---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10K

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

For the fiscal year ended March 31, 2011

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

For the transition period from _____ to _____

Commission File Number: 027229

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

|Nevada                                           | 880409163                       
|------------------------------------------------ | ---------------------------------
|(State or other jurisdiction of incorporation or | (IRS Employer Identification No.)
|organization)                                    |                                  
|                                                 |                                  
|Rm 803, 8/F, Jubilee Centre                      |                                  
|No. 42 Gloucester Road                           |                                  
|Wanchai, Hong Kong, China                        | __________                       
|(Address of principal executive offices)         | (Zip Code)                       

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

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

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

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

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

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

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

Indicate by check mark if disclosure of delinquent filers
in response to Item 405 of Regulation SK is not contained herein, and will not
be contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10K
or any amendment to this Form 10K. [ x ]

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

---

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a nonaccelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b2 of the
Exchange Act.

|Large accelerated filer [ ]                                                   | Accelerated filer [ ]          
|----------------------------------------------------------------------------- | -------------------------------
|Nonaccelerated filer [ ] (do not check if a smaller
      reporting company) | Smaller reporting company [ x ]

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

The registrants common stock ceased to be eligible for
quotation on the OTC Bulletin Board effective August 19, 2008, for failure to
comply with NASD (now FINRA) Rule 6530. There is currently no public market for
the registrants common stock. However, as reported in its current report on
Form 8-K filed with the SEC on July 14, 2011, the registrant has acquired an
exclusive sublicense dated June 29, 2011 from Fire Block Technologies Inc. to
use and apply, in Southeast Asia, including China, the patent-pending processes
and solutions licensed by Fire Block Technologies Inc. from Fire Block
International Inc., a private Canadian company, for the manufacture of
engineered construction products from palm oil tree waste material with zero
ignition and zero flame spread properties. The registrant intends to pay a
CAD$150,000 acquisition fee to Fire Block Technologies Inc. by way of the
issuance of 10,000,000 fully paid shares of common stock in the capital of the
registrant (at a deemed issue price per share of CAD$0.015, or $0.015 based on
the noon exchange rate on September 29, 2011, as published by the Bank of
Canada, of CAD$1.00: $0.9673) to Fire Block Technologies Inc. The aggregate
market value of the registrants common stock held by nonaffiliates of the
registrant as of September 29, 2011, not including the deemed issue price at
which such stock might be issued to Fire Block Technologies Inc., was
approximately $31,351,109.

The registrant had 57,761,834 shares of common stock outstanding
as of September 30, 2011.

- ii -

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|WORLDSTAR ENERGY, CORP.
|-----------------------
|Form 10K              

|ITEM
      1.                                                                      | BUSINESS                                                                                              | 2 
|---------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------- | --
|ITEM 1A.                                                                           | RISK
      FACTORS                                                                                    | 4 
|ITEM
      1B.                                                                     | UNRESOLVED STAFF COMMENTS                                                                             | 8 
|ITEM 2.                                                                            | PROPERTIES                                                                                            | 9 
|PRINCIPAL MINERAL PROPERTY                                                         | 9                                                                                                    
|MONGOLIA                                                                           | 11                                                                                                   
|ITEM
      3.                                                                      | LEGAL PROCEEDINGS                                                                                     | 13
|ITEM 4.                                                                            | (REMOVED
      AND RESERVED)                                                                          | 13
|ITEM
      5.                                                                      | MARKET FOR COMMON EQUITY, RELATED SHAREHOLDER MATTERS
      AND ISSUER PURCHASES OF EQUITY SECURITIES | 14
|MARKET INFORMATION                                                                 | 14                                                                                                   
|RECENT SALES OF UNREGISTERED SECURITIES                                            | 14                                                                                                   
|PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND
      AFFILIATED PURCHASERS       | 15                                                                                                   
|ITEM
      6.                                                                      | SELECTED FINANCIAL DATA                                                                               | 15
|ITEM 7.                                                                            | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS           | 15
|OVERVIEW OF OUR BUSINESS                                                           | 15                                                                                                   
|OUR PLAN OF OPERATIONS                                                             | 16                                                                                                   
|RESULTS OF OPERATIONS  YEARS ENDED MARCH 31,
      2011 AND 2010                  | 18                                                                                                   
|CRITICAL ACCOUNTING POLICIES AND ESTIMATES                                         | 20                                                                                                   
|OFFBALANCE SHEET ARRANGEMENTS                                                     | 26                                                                                                   
|ITEM 7A.                                                                           | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK                                      | 27
|ITEM
      8.                                                                      | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                           | 27
|ITEM 9.                                                                            | CHANGES IN
      AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE                          | 27
|ITEM
      9A.                                                                     | CONTROLS AND PROCEDURES                                                                               | 27
|EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES                                   | 27                                                                                                   
|INTERNAL CONTROL OVER FINANCIAL REPORTING                                          | 27                                                                                                   
|MANAGEMENT REPORT ON ASSESSMENT OF INTERNAL CONTROL OVER
      FINANCIAL REPORTING | 28                                                                                                   
|INHERENT LIMITATION OF THE EFFECTIVENESS OF
      INTERNAL CONTROL                 | 28                                                                                                   
|CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING                               | 28                                                                                                   
|ITEM
      9A(T).                                                                  | **CONTROLS AND PROCEDURES**                                                                           | 28
|ITEM 9B.                                                                           | OTHER
      INFORMATION                                                                               | 28
|ITEM
      10.                                                                     | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
      GOVERNANCE                                          | 29
|DIRECTORS AND EXECUTIVE OFFICERS                                                   | 29                                                                                                   
|TERM OF OFFICE                                                                     | 30                                                                                                   
|SIGNIFICANT EMPLOYEES                                                              | 30                                                                                                   
|FAMILY RELATIONSHIPS                                                               | 30                                                                                                   
|BOARD INDEPENDENCE                                                                 | 30                                                                                                   
|COMMITTEES OF THE BOARD OF DIRECTORS                                               | 31                                                                                                   
|INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS                                           | 31                                                                                                   
|COMPLIANCE WITH SECTION 16 OF THE SECURITIES
      EXCHANGE ACT                    | 32                                                                                                   
|CODE OF ETHICS                                                                     | 32                                                                                                   

- iii -

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|ITEM 11.                                                                                               | EXECUTIVE COMPENSATION                                                                               | 33
|------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------- | --
|SUMMARY COMPENSATION TABLE                                                                             | 33                                                                                                  
|OUTSTANDING
      EQUITY AWARDS AS OF MARCH 31, 2011                                                   | 34                                                                                                  
|EQUITY COMPENSATION PLANS                                                                              | 34                                                                                                  
|COMPENSATION
      OF DIRECTORS                                                                        | 34                                                                                                  
|EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGEINCONTROL
      ARRANGEMENTS            | 34                                                                                                  
|ITEM 12.                                                                                               | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 34
|ITEM 13.                                                                                               | CERTAIN RELATIONSHIPS AND
      RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                      | 35
|WHERE
      YOU CAN FIND MORE INFORMATION                                                              | 36                                                                                                  
|GLOSSARY OF TECHNICAL TERMS                                                                            | 36                                                                                                  
|ITEM 14.                                                                                               | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                               | 37
|AUDIT FEES                                                                                             | 37                                                                                                  
|AUDIT
      RELATED FEES                                                                               | 37                                                                                                  
|TAX FEES                                                                                               |                                                                                                      | 37
|ALL
      OTHER FEES                                                                                   | 38                                                                                                  
|AUDIT COMMITTEE PREAPPROVAL OF AUDIT AND PERMISSIBLE
      NONAUDIT SERVICES OF INDEPENDENT AUDITORS | 38                                                                                                  
|PART IV                                                                                                |                                                                                                      | 38
|ITEM 15.                                                                                               | EXHIBITS                                                                                             | 38
|FINANCIAL STATEMENTS FILED AS PART OF THIS ANNUAL REPORT
      ON FORM 10K                            | 40                                                                                                  
|SIGNATURES                                                                                             | 41                                                                                                  

- iv -

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FORWARDLOOKING STATEMENTS

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

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

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

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

For further information, you should carefully read and
consider the section of this annual report entitled “Risk
Factors” beginning on page4.

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

1

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PART I

|ITEM 1. | BUSINESS
|------- | --------

Overview

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

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

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

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

Abortive Acquisition of WorldStar Energy Corp. (British
Columbia)

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

Acquisition of National Base Investment Limited

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

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

2

---

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

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

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

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

Current Status

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

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

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

3

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ZeroignitionTM and ZiTM, referred to in
this annual report, are trademarks controlled by Fire Block International Inc.

Incorporation and Principal Business Offices

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

Accounting Treatment

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

|ITEM 1A. | RISK FACTORS
|-------- | ------------

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

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

Risks Related to Our Company

We have no operations and only nominal assets.

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

4

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

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

We had net loss of $29,939 for the year ended March 31, 2011
and a net loss of $107,746 for the year ended March 31, 2010. As of March 31,
2011, we had a working capital deficiency of $5,267,833. This deficiency
includes current liabilities of $5,370,412 representing payables and accrued
expenses, loans from minority stockholders, amount due to related companies,
amount due to a minority stockholder, amount due to a former stockholder,
related party payable and short-term loans. In addition, in order to preserve
our rights under our sublicense agreement with Fire Block Technologies Inc., we
are under obligations to pay a continuing royalty to Fire Block Technologies
Inc., and to purchase certain escalating minimum quantities of
ZeroignitionTM Solution from Fire Block Technologies Inc. during each
year of the term of the sublicense agreement.

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

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

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

As of March 31, 2011, the outstanding principal and unpaid
interest amount of our liabilitieswas $5,370,412. The widely reported domestic
and global recession, and the unprecedented levels of disruption and continuing
illiquidity in the credit markets have had an adverse effect on our financial
condition, and if sustained or worsened, such adverse effects could continue or
deteriorate. Disruptions in the credit and financial markets have adversely
affected financial institutions, inhibited lending and limited access to capital
and credit for many companies, including ours. These conditions have made it
difficult for us to obtain capital and financing and have limited our
flexibility to plan for acquisitions of any business or assets that we may
identify. If these conditions persist or deteriorate, they could, among other
things, make it difficult for us to finance our working capital requirements and
service our existing debt.

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

5

---

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

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

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

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

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

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

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

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

6

---

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

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

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

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

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

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

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

7

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

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

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

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

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

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

|ITEM 1B. | UNRESOLVED STAFF COMMENTS
|-------- | -------------------------

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

8

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|ITEM 2. | PROPERTIES
|------- | ----------

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

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

Principal Mineral Property

Description and Location

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

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

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

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

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

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

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

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

9

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Borts Uul Copper Section

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

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

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

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

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

Khyargas Gold Prospective Section

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

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

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

Tumurchuluut Iron Section

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

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

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

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

10

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Mongolia

General Information

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

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

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

Government

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

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

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

Mining Industry

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

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

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

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

11

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Minerals Law and Taxation

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

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

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

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

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

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

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

- the tax rate on corporate income was reduced from 30% to 25% for annual
  income above three billion tugrugs (approximately US$2.6 million) and to 10%
  for annual incomes up to three billion tugrugs;
- the value-added tax (VAT) was reduced from 15% to 10%;
- a loss-carry-forward provision, improved depreciation allowances and a
  re-investment tax credit were included to compensate for the elimination of
  tax holidays that had been previously available to foreign owned companies.

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

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

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

Windfall Profits Tax

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

Environmental Regulations

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

| | i.   | comply with the legislation and the requirements of State
      inspectors,                                              
| | ---- | -------------------------------------------------------------------------------------------------------------------------
| | ii.  | keep records on toxic substance disposal and waste
      discharges as well as the operation of any monitoring equipment,
| | iii. | include provisions for reclamation and restoration in
      annual budgets,                                              
| | iv.  | keep the "ecological passport" of the area, and                                                                          
| | v.   | carry out environmental impact assessments that identify
      possible adverse effects from production.                 

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

|ITEM 3. | LEGAL PROCEEDINGS
|------- | -----------------

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

|ITEM 4. | (Removed and Reserved)
|------- | ----------------------

PART II

13

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

Market Information

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

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

OTC Bulletin Board

2011
    20101stQuarter
    $0.15  0.15
    $0.20  1.012ndQuarter
    0.05  0.01
    0.20  0.553rdQuarter
    0.05  0.05
    0.30  0.394thQuarter
    0.05  0.05
    0.15  0.30


Holders

The number of record holders of our common stock, $0.001 par
value, as of September 30, 2011 was 102.

Dividends

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

Equity Compensation Plans

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

Recent Sales of Unregistered Securities

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

We have reported sales of securities without registration under
the Securities Act of 1933 during our fiscal year ended March 31, 2011 on
the following reports, as filed with the Securities and Exchange Commission. No
securities were issued during this period.

14

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Report
    Date of Filing with SECQuarterly Report on Form 10 Q for the
      quarterly period ended June 30, 2010
    September 30, 2011Quarterly Report on Form 10 Q for the
      quarterly period ended September 30, 2010
    September 30, 2011Quarterly Report on Form 10 Q for the
      quarterly period ended December 31, 2010
    September 30, 2011


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

Purchases of Equity Securities by the Issuer and Affiliated
Purchasers

We did not purchase any of our shares of common stock or other
securities during the year ended March 31, 2011.

|ITEM 6. | SELECTED FINANCIAL DATA
|------- | -----------------------

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

|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF
      FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------------

The following discussion of our financial condition, changes in
financial condition and results of operations for the years ended March 31, 2011
and 2010 should be read in conjunction with our most recent audited consolidated
financial statements for the years ended March 31, 2011 and 2010, which are
included in this annual report, and the related notes to the consolidated
financial statements. This discussion contains forwardlooking statements that
involve risks, uncertainties and assumptions. Our actual results may differ
materially from those anticipated in these forwardlooking statements as a
result of many factors, including, but not limited to, those set forth under
Risk Factors and elsewhere in this annual report.

Overview of Our Business

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

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

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

15

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Acquisition of National Base Investment Limited

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

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

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

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

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

Forfeiture of Mineral Exploration Licenses

Due in large part to the economic recession that commenced in
the United States in December 2007, and the general worldwide economic downturn
that followed, we were unable to raise sufficient financing to commence our
planned exploration activities on the properties covered by the Mongolian
licenses. As a result, during the year ended March 31, 2010, our Company was
forced to cease operations in Mongolia, and we were unable to maintain our
interests in the Mineral Exploration License Certificates issued by the Minerals
and Petroleum Authority of Mongolia. Accordingly, the exploration rights
represented by the Mongolian licenses were forfeited, our Company wrote off the
remaining book value of $7,317,739 as of March 31, 2008, and we once again
became a shell company as defined in Rule 12b2 of the Exchange Act.

Our Plan of Operations

Overview

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

16

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Fire Block Technologies Inc. is a private Barbados company that
controls the exclusive worldwide license outside of Canada for the sale,
marketing and distribution of ZeroignitionTM Solution together with
the sub-licensing rights for the patent-pending ZeroignitionTM New
Materials Technology.

ZeroignitionTM Solution is a proprietary formula,
which when used in conjunction with the patent pending ZeroignitionTM
New Materials Technology, is capable of creating a wide range of wood-based
products with non-combustible characteristics (ZeroignitionTM
Products). These new and unique revolutionary technologies and products, which
demonstrate extreme flame resistance and highly efficient thermal protection,
are non-toxic, pH neutral, environmentally friendly, non-corrosive and have
withstood direct heat in excess of 18,000 degrees Fahrenheit without ignition or
flame spread. Extensive testing to ASTM standards by INTERTEK Laboratories
(Vancouver, Canada) and EMERCOM of Russia (Moscow) has resulted in achieving
Class A fire ratings on wood fiber, cellulose, and textile products treated
with ZeroignitionTM Solution.

Siempelkamp GmbH & Co, (Siempelkamp) (Krefeld, Germany),
under contract with the owner of ZeroignitionTM technology and Fire
Block Technologies Inc., has successfully completed product testing on OSB
(oriented strand board), MDF (medium density fiberboard), particle board and
ZeroignitionTM Wallboard (a sheetrock replacement) manufactured
using the ZeroignitionTM New Materials Technology, both for
traditional wood fiber boards and EFB (or empty fruit basket) waste material
boards. Siempelkamp, a leader in lumber, cellulose fiber and wood products
equipment manufacture and factory design, was established in 1883 and holds a
70% global market share in this industry, which represents 1,400 of the 2,000
OSB and MDF plants in the world.

Our sublicense is for a 10 year term, and is renewable for
successive periods of 10 years each. We have paid a CAD$150,000 acquisition fee
to Fire Block Technologies Inc. by way of the issuance of 10,000,000 fully paid
shares of our common stock to Fire Block Technologies Inc. We have also agreed
to pay a continuing royalty to Fire Block Technologies Inc. of: (a) 1% of the
net invoice price from sales of Zeroignition Products by our Company and any of
our sublicensees; and (b) 3% of our Companys net invoice price from sales of
any palm waste material that has been processed into pulp fibre
(ZiTM-Pulp) or chips (ZiTM-Chips) and treated with
ZeroignitionTM Solution for use as a raw material for the manufacture
and production of engineered wood products. The 3% royalty relates to our
Companys obligation under the sublicense agreement to manufacture
ZiTM-Pulp and ZiTM-Chips for sale to our own future
sublicensees, as well as to certain existing manufacturers of Zeroignition
Products in the territory covered by the sublicense. In addition, we have agreed
to purchase from Fire Block Technologies Inc. certain minimum quantities of
ZeroignitionTM Solution during each year of the term of the
sublicense agreement, as follows: year 1  CAD$5,000,000; year 2 -
CAD$25,000,000; year 3 - CAD$75,000,000; year 4 and each subsequent year -
CAD$100,000,000.

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

17

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Liquidity and Financial Resources

We had cash of $25,322 and a working capital deficiency of
$5,267,833 at March 31, 2011.

Our Companys continuation as a going concern is dependent upon
our ability to generate sufficient cash flow to meet our obligations on a timely
basis, to pay off existing debt and provide sufficient funds for general
corporate purposes, all of which is uncertain. Our consolidated financial
statements contain additional note disclosures to this effect, and the
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

Given the forfeiture of our exploration rights represented by
the Mongolian licenses, and despite our acquisition of an exclusive sublicense
to manufacture ZeroignitionTM Products from palm oil tree waste
material for distribution in Southeast Asia, we currently have no operations and
only nominal assets. Furthermore, we presently do not have sufficient financial
resources to fund the construction of the required facilities to process palm
oil tree waste material and manufacture our planned ZeroignitionTM
Products, or to fund the start-up of operations.

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

Cash and Working Capital

The following table sets forth our cash and cash equivalents
and working capital as of March 31, 2011 and 2010:

|                           |   | As of      |   |   | As of      |  
|-------------------------- | - | ---------- | - | - | ---------- | -
|                           |   | March 31,  |   |   | March 31,  |  
|                           |   | 2011       |   |   | 2010       |  
|                           |   |            |   |   |            |  
|Cash and cash equivalents  | $ | 25,322     |   | $ | 8,872      |  
|                           |   |            |   |   |            |  
|Working capital deficiency | $ | (5,267,833 | ) | $ | (5,237,894 | )

Results of Operations  Years Ended March 31, 2011 and 2010

The following table sets forth our consolidated loss from
operations during the fiscal years ended March 31, 2011 and 2010.

18

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Consolidated Loss From Operations

|                                                    |   | Year Ended |   |   | Year Ended |  
|--------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                    |   | March 31,  |   |   | March 31,  |  
|                                                    |   | 2011       |   |   | 2010       |  
|                                                    |   |            |   |   |            |  
|Depreciation of property, plant and
      equipment |   | -          |   |   | (4,658     | )
|General and administrative expenses                 |   | (29,939    | ) |   | (594       | )
|Termination of Mongolian project                    |   | -          |   |   | (102,494   | )
|Loss from operations                                | $ | (29,939    | ) | $ | (107,746   | )

Depreciation of Property, Plant and Equipment

Our depreciation expense amounted to $Nil for the year ended
March 31, 2011 (2010 - $4,658). The Company wrote-off all its property, plant
and equipment at March 31, 2010, resulting in $Nil in depreciation in the
current year.

General and Administrative Expenses

Our general and administrative expenses increased to $29,939
during the year ended March 31, 2011 as compared to $594 during the year ended
March 31, 2010 as the Company has commenced reactivation activities. The Company
was basically inactive beginning April 1, 2008. During the year ended March 31,
2011, the Company commenced efforts in preparation of past-due filings.

Termination of Mongolian project

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

Net Loss

The following table reflects our net loss for the years ended
March 31, 2011 and 2010, after taking into account the amounts recognized as
other income or expenses.

|                                 |   | Year Ended |   |   | Year Ended |  
|-------------------------------- | - | ---------- | - | - | ---------- | -
|                                 |   | March 31,  |   |   | March 31,  |  
|                                 |   | 2011       |   |   | 2010       |  
|Loss from operations             | $ | (29,939    | ) | $ | (5,252     | )
|Termination of Mongolian project |   | -          |   |   | (102,494   | )
|Net loss                         | $ | (29,939    | ) | $ | (107,746   | )

We recorded a net loss of $29,939 for the year ended March 31,
2011 as compared to a net loss of $107,746 for the year ended March 31, 2010.

Cash Flows From Operating Activities

Our cash flows from operating activities during 2011 were
($29,300). Our cash flows from operating activities for 2011 include net loss of
$29,939, and a net change in other current liabilities of $639.

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

Cash Flows From Investing Activities

Our cash flows from investing activities during 2011 and 2010
were $Nil.

Cash Flows From Financing Activities

Our cash flows from financing activities during 2011 (2010 were
$Nil) comprised of a short term loan of $45,750 from BLMH Technologies Inc., a
company related to the vendor of the new sublicense acquired by the company
subsequent to the year end.

Critical Accounting Policies and Estimates

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

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

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

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

Basis of Presentation

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

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Principles of Consolidation

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

Use of Estimates

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

Foreign Currency Translation

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

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

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

Cash and Cash Equivalents

Cash and cash equivalents include all cash, deposits in banks
and other highly liquid investments with initial maturities of three months or
less to be cash equivalents. As of March 31, 2011 most of the cash and cash
equivalents were denominated in US dollars and were placed with banks in Hong
Kong and Canada.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to
significant concentrations of credit risk consist principally of cash and cash
equivalents and amounts due from related parties. As of March 31, 2011,
substantially all of the Company and related companies cash and cash
equivalents and related companies were held by major financial institutions located in
Hong Kong and Canada which management believes are of high credit quality.

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Property, Plant and Equipment

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

Annual rateFurniture
    10%Computer software
    10%Computers
    33.33%


Maintenance or repairs are charged to expense as incurred. Upon
sale or disposition, the applicable amounts of asset cost and accumulated
depreciation are removed from the accounts and the net amount less proceeds from
disposal is charged or credited to income. During the year ended March 31, 2010,
the Company wrote-of all their property, plant and equipment due to the
termination of the Mongolian project.

Impairment of Long-Lived Assets

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

Asset Retirement Obligations (ARO)

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

Basic and Diluted Loss per Share

Basic loss per common share is calculated by dividing net loss
by the weighted average number of common shares outstanding during the period.
Diluted loss per common share is calculated by dividing the net loss by the sum
of the weighted average number of common shares outstanding and the dilutive
common equivalent shares outstanding during the period. Common equivalent shares
consist of the shares issuable upon exercise of stock options and warrants
calculated using the treasury stock method.

22

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Common equivalent shares are not included in the calculation of
the weighted average number of shares outstanding for diluted loss per common
shares when the effect would be anti-dilutive.

Income Taxes

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

Financial Instruments and Comprehensive Income

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

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

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

Recently Adopted Accounting Pronouncements

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

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

23

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

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

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

In June 2008, the FASB issued FASB SP EITF 03-6-1, Determining
Whether Instruments Granted in Share-Based Payment Transactions are
Participating Securities (SP-EITF 03-6-1). SP EITF 03-6-1 addresses whether
instruments granted in share-based payment transactions are participating
securities prior to vesting and, therefore, need to be included in the
computation of earnings per share under the two-class method as described in
SFAS No. 128, Earnings per Share. SP EITF 03-6-1 is effective for financial
statements issued for the Companys fiscal years beginning on or after December
15, 2008 and earlier adoption is prohibited. The Company adopted SP EITF 03-6-1
effective April 1, 2009 and considers SP EITF 03-6-1 had no material impact on
the Companys consolidated financial statements. In April 2009, the FASB issued
three FASB Staff Positions (FSPs) that are intended to provide additional
application guidance and enhance disclosures about fair value measurements and
impairments of securities. FSP No. 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly (FSP 157-4),
clarifies the objective and method of fair value measurement even when there has
been a significant decrease in market activity for the asset being measured. FSP
No. 115-2 and FSP No. 124-2, Recognition and Presentation of
Other-Than-Temporary Impairments, (FSP 115-2 and FSP 124-2), establish a new
model for measuring other-than-temporary impairments for debt securities,
including criteria for when to recognize a write-down through earnings versus
other comprehensive income. FSP No. 107-1 and APB 28-1, Interim Disclosures
About Fair Value of Financial Instruments, expand the fair value disclosures required for all financial instruments
within the scope of SFAS, No. 107, Disclosures about Fair Value of Financial
Instruments (FSP 107-1 and APB 28-1) to interim periods. All of these FSPs are
effective for interim and annual periods ending after June 15, 2009, our quarter
ended June 30, 2009. The adoption of these FSPs will not have a material impact
on our consolidated results of operations and financial condition. However,
adoption of FSP 107-1 and APB 28-1 during the quarter ended June 30, 2009
resulted in increased disclosures in our consolidated financial statements.

24

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

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

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

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

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

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

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

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

Recently Issued Accounting Pronouncements

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

OffBalance Sheet Arrangements

We have no offbalance sheet arrangements.

26

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ITEM 7A.
    QUANTITATIVE AND
      QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK


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

|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY
      DATA
|------- | -------------------------------------------------

Our audited consolidated financial statements as of March 31,
2011 and 2010 for the years ended March 31, 2010 and 2009, and the related notes
to the consolidated financial statements, are filed as part of this annual
report beginning on page F1 below, and are incorporated by reference in this
Item 8.

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


None.

|ITEM 9A. | CONTROLS AND PROCEDURES
|-------- | -----------------------

Evaluation of Disclosure Controls and Procedures

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

Our management has evaluated the effectiveness of our
disclosure controls and procedures as of March 31, 2011 (under the supervision
and with the participation of the Chief Executive Officer and the Chief
Financial Officer), pursuant to Rule 13a15(b) promulgated under the
Securities Exchange Act of 1934, as amended. As part of such evaluation,
management considered the matters discussed below relating to internal control
over financial reporting, however, our filings have been delinquent during the
period from March 31, 2011 to date as the Company did not have the financial
resources to fund the costs involved in completing these filings. Based on this
evaluation, our Companys Chief Executive Officer and Chief Financial Officer
have concluded that our Companys disclosure controls and procedures were
effective as of March 31, 2011.

Internal Control over Financial Reporting

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

- pertain to the maintenance of records that in reasonable detail accurately
  and fairly reflect the transactions and dispositions of the assets of the
  registrant;

27

---

- provide reasonable assurance that transactions are recorded as necessary to
  permit preparation of financial statements in accordance with generally
  accepted accounting principles, and that receipts and expenditures of the
  registrant are being made only in accordance with authorizations of management
  and directors of the registrant; and
- provide reasonable assurance regarding prevention or timely detection of
  unauthorized acquisition, use or disposition of the registrants assets that
  could have a material effect on the financial statements.

Management Report on Assessment of Internal Control Over
Financial Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting as such term is defined in
Rule 13a15(f) Securities Exchange Act of 1934, as amended. Management
(under the supervision and with the participation of the Chief Executive Officer
and the Chief Financial Officer), assessed the effectiveness of our internal
control over financial reporting as of March 31, 2011. In making this
assessment, management used the framework set forth in Internal Control 
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission, however, our filings have been delinquent during the period
from March 31, 2010 to date as the Company did not have the financial resources
to fund the costs involved in completing these filings. Based on our evaluation
under this framework, our management concluded that our internal control was not
effective as of March 31, 2011.

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

Inherent Limitation of the Effectiveness of Internal Control

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

Changes in Internal Control Over Financial Reporting

During the year ended March 31, 2011, there was no change in
our internal control over financial reporting or in other factors that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.

|ITEM 9A(T). | CONTROLS AND PROCEDURES
|----------- | -----------------------

Not applicable.

|ITEM 9B. | OTHER INFORMATION
|-------- | -----------------

Not applicable.

28

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PART III

|ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
      GOVERNANCE
|-------- | ------------------------------------------------------------

Directors and Executive Officers

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

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

Notes

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

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

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

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

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

29

---

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

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

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

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

Term of Office

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

Significant Employees

There are no significant employees other than our executive
officers.

Family Relationships

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

Board Independence

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

30

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Committees of the Board of Directors

Audit Committee

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

Involvement in Certain Legal Proceedings

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

| | 1. | A petition under the Federal bankruptcy laws or any state
      insolvency law was filed by or against, or a receiver, fiscal agent or
      similar officer was appointed by a court for the business or property of
      such person, or any partnership in which he was a general partner at or
      within two years before the time of such filing, or any corporation or
      business association of which he was an executive officer at or within two
      years before the time of such filing;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | 2. | Such person was convicted in a criminal proceeding or is
      a named subject of a pending criminal proceeding (excluding traffic
      violations and other minor offenses);                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | 3. | Such person was the subject of any order, judgment, or
      decree, not subsequently reversed, suspended or vacated, of any court of
      competent jurisdiction, permanently or temporarily enjoining him from, or
      otherwise limiting, the following activities:                                                                                                                                                                                                                                    

| | i.   | Acting as a futures commission merchant, introducing
      broker, commodity trading advisor, commodity pool operator, floor broker,
      leverage transaction merchant, any other person regulated by the Commodity
      Futures Trading Commission, or an associated person of any of the
      foregoing, or as an investment adviser, underwriter, broker or dealer in
      securities, or as an affiliated person, director or employee of any
      investment company, bank, savings and loan association or insurance
      company, or engaging in or continuing any conduct or practice in
      connection with such activity;
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ii.  | Engaging in any type of business practice; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | iii. | Engaging in any activity in connection with the purchase
      or sale of any security or commodity or in connection with any violation
      of Federal or State securities laws or Federal commodities
  laws;                                                                                                                                                                                                                                                                                                                                                                                                                            

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

31

---

| | 6. | Such person was found by a court of competent
      jurisdiction in a civil action or by the Commodity Futures Trading
      Commission to have violated any Federal commodities law, and the judgment
      in such civil action or finding by the Commodity Futures Trading
      Commission has not been subsequently reversed, suspended or
  vacated;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                           
| | 7. | Such person was the subject of, or a party to, any
      Federal or State judicial or administrative order, judgment, decree, or
      finding, not subsequently reversed, suspended or vacated, relating to an
      alleged violation of:                                                                                                               

| | i.   | Any Federal or State securities or commodities law or
      regulation; or                                                                                                                                                                                                                                                
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                           
| | ii.  | Any law or regulation respecting financial institutions
      or insurance companies including, but not limited to, a temporary or
      permanent injunction, order of disgorgement or restitution, civil money
      penalty or temporary or permanent cease-and-desist order, or removal or
      prohibition order; or
| |      |                                                                                                                                                                                                                                                                                                                           
| | iii. | Any law or regulation prohibiting mail or wire fraud or
      fraud in connection with any business entity;
or                                                                                                                                                                                                            

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

There are currently no legal proceedings to which any of our
directors or officers is a party adverse to us or in which any of our directors
or officers has a material interest adverse to us.

Compliance with Section 16 of the Securities Exchange
Act

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

Reporting Person
    No. of Late Reports During the Fiscal
      Year Ended March 31, 2011
    No. of Late Reports During the Year
      Ended March 31, 2010Richard Tay
    Nil
    NilMichael Kinley
    Nil
    Nil


Code of Ethics

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

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

32

---

| | 2) | compliance with applicable governmental laws, rules and
      regulations;                                                                             
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                        
| | 3) | the prompt internal reporting of violations of the Code
      of Ethics to an appropriate person or persons identified in the Code of
      Ethics; and
| |    |                                                                                                                                                        
| | 4) | accountability for adherence to the Code of
  Ethics.                                                                                                  

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

|ITEM 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------

Summary Compensation Table

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

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

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

Name andPrincipalPositionDuringYear EndedMarch 31
    Year orPeriod
    Salary($)
    Bonus($)
    StockAwards($)
    OptionAwards($)(1)
    NonEquityIncentivePlanCompensation($)
    Nonqualified**Deferred**CompensationEarnings($)
    All OtherCompensationCompensation($)
    Total($)RichardTay(2)President and CEO
    2011 2010 2009 2008
    - - - -
    - - - -
    - - - -
    - - - -
    - - - -
    - - - -
    - - - -
    - - - -MichaelKinley(3)CFO and Former President and CEO
    2011 2010 2009 2008 2007
    - -  -
    - -  
    - -  
    - -  
    - -  
    - -  
    - - - 60,000(4)
    - - - 60,000(5)


Notes:

|(1) | We have not granted options to acquire shares of our
      common stock or made any stock awards to any of our directors or
      officers.      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Mr. Tay was appointed President and CEO effective
      February 4, 2007. He resigned from all positions with our Company on July
      15, 2011.

33

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|(3) | Mr. Kinley was the sole director and officer of the
      Company from June 30, 2004 to February 4, 2007. Mr. Kinley was replaced by
      Mr. Tay as President and CEO effective February 4, 2007. He resigned from
      all positions with our Company on January 30, 2009, but was re-appointed
      as Chief Financial Officer on July 15, 2011.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Represents the dollar amount of the professional services
      accrued and unpaid owing to Winslow Associates Management &
      Communications Inc., a company of which Michael Kinley is
  President.                                                                                                                                              

Outstanding Equity Awards as of March 31, 2011

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

Equity Compensation Plans

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

Compensation of Directors

Except as outlined under Summary of Compensation Table above,
there was no other compensation paid to directors of the Company for the year
ended March 31, 2011.

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

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

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

The following table sets forth information as of September 30,
2011 regarding the beneficial ownership of our common stock by:

- each person who is known by us to beneficially own more than 5% of our
  shares of common stock;
- each named executive officer, each director and all of our directors and
  executive officers as a group; and
- each person who, as of March 31, 2011, was a named executive officer or a
  director, and all persons who were directors or executive officers as of March
  31, 2011, as a group.

The number of shares beneficially owned and the percentage of
shares beneficially owned are based on 57,761,834 shares of common stock
outstanding as of September 30, 2011.

| |                                                     |  | As of September 30, 2011 | 
| | --------------------------------------------------- |  | ------------------------ | 
| | Name and
      Address of Beneficial Owner(1)       |  | Shares                   | 
| | Named Executive Officers and
      Directors(2)     |  |                          | 
| | Rudijanto Azali(3)President, CEO and
      Director |  | Nil                      | 
| | Supriadi(4)Director                                 |  | Nil                      | 
| | Michael Kinley CFO                                  |  | 500,000                  | 

34

---

|                                                                                            |  | As of September 30, 2011 |    
|------------------------------------------------------------------------------------------- |  | ------------------------ | ---
|Name and
      Address of Beneficial Owner(1)                                               |  | Shares                   |    
|Directors and Executive Officers as a Group (Three
      Persons)                           |  | 500,000                  |    
|Richard Tay(5)Former President, CEO and
      Director                                      |  | 30,000,000               | (4)
|Michael Kinley(6)Former CFO
      and Director                                              |  | 500,000                  |    
|Directors
      and Executive Officers as at March 31, 2008, as a Group
      (Two Persons) |  | 30,500,000               |    
|Major Shareholders (Greater than
      5%)                                                  |  |                          |    
|Jewel Star                                                                                  |  | 30,000,000               | (7)

Notes

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

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


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

- any of our directors or officers;
- any person proposed as a nominee for election as a director;
- any person who beneficially owns, directly or indirectly, shares carrying
  more than 5% of the voting rights attached to our outstanding shares of common
  stock;

35

---

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

Michael Kinley

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

Jewel Star

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

Where You Can Find More Information

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

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

Glossary of Technical Terms

SEC Industry Guide 7 Definitions

|reserve | The term reserve refers to that part of a mineral
      deposit which could be economically and legally extracted or produced at
      the time of the reserve determination. Reserves must be supported by a
      feasibility study done to bankable standards that demonstrates the
      economic extraction. (Bankable standards implies that the confidence
      attached to the costs and achievements developed in the study is
      sufficient for the project to be eligible for external debt financing.) A
      reserve includes adjustments to the insitu tons and grade to include
      diluting materials and allowances for losses that might occur when the
      material is mined.
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

36

---

|proven reserve       | The term proven reserve refers to reserves for which
      (a) quantity is computed from dimensions revealed in outcrops, trenches,
      workings or drill holes; grade and/or quality are computed from the
      results of detailed sampling and (b) the sites for inspection, sampling
      and measurement are spaced so closely and the geologic character is so
      well defined that size, shape depth and mineral content of reserves are
      wellestablished.
|-------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|mineralized material | The term mineralized material refers to material that
      is not included in the reserve as it does not meet all of the criteria for
      adequate demonstration for economic or legal extraction.                                                                                                                                                                                                                                                                         
|                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|exploration stage    | An exploration stage prospect is one which is not in
      either the development or production stage.                                                                                                                                                                                                                                                                                                                                                                        
|                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|production stage     | A production stage project is actively engaged in the
      process of extraction and beneficiation of mineral reserves to produce a
      marketable metal or mineral product.                                                                                                                                                                                                                                                                                               

|ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES
|-------- | --------------------------------------

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

We have not retained the services of any other independent
auditors. Smythe Ratcliffe LLP performed the services listed below and the fees
listed below were paid or accrued for the fiscal years ended March 31, 2011 and
2010:

Audit Fees

2011
    2010$10,000
    None


Audit Related Fees

2011
    2010None
    None


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

Tax Fees

2011
    2010None
    None


37

---

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

All Other Fees

2011
    2010None
    None


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

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

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

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

PART IV

|ITEM 15. | EXHIBITS
|-------- | --------

|Exhibit                                                                            |                                                                 
|---------------------------------------------------------------------------------- | ----------------------------------------------------------------
|Number                                                                             | Description                                                     
|                                                                                  
|Plan of Acquisition,
      Reorganization, Arrangement, Liquidation, or Succession
|                                                                                   |                                                                 
|2.1                                                                                | Post Transaction Schematic of Corporate
      Structure(1)      
|                                                                                  
|Articles of Incorporation and
      Bylaws                                       
|                                                                                   |                                                                 
|3.1                                                                                | Certificate of Incorporation of WorldStar
      Energy, Corp.(2)
|                                                                                   |                                                                 
|3.2                                                                                | Bylaws of WorldStar Energy,
      Corp.(2)                      

38

---

|Material Contracts             
|-------------------------------
|                               
|10.1                           
|                               
|10.2                           
|                               
|10.3                           
|                               
|10.4                           
|                               
|Consents of Experts and Counsel
|                               
|23.1                           
|                               
|Certifications                 
|                               
|31.1                           
|                               
|31.2                           
|                               
|32.1                           

|Notes
|-----
|(1)  
|     
|(2)  
|     
|(3)  

39

---

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

|Index                                                                                                              |                 
|------------------------------------------------------------------------------------------------------------------ | ----------------
|Consolidated Financial Statements                                                                                  |                 
|Report of Independent Registered Public
      Accounting Firm                                                      | F1             
|Consolidated Balance Sheets
      as of March 31, 2011 and 2010                                                    | F2             
|Consolidated Statements of Operations for
      the Years Ended March 31, 2011 and 2010                            | F3             
|Consolidated Statements
      of Changes in Stockholders Equity for the Years Ended March 31, 2011
      and 2010 | F4             
|Consolidated Statements of Cash Flows for
      the Years Ended March 31, 2011 and 2010                            | F5             
|Notes to the Consolidated
      Financial Statements for the Years Ended March 31, 2011 and 2010                   | F6
       F20

40

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

We have audited the accompanying consolidated balance sheets of
WorldStar Energy, Corp. as of March 31, 2011 and 2010, the related consolidated
statements of operations, changes in stockholders equity and cash flows for
each of the years ended March 31, 2011 and 2010, and the cumulative period from
inception on November 28, 2006 through March 31, 2011. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Companys internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above, present fairly, in all material respects, the financial position of
WorldStar Energy, Corp. as of March 31, 2011 and 2010 and the results of their
operations and their cash flows for the years ended March 31, 2011 and 2010, and
the cumulative period from inception on November 28, 2006 through March 31, 2011
in conformity with accounting principles generally accepted in the United States
of America.

The accompanying consolidated financial statements have been
prepared assuming the Company will continue as a going concern. As shown in the
consolidated financial statements, the Company reported a net loss of $29,939
during the year ended March 31, 2011 and a net loss of $107,746 during the year
ended March 31, 2010. In addition, as of March 31, 2011 and 2010, the Company
reported a deficit in net working capital of $5,267,833 and $5,237,894,
respectively. As discussed in note 1 to the consolidated financial statements,
the Companys significant historical operating losses, lack of liquidity, and
inability to make the principal and interest payment to its debtors raise
substantial doubt about its ability to continue as a going concern. Managements
plans in regard to these matters are also discussed in note 1. The consolidated
financial statements do not include any adjustments related to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result should the Company be unable to
continue as a going concern.

As described in note 18, in September 2011, the Company sold
its 100% interest in National Base Investment Limited and has currently acquired
an exclusive sublicense for new technology in construction material.

Smythe Ratcliffe LLP (signed)

Chartered Accountants

Vancouver, British Columbia, Canada September 30, 2011



---

|WORLDSTAR ENERGY, CORP.    
|---------------------------
|CONSOLIDATED BALANCE SHEETS

|                                                                |   | At March 31, |  
|--------------------------------------------------------------- | - | ------------ | -
|                                                                |   | 2011         |  
|ASSETS                                                          |   |              |  
|                                                                |   |              |  
|Current Assets:                                                 |   |              |  
|Cash and cash equivalents                                       | $ | 25,322       |  
|Amount due from
      a director (note 14)                      |   | 77,257       |  
|                                                                |   |              |  
|Total Current Assets                                            |   | 102,579      |  
|                                                                |   |              |  
|Total Assets                                                    | $ | 102,579      |  
|                                                                |   |              |  
|LIABILITIES AND STOCKHOLDERS EQUITY
      (DEFICIENCY)         |   |              |  
|                                                                |   |              |  
|Current Liabilities:                                            |   |              |  
|Accounts payable                                                | $ | 221,190      |  
|Loans from
      directors (notes 9 and 14)                     |   | 3,433,571    |  
|Amount due to related companies
      (notes 7 and 14)          |   | 1,011,716    |  
|Amount due to a
      director (notes 7 and 14)                 |   | 624,133      |  
|Short-term loans (note 10)                                      |   | 79,802       |  
|                                                                |   |              |  
|Total
      Liabilities                                         |   | 5,370,412    |  
|                                                                |   |              |  
|                                                                |   |              |  
|Stockholders Equity (Deficiency):                              |   |              |  
|Capital stock (57,761,834 common
      shares issued (note 11)) |   | 57,762       |  
|Additional
      paid-in capital                                |   | 7,119,843    |  
|Share issue costs                                               |   | (556,875     | )
|Accumulated
      other comprehensive income                    |   | 244          |  
|Deficit accumulated during the
      development stage          |   | (11,888,807  | )
|                                                                |   |              |  
|Total Stockholders Deficiency                                  |   | (5,267,833   | )
|                                                                |   |              |  
|Total Liabilities and
      Stockholders Equity                | $ | 102,579      |  

Nature of Operations and Going Concern (note 1) Commitment
and Contingencies (note 12) Subsequent events (note 18)

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

F-2

---

|WORLDSTAR ENERGY, CORP.              
|-------------------------------------
|CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                                             |   | Year Ended |   |   | Year Ended |   |   | Cumulative  |  
|---------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ----------- | -
|                                                                             |   | March 31,  |   |   | March 31,  |   |   | Total Since |  
|                                                                             |   | 2011       |   |   | 2010       |   |   | Inception   |  
|                                                                             |   |            |   |   |            |   |   |             |  
|Operating expenses                                                           |   |            |   |   |            |   |   |             |  
|Depreciation of property, plant
      and equipment                          | $ |           |   | $ | 4,658      |   | $ | 1,332,712   |  
|Property
      exploration and maintenance                                   |   |           |   |   |           |   |   | 419,836     |  
|General and administrative
      expenses                                    |   | 29,939     |   |   | 594        |   |   | 1,204,796   |  
|                                                                             |   |            |   |   |            |   |   |             |  
|Loss before other expenses                                                   |   | (29,939    | ) |   | (5,252     | ) |   | (2,957,344  | )
|                                                                             |   |            |   |   |            |   |   |             |  
|Other income (expenses):                                                     |   |            |   |   |            |   |   |             |  
|Write-off of mineral
      exploration rights                                |   |           |   |   |           |   |   | (7,317,739  | )
|Termination of Mongolian project (note 8)                                    |   |           |   |   | (102,494   | ) |   | (102,494    | )
|Finance costs                                                                |   |           |   |   |           |   |   | (9,011      | )
|Other income                                                                 |   |           |   |   |           |   |   | 5,403       |  
|                                                                             |   |            |   |   |            |   |   |             |  
|Total other expenses                                                         |   |           |   |   | (102,494   | ) |   | (7,423,841  | )
|                                                                             |   |            |   |   |            |   |   |             |  
|Loss before minority interests                                               |   | (29,939    | ) |   | (107,746   | ) |   | (10,381,185 | )
|                                                                             |   |            |   |   |            |   |   |             |  
|Minority interest in net loss of subsidiaries                                |   |           |   |   |           |   |   | 5           |  
|                                                                             |   |            |   |   |            |   |   |             |  
|Net loss and comprehensive loss                                              | $ | (29,939    | ) | $ | (107,746   | ) | $ | (10,381,180 | )
|                                                                             |   |            |   |   |            |   |   |             |  
|Loss per basic and diluted share of common stock:                            |   |            |   |   |            |   |   |             |  
|                                                                             |   |            |   |   |            |   |   |             |  
|Weighted average number of basic
      and diluted common shares outstanding |   | 57,761,834 |   |   | 57,761,834 |   |   |             |  
|                                                                             |   |            |   |   |            |   |   |             |  
|Basic and diluted loss per share
      of common stock                       | $ | (0.00      | ) | $ | (0.00      | ) |   |             |  

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

F-3

---

|WORLDSTAR ENERGY, CORP.                                         
|----------------------------------------------------------------
|CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS
      EQUITY
|FOR THE YEARS ENDED MARCH 31, 2010 AND 2009                     

|                                                                                                                                                        |  |               |   |   |         |   |   |             |   |   |          |   |   |               |   |   | Deficit     |   |   |               |  
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | - | - | ------- | - | - | ----------- | - | - | -------- | - | - | ------------- | - | - | ----------- | - | - | ------------- | -
|                                                                                                                                                        |  |               |   |   |         |   |   |             |   |   |          |   |   | Accumulated   |   |   | Accumulated |   |   |               |  
|                                                                                                                                                        |  |               |   |   |         |   |   | Additional  |   |   |          |   |   | Other         |   |   | During the  |   |   | Total         |  
|                                                                                                                                                        |  |               |   |   |         |   |   | Paid-in     |   |   | Share    |   |   | Comprehensive |   |   | Development |   |   | Stockholders |  
|                                                                                                                                                        |  | Capital Stock |   |   | Capital |   |   | Issue Costs |   |   | Income   |   |   | Stage         |   |   | Equity      |  
|                                                                                                                                                        |  |               |   |   |         |   |   |             |   |   |          |   |   |               |   |   |             |   |   |               |  
|                                                                                                                                                        |  | Shares        |   |   | Amount  |   |   |             |   |   |          |   |   |               |   |   |             |   |   |               |  
|                                                                                                                                                        |  |               |   |   |         |   |   |             |   |   |          |   |   |               |   |   |             |   |   |               |  
|                                                                                                                                                        |  |               |   |   |         |   |   |             |   |   |          |   |   |               |   |   |             |   |   |               |  
|Inception at November 28, 2006
        (legal
      subsidiary National Base
        Investment Limited (NB))                                         |  | 1             |   | $ | 1       |   | $ |            |   | $ |         |   | $ |              |   | $ |            |   | $ | 1             |  
|                                                                                                                                                        |  |               |   |   |         |   |   |             |   |   |          |   |   |               |   |   |             |   |   |               |  
|Loss for the period                                                                                                                                     |  |              |   |   |        |   |   |            |   |   |         |   |   |              |   |   | (21,090     | ) | $ | (21,090       | )
|                                                                                                                                                        |  |               |   |   |         |   |   |             |   |   |          |   |   |               |   |   |             |   |   |               |  
|Balance at March 31, 2007                                                                                                                               |  | 1             |   |   | 1       |   |   |            |   |   |         |   |   |              |   |   | (21,090     | ) |   | (21,089       | )
|                                                                                                                                                        |  |               |   |   |         |   |   |             |   |   |          |   |   |               |   |   |             |   |   |               |  
|Capital stock of NB eliminated 
        on reverse
      acquisition                                                                                    |  | (1            | ) |   | (1      | ) |   |            |   |   |         |   |   |              |   |   | 1           |   |   |              |  
|Balance of legal parent 
        WorldStar Energy, Corp.
        (legal
      parent) stockholders
        equity before reverse 
       acquisition |  | 630,134       |   |   | 630     |   |   | 821,433     |   |   |         |   |   | 5,209         |   |   | (1,834,900  | ) |   | (1,007,628    | )
|Reversal of legal parents
        stockholders
      equity at reverse
        acquisition                                                            |  |              |   |   | (630    | ) |   | (821,433    | ) |   |         |   |   | (5,209        | ) |   | 827,272     |   |   |              |  
|Shares issued on acquisition of 
      NB                                                                                                               |  | 30,000,000    |   |   |        |   |   |            |   |   |         |   |   |              |   |   |            |   |   |              |  
|Facilitation fee for reverse 
        acquisition                                                                                                       |  | 2,000,000     |   |   | 2,000   |   |   | 498,000     |   |   |         |   |   |              |   |   | (500,000    | ) |   |              |  
|Private placement                                                                                                                                       |  | 22,000,000    |   |   | 22,000  |   |   | 5,478,000   |   |   | (6,875   | ) |   |              |   |   |            |   |   | 5,493,125     |  
|Shares issued for finders fee                                                                                                                          |  | 2,200,000     |   |   | 2,200   |   |   | 547,800     |   |   | (550,000 | ) |   |              |   |   |            |   |   |              |  
|Shares issued to settle debt                                                                                                                            |  | 931,700       |   |   | 932     |   |   | 626,673     |   |   |         |   |   |              |   |   |            |   |   | 627,605       |  
|Adjustment due to difference in
        par value
      of shares of NB and 
        legal parent                                                       |  |              |   |   | 30,630  |   |   | (30,630     | ) |   |         |   |   |              |   |   |            |   |   |              |  
|Foreign currency translation                                                                                                                            |  |              |   |   |        |   |   |            |   |   |         |   |   | 244           |   |   |            |   |   | 244           |  
|Loss for the year                                                                                                                                       |  |              |   |   |        |   |   |            |   |   |         |   |   |              |   |   | (10,217,305 | ) |   | (10,217,305   | )
|                                                                                                                                                        |  |               |   |   |         |   |   |             |   |   |          |   |   |               |   |   |             |   |   |               |  
|                                                                                                                                                        |  |               |   |   |         |   |   |             |   |   |          |   |   |               |   |   |             |   |   |               |  
|Balance at March 31, 2008                                                                                                                               |  | 57,761,834    |   |   | 57,762  |   |   | 7,119,843   |   |   | (556,875 | ) |   | 244           |   |   | (11,746,022 | ) |   | (5,125,048    | )
|Loss for the year                                                                                                                                       |  |              |   |   |        |   |   |            |   |   |         |   |   |              |   |   | (5,100      | ) |   | (5,100        | )
|Balance at March 31, 2009                                                                                                                               |  | 57,761,834    |   | $ | 57,762  |   | $ | 7,119,843   |   | $ | (556,875 | ) | $ | 244           |   | $ | (11,751,122 | ) | $ | (5,130,148    | )
|Loss for the year                                                                                                                                       |  |              |   |   |        |   |   |            |   |   |         |   |   |              |   |   | (107,746    | ) |   | (107,746      | )
|Balance at March 31, 2010                                                                                                                               |  | 57,761,834    |   | $ | 57,762  |   | $ | 7,119,843   |   | $ | (556,875 | ) | $ | 244           |   | $ | (11,858,868 | ) | $ | (5,237,894    | )
|Loss for the year                                                                                                                                       |  |              |   |   |        |   |   |            |   |   |         |   |   |              |   |   | (29,939     | ) |   | (29,939       | )
|Balance at March 31, 2011                                                                                                                               |  | 57,761,834    |   | $ | 57,762  |   | $ | 7,119,843   |   | $ | (556,875 | ) | $ | 244           |   | $ | (11,888,807 | ) | $ | (5,267,833    | )

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

F-4

---

|WORLDSTAR ENERGY, CORP.              
|-------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                                   |   | Year Ended |   |   | Year Ended |   |   | Cumulative  |  
|-------------------------------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ----------- | -
|                                                                                                   |   | March 31,  |   |   | March 31,  |   |   | Total Since |  
|                                                                                                   |   | 2011       |   |   | 2010       |   |   | Inception   |  
|Cash Flows From Operating Activities:                                                              |   |            |   |   |            |   |   |             |  
|Net loss                                                                                           | $ | (29,939    | ) | $ | (107,746   | ) | $ | (10,381,180 | )
|Adjustments to reconcile net loss to net
      cash used
           in operating activities:       |   |            |   |   |            |   |   |             |  
|Depreciation                                                                                       |   |           |   |   | 4,658      |   |   | 1,332,712   |  
|Termination of Mongolian
      project                                                             |   |           |   |   | 102,494    |   |   | 102,494     |  
|Interest                                                                                           |   |           |   |   |           |   |   | 812         |  
|Minority interest in net loss
      of subsidiaries                                                |   |           |   |   |           |   |   | (5          | )
|Write-off of mineral exploration rights                                                            |   |           |   |   |           |   |   | 7,317,739   |  
|Termination of Mongolian
      project                                                             |   |           |   |   |           |   |   | 102,494     |  
|Changes in operating assets and liabilities                                                        |   |            |   |   |            |   |   |             |  
|Amount due from
      a minority stockholder                                                       |   |           |   |   |           |   |   | (110,976    | )
|Prepaid expenses                                                                                   |   |           |   |   |           |   |   | (77,772     | )
|Other payables
      and accrued expenses                                                          |   | 1,661      |   |   |           |   |   | (51,141     | )
|Amount due to related companies                                                                    |   | (1,022     | ) |   |           |   |   | 868,363     |  
|Amount due to a
      minority stockholder                                                         |   |           |   |   |           |   |   | 624,790     |  
|                                                                                                   |   |            |   |   |            |   |   |             |  
|Net Cash Flows Used in
      Operating Activities                                                  |   | (29,300    | ) |   | (594       | ) |   | (374,164    | )
|                                                                                                   |   |            |   |   |            |   |   |             |  
|Cash Flows From Investing Activities:                                                              |   |            |   |   |            |   |   |             |  
|Purchase of equipment                                                                              |   |           |   |   |           |   |   | (7,864      | )
|Cash inflow on reverse
      take-over                                                             |   |           |   |   |           |   |   | 24,346      |  
|Cash inflow from BGI and BGHK                                                                      |   |           |   |   |           |   |   | 424,120     |  
|Cash advance to BGHK before
      acquisition on                                                   |   |            |   |   |            |   |   |             |  
|February 27, 2007                                                                                  |   |           |   |   |           |   |   | (3,714,286  | )
|                                                                                                   |   |            |   |   |            |   |   |             |  
|Net Cash Flows Used in Investing Activities                                                        |   |           |   |   |           |   |   | (3,273,684  | )
|                                                                                                   |   |            |   |   |            |   |   |             |  
|Cash Flows From Financing Activities:                                                              |   |            |   |   |            |   |   |             |  
|Amount advanced from ultimate
      holding company                                                |   |           |   |   |           |   |   | 3,540,000   |  
|Amount advanced from related parties                                                               |   |           |   |   |           |   |   | 15,873      |  
|Amount advanced from a former
      stockholder                                                    |   |           |   |   |           |   |   | 74,286      |  
|Proceeds from short-term loans                                                                     |   | 45,750     |   |   |           |   |   | 172,850     |  
|Repayment of short-term loans                                                                      |   |           |   |   |           |   |   | (127,100    | )
|Proceeds from minority stockholders in
      subscribing 
           subsidiaries allotted shares |   |           |   |   |           |   |   | 5           |  
|Proceeds from issuance of
      shares                                                             |   |           |   |   |           |   |   | 1           |  
|                                                                                                   |   |            |   |   |            |   |   |             |  
|Net Cash Flows Provided by
      Financing Activities                                              |   | 45,750     |   |   |           |   |   | 3,675,915   |  
|                                                                                                   |   |            |   |   |            |   |   |             |  
|Foreign Exchange Effect on
      Cash                                                              |   |           |   |   |           |   |   | (2,745      | )
|                                                                                                   |   |            |   |   |            |   |   |             |  
|Net Increase (Decrease) in
      Cash and Cash 
           Equivalents                             |   | 16,450     |   |   | (594       | ) |   | 25,322      |  
|                                                                                                   |   |            |   |   |            |   |   |             |  
|Cash and Cash Equivalents at
      Beginning of Year                                               |   | 8,872      |   |   | 9,466      |   |   |            |  
|                                                                                                   |   |            |   |   |            |   |   |             |  
|Cash and Cash Equivalents at
      End of Year                                                     | $ | 25,322     |   | $ | 8,872      |   | $ | 25,322      |  

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

F-5

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|1. | NATURE OF OPERATIONS AND GOING
  CONCERN
|-- | ----------------------------------------

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

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

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

The Company is a holding company that only operates through its
subsidiaries. Through its indirectly owned subsidiary, BGL, the Company is
principally engaged in the exploration and the development of mineral deposits.
BGL owns Mineral Exploration License Certificates issued by the Minerals and
Petroleum Authority of Mongolia. During the year ended March 31, 2009, the
Company ceased active mineral exploration operations in Mongolia and was not
able to fund sufficient activities in order to maintain its interests in the
Mineral Exploration License Certificates issued by the Minerals and Petroleum
Authority of Mongolia. Accordingly, the exploration rights represented by those
licenses were forfeited and the Company wrote off the remaining book value of
$7,317,739 as of March 31, 2008. Subsequent to the year end, the Company sold
its 100% interest in NB and acquired an exclusive sublicense from a private
Canadian company for the manufacture of engineered construction products from
palm oil tree waste material (notes 18 (a) and (b)). Our strategic plan remains
contingent on, among other things, financing, the successful completion of all
documents required under a letter of intent we have signed with the owners of
Palm Oil Plantations in Indonesia, the construction of processing and
manufacturing facilities, and our ability to establish relationships with
suppliers and distributors in South East Asia, none of which can be assured.

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

Several adverse conditions cast substantial doubt on the
validity of this assumption. The Company has incurred significant losses since
inception (2011 - $29,939; 2010 - $107,746), is currently unable to self-finance
its operations, has a working capital deficiency of $5,267,833 (2010 -
$5,237,894), a deficit accumulated during the development stage of $11,888,807
(2010 - $11,858,868), limited resources, no source of operating cash flow, no
assurance that sufficient funding will be available to conduct further
operations, debts comprised of other payables and accrued expenses, loans from
directors, related companies, and short-term loans totaling $5,370,412 currently
due or considered delinquent, no assurance that the Company will not face
additional legal actions from those creditors, and there is no assurance that
the Companys business plans will become commercially viable or profitable. Any
one or a combination of these above conditions could result in failure of the
business and require the Company to cease operations.

F-6

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|1. | NATURE OF OPERATIONS AND GOING CONCERN
    (Contd)
|-- | ---------------------------------------------------

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

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

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

|2. | BASIS OF PRESENTATION
|-- | ---------------------

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

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

|3. | SIGNIFICANT ACCOUNTING
POLICIES
|-- | -------------------------------

Principles of Consolidation

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

Use of Estimates

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

F-7

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|3. | SIGNIFICANT ACCOUNTING POLICIES
  (Contd)
|-- | ------------------------------------------

Use of Estimates (Contd)

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

Foreign Currency Translation

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

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

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

Cash and Cash Equivalents

Cash and cash equivalents include all cash, deposits in banks
and other highly liquid investments with initial maturities of three months or
less to be cash equivalents. As of March 31, 2011 most of the cash and cash
equivalents were denominated in US dollars and were placed with banks in Hong
Kong and Canada.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to
significant concentrations of credit risk consist principally of cash and cash
equivalents and amounts due from related parties. As of March 31, 2011,
substantially all of the Company and related companies cash and cash
equivalents and related companies were held by major financial institutions
located in Hong Kong and Canada which management believes are of high credit
quality.

F-8

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|3. | SIGNIFICANT ACCOUNTING POLICIES
  (Contd)
|-- | ------------------------------------------

Property, Plant and Equipment

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

Annual rateFurniture
    10%Computer software
    10%Computers
    33.33%


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

Mineral Exploration Rights

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

Impairment of Long-Lived Assets

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

Asset Retirement Obligations (ARO)

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

F-9

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|3. | SIGNIFICANT ACCOUNTING POLICIES
  (Contd)
|-- | ------------------------------------------

Basic and Diluted Loss per Share

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

Income Taxes

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

Financial Instruments and Comprehensive Income

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

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

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

F-10

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|3. | SIGNIFICANT ACCOUNTING POLICIES
  (Contd)
|-- | ------------------------------------------

Recently Adopted Accounting Pronouncements

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

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

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

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

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

F-11

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|3. | SIGNIFICANT ACCOUNTING POLICIES
  (Contd)
|-- | ------------------------------------------

Recently Adopted Accounting Pronouncements
(Contd)

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

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

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

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

F-12

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|3. | SIGNIFICANT ACCOUNTING POLICIES
  (Contd)
|-- | ------------------------------------------

Recently Adopted Accounting Pronouncements
(Contd)

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

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

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

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

F-13

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|3. | SIGNIFICANT ACCOUNTING POLICIES (Contd)
|-- | ----------------------------------------

Recently Adopted Accounting Pronouncements
(Contd)

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

Recently Issued Accounting Pronouncements

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

|4. | FINANCIAL INSTRUMENTS AND RISKS
|-- | -------------------------------

The Company has classified its financial instruments as
follows:

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

(a)Fair Value

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

(b)Credit Risk

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

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

F-14

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|4. | FINANCIAL INSTRUMENTS AND RISKS
  (Contd)
|-- | ------------------------------------------

(b) Credit Risk (Contd)

With respect to the amount due from a director, the credit risk
has been assessed as low by management as the Company has strong working
relationship with the party involved.The Companys concentration of credit risk
and maximum exposure thereto is as follows:

| |                            |   | 2011    |  |   | 2010   | 
| | -------------------------- | - | ------- |  | - | ------ | 
| |                            |   |         |  |   |        | 
| | Cash                       | $ | 25,291  |  | $ | 8,841  | 
| | Short-term investments     |   | 31      |  |   | 31     | 
| | Amount due from a director |   | 77,257  |  |   | 77,257 | 
| |                            |   |         |  |   |        | 
| |                            | $ | 102,579 |  | $ | 86,129 | 

(c)Liquidity Risk

Liquidity risk is the risk that the Company will encounter
difficulty in satisfying financial obligations as they become due. The Companys
approach to managing liquidity risk is to provide reasonable assurance that it
will have sufficient funds to meet liabilities when due. The Company manages its
liquidity risk by forecasting cash flows required for operations and anticipated
investing and financing activities. The Companys cash and cash equivalents at
March 31, 2011 totalled $25,322 (2009 - $8,872) which will not be sufficient to
meet its obligations related to its accounts payable and accrued liabilities of
$221,190 (2010 - $219,529) and a total of $5,149,222 (2010 - $5,104,494) for
loans from directors, amounts due to ultimate holding company (pre-acquisition);
related companies; a director; and a former stockholder, due to related
companies and short-term loans.

All its non-derivative financial liabilities are made up of
accounts payable and accrued liabilities which are due within the first fiscal
quarter of 2012 and loans from directors; due to related companies; due to a
director; and short-term loans are due on demand.

(d)Market Risk

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

| | (i) | Interest rate risk                            
| | --- | ----------------------------------------------
| |     |                                               
| |     | Interest rate risk consists of two components:
| |     |                                               
| |     | (a)                                           
| |     |                                               
| |     | (b)                                           

F-15

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|4. | FINANCIAL INSTRUMENTS AND RISKS
  (Contd)
|-- | ------------------------------------------

(d) Market Risk (Contd)

| | (i)   | Interest rate risk (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |       | The Company is exposed to interest rate cash flow risk on
      its loans from directors with a variable interest rate as the interest on
      the loans will fluctuate during the term of the loans as interest rates
      fluctuate. The Company is exposed to interest rate price risk on its
      short- term loans debt with fixed interest rates as the prevailing
      interest rate can differ from the interest rate of the loans.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |       | The Companys cash and cash equivalents consist of cash
      held in bank accounts and short-term investments. Due to the short-term
      nature of these financial instruments, fluctuations in market interest
      rates do not have a significant impact on estimated fair values and on
      cash flows as of March 31, 2011.                                                                                                         
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (ii)  | Foreign currency risk                                                                                                                                                                                                                                                                                                                                                                                                                          
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |       | The Company is not exposed to foreign currency risk as it
      does not have any financial instruments denominated in foreign
      currencies.                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (iii) | Other price risk                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |       | Other price risk is the risk that the fair value or
      future cash flows of a financial instrument will fluctuate due to changes
      in market prices, other than those arising from interest rate risk or
      foreign currency risk. The Company has no financial instruments exposed to
      other price risk.                                                                                                                       

|5. | REVERSE TAKEOVER AND
  RECAPITALIZATION
|-- | ---------------------------------------

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

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

F-16

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|5. | REVERSE ACQUISITION AND RECAPITALIZATION
      (Contd)
|-- | -------------------------------------------------------

|Assets acquired:                                                               |   |            |  
|------------------------------------------------------------------------------ | - | ---------- | -
|Cash and cash equivalents                                                      | $ | 24,346     |  
|Advances
      receivable from the Jewel Star Group of companies               |   | 5,300,000  |  
|                                                                               |   | 5,324,346  |  
|Less liabilities assumed:                                                      |   |            |  
|Accounts payable and accrued
      liabilities                                 |   | (211,244   | )
|Obligation to
      issue shares                                               |   | (627,605   | )
|Share subscriptions received in
      advance of the transaction, net of costs |   | (5,493,125 | )
|                                                                               |   |            |  
|Net purchase price deficiency                                                  | $ | (1,007,628 | )
|                                                                               |   |            |  
|Legal parent capital transferred to continuing deficit                         | $ | 827,272    |  
|                                                                               |   |            |  
|Legal parent deficit transferred to continuing deficit                         |   | (1,834,900 | )
|                                                                               |   |            |  
|Net purchase price deficiency                                                  | $ | (1,007,628 | )

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

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

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

|Expenses                                    |   |         | 
|------------------------------------------- | - | ------- | 
|Management fees                             | $ | 20,000  | 
|Professional
      fees                     |   | 48,719  | 
|Transfer agent and filing fees              |   | 2,884   | 
|Foreign exchange                            |   | 1,148   | 
|Office                                      |   | 131     | 
|Write-off of
      Indonesian project costs |   | 159,000 | 
|                                            |   |         | 
|Loss for the period                         | $ | 231,882 | 

|6. | INCOME TAXES
|-- | ------------

United States

The Company is subject to income tax at the rate of 35% on
income earned in the United States. As of March 31, 2011, all of the Companys
operations were carried on outside the US and the Company had accumulated losses
for income tax purposes of approximately $2,400,000, however, utilization of any
such losses against future taxable income is limited under the Internal Revenue
Code as a result of corporate reorganizations in 2002 and 2007 involving
separate changes in control which substantially restrict tax loss utilization.

F-17

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|6. | INCOME TAXES (Contd)
|-- | ---------------------

BVI

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

Hong Kong

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

Mongolia

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

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

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

|8. | TERMINATION OF MONGOLIAN
PROJECT
|-- | --------------------------------

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

|9. | LOANS FROM DIRECTORS
|-- | --------------------

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

|10. | SHORT-TERM LOANS
|--- | ----------------

Included in short-term loans is $34,052 (2010 - $34,052) from a
third party that bears interest at 12% per annum and $45,750 (2010 - $ Nil) from
BLMH Technologies Inc., a company related to the vendor of the new sublicense
acquired by the company subsequent to the year end (note 18 (b)), that bears
interest at 8% per annum. Both of these loans are unsecured and repayable on
demand.

|11. | CAPITAL STOCK
|--- | -------------

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

F-18

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|11. | CAPITAL STOCK (Contd)
|--- | ----------------------

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

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

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

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

No share issuances occurred during the year ended March 31,
2011.

|12. | COMMITMENT AND
CONTINGENCIES
|--- | ----------------------------

The Company had no commitments or contingent liabilities as of
March 31, 2011.

|13. | MINORITY INTERESTS
|--- | ------------------

Minority interests result from the consolidation of 98% owned
subsidiary of BGI and 50.96% owned subsidiaries of BGHK and BGL. As of March 31,
2011, BGI, BGHK and BGL recorded a net liability. As a result, the minority
interests in the net loss of these subsidiaries is $Nil for the year ended March
31, 2011 due to the minority stockholders equity balance being $Nil at March
31, 2011. Such minority interests in the net losses of the subsidiaries have not
been recorded, the minority interests in future profits will not be recognized
until the aggregate of such profits equal the aggregate unrecognized losses.

|14. | RELATED PARTY TRANSACTIONS
|--- | --------------------------

Apart from the transactions as disclosed in notes 7, 9 and 11
to the consolidated financial statements, during the years ended March 31, 2011
and 2010, the Company had no other material transactions with its related
parties during the reporting periods. Amounts due to related parties are
non-interest bearing and unsecured. These transactions were in the normal course
of operations and were measured at the exchange amount, which is the amount of
consideration established and agreed to by the related parties.

|15. | SEGMENT INFORMATION
|--- | -------------------

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

F-19

---

|WORLDSTAR ENERGY, CORP.                   
|------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|YEARS ENDED MARCH 31, 2011 AND 2010       

|16. | SUPPLEMENTAL DISCLOSURES OF CASH FLOW
      INFORMATION
|--- | -------------------------------------------------------

|                                  |   |      |  |   |      |  |   | Cumulative  | 
|--------------------------------- | - | ---- |  | - | ---- |  | - | ----------- | 
|                                  |   |      |  |   |      |  |   | Total Since | 
|                                  |   | 2011 |  |   | 2010 |  |   | Inception   | 
|                                  |   |      |  |   |      |  |   |             | 
|Cash paid for:                    |   |      |  |   |      |  |   |             | 
|Interest                          | $ |     |  | $ |     |  | $ | 9,011       | 
|Income taxes                      | $ |     |  | $ |     |  | $ |            | 
|Shares issued for debt settlement | $ |     |  | $ |     |  | $ | 627,605     | 

|17. | RISK AND CAPITAL
MANAGEMENT
|--- | ---------------------------

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

The Company currently has no source of revenues; as such, the
Company is dependent upon external financings or the sale of assets (or an
interest therein) to fund activities. In order to carry future projects and pay
for administrative costs, the Company will spend its existing working capital
and raise additional funds as needed. Management reviews its capital management
approach on an ongoing basis and believes that this approach, given the relative
size of the Company, is reasonable. There were no changes in the Companys
approach to capital management during the year ended March 31, 2011. The Company
is not subject to externally imposed capital requirements.

|18. | SUBSEQUENT EVENTS
|--- | -----------------

|a) | Effective September 8, 2011, the Company sold its 100%
      interest in NB to an arms length party in exchange for $10 and an
      indemnification in favor of the Company against all present and future
      obligations of NB. As a result of the sale, the Company will cease
      consolidating NB on that date, which will result in reductions of assets
      and liabilities. On a pro-forma basis (as if the sale of NB had occurred
      on March 31, 2011), the assets would be reduced by $ 82,079, the total
      liabilities would be reduced by $5,095,628 with a resultant gain of
      $5,013,549.                                                                                                                                                                                                                                                                                                                                                                          
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | As at March 31, 2011, pro -forma continuing operations
      would consist of assets of $20,500 and liabilities of $274,783. Operations
      for the year ended March 31, 2011 would have amounted to a net loss of
      $29,939 and a loss per share of $0.00.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|b) | Subsequent to the year end, the Company acquired an
      exclusive sublicense to use and apply, in Southeast Asia, including China,
      the patent-pending processes and solutions licensed by a private Canadian
      company (the vendor), for the manufacture of engineered construction
      products from palm oil tree waste material with zero ignition and zero
      flame spread properties. This sublicense is for a 10 year term, and is
      renewable for successive periods of 10 years each. The Company has agreed
      to pay a CAD$150,000 acquisition fee to the vendor, to be paid by the
      issuance of 10,000,000 fully paid shares of common stock in the capital of
      the Company and to pay a continuing royalty to the vendor . The Company
      must, in order to preserve the license rights, purchase from the vendor
      certain escalating minimum quantities of a certain solution during each
      year of the term of the sublicense agreement.

F-20

---

SIGNATURES

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

WORLDSTAR ENERGY, CORP.

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

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

|By: | /s/ Rudijanto Azali                                   | 
|--- | ----------------------------------------------------- | 
|    | Rudijanto Azali                                       | 
|    | (Principal Executive Officer)                         | 
|    | President, Chief Executive
      Officer and Director | 
|    | Date: September 30, 2011                              | 
|    |                                                       | 
|    |                                                       | 
|By: | /s/ Michael Kinley                                    | 
|    | Michael Kinley                                        | 
|    | (Principal Financial Officer)                         | 
|    | Chief Financial Officer                               | 
|    | Date: September 30, 2011                              | 
|    |                                                       | 
|    |                                                       | 
|By: | /s/ Supriadi                                          | 
|    | Supriadi                                              | 
|    | Director                                              | 
|    | Date: September 30, 2011                              | 

41

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