<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 EXCHANGE
       ACT OF 1934

       For the year period ended    DECEMBER 31, 2006
                                    -----------------

[ ]    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 of           (IRS Employer Identification No.)
   incorporation or organization)

                        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:         Name of Exchange on which registered:
        Common Shares                             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 January 30, 2007 was approximately $2.25 million (based upon a
closing sale price of $0.45 per share, as reported on the OTCBB).

The issuer's revenues for the fiscal year ended December 31, 2006, were $3.4
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; 20,164,996 shares issued and outstanding on
December 31, 2006.

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

<Page>

                         Sancon Resources Recovery, Inc.

                                   FORM 10-KSB

                                FISCAL YEAR 2006

TABLE OF CONTENTS


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


PART II                                                                        5
Item 5.    Market for Common Equity, Related Stockholder Matters, and
              Small Business Issues/purchases of Equity Securities             5
Item 6.    Management's Discussion and Analysis, or Plan of Operation          6
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                                            11
Item 8B.   Other Information                                                  11


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


SIGNATURES                                                                    18




<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 SRPL prior to the merger with
MKAC. A change in name for the combined entity was contemplated at the time of
combination. Subsequent to the combination, effective August 4, 2006, the listed
company, MKA Capital Inc., changed its name to Sancon Resources Recovery, Inc
(hereinafter referred to as "Sancon").

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>         <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
</TABLE>

                                       3



<Page>

OUR STRATEGY

The Chinese demand for secondary plastics and recycled plastics already runs
into 8 million tons per year according to China's State Environmental Protection
Agency. Our near-term growth strategy is to first strengthen our relationships
with our existing major suppliers in Japan and the USA to offer large selection
of plastic raw materials; secondly, 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.

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 have identified several key points which will give Sancon the
competitive edge in the market place:
1)    Sancon offers large selection of plastic raw materials to our customers.
2)    With our operations in Melbourne Australia and new processing facility
      opened up in Sydney, Sancon will sell direct to our partners and customs
      in China to protect our company's profit margin.
3)    Hong Kong trading operation will source recycled materials globally for 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 major
      milestones are achieved.

                                       4



<Page>

INTELLECTUAL PROPERTY

None.

EMPLOYEES

At December 31, 2006, the Company had 20 employees in total (excluding
consultants), in collection, processing, sales, logistic, finance and
administration. There are 10 employees in Australia and 10 employees located in
China and Hong Kong. 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.

ITEM 2   DESCRIPTION OF PROPERTY

The Company leases office space in Hong Kong and Australia. The lease for
Australia expires 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 $132000.00 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. However, we may need to
lease other facilities for our future operation purpose

ITEM 3   LEGAL PROCEEDINGS

There is no legal proceeding against us or our directors during fiscal year
2006.

ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during fiscal year 2006.

                                  -- 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 2006                     FISCAL 2005
         ----------------------------------------------------------------------------------
         QUARTER                 $ HIGH      $ LOW CLOSING      $ HIGH      $ LOW CLOSING
                              CLOSING PRICE       PRICE      CLOSING PRICE       PRICE
         ----------------------------------------------------------------------------------
<S>                                <C>            <C>              <C>           <C>
         ----------------------------------------------------------------------------------
         First                      2              0.5             4              2
         ----------------------------------------------------------------------------------
         Second                    1.3             0.4             3             1.25
         ----------------------------------------------------------------------------------
         Third                     0.58           0.12             2             1.25
         ----------------------------------------------------------------------------------
         Fourth                    0.25            0.1             2             0.05
         ----------------------------------------------------------------------------------
</TABLE>

                                       5



<Page>

HOLDERS OF THE COMPANY'S STOCK

The Company has issued common stock only. On December 31, 2006, the total number
of holders of record was approximately 524.

DIVIDENDS

We did not pay any cash dividends on our common stock for fiscal year ended on
December 31, 2006.

UNREGISTERED SALES OF EQUITY SECURITIES

<TABLE>
<CAPTION>
<S>                                                                           <C>
    date          type         amount                 person                  consideration           transaction

  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
</TABLE>

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.

                                       6



<Page>

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.

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
collectibility is reasonably assured. Payments received before all of the
relevant criteria for revenue recognition are satisfied are recorded as advances
from customers.

                                       7



<Page>

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.

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 forwards. 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.

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.

                                       8



<Page>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The Company effected a business combination between the registrant (formerly
named MKA Capital, Inc.) and Sancon Recycling Pty, Ltd., effective May 30, 2006.
Further disclosure of this combination is presented in the notes to the
financial statements filed under Item 7 herein.

We changed our fiscal year from June 30 to December 31. As a result, audited
financial statements for the six months transition period ended 31 December 2005
were filed under Item 7 herein. However, for comparison purpose, we provided
un-audited financial statements for the year ended December 31, 2005 as the
comparative figures as follows:

<TABLE>
<CAPTION>
                                   SANCON RESOURCES RECOVERY, INC.

                                   CONSOLIDATED STATEMENT OF INCOME


                                            IN US DOLLARS

                                                                   YEAR ENDED DECEMBER 31,
                                                                 2006                   2005
                                                               AUDITED                UNAUDITED
<S>                                                      <C>                                <C>
SALES                                                    $         3,447,402                875,400
   Cost of sales                                                   2,929,141                636,002
                                                        ---------------------  ---------------------
   Net gross profit/(loss)                                           518,261                239,398

Operating Expenses
   Depreciation                                                       41,604                 11,183
   Selling, General and Administrative                               514,872                271,652
                                                        ---------------------  ---------------------

OPERATING LOSS                                                       (38,215)               (43,437)

Other Income (Expense)
   Other income(expenses)                                             47,827                      0
   Interest income                                                     3,138                    885
                                                        ---------------------  ---------------------
                                                                      50,965                    885
                                                        ---------------------  ---------------------

Gain/(loss) before discontinued operation                             12,750                (42,552)

Discontinued Operation
      Gain on Disposal of Subsidiary                                  18,827

                                                        ---------------------  ---------------------
NET GAIN/(LOSS) BEFORE MINORITY INTEREST AND                          31,577                (42,552)
TAXES

   Income tax expense                                                 13,675                      -

                                                        ---------------------  ---------------------
NET OPERATING GAIN/(LOSS)                                             17,902                (42,552)
                                                        =====================  =====================
</TABLE>

RESULTS OF OPERATIONS FOR THE YEAR ENDED 31 DECEMBER, 2006

Revenue

Revenues for the year ended December 31, 2006 were $3,447,402 as compared to
$875,400 of 2005, an increase of $2,572,002 or 294%. The sharp increases were
mainly due to the significant sales amount contributed from DFSL and Guangcheng.
During the 12 months ended December 31, 2006, the Company set up its
wholly-owned subsidiary Guangcheng in Hong Kong and restructured DFSL's
business. The both companies are engaged in recycling material trading business.

                                                  9



<Page>

Cost of revenue

Cost of revenue for the year ended December 31, 2006 increased to $2,929,141
from $636,002 for the year ended December 31, 2005, an increase of $2,293,139 or
361%. 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, 2006 is $518,261, representing
116% increase compared to $239,398 for 2005. While the gross margin dropped from
27.6% in 2005 to 15.0% in 2006. The drop of the gross margin is mainly due to
that the margin from trading business new launched in 2006 is much lower than
that of processing business operated in Australia.

Selling, general and administrative expenses

Selling, general and administrative expenses increased to $514,872 for the year
ended December 31, 2006, from $271,652 in 2005, an increase of $243,220 or 90%.
The significant increase of Selling, general and administrative expenses are
mainly resulted from the increment of Selling, general and administrative
expenses in DFSL and Guangcheng due to their newly started business during 2006
and the expenses related to US listing costs.

Depreciation Expense

Depreciation expense increased to $41,604 in 2006 from $11,183 in 2005. The
expenses increased $30,421 or 272% during the year ended on December 31, 2006 as
compared to that in 2005. The increases were due to the purchase of plant and
machinery in Q2, 2006 to expand its processing capacity.

Net loss/income

Net income in 2006 was $17,902, compared to a net loss of $42,552 in 2005. The
increase is mainly contributed to the significant net income from DFSL and
Guangcheng in year 2006.

LIQUIDITY AND CAPITAL RESOURCES

As shown in the accompanying financial statements, the Company still suffered
accumulated loss of $116,715 as of December 31, 2006. In addition, our working
capital is negative $288,087.

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,
2006 amounted to $29,232 compared to net cash used by $1,273 in the six months
transition period ended December 31, 2005. The net cash inflow from operating
activities was mainly due to net operating gain of $17,902, depreciation and
amortization of $ 41,604, shares issued in lieu of compensation $27,500 and
decrease of trade payable, tax payable and other current liabilities of $411,633
by netting of the gain on disposal $18,827, increase of trade receivables
$380,931 and other current assets $69,649.

Investing Activities

Net cash used in investing activities amounted to $185,446 in the year ended on
December 31, 2006 compared to $71,573 during the six months transition period
ended December 31, 2005. The net cash outflow primarily consisted of the cash
outflow resulting from the purchase of property and equipment of $189,108 and
cash decreased due to disposal of subsidiary of $67,807, and netting of the cash
inflow due to acquire of MKAC of $71,469.

                                       10



<Page>

Financing Activities

Net cash obtained by financing activities amounted to $148,768 in the year ended
on December 31, 2006 compared to $113,037 during the six months transition
period ended December 31, 2005. The net cash inflow was due to the increase of
shareholders' loan to the company of $127,063, and return of mortgage loan of
$21,705.

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."

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 effective such that the
material information required to be included in our Securities and Exchange
Commission ("SEC") reports is recorded, processed, summarized and reported
within the time periods specified in SEC rules and forms relating to us,
including our consolidating subsidiaries, and was made known to them by others
within those entities, particularly during the period when this report was being
prepared.

As of December 31, 2006, there were no changes in our internal accounting
controls or in other factors that materially affected our internal controls over
financial reporting.

ITEM 8B  OTHER INFORMATION

None

                                       11



<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                  37     CEO, Director                        November 29, 2002
Jimmy Yiu                  48     Executive Director, Director            June 1, 2006
Chen Guangliang            39     VP, China Operation                     June 1, 2006
David Chen                 39     Non Executive Chairman                  June 1, 2006
Cong Yuanli                56     Director                                June 1, 2006
Helen Bouzas                      Director (resigned)              Resigned on April 1, 2007
Klaus Shen                 33     CFO                                    April 10, 2007
Richard Yan                32     CFO (resigned)                   Resigned on 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, EXECUTIVE DIRECTOR

Mr. Yiu is currently the executive 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's China operation. He was
the General Manager of Shenzhen Sanjiang Plastic Factory Co, Zhejiang Sanjiang
Resources Co. both are medium sized plastic material recycling, processing and
trading company based in Guangdong province of China from 1996 to 2005. He
previously served as manager of trading of Zhejiang Walsar Group from 1990 to
1995. Mr. Chen has more than 17 years experiences in the resources recycling
business which contributes to his deep knowledge and understanding in the
industry.

KLAUS SHEN, CHIEF FINANCIAL OFFICER

Mr. Shen joined Sancon as Vice President of Finance in February 2007, and served
as CFO of Sancon since April 2007. Prior to that, he set up a consulting
business 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 in various accounting and auditing
roles. He holds MBA degree 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.

                                       12



<Page>

RICHARD YAN, CHIEF FINANCIAL OFFICER (RESIGNED)

Mr. Yan served in several positions at MKA Capital, Inc. (formally Financial
Telecom Limited (USA) Inc.) since its inception in 2004 as Vice President and
Financial Controller. He previously served as the Financial Controller and
acting Chief Financial Officer of Hartcourt Companies Inc since 2002 (OTCBB:
HRCT), a consolidator of IT distribution company. Mr. Yan also worked at KPMG
China for years and accumulated extensive experience in the areas of auditing,
taxation & financial and management advisory services. He is a Certified Public
Accountant (China), and holds Bachelor of Economics and MBA degrees from
Shanghai JiaoTong University. He resigned from his position on April 10, 2007
due to his personal reasons.

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 to 2006. He
was the former CEO of Hartcourt Companies Inc from 2002 to 2004 (OTCBB: HRCT), a
consolidator of IT distribution companies, Previously, Mr. Chen severed in
numerous management position including CEO of V2 Technology, a leading
videoconferencing technology company, 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.

MS. HELEN BOUZAS, INDEPENDENT DIRECTOR

Ms. Bouzas possess over 15 years of experience and knowledge in the field of
environmental science, waste management and occupational hygiene. She is a NATA
Assessor of Chemicals (National Association of Testing Authority), and is one of
the most respected consultants in Australia's Environmental, Waste Management
and Occupational Hygiene services industry. Currently serving as the Managing
Director of a successful Australia based company focusing on the various areas
of Environmental, Waste Management and Occupational Hygiene, Ms. Bouzas is a
committee member in key industry and government groups. Ms. Bouzas holds a
Bachelor of Science in Environmental Science and Biochemistry degree from
Victoria University of Technology, Australia. She resigned from Independent
Director on April 1, 2007.

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.

                                       13



<Page>

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 not compensated for the year ended December 31, 2006, 2005 and 2004.
However, Our CEO will be entitled to receive stock compensation for services
rendered to be approved by the board. Our other officers were compensated under
$100,000 for the year ended December 31, 2006, 2005 and 2004.

DIRECTORS' COMPENSATION

Our Directors has not been compensated as of December 31, 2006.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

Equity compensation plan information as of December 31, 2006

<TABLE>
<CAPTION>
<S>                                                     <C>                    <C>                    <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) )
                                                                                                     (c)

                                                       (a)
                                                                              (b)
--------------------------------------------- ----------------------- --------------------- ----------------------
Equity compensation plans approved
by security holders:                                    -                      -                      -
--------------------------------------------- ----------------------- --------------------- ----------------------
Equity compensation plans not approved
by security holders:                                    -                      -                      -
--------------------------------------------- ----------------------- --------------------- ----------------------
Total                                                   -                      -                      -
--------------------------------------------- ----------------------- --------------------- ----------------------
</TABLE>

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

Security ownership of certain beneficial owners

The following persons are known to be the beneficial owners of more than 5% of
the Company's voting securities, as of December 31, 2006:

                                       14



<Page>
<TABLE>
<CAPTION>
TITLE OF CLASS                    NAME AND ADDRESS OF BENEFICIAL OWNER        NUMBER OF SHARES      PERCENT OF
                                                                                                     CLASS(1)
<S>                               <C>                                            <C>                  <C>
Common Stock                      Mr. Jack Chen
                                  36 Graham St, Surrey Hills,                    4,700,000            23.31%
                                  VIC 3127, Australia

Common Stock                      Mr. Yiu Lo Chung
                                  Unit 1406A, Nanyang Plaza,
                                  No. 57, Hung To Road, Kwun                     4,000,000            19.84%
                                  Tong, Kowloon, Hong Kong

Common Stock                      Mr. Chen Guanliang
                                  2-1, Floor 21, No. 4,
                                  Dahuanjiayuan, Huangyan                        4,000,000            19.84%
                                  District, Taizhou, Zhejiang,
                                  China
</TABLE>

Notes:

(1) Based on 20,164,996 issued and outstanding voting common stock as of
December 31, 2006

SECURITY OWNERSHIP OF MANAGEMENT

The following persons are known to be the beneficial owners of the Company's
voting securities, as of December 31, 2006:

<TABLE>
<CAPTION>

TITLE OF CLASS                    NAME AND ADDRESS OF BENEFICIAL OWNER        NUMBER OF SHARES      PERCENT OF
                                                                                                     CLASS(1)
<S>                               <C>                                            <C>                  <C>
Common Stock                      Mr. Jack Chen
                                  36 Graham St, Surrey Hills,                    4,700,000            23.31%
                                  VIC 3127, Australia

Common Stock                      Mr. Chen Guanliang
                                  2-1, Floor 21, No. 4,
                                  Dahuanjiayuan, Huangyan                        4,000,000            19.84%
                                  District, Taizhou, Zhejiang, China

Common Stock                      Mr. Yiu Lo Chung
                                  Unit 1406A, Nanyang Plaza,
                                  No. 57, Hung To Road, Kwun                     4,000,000            19.84%
                                  Tong, Kowloon, Hong Kong

Common Stock                      Mr. David Chen                                    18,247             0.02%
</TABLE>

Notes:

(1) Based on 20,164,996 issued and outstanding voting common stock as of
December 31, 2006.

ITEM 12  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There is no any transaction as of December 31, 2006.

                                       15



<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
Number    Note   Description 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.

                                       16



<Page>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

During the fiscal year ended December 31, 2006, our principal independent
accountant was Kabani & Company, Inc, the services of which were provided in the
following categories and amount:

AUDIT FEES

We changed our independent accountant to Kabani & Company, Inc. on November 27,
2006. Our fiscal year ended June 30 during the year 2004 and 2005 prior to the
engagement of Kabani, the aggregate fees billed by PKF for professional services
rendered for our annual financial statement for two fiscal years ended June 30
of 2004 and 2005 were approximately $36,688. The aggregate fees billed by Kabani
& Company, Inc for professional services rendered for the audit of our annual
financial statements for the 6 months of fiscal year 2005 and fiscal year 2006
were approximately $65,000 and for services performed in connection with the
Company's registration statement on Form 10-QKB filed in September 2006 were
approximately $ 40,000.

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 2006 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, 2006 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, 2006.

                                       17



<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 16, 2007
                                                               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 16, 2007
                                                              By: /s/ David Chen
                                                        ------------------------
                                                                      David Chen
                                                                        Chairman

Date:  April 16, 2007
                                                              By:  /s/ Jimmy Yiu
                                                        ------------------------
                                                                       Jimmy Yiu
                                                                        Director

Date:  April 16, 2007
                                                            By:  /s/ Cong Yuanli
                                                        ------------------------
                                                                      Cong Yuanl
                                                            Independent Director

Date:  April 16, 2007
                                                              By:  /s/ Jack Chen
                                                        ------------------------
                                                                      Jack. Chen
                                                                        Director

                                       18




<Page>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS

                        INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

-------------------------------------------------------------------------------- -------
<S>                                                                                <C>
Report of Independent Registered Public Accounting Firm                            F-2
-------------------------------------------------------------------------------- -------

-------------------------------------------------------------------------------- -------
Consolidated Balance Sheet as of December 31, 2006                                 F-3
-------------------------------------------------------------------------------- -------

-------------------------------------------------------------------------------- -------
Consolidated Statements of Operation for the year ended December 31, 2006
and transitional six month period ended December 31, 2005                          F-4
-------------------------------------------------------------------------------- -------

-------------------------------------------------------------------------------- -------
Consolidated Statements of Stockholders' Deficit for the years ended
December 31, 2006 and transitional six month period ended December 31, 2005        F-5
-------------------------------------------------------------------------------- -------

-------------------------------------------------------------------------------- -------
Consolidated Statements of Cash Flows for the years ended December 31, 2006
and transitional six month period ended December 31, 2005                          F-6
-------------------------------------------------------------------------------- -------

-------------------------------------------------------------------------------- -------
Notes to the Consolidated Financial Statements for the years ended
December 31, 2006 and transitional six month period ended December 31, 2005        F-7
-------------------------------------------------------------------------------- -------

                                           F-1
</TABLE>




<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, 2006 and
the related consolidated statements of operations, consolidated statements of
stockholders' deficit and consolidated statements of cash flows for the year
ended December 31, 2006 and for the transitional six month period ended December
31, 2005. 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 statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sancon Resources Recovery, Inc
as of December 31, 2006 and the results of its operations and its cash flows for
year ended December 31, 2006 and for the transitional six month period ended
December 31, 2005, 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 $116,715 as of December 31,
2006 and working capital deficiency of $288,087. 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
April 7, 2007

                                      F-2



<Page>
<TABLE>
<CAPTION>
                                    SANCON RESOURCES RECOVERY, INC.
                                       CONSOLIDATED BALANCE SHEET
                                        AS OF DECEMBER 31, 2006

                                                 ASSETS
<S>                                                                                  <C>
   Current assets
      Cash and cash equivalents                                                      $         63,600
      Trade receivables                                                                       445,181
      Advance to suppliers                                                                     48,892
      Other current assets                                                                     26,186
                                                                                    ------------------
         TOTAL CURRENT ASSETS                                                                 583,859

   Property, plant & equipment, net                                                           270,175
                                                                                    ------------------
      TOTAL ASSETS                                                                   $        854,034
                                                                                    ==================

                                 LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES
   Current liabilities
      Trade payables                                                                 $        321,851
      Mortgage Loans - Current                                                                  5,674
      Due to related parties                                                                  467,119
      Accrued expenses and other payables                                                      60,652
      Advances                                                                                 16,650
                                                                                    ------------------
         TOTAL CURRENT LIABILITY                                                              871,946

   Long term liability
      Due to related parties                                                                   18,034
      Mortgage loans                                                                           34,602
                                                                                    ------------------
      TOTAL LIABILITY                                                                         924,582
                                                                                    ------------------

   Commitment                                                                                       -

STOCKHOLDERS' DEFICIT
   Share Capital
      Authorized: 500,000,000 common shares, par value $0.001 per share
      Issued and Outstanding: 20,164,996 shares                                                20,165
   Additional paid-in capital                                                                  27,249
   Other comprehensive loss                                                                   (1,247)
   Accumulated deficit                                                                      (116,715)
                                                                                    ------------------
      TOTAL STOCKHOLDERS' DEFICIT                                                            (70,548)
                                                                                    ------------------
      TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT                                      $        854,034
                                                                                    ==================

                  The accompanying notes is an integral of these financial statements.

                                                  F-3



<Page>

                                          SANCON RESOURCES RECOVERY, INC.
                                         CONSOLIDATED STATEMENTS OF INCOME


                                                                    FOR THE YEAR ENDED     FOR THE TRANSITION SIX
                                                                                             MONTH PERIOD ENDED
                                                                    DECEMBER 31, 2006        DECEMBER 31, 2005
                                                                ------------------------  ------------------------

Net Sales                                                        $            3,447,402    $              403,412
   Cost of sales                                                              2,929,141                   208,788
                                                                ------------------------  ------------------------
   Gross profit (loss)                                                          518,261                   194,624

Operating Expenses
   Depreciation                                                                  41,604                     8,553
   Selling, General and Administrative                                          514,872                   197,756
                                                                ------------------------  ------------------------
   Total Operating expenses                                                     556,476                   206,309
                                                                ------------------------  ------------------------

   Operating Loss                                                               (38,215)                  (11,685)

Other Income (Expense)
   Other income (expenses)                                                       47,827                         -
   Interest income                                                                3,138                       279
                                                                ------------------------  ------------------------
   Total other income                                                            50,965                       279
                                                                ------------------------  ------------------------

Income/(loss) from continued operations before income taxes                      12,750                   (11,406)

Discontinued Operation
      Gain on Disposal of Subsidiary                                             18,827                         -

                                                                ------------------------  ------------------------
Income/(loss) before income taxes                                                31,577                   (11,406)

   Income taxes                                                                  13,675                         -

                                                                ------------------------  ------------------------
Net income (loss)                                                $               17,902    $              (11,406)
                                                                ========================  ========================

Other comprehensive income/(loss)                                                (1,434)                      187

                                                                ------------------------  ------------------------
Comprehensive income/(loss)                                      $               16,468    $              (11,219)
                                                                ========================  ========================

Earnings per share
   Basic and diluted earnings/(loss) per share                   $                 0.00    $                (0.00)
                                                                ========================  ========================
   Basic & diluted weighted average shares outstanding                       17,890,350                14,897,215
                                                                ========================  ========================

                        The accompanying notes is an integral of these financial statements.

                                                        F-4



<Page>

                                                   SANCON RESOURCES RECOVERY, INC.
                                          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                                     FOR THE YEAR ENDED DECEMBER 31, 2006 AND FOR THE TRANSITION
                                              SIX MONTH PERIOD ENDED DECEMBER 31, 2005


                                                                  ADDITIONAL         OTHER
                                                    COMMON         PAID IN        COMPREHENSIVE      ACCUMULATED
                                      SHARES         STOCK         CAPITAL           INCOME            DEFICIT           TOTAL
                                   ------------- ------------- --------------- ------------------- ---------------- ----------------
BALANCE JUNE 30, 2005                14,897,215   $    14,897   $           -   $               -   $      (17,150)  $       (2,253)

Foreign Currency Translation                  -             -               -                 187                -              187
Net loss                                      -             -               -                   -          (11,406)         (11,406)

                                   ------------- ------------- --------------- ------------------- ---------------- ----------------
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   $          (1,247)  $     (116,715)  $      (70,548)
                                   ============= ============= =============== =================== ================ ================


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


                                                                 F-5



<Page>

                                         SANCON RESOURCES RECOVERY, INC.
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                            FOR THE TRANSITION
                                                                                            SIX MONTH PERIOD
                                                                      FOR THE YEAR ENDED    ENDED

                                                                      DECEMBER 31, 2006      DECEMBER 31, 2005
                                                                    ---------------------  ---------------------

CASH FLOWS FROM OPERATING ACTIVITIES
      Net Income (Loss)                                              $            17,902    $           (11,406)
      Adjustments to reconcile net income (loss) to net
      cash flows provided by (used in) operating activities:
           Depreciation and amortization                                          41,604                  8,553
           Gain on disposal of investment / subsidiary                           (18,827)                     -
           Shares issued in lieu of compensation                                  27,500                      -
           Changes in current assets and liabilities:
                Increase in trade receivables                                   (380,931)               (37,100)
                Decrease in inventory                                                  -                  4,946
                Decrease (increase) in other current assets                      (69,649)               (14,608)
                Increase in tax payable                                           13,137                      -
                Increase  in trade payable                                       217,819                 18,557
                Increase in other current liabilities                            180,677                 29,785
                                                                    ---------------------  ---------------------
           Net cash flows provided by (used in) operating
           activities                                                             29,232                 (1,273)
                                                                    ---------------------  ---------------------

CASH FLOWS FROM INVESTING ACTIVITIES
      Purchase of property and equipment                                        (189,108)               (71,573)
      Cash acquired due to acquisitions                                           71,469                      -
      Cash decreased due to disposal of subs                                     (67,807)                     -
                                                                    ---------------------  ---------------------
           Net cash flows used in investing activities                          (185,446)               (71,573)
                                                                    ---------------------  ---------------------

CASH FLOWS FROM FINANCING ACTIVITIES
      Shareholders' loan                                                         127,063                 96,335
      Proceeds from mortgage loan                                                 21,705                 16,702
                                                                    ---------------------  ---------------------
           Net cash flows provided by investing activities                       148,768                113,037
                                                                    ---------------------  ---------------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                            3,463                 (2,204)
                                                                    ---------------------  ---------------------

NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENT                                 (3,983)                37,987

      Cash & Cash Equivalent at start of period                                   67,583                 29,596
                                                                    ---------------------  ---------------------
      Cash & Cash Equivalent at end of period                        $            63,600    $            67,583
                                                                    =====================  =====================

Supplemental information for Cash Expenses
      Cash paid for Interest Expenses                                $             3,695    $               921
                                                                    =====================  =====================
      Cash paid for Income Taxes                                     $               952    $               238
                                                                    =====================  =====================

Non-cash investing & financing activities:
      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 is an integral of these financial statements.

                                                       F-6
</TABLE>



<Page>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31,
2006 AND TRANSITIONAL SIX MONTH PERIOD ENDED DECEMBER 31, 2005

NOTE 1  NATURE OF OPERATIONS

Sancon Resources Recovery, Inc. ("Sancon", or "the Company", or "we", or "us")
is registered in the state of Nevada in April 2003. Sancon is an industrial
recycling company with operations based in Melbourne Australia and Hong Kong
(SAR) China. Sancon aims to provide solutions to today's soaring raw material
cost for manufactures and assists in solving environmental problems.

<TABLE>
<CAPTION>
                     The Sancon group comprises of the following companies:

Registered Name                                                     Domicile       % Ownership
(business is conducted under the registered names)
<S>                                                                 <C>                <C>
Digital Financial Service Limited ("DFSL" hereinafter)              Hong Kong          100
Sancon Recycling Pty Ltd ("SRPL" hereinafter)                       Australia          100
Guang Cheng Int'l Trading Ltd. ("Guang Cheng" hereinafter)          Hong Kong          100
</TABLE>

NOTE 2   BASIS OF PRESENTATION

(a)   Principles of Consolidation

The accompanying consolidated financial statements include all of the accounts
of the Company and all of the subsidiaries under its control as of and for the
year ended December 31, 2006 while the historical results for the six month
transition period ended December 31, 2005 only include Sancon Recycling Pty Ltd.
All material inter-company balances and transactions have been eliminated in
consolidation.

(b)   Going Concern

As shown in the accompanying consolidated financial statements, the Company
incurred accumulated losses of $116,715 as of December 31, 2006 and working
capital deficiency of $288,087. 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 COMBINATION AND CORPORATE RESTRUCTURE

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 exchanged 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 held 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.

The exchange of shares with SRPL has been accounted for as a reverse acquisition
under the purchase method of accounting since the stockholders of the SRPL
obtained control of the consolidated entity. Accordingly, the acquisition has
been recorded as a recapitalization of SRPL, with SRPL being treated as the
continuing entity. The historical financial statements presented are those of
SRPL for the year ended December 31, 2006 and for the six month transition
period ended December 31, 2005 and of the Company from the acquisition date
through December 31, 2006. The continuing company has retained December 31 as
its fiscal year end.

                                      F-7



<Page>

Effective with the Agreement, the former shareholders of Sancon Resources
Recovery, Inc. own 14,897,215 shares of the company's voting common stock or
73.87% of the Registrant's 20,164,996 issued and outstanding voting common
stock.

A change in name for the combined entity was contemplated at the time of
combination. Subsequent to the combination, effective August 4, 2006, the listed
company, MKA Capital Inc., changed its name to Sancon Resources Recovery, Inc.

A summarized financial position for the legal acquirer, Sancon, at the
acquisition date, is provided below.

                     Summary Statement of Financial Position
                                 At May 31, 2006

         Cash                                             $      71,469
         Other current assets                                    13,593
         Depreciable tangible assets                                  -
         Current liabilities                                   (186,106)
                                                          --------------
         Net Assets acquired                              $    (101,044)
                                                          ==============

The accompanying financial statements present on a consolidated basis the
accounts of the Company and its wholly owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated in consolidation.

NOTE 4.  RECENT PRONOUNCEMENTS REGARDING ACCOUNTING STANDARDS

In February 2006, FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments". SFAS No. 155 amends SFAS No 133, "Accounting for
Derivative Instruments and Hedging Activities", and SFAF No. 140, "Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities". SFAS No. 155, permits fair value remeasurement for any hybrid
financial instrument that contains an embedded derivative that otherwise would
require bifurcation, clarifies which interest-only strips and principal-only
strips are not subject to the requirements of SFAS No. 133, establishes a
requirement to evaluate interest in securitized financial assets to identify
interests that are freestanding derivatives or that are hybrid financial
instruments that contain an embedded derivative requiring bifurcation, clarifies
that concentrations of credit risk in the form of subordination are not embedded
derivatives, and amends SFAS No. 140 to eliminate the prohibition on the
qualifying special-purpose entity from holding a derivative financial instrument
that pertains to a beneficial interest other than another derivative financial
instrument. This statement is effective for all financial instruments acquired
or issued after the beginning of the Company's first fiscal year that begins
after September 15, 2006. Management is currently evaluating the effect of this
pronouncement on financial statements.

In March 2006, FASB issued SFAS 156 "Accounting for Servicing of Financial
Assets" this Statement amends FASB Statement No. 140, ACCOUNTING FOR TRANSFERS
AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS OF LIABILITIES, with
respect to the accounting for separately recognized servicing assets and
servicing liabilities.

This Statement:

1. Requires an entity to recognize a servicing asset or servicing liability each
time it undertakes an obligation to service a financial asset by entering into a
servicing contract.

2. Requires all separately recognized servicing assets and servicing liabilities
to be initially measured at fair value, if practicable.

3. Permits an entity to choose "Amortization method" or "Fair value measurement
method" for each class of separately recognized servicing assets and servicing
liabilities.

                                      F-8



<Page>

4. At its initial adoption, permits a one-time reclassification of
available-for-sale securities to trading securities by entities with recognized
servicing rights, without calling into question the treatment of other
available-for-sale securities under Statement 115, provided that the
available-for-sale securities are identified in some manner as offsetting the
entity's exposure to changes in fair value of servicing assets or servicing
liabilities that a servicer elects to subsequently measure at fair value.

5. Requires separate presentation of servicing assets and servicing liabilities
subsequently measured at fair value in the statement of financial position and
additional disclosures for all separately recognized servicing assets and
servicing liabilities.

This Statement is effective as of the beginning of the Company's first fiscal
year that begins after September 15, 2006. Management believes that this
statement will not have a significant impact on the financial statements.

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 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 overfunded or underfunded 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:

      a.    A brief description of the provisions of this Statement
      b.    The date that adoption is required
      c.    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. The management is currently
evaluating the effect of this pronouncement on 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. The management is currently evaluating the
effect of this pronouncement on financial statements.

                                      F-9



<Page>

In July 2006, the FASB released FASB Interpretation No. 48, Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (FIN
48). FIN 48 clarifies the accounting and reporting for uncertainties in income
tax law. This interpretation prescribes a comprehensive model for the financial
statement recognition, measurement, presentation and disclosure of uncertain tax
positions taken or expected to be taken in income tax returns. This statement is
effective for fiscal years beginning after December 15, 2006. We are currently
in the process of evaluating the expected effect of FIN 48 on our results of
operations and financial position.

NOTE 5   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.
These assets are depreciated under declining-balance method down to nil residual
values by multiplying annual rates as follows:

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

(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 preparation of projected undiscounted
cash flows and, should different conditions prevail, material write downs may
occur.

(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.

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.

                                      F-10



<Page>

(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.

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.

                                      F-11



<Page>

(i)   Long-term Investments

Long-term investments in equities are recorded at cost, using the cost method of
accounting for investments in equities.

(j)   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.

(k)   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.

(l)   Reclassifications

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

(m)   Stock based payments

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 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-12



<Page>

As of December 31, 2005 and December 31, 2006, the Company did not issue or make
provision through the issuance of stock options to employees and directors.

Note 6.  Concentrations and Commitments

(a)   Concentrations

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

Foreign laws, regulations and judicial procedures may be more or less protective
of lessor rights than those which apply 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 Hong Kong and Australia. The lease for
Australia expires in 2008, and Hong Kong in 2007. Based upon existing leases,
without renewals, the minimum lease payments up to expiry are as follows:


                  2007                           $   104,060
                  2008                           $   104,060
                                                 -----------
                  Total                          $   208,120
                                                 ===========

The Company recorded rent expenses of $74,507 for the year ended December 31,
2006 and $27,775 for the transitional period ended December 31, 2005.

EQUIPMENT
In year 2005, the company purchased a vehicle by mortgage loan from Toyota
Financial Service. The totally amount of the loan is $18,655 with payment term
of sixty (60) months. The annual interest rate is 7.99%. The payment is to be
made in 60 equal monthly installments of $278 each and the final installment of
$5,000. The balance as on December 31, 2006 amounted to $15,161, with $2,565 as
current liability.

In year 2006, the company purchased a vehicle by mortgage loan from CBFC Limited
ABN. The totally amount of the loan is $26,045 with payment term of sixty (60)
months. The annual interest rate is 8.32%. The payment is to be made in 60 equal
monthly installments of $404 each and the final installment of $7,443. The
balance as on December 31, 2006 amounted to $25,115, with $3,109 as current
liability.

Note 7.  Depreciable Assets

(a)   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.

                                      F-13



<Page>

<TABLE>
<CAPTION>
                      Fixtures and    Plant and     Vehicles     Others     Total
                      Fittings        Machinery
<S>                   <C>             <C>            <C>         <C>        <C>
Cost                  16,889          288,312        23,293      9,354      337,848
Accumulated
Depreciation          (6,341)         (52,964)      (8,226)      (142)      (67,673)
                    -----------------------------------------------------------------
Net Carrying Value    10,548          235,348       15,067       9,212      270,175
                    =================================================================
</TABLE>

      Included in property and equipment is approximately $44,700 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
$10,439.

      Depreciation and amortization expense for the year ended December 31, 2006
and for the transitional period ended December 31, 2005 was $41,604 and $8,553,
respectively.

Note 8.  Related party transactions

The shareholders' loan was due to Mr. Jack Chen, CEO and director of the
Company, Mr. Cheng Guangliang, shareholder of the Company and Jimmy Yiu,
directors 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 $10,000, $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 of due to related parties represented a)
loans from Mr. Jack Chen of 287,605, without interest, unsecured and due on
demand, for the Company's normal operation. b) loans from Mr. Chen Guang Liang
of $160,871, without interest, unsecured and due on demand for the Company's
normal operation.

Included in accounts receivable $215,540 to be received from Shenzhen Sanjiang
Plastic Factory owned by the father of the sole director of Guang Cheng
International Trading Ltd. Guang Cheng International Trading Ltd sold $741,546
worth of goods to Shenzhen Sanjiang Plastic Factory during the year ended
December 31, 2006.

Note 9.  Segmental information

Following is a summary of segment information by geographic unit for the year
ended December 31, 2006:

<TABLE>
<CAPTION>
                            Australia       Hongkong      Un-allocated        TOTAL
                                                                          -------------
<S>                       <C>              <C>            <C>              <C>
Sales, net                $    650,676     $ 2,796,726    $         -      $ 3,447,402
Net income (loss)               (8,838)         26,740        (35,804)         (17,902)
Total Assets                   391,151         450,776         12,107          854,034
Capital Expenditure            189,108               -              -          189,108
Depreciation                    41,604               -              -           41,604
</TABLE>

Following is a summary of segment information by geographic unit for the
transitional period ended December 31, 2005:

<TABLE>
<CAPTION>
                            Australia       Hongkong      Un-allocated        TOTAL
                                                                          -------------
<S>                       <C>              <C>            <C>              <C>
Sales, net                $    403,412     $         -    $         -      $   403,412
Net income (loss)              (11,406)              -              -          (11,406)
Total Assets                   252,473               -              -          252,473
Capital Expenditure             71,573               -              -           71,573
Depreciation                     8,553               -              -            8,553
</TABLE>

                                      F-14



<Page>

Note 10. Stockholders' equity

On January 25, 2006 the Company affected the reverse stock split of 1:25 shares.
All outstanding shares are retroactively restated based on the split.

Following is the summary of shares activity during the year ended December 31,
2006. These shares are recorded on the closing price of common shares on the
OTCBB when the shares issued.

27-Nov-06  common share  250,000 Beer Creak Capital    $ 27,500   Consulting fee

The Company did not issue any shares during the transitional six month period
ended December 31, 2005.

Note 11. 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, 2006 and for the transitional
period ended December 31, 2005. Accordingly, the Company has no net deferred tax
assets.

The components of income before income taxes are as follows:

   --------------------------------------------- ------------- -------------
                                                     2006           2005
   --------------------------------------------- ------------- -------------
    Income (loss) subject to Australia            $     8,838   $   (11,406)
   --------------------------------------------- ------------- -------------
    Income (loss) subject to Hong Kong                 61,935             -
   --------------------------------------------- ------------- -------------
    Income (loss) subject to United States            (35,195)            -
   --------------------------------------------- ------------- -------------
    Income before taxes                           $    17,902   $   (11,406)
   --------------------------------------------- ------------- -------------

United States of America
As of December 31, 2006, the Company in the United States of America had
approximately $106,061in net operating loss carryforwards 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 carryforwards 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 carryforwards could be restricted. The deferred tax
assets for the United States entity at December 31, 2006 consists mainly of net
operating loss carryforwards 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, 2006
and 2005.

   --------------------------------------------- ------------- -------------
                                                     2006           2005
   --------------------------------------------- ------------- -------------
    Net Operating Loss Carryforwards                   35,195   $   106,061
   --------------------------------------------- ------------- -------------
    Total Deferred Tax Assets                          56,400        42,400
   --------------------------------------------- ------------- -------------
    Less: Valuation Allowance                         (56,400)      (42,400)
   --------------------------------------------- ------------- -------------
    Net Deferred Tax Assets                                 -             -
   --------------------------------------------- ------------- -------------

Hong Kong
As of December 31, 2006, the Company's Hong Kong subsidiary had net income.
Pursuant to Hong Kong income tax laws, the Company has made 17.5% income tax
provision of $13,275 for the year ended December 31, 2006.

AUSTRALIA
As of December 31, 2006 the Company's Australian subsidiary had net income.
Pursuant to Australian income tax laws, the Company has made minimum income tax
provision.

                                      F-15



<Page>

The following table sets forth the significant components of the net deferred
tax assets for operation in the Australia as of December 31, 2006 and 2005.

   --------------------------------------------- ------------- -------------
                                                     2006           2005
   --------------------------------------------- ------------- -------------
    Net Operating Loss Carryforwards                   20,076   $    28,556
   --------------------------------------------- ------------- -------------
    Total Deferred Tax Assets                           6,022         8,567
   --------------------------------------------- ------------- -------------
    Less: Valuation Allowance                          (6,022)       (8,567)
   --------------------------------------------- ------------- -------------
    Net Deferred Tax Assets                                 -             -
   --------------------------------------------- ------------- -------------

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:

<TABLE>
<CAPTION>
<S>                                                                <C>           <C>
Tax expense (credit) at statutory rate-federal                     2006          2005
Tax expense (credit) at statutory rate-federal                     (34)%         (34)%
State tax expense net of federal tax                               (6)%          (6)%
Changes in valuation allowance                                     40%           40%
Foreign income tax:
Australia                                                          30%           30%
Hongkong                                                           17.5%         -
Change in valuation allowance                                      (30)%         (30)%
----------------------------------------------------------------------------------------------
Tax expense at actual rate                                         17.5%         -%
                                                                                 =============
</TABLE>

Note 12. Major customers and vendors

Dexin Hardware Plastic Ltd, Three Rivers, Sanjiang and Three You, our three top
customers, provided 58% of net revenue for the year ended December 31, 2006 and
45% for the transitional six month period ended December 31, 2005, respectively.
Total accounts receivable due from these customers was approximately $260,105
and $80,456 as of December 31, 2006 and for the transitional six month period
ended December 31, 2005, respectively.

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 and Tricept Trading Limited, our major vendors, accounted
for 47% and 0% of the Company's net purchases for the year ended December 31,
2006 and for the transitional six month period ended December 31, 2005,
respectively. Total accounts payable due to these vendors was $29,605 and zero
as of December 31, 2006 and for the transitional six month period ended December
31, 2005, respectively.

Note 13. Subsequent event

On January 23, 2007 the Company issued 250,000 shares to Beer Creak Capital as
part of consulting agreement.


                                      F-16