
      activitiesDepreciation
      (Note C)
    3,047
    3,094Common
      stock issued for services (Note G)
    -
    321,348Common
      stock issued in exchange for debt and expenses paid by shareholders (Note
      G)
    15,078
    663Changes
      in assets and liabilities:Accounts
      receivable
    46,426
    101,147Inventories
    3,156
    (9,360)Employee
      advances
    35,559
    (49,091)Prepaid
      expenses and other
    20,763
    14,751Accounts
      payable and other liabilities
    160,796
    (28,586)Deferred
      revenue (Note A)
    (5,888)
    5,888Customer
      deposit
    4,831
    -NET
      CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    7,216
    (136,898)CASH
      FLOWS FROM INVESTING ACTIVITIES:Capital
      expenditures
    -
    (249)NET
      CASH (USED IN) INVESTING ACTIVITIES
    -
    (249)CASH
      FLOWS FROM FINANCING ACTIVITIES:Capital
      contributions from related parties (Note G)
    42,875
    111,720Repayments
      of notes payable
    -
    (24,156)Proceeds
      from related parties, net of repayments
    36,600
    46,283NET
      CASH PROVIDED BY FINANCING ACTIVITIES
    79,475
    133,847NET
      INCREASE (DECREASE) IN CASH AND EQUIVALENTS
    86,691
    (3,300)Cash
      and cash equivalents at the beginning of the year
    7,874
    11,174Cash
      and cash equivalents at the end of the year
    $
      94,565
    $
      7,874Supplemental
      Disclosures of Cash Flow InformationCash
      paid for interest
    $ -
    $ -Cash
      paid for income taxes
    -
    -Common
      stock issued in exchange for services (Note G)
    -
    321,348Common
      stock issued in exchange for debt and expenses paid by shareholders (Note
      G)
    15,078
    663Common
      stock issued in exchange for accrued service fees (Note G)
    82,400
    -Common
      stock subscribed in exchange for notes payable to related parties (Note
      G)
    15,000
    -Common
      stock subscribed in exchange for accrued interest to related parties (Note
      G)
    3,458
    -
 
 
 See
accompanying notes to consolidated financial statements
 
 
 **F-7**
  26/27
  **LARGO
VISTA GROUP, LTD.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
31, 2004 AND 2003**
 
 **NOTE
A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 A summary
of the significant accounting policies applied in the preparation of the
accompanying consolidated financial statements follows.
 
 Business
and Basis of Presentation
 
 Largo
Vista Group, Ltd. (the "Company") was incorporated under the laws of the State
of Nevada. The Company is principally engaged in the distribution of liquid
petroleum gas (LPG) in the retail and wholesale markets in South China and in
the purchase of petroleum products for delivery to the Far East.
 
 The
consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiaries, Largo Vista, Inc., Largo Vista Construction, Inc.,
and Largo Vista International Corp. Largo Vista, Inc. is formed under the laws
of the State of California and is inactive. Largo Vista Construction, Inc. is
formed under the laws of the State of Nevada and is inactive. Largo Vista
International Corp. is formed under the laws of Panama and is inactive. The
Company also has operations through DBA (Doing Business As) agreements with
Zunyi Jiahong Gas Co., Ltd. ("Jiahong"). Jiahong is registered under the Chinese
laws in the Peoples Republic of China.
 
 All
significant intercompany balances and transactions have been eliminated in
consolidation. All amounts in these consolidated financial statements and notes
thereto are stated in United States dollars unless otherwise
indicated.
 
 Foreign
Currency Translation
 
 The
financial statements and results of operations of the Company's Chinese
subsidiary are measured using local currency as the functional currency. The
reporting currency of the Company is the US dollar; accordingly, all amounts
included in the consolidated financial statements have been translated into US
dollars. The accumulated currency translation adjustment is reflected as a
separate component of stockholders’ equity on the consolidated balance sheet.
Foreign currency translation gains and losses are included in the consolidated
results of operations for the period presented. The national currency of the
People's Republic of China, the Renminbi (RMB), is pegged to the U.S. dollar.
The average rate of exchange for fiscal 2004 and 2003 was 8.28 RMB to the
dollar.
 
 Cash
and Cash Equivalents
 
 For
purposes of the Statements of Cash Flows, the Company considers all highly
liquid debt instruments purchased with a maturity date of three months or less
to be cash equivalents.
 
 Property
and Equipment
 
 Property
and equipment are stated at cost. When retired or otherwise disposed, the
related carrying value and accumulated depreciation are removed from the
respective accounts and the net difference less any amount realized from
disposition, is reflected in earnings. For financial statement purposes,
property and equipment are recorded at cost and depreciated using the
straight-line method over their estimated useful lives (Note C).
 
 
 **F-8**
  28
  
 **LARGO
VISTA GROUP, LTD.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
31, 2004 AND 2003**
 
 **NOTE
A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**
 
 Long-Lived
Assets
 
 The
Company has adopted Statement of Financial Accounting Standards No. 144 (“SFAS
144”). The Statement requires that long-lived assets and certain identifiable
intangibles held and used by the Company be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Events relating to recoverability may include
significant unfavorable changes in business conditions, recurring losses, or a
forecasted inability to achieve break-even operating results over an extended
period. The Company evaluates the recoverability of long-lived assets based upon
forecasted undiscounted cash flows. Should an impairment in value be indicated,
the carrying value of intangible assets will be adjusted, based on estimates of
future discounted cash flows resulting from the use and ultimate disposition of
the asset. SFAS No. 144 also requires assets to be disposed of be reported at
the lower of the carrying amount or the fair value less costs to sell.
 
 Income
Taxes
 
 The
Company has implemented the provisions on Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (“SFAS 109”). SFAS 109 requires
that income tax accounts be computed using the liability method. Deferred taxes
are determined based upon the estimated future tax effects of differences
between the financial reporting and tax reporting bases of assets and
liabilities given the provisions of currently enacted tax laws.
 
 Net
Earnings (Losses) Per Common Share
 
 The
Company computes earnings per share under Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" (“SFAS 128”). Net earnings (losses) per
common share is computed by dividing net income (loss) by the weighted average
number of shares of common stock and dilutive common stock equivalents
outstanding during the year. Dilutive common stock equivalents consist of shares
issuable upon conversion of convertible preferred shares and the exercise of the
Company's stock options and warrants (calculated using the treasury stock
method).
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
 
 Fair
Value of Financial Instruments
 
 Statement
of Financial Accounting Standards No. 107, "Disclosures About Fair Value of
Financial Instruments," requires disclosure of the fair value of certain
financial instruments. The carrying value of cash and cash equivalents, accounts
receivable, accounts payable and short-term borrowings, as reflected in the
balance sheets, approximate fair value because of the short-term maturity of
these instruments.
 
 
 
 
 **F-9**
  29
  
 **LARGO
VISTA GROUP, LTD.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
31, 2004 AND 2003**
 
 **NOTE
A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**
 
 Inventories
 
 Inventories
consist primarily of LPG. Cost is determined by the first-in, first-out method
for retail operations and specific identification method for wholesale
operations. (See Note B).
 
 Revenue
Recognition
 
 For
revenue from product sales, the Company recognizes revenue in accordance with
Staff Accounting Bulletin No. 104, REVENUE RECOGNITION ("SAB104"), which
superceded Staff Accounting Bulletin No. 101, REVENUE RECOGNITION IN FINANCIAL
STATEMENTS ("SAB101"). SAB 101 requires that four basic criteria must be met
before revenue can be recognized: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred; (3) the selling price is fixed and
determinable; and (4) collectibility is reasonably assured. Determination of
criteria (3) and (4) are based on management's judgments regarding the fixed
nature of the selling prices of the products delivered and the collectibility of
those amounts. Provisions for discounts and rebates to customers, estimated
returns and allowances, and other adjustments are provided for in the same
period the related sales are recorded. The Company defers any revenue for which
the product has not been delivered or is subject to refund until such time that
the Company and the customer jointly determine that the product has been
delivered or no refund will be required.
 
 SAB 104
incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"),
MULTIPLE-DELIVERABLE REVENUE ARRANGEMENTS. EITF 00-21 addresses accounting for
arrangements that may involve the delivery or performance of multiple products,
services and/or rights to use assets. The effect of implementing EITF 00-21 on
the Company's consolidated financial position and results of operations was not
significant.
 
 The
Company generally recognizes revenue upon delivery of LPG to the customer.
Revenue associated with shipments of petroleum products is recognized when title
passes to the customer. There are no significant credit transactions.
 
 In
February 2002, the Company entered into an agreement (“Agreement”) with Zunyi
Municipal Government (“Government”) to design and install LPG pipeline systems
in residential areas in the city of Zunyi, China on behalf of Government. In
exchange for installing the pipeline, the Agreement provides for the Company to
be the sole LPG supplier for those households. The Company substantially
completed the installation of the LPG pipeline as of December 31, 2002. Pursuant
to the Agreement, Government had paid to the Company 50% of the total contracted
installation price, and the Company has to collect the remaining 50% of contract
price directly from the customers. The Company’s management has determined that
the collectibility and length of time to collect the amount due from customers
can not be reasonably assured. Accordingly, revenues are recognized as collected
in connection with the portion of the contracted price to be collected from
customers. During the year ended December 31, 2004 and 2003, the Company
received and recognized revenues of $11,171 and $44,233, respectively, in
connection with the installation fees collected from customers.
 
 
 
 
 **F-10**
  30
  
 **LARGO
VISTA GROUP, LTD.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
31, 2004 AND 2003**
 
 **NOTE
A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**
 
 Revenue
Recognition (Continued)
 
 In May
2003, the Company entered into its Second Agreement (“Second Agreement”) with
Government to design and install more LPG pipeline systems in residential areas
in the city of Zunyi, China on behalf of Government. In exchange for installing
the pipeline, the Second Agreement provides for the Company to be the sole LPG
supplier for those households. Pursuant to the Second Agreement, Government is
obligated to pay to the Company 50% of the total contracted installation price,
and the Company has to collect the remaining 50% of contracted price directly
from the customers. During the year ended December 31, 2003, the Company did not
receive any payments from Government and thus delayed the installation of
pipelines. The Company accounted for installation fees of $5,888 received from
customers during the year ended December 31, 2003 as deferred revenue. During
the year ended December 31, 2004, the Company received 50% of the total
contracted price, or $87,258, from Government and additional $2,264 of payments
from customers. The Company substantially completed the installation of the LPG
pipeline as of December 31, 2004, and accounted for the total receipt of $95,410
from Government and customers as of December 31, 2004 in connection with Second
Agreement as revenues during the year ended December 31, 2004. The Company also
charged to income during the year ended December 31, 2004 the design and
installation costs of $105,903 incurred by the Company for the pipeline project.
Additionally, the Company management has determined that the collectibility and
length of time to collect the remaining contracted price due from customers can
not be reasonably assured. Accordingly, revenues will be recognized as collected
in connection with the portion of contracted price to be collected from
customers.
 
 Advertising
 
 The
Company follows the policy of charging the costs of advertising to expenses as
incurred. The Company incurred no advertising costs during the years ended
December 31, 2004 and 2003.
 
 Research
and Development
 
 The
Company accounts for research and development costs in accordance with the
Financial Accounting Standards Board’s Statement of Financial Accounting
Standards No. 2 (“SFAS 2”), “Accounting for Research and Development Costs.”
Under SFAS 2, all research and development costs must be charged to expense as
incurred. Accordingly, internal research and development costs are expensed as
incurred. Third-party research and developments costs are expensed when the
contracted work has been performed or as milestone results have been achieved.
Company-sponsored research and development costs related to both present and
future products are expensed in the period incurred. The Company incurred no
expenditures on research and product development for 2004 and 2003.
 
 Liquidity
 
 As shown
in the accompanying financial statements, the Company incurred a net loss from
operations of $276,551 and $496,752 during the year ended December 31, 2004 and
2003, respectively. The Company's current liabilities exceeded its current
assets by $928,301 as of December 31, 2004.
 
 
 
 
 **F-11**
  31
  
 **LARGO
VISTA GROUP, LTD.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
31, 2004 AND 2003**
 
 **NOTE
A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**
 
 Concentrations
of Credit Risk
 
 Financial
instruments and related items, which potentially subject the Company to
concentrations of credit risk, consist primarily of cash, cash equivalents and
related party receivables. The Company places its cash and temporary cash
investments with credit quality institutions. At times, such investments may be
in excess of the FDIC insurance limit. The Company periodically reviews its
trade receivables in determining its allowance for doubtful accounts. The
allowance for doubtful accounts was $0 at December 31, 2004 and
2003.
 
 Comprehensive
Income (Loss)
 
 The
Company adopted Statement of Financial Accounting Standards No. 130, “Reporting
Comprehensive Income”. SFAS No. 130 establishes standards for the reporting and
displaying of comprehensive income and its components. Comprehensive income is
defined as the change in equity of a business during a period from transactions
and other events and circumstances from non-owner sources. It includes all
changes in equity during a period except those resulting from investments by
owners and distributions to owners. SFAS No. 130 requires other comprehensive
income (loss) to include foreign currency translation adjustments and unrealized
gains and losses on available-for-sale securities.
 
 Stock
Based Compensation
 
  In
December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148 (“SFAS No. 148”), "Accounting for Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS 123." This
statement amends SFAS No. 123, "Accounting for Stock-Based Compensation,"
to provide alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation. In
addition, this statement amends the disclosure requirements of SFAS No. 123
to require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The Company has chosen to
continue to account for stock-based compensation using the intrinsic value
method prescribed in APB Opinion No. 25 and related interpretations.
Accordingly, compensation expense for stock options is measured as the excess,
if any, of the fair market value of the Company's stock at the date of the grant
over the exercise price of the related option. The Company has adopted the
annual disclosure provisions of SFAS No. 148 in its financial reports for
the year ended December 31, 2004 and 2003 and will adopt the interim
disclosure provisions for its financial reports for the subsequent periods. The
Company has no awards of stock-based employee compensation outstanding at
December 31, 2004 and 2003.
  
 Reclassifications
 
 Certain
reclassifications have been made in prior year’s financial statements to conform
to classifications used in the current year.
 
 
 
 
 
 **F-12**
  32
  
 **LARGO
VISTA GROUP, LTD.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
31, 2004 AND 2003**
 
 **NOTE
A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**
 
 Segment
Information
 
 Statement
of Financial Accounting Standards No. 131, “Disclosures about Segments of an
Enterprise and Related Information” (“SFAS 131”) establishes standards for
reporting information regarding operating segments in annual financial
statements and requires selected information for those segments to be presented
in interim financial reports issued to stockholders. SFAS 131 also establishes
standards for related disclosures about products and services and geographic
areas. Operating segments are identified as components of an enterprise about
which separate discrete financial information is available for evaluation by the
chief operating decision maker, or decision-making group, in making decisions
how to allocate resources and assess performance. The information disclosed
herein materially represents all of the financial information related to the
Company’s principal operating segment.
 
 New
Accounting Pronouncements
 
  In
November 2004, the Financial Accounting Standards Board (FASB) issued
SFAS 151, *Inventory
Costs— an amendment of ARB No. 43, Chapter 4* . This
Statement amends the guidance in ARB No. 43, Chapter 4, “Inventory
Pricing,” to clarify the accounting for abnormal amounts of idle facility
expense, freight, handling costs, and wasted material (spoilage).
Paragraph 5 of ARB 43, Chapter 4, previously stated that “. . . under
some circumstances, items such as idle facility expense, excessive spoilage,
double freight, and rehandling costs may be so abnormal as to require treatment
as current period charges. . . .” This Statement requires that those items be
recognized as current-period charges regardless of whether they meet the
criterion of “so abnormal.” In addition, this Statement requires that allocation
of fixed production overheads to the costs of conversion be based on the normal
capacity of the production facilities. This Statement is effective for inventory
costs incurred during fiscal years beginning after June 15, 2005.
Management does not believe the adoption of this Statement will have any
immediate material impact on the Company.
   
   In
December 2004, the FASB issued SFAS No.152, “Accounting for Real Estate
Time-Sharing Transactions—an amendment of FASB Statements No. 66 and 67” (“SFAS
152) The amendments made by Statement 152 This Statement amends FASB Statement
No. 66, Accounting for Sales of Real Estate, to reference the financial
accounting and reporting guidance for real estate time-sharing transactions that
is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real
Estate Time-Sharing Transactions. This Statement also amends FASB Statement No.
67, Accounting for Costs and Initial Rental Operations of Real Estate Projects,
to state that the guidance for (a) incidental operations and (b) costs incurred
to sell real estate projects does not apply to real estate time-sharing
transactions. The accounting for those operations and costs is subject to the
guidance in SOP 04-2. This Statement is effective for financial statements for
fiscal years beginning after June 15, 2005. with earlier application encouraged.
The Company does not anticipate that the implementation of this standard will
have a material impact on its financial position, results of operations or cash
flows.
   
  
 
 **F-13**
  33
  
 
 **LARGO
VISTA GROUP, LTD.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
31, 2004 AND 2003**
 
 **NOTE
A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**
 
 New
Accounting Pronouncements (Continued)
 
  On
December 16, 2004, the Financial Accounting Standards Board (“FASB”)
published Statement of Financial Accounting Standards No. 123 (Revised
2004), *Share-Based
Payment* (“SFAS
123R”). SFAS 123R requires that compensation cost related to share-based payment
transactions be recognized in the financial statements. Share-based payment
transactions within the scope of SFAS 123R include stock options, restricted
stock plans, performance-based awards, stock appreciation rights, and employee
share purchase plans. The provisions of SFAS 123R are effective as of the first
interim period that begins after June 15, 2005. Accordingly, the Company
will implement the revised standard in the third quarter of fiscal year 2005.
Currently, the Company accounts for its share-based payment transactions under
the provisions of APB 25, which does not necessarily require the recognition of
compensation cost in the financial statements. Management is assessing the
implications of this revised standard, which may materially impact the Company’s
results of operations in the third quarter of fiscal year 2005 and thereafter.
   On
December 16, 2004, FASB issued Statement of Financial Accounting Standards
No. 153, *Exchanges
of Nonmonetary Assets, an amendment of APB Opinion No. 29, Accounting for
Nonmonetary Transactions* (“ SFAS
153 ”). This
statement amends APB Opinion 29 to eliminate the exception for nonmonetary
exchanges of similar productive assets and replaces it with a general exception
for exchanges of nonmonetary assets that do not have commercial substance. Under SFAS
153 , if a
nonmonetary exchange of similar productive assets meets a commercial-substance
criterion and fair value is determinable, the transaction must be accounted for
at fair value resulting in recognition of any gain or loss . SFAS
153 is
effective for nonmonetary transactions in fiscal periods that begin after
June 15, 2005. The Company does not anticipate that the implementation of
this standard will have a material impact on its financial position, results of
operations or cash flows.
  
 **NOTE
B - INVENTORIES**
 
 Inventories
are stated at the lower of cost or market determined by the first-in, first-out
(FIFO) method. Inventories consist primarily of liquid petroleum gas available
for sale to contract clients and the public. Components of inventories as of
December 31, 2004 and 2003 are as follows:
 
 2004
    2003Liquid
      petroleum gas
    $
      2,860
    $
      10,418Packaging
      bottles
    4,428
    1,204Supplies
    1,546
    368$
      8,834
    $
      11,990
 
 **NOTE
C - PROPERTY, PLANT AND EQUIPMENT**
 
 Property
and equipment are stated at cost. For financial statement purposes, property and
equipment are recorded at cost and depreciated using the straight-line method
over their estimated useful lives of 5 years. The Company’s property and
equipment at December 31, 2004 and 2003 consists of the following:
 
 
 
 **F-14**
  34
  
 
 **LARGO
VISTA GROUP, LTD.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
31, 2004 AND 2003**
 
 **NOTE
C - PROPERTY, PLANT AND EQUIPMENT (Continued)**
 
 2004
    2003Office
      furniture and equipment
    $
      3,542
    $
      3,542Transportation
      equipment
    12,679
    12,679Total
    16,221
    16,221Accumulated
      depreciation
    (9,273)
    (6,226)$
      6,948
    $
      9,995
 
 Depreciation
expense included as a charge to income amounted to $3,047 and $3,094 for the
year ended December 31, 2004 and 2003, respectively.
 
 **NOTE
D - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES**
 
 Accounts
payable and accrued liabilities at December 31, 2004 and 2003 are as
follows:
 
 2004
    2003Accrued
      expenses
    $
      344,165
    $
      297,166Accrued
      interest
    123,467
    95,528Total
    $
      467,632
    $
      392,694
 
 During
the year ended December 31, 2003, the Company’s Chairman and one of its
consultants released the Company’s obligation for a total of $108,000 of unpaid
service fees. The Company accounted for the $108,000 forgiveness of debt as
other income during the year ended December 31, 2003.
 
 **NOTE
E - NOTES PAYABLE TO RELATED PARTIES**
 
 Notes
payable to related parties at December 31, 2004 and 2003 consists of the
following:
 
 2004
    2003Note
      payable on demand to Company shareholder; interest payable
      monthly
      at 7% per annum; unsecured (a)
    $
      -
    $
      15,000Note
      payable on demand to Company’s Chairman; interest payable
      monthly
      at 7% per annum; unsecured.
    434,782
    434,782Total
    434,782
    449,782Less:
      current portion
    (434,782)
    (449,782)$
      -
    $
      -
 
 (a) In
December 2004, the Company entered into an agreement with the Company’s
shareholder to issue an aggregate of 1,230,546 shares of its common stock in
exchange for the note payable of $15,000 and all accrued unpaid interest of
$3,458. The Company accounted for the shares to be issued as stock subscription
payable at December 31, 2004 (Note G). The Company has issued the common shares
to the shareholder subsequent to the date of the financial statements.
 
 
 
 **F-15**
  35
  
 **LARGO
VISTA GROUP, LTD.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
31, 2004 AND 2003**
 
 **NOTE
F - RELATED PARTY TRANSACTIONS**
 
 In
addition to notes payable to related parties described in Note E, two
shareholders of the Company have advanced funds to the Company for working
capital purposes. No formal repayment terms or arrangements exist. The net
amount of advances due the shareholders at December 31, 2002 was $1,225. During
the year ended December 31, 2003, the Company repaid to the shareholders $1,019
in cash and also issued 10,323 shares of its common stock in exchange for $206
of the advances (Note G).
 
 During
the year ended December 31, 2002, a consultant (former officer) of the Company
has advanced funds to the Company for working capital purposes. No formal
repayment terms or arrangements exist. The net amount of advances due the
consultant at December 31, 2002 was $117. During the year ended December 31,
2003, the Company issued 7,312 shares of its common stock in exchange for
settlement of the advance (Note G).
 
 A
consultant (shareholder and former employee) of the Company has advanced funds
to the Company as working capital of its Vietnam representative office. No
formal repayment terms or arrangements exist. The net amount of advances due the
consultant at December 31, 2003 was $15,078. In March 2004, the Company issued
an aggregate of 1,004,994 shares of common stock to the consultant and former
employee in exchange for the $15,078 of expenses paid on behalf of the Company
(Note G). The consultant continued advancing funds the Company as working
capital during the year ended December 31, 2004. The net amount of advances due
the consultant at December 31, 2004 was $14,708.
 
 The
Company’s Chief Financial Officer has advanced funds to the Company for working
capital purpose. No formal repayment terms or arrangements exist. The net amount
of advances due the Chief Financial Officer at December 31, 2004 was
$11,326.
 
 The
Company’s Chairman has advanced funds to the Company for working capital
purposes. No formal repayment terms or arrangements exist. The net amount of
advances due the Company’s Chairman at December 31, 2004 and 2003 was $131,359
and $105,716, respectively.
 
 During
the year ended December 31, 2004 and 2003, the Company Chairman and significant
shareholders contributed cash of $42,875 and $111,720, respectively to the
Company as working capital.
 
 **NOTE
G - CAPITAL STOCK**
 
 The
Company has authorized 25,000,000 shares of Series A Preferred Stock, with a par
value of $.001 per share. As of December 31, 2004 and 2003, the Company has no
Series A Preferred Stock issued and outstanding. The company has authorized
400,000,000 shares of common stock, with a par value of $.001 per share. As of
December 31, 2004 and 2003, the Company has 269,963,856 and 264,615,280 shares
of common stock issued and outstanding, respectively.
 
 For the
year ended December 31, 2003, the Company issued an aggregate of 18,051,730
shares of common stock to consultants for services rendered in the amount of
$321,348. All valuations of common stock issued for services were based upon the
value of the services rendered, which did not differ materially from the fair
value of the Company's common stock during the period the services were
rendered.
 
 
 **F-16**
  36
  
 **LARGO
VISTA GROUP, LTD.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
31, 2004 AND 2003**
 
 **NOTE
G - CAPITAL STOCK (Continued)**
 
 Additionally,
the Company issued an aggregate of 17,635 shares of common stock to related
parties in exchange for previously incurred debt of $323 (see Note F) and an
aggregate of 18,054 shares of common stock in exchange for $340 of office
expenses paid by shareholders. During the year ended December 31, 2003, the
Company Chairman and significant shareholders contributed cash of $111,720 to
the Company as working capital.
 
 For the
year ended December 31, 2004, the Company issued an aggregate of 4,343,582
shares of common stock to consultants in exchange for accrued service fees of
$82,400. All valuations of common stock issued for services were based upon the
value of the services rendered, which did not differ materially from the fair
value of the Company's common stock during the period the services were
rendered.
 
 Additionally,
the Company issued an aggregate of 1,004,994 shares of common stock to a
consultant and former employee in exchange for $15,078 of expenses paid on
behalf of the Company (Note F). During the year ended December 31, 2004, the
Company Chairman and significant shareholders contributed cash of $42,875 to the
Company as working capital. In December 2004, one of the Company’s significant
shareholders agreed to subscribe 1,230,546 shares of common stock in exchange
for $15,000 of notes payable and $3,458 of accrued interest due to the
shareholder (Note E). The Company accounted for the common shares issued
subsequent to the date of financial statements as stock subscription payable at
December 31, 2004.
 
 **NOTE
H - INCOME TAXES**
 
 The
Company has adopted Financial Accounting Standards No. 109, which requires the
recognition of deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial statement or tax
returns. Under this method, deferred tax liabilities and assets are determined
based on the difference between financial statements and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. Temporary differences between taxable
income reported for financial reporting purposes and income tax purposes are
insignificant.
 
 At
December 31, 2004, the Company has available for federal income tax purposes a
net operating loss carryforward of approximately $16,390,000, expiring in the
year 2024, that may be used to offset future taxable income. The Company has
provided a valuation reserve against the full amount of the net operating loss
benefit, since in the opinion of management based upon the earnings history of
the Company, it is more likely than not that the benefits will not be realized.
 
 Components
of deferred tax assets as of December 31, 2004 are as follows:
 
 Non
      Current:Net
      operating loss carryforward
    $5,636,000Valuation
      allowance
    (5,636,000)Net
      deferred tax asset
    $
      -
 
 
 
 
 **F-17**
  37
  
 **LARGO
VISTA GROUP, LTD.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
31, 2004 AND 2003**
 
 **NOTE
I - EARNINGS (LOSSES) PER SHARE**
 
 Basic and
fully diluted losses per share are calculated by dividing net income (loss)
available to common shareholders by the weighted average of common shares
outstanding during the year. The Company has no potentially dilutive securities,
options, warrants or other rights outstanding. The following table sets forth
the computation of basic and diluted earnings (losses) per share:
 
 2004
    2003Net
      income (loss) available to
      common
      stockholders
    $
      (276,551)
    $
      (496,752)Basic
      and diluted earning (loss) per share
    $
      (0.00)
    $
      (0.00)Basic
      and diluted weighted average
      number
      of common shares outstanding
    269,072,427
    257,506,361
 
 **NOTE
J - COMMITMENTS AND CONTINGENCIES**
 
 Lease
Commitments
 
 The
Company leases office space on a month-to-month basis at base rent of $755 per
month in Newport Beach, California for its corporate offices. The Company also
leases office space on a month to month basis in Ho Chi Minh City, Vietnam at
base rent of $500 per month for an administrative and sales representative.
 
 The
Company leases distribution and office facilities in Zunyi City, Province of
Guizhou, China. Commitments for minimum rentals under non-cancelable leases at
the end of 2004 are as follows.
 
 Year
    Amount2005
    $
      2,9222006
    2,4142007
    2,414Total
    $
      7,750
 
 Rental
expense charged to operations was $17,182 and $47,995 for the year ended
December 31, 2004 and 2003, respectively.
 
 Sublease
Agreement
 
 The
Company leases an office suite on a month-to-month basis at base rent of $590
per month in Newport Beach, California and subleases the office to a third party
for $2,000 per month starting May 2003. During the year ended December 31, 2004
and 2003, the Company recorded $16,180 and $11,859 of rentals received as other
income, net of costs and expenses.
 
 
 
 
 
 
 
 **F-18**
  38
  
 **LARGO
VISTA GROUP, LTD.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
31, 2004 AND 2003**
 
 **NOTE
J - COMMITMENTS AND CONTINGENCIES (Continued)**
 
 Consulting
Agreements
 
 The
Company has several agreements with outside contractors to provide
organizational services, business development in China and Vietnam,
international petroleum, and other products trading consultation services. The
agreements are generally for a term of 12 months from inception and renewable
from year to year unless either the Company or Consultant terminates such
engagement with written notice
 
 Litigation
and Contingencies
 
 The
Company is subject to other legal proceedings and claims, which arise in the
ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the Company believes that the final disposition of such
matters will not have a material adverse effect on its financial position,
results of operations, or liquidity.
 
 **NOTE
K - GOING CONCERN MATTERS**
 
 The
accompanying statements have been prepared on a going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. As shown in the financial statements during the
years ended December 31, 2004 and 2003, the Company incurred losses from
operations of $276,551 and $496,752, respectively. The Company's current
liabilities exceeded its current assets by $928,301 as of December 31, 2004.
These factors among others may indicate that the Company will be unable to
continue as a going concern for a reasonable period of time.
 
 The
Company’s existence is dependent upon management’s ability to develop profitable
operations and resolve its liquidity problems. Management anticipates the
Company will attain profitable status and improve its liquidity through the
continued developing, marketing and selling of its products and additional
equity investment in the Company. The accompanying consolidated financial
statements do not include any adjustments that might result should the Company
be unable to continue as a going concern.
 
 In order
to improve the Company’s liquidity, the Company is actively pursuing additional
equity financing through discussions with investment bankers and private
investors. There can be no assurance the Company will be successful in its
effort to secure additional equity financing.
 
 If
operations and cash flows continue to improve through these efforts, management
believes that the Company can continue to operate. However, no assurance can be
given that management’s actions will result in profitable operations or the
resolution of its liquidity problems.
 
 
 
 
 
 
 
 **F-19**
  39
  
 
 
 **LARGO
VISTA GROUP, LTD.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
31, 2004 AND 2003**
 
 **NOTE
L - SUBSEQUENT EVENTS**
 
 On March
28, 2005, the Company entered into a definitive agreement with Shanghai Offshore
Oil Group (HK) Co., Ltd. (“Shangahi Oil”) to provide fuel oil from Russia to
end-users in China beginning in May of 2005 for a period of thirty-seven (37)
months. In exchange for the distribution right, the Company agreed to issue to
Shanghai Oil an aggregate of 99,999,999 shares of its common stock. The common
shares shall be issued over 3 years at 33,333,333 shares per year, commencing
May 2005.
 
 
 
 **F-20**
 
  40
  
 **Item
8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE**
 
 None.
 
 **Item
8A. CONTROLS AND PROCEDURES**
 
 Within
the 90 days prior to the date of this report, Largo Vista Group, Ltd carried out
an evaluation, under the supervision and with the participation of Largo Vista's
management, including Largo Vista's Interim Chief Executive Officer and
Principal Accounting Officer, of the effectiveness of the design and operation
of Largo Vista's disclosure controls and procedures pursuant to Exchange Act
Rule 13a-15. Based upon that evaluation, the Interim Chief Executive Officer and
Principal Accounting Officer concluded that Largo Vista's disclosure controls
and procedures are effective in timely alerting them to
 material
information relating to Largo Vista required to be included in Largo Vista's
periodic Securities and Exchange Commission filings. There has been no
significant changes in Largo Vista's internal controls or in other factors that
could significantly affect these controls subsequent to the evaluation
date.
 
 **PART
III**
 
 **Item
9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE WITH
SECTION 16(a) OF THE EXCHANGE ACT**
 
 Name Age
Position
 -------
----- -----------------------------------------------
 
 Albert N.
Figueroa 38 Director; Principal Accounting Officer
 
 Deng Shan
53 Interim Chief Executive officer and Chairman of the Board of
Directors
 
 Directors
serve until the next annual meeting of shareholders, or until their successors
are elected.
 
 Albert N.
Figueroa, Secretary and Treasurer, is in charge of day-to-day business
operations of Largo Vista in the United States, as well as being a liaison with
all outside service providers, and generally maintains the consistency of
information within the Company. Mr. Figueroa joined the Company in July
1991.
 
 Deng
Shan, Chairman of the Board of Directors, is well versed in the business
practices of China. Early in his career Mr. Deng was a lecturer in Wuhan
Chemical Engineering School. Later he advanced to associate professor at
Huazhong University of Science and Technology. In 1989, Mr. Deng became the
Director, Science and Technology Commission, Nanshan District Government, China.
In 1994, Mr. Deng was appointed Chief Executive Officer/Chairman of the Board of
four commercial companies. Mr. Deng joined the Company in April
1997.
 
 The
Company does not have an audit committee and consequently the entire Board of
Directors serves in that capacity. The Board’s pre-approval policy regarding
professional services provided by the Company’s principal accountant is to
pre-approve the engagement of the principal accountant for the performance of
all professional services. The policy does provide a waiver of pre-approval in
the event that such services, in the aggregate, will be less than 5% of the
audit fee, such services are not recognized as non-audit fees at the time of the
engagement, and pre-approval is obtained from a designated member of the Board
prior to the engagement. Until such time as an audit committee is appointed, the
designated individual is the Principal Executive Officer, currently the
President of the Company. 100% of the 2003 non-audit fees were pre-approved by
the designated Board member and subsequently approved by the Board.
 
 Section
16(a) of the Securities Exchange Act of 1934, as amended, and the rules
thereunder require the Company's officers and directors, and persons who own
more than 10% of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and to furnish the Company with copies. Based solely on its review of
the copies of the Section 16(a) forms received by it, or written representations
from certain reporting persons, the Company believes that, during the last
fiscal year, all Section 16(a) filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were complied
with.
 
 The
Company has adopted a Policy Statement on Business Ethics and Conflicts of
Interest, which was approved by the Board of Directors, applicable to all
employees, which is attached as an exhibit to this report.
 
 41
 **Item
10. EXECUTIVE COMPENSATION**
 
 The
following table sets forth all compensation paid or accrued by the Company
during the last three years to its executive officers.
 
 Name
    
    
    
    Other
    
    Securities
    
    All
      otherAnd
    
    
    
    Annual
    Restricted
    Underlying
    LTIP
    Compen-Principal
    
    Salary
    Bonus
    Compen-
    Stock
    Options/
    Payouts
    sationPosition
    Year
    ($)
    ($)
    sation($)
    Awards($)
    SARs
      (#)
    ($)
    ($)Deng
      Shan,
    2004
    0
    0
    0
    0
    0
    0
    0Interim
      CEO
    2003
    0
    0
    0
    0
    0
    0
    02002
    0
    0
    0
    100,000
    0
    0
    0Albert
    2004
    54,000
    0
    0
    0
    0
    0
    0Figueroa,
    2003
    33,500
    0
    0
    0
    0
    0
    0Secretary
    2002
    30,512
    0
    0
    0
    29,488
    0
    0Daniel
    2004
    0
    0
    0
    0
    0
    0
    0Mendez,
    2003
    0
    0
    0
    0
    0
    0
    0Ex-President
    2002
    3,814
    0
    0
    0
    104,685
    0
    0Edward
    2004
    0
    0
    0
    0
    0
    0
    0Deese,
    2003
    6,000
    0
    0
    0
    0
    0
    0Ex-Interim
    2002
    30,000
    0
    0
    0
    0
    0
    0COO
 
 Notes:
 (1) The
officers listed above were paid their salary in a combination of registered
stock options, unregistered stock and/or cash. Any issuance of unregistered
common stock was valued at market, generally determined by the closing price on
the first day of trading of the following month.
 
 (2)
Albert N. Figueroa, Secretary/Treasurer, serves under a semi- annual consulting
contract renewed effective January 1, 2004 at annualized compensation of $54,000
that may be terminated upon 30 days written notice of either party.
 
 (3) Deng
Shan, Interim CEO, serves under a semi- annual Agreement for Services renewed
effective January 1, 2004 at annualized compensation of $84,000 that may be
terminated upon 30 days written notice of either party.
 
 (4)
Daniel Mendez, President, served under an annual Agreement for Services for an
annual compensation of $120,000. He resigned his position as president August
1,2002. Effective August 2,2002, Mr. Mendez agreed to provide consulting
services as the Company required. Mendez also served as a member of the Board of
Directors until his resignation October 17, 2002
 
 (5)
Edward Deese, Interim Chief Operating Officer, served under a semi-annual
Agreement for Services for an annualized compensation of $72,000. His agreement
terminated as of January 31, 2003. Deese also served as a member of the Board of
Directors from August 1, 2002 to January 17, 2003
 
 (6) James
DeOlden, Director served on the Board of Directors from September 12, 2002 to
October 17, 2002
 
 (7) The
members of the Company's Board of Directors receive no additional compensation
for serving as directors.
 
  42
  
 
 **Item
11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT**
 **AND
RELATED STOCKHOLDER MATTERS**
 
 The
following table sets forth information regarding beneficial ownership as of
April 14, 2004 of the Company's common stock by any person who is known to the
Company to be the beneficial owner of more than 5% of the Company's voting
securities and by each director and officer of the Company.
 
 Beneficial
    PercentageName
      and Address (1)
    Ownership
    of
      ClassShanghai
      Offshore Oil Group (HK) Co., Ltd (1)
    33,333,333
    8.89%Albert
      Figueroa (2)
    5,425,607
    1.44%Deng
      Shan (2), (3)
    81,150,285
    21.63%All
      directors/officers as a group (2 persons)
    86,575,892
    23.07%
 
 (1) The
address for Shanghai Offshore Oil Group (HK) Co., Ltd. is 35/F Bund Center, 222
Yan An Road East, Shanghai, China
 
 (2) The
address for Mssrs. Figueroa and Deng is 4570 Campus Drive, Newport Beach, CA
92660
 
 (2) Mr.
Deng Shan owns 2,892,396 (0.77%) shares personally, and 78,257,889 (20.86%)
shares through his majority owned corporation, Proton Technology Corporation
Limited.
 
 **Item
12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**
 
 Notes
payable to related parties at December 31, 2004 and 2003 consists of the
following:
 
 2004
    2003Note
      payable on demand to Company shareholder; interest payable
      monthly
      at 7% per annum; unsecured (a)
    $
      -
    $
      15,000Note
      payable on demand to Company’s Chairman; interest payable
      monthly
      at 7% per annum; unsecured.
    434,782
    434,782Total
    434,782
    449,782Less:
      current portion
    (434,782)
    (449,782)$
      -
    $
      -
 
 (a) In
December 2004, the Company entered into an agreement with the Company’s
shareholder to issue an aggregate of 1,230,546 shares of its common stock in
exchange for the note payable of $15,000 and all accrued unpaid interest of
$3,458. The Company accounted for the shares to be issued as stock subscription
payable at December 31, 2004 (Note G). The Company has issued the common shares
to the shareholder subsequent to the date of the financial
statements.
 
 Two
shareholders of the Company have advanced funds to the Company for working
capital purposes. No formal repayment terms or arrangements exist. The net
amount of advances due the shareholders at December 31, 2002 was $1,225. During
the year ended December 31, 2003, the Company repaid to the shareholders $1,019
in cash and also issued 10,323 shares of its common stock in exchange for $206
of the advances.
 
 During
the year ended December 31, 2002, a consultant (former officer) of the Company
has advanced funds to the Company for working capital purposes. No formal
repayment terms or arrangements exist. The net amount of advances due the
consultant at December 31, 2002 was $117. During the year ended December 31,
2003, the Company issued 7,312 shares of its common stock in exchange for
settlement of the advance.
 
 A
consultant (shareholder and former employee) of the Company has advanced funds
to the Company as working capital of its Vietnam representative office. No
formal repayment terms or arrangements exist. The net amount of advances due the
consultant at December 31, 2003 was $15,078. In March 2004, the Company issued
an aggregate of 1,004,994 shares of common stock to the consultant and former
employee in exchange for the $15,078 of expenses paid on behalf of the Company.
The consultant continued advancing funds the Company as working capital during
the year ended December 31, 2004. The net amount of advances due the consultant
at December 31, 2004 was $14,708.
 
 43
 The
Company’s Chief Financial Officer has advanced funds to the Company for working
capital purpose. No formal repayment terms or arrangements exist. The net amount
of advances due the Chief Financial Officer at December 31, 2004 was
$11,326.
 
 The
Company’s Chairman has advanced funds to the Company for working capital
purposes. No formal repayment terms or arrangements exist. The net amount of
advances due the Company’s Chairman at December 31, 2004 and 2003 was $131,359
and $105,716, respectively.
 
 During
the year ended December 31, 2004 and 2003, the Company Chairman and significant
shareholders contributed cash of $42,875 and $111,720, respectively to the
Company as working capital.
 
 As of
April 14, 2004, other than issuances of common shares to executive officers as
compensation or in satisfaction of cash advances and transactions described
above, there have been no transactions to which the Company was a party
involving $100,000 or more and in which any director, executive officer, or
holder of more than five percent of our common stock had a material
interest.
 
 
 **Item
13. EXHIBITS**
 
 (a)
Exhibits
 
 3.(i)
Articles of Incorporation of Largo Vista Group, Limited (filed Form 10SB,
11/2/99)
 3.(ii)
Bylaws of Largo Vista Group, Limited (filed Form 10SB, 11/2/99)
 3.(iii)
Articles of Incorporation of Largo Vista Inc. (filed Form 10SB,
11/2/99)
 3.(iv)
Bylaws of Largo Vista Inc. (filed Form 10SB, 11/2/99)
 3.(v)
Articles of Incorporation of Everlasting International Limited (filed Form 10SB,
11/2/99)
 3.(vi)
Bylaws of Everlasting International Limited (filed Form 10SB,
11/2/99)
 3.(vii)
Articles of Incorporation of Kunming Xinmao Petrochemical Industry Co., Ltd.
(filed Form 10SB, 11/2/99)
 
 10
Material Contracts
 
 10.(a)
Contract. Largo Vista Group, Ltd. and Sentio Corporation, December 28, 1998,
(filed Form 10SB, 11/2/99)
 10.(b)
Contract. Hong Kong De Xiang Tuo Yi Industrial Company, August 28, 1992 (filed
Form 10SB, 11/2/99)
 10.(c)
Plan and Agreement of Reorganization between Largo Vista Group, Ltd., Proton
Technology Corporation, Ltd. and Everlasting International, December 21, 1996
(filed Form 10SB, 11/2/99)
 10.(d)
Joint Venture Agreement of Kunming Xinmao Petrochemical Industry Co., Ltd.,
August 8, 1992 (filed Form 10SB, 11/2/99)
 10.(e)
Approval Certificate of Enterprise with Foreign Investment in the People's
Republic of China (filed Form 10SB, 11/2/99)
 10.(f)
Business License of Enterprise in the Peoples Republic of China (filed Form
10SB, 11/2/99)
 10.(g)
Business Permit to Engage in LPG Business in Yunnan Province (filed Form 10SB,
11/2/99)
 10.(h)
Notice of Subsidiaries of the Agriculture Bank of China, Yunnan Provincial
Branch, Acting as Agents for Collection and Receipt of Payment for Kunming
Xinmao Petrochemical Industry Co., Ltd. (filed Form 10SB, 11/2/99)
 10.(i)
Agreement of Supply of Liquefied Petroleum Gas, March 18, 1996 (filed Form 10SB,
11/2/99)
 10.(j)
Method of Insurance for LPG Credit, August 26, 1997 (filed Form 10SB,
11/2/99)
 10.(k)
Memorandum of Understanding Kunming Xinmao Petrochemical Industry Co., Ltd. and
Wuhan Minyi Fuel Gas Petrochemical Company Limited, March 14, 1999 (filed Form
10SB, 11/2/99)
 10.(l)
Memorandum of Understanding Kunming Xinmao Petrochemical Industry Co., Ltd. and
Guilin Municipal Garden Fuel Gas Pipelines Limited, March 29, 1999 (filed Form
10SB, 11/2/99)
 10.(m)
Approval Certificate of Enterprisees with Foreign Investment in the Peoples
Republic of China, August 21, 1992 (filed Form 10SB, 11/2/99)
 10.(n)
Contract. Enterprise Ownership Transfer Agreement "Ten Year Leasing Contract",
Seller Chen Mao Tak, Purchaser Everlasting International, Ltd., third party
Kunming Fuel General Company, November 8, 1995 (filed Form 10SB-A1, 1/14/2000 as
EX-10.D)
 10.(o)
Joint Venture Agreement. , Largo Vista with the United Arab Petroleum
Corporation ("UAPC"), known as Largo Vista/UAPC Partners (filed Form 10SB-A1,
1/14/2000 as EX-10.F)
 
 44
 10.(p)
Memorandum of Association Limited Liability Company. Largo Vista Group, Ltd.,
LLC, Dubai, UAE, October 12, 1999, Largo Vista Group, Ltd., UAPC, and Sheik Al
Shabani, named Largo Vista Group Limited, Limited Liability Company of the UAE
(filed Form 10SB-A1, 1/14/2000 as EX-10.G)
 10.(q)
Contract: Mekong Petroleum Joint Venture Co., Ltd. (PETROMEKONG) Buyer, and
United Arab Petroleum Corporation Seller, November 25, 1999 (filed Form 10SB-A1,
1/14/2000 as EX-10.H)
 10.(r)
Contract: Mekong Petroleum Joint Venture Co., Ltd. (PETROMEKONG), Buyer, and
United Arab Petroleum Corporation Seller, December 18, 1999 (filed Form 10SB-A1,
1/14/2000 as EX-10.H)
 10.(s)
Employment Agreement Daniel J. Mendez 1999 (filed Form 10SB-A1 as Ex-3.iv,
1/14/2000)
 10.(t)
Consultant Agreement Deng Shan 1999 (filed Form 10SB-A1, as Ex-3.v
1/14/2000)
 10.(u)
Contract. "Enterprise Ownership Transfer Agreement", November 8, 1995, new
translation (filed Form 10SB-A2, 3/20/2000 as EX-10.E.1)
 10.(v)
Contract. "Agreement on Payment", November 8, 1995 (filed Form 10SB-A2,
3/20/2000 as EX-10.E.2)
 10.(w)
Contract. "Agreement on Supply of Liquified Petroleum Gas", March 18, 1996
(filed Form 10SB-A2, 3/20/2000 as EX-10.E.3)
 10.(x)
Employment Agreement Albert N. Figueroa 1999 (filed as Ex-3.vi
3/21/2000)
 10.(y)
Agreement on Zunyi Pipeline Project No.1 Largo Vista Group, Ltd - Proton
Enterprise (Wuhan) LTD., China (Agent Agreement)
 10.(z)
Zunyi Pipeline #1 Contract Proton Enterprise (Wuhan) LTD. & Construction
Headquarters of Zunyi Municipal Government, Dated February 2, 2002
 10.(aa)
Gas Supply Contract Between Proton Enterprise (Wuhan) LTD. and Zunyi Government
Administration Construction Team, Dated October 15, 2002 40 Years Exclusive
Right
 10.(ab)
Zunyi Jiahong Gas Co., Ltd. & Largo Vista Group, Ltd. Lease Agreement
No.JHLGOV0802 Dated August 27, 2002
 10.(ac)  Policy
Statement on Business Ethics and Conflicts of Interest
 10 (ad)
Agreement and Assignment of Certain Contractual Rights and Benefits between
Largo Vista Group, Ltd. and Shanghai Offshore Oil Group (HK) Co.,
Ltd.
 All of
the exhibits listed above have been filed previously with the forms and on the
dates indicated.
 
  ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
 
 The
following table sets forth fees billed to the Company by our auditors during the
fiscal years ended December 31, 2004 and 2003:
 
 
 DECEMBER
      31, 2004
    DECEMBER
      31, 20031.
      Audit Fees
    $
      56,400
    $
      36,2892.
      Audit Related Fees
    --
    --3.
      Tax Fees
    --
    --4.
      All Other Fees
    --
    --Total
      Fees
    $
      56,400
    $
      36,289
 
 
 Audit
fees consist of fees billed for professional services rendered for the audit of
the Company's consolidated financial statements and review of the interim
consolidated financial statements included in quarterly reports and services
that are normally provided by Russell Bedford Stefanou Mirchandani LLP in
connection with statutory and regulatory filings or engagements.
 
 Audit-related
fees consists of fees billed for assurance and related services that are
reasonably related to the performance of the audit or review of the Company's
consolidated financial statements, which are not reported under "Audit Fees."
There were no Audit-Related services provided in fiscal 2004 or 2003.
 
 Tax fees
consists of fees billed for professional services for tax compliance, tax advice
and tax planning.
 
 All other
fees consist of fees for products and services other than the services reported
above. There were no management consulting services provided in fiscal 2004 or
2003.
 
 45
 **Audit
Committee’s Pre-Approval Policies and Procedures**
 **--------------------------------------------------------------------------**
 
 The
Company currently does not have a designated Audit Committee, and accordingly,
the Company's Board of Directors' policy is to pre-approve all audit and
permissible non-audit services provided by the independent auditors. These
services may include audit services, audit-related services, tax services and
other services. Pre-approval is generally provided for up to one year and any
pre-approval is detailed as to the particular service or category of services
and is generally subject to a specific budget. The independent auditors and
management are required to periodically report to the Company's Board of
Directors regarding the extent of services provided by the independent auditors
in accordance with this pre-approval, and the fees for the services performed to
date. The Board of Directors may also pre-approve particular services on a
case-by-case basis.
 
 
 
 
 **SIGNATURES**
 
 In
accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934,
 the
Registrant caused this report to be signed on its behalf by the
undersigned,
 thereunto
duly authorized.
 
 LARGO
VISTA GROUP, LTD.
 
 Signature
    Title
    Date/s/Albert
      N. Figueroa
    Secretary/Treasurer
    April
      15, 2005Albert
      N. Figueroa/s/Deng
      Shan
    Interim
      CEO
    April
      15, 2005Deng
      Shan