<PAGE>

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

                                   FORM 10-KSB


(Mark One)

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

For the year period ended    DECEMBER 31, 2007
                             -----------------

   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from
                                -----------------

                        Commission file number 000-50760


                         SANCON RESOURCES RECOVERY, INC.
              (Exact name of small business issuer in its charter)

              Nevada                              58-2670972
 (State or other jurisdiction                   (IRS Employer
of incorporation or organization)              Identification No.)


                        1507 Greenland Commercial Centre
                    1258 Yuyuan Road, Shanghai, China 200050
                    (Address of principal executive offices)

                                (+61) 3 9574 6767
                           (Issuer's telephone number)

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

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

Title of each class: Common Shares   Name of Exchange on which registered: OTCBB

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. [ ]

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

Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendments to this Form 10-KSB.       [X]

Check whether the registrant is a shell company (as defined in Rule 12b-2 of the
exchange Act). Yes [ ] No [X]

The aggregate market value of voting stock held by non-affiliates of the
registrant as of March 25, 2008 was approximately $0.75 million (based upon a
closing sale price of $0.15 per share, as reported on the OTCBB).

The issuer's revenues for the fiscal year ended December 31, 2007, were $6.1
million.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

Common Stock: par value of $0.001; 20, 414,996 shares issued and outstanding on
December 31, 2007.

Transitional Small Business Disclosure Format (Check one):  Yes [ ]   No [X]

<PAGE>

                         Sancon Resources Recovery, Inc.

                                   FORM 10-KSB

                                FISCAL YEAR 2007



TABLE OF CONTENTS


PART I
Item 1.       Description of Business                                         3
Item 2.       Description of Property                                         5
Item 3.       Legal Proceedings                                               6
Item 4.       Submission of Matters to a Vote of Security Holders             6


PART II
Item 5.       Market for Common Equity, Related Stockholder Matters, and
                Small Business Issues/purchases of Equity Securities           6
Item 6.       Management's Discussion and Analysis, or Plan of Operation       7
Item 7.       Financial Statements and Supplementary Data                     11
Item 8.       Changes in and Disagreements with Accountants on Accounting
                and Financial Disclosure                                      11
Item 8A.      Controls and Procedures                                         12
Item 8B.      Other Information                                               12


PART III
Item 9.       Directors, Executives Officers, Promoters and Control
                Persons Compliance with Section 16(a) of the Exchange Act     13
Item 10.      Executive Compensation                                          14
Item 11.      Security Ownership of Certain Beneficial Owners and
                Management and Related Stockholder Matters                    15
Item 12.      Certain Relationships and Related Transactions                  15
Item 13.      Exhibits                                                        17
Item 14.      Principal Accountant Fees and Services                          18


SIGNATURES                                                                    19

                                       2
<PAGE>


                                  -- PART I --

ITEM 1   DESCRIPTION OF BUSINESS

BUSINESS COMBINATION AND CORPORATE RESTRUCTURING

Effective May 26, 2006, a business combination occurred between Sancon Recycling
Pty Ltd. ("SRPL") and MKA Capital Inc. (hereinafter referred to as "MKAC"). The
combination was effected by MKAC exchange its seventy-five percent (75%) equity
stake in MK Aviation, S.A. (hereinafter referred to as "MKA") for one hundred
percent (100%) equity stake in SRPL held by Mr. Jack Chen, Mr. Yiu Lo Chung, Mr.
Guy Waters, and associated parties ("the Shareholders"). Meanwhile, the
Shareholders exchanged their ownership of seventy-five percent (75%) equity
stake in MK Aviation, S.A. with 14,897,215 shares of the Registrant's common
stock from Mr. Kraselnick and associated parties.

As a result of the merger, there was a change in control of the public entity
MKAC. In accordance with SFAS No. 141, SRPL was the acquiring entity. While the
transaction is accounted for using the purchase method of accounting, in
substance the Agreement is a recapitalization of the Company's capital
structure. For accounting purposes, SRPL accounted for the transaction as a
reverse acquisition and SRPL is the surviving entity. SRPL did not recognize
goodwill or any intangible assets in connection with the transaction.

Effective with the Agreement, the Shareholders will own 14,897,215 shares of
MKAC voting common stock or 74.28% of the Registrant's 20,030,370 issued and
outstanding voting common stock, subject to achieving certain performance
targets.

All references to common stock, share and per share amounts have been
retroactively restated to reflect the exchange of 100 shares of SRPL common
stock for 14,897,215 shares of the MKAC's common stock outstanding immediately
prior to the merger as if the exchange had taken place as of the beginning of
the earliest period presented.

The accompanying financial statements present the historical financial
condition, results of operations and cash flows of Sancon as of December 31,
2007.

BUSINESS OF THE ISSUER

OVERVIEW OF THE COMPANY AND ITS OPERATIONS

Sancon Resources Recovery, Inc. is an industrial waste recycling company with
operations based in Australia, Hong Kong and China. Sancon currently exports
more than 25,000 tons of recycled industrial waste material annually to its
processing partners and manufacturers in China. Sancon's main operations and
services include industrial waste management consulting, collection and
reprocess of recyclable materials such as plastic, cardboard, and paper sourced
from suppliers such as Hella, Full Views, Wastech Holdings, Supagas, and
Priority etc, before its re-entry into manufacture cycles as raw materials. The
use of recycled material is both environmentally friendly and is a key part of
today's competitive manufacturing process to lower costs. As China gains global
manufacturing dominance and oil price soars, Chinese manufacturers are
increasingly turning to recycled materials to lower its costs, resulting
tremendous demand for recycled materials import. The major customers for Sancon
are Chinese manufacturers and recycled material traders such as Three Rivers,
TeamSmart, GwongYan etc, which are located mainly in the Chinese provinces of
Guangdong, Zhejiang, Fujian and Hong Kong.

The Sancon group comprises the following companies:

<TABLE>
<CAPTION>

Registered Name                                                                     Domicile         Owner     %       Status
(business is conducted under the registered names)                                                             held
<S>                               <C>                                                                           <C>
Digital Financial Service Limited ("DFSL" hereinafter)                              Hong Kong        Sancon     100    Active
Sancon Recycling Pty Ltd.                                                           Australia        Sancon     100    Active
Guang Cheng Int'l Trading Ltd. ("Guang Cheng" hereinafter)                          Hong Kong        Sancon     100    Active
Sancon Resources Recovery (Shanghai) Co., Ltd. ("Sancon SH" hereinafter)            Shanghai         Sancon     70     Active
</TABLE>

                                       3
<PAGE>

OUR STRATEGY

The Chinese demand for secondary plastics and recycled plastics already runs
into millions tons per year according to China's State Environmental Protection
Agency. Our near-term growth strategy is to first expand our recycling and waste
management operations in China by setting up a network of facilities and
logistics around China; secondly, strengthen our relationships with our existing
major suppliers in Japan and the USA to offer large selection of plastic raw
materials and we aim to increase our processing capacity for recycled plastic
waste materials at our existing facilities in Australia for export to China. The
well established trust on quality control of the recycled materials with
Sancon's customers in China, and our aggressive expansion plans laid the
groundwork firmly for long-term growth.

THE TREND IN CHINESE MARKET

According to China National Resources Recycling Association, recyclable solid
waste import to China has experienced a dramatic increase in the last 2 decades.
During early 1990's, China imported 1-2 million tons of recyclable wastes per
year. By 1999, China imported 10 million tons of recyclable solid wastes per
year. In 2006(pound) China imported 37 million tons of recyclable wastes.
China's total domestic recycled volume is estimated to have reached over 50
million tons in 2007, with an estimated total worth of US$6 billion.

SANCON'S VISIONS AND GOALS

The long-term objective of Sancon is to seek and develop further alternative
resources recovery solutions, which will protect our environment and maximize
sustainable usage for industrial waste materials. At Sancon we believe reducing
the environmental impact of manufactured products is through both professional
services offered to manufacturers and commercial entities to increase
recyclability of waste materials, and efficient redeployment of waste materials.

SERVICES OFFERED TO OUR CLIENTS

Sancon strives to take an all-inclusive approach to provide eco-friendly
solutions leading to the sustainable use of waste materials. Our services
include collection from manufacturing and commercial sites, re-process waste
materials to increase recyclability, end-of-life disassembly, redeployment of
recyclable materials, and destruction of sensitive materials and products

OUR DISTRIBUTION METHOD AND CUSTOMERS

As our ending customers are diversified with geographic areas, we distribute our
products into certain wholesalers who have wide connection with different
customers in certain geographic area. Due to the distribution method, we depend
on these distributors which are located in Hong Kong and China, such as Three
Rivers, Team Smart, Gwong Yan, China Sanyou Group, Zhejiang Walsar Group, etc.

OUR SUPPLIERS

We collect recyclable raw materials from commercial and industrial suppliers
whenever and wherever possible. As a result, our suppliers are quite
diversified.

COMPETITION

The markets for the Company's products and services are competitive, and the
Company faces competition from a number of sources. Many of the Company's
competitors have substantially greater resources than the Company. Those
resources may include greater name recognition; larger product lines;
complementary lines of business; and greater financial, marketing, information
systems, and other resources. The Company can give no assurance competitive
pressures will not materially and adversely affect the Company's business,
financial condition, and results of operations.

But the management has identified several key points which will give Sancon the
competitive edge in the market place:



                                       4
<PAGE>

1)       Sancon offers large selection of plastic raw materials to our
         customers.
2)       With the intended expansion of our operations in Melbourne Australia,
         Sancon will be able to serve greater number of customers and sell
         direct to our partners and customs in China.
3)       Hong Kong trading operation will source recycled materials globally to
         meet the increasing demand from our customers in China.
4)       Working closely with more processing partners in China will add value
         to our products. 5) Industry know-how and management team's ability to
         ensure all operating and environmental standards are achieved.

INTELLECTUAL PROPERTY

None.

EMPLOYEES

As of December 31, 2007, the Company employed 15 people in both Australia and
Hong Kong subsidiaries. Our joint venture in China employed 20 people full time,
and all other personnel of the China joint venture are employed as sub
contractors. To make our work more efficient, we outsourced a few functions,
such as book keeping and administration, to certain professional firms to enable
our resource being focused on sales and processing functions.

FACTORS THAT MAY AFFECT FUTURE RESULTS

The business in which the Company is engaged is capital supportive. Accordingly,
the Company's ability to execute its business strategy and to sustain its
operations depends upon its ability to maintain or procure capital. There can be
no absolute assurance the necessary amount of capital will continue to be
available to the Company on favorable terms, or at all. The Company's inability
to obtain sufficient capital or to renew its credit facilities would limit the
Company's ability to: (i) add new equipment to its portfolio, (ii) fund its
working capital needs, and (iii) finance possible future acquisitions. The
Company's access to capital may have a material adverse effect on the Company's
business, financial condition and/or results of operations.

There can be no absolute assurance the Company will be able to effectively
manage its existing or the possible future expansion of its operations, or the
Company's systems, procedures or controls will be adequate to support the
Company's operations. Consequently, the Company's business, financial condition
and/or results of operations could be possibly and adversely affected.

The Company does not foresee changes in tax laws for the jurisdictions in which
the Company and its subsidiaries operate. There can be no absolute assurance
that changes will not occur, and therefore no absolute assurance such changes
will not materially and adversely affect the Company's business, financial
condition and results of operations.

As a public company, Sancon is subject to certain regulatory requirements
including, but not limited to, compliance with Section 404 of the Sarbanes-Oxley
Act of 2002 ("SOX404"). Such compliance results in significant additional costs
to the Company by increased audit and consulting fees, and the time required by
management to address the regulations. The SEC has recently delayed the
implementation date of SOX404 for non-accelerated filers until the fiscal year
ended December 31, 2007. However, should the Company successfully fulfill its
plans to procure financing and expand its operations; the Company may come under
the accelerated filer definition, and be required to comply with SOX404 before
December 31, 2007. In any case, such costs will likely affect adversely the
Company's business, financial condition and results of operations.


ITEM 2   DESCRIPTION OF PROPERTY

The Company leases office space in Australia, Hong Kong and Shanghai. The lease
for Australia and Shanghai expire in 2008, and Hong Kong in 2007. The Australian
Office is located in 7-9 Graham Road Clayton South 3169 VIC Australia, Rental
fee, without GST and outgoing is $132,000.00 per annum. The size of the whole
building is 2,414 square meters. The Hong Kong office is located in Unit 1406A,
Nanyang Plaza No. 57 Hung To Road, Kwun Tong Kowloon, Hong Kong. The Shanghai
office is located in Ground floor, B2 Building, No. 628 Suide Road, Putuo,
Shanghai, PRC. However, we may need to lease other facilities for our future
operation purpose.


                                       5
<PAGE>


ITEM 3   LEGAL PROCEEDINGS

There is no legal proceeding against us or our directors during fiscal year
2007.


ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during fiscal year 2007.


                                  -- PART II --

ITEM 5   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

The Company's stock is assigned the symbol SRRY.OB and is quoted and traded on
the OTCBB.

The range of low to high closing prices on the OTCBB is shown in the table below
(rounded to the nearest cent). This information is taken from MSN Money and CSI.
Readers should note OTCBB quotations are a reflection of inter-dealer prices,
without retail mark-up, mark-down, or commissions, and may not represent actual
transactions.

<TABLE>
<CAPTION>

                                  FISCAL 2007                                       FISCAL 2006
QUARTER          $ HIGH CLOSING PRICE      $ LOW CLOSING PRICE     $ HIGH CLOSING PRICE      $ LOW CLOSING PRICE
<S>                      <C>                      <C>                      <C>                      <C>
First                    1.40                     0.11                     2.00                     0.50
Second                   0.71                     0.35                     1.30                     0.40
Third                    0.53                     0.25                     0.58                     0.12
Fourth                   0.60                     0.13                     0.25                     0.10
</TABLE>


HOLDERS OF THE COMPANY'S STOCK

The Company has issued common stock only. On December 31, 2007, the total number
of holders of record as according to our transfer agent was approximately 729.

DIVIDENDS

We did not pay any cash dividends on our common stock for fiscal year ended on
December 31, 2007.

UNREGISTERED SALES OF EQUITY SECURITIES

<TABLE>
<CAPTION>
    date          type         amount                 person                  consideration           transaction
<S>     <C>                      <C>                                            <C>
  1-Feb-06    common share       11,283             R. Gorthuis                 $     14,668          Compensation
  1-Feb-06    common share        4,003               R. Yan                    $      4,166          Compensation
  1-Feb-06    common share        3,753  TWC Corporation Services Limited       $      3,642      Settlement of debts
  1-Feb-06    common share        9,685            Bok, Wai Kee                 $      9,398      Settlement of debts
  1-Feb-06    common share        1,028          Ng, Yu Yan Betty               $        998      Settlement of debts
 10-Feb-06    common share       54,539           Mr. Lu Zhao Hui               $     68,174   Increase investment holdings
 10-Feb-06    common share       61,846            Mr. Song Lin                 $     77,308   Increase investment holdings
 25-May-06    common share     (54,539)           Mr. Lu Zhao Hui               $    (68,174)  Decrease investment holdings
 25-May-06    common share     (61,846)            Mr. Song Lin                 $    (77,308)  Decrease investment holdings
 25-May-06    common share       13,110             R. Gorthuis                 $     12,668          Compensation
 25-May-06    common share        8,623               R. Yan                    $      8,332          Compensation
 27-Nov-06    common share      250,000         Bear Creek Capital              $     27,500         Consulting fee
 23-Jan-07    common share      250,000         Bear Creek Capital              $     88,500         Consulting fee
</TABLE>



                                       6
<PAGE>


The number of shares issued was based on the average closing price of our common
shares on the OTCBB during certain periods. The shares were exempt from
registration pursuant to Section 4(2) under the Securities Act of 1933, as
amended, pursuant to Rule 903, as a sale by the issuer in an offshore
transaction. No underwriting or other commissions were paid in connection with
the issuance of these shares. No forms of conversion or exercise options are
attached to the shares.


ITEM 6   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion contains forward-looking statements. Forward looking
statements are identified by words and phrases such as "anticipate", "intend",
"expect" and words and phrases of similar import. We caution investors that
forward-looking statements are only predictions based on our current
expectations about future events and are not guarantees of future performance.
Our actual results, performance or achievements could differ materially from
those expressed or implied by the forward-looking statements due to risks,
uncertainties and assumptions that are difficult to predict, including those set
forth in Item 1A above. We encourage you to read those risk factors carefully
along with the other information provided in this Report and in our other
filings with the SEC before deciding to invest in our stock or to maintain or
change your investment. We undertake no obligation to revise or update any
forward-looking statement for any reason, except as required by law.

You should read this MD&A in conjunction with the Consolidated Financial
Statements and Related Notes in Item 7.

OVERVIEW

Sancon Resources Recovery, Inc. is an industrial waste recycling company with
operations based in Australia, Hong Kong and China. Sancon currently exports
more than 25,000 tons of recycled industrial waste material annually to its
processing partners and manufacturers in China. Sancon's main operations and
services include industrial eco-friendly consulting, collection and reprocess of
recyclable materials such as plastic, cardboard, and paper before its re-entry
into manufacture cycles as raw materials. The use of recycled material is both
environmentally friendly and is a key part of today's competitive manufacturing
process to lower costs. As China gains global manufacturing dominance and oil
price soars, Chinese manufacturers are increasingly turning to recycled
materials to lower costs, resulting tremendous demand for recycled materials
import. The major markets for Sancon are Chinese manufacturers located mainly in
the provinces of Guangdong, Zhejiang and Fujian in China. PLAN OF OPERATION
During the next twelve months, we expect to take the following steps in
connection with the development of our business and the implementation of our
plan of operations:

o        We intend to continue with our marketing strategies to deliver our
         products in China;

o        Along with the continued plastic materials products we are now
         processing, we are also developing to process other materials, such as
         glasses, electronic materials.
o        During the next twelve months, the Company expects to set up new
         processing center in China.
o        During the next twelve months, the Company is planning to raise
         additional US$1-2 million cash to facilitate our processing capacity.
         The capital will be used to some or all of the following activities: 1)
         acquisition of other companies running similar business in China; 2)
         purchase of new equipment to satisfy increasing new type of materials
         requirements; 3) marketing and general administrative expenses for new
         launched operation of China. We may raise such capital through issuing
         our common stocks or warrants.

Our aggressive expansion plan will be replied on such capital support. We can
not assure the successful result of fund raising. As such, we may not execute
our initial business strategy or plan as expected, and furthermore, our
competitors may stand in a better position than us, which results in an adverse
effect on our business, although we believe that currently, even without such
funds, we can still run a healthy business within our already occupied markets.


                                       7
<PAGE>

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires us to
make estimates and judgments that affect our reported assets, liabilities,
revenues, and expenses, and the disclosure of contingent assets and liabilities.
We base our estimates and judgments on historical experience and on various
other assumptions we believe to be reasonable under the circumstances. Future
events, however, may differ markedly from our current expectations and
assumptions. While there are a number of significant accounting policies
affecting our consolidated financial statements; we believe the following
critical accounting policies involve the most complex, difficult and subjective
estimates and judgments: allowance for doubtful accounts; income taxes;
stock-based compensation; asset impairment.

REVENUE RECOGNITION

In accordance with generally accepted accounting principles ("GAAP") in the
United States, revenue is recognized only when the price is fixed or
determinable, persuasive evidence of an arrangement exists, the service is
performed, and collection of the resulting receivable is reasonably assured.
Noted below are brief descriptions of the product or service revenues that the
Company recognizes in the financial statements contained herein.

SALE OF GOODS

Revenue is recognized at the date of shipment to customers when a formal
arrangement exists, the price is fixed or determinable, the delivery is
completed, no other significant obligations of the Company exist and
collectability is reasonably assured. Payments received before all of the
relevant criteria for revenue recognition are satisfied are recorded as advances
from customers.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

We maintain an allowance for doubtful accounts to reduce amounts to their
estimated realizable value. A considerable amount of judgment is required when
we assess the realization of accounts receivables, including assessing the
probability of collection and the current credit-worthiness of each customer. If
the financial condition of our customers were to deteriorate, resulting in an
impairment of their ability to make payments, an additional provision for
doubtful accounts could be required. We initially record a provision for
doubtful accounts based on our historical experience, and then adjust this
provision at the end of each reporting period based on a detailed assessment of
our accounts receivable and allowance for doubtful accounts. In estimating the
provision for doubtful accounts, we consider: (i) the aging of the accounts
receivable; (ii) trends within and ratios involving the age of the accounts
receivable; (iii) the customer mix in each of the aging categories and the
nature of the receivable; (iv) our historical provision for doubtful accounts;
(v) the credit worthiness of the customer; and (vi) the economic conditions of
the customer's industry as well as general economic conditions, among other
factors.

INCOME TAXES

We account for income taxes in accordance with SFAS No. 109, Accounting for
Income Taxes. SFAS 109 prescribes the use of the liability method. Under this
method, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to temporary differences between the financial
statement carrying amounts and the tax basis of assets and liabilities. Deferred
tax assets and liabilities are measured using the enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. We then assess the likelihood that our
deferred tax assets will be recovered from future taxable income and to the
extent we believe that recovery is not likely, we establish a valuation
allowance. To the extent we establish a valuation allowance, or increase or
decrease this allowance in a period, we increase or decrease our income tax
provision in our statement of operations. If any of our estimates of our prior
period taxable income or loss prove to be incorrect, material differences could
impact the amount and timing of income tax benefits or payments for any period.
In addition, as a result of the significant change in the Company's ownership,
the Company's future use of its existing net operating losses may be limited.
The Company operates in several countries. As a result, we are subject to
numerous domestic and foreign tax jurisdictions and tax agreements and treaties
among the various taxing authorities. Our operations in these jurisdictions are
taxed on various bases: income before taxes, deemed profits and withholding
taxes based on revenue. The calculation of our tax liabilities involves
consideration of uncertainties in the application and interpretation of complex
tax regulations in a multitude of jurisdictions across our global operations.


                                       8
<PAGE>

We recognize potential liabilities and record tax liabilities for anticipated
tax audit issues in the U.S. and other tax jurisdictions based on our estimate
of whether, and the extent to which, additional taxes will be due. The tax
liabilities are reflected net of realized tax loss carry forwabds. We adjust
these reserves upon specific events; however, due to the complexity of some of
these uncertainties, the ultimate resolution may result in a payment that is
different from our current estimate of the tax liabilities. If our estimate of
tax liabilities proves to be less than the ultimate assessment, an additional
charge to expense would result. If payment of these amounts ultimately proves to
be less than the recorded amounts, the reversal of the liabilities would result
in tax benefits being recognized in the period when the contingency has been
resolved and the liabilities are no longer necessary.

Changes in tax laws, regulations, agreements and treaties, foreign currency
exchange restrictions or our level of operations or profitability in each taxing
jurisdiction could have an impact upon the amount of income taxes that we
provide during any given year.

STOCK-BASED COMPENSATION

During December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS 123". This statement
amends SFAS No. 123, "Accounting for Stock-Based Compensation", to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, this
statement amends the disclosure requirements of SFAS No. 123 to require
prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. The Company has chosen to continue to account
for stock-based compensation using the intrinsic value method prescribed in APB
Opinion No. 25 and related interpretations. Accordingly, compensation expense
for stock options is measured as the excess, if any, of the fair market value of
the Company's stock at the date of the grant over the exercise price of the
related option. The Company has adopted the annual disclosure provisions of SFAS
No. 148 in its financial reports for the year ended December 31, 2005 and has
adopted the interim disclosure provisions in its financial reports for the
subsequent periods.

Effective January 1, 2006, the beginning of Sancon's first fiscal quarter of
2006, the Company adopted the fair value recognition provisions of SFAS 123R,
using the modified-prospective transition method. Under this transition method,
stock-based compensation expense was recognized in the consolidated financial
statements for granted stock options, since the related purchase discounts
exceeded the amount allowed under SFAS 123R for non-compensatory treatment.
Compensation expense recognized included: the estimated expense for stock
options granted on and subsequent to January 1, 2006, based on the grant date
fair value estimated in accordance with the provisions of SFAS 123R; and the
estimated expense for the portion vesting in the period for options granted
prior to, but not vested as of January 1, 2006, based on the grant date fair
value estimated in accordance with the original provisions of SFAS 123. Results
for prior periods have not been restated, as provided for under the
modified-prospective method.

As of December 31, 2007 and 2006, the Company did not issue or make provision
through the issuance of stock options to employees and directors.

For other items paid for by common stock, the value of the transaction is
determined by the value of the goods or services received, measured at the time
of the transaction. The corresponding stock value, used to determine the number
of share to be issued, is the value of the average price for the 20 to 30 days
prior to the transaction date.

ASSET IMPAIRMENT

We periodically evaluate the carrying value of other long-lived assets,
including, but not limited to, property and equipment and intangible assets,
when events and circumstances warrant such a review. The carrying value of a
long-lived asset is considered impaired when the anticipated undiscounted cash
flows from such asset is less than its carrying value. In that event, a loss is
recognized based on the amount by which the carrying value exceeds the fair
value of the long-lived asset. Fair value is determined primarily using the
anticipated cash flows discounted at a rate commensurate with the risk involved.
Significant estimates are utilized to calculate expected future cash flows
utilized in impairment analyses. We also utilize judgment to determine other
factors within fair value analyses, including the applicable discount rate.


                                       9
<PAGE>

RESULTS OF OPERATIONS FOR THE YEAR ENDED 31 DECEMBER, 2007

Revenue

Revenues for the year ended December 31, 2007 were $6,070,830 as compared to
$3,447,402 of 2006, an increase of $2,623,428 or 76%. The sharp increases were
mainly due to the significant sales amount contributed from DFSL, Guangcheng and
Shanghai. During the 12 months ended December 31, 2007, the Company set up its
wholly-owned subsidiary Guangcheng in Hong Kong, restructured DFSL's business
and exercised its conversion right to convert 70% equity interest in Sancon
Shanghai. The three companies are engaged in recycling material trading
business.

Cost of revenue

Cost of revenue for the year ended December 31, 2007 increased to $4,620,101
from $2,929,141 for the year ended December 31, 2006, an increase of $1,690,960
or 58%. The significant increase of cost of sales is in line with the sales
during the year ended December 31, 2006.

Gross profit

The gross profit for the year ended December 31, 2007 is $932,468, representing
180% increase compared to $518,261 for 2006. And the gross margin rose from
15.0% in 2006 to 35.6% in 2007. The rise of the gross margin is mainly due to
that the margin from trading business new incorporate subsidiary in Shanghai.

Selling, general and administrative expenses

Selling, general and administrative expenses increased to $1,383,660 for the
year ended December 31, 2007, from $514,872 in 2006, an increase of $868,788 or
169%. The significant increase of Selling, general and administrative expenses
are mainly resulted from the increment of Selling, general and administrative
expenses in DFSL, Guangcheng and Sancon SH due to their newly started business
during 2007 and the expenses related to US listing costs.

Depreciation Expense

Depreciation expense increased to $80,656 in 2007 from $41,604 in 2006. The
expenses increased $39,052 or 94% during the year ended on December 31, 2007 as
compared to that in 2006. The increases were due to the purchase of plant and
machinery in 2007 to expand its processing capacity.

Net loss/income

Net loss in 2007 was $167,843, compared to a net income of $17,902 in 2006. The
decrease is mainly contributed to the significant net loss from Sancon
Australia, DFSL and Guangcheng in year 2007.

Liquidity and Capital Resources

As shown in the accompanying financial statements, the Company still suffered
accumulated loss of $284,558 as of December 31, 2007. In addition, our working
capital is negative $489,589.

Our ability to continue as a going concern depends on the success of our plan to
seek funding sources and the success of our future operations.

Operating Activities

The net cash provided by operating activities in the year ended on December 31,
2007 amounted to $218,237 compared to $29,232 in the year ended December 31,
2006. The net cash inflow from operating activities was mainly due to the
depreciation and amortization $80,656, shares issued for services $88,500,
minority interest $67,947 and increase in tax payable $153,620, by netting of
net operating loss of $167,843, increase in trade receivables of $183,435.


                                       10
<PAGE>

Investing Activities

Net cash used in investing activities amounted to $190,712 in the year ended on
December 31, 2007 compared to $185,446 in 2006. The net cash outflow primarily
consisted of the cash outflow resulting from the purchase of property and
equipment of $190,712.

Financing Activities

Net cash obtained by financing activities amounted to $143,469 in the year ended
on December 31, 2007 compared to $148,768 in 2006. The net cash inflow was due
to the increase of cash acquired due to subscription of $350,000 and decrease of
loan from shareholders amounting $195,014.

The Company has financed its growth by utilizing cash reserves and loan from
directors. Loan from directors usually was unsecured, and no payment term and
without interest bearing. The Company's primary use of funds is for the purchase
of equipment for operation.

Inflation

In the opinion of management, inflation has not had a material effect on the
Company's financial condition or results of its operations

Trends and uncertainties

Management believes there are no known trends, events, or uncertainties that
could, or reasonably be expected to, adversely affect the Company's liquidity in
the short and long terms, or its net sales, revenues, or income from continuing
operations.

The Company's operations are not affected by seasonal factors.

OFF-BALANCE SHEET ARRANGEMENTS

There are no off-balance sheet arrangements that have or are reasonably likely
to have a current or future effect on the Company's financial condition, changes
in financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources, that are material to investors.


ITEM 7.   FINANCIAL STATEMENTS


Financial statements are attached hereto following beginning on Page F-1.


ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

We engaged Kabani & Company, Inc. ("Kabani"), as our new independent accountant
on November 27, 2006. The decision to retain Kabani & Company, Inc. was
recommended and approved by the Registrant's Board of Directors.

During the Registrant's two most recent fiscal years and any subsequent interim
period prior to the engagement of Kabani, neither the Registrant nor anyone on
the Registrant's behalf consulted with Kabani regarding either (i) The
application of accounting principles to a specific completed or contemplated
transaction, or the type of audit opinion that might be rendered on the small
business issuer's financial statements and either written or oral advice was
provided that was an important factor considered by the small business issuer in
reaching a decision as to the accounting, auditing or financial reporting issue,
or (ii) Any matter that was the subject of either a "disagreement" or a
"reportable event."

                                      11
<PAGE>

ITEM 8A  CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including
our principal executive officer and the principal financial officer, we
conducted an evaluation of the effectiveness of the design and operation of its
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as of the end of the period covered
by this report (the "Evaluation Date"). Based on this evaluation, our principal
executive officer and principal financial officer concluded as of the Evaluation
Date, that our disclosure controls and procedures were not effective.

MANAGEMENTS' ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal
control over financial reporting of the Company. Internal control over financial
reporting is a process designed by, or under the supervision of, our chief
executive and chief financial officers and effected by our 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
principals.

Management, with the participation of our principal executive officer and
principal financial officer, has evaluated the effectiveness of our internal
control over financial reporting as of December 31, 2007 based on criteria
established under the COSO framework, an integrated framework for evaluation of
internal controls issued to identify the risks and control objectives related to
the evaluation of the control environment by the Committee of Sponsoring
Organizations of the Treadway Commission.

Based on our evaluation described above, management has concluded that our
internal control over financial reporting was not effective as of December 31,
2007. Management has determined that (i) our inadequate staffing and supervision
and (ii) the significant amount of manual intervention required in our
accounting and financial reporting process are material weaknesses in our
internal control over financial reporting.

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

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There was no change in our internal control over financial reporting during the
quarter ended December 31, 2007 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

ITEM 8B  OTHER INFORMATION

Item a.  Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item b.  Changes in Securities and Use of Proceeds.

None

Item c.  Defaults Upon Senior Securities.

None.

Item d.  Submission of Matters to a Vote of Security Holders.

Matters for a vote of security holders were submitted to security holders in the
Company's Proxy Statement, filed upon December 6, 2005. The remainder of the
information required by this item is incorporated by reference to the Company's
Proxy Statement.

Item e.  Other Information.

None.

                                       12
<PAGE>


                                 -- PART III --


ITEM 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS:
           COMPLIANCE WITH SECTION (16) OF THE EXCHANGE ACT

IDENTIFICATION AND BACKGROUNDS OF DIRECTORS AND OFFICERS

<TABLE>
<CAPTION>

               NAME                    AGE          PRINCIPAL POSITION            APPOINTMENT/RESIGNATION DATE
<S>                                    <C>                                                      <C> <C>
Jack Chen                              38     CEO, Director                            November 29, 2002
Jimmy Yiu                              49     Director                                    June 1, 2006
Chen Guangliang                        40     VP, China Operation                         June 1, 2006
David Chen                             40     Non Executive Chairman                      June 1, 2006
Cong Yuanli                            57     Director                                    June 1, 2006
Klaus Shen                             34     CFO                                        April 12, 2007
</TABLE>

MR. JACK CHEN, CHIEF EXECUTIVE OFFICER & DIRECTOR

Mr. Chen is currently the CEO of Sancon as well as as the Managing Director of
Sancon Recycling Pty Ltd, the wholly owned subsidiary of Sancon Resources
Recovery, Inc. and a successful Australia based resources recycling company with
presence in Australia and China. With more than eight years of solid industrial
experiences in resources recovery sector in Australia and Asia, Mr. Chen is an
expert in the collection, processing, trading and reuse of industrial waste
materials. Previously, he worked in a management position for a multinational
German plastics and chemicals company and later built a successful plastics
trading business between Hong Kong and China.

MR. JIMMY YIU, DIRECTOR

Mr. Yiu is currently the director of Sancon. He was the Managing Director of
Team Smart International Ltd, a successful medium-sized Waste Management and
Material Recycling business with head office in Hong Kong and numerous
processing plants in China, Malaysia and Indonesia. Mr. Yiu has spent almost 25
years in the resources recycling industry and has deep knowledge and experience
of the industry.

MR. CHEN GUANGLIANG, VP - CHINA OPERATIONS

Mr. Chen is currently the Vice President for Sancon. He was the General Manager
of Three Rivers (Hong Kong) Ltd, a medium-sized Material Recycling and trading
company based in China, which owned a material processing plant in the city of
ShenZhen in China, namely ShenZhen SanJiang Plastic Factory. Mr. Chen has more
than 12 years experiences in the resources recycling business which contributes
to his distinguished knowledge and understanding in the industry

KLAUS SHEN, CHIEF FINANCIAL OFFICER

Mr. Shen served as CFO of Sancon since April 2007. Prior to that, he set up a
consulting firm in China, which provides accounting and consulting services to
Foreign Invested Enterprises in China. Mr Shen previously worked as General
Manager of Shanghai Xilian Assets Management Co., Ltd. from 2003 to 2005. He was
the CFO for Shanghai Chiway Venture Capital Co., Ltd. from 2001 to 2003. From
1996 to 2001, he worked for KPMG Shanghai office. He holds MBA degrees from
University of Ballarat in Australia and Bachelor of Economics in Shanghai
University of Finance and Economics. Mr. Shen is a senior member of Shanghai
Investment Association.



                                       13
<PAGE>

MR. DAVID CHEN, NON EXECUTIVE CHAIRMAN OF THE BOARD

Mr. Chen served as the Non executive Chairman of the Board since June, 2006.
Prior to that, Mr. Chen served as the CEO of MKA Capital, Inc. (formally
Financial Telecom Limited (USA) Inc.) since its inception in 2004. He is the
president and CEO of Shine Media Acquisition Corp. a blank check company listed
on OTC Bulletin Board, since its inception in June 2005. He was the former CEO
of Hartcourt Companies Inc from 2002 to 2004 (OTCBB: HRCT), a consolidator of IT
distribution companies, and CEO of V2 Technology, a leading videoconferencing
technology company. Previously, Mr. Chen was the Marketing Director of Time
Warner's CNN Asia Pacific unit, Sales Director of Turner Broadcasting Systems
Asia, and Managing Director of HelloAsia Inc. Mr. Chen holds a Bachelor of
Economics degree from Monash University of Australia.

MR. CONG YUANLI, INDEPENDENT DIRECTOR

Mr. Cong Yuanli is the Chairman of Landwood Enterprise Holdings Ltd, a China
based diversified holding company with businesses in international trading,
import/export, real estate investment and financing. Previously he was a
director at Hong Kong Landtrade Group, a holding company in real estate
investment, international trust financing, hotel investment, and international
trading, where he was responsible for the international trading activities. Mr.
Cong is an avid fine art, antique and furniture collector and is the owner of
Beijing Landwood Gallery and Beijing Yuanhantang Antique Furniture Ltd. Mr. Cong
holds Bachelor of Economics and Management degree from Beijing University of
Finance and Economics of China.

FAMILY RELATIONSHIPS

Family relationships among directors, executive officers, or persons nominated
or chosen by the Company to become directors or executive officers are as
follows: Mr. Jack Chen and Mr. David Chen are brothers.


SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under Section 16(a) Beneficial Ownership Reporting Compliance, each person who
was at any time during the fiscal year, a director, officer, beneficial owner of
more than ten percent of any class of equity securities of the Company
registered pursuant to section 12 ("reporting person") is required to file Forms
3, 4, and 5 on a timely basis, during the most recent fiscal year or prior
fiscal years. Due to lack of knowledge, the relevant beneficial owners did not
file on time. They will file Form 3 and Form 5 shortly.

CODE OF ETHICS

The Company has Standards of Ethical Conduct Policy ("Code of Ethics") that
applies to all employees and directors, including the Chairman, Chief Executive
Officer, and Chief Financial Officer. The Code of Ethics is filed as Exhibit
14.1 to this 10-KSB report.

AUDIT COMMITTEE FINANCIAL EXPERT

The Company's board of directors has determined it does not have at least one
audit committee financial expert serving on its audit committee, as that term is
used in Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act.

The reason for the lack of an audit committee financial expert is the Company's
inability to find a suitable person by the reporting date of this 10-KSB report.
The Company continues its efforts to locate and appoint such a person.


ITEM 10  EXECUTIVE COMPENSATION

OFFICERS' COMPENSATION

Our CEO was compensated approximately $18,500 for the year ended December 31,
2007 and was not compensated for the year ended December 31, 2006 and 2005.
However, Our CEO will be entitled to receive stock compensation for services
rendered to be approved by the board.


                                       14
<PAGE>

DIRECTORS' COMPENSATION

Our Directors has not been compensated as of December 31, 2007.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

Equity compensation plan information as of December 31, 2007

<TABLE>
<CAPTION>
<S>     <C>

---------------------------------------------------------- ----------------------- --------------------- -----------------------
Plan category                                               Number of securities     Weighted-average     Number of securities
                                                             to be issued to be     exercise price of     remaining available
                                                            issued upon exercise       outstanding        for future issuance
                                                               of outstanding       options, warrants         under equity
                                                             options, warrants          and rights         compensation plans
                                                                 and rights                              (excluding securities
                                                                                                          reflected in column
                                                                                                                 (a) )
                                                                    (a)                    (b)                    (c)
---------------------------------------------------------- ----------------------- --------------------- -----------------------
Equity compensation plans approved by security
holders:None                                                         -                      -                      -
---------------------------------------------------------- ----------------------- --------------------- -----------------------
Equity compensation plans not approved by security
holders:None                                                         -                      -                      -
---------------------------------------------------------- ----------------------- --------------------- -----------------------
Total                                                                -                      -                      -
---------------------------------------------------------- ----------------------- --------------------- -----------------------
</TABLE>


ITEM 11  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

Security ownership of certain beneficial owners

Dhe following persons are known to be the beneficial owners of more than 5% of
the Company's voting securities, as of December 31, 2007:

<TABLE>
<CAPTION>
<S>     <C>
    TITLE OF CLASS            NAME AND ADDRESS OF BENEFICIAL OWNER              NUMBER OF SHARES            PERCENT OF CLASS(1)

Common Stock            Mr. Jack Chen
                        36 Graham St, Surrey Hills,                                 4,700,000                      23.02%
                        VIC 3127, Australia
Common Stock            Mr. Yiu Lo Chung
                        Unit 1406A, Nanyang Plaza,
                        No. 57, Hung To Road, Kwun                                  2,000,000                      9.80%
                        Tong, Kowloon, Hong Kong
Common Stock            Mr. Chen Guanliang
                        2-1, Floor 21, No. 4,
                        Dahuanjiayuan, Huangyan                                     2,000,000                      9.80%
                        District, Taizhou, Zhejiang,
                        China
</TABLE>

Notes:

(1) Based on 20, 414,996 issued and outstanding voting common stock as of
December 31, 2007.

                                       15
<PAGE>

SECURITY OWNERSHIP OF MANAGEMENT

The following persons are known to be the beneficial owners of the Company's
voting securities, as of December 31, 2007:
<TABLE>
<CAPTION>
<S>     <C>

    TITLE OF CLASS            NAME AND ADDRESS OF BENEFICIAL OWNER              NUMBER OF SHARES           PERCENT OF CLASS(1)

Common Stock            Mr. Jack Chen
                        36 Graham St, Surrey Hills,                                4,700,000                     23.02%
                        VIC 3127, Australia

Common Stock            Mr. Chen Guanliang
                        2-1, Floor 21, No. 4,
                        Dahuanjiayuan, Huangyan                                    2,000,000                      9.80%
                        District, Taizhou, Zhejiang, China
Common Stock            Mr. Yiu Lo Chung
                        Unit 1406A, Nanyang Plaza,
                        No. 57, Hung To Road, Kwun                                 2,000,000                      9.80%
                        Tong, Kowloon, Hong Kong
Common Stock            Mr. David Chen
                        No. 628, Suide Road, Putuo,
                        Shanghai, China                                             611,172                       2.99%
</TABLE>

Notes:
(1) Based on 20, 414,996 issued and outstanding voting common stock as of
December 31, 2007. .



ITEM 12  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There is no any transaction as of December 31, 2007.


                                       16
<PAGE>
ITEM 13  EXHIBITS

The following list describes the exhibits filed as part of this Report on Form
10-KSB.

<TABLE>
<CAPTION>
<S>     <C>

Exhibit    Note         Description
Number                  of Document

3.1          (1)       Articles of Incorporation of Financial Telecom Limited (USA), Inc.
3.2          (1)       Amended and Restated Bylaws of Financial Telecom Limited (USA), Inc.
10.1         (1)       Agreement between Hong Kong Futures Exchange Limited and Financial Telecom Limited
10.2         (1)       Market Service Datafeed Agreement between Stock Exchange Information Services Limited and Financial
                       Telecom Limited
10.3         (2)       Option agreement dated December 14, 2004 between Fintel Group Limited and shareholders of Shanghai
                       Longterms Technology Limited.
10.4         (2)       Option agreement dated January 5, 2005 between Fintel Group Limited and shareholders of Beijing JCL
                       Technology Commerce Limited.
10.5         (2)       Option agreement dated January 20, 2005 between Fintel Group Limited and shareholders of Shanghai
                       Qianhou Computer Technology Limited.
10.6         (2)       Independent contractor agreement between Fintel Group Limited and Mr. Sam Chong Keen.
10.7         (2)       Independent contractor agreement between Fintel Group Limited and Info Media Company.
10.8         (2)       Independent contractor agreement between Fintel Group Limited and China Digital Distribution Limited.
10.9         (3)       Sales and purchase agreement dated March 25, 2005 between Fintel Group Limited and shareholders of Enjoy
                       Media Holdings Limited
10.10        (4)       Sales and purchase agreement dated April 25, 2005 between Fintel Group Limited and shareholders of Beijing
                       Genial Technology Co. Ltd.
10.11        (4)       Option agreement dated March 7, 2005 between Fintel Group Limited and shareholders of Beijing Sinoskyline
                       technology Trading Co. Ltd.
14.1         (8)       Code of Ethics
16.1         (6)       Change in Certifying Accountants
17.1         (5)       Correspondence on departure of Directors
20.1         (7)       Proxy Statement dated December 6, 2005
21.1         (9)       Subsidiaries of the registrant
24.1         (9)       Power of Attorney
31.1         (9)       Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                       Section 302 of the Sarbanes-Oxley Act of 2002
31.2         (9)       Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                       Section 302 of the Sarbanes-Oxley Act of 2002
32.1         (9)       Certification of Officers, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                       Sarbanes-Oxley Act of 2002
</TABLE>


----------------------

(1)    Incorporated herein by reference to the registrant's initial Registration
       Statement on Form 10-SB (File No. 000-50760) filed on May 13, 2004.
(2)    Incorporated  herein by reference to the  registrant's  Annual Report on
       Form 10-KSB (File No.  000-50760) filed April 15, 2005.
(3)    Incorporated herein by reference to the registrant's Quarterly Report of
       Form 10-QSB (File No. 000-50760) filed May 6, 2005.
(4)    Incorporated herein by reference to the registrant's Quarterly Report of
       Form 10-QSB (File No. 000-50760) filed August 6, 2005.
(5)    Incorporated herein by reference to the registrant's Current Report on
       Form 8K/A (File No. 000-50760) filed November 29, 2005.
(6)    Incorporated herein by reference to the registrant's Current Report on
       Form 8K/A (File No. 000-50760) filed January 25, 2006.
(7)    Incorporated herein by reference to the registrant's Proxy Statement
       (File No. 000-50760) filed December 6, 2005.
(8)    Incorporated herein by reference to the registrant's Annual Report on
       Form 10-KSB (File No. 000-50760) filed April 26, 2006.
(9)    Filed herewith.



                                       17
<PAGE>


ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

During the fiscal year ended December 31, 2007, our principal independent
accountant was Kabani & Company, Inc, the services of which were provided in the
following categories and amount:

AUDIT FEES

Kabani & Company, Inc is our independent accountant from November 27, 2006. The
aggregate fees billed by Kabani & Company, Inc for professional services
rendered for the audit of our financial statements for the period ended March
31, June 30, September 30, 2007 were approximately $16,000, $13,500 and $12,500,
respectively, and for services performed in connection with the Company's annual
financial statement on Form 10-KSB filed for the year ended December 31, 2007
were approximately $50,000.

AUDIT RELATED FEES

Other than the fees described under the caption "Audit Fees" above, Kabani &
Company, Inc did not bill any fees for services rendered to us during fiscal
year 2007 for assurance and related services in connection with the audit or
review of our financial statements.

TAX FEES

There were no fees billed by Kabani & Company, Inc for professional services
rendered during the fiscal year ended December 31, 2007 for tax compliance, tax
advice, and tax planning.

ALL OTHER FEES

There were no fees billed by Kabani & Company, Inc for other professional
services rendered during the fiscal year ended December 31, 2007.


                                       18
<PAGE>


 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.

                                                 Sancon Resources Recovery, Inc.

Date:  April 1, 2008
                                                               By: /s/ Jack Chen
                                                --------------------------------
                                                                       Jack Chen
                                                         Chief Executive Officer



In accordance with the 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.

                                                 Sancon Resources Recovery, Inc.

Date:  April 1, 2008
                                                              By: /s/ David Chen
                                                 -------------------------------
                                                                      David Chen
                                                                        Chairman

Date:  April 1, 2008
                                                              By:  /s/ Jimmy Yiu
                                                      --------------------------
                                                                       Jimmy Yiu
                                                                        Director

Date:  April 1, 2008
                                                            By:  /s/ Cong Yuanli
                                                      --------------------------
                                                                      Cong Yuanl
                                                            Independent Director

Date:  April 1, 2008
                                                              By:  /s/ Jack Chen
                                                      --------------------------
                                                                      Jack. Chen
                                                                        Director


<PAGE>




FINANCIAL STATEMENTS

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



Report of Independent Registered Public Accounting Firm                     F-2

Consolidated Balance Sheet as of December 31, 2007                          F-3

Consolidated Statements of Operation for the years ended
December 31, 2007 and December 31, 2006                                     F-4


Consolidated Statements of Stockholders' Deficit for the years ended
December 31, 2007 and December 31, 2006                                     F-5


Consolidated Statements of Cash Flows for the years ended
December 31, 2007 and December 31, 2006                                     F-6


Notes to the Consolidated Financial Statements for the years ended
December 31, 2007 and December 31, 2006                                     F-7



                                      F-1
<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Stockholders and Board of Directors
Sancon Resources Recovery, Inc.

We have audited the accompanying consolidated balance sheet of Sancon Resources
Recovery, Inc., a Nevada Corporation (the "Company") as of December 31, 2007 and
the related consolidated statements of operations, consolidated statements of
stockholders' deficit and consolidated statements of cash flows for the years
ended December 31, 2007 and December 31, 2006. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits of these statements 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. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statements presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sancon Resources Recovery, Inc
as of December 31, 2007 and the results of its operations and its cash flows for
the years ended December 31, 2007 and December 31, 2006, in conformity with
accounting principles generally accepted in the United States of America.

The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has accumulated deficit of $284,558 as of December 31,
2007 and working capital deficiency of $489,589. These factors as discussed in
Note 2 to the financial statements, raises substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

/s/ Kabani & Company, Inc.
                          CERTIFIED PUBLIC ACCOUNTANTS

Los Angeles, California
February 22, 2008


                                      F-2
<PAGE>

<TABLE>
<CAPTION>
<S>     <C>

                                 SANCON RESOURCES RECOVERY, INC.
                                   CONSOLIDATED BALANCE SHEET
                                     AS OF DECEMBER 31, 2007


                                             ASSETS
     Current assets
               Cash and cash equivalents                                            $   250,470
               Trade receivables                                                        628,616
               Inventory                                                                  3,763
               Prepaid expenses                                                          81,467
               Due from related parties                                                  73,285
                                                                                    -----------
                  TOTAL CURRENT ASSETS                                                1,037,601

     Property, plant & equipment, net                                                   540,691
     Security deposit                                                                     9,644
                                                                                    -----------
               TOTAL ASSETS                                                         $ 1,587,936
                                                                                    ===========

                              LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES
     Current liabilities
               Trade payables                                                       $   402,961
               Capital lease - current                                                   10,206
               Accrued expenses and other payables                                      144,309
               Shares to be issued                                                      350,000
               Tax payables                                                             187,019
               Due to related parties                                                   327,122
               Other payables                                                           105,573
                                                                                    -----------
                  TOTAL CURRENT LIABILITY                                             1,527,190

     Long term liability
               Capital lease                                                             48,119
                                                                                    -----------

                                                                                    -----------
               TOTAL LIABILITY                                                        1,575,309
                                                                                    -----------

     Minority Interest                                                                  153,220

STOCKHOLDERS' DEFICIT
     Share Capital
               Authorized: 500,000,000 common shares, par value $0.001 per share
               Issued and Outstanding: 20,414,996 shares                                 20,415
     Additional paid-in capital                                                         115,499
     Other comprehensive income                                                           8,051
     Accumulated deficit                                                               (284,558)
                                                                                    -----------
               TOTAL STOCKHOLDERS' DEFICIT                                             (140,593)
                                                                                    -----------
               TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT                            $ 1,587,936
                                                                                    ===========

             The accompanying notes form an integral of these financial statements.

                                              F-3
<PAGE>

                         SANCON RESOURCES RECOVERY, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                        FOR THE YEARS ENDED
                                                                    DECEMBER 31,    DECEMBER 31,
                                                                       2007            2006
                                                                    ------------    ------------

Net Sales                                                           $  6,070,830    $  3,447,402
Cost of sales                                                          4,620,101       2,929,141
                                                                    ------------    ------------
Gross profit (loss)                                                    1,450,729         518,261

Operating Expenses
              Depreciation                                                80,656          41,604
              Selling, General and Administrative                      1,383,660         514,872
                                                                    ------------    ------------
              Total Operating expenses                                 1,464,316         556,476
                                                                    ------------    ------------

              Operating Loss                                             (13,587)        (38,215)

Other Income
              Other income                                                21,816          47,827
              Interest income                                              4,797           3,138
                                                                    ------------    ------------
              Total other income                                          26,613          50,965
                                                                    ------------    ------------

Income from operations before income taxes and minority interest          13,026          12,750

Income taxes                                                            (112,922)        (13,675)
Minority Interest                                                        (67,947)           --

Income from continued operations                                        (167,843)           (925)
                                                                    ------------    ------------

Discontinued operations

              Gain on Disposal of Subsidiary                                  --          18,827
                                                                    ------------    ------------
Net income (loss)                                                       (167,843)         17,902

              Other comprehensive item:
         Foreign currency translation gain (loss)                          9,298          (1,434)
                                                                    ------------    ------------
Net comprehensive income/(loss)                                     $   (158,545)   $     16,468
                                                                    ============    ============


Earnings (loss) per share
              Basic & diluted earnings (loss) per share             $      (0.01)   $      0.00
                                                                    ============    ============
              Basic & diluted weighted average shares outstanding     20,399,928      17,890,350
                                                                    ============    ============

     The accompanying notes form an integral of these financial statements.

                                      F-4
<PAGE>



                                                 SANCON RESOURCES RECOVERY, INC.
                                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                                   FOR THE YEARS ENDED DECEMBER 31, 2007 AND DECEMBER 31, 2006

                                                                      ADDITIONAL         OTHER
                                                         COMMON        PAID IN        COMPREHENSIVE   ACCUMULATED
                                          SHARES         STOCK         CAPITAL        INCOME (LOSS)     DEFICIT         TOTAL
                                        ----------     ----------     ----------      ------------    ----------      ----------
BALANCE DECEMBER 31, 2005               14,897,215     $   14,897     $       --      $      187      $  (28,556)     $  (13,472)

Recapitalization of Sancon on
reverse acquisition                      5,017,133          5,017             --              --        (106,061)       (101,044)
Fractional shares                              648              1             (1)             --              --              --
Issuance of shares for services            250,000            250         27,250              --              --          27,500
Foreign Currency Translation                    --             --             --          (1,434)             --          (1,434)
Net income                                     --              --             --              --          17,902          17,902
                                        ----------     ----------     ----------      ----------      ----------      ----------
BALANCE DECEMBER 31, 2006               20,164,996         20,165         27,249          (1,274)       (116,715)        (70,548)

Issuance of shares for services            250,000            250         88,250              --              --          88,500
Foreign Currency Translation                    --             --             --           9,298              --           9,298
Net income                                      --             --             --              --        (167,843)       (167,843)
                                        -----------    ----------     ----------      ----------      ----------      ----------
BALANCE DECEMBER 31, 2007               20,414,996     $   20,415     $  115,499      $    8,051      $ (284,558)     $ (140,593)
                                        ==========     ==========     ==========      ==========      ==========      ==========

                                               The accompanying notes form an integral part of these financial statements


                                                               F-5
<PAGE>


                                 SANCON RESOURCES RECOVERY, INC.
                              CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                     FOR THE YEAR ENDED DECEMBER 31,
                                                                            2007         2006
                                                                         ---------    ---------

CASH FLOWS FROM OPERATING ACTIVITIES
       Net Income (Loss)                                                 $(167,843)   $  17,902
       Adjustments to reconcile net income (loss) to net
       cash flows provided by operating activities:
           Depreciation and amortization                                    80,656       41,604
           Gain on disposal of investment / subsidiary                          --      (18,827)
           Shares issued for services                                       88,500       27,500
           Minority interest                                                67,947           --
           Changes in current assets and liabilities:
               Increase in trade receivables                              (183,435)    (380,931)
               Increase in inventory                                        (3,763)          --
               Decrease in advance to suppliers                             26,973           --
               Decrease (increase) in other current assets                  41,469      (69,649)
               Increase in tax payable                                     153,620       13,137
               Increase in trade payable                                    81,110      217,819
               Increase (decrease) in other current liabilities             33,003      180,677
                                                                         ---------    ---------
           Net cash flows provided by operating activities                 218,237       29,232
                                                                         ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES
       Purchase of property and equipment                                 (190,712)    (189,108)
       Cash acquired due to acquisitions                                        --       71,469
       Cash decreased due to disposal of subs                                   --      (67,807)
                                                                         ---------    ---------
           Net cash flows used in investing activities                    (190,712)    (185,446)
                                                                         ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES
       Cash acquired due to subscription                                   350,000           --
       Shareholders' loan                                                 (195,014)     127,063
       Proceeds from capital lease                                         (11,517)      21,705
                                                                         ---------    ---------
           Net cash flows provided by financing activities                 143,469      148,768
                                                                         ---------    ---------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                     15,876        3,463
                                                                         ---------    ---------

NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENT                          186,870       (3,983)

       Cash & Cash Equivalent at start of period                            63,600       67,583
                                                                         ---------    ---------
       Cash & Cash Equivalent at end of period                           $ 250,470    $  63,600
                                                                         =========    =========

Supplemental information:
       Cash paid for Interest Expenses                                   $   4,210    $   3,695
                                                                         =========    =========

       Cash paid for Income Taxes                                        $      --    $     952
                                                                         =========    =========

Non-cash investing & financing activities:

       The Company converted note payable of $200,000 into investment to acquire
       70% ownership interest in Sancon Shanghai on August 15, 2007. The Company
       issued 5,017,133 shares as part of recapitalization are not included in
       the statement of cash flows as of December 31, 2006.


             The accompanying notes form an integral of these financial statements.
</TABLE>

                                              F-6
<PAGE>


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31,
2007 AND DECEMBER 31, 2006

NOTE 1  NATURE OF OPERATIONS

Sancon Resources Recovery, Inc. ("Sancon", or "the Company", or "we", or "us")
is registered in good standing under Chapter 78 of the Nevada Statutes, and its
common stock is traded on the OTCBB under the symbol SRRY.OB. Sancon is an
industrial recycling company with operations based in Melbourne Australia, Hong
Kong (SAR) and Shanghai China. Sancon aims to provide solutions to today's
soaring raw material cost for manufactures and assists in solving our
environmental problems.

On August 15, 2007, the Company completed the acquisition of 70% of the equity
interest in Sancon Resources Recovery (Shanghai) Co., Ltd by exercising its
option to convert $200,000 of convertible promissory note (See note 3).

The Sancon group comprises of the following companies:
<TABLE>
<CAPTION>
<S>     <C>
Registered Name                                                                     Domicile        Owner     % held   Status
(business is conducted under the registered names)
Digital Financial Service Limited ("DFSL" hereinafter)                             Hong Kong        Sancon     100     Active
Sancon Recycling Pty Ltd.                                                          Australia        Sancon     100     Active
Guang Cheng Int'l Trading Ltd. ("Guang Cheng" hereinafter)                         Hong Kong        Sancon     100     Active
Sancon Resources Recovery (Shanghai) Co., Ltd. ("Sancon SH" hereinafter)            Shanghai        Sancon      70     Active
</TABLE>

Effective May 26, 2006, a business combination occurred between Sancon Recycling
Pty Ltd. ("SRPL") and the Company. The combination was effected an exchange of
shares, the Company would exchange its seventy-five percent (75%) equity stake
in MK Aviation, S.A. (hereinafter referred to as "MKA") with one hundred percent
(100%) equity stake in SRPL eld by Mr. Jack Chen, Mr. Yiu Lo Chung and Mr. Guy
Waters, ("the Shareholders"). Meanwhile, the Shareholders exchanged its
seventy-five percent (75%) equity stake in MK Aviation, S.A. with 14,897,215
shares of the Registrant's common stock from Mr. Kraselnick and associated
parties.

As a result of the merger, there was a change in control of the public entity.
In accordance with SFAS No. 141, the Company was the acquiring entity. While the
transaction is accounted for using the purchase method of accounting, in
substance the Agreement is a recapitalization of the Company's capital
structure. For accounting purposes, the Company accounted for the transaction as
a reverse acquisition and the Company is the surviving entity. The Company did
not recognize goodwill or any intangible assets in connection with the
transaction.

All references to common stock, share and per share amounts have been
retroactively restated to reflect the exchange of 100 shares of SRPL common
stock for 14,897,215 shares of the Sancon's common stock outstanding immediately
prior to the merger as if the exchange had taken place as of the beginning of
the earliest period presented. Effective August 4, 2006, the listed company, MKA
Capital Inc., changed its name to Sancon Resources Recovery, Inc.

The accompanying consolidated financial statements have been prepared in
accordance with the rules and regulations of the Securities and Exchange
Commission for the presentation of financial information, and include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included.

NOTE 2   BASIS OF PRESENTATION

(a)  Principles of Consolidation

The accompanying consolidated financial statements include accounts of the
Company and all of the subsidiaries under its control, which include DFSL,
Sancon Recycling Pty Ltd., and Guang Cheng for the year ended December 31, 2007
and Sancon SH (70%) from August 15, 2007 to December 31, 2007. While the
historical results for the year ended December 31, 2006 only include the
Company, DFSL, Sancon Recycling Pty Ltd. and Guang Cheng. All material
inter-company balances and transactions have been eliminated in consolidation.

                                      F-7
<PAGE>

(b) Going Concern

As shown in the accompanying consolidated financial statements, the Company
incurred accumulated losses of $284,558 as of December 31, 2007 and working
capital deficiency of $489,589. These matters raise substantial doubt about the
Company's ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. This basis of accounting
contemplates the recovery of the Company's assets and the satisfaction of
liabilities in the normal course of business.

The Company has taken certain restructuring steps to provide the necessary
capital to continue its operations. These steps included:

o        Look for growth opportunities through acquisitions & merger with
         profitable companies
o        Raise capital through public offering
o        Take measures to control cost and operating expenses


NOTE 3   BUSINESS ACQUISITION

The Company invested in the Convertible Note of US$200,000, which was issued on
June 1, 2007 by Sancon Resource Recovery (Shanghai) Co., Ltd. ("Sancon SH"), a
corporation organized under the laws of the People's Republic of China. The
convertible note with 0% interest bearing shall become due and payable on the
first anniversary of the issue date. At any time prior to the issue date, at the
option of Sancon in its sole discretion, the convertible note may be converted
into 70% equity interest in Sancon SH.

On August 15, 2007, the Company exercised its conversion right to convert its
convertible note with face value of $200,000 into 70% equity interest of Sancon
Resource Recovery (Shanghai) Co., Ltd., pursuant to the terms of Convertible
Note issued on June 1, 2007.

Sancon Resource Recovery (Shanghai) Co., Ltd was established in March 2007, in
Shanghai, China, focuses on the recycling of wasted wine bottle in China. Sancon
SH started operations on April 1, 2007. Sancon SH is 100% owned by Jack Chen who
is also a director of Sancon Recycling Pty Ltd, Australia, a 100% owned
subsidiary of the Company. The acquisition resulted in recapitalization of the
Company's capital structure similar to the pooling of interest method.

A summarized financial position for the acquired company, Sancon SH, at the
acquisition date, is provided below.

                  Sancon Resource Recovery (Shanghai) Co., Ltd.
                     Summary Statement of Financial Position
                               At August 15, 2007

                                    Amount

Cash                             $     253,549
Other Current Assets                    32,447
Property & Equipment                    68,957
Current Liabilities                    (73,268)
                                 -------------
Net Assets                             281,685
Net Assets Acquired (70%)       $      197,180
                                ==============


        UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION DISCLOSURE
                      FOR THE YEAR ENDED DECEMBER 31, 2007

The following un-audited pro forma consolidated financial information for the
year ended December 31, 2007 as presented below, reflects the results of
operations of the Company assuming the acquisition occurred on April 1, 2007.
These pro forma results have been prepared for information purposes only and do
not purport to be indicative of what operating results would have been had the
acquisitions actually taken place on April 1, 2007 and may not be indicative of
future operating results.


                                      F-8
<PAGE>

                                                   Year ended December 31, 2007
                                                           (Unaudited)

          Revenue                                         $ 6,075,111

          Operating loss                                  $  (257,041)
                                                          -----------

          Net loss                                        $  (333,551)
                                                          ===========

          Basic and fully diluted gain/(loss) per share   $     (0.02)
                                                          ===========



NOTE 4   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Use of Estimates

These financial statements are prepared in accordance with accounting principles
accepted generally in the USA. These principles require management to use its
best judgment in determining estimates and assumptions that: affect the reported
amounts of assets and liabilities; 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. Management makes its best
estimate of the ultimate outcome for such items based on historical trends and
other information available when the financial statements are prepared. Changes
in estimates are recognized in accordance with the relevant accounting rules,
typically in the period when new information becomes available to management.
Actual results in the future could differ from the estimates made in the prior
and current periods.

(b).Property, Plant & Equipment

Property, plant and equipment are stated at cost, less accumulated depreciation.

For our subsidiary in Australia we us declining balance method of depreciation
by multiplying annual rates as follows:


            Plant and Machinery                                           20.0%
            Motor Vehicles                                                22.5%
            Fixture and Fittings                                          22.0%

For our subsidiary in Shanghai we use straight line method over the following
estimated useful lives:


            Plant and Machinery                                           10 yrs
            Motor Vehicles                                                5 yrs
            Office equipment                                              5 yrs

(c). Impairment of Long-lived assets

The Company periodically reviews its portfolio of assets for impairment in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
"Accounting for the Impairment or Disposal of Long-lived Assets." Such review
necessitates estimates of current market values; re-lease rents, residual values
and component values. The estimates are based on currently available market data
and are subject to fluctuation from time to time. The Company initiates its
review periodically, whenever events or changes in circumstances indicate that
the carrying amount of a long-lived asset may not be recoverable. Recoverability
of an asset is measured by comparison of its carrying amount to the expected
future undiscounted cash flows (without interest charges) that the asset is
expected to generate. Any impairment to be recognized is measured by the amount
by which the carrying amount of the asset exceeds its fair market value.
Significant management judgment is required in the forecasting of future
operating results which are used in the `reparation of projected undiscounted
cash flows and, should different conditions prevail, material write downs may
occur.


                                      F-9
<PAGE>

(d). Foreign Currency Translation

The reporting currency used in the preparation of these consolidated financial
statements is U.S. dollars. Local currencies are the functional currencies for
the Companies subsidiaries. For the purpose of consolidation: assets and
liabilities of subsidiaries with functional currencies other than U.S. dollars
are translated into U.S. dollars at the applicable rates of exchange in effect
at the balance sheet date; and income and expense items are translated into U.S.
dollars at the average applicable rates during the year, while equity is
accounted for using historical rates.

Translation gains and losses resulting from fluctuations in exchange rates are
recorded as a separate component of other comprehensive income within
stockholders' equity as cumulative translation adjustments. Gains and losses
resulting from foreign currency transactions are included in results of
operations.

(e). Earnings Per Share

Basic earnings per share ("EPS") is calculated using net earnings (the
numerator) divided by the weighted-average number of shares outstanding (the
denominator) during the reporting period. Diluted EPS includes the effect from
potentially dilutive securities. Diluted EPS is equal to basic EPS for all
periods presented, as the Company has no potentially dilutive securities.

(f). Revenue Recognition

The Company's revenue recognition policies are in compliance with Staff
accounting bulletin (SAB) 104. Sales revenue is recognized when the significant
risks and rewards of the ownership of goods have been transferred to the buyers.
No revenue is recognized if there are significant uncertainties regarding the
recovery of the consideration due, the possible return of goods, or when the
amount of revenue and the costs incurred or to be incurred in respect of the
transaction cannot be measured reliably.

(g). Income Taxes

The Company has adopted Financial Accounting Standard No. 109 (SFAS 109) which
requires the recognition of deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statement or tax returns. Under this method, deferred tax liabilities and assets
are determined based on the difference between financial statements and tax
basis of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse.

The Company operates in several countries. As a result, we are subject to
numerous domestic and foreign tax jurisdictions and tax agreements and treaties
among the various taxing authorities. Our operations in these jurisdictions are
taxed on various bases: income before taxes, deemed profits and withholding
taxes based on revenue. The calculation of our tax liabilities involves
consideration of uncertainties in the application and interpretation of complex
tax regulations in a multitude of jurisdictions across our global operations.

We regularly assess our position with regard to individual tax exposures and
record liabilities for our uncertain tax positions and related interest and
penalties according to the principles of FAS 5, ACCOUNTING FOR CONTINGENCIES.
These accruals reflect management's view of the likely outcomes of current and
future audits. The future resolution of these uncertain tax positions may be
different from the amounts currently accrued and therefore could impact future
tax period expense.

The Company has U.S. federal net operating loss carry forwards that if unused
could expire in varying amounts in the years through 2020 to 2026. However, as a
result of the acquisition, the amount of net operating loss carry forward
available to be utilized in reduction of future taxable income was reduced
pursuant to the change in control provisions of Section 382 of the Internal
Revenue Code.

                                      F-10
<PAGE>

A 100% valuation allowance has been established as a reserve against the
deferred tax assets arising from the net operating losses and other net
temporary differences since it cannot, at this time, be considered more likely
than not that their benefit will be realized in the future.

Changes in tax laws, regulations, agreements and treaties, foreign currency
exchange restrictions or our level of operations or profitability in each taxing
jurisdiction could have an impact upon the amount of income taxes that we
provide during any given year.

(h). Allowance for Doubtful Accounts

The Company presents accounts receivable at the net of allowances for doubtful
accounts. The allowances are calculated based on detailed review of certain
individual customer accounts and an estimation of the overall economic
conditions affecting the Company's customer base. The Company reviews a
customer's credit history before extending credit. If the financial condition of
its customers were to deteriorate, resulting in an impairment of their ability
to make payments, additional allowances may be required. No provision for
doubtful accounts has been made in these financial statements, as the accounts
are considered collectible in full.

 (i) Segment Information

The Company adopted Statement of Financial Accounting Standards No. 131,
Disclosures about Segments of an Enterprise and Related Information ("SFAS
131"). SFAS establishes standards for reporting information regarding operating
segments in annual financial statements and requires selected information for
those segments to be presented in interim financial reports issued to
stockholders. SFAS 131 also establishes standards for related disclosures about
products and services and geographic areas. Operating segments are identified as
components of an enterprise about which separate discrete financial information
is available for evaluation by the chief operating decision maker, or decision
making group, in making decisions how to allocate resources and assess
performance.

(j) Comprehensive Income

Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting
Comprehensive Income," establishes standards for reporting and displaying of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements.


(k)  Reclassifications

Certain reclassifications have been made in prior years' financial statements to
conform to classifications used in the current year.

(l) Stock based payments

Effective January 1, 2006, the beginning of SRPL's first fiscal quarter of 2006,
the Company adopted the fair value recognition provisions of SFAS 123R, using
the modified-prospective transition method. Under this transition method,
stock-based compensation expense was recognized in the consolidated financial
statements for granted stock options, since the related purchase discounts
exceeded the amount allowed under SFAS 123R for non-compensatory treatment.
Compensation expense recognized included: the estimated expense for stock
options granted on and subsequent to January 1, 2006, based on the grant date
fair value estimated in accordance with the provisions of SFAS 123R; and the
estimated expense for the portion vesting in the period for options granted
prior to, but not vested as of January 1, 2006, based on the grant date fair
value estimated in accordance with the original provisions of SFAS 123. Results
for prior periods have not been restated, as provided for under the
modified-prospective method.

                                      F-11
<PAGE>

As of December 31, 2007 and December 31, 2006, the Company did not issue or make
provision through the issuance of stock options to employees and directors.

(m) Recent Pronouncements

In September 2006, FASB issued SFAS 157 `Fair Value Measurements'. This
Statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles ("GAAP"), and expands disclosures
about fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is the
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the application of this
Statement will change current practice. This Statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. Management is currently
evaluating the effect of this pronouncement on the financial statements.

In September 2006, FASB issued SFAS 158 `Employers' Accounting for Defined
Benefit Pension and Other Postretirement Plans--an amendment of FASB Statements
No. 87, 88, 106, and 132(R)' This Statement improves financial reporting by
requiring an employer to recognize the over funded or under funded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income of a business entity or changes in unrestricted net assets
of a not-for-profit organization. This Statement also improves financial
reporting by requiring an employer to measure the funded status of a plan as of
the date of its year-end statement of financial position, with limited
exceptions. An employer with publicly traded equity securities is required to
initially recognize the funded status of a defined benefit postretirement plan
and to provide the required disclosures as of the end of the fiscal year ending
after December 15, 2006. An employer without publicly traded equity securities
is required to recognize the funded status of a defined benefit postretirement
plan and to provide the required disclosures as of the end of the fiscal year
ending after June 15, 2007. However, an employer without publicly traded equity
securities is required to disclose the following information in the notes to
financial statements for a fiscal year ending after December 15, 2006, but
before June 16, 2007, unless it has applied the recognition provisions of this
Statement in preparing those financial statements:

     1. A brief description of the provisions of this Statement
     2. The date that adoption is required
     3. The date the employer plans to adopt the recognition provisions of this
        Statement, if earlier.

The requirement to measure plan assets and benefit obligations as of the date of
the employer's fiscal year-end statement of financial position is effective for
fiscal years ending after December 15, 2008. Management is currently evaluating
the effect of this pronouncement on the financial statements.

In February 2007, FASB issued FASB Statement No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. FAS 159 is effective for fiscal
years beginning after November 15, 2007. Early adoption is permitted subject to
specific requirements outlined in the new statement. Therefore, calendar-year
companies may be able to adopt FAS 159 for their first quarter 2007 financial
statements. The new statement allows entities to choose, at specified election
dates, to measure eligible financial assets and liabilities at fair value that
are not otherwise required to be measured at fair value. If a company elects the
fair value option for an eligible item, changes in that item's fair value in
subsequent reporting periods must be recognized in current earnings. FAS 159
also establishes presentation and disclosure requirements designed to draw
comparison between entities that elect different measurement attributes for
similar assets and liabilities. Management is currently evaluating the effect of
this pronouncement on the financial statements.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements". This Statement amends ARB 51 to establish
accounting and reporting standards for the noncontrolling (minority) interest in
a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a
noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. SFAS No. 160 is effective for the Company's fiscal year
beginning October 1, 2009. Management is currently evaluating the effect of this
pronouncement on financial statements.


                                      F-12
<PAGE>

In December 2007, the FASB issued SFAS No. 141(R), "Business Combinations". This
Statement replaces SFAS No. 141, Business Combinations. This Statement retains
the fundamental requirements in Statement 141 that the acquisition method of
accounting (which Statement 141 called the purchase method) be used for all
business combinations and for an acquirer to be identified for each business
combination. This Statement also establishes principles and requirements for how
the acquirer: a) recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree; b) recognizes and measures the goodwill acquired in
the business combination or a gain from a bargain purchase and c) determines
what information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business combination. SFAS No.
141(R) will apply prospectively to business combinations for which the
acquisition date is on or after Company's fiscal year beginning October 1, 2009.
While the Company has not yet evaluated this statement for the impact, if any,
that SFAS No. 141(R) will have on its consolidated financial statements, the
Company will be required to expense costs related to any acquisitions after
September 30, 2009.

In March 19, 2008, FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities. The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity's financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. Currently the Company does not carry any derivative instruments and
the adoption of this statement may not have any effect on the financial
statements.

Note 5.  Concentrations and Commitments

(a). Concentrations

The Company has focused on business in overseas markets, which the Company
believes present opportunities. Business with foreign customers is subject to
risks related to the economy of the country or region in which such customers
are located, which may be weaker than the U.S. economy. On the other hand,
foreign economy may remain strong even though the U.S. economy does not. Foreign
economic downturn may impact foreign customer's ability to make payments.
Furthermore, foreign customers are subject to risks related to currency
conversion fluctuations.

Foreign laws, regulations and judicial procedures may be more or less protective
for the local company's rights than those in the United States. The Company
could experience collection or repossession problems related to the enforcement
of its business agreements under foreign local laws and the remedies in foreign
jurisdictions. The protections potentially offered by Section 1110 of the
Bankruptcy Code do not apply to non-U.S. carriers, and applicable local law may
not offer similar protections.

(b). Commitments

Office space:
The Company leases office space in Australia, Hong Kong and Shanghai. The lease
for Australia expires in October 2011 while leases for Shanghai expires on
various dates between January 2008 to September 2010.. Based upon existing
leases, without renewals, the minimum lease payments up to expiry are as
follows:


           2008             $249,000
                            --------
           2009              201,000
                            --------
           2010              225,000
                            --------
           2011               86,000
                            --------
          Total             $761,000
                            ========

Equipment:
In year 2005, the company purchased a vehicle under capital lease from Toyota
Financial Service. The annual interest rate is 7.99% with payment term of sixty
(60) months. The payment is to be made in 59 equal monthly installments of $326
each and the final installment of $5,545. The balance as of December 31, 2007
amounted to $13,705 with $3,108 as current liability.


                                      F-13
<PAGE>

In year 2006, the company purchased a vehicle by mortgage loan from CBFC Limited
ABN. The annual interest rate is 8.32% with payment term of sixty (60) months.
The payment is to be made in 59 equal monthly installments of $451 each and the
final installment of $8,248. The balance as of December 31, 2007 amounted to
$20,574 with $3,754 as current liability.

In September 2007, the company purchased a vehicle by mortgage loan from CBFC
Limited ABN. The annual interest rate is 8.6% with payment term of forty-eight
(48) months. The payment is to be made in 47 equal monthly installments of $394
each and the final installment of $6,485. The balance as of December 31, 2007
amounted to $24,046 with $3,344 as current liability.

The Company pays approximately $1,171 per month under these leases, the last of
which expires in September 2011.

Total minimum lease payments under the above leases are as follows:

                                                Capital
                                                Leases
                                               --------
2008                                           $ 14,057
2009                                             14,057
2010                                             17,645
2011                                             21,550
                                               --------
                                               $ 67,309
Less: Amount representing interest               (8,984)
Present value of minimum lease payments          58,325
Less: Current portion                           (10,206)
                                               --------
                                               $ 48,119
                                               ========


Note 6. Depreciable Assets

Property, Plant and Equipment

Property, plant and equipment are stated at cost, less accumulated depreciation
and any impairment in value. The carrying values are reviewed for impairment
when events or changes in circumstances indicate the carrying value may not be
recoverable. Impairment losses are recognized in the income statement.

<TABLE>
<CAPTION>
<S>     <C>

                            Plant and Machinery       Vehicles      Office Equipments        Total

Cost                               374,084            282,025             33,901            690,010
Accumulated Depreciation          (116,415)           (22,728)           (10,176)          (149,319)
                                  --------            -------            -------           --------

Net Carrying Value                 257,669            259,297             23,725            540,691
                                  ========            =======            =======           ========
</TABLE>

Included in property and equipment is approximately $67,821 of assets, which are
leased under non-cancelable leases and accounted for as capital leases, which
expire through September 2011. The accumulated depreciation included in the
property and equipment for these leases is approximately $18,180.

Depreciation and amortization expense for the year ended December 31, 2007 and
December 31, 2006 was $80,656 and $41,604, respectively.

                                      F-14
<PAGE>

Note 7.  Related Party Transactions

The shareholders' loan was due from Mr. Jack Chen, CEO and director of the
Company, Mr. Cheng Guangliang, shareholder of the Company, and due to Jimmy Yiu,
directors of the Company, David Chen, former CEO and Shareholder of the Company.
Included in the amount of due to related parties, there were convertible loans
due to Mr. Jack Chen, Mr. Jimmy Yiu and Mr. Chen Guangliang, with 5% annual
interest rate, amounting of $929, $5,021 and $3,013 respectively, being matured
in May 2008. The principals of the loans can be converted into the Company's
common stock at $0.39 per share. Other than those convertible loans, the amount
due to related parties represented

a) loans from Mr. Jack Chen of 15,000, without interest, unsecured and due on
demand, for the Company's normal operation. b) loans from Mr. Chen Guang Liang
of $67,248, without interest, unsecured and due on demand for the Company's
normal operation.

Due to related party includes loan from Mr. Jack Chen of $327,122 without
interest, unsecured and not be payable until such time as the Board of Directors
determine. Guang Cheng International Trading Ltd sold $703,344 worth of goods to
Shenzhen Sanjiang Plastic Factory, owned by the father of the sole director of
Guang Cheng International Trading Ltd during the year ended December 31, 2007.
No accounts receivable outstanding from Shenzhen Sanjiang Plastic Factory as at
December 31, 2007.

Note 8. Segmental Information

Statement of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure
About Segments of an Enterprise and Related Information" requires use of the
"management approach" model for segment reporting. The management approach model
is based on the way a company's management organizes segments within the company
for making operating decisions and assessing performance. Reportable segments
are based on products and services, geography, legal structure, management
structure, or any other manner in which management disaggregates a company.
During the years ended December 31, 2007 and 2006, the Company is organized into
three business segments based on geography areas: (1) Australia, (2) Hong Kong
and (3) Shanghai. The following table presents a summary of operating
information and certain year-end balance sheet information for the years ended
December 31, 2007 and 2006:

                                      F-15
<PAGE>

                                   YEARS ENDED DECEMBER 31
                                     2007           2006
Revenues from various areas:
        Australia                $ 1,467,867    $   650,676
        Hong Kong                  3,501,311      2,796,726
        Shanghai                   1,101,652             --
                                 -----------    -----------
             Consolidated        $ 6,070,830    $ 3,447,402
                                 ===========    ===========

Net income (loss):
        Australia                $   (82,971)   $    (8,838)
        Hong Kong                    (64,666)        26,740
        Shanghai                     226,489
        Un-allocted                 (246,695)       (35,804)
                                 -----------    -----------
             Consolidated        $  (167,843)   $   (17,902)
                                 ===========    ===========

Identifiable assets:
        Australia                $   586,374    $   391,151
        Hong Kong                     14,829        450,776
        Shanghai                     893,538             --
        Un-allocted                   93,196         12,107
                                 -----------    -----------
             Consolidated        $ 1,587,937    $   854,034
                                 ===========    ===========

Depreciation and amortization:
        Australia                $    69,591    $    41,604
        Hong Kong                         --             --
        Shanghai                      11,065             --
                                 -----------    -----------
             Consolidated        $    80,656    $    41,604
                                 ===========    ===========

Capital expenditures:
        Australia                $    73,916    $   189,108
        Hong Kong                         --             --
        Shanghai                      11,065             --
        Un-allocted                       --             --
                                 -----------    -----------
             Consolidated        $    84,981    $   189,108
                                 ===========    ===========


Note 9. Stockholders' Equity

During the nine months period ended September 30, 2007, the Company issued
250,000 shares to consultants recorded at the fair market value of $88,500.

On April 15, 2007, the Company entered into a Share Purchase Agreement to issue
and sell 1,000,000 shares of its common stock in an offshore transaction under
Regulation S to Fengteng Investment Consulting Management (Shanghai) Co.,
Limited at US$0.35 per share for gross proceeds of US$350,000. The shares are
subject to 144 restriction and proceeds will be used for working capital needs.
These shares are recorded as shares to be issued as at December 31, 2007.

Note 10. Income Taxes

The Company is registered in the State of Nevada and has operations in primarily
three tax jurisdictions - the Australia, Hong Kong and the United States. For
certain operations in the United States of America, and Australia, the Company
has incurred net accumulated operating losses for income tax purposes. The
Company believes that it is more likely than not that these net accumulated
operating losses will not be utilized in the future. Therefore, the Company has
provided full valuation allowance for the deferred tax assets arising from the
losses at these locations as of December 31, 2007 and December 31, 2006.
Accordingly, the Company has no net deferred tax assets.

                                      F-16
<PAGE>

The components of income before income taxes are as follows:

                                                  2007         2006

     Income (loss) subject to Australia       $ (81,603)   $  (8,480)
     Income (loss) subject to Hong Kong         (64,666)      61,934
     Income (loss) subject to Shanghai          338,043           --
     Income (loss) subject to United States    (178,748)     (40,704)
     Income before taxes                         13,026    $  12,750

United States of America
As of December 31, 2007, the Company in the United States of America had
approximately $261,000 in net operating loss carry forwards available to offset
future taxable income. Federal net operating losses can generally be carried
forward 20 years. The Tax Reform Act of 1986 limits the use of net operating
loss and tax credit carry forwards in certain situations when changes occur in
the stock ownership of a company. In the event the Company has a change in
ownership, utilization of carry forwards could be restricted. The deferred tax
assets for the United States entity at December 31, 2007 consists mainly of net
operating loss carry forwards and were fully reserved as the management believes
it is more likely than not that these assets will not be realized in the future.

The following table sets forth the significant components of the net deferred
tax assets for operation in the United States of America as of December 31, 2007
and 2006.

                                                  2007         2006

     Net Operating Loss Carry forwards          261,000       54,000
     Total Deferred Tax Assets                  104,000       22,000
     Less: Valuation Allowance                 (104,000)     (22,000)
     Net Deferred Tax Assets                         --           --

Hong Kong
As of December 31, 2007, the Company's Hong Kong subsidiary had net loss.
Pursuant to Hong Kong income tax laws, the Company has not made income tax
provision for the year ended December 31, 2007.

Australia
As of December 31, 2007 the Company's Australian subsidiary had net loss.
Pursuant to Australian income tax laws, the Company has made minimum income tax
provision of $1,368 for the year ended December 31, 2007.

The following table sets forth the significant components of the net deferred
tax assets for operation in the Australia as of December 31, 2007 and 2006.

                                                  2007         2006
     Net Operating Loss Carryforwards           106,000      20,076
     Total Deferred Tax Assets                   32,000       6,022
     Less: Valuation Allowance                  (32,000)     (6,022)
     Net Deferred Tax Assets                        --          --

Shanghai
As of December 31, 2007 the Company's Shanghai subsidiary had net income.
Pursuant to China income tax laws, the Company has made 33% income tax provision
of $111,554 for the year ended December 31, 2007.



                                      F-17
<PAGE>

The following is a reconciliation of the provision for income taxes at the U.S.
federal income tax rate to the income taxes reflected in the Statement of
Operations:

                                                  2007       2006

Tax expense (credit) at statutory rate-federal   (34)%       (34)%
State tax expense (credit) net of federal tax     (6)%        (6)%
Changes in valuation allowance                     40%         40%
Foreign income tax:
Australia                                          30%         30%
Hongkong                                         17.5%       17.5%
Shanghai                                           33%         --
Change in valuation allowance                  (47.5)%       (30)%
                                               ------        ------
Tax expense at actual rate                        33%        17.5%
                                              =======        ======


Note 11. Major Customers and Vendors

San Jiang, Wei Er Sha and Pernod Ricard Trading, our three top customers,
provided 47% of net revenue for the year ended December 31, 2007, respectively.
Total accounts receivable due from these customers was approximately $398,538 as
of December 31, 2007.

The Company extends credit to its customers based upon its assessment of their
credit worthiness and generally does not require collateral. Credit losses have
not been significant.

Team Smart Int'l Ltd, Tricept Trading Limited and Penavico Logistics are our
major vendors. Total accounts payable due to these vendors was $130,286 as of
December 31, 2007.


Note 12. Subsequent Event (Unaudited)

On March 10, 2008 the Company issued 1,448,572 shares. This includes 1,000,000
shares which were recorded as shares to be issued as of December 31, 2008 (See
note 10). The remaining 448,572 shares were erroneously issued and to be
cancelled.



                                      F-18