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UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

(Mark One)

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

For the fiscal year ended March 31, 2008

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

For the transition period from [   ] to [  
]

Commission file number 000-30299

LIGHTSCAPE TECHNOLOGIES
INC.(Name of small business issuer in its charter)

|Nevada                                                               | 98-0217653                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|3/F., 80 Gloucester Road                                             |                                     
|Wanchai, Hong Kong                                                   | 0000000                             
|(Address of principal executive offices)                             | (Zip Code)                          

Issuers telephone number (852) 2546-1808

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

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|Nil                 | Nil                                      

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

Common Shares, par value $0.001(Title of class)

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

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

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 [   ]

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Check if there is 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 registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [   ]

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

State issuers revenues for its most recent fiscal year.
$6,032,423

The aggregate market value of the voting and non-voting common
equity held by non-affiliates as of June 30, 2008 was 37,104,739 common
shares @ $1.50(1)= $55,657,108.50

(1) Closing price for the common stock as reported by
the quotation service operated by the OTC Bulletin Board on June 30, 2008.

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuers
classes of equity stock, as of the latest practicable date.

55,876,410common shares issued and
  outstanding as of June 30, 2008.

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

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PART I

**ITEM
1.**     **DESCRIPTION OF BUSINESS.**

Forward Looking Statements

This
annual report contains forward-looking statements as that term is defined in
Section 27A of the United States Securities Act of 1933 and Section 21E of the
United States Securities Exchange Act of 1934. These statements relate to future
events or our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as may, should, intends,
expects, plans, anticipates, believes, estimates, predicts,
potential, or continue or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled Risk Factors, which may cause our or our industrys actual results,
levels of activity or performance to be materially different from any future
results, levels of activity or performance expressed or implied by these
forward-looking statements.

Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity or
performance. Except as required by applicable law, including the securities laws
of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

In
this annual report, unless otherwise specified, all dollar amounts are expressed
in United States dollars and all references to common shares refer to the
common shares in our capital stock. Our financial statements are prepared in
accordance with United States generally accepted accounting principles.

As
used in this annual report and unless otherwise indicated, the terms we, us
and our refer to Lightscape Technologies Inc. and our subsidiaries.

Company Overview

We
were incorporated under the laws of the State of Nevada under the name Legacy
Bodysentials Inc. on September 14, 1995. On September 25, 1996, we changed our
name to Legacy Minerals Inc. and on May 18, 1998, we changed our name to
Global Commonwealth Inc. On November 12, 1999, we changed our name to Global
Innovative Systems Inc. and on April 23, 2007, we changed our name to
Lightscape Technologies Inc. The name change became effective with NASDAQs
OTC Bulletin Board at the opening for trading on April 23, 2007 under the new
stock symbol LTSC.

We
are a holding company engaged in four main business activities: (i)
light-emitting diode (LED) outdoor advertising, (ii) LED solutions, (iii)
lighting source products and (iv) energy-savings solutions. During the fiscal
year ended March 31, 2008, approximately 0% of our revenue was derived from our
LED outdoor advertising business, 59% from our LED solutions business, 40% from
our lighting source products business and 1% from our energy-savings solutions
business.

LED Outdoor Advertising Business

On
February 12, 2008, we entered into a joint venture agreement with Beijing
Xintong Media & Cultural Development Co. Ltd. (BX) to build an LED outdoor
advertising network in the Peoples Republic of China (the PRC or China).

Pursuant
to the terms of the joint venture agreement, the joint venture company will be
named Beijing Xintong New Vision Media Advertising Co. Ltd. (BXNV), an
existing company incorporated in the PRC. Our company agreed to contribute to
BXNV cash and an LED billboard for the joint ventures initial installation
within ninety business days of signing the agreement. In exchange for these
contributions, we would obtain 50.1% ownership of BXNV, with the remaining 49.9%
to be held by BX. Additionally, our company would be the exclusive supplier to
sell LED modules and screens to the joint venture in the future. As per the
terms of the joint

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venture agreement, BX agreed to contribute cash to BXNV and
agreed to secure certain government licenses, rental agreements and advertising
agreements for BXNV relating to the placement of LED billboards at new and
existing properties in China and the advertising content to be displayed on the
LED screens. The parties agreed that the closing of the joint venture agreement
would occur within ninety business days of signing the agreement. As of June 30,
2008, the joint venture agreement has not closed and the parties have verbally
agreed to extend the closing date indefinitely. We expect to close the agreement
in late August 2008.

The
operations of the joint venture company are anticipated to include the sourcing,
design installation, servicing and maintenance of large-sized LED billboards at
locations in China, and the securing of advertising contracts for advertising
and media content to be displayed on the LED screens. The joint venture plans to
target niche applications which are currently underserved by existing
competition. Target applications include the installation of LED billboards
averaging approximately 150 square meters (approximately 1,615 square feet) in
area located primarily on outdoor façade walls of shopping centers, hotels,
offices and other commercial buildings. The prime locations for the joint
ventures LED screens are major property developments owned by BXs parent the
New World Group.

The
primary end-user markets for the LED outdoor advertising network are expected to
be major advertising agencies in China and Hong Kong, and individual
advertisers, such as major corporations and government entities, based in China
and Hong Kong. Demand for LED outdoor advertising is primarily based on clients
desire to cost-effectively distribute advertisements to as large a target market
of viewers as possible. The joint ventures outdoor advertising network is
expected to meet these demands through the large size of the LED billboards and
the location of the LED billboards in high-traffic commercial and residential
areas. Advertising contracts are expected to be secured primarily by the
internal sales team of BXNV.

As
of June 30, 2008, we have completed the installation of one LED billboard on the
outside overpass wall of a shopping mall in the Chongwen District of Beijing.
The LED screen measures 264 square meters in area (approximately 2,842 square
feet). A minimum of twenty-five LED outdoor advertising billboards are targeted
to be installed in the largest cities in China by the joint venture by the end
of calendar year 2009. In 2010 and beyond, the joint venture intends to expand
its network coverage to include other cities in China.

Our
company has formed a strategic partnership with Ogilvy & Mather Group, a
major advertising agency in Hong Kong, and is in the process of negotiating
strategic partnership agreements and contracts with other advertising agencies
and advertisers for the sales of advertising space on the LED billboard
network.

LED Solutions Business

During
2006, we entered the LED solutions business through two acquisitions of the
shares of Lightscape Technologies (Macau) Limited (Lightscape Macau). On
February 6, 2006, we incorporated Lightscape Macau as a joint venture company.
Initially, we held 50.4% of the issued and outstanding shares of Lightscape
Macau after the commencement of the joint venture. On September 29, 2006,
however, we acquired the remaining 49.6% of the issued and outstanding shares of
Lightscape Macau in consideration for the payment of $1,550 (MOP12,400) and the
issuance of 1,200,000 common shares by our company. Immediately upon the
acquisition of the remaining 49.6% interest, the 1,200,000 common shares were
delivered into escrow pursuant to an Escrow Agreement dated September 29, 2006
between Chan Albert Yee Tat, Luminous LED Technologies Limited, Tech Team
Development Limited and Clark Wilson LLP. The escrowed shares were to be held
and released to the vendors so long as the net profit of Lightscape Macau is not
less than $2,564,103 (HK$20,000,000) during the period from October 1, 2006 to
September 30, 2007. If the net profit of Lightscape Macau was less than
$2,564,103 (HK$20,000,000) during the period, a percentage of the common shares
currently held in escrow equal to the percentage of the shortfall in net profit
were to be released by the escrow agent for immediate cancellation by our
company, with the balance of the common shares to be released to the vendors. If
Lightscape Macau failed to generate any net profit during the period, all of the
escrowed shares were to be released by the escrow agent for immediate
cancellation by our company. Our company believes that Lightscape Macau failed
to generate any audited net profit during the period. As of June 30, 2008, we
have begun the procedure to have all of the escrowed shares released from escrow
and delivered to our company for cancellation.

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During
2007, we also incorporated a wholly-owned subsidiary, Lightscape Technologies
(Greater China) Limited in Hong Kong to engage in the LED solutions business in
Hong Kong and China.

We
  operate in three principal lines of the LED products and services industry:
  (i) LED Systems, (ii) original equipment manufacturing (OEM) and
  Licensing, and (iii) LED Screen Rental Service.

Our
operations in the LED products and services industry focus on the use of
semiconductor devices, known as LEDs, as the primary light source. Compared to
conventional incandescent and fluorescent lamps, LEDs are designed to offer
superior efficiency, reliability and creative design versatility with the
additional benefits of lower energy consumption, prolonged operational life and
the non-use of mercury.

LED Systems

We
provide creative design, installation and digital control of high-specification
LED systems. Our system designs typically consist of various LED hardware
components sourced from third parties, including LED video panels, individual
LED modules and lighting fixtures of various sizes, intensities and color
capabilities, LED flood lights, spotlights, string lights, cove lights, light
tubes and light tiles, submersible LED lights, audio-visual equipment, and
related support hardware, cabling and accessories.

These
LED-based hardware components are integrated by our design team, installed and
then driven by our proprietary digital controller software system, the
Multimedia and Video Show Control System. This product is a user-friendly,
PC-based software system for the authoring, control and playback of intricate,
large-scale video, lighting and audio effects. This product has the ability to
simultaneously control up to four high-resolution LED video walls, an unlimited
number of multiplex channels, DMX universes, 0-10v analog channels, and RS-232
devices. The softwares graphical user interface and digital control
capabilities simplifies the process of creating and playing elaborate video,
lighting and multimedia effects through LED systems which may contain thousands
of individual addresses.

Our
LED systems are designed for both interior and exterior applications, and our
sales and marketing strategy targets clients demanding high-performance video
and color lighting systems. Demand for our LED systems is primarily based on our
end-user clients desire to add programmable video and/or dynamic lighting
effects to their properties in order to attract and retain customers, and/or to
differentiate and accentuate architectural elements. Demand is also driven by
clients desire for reliable, low-maintenance and energy-efficient video and
lighting design solutions.

The
primary end-user markets for our LED systems include hospitality (casinos,
hotels, nightclubs), entertainment (concert halls, theaters, television
studios), retail (shopping centers, digital signage), high-end residential
(condominiums), architectural (public landmarks, fountains, office buildings),
and special exhibits (conventions, trade show booths). The geographical target
markets for our LED systems include Macau, Hong Kong, China and Singapore.

Our
LED systems are typically specified within a design plan developed by architects
or lighting designers engaged by the owner of an end-user project. Our sales
personnel work with the architects and lighting designers on the design process
to incorporate our LED systems. Our LED systems are then typically purchased by
general contractors or electrical contractors engaged by the owner of an
end-user project, or by the project owner directly. During installation of the
LED system, we provide on-site supervision to ensure that the LED hardware is
properly installed and operational. We also typically provide client training
services in the use of our digital controller software, and collaborate with
clients in using our software system to create customized video, lighting and
multimedia effects for playback on the installed LED system.

Our
LED systems are sold primarily by our internal sales team through established
relationships with architects, lighting designers and real estate development
owners. A core component of our sales teams approach is a focus on design
creativity, including the professional production of videos for each potential
client with animated renderings of the artistic vision for the clients
installed systems and the types of creative multimedia and lighting effects that
may be achieved.

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OEM and Licensing

We
offer OEM and licensing of our proprietary digital controller software product,
the Multimedia and Video Show Control System. Our OEM business primarily targets
LED manufacturers and LED system designers which use our software system to
create and control video, lighting and multimedia effects for their own LED
systems, which are typically sold under their own brand name. We also license
our software system, primarily to owners of end-user projects which have
installed or rented our LED systems. Our OEM and licensing sales are primarily
made by our internal sales team and our geographical target markets include
Macau, Hong Kong, China and Singapore.

LED Rentals

We
provide rentals of LED-based hardware. The main products we rent include LED
video panels and LED video walls. Complementary products we rent include
individual LED fixtures of various sizes, intensities and color capabilities,
LED flood lights and spotlights. Demand for LED hardware rentals is primarily
based on clients desire to cost-effectively meet their short-term need for
dynamic video and lighting effects in order to deliver advertising, messaging
and/or dramatic lighting effects.

The
primary markets for LED rentals include corporate events (conventions,
conferences, trade shows, special exhibits), advertising companies (indoor and
outdoor digital signage), television and film productions, government (special
events), and live performances (theatre productions, music concerts). Our LED
rental sales are primarily made by our internal sales team and our geographical
target markets currently include Macau and Hong Kong.

Lighting Source Products Business

Our
company entered into the lighting source products business through several
transactions that culminated in our company acquiring 76.8% of the issued and
outstanding common shares of Beijing Illumination (Hong Kong) Limited (Beijing
Illumination) through the issuance of 13,683,153 shares of common stock and a
cash payment of $1,928,021. As a result, Beijing Illumination is now a
majority-owned subsidiary of our company. Following the acquisition of a
majority interest in Beijing Illumination on February 27, 2006, we expanded our
business into the manufacturing and sale of lighting and specialty lighting
source products.

Beijing
Illumination is an investment holding company which is engaged in the
manufacture, sale, research and development of lighting products. Beijing
Illumination, through its wholly-owned subsidiary Beijing Aihua New Enterprise
Lighting Appliance Company Ltd., manufactures and sells the following four main
categories of high-intensity discharge (HID) related lighting products: (i)
metal halide lamps; (ii) high-pressure sodium lamps; (iii) xenon lamps; and (iv)
special application HID lamps. In addition to HID lamps, Beijing Illumination
has expanded its product mix into ultra high-pressure mercury lamps.

Compared
to conventional incandescent and fluorescent lamps, HID lamps produce a much
larger quantity of light in a relatively small package. Customer demand for
Beijing Illuminations products is primarily driven by the ability of HID lamps
to generally offer superior efficiency, luminosity, reliability and versatility
with the additional benefit of low energy consumption in comparison with
conventional incandescent or fluorescent lamps.

Beijing
Illuminations HID lamps are used within a wide variety of industrial,
governmental, commercial and residential applications. Metal halide lamps are
used primarily for indoor and outdoor lighting of factories, warehouses,
industrial plants, airports, sports stadiums, supermarkets, shopping centers,
underground parkades and residential buildings. Main applications for
high-pressure sodium lamps include street lighting, subway systems courtyard
lighting and general outdoor lighting. Xenon lamps are used within the
manufacturing of automobile headlights. Special application HID lamps consist
primarily of multi-color lamps which are used in specialized applications such
as aquariums, hydroponics, outdoor decorative lighting of buildings, bridges and
other large architectural structures, and indoor decorative lighting for
theatres and other entertainment venues. The primary applications for ultra
high-pressure mercury lamps are as key components within light-weight digital
crystal projectors and rear projection televisions.

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Beijing
Illuminations internal sales team and sales agents sell its lighting products
through a variety of sales channels including manufacturers, wholesalers,
distributors, contractors, and directly to end-users. The primary geographical
markets for Beijing Illuminations products are China, Hong Kong, Macau,
Singapore, India and the United States.

Energy-Savings Solutions Business

On
January 13, 2005, we closed a share exchange agreement dated January 7, 2005,
whereby we acquired all of the issued and outstanding ordinary shares of Tech
Team Holdings Limited (Tech Team) in exchange for the issuance, by our
company, of 13,000,000 shares of our common stock to the former shareholders of
Tech Team. As a result of the share exchange transaction, Tech Team became a
wholly-owned subsidiary of our company as of January 13, 2005. As the former
shareholders of Tech Team held 68.3% of the shares of our common stock as of the
acquisition date, and because the business of Tech Team represented the only
business operations of our company at that time, the acquisition of Tech Team
was deemed to be a reverse acquisition for accounting purposes. As of January
13, 2005, we commenced the business of selling energy-saving products through
Tech Team, our wholly-owned operating subsidiary.

Tech
Team is a developer, manufacturer and integrator of energy-saving products and
technologies, and a provider of energy management consulting services. Tech
Teams primary product is the Eco-Pro Energy Saver, a proprietary system which
reduces energy consumed by lighting and other electrical equipment and acts as a
protective buffer against voltage surges and other distortions. The technology
can be applied to a broad range of commercial, industrial, civil and residential
applications, including commercial buildings, office buildings, factories,
industrial plants and street lighting. In addition, Tech Team is a value added
reseller of complementary energy-efficiency products which can be integrated and
installed with the Eco-Pro Energy Saver system to further condition the power
flow and enhance energy-savings rates for clients. These complementary products
include voltage stabilizers, high-performance T5 lighting systems, active
harmonic filters, transient voltage surge suppressors and power factor
correction systems. Tech Teams energy management consulting services include
energy audits, design of customized energy management solutions, product
integration and system installation, customer training and after-sales service
support.

Customer
demand for Tech Teams energy management products and services is primarily
driven by cost-savings. Cost-savings result from the use of Tech Teams energy
management products and services from energy conservation and energy efficiency.
Energy conservation is the reduction of electricity consumption by reducing
waste. This results in direct cost savings on monthly power bills for customers.
Energy efficiency is the reduction or elimination of distortions, disturbances,
and pollution in the flow of electricity within a customers electrical systems.
This results primarily in indirect cost savings through decreased production
losses, prolonged lifespan of equipment and reduced maintenance costs. Tech
Teams products address the demand for both energy conservation and energy
efficiency.

The
market for Tech Teams energy-saving products and services is primarily focused
on medium-to-large-scale users of electrical energy across a wide range of
sectors and industries. Industrial markets include manufacturing facilities,
chemical plants, refineries, industrial parks and warehouses. Commercial markets
include office buildings, hotels, shopping centers, racetracks, golf courses,
casinos, stadiums, large restaurants, cinemas, theatres, theme parks,
supermarkets and retail chains. Municipal markets include airports, train
stations, subway stations, water treatment plants, police stations and street
lighting. Institutional markets include hospitals, sanitariums and universities.
Residential markets include large residential estates, condominium complexes and
apartment buildings.

Tech
Teams geographical target markets are primarily large commercial and industrial
customers in Hong Kong, China, Macau and Singapore. Marketing, sales and
distribution of Tech Teams products are accomplished through the following two
main channels:

- Direct Marketing: Tech Team markets and sells products directly to
  customers and potential customers through an internal team of sales
  professionals. These personnel target large customers in Hong Kong, China and
  Macau.

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- Distributorships: Tech Team markets and sells products in Hong
  Kong, China, Macau and Singapore through non-exclusive distributorship
  agreements. Tech Team currently has distributorship agreements within these
  regions with five private companies and one quasi- governmental organization.
  The Hong Kong Productivity Council has endorsed Tech Teams products, and the
  council introduces Tech Teams energy management solutions to its affiliates
  and members via seminars and exhibitions. Tech Team has also signed a
  Marketing and Sales Cooperation Agreement with Shanghai ISSON Power Quality
  Co. Ltd., a subsidiary of the Baoshan Steel Group. This is an institute which
  develops and promotes energy efficiency solutions for entities throughout
  China. The distributorship agreements enable Tech Team to access the
  distributors existing clientele and relationship network, which allows for
  market penetration with minimal overhead expenses.

Tech
Team utilizes the following three types of sales agreements: (i) service
contracts, (ii) direct sales contracts and (iii) trading contracts. For service
contracts, the revenue from consulting services is recognized when the services
have been provided and completed. This method is used to recognize revenue for
service contracts because such services are provided within a short period of
time and because Tech Teams obligations are met upon completion and fulfillment
in accordance with the service contracts. Revenue from direct sales is obtained
from sales of hardware or sales-type leases. Such sales are recognized when the
product is delivered and installed and all outstanding obligations of Tech Team
pursuant to the sales contract are completed. Revenue from trading contracts is
also obtained from hardware sales but represents sales to distributors and
agents and is recognized when the product is delivered and title is transferred.
In general, Tech Team recognizes revenue when it is realized or realizable and
earned. Tech Team considers revenue realized or realizable and earned when it
has persuasive evidence of an arrangement, the product has been delivered and
installed or the services have been provided to the customer, the sale price is
fixed or determinable, and collectively is reasonably assured.

During
the year ended March 31, 2008, our company discontinued operations in the
energy-savings solutions business. We decided to discontinue operations in the
energy-savings solutions business to more effectively utilize our financial and
other resources within our other business units, including our LED outdoor
advertising business and LED solutions business.

Competition

Each
of our operating businesses faces intense competitive pressures within its
respective markets. Such competition may come from domestic and international
operators. While our businesses are managed with the objective of achieving
sustainable growth over the long-term through developing and strengthening
competitive advantages, many factors, including market and technology changes,
may erode competitive advantages or prevent their strengthening. Accordingly,
future operating results will depend to some degree on whether our operating
subsidiaries are successful in protecting or enhancing their competitive
advantages.

LED Outdoor Advertising Business

Our
LED outdoor advertising business competes with other China-based out-of-home
audiovisual media network providers, including Focus Media Holding Ltd., Clear
Media Limited and TOM Group Limited. These companies have large, established
outdoor advertising networks and sales channels, and substantially greater
resources to devote to building and maintaining outdoor advertising networks and
securing advertising contracts than we do. Our competitive advantages include:
our joint venture partners subsidiary relationship with the New World Group,
which is expected to enhance the ability of the joint venture to locate LED
billboards on high-traffic buildings in prime locations owned by the New World
Group, and to enhance its ability to navigate and comply with applicable
government regulations; the large-size of our planned LED billboard
installations (averaging approximately 150 square meters or 1,615 square feet in
area); and our experience in the sourcing, installation and digital control of
large-size LED video walls.

LED Solutions Business

Our
LED systems, OEM software and LED rental service compete with video and lighting
products utilizing traditional lighting technology provided by many vendors. In
the high-performance video and color lighting

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markets in which we have primarily competed to date,
competition has largely been fragmented among a number of small manufacturers of
LED systems and designers of LED-based lighting solutions. However, we are
increasingly experiencing competition from larger, more established companies,
including those in the general lighting industry such as Koninklijke Philips
Electronics NV which have established and expanded business units competing in
the LED systems market. These companies have global marketing capabilities and
substantially greater resources to devote to research and development and other
aspects of the development, manufacture, marketing, design and installation of
LED systems and rentals of LED hardware than we do. Our competitive advantages
include: our focus on providing artistic, creative and customized LED solutions
which meet clients demands for both architectural enhancements and
energy-efficiency; our established supply chain to OEM manufacturers of
low-cost, high-quality LED hardware; and our proprietary digital controller
software system capable of creating customized video, lighting and multimedia
effects for playback on installed LED systems.

Lighting Source Products Business

There
are currently about 6 to 8 manufacturers of electric arc tubes of metal halide
lamps and approximately 30 manufacturers of electric arc tubes of high-pressure
sodium lamps in the PRC. Beijing Illumination is the first and only domestic
manufacturer in the PRC equipped with the production facilities for ultra
high-pressure mercury lamps.

Energy-Savings Solutions Business

Tech
Teams primary competitors are other energy management services companies
providing similar products in its target market. There are approximately 50
companies that do business in Tech Teams target market which are engaged in the
sales of energy saving products. Our management, however, is not aware of any
competitor doing business in Tech Teams target market that offers an entire
product line comparable to Tech Teams products. Most energy management
companies sell a single product or single brand. The single-product approach has
generated savings for specific conservation issues, such as reducing energy
consumption of chillers or lighting fixtures, but has produced inconsistent
results in overall energy consumption for electricity consumers. Similarly, this
single-product approach often addresses one issue while creating new ones. For
example, use of single products may inadvertently create new energy efficiency
problems such as distortions and disturbances that can damage customer
equipment.

Raw Materials and Principal Suppliers

The
primary hardware required for the operation of our LED outdoor advertising and
LED solutions businesses consists of LED billboards and video panels, individual
LED modules and fixtures of various sizes, intensities and color capabilities,
LED flood lights, spotlights, string lights, cove lights, light tubes and light
tiles, submersible LED lights, audio-visual equipment, and related support
hardware, cabling and accessories. We purchase our LED-based hardware primarily
from third party manufacturers who build these components according to our
design and technical specifications. We select component suppliers based on
price and quality. Maintaining a steady supply of our LED-based hardware is
important to our operations and the growth of our LED solutions business,
including our LED outdoor advertising network. We also develop and integrate
proprietary software to drive the authoring, control and playback of content on
our LED billboards and our other LED-based systems.

Two
OEMs in China were the major suppliers of LED hardware for our LED-based
business during the year ended March 31, 2008. There are many qualified
alternative suppliers for our equipment, and our obligation to our current
suppliers is not exclusive. We have never experienced any material delay or
interruption in the supply of our LED hardware.

The
primary hardware used in the manufacture of our lighting source products
includes lighting ballasts, capacitors, arc tubes and glass bulbs. We purchase
component parts from third party wholesale distributors. We select component
suppliers based on price and quality. Our company is not materially dependent
upon any one supplier for component parts used in the manufacture of our
lighting source products, and at the present time, raw materials and components
are in adequate supply.

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Tech Teams principal supplier of
component parts for energy savings equipment is Guilin Electrical Equipment
Scientific Research Institute. Under a 10-year Original Equipment Manufacturer
Agreement dated June 1, 2000, Guilin Electrical Equipment Scientific Research
Institute manufactures component parts used by Tech Team to assemble and create
trademarked Eco-Pro Energy Saver products. Tech Team has established its own
product assembly facility in Zhuhai, PRC, where the component parts are
assembled into finished products. Tech Team relies on Guilin Electrical
Equipment Scientific Research Institute for the manufacture of its component
parts, and a sudden change in the business affairs of this entity would have an
effect on Tech Team. The principal components of Tech Teams energy-saving
products are magnetic steel coils, computer chips, circuit boards, transformers
and miscellaneous electrical circuitry and components. The prices for these
components are subject to market forces largely beyond Tech Teams control. The
prices for these components have varied significantly in the past and may vary
significantly in the future.

Significant Customers

Over
42% of our total revenue was derived from the sale of LED systems to two
customers during the year ended March 31, 2008.

Compliance with Environmental Laws

To
our knowledge, neither the production nor the sale of our products constitute
activities or generate materials, in a material manner, that requires compliance
with federal, state or local environmental laws in any jurisdictions of our
operation.

Government Regulation

Our
LED outdoor advertising business is subject to compliance with certain
government regulations in the PRC. We operate our LED outdoor advertising
business in the PRC under a regulatory regime consisting of the State Council,
which is the highest authority of the executive branch of the PRC central
government, and ministries and agencies under its authority including the State
Administration for Industry and Commerce, or SAIC.

The
principal regulations governing outdoor advertising businesses in the PRC
include:

- The Advertising Law (1994);
- The Advertising Administrative Regulations (1987);
- The Implementing Rules for the Advertising Administrative Regulations
  (2004); and
- The Outdoor Advertising Registration Administrative Regulations (1995).

Regulation of Business Licenses for Advertising
Operations

Companies
engaged in advertising activities must obtain from the SAIC or its local
branches a business license which specifically includes operating an advertising
business within its business scope. Companies conducting advertising activities
without such a license may be subject to penalties, including fines,
confiscation of advertising income and orders to cease advertising operations.
The business license of an advertising company is valid for the duration of its
existence, unless the license is suspended or revoked due to a violation of any
relevant law or regulation. Our company, our subsidiaries and/or our joint
venture company have obtained or are in the process of obtaining such business
licenses from the local branches of the SAIC as required by the existing PRC
regulations. We do not expect to encounter any material difficulties in
obtaining or maintaining our required business licenses for the operation of our
LED outdoor advertising business in the PRC.

Regulation of Outdoor Advertising

The
Advertising Law stipulates that the exhibition and display of outdoor
advertisements must not:

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- 11 -

- utilize traffic safety facilities and traffic signs;
- impede the use of public facilities, traffic safety facilities and traffic
  signs;
- obstruct commercial and public activities or create an eyesore in urban
  areas;
- be placed in restrictive areas near government offices, cultural landmarks
  or historical or scenic sites; and
- be placed in areas prohibited by the local governments from having outdoor
  advertisements.

In
addition, The Outdoor Advertising Registration Administrative Regulations
stipulate that outdoor advertisements in China must be registered with the local
SAIC before dissemination. Advertising distributors are required to submit a
registration application form and other supporting documents for registration,
including the content of the proposed outdoor advertisement. After review and
examination, if an application complies with the requirements, the local SAIC
will issue an Outdoor Advertising Registration Certificate for such
advertisement. Our company, our subsidiaries and/or our joint venture company
have obtained or are in the process of obtaining such Outdoor Advertising
Registration Certificates for the advertisements displayed and intended to be
displayed on our LED outdoor advertising billboards. We do not expect to
encounter any material difficulties in obtaining or maintaining our required
certificates for the dissemination of outdoor advertisements in the PRC.

The
placement and installation of LED billboards is subject to municipal zoning laws
and governmental approvals. Our company, our subsidiaries and/or our joint
venture company have obtained or are in the process of obtaining such municipal
government approvals for each of our LED outdoor advertising billboards
currently installed or planned to be installed in the PRC. We do not expect to
encounter any material difficulties in obtaining or maintaining our required
government approvals for the installation or operation of our LED outdoor
advertising billboards in the PRC

Regulation of Advertising Content

PRC
advertising regulations stipulate certain content requirements for
advertisements in the PRC, which include prohibitions on misleading content,
superlative wording, socially destabilizing content or content involving
obscenities, superstition, violence, discrimination or infringement of the
public interest. Advertisements for anaesthetic, psychotropic, toxic or
radioactive drugs are prohibited. It is prohibited to disseminate tobacco
advertisements via broadcast media. It is also prohibited to display tobacco
advertisements in any public area. There are also specific restrictions and
requirements regarding advertisements that relate to matters such as patented
products or processes, pharmaceuticals, medical instruments, agrochemicals,
foodstuff, alcohol and cosmetics. In addition, all advertisements relating to
pharmaceuticals, medical instruments, agrochemicals and veterinary
pharmaceuticals advertised through out-of-home forms of media, together with any
other advertisements which are subject to censorship by administrative
authorities according to relevant laws and administrative regulations, must be
submitted to the relevant administrative authorities for content approval prior
to dissemination. We do not believe that advertisements containing content
subject to restriction or censorship will comprise a material portion of the
advertisements expected to be shown on our LED outdoor advertising billboard
network.

Advertising
operators and distributors are required by PRC advertising regulations to ensure
that the content of the advertisements they distribute are in full compliance
with applicable law. In providing advertising services, advertising operators
and distributors must review the prescribed supporting documents provided by
advertisers for advertisements and verify that the content of the advertisements
comply with applicable PRC laws and regulations. In addition, prior to
distributing advertisements for certain commodities which are subject to
government censorship and approval, advertising distributors are obligated to
ensure that such censorship has been performed and approval has been obtained.
Violation of these regulations may result in penalties, including fines,
confiscation of advertising income, orders to cease dissemination of the
advertisements and orders to publish an advertisement correcting the misleading
information. In circumstances involving serious violations, the SAIC or its
local branches may revoke violators licenses or permits for advertising
business operations. Furthermore, advertisers, advertising operators or
advertising distributors may be subject to civil liability if they infringe on
the legal rights and interests of third parties in the course of their
advertising business.

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- 12 -

We
intend to employ (or access through our joint venture relationship) qualified
inspectors specifically trained to review advertising content for compliance
with relevant PRC laws and regulations.

Research and Development

Our
  company spent $133,000 on research and development activities among all of our
  subsidiaries during the year ended March 31, 2008. During the year ended March
  31, 2007, our company did not spend a material amount on research and development
  activities.

Within
our LED solutions business, our software engineers develop and improve upon
high-end digital software controllers which integrate the control of video,
lighting, electrical and mechanical devices within our LED systems. Our product
engineers also develop customized, innovative LED lighting products such as LED
lighting tubes to enhance lighting distances and customized LED lighting
fixtures for use in our LED lighting systems.

Within
our lighting source products business,we have engaged in a joint
venture with U.S. based research and development house eeLe Laboratories (LLC)
for collaborative research and development of new lighting source products, such
as front and rear projection display systems and fiber optic lighting.

Intellectual Property

Patents and Trademarks

Our
patents granted, patents pending and registered trademarks are as follows:

Name
    Type
    ID No.
    Owner
    Jurisdiction


Multi Media & Video Show Control System
    Patent
    HK1105528
    Grandplex Development Limited
    Hong KongFX Glass
    Patent
    HK1105525
    Grandplex Development Limited
    Hong KongInteractive LED System
    Patent
    HK1105529
    Grandplex Development Limited
    Hong KongEnergy saver
    Patent
    Application Pending
    Grandplex Development Limited
    ChinaMulti Media & Video Show
    Patent
    Application
    Grandplex Development
    n/aControl System
    Cooperation Treaty
    Pending
    LimitedFX Glass
    Patent Cooperation Treaty
    Application Pending
    Grandplex Development Limited
    n/aLIGHTSCAPE TECHNOLOGIES
    Trademark
    300850888
    Tech Team Investment Limited
    Hong KongLIGHTSCAPE TECHNOLOGIES
    Trademark
    028764-028768
    Tech Team Investment Limited
    MacauLIGHTSCAPE TECHNOLOGIES
    Trademark
    T0708254F T0708255D T0708257J
    Tech Team Investment Limited
    SingaporeLIGHTSCAPE TECHNOLOGIES
    Trademark
    Application Pending
    Tech Team Investment Limited
    USA, EU, China


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- 13 -

Name
    Type
    ID No.
    Owner
    Jurisdiction


ECO-PRO
    Trademark
    2000B14800
    Grandplex Development Limited
    Hong KongECO-PRO
    Trademark
    TM161948
    Grandplex Development Limited
    ThailandECO-PRO
    Trademark
    1603844
    Grandplex Development Limited
    EUECO-PRO
    Trademark
    N/005833
    Grandplex Development Limited
    Macau


Domain Names

We
own and operate the duly registered internet domain names: www.lightscapetech.com.hk and www.techteam.com.hk. The information contained in our
websites does not form part of this annual report. Our company makes available,
on or through our websites, our annual report on Form 10-KSB, quarterly reports
on Form 10-QSB, current reports on Form 8-K, and amendments to those reports
after they are electronically filed or furnished to the Securities and Exchange
Commission.

Additionally,
any document filed by us, including this annual report on Form 10-KSB, may be
viewed at the Securities and Exchange Commissions public reference room, 100 F
Street NE, Washington, D.C. 20549. Please call the Securities and Exchange
Commission at 1-800-732-0330 for further information about its public reference
room. These Securities and Exchange Commission filings are also available to the
public at the Securities and Exchange Commissions website at www.sec.gov.

Employees

On
a consolidated basis among all of our subsidiaries, our company had a total of
223 full-time employees as of March 31, 2008, with approximately 23 in the area
of sales and marketing, 162 in operations and 38 in management and
administration. As of March 31, 2008, Bondy Tan was the sole employee of
Lightscape Technologies Inc. Mr. Tan is the President and Chief Executive
Officer of Lightscape Technologies Inc. Of these employees, none are covered by
collective bargaining agreements. We plan to appoint a Chief Operating Officer
and a Chief Financial Officer during calendar year 2008.

Subsidiaries

The
names of our wholly-owned and majority-owned subsidiaries, their dates of
incorporation and the jurisdictions in which they are incorporated are as
follows:

|                                             |                   |                                | Percentage of
|-------------------------------------------- | ----------------- | ------------------------------ | -------------
|                                             | Date of           | Place of                       | effective    
|Name of subsidiary                           | incorporation     | incorporation                  | ownership    
|                                             |                   |                                |              
|Tech Team Holdings Limited                   | February 15, 2002 | The Cayman Islands             | 100          
|                                             |                   |                                |              
|Tech Team Investment Limited                 | March 24, 2000    | The British Virgin Islands     | 100          
|                                             |                   |                                |              
|Tech Team Development
      (Zhuhai) Limited | August 23, 2002   | The Peoples Republic of China | 100          
|                                             |                   |                                |              
|Tech Team Development Limited                | October 22, 1999  | Hong Kong                      | 100          
|                                             |                   |                                |              
|Luminous Lighting Technology (Asia) Limited  | August 23, 2000   | Hong Kong                      | 100          

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- 14 -

|                                                                      |                   |                                | Percentage of
|--------------------------------------------------------------------- | ----------------- | ------------------------------ | -------------
|                                                                      | Date of           | Place of                       | effective    
|Name of subsidiary                                                    | incorporation     | incorporation                  | ownership    
|                                                                      |                   |                                |              
|Grandplex Development Limited                                         | January 18, 1999  | Hong Kong                      | 100          
|                                                                      |                   |                                |              
|Tech Team (China) Limited                                             | May 22, 2002      | The British Virgin Islands     | 100          
|                                                                      |                   |                                |              
|Tomi Fuji Energy Management Services Consultants
      Limited        | March 10, 2004    | Hong Kong                      | 100          
|                                                                      |                   |                                |              
|Beijing Illumination (Hong Kong) Limited                              | October 11, 2002  | Hong Kong                      | 76.8         
|                                                                      |                   |                                |              
|Beijing Aihua New Enterprise Lighting Appliance
      Company Limited | July 26, 1999     | The Peoples Republic of China | 76.8         
|                                                                      |                   |                                |              
|Tomi Fuji Energy Pte. Limited                                         | December 17, 2004 | Singapore                      | 80           
|                                                                      |                   |                                |              
|Powerland Technology Limited                                          | September 8, 2005 | The British Virgin Islands     | 100          
|                                                                      |                   |                                |              
|Lightscape Technologies (Macau) Limited                               | February 6, 2006  | Macau                          | 100          
|                                                                      |                   |                                |              
|Lightscape Technologies (Greater China) Limited                       | April 11, 2007    | Hong Kong                      | 100          
|                                                                      |                   |                                |              
|Pro Shing Construction Team Macau Limited                             | June 19, 2006     | Macau                          | 80           

RISK FACTORS

Much
of the information included in this annual report includes or is based upon
estimates, projections or other forward-looking statements. Such forward-looking
statements include any projections or estimates made by us and our management in
connection with our business operations. While these forward-looking statements,
and any assumptions upon which they are based, are made in good faith and
reflect our current judgment regarding the direction of our business, actual
results will almost always vary, sometimes materially, from any estimates,
predictions, projections, assumptions or other future performance suggested
herein.

Such
estimates, projections or other forward-looking statements involve various risks
and uncertainties as outlined below. We caution the reader that important
factors in some cases have affected and, in the future, could materially affect
actual results and cause actual results to differ materially from the results
expressed in any such estimates, projections or other forward-looking
statements. Prospective investors should consider carefully the risk factors set
out below.

Risks Related to Our Business

Our limited operating history makes it difficult to evaluate
our future prospects and results of operations.

We
have a limited operating history. Accordingly, you should consider our future
prospects in light of the risks and uncertainties experienced by early stage
companies in evolving markets such as the growing market for LED outdoor
advertising and LED systems inthe PRC. Some of these risks and
uncertainties relate to our ability to:

- attract new customers and increased spending per customer;
- increase awareness of our brand and continue to develop customer loyalty;
- respond to competitive market conditions;

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- 15 -

- respond to changes in our regulatory environment;
- manage risks associated with intellectual property rights;
- maintain effective control of our costs and expenses;
- raise sufficient capital to sustain and expand our business; and
- attract, retain and motivate qualified personnel.

If
we are unsuccessful in addressing any of these risks and uncertainties, our
business may be materially and adversely affected.

We may require additional financing, the availability of
which cannot be assured, and if our company is unable to obtain such financing,
our business may fail.

Our
business plan calls for expenses, working capital and capital expenditures
necessary to continue the build-up of our LED outdoor advertising network and to
complete supply and build contracts for LED systems. However, there is no
assurance that actual cash requirements will not exceed our estimates. We may
need to raise additional funds to:

- support our planned rapid growth;
- develop new or enhanced services and technologies;
- increase our marketing efforts;
- acquire complementary businesses or technologies; and/or
- respond to competitive pressures or unanticipated requirements.

We
depend to a large extent on outside capital over the near-term to fund our
capital needs. Such outside capital may be obtained from additional debt or
equity financing. We do not currently have any arrangement for financing and
there is no assurance that capital will be available to meet our continuing
development costs or, if the capital is available, that it will be on terms
acceptable to us. The issuance of additional equity securities by us would
result in a dilution in the equity interests of our current stockholders.
Obtaining commercial loans, assuming those loans would be available, would
increase our liabilities and future cash commitments. If we are unable to obtain
financing in the amounts and on terms deemed acceptable to us, we may be unable
to implement our business and growth strategies, respond to changing business or
economic conditions, withstand adverse operating results, consummate desired
acquisitions or compete effectively.

Our operations are cash intensive and our business could be
adversely affected if we fail to maintain sufficient levels of working capital.

We
expend a significant amount of cash in our operations, principally to fund our
procurement of LED-based hardware. Our suppliers typically require payment in
full within 30-60 days after delivery, although some of our suppliers provide us
with credit. In turn, we typically require our customers to make payment in full
on delivery, although we offer some of our long-standing customers credit terms.
We generally fund most of our working capital requirements out of cash flow
generated from operations. If we fail to generate sufficient revenues from our
sales, or if we experience difficulties collecting our accounts receivable, we
may not have sufficient cash flow to fund our operating costs and our
profitability could be adversely affected.

Our operating results may fluctuate from period to period
and if we fail to meet market expectations for a particular period, our share
price may decline.

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- 16 -

Our
operating results have fluctuated from period to period and are likely to
continue to fluctuate as a result of a wide range of factors, including a
historical reliance on non-recurring revenue streams. For example, our provision
of LED systems generally consists of large-scale, one-off supply and build
contracts completed for large property developments. Interim reports may not be
indicative of our performance for the year or our future performance, and
period-to-period comparisons may not be meaningful due to a number of reasons
beyond our control. We cannot assure you that our operating results will meet
the expectations of market analysts or our investors. If we fail to meet their
expectations, there may be a decline in our share price.

If there are any interruptions to or a decline in the
quality of our LED hardware supply channels, our sales could be materially and
adversely affected.

LED
video screens, modules and lighting hardware are the principal component parts
used in our sales. We procure all of our LED hardware from a number of
third-party manufacturers. Our third-party suppliers may not continue to be able
to provide an adequate supply of LED hardware to satisfy our present and future
sales needs. The supply of LED video screens, modules and lighting hardware is
dependent on the output of OEM LED manufacturers. Our current suppliers may not
be able to provide LED video screens, modules and lighting hardware of
sufficient quality to meet our quality control requirements. Any interruptions
to or decline in the amount or quality of our LED hardware supply could
materially disrupt our sales and adversely affect our business. We are
vulnerable to increases in the price of raw materials (particularly of LED
modules and video screens) and other operating costs. If the costs of raw
materials or other costs of sales and distribution of our products and services
increase, and we are unable to entirely offset these increases by raising prices
of our products and services, our profit margins and financial condition could
be adversely affected.

Our company is subject to supply channel risk due to a
concentration of supply lines with a limited number of vendors and any
significant interruption from these vendors may have a material adverse effect
on our company.

Our
company currently relies on several vendors, two of which account for more than
50% of our purchases for the year ended March 31, 2008. If these vendors
terminate their relationship with our company or if our companys supply from a
vendor is interrupted or terminated for any reason, we may not have sufficient
time to replace the supply of products from the remaining vendors. Any such
interruption would negatively impact our ability to sell and distribute our
products.

We operate in a highly-competitive industry and our failure
to compete effectively may adversely affect our ability to generate revenue.

Management
is aware of similar products and services which compete directly with our LED
outdoor advertising and LED systems, and some of the companies developing and
offering these similar products and services have greater financial, technical
and marketing resources, larger LED outdoor advertising and LED system
distribution networks, and greater brand name recognition than us. These
companies may develop products and services superior to those of our company.
Such competition will potentially affect our chances of achieving profitability
in the future.

This
may place us at a disadvantage in responding to our competitors pricing
strategies, technological advances, marketing campaigns, alliances and other
initiatives. Some of our competitors conduct more extensive promotional
activities and offer lower prices to customers than we do, which could allow
them to gain greater market share or prevent us from increasing our market
share. In the future, we may need to decrease our prices if our competitors
continue to lower their prices. Our competitors may be able to respond more
quickly to new or changing opportunities, technologies and customer
requirements. Further, to the extent our competitors are able to attract and
retain customers based on product and/or price advantages, our business and
ability to grow could be adversely affected in a material manner. To be
successful, we must establish and strengthen our brand awareness, effectively
differentiate our product and service lines from those of our competitors and
build our strategic partnerships. To achieve this we may have to substantially
increase marketing expenses in order to compete effectively.

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- 17 -

Our failure to maintain existing relationships or to obtain
new relationships with companies that allow us to access desirable locations
where we plan to operate our LED outdoor advertising billboards could harm our
growth potential and our ability to increase our revenues.

Our
ability to generate future revenues from LED outdoor advertising sales depends
largely upon our ability to secure desirable locations for the installation and
operation of our large-scale outdoor LED billboards. This, in turn, requires
that we develop and maintain joint venture, strategic and/or other business
relationships with property owners and developers which own the targeted
locations suitable to locate our LED billboards. If we are unable to maintain
our existing relationships or to form new relationships with property owners and
developers, our ability to install and operate LED outdoor billboards would be
negatively impacted. In turn, advertisers may not find advertising on our LED
outdoor advertising attractive and may not wish to purchase advertising time
slots on our network, which would have a material negative impact on our ability
to grow future revenues.

If we are unable to attract advertisers to advertise on the
LED outdoor advertising network we are building, we will be unable to generate
advertising fees, which could negatively affect our ability to grow
revenues.

The
fees we can charge advertisers for time slots on our LED billboard network
depends on the size and quality of our LED billboard network and the demand by
advertisers for advertising time on our network. Advertisers will choose to
advertise on our LED network in part based on the size of our network and the
desirability of the locations where we operate our LED outdoor billboards. If we
fail to maintain or to increase the number of locations and LED billboards in
our network, advertisers may be unwilling to purchase time on our network which
could negatively affect our ability to grow our revenues in the future.

We may be subject to government actions based on the content
displayed on and the locations of the LED billboards in the LED outdoor
advertising network we are building in China.

In
China, The Outdoor Advertising Registration Administrative Regulations stipulate
that outdoor advertisements in China must be registered with the local State
Administration for Industry and Commerce, or SAIC, before dissemination.
Advertising distributors are required to submit a registration application form
and other supporting documents for registration, including the content of the
proposed outdoor advertisement. Our company, our subsidiaries and/or our joint
venture company have obtained or are in the process of obtaining such Outdoor
Advertising Registration Certificates for the advertisements displayed and
intended to be displayed on our LED outdoor advertising billboards. However, we
may be subject to government action if advertisements shown on our outdoor LED
network are in violation of relevant PRC advertising laws and regulations or
that the advertisements broadcast on our network have not received required
approval from the relevant local supervisory bodies.

In
addition, the placement and installation of LED billboards in China is subject
to municipal zoning laws and governmental approvals. Our company, our
subsidiaries and/or our joint venture company have obtained or are in the
process of obtaining such municipal government approvals for each of our LED
outdoor advertising billboards currently installed or planned to be installed in
the PRC. If our existing or future LED billboards are installed in violation of
municipal zoning laws or without the required government approvals and are
required to be removed, it would diminish the attractiveness of our LED outdoor
advertising network for advertisers and adversely affect our ability to sell
advertising space on our network which we would in turn adversely affect our
ability to grow future revenues.

Rapid technological changes in our industry could render our
products non-competitive or obsolete and consequently affect our ability to
generate revenues.

Currently,
we derive a majority of our revenues from the sale of LED systems and lighting
source products. We expect to derive a greater proportion of future revenues
from our LED outdoor advertising business. Each of these industries in which we
are active are characterized by rapid technological change, new products and
services, new sales channels, evolving industry standards and changing client
preferences. Our success will depend, in part, upon our ability to make timely
and cost-effective enhancements and additions to our technology and to introduce
new products and services that meet customer demands. We expect new products and
services to be developed and introduced by other companies that compete with our
products and services. The proliferation of new LED products and services in our
markets may reduce demand for our LED products and services. In addition, the
rapid

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- 18 -

technological advancements in HID lighting products may render
our current lighting source products obsolete. There can be no assurance that we
will be successful in responding to these or other technological changes, to
evolving industry standards or to new products and services offered by our
current and future competitors. In addition, we may not have access to
sufficient capital for our research and development needs in order to develop
new products and services.

We could lose our competitive advantages if we are not able
to protect our proprietary technology and intellectual property rights against
infringement, and any related litigation could be time-consuming and costly.

Our
success and ability to compete depends in part on our proprietary technology
incorporated in our products and solutions, such as our Multimedia and Video
Show Control System used for the authoring, control and playback of content on
our LED advertising billboards and LED systems. If any of our competitors copy
or otherwise gain access to our proprietary technology or develop similar
technologies independently, we would not be able to compete as effectively. We
consider our patents and trademarks invaluable to our ability to continue to
develop and maintain the goodwill and recognition associated with our brands.
The measures we take to protect the proprietary technology, and other
intellectual property rights, which presently are based upon a combination of
patent, trademark and trade secret laws, may not be adequate to prevent their
unauthorized use. Further, the laws of foreign countries may provide inadequate
protection of such intellectual property rights. We may need to bring legal
claims to enforce or protect such intellectual property rights. Any litigation,
whether successful or unsuccessful, could result in substantial costs and a
diversion of corporate resources. In addition, notwithstanding any rights we
have secured to our intellectual property, other persons may bring claims
against us claiming that we have infringed on their intellectual property
rights, including claims that our intellectual property rights are not valid.
Any claims against us, with or without merit, could be time-consuming and costly
to defend or litigate, divert our attention and resources, result in the loss of
goodwill associated with our trademarks or require us to make changes to our
technologies.

We may not be able to hire and retain qualified personnel to
support our growth and if we are unable to retain or hire such personnel in the
future, our ability to improve our products and implement our business
objectives could be adversely effected.

To
continue our growth, we will need to recruit additional senior management
personnel, including persons with financial and sales experience. In addition,
we must hire, train and retain a number of other skilled personnel, including
persons with experience in LED system design, creative lighting design,
development of intelligent LED control software, electrical engineering and
operations. Intense competition for these personnel could cause our compensation
costs to increase significantly, which could have a material adverse effect on
our results of operations. Our future success and ability to grow our business
will depend in part on the continued service of these individuals and our
ability to identify, hire and retain additional qualified personnel. If we are
unable to attract and retain qualified employees, we may be unable to meet our
business and financial goals.

We
are highly dependent on our senior management to manage our business and
operations. In particular, we rely substantially on our chief executive officer,
Mr. Bondy Tan, to manage our operations. In addition, we also rely on design,
engineering, sales and marketing personnel with technical and industry knowledge
to market, sell and install our products and services. We do not maintain key
man life insurance on any of our senior management or key personnel. The loss of
any one of them, in particular Mr. Tan, would have a material adverse effect on
our business and operations. Competition for senior management personnel is
intense and the pool of suitable candidates is limited. We may be unable to
locate a suitable replacement for any senior management personnel that we lose.
In addition, if any member of our senior management joins a competitor or forms
a competing company, they may compete with us for customers, business partners
and other key professionals and staff members of our company.

Our company is subject to sales channel risk due to a
concentration of sales to a limited number of customers and any significant
interruption from these customers may have a material adverse effect on our
company.

Over
42% of our revenue was contributed from sales of LED systems to two customers
for the year ended March 31, 2008. If these, or any of our customers ceased
their business with our company, we would require time to find other customers.
If we lose these customers or are unable to generate recurring revenues from
these customers, there will be a negative impact on our overall performance. We
have not entered into long-term supply contracts

---

- 19 -

with any of these major customers. Therefore, there can be no
assurance that we will maintain or improve the relationships with these
customers, or that we will be able to continue to supply these customers at
current levels or at all. If we cannot maintain long-term relationships with our
major customers, the loss of a significant portion of our sales to them could
have an adverse effect on our business, financial condition and results of
operations.

Our growth could be impaired if we do not successfully
handle certain risks associated with international business.

There
are risks inherent in doing business in international markets, including:

- fluctuations in currency exchange rates;
- difficulties in staffing and managing foreign operations;
- changes in regulatory requirements, tariffs and other trade barriers;
- potential adverse tax consequences; and
- inadequate protection for intellectual property rights.

One
or more of these factors may make it difficult for us to fully implement our
international business strategies and may have a material adverse effect on our
current or future international operations.

We derive a substantial portion of our revenues from sales
in the PRC and any downturn in the Chinese economy could have a material adverse
effect on our business and financial condition.

A
substantial portion of our revenues are generated from sales in the PRC. We
anticipate that revenues from sales of our products and services in the PRC will
continue to represent a substantial proportion of our total revenues in the near
future. Any significant decline in the condition of the PRC economy could, among
other things, adversely affect consumer buying power and discourage the purchase
of our products and services, which in turn would have a material adverse effect
on our revenues and profitability.

Any changes in the political and economic policies of, or
any new regulations implemented by, the Chinese government could affect, or even
restrict, the operation of our business and our ability to generate revenues.

Our
business is currently focused on the sale of LED outdoor advertising and LED
products and services in China. Accordingly, our business, results of operations
and financial condition are affected to a significant degree by any economic,
political and legal developments in China.

Since
the late 1970s, the Chinese government has been reforming its economic system.
Although we believe that economic reform and the macroeconomic measures adopted
by the Chinese government has had and will continue to have a positive effect on
the economic development in China, there can be no assurance that the economic
reform strategy will not from time to time be modified or revised. Some
modifications or revisions, if any, could have a material adverse effect on the
overall economic growth of China and the development of specialty lighting
products and services in China. Any such changes would have a material adverse
effect on our business. Furthermore, there is no guarantee that the Chinese
government will not impose other economic or regulatory controls that would have
a material adverse effect on our business. Any changes in the political,
economic and social conditions in China, adjustments in policies by the Chinese
government or changes in laws and regulations on the sale of LED outdoor
advertising or LED products and services could affect the manner in which we
operate our business and restrict or prohibit transactions initiated or
conducted by our company. Any such changes or new regulations could affect our
ability to develop and sell our products and therefore affect our ability to
generate revenues.

Our company is subject to foreign exchange rate risk,
particularly fluctuations in the exchange rate between Chinese Renminbi and
United States dollars.

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- 20 -

Our
company may enter sales transaction denominated in Chinese Renminbi. The PRC
State Administration for Foreign Exchange, under the authority of the Peoples
Bank of China, controls the conversion of Renminbi into foreign currencies. The
principal regulation governing foreign currency exchange in China is the Foreign
Currency Administration Rules (1996), as amended. Under the Rules, once various
procedural requirements are met, Renminbi is convertible for current account
transactions, including trade and services, but not for capital account
transactions, including direct investment, loan or investment in securities
outside China, unless the prior approval of the State Administration of Foreign
Exchange of the PRC is obtained. Although the Chinese government regulations now
allow greater convertibility of Renminbi for current account transactions,
significant restrictions still remain.

The
value of the Renminbi is subject to changes in Chinas central government
policies and to international economic and political developments affecting
supply and demand in the China Foreign Exchange Trading System market. Since
1994, the conversion of Renminbi into foreign currencies, including United
States dollars, has been based on rates set by the Peoples Bank of China, which
are set daily based on the previous days interbank foreign exchange market
rates and current exchange rates on the world financial markets. Since 1994, the
official exchange rate generally has been stable, but the Chinese government
recently announced that it will no longer measure its currency exclusively to
the United States dollar but will switch to a managed floating exchange rate
based on market supply and demand with reference to a basket of currencies yet
to be named by the Peoples Bank of China, which will likely increase the
volatility of Renminbi as compared to United States dollars.

Our
company has experienced minimal foreign exchange gains and losses to date due to
the relative stability of the Renminbi. We do not know what affect, if any, the
decoupling of the Renminbi from the United States dollar will have on our
financial statements and results of operations. We do not currently engage in
hedging activities to reduce our exposure to exchange rate fluctuation.

New or changing government policies or regulations related
to the LED outdoor advertising or LED products and services industries in our
markets may have an adverse effect on our operations and may require our company
to modify our business plan.

Our
management oversees trends in our market industries by accessing available
market information, including updated governmental policies and regulations
related to such industries from time to time, particularly the LED outdoor
advertising industry in China. Both short and long-term changes in governmental
policies or regulations affecting the LED outdoor advertising or LED products
and services industries may trigger our company to take appropriate measures to
re-position our company to achieve our business plan or alter the business plan
as a whole. We cannot assure that our company will be able to adapt to changing
policies and regulations efficiently in order to maintain the currently
anticipated level of business, results of operations or financial condition.

If LED-based hardware does not achieve greater market
acceptance, prospects for our growth and profitability may be limited.

Our
companys future success depends on increased market acceptance of LED-based
hardware. Potential customers for LED-based hardware may be reluctant to adopt
LED video and lighting hardware as an alternative to traditional light source
technology because of its higher initial cost and relatively low light output in
comparison with the most powerful traditional lighting sources, or because of
perceived risks relating to LED technologys novelty, complexity, reliability
and quality, usefulness and cost-effectiveness when compared to other lighting
sources available in the market. These factors could adversely affect demand for
our companys LED outdoor advertising billboards and/or our LED systems. If
acceptance of LED-based hardware does not continue to grow, opportunities to
increase our revenues and operate profitably may be limited.

If advances in LED technology do not continue, we may be
unable to increase our penetration of our existing markets or expand into new
markets.

Our
company does not design or manufacture LEDs or individual LED modules. Our
ability to continue penetrating our existing markets and to expand into new
markets depends on continued advancements in the design and manufacture by
others of LEDs and LED modules. In the LED outdoor billboard advertising and
high-performance LED color lighting markets that we currently serve, we rely on
continued improvements in the

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- 21 -

brightness, efficiency and initial cost of color LEDs. The
continued development of LED technologies depends on other companies research
and is out of our control. If advancements in LED technologies occur at a slower
pace than we anticipate, or fail to occur at all, we may be unable to penetrate
additional markets, our revenues will be significantly reduced, and our future
prospects for success may be harmed.

If we fail to develop and maintain an effective system of
internal controls, we may not be able to accurately report our financial results
or prevent fraud; as a result, current and potential shareholders could lose
confidence in our financial reports, which could harm our business and the
trading price of our common stock.

Effective
internal controls are necessary for us to provide reliable financial reports and
effectively prevent fraud. Section 404 of the Sarbanes-Oxley Act of 2002
requires us to evaluate and report on our internal controls over financial
reporting beginning with our Annual Report on Form 10-KSB for the fiscal year
ended March 31, 2008. We plan to prepare for compliance with Section 404 by
assessing, testing and, if necessary, strengthening our system of internal
controls to provide the basis for our report. The process of strengthening our
internal controls and complying with Section 404 is expensive and time
consuming, and requires significant management attention, especially given that
we have only recently undertaken any efforts to comply with the requirements of
Section 404. We cannot be certain that the measures we will undertake will
ensure that we will maintain adequate controls over our financial processes and
reporting in the future. Furthermore, if we are able to rapidly grow our
business, the internal controls that we will need will become more complex, and
significantly more resources will be required to ensure our internal controls
remain effective. Failure to implement required controls, or difficulties
encountered in their implementation, could harm our operating results or cause
us to fail to meet our reporting obligations. If we or our auditors discover a
material weakness in our internal controls, the disclosure of that fact, even if
the weakness is quickly remedied, could diminish investors confidence in our
financial statements and harm our stock price. In addition, non-compliance with
Section 404 could subject us to a variety of administrative sanctions and the
inability of registered broker-dealers to make a market in our common stock,
which would further reduce our stock price.

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

Although
we are organized under the laws of the State of Nevada, our principal executive
office is located in Hong Kong. Outside the United States, it may be difficult
for investors to enforce judgments against us obtained in the United States in
any such actions, including actions predicated upon civil liability provisions
of federal securities laws. In addition, all of our officers and directors
reside outside the United States, and nearly all of the assets of these persons
and our assets are located outside of the United States. As a result, it may not
be possible for investors to effect service of process within the United States
upon such persons or to enforce against us or such persons judgments predicated
upon the liability provisions of the United States securities laws. There is
substantial doubt as to the enforceability against us or any of our directors
and officers located outside the United States in original actions or in actions
of enforcement of judgments of United States courts or liabilities predicated on
the civil liability provisions of United States federal securities laws.

Risks Related to Our Industry

The LED outdoor advertising and LED products and services
industries in the PRC may face increasing competition from both domestic and
foreign companies, as well as increasing industry consolidation, which may
affect our market share and profit margin.

The
specialty lighting industry, including the provision of LED outdoor advertising
billboards, LED lighting systems, LED screen rental services, and advanced
lighting products, in the PRC is highly competitive. Our products and services
are targeted primarily at property owners and developers, a market in which we
face increasing competition. In addition, there is an increasing trend of
consolidation through the industry. We believe that our ability to maintain our
market share and grow our operations within this landscape of changing and
increasing competition is largely dependant upon our ability to distinguish the
quality of our products and services.

In
addition, prior to the entry of the PRC into the World Trade Organization
(WTO), high barriers to entry existed for many potential competitors in our
business through the use of tariffs and restrictive import

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- 22 -

licensing and distribution practices. The admission of the PRC
to the WTO has lowered some of the tariffs and other barriers to entry so we can
expect that competition will increase.

We
cannot assure you that our current or potential competitors will not develop
products or services of a comparable or superior quality to ours, or adapt more
quickly than we do to evolving consumer preferences or market trends. In
addition, our competitors may merge or form alliances to achieve a scale of
operations or sales network which would make it difficult for us to compete.
Increased competition may also lead to price wars or negative brand advertising,
which may adversely affect our market share and profit margin. We cannot assure
you that we will be able to compete effectively with our current or potential
competitors.

Risks Related to Our Common Stock

A decline in the price of our common stock could affect our
ability to raise further working capital and adversely impact our operations.

A
prolonged decline in the price of our common stock could result in a reduction
in the liquidity of our common stock and a reduction in our ability to raise
capital. Because our operations have been primarily financed through the sale of
equity securities, a decline in the price of our common stock could be
especially detrimental to our liquidity and our continued operations. Any
reduction in our ability to raise equity capital in the future would force us to
reallocate funds from other planned uses and would have a negative effect on our
business plans and operations, including our ability to develop new products and
continue our current operations. If the stock price declines, there can be no
assurance that we will be able to raise additional capital or generate funds
from operations sufficient to meet our obligations. We believe the following
factors could cause the market price of our common stock to continue to
fluctuate widely and could cause our common stock to trade at a price below the
price at which you purchase your shares:

- actual or anticipated variations in our quarterly operating results;
- announcements of new services, products, acquisitions or strategic
  relationships by us or our competitors;
- trends or conditions in the energy management services industry;
- changes in accounting treatments or principles;
- changes in earnings estimates by securities analysts and in analyst
  recommendations;
- changes in market valuations of other energy management services companies;
  and
- general political, economic and market conditions.

The
market price for our common stock may also be affected by our ability to meet or
exceed expectations of analysts or investors. Any failure to meet these
expectations, even if minor, could materially adversely affect the market price
of our common stock.

If we issue additional shares in the future, it will result
in the dilution of our existing stockholders.

Our
certificate of incorporation authorizes the issuance of 800,000,000 shares of
common stock and 100,000,000 shares of preferred stock. Our board of directors
has the authority to issue additional shares up to the authorized capital stated
in the certificate of incorporation. Our board of directors may choose to issue
some or all of such shares to acquire one or more businesses or to provide
additional financing in the future. The issuance of any such shares will result
in a reduction of the book value or market price of the outstanding shares of
our common stock. If we issue any such additional shares, such issuance also
will cause a reduction in the proportionate ownership and voting power of all
other stockholders. Further, any such issuance may result in a change of control
of our corporation.

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- 23 -

If a market for our common stock does not develop,
stockholders may be unable to sell their shares.

There
is currently a limited market for our common stock, which trades through the OTC
Bulletin Board. Trading of stock through the OTC Bulletin Board is frequently
thin and highly volatile. There is no assurance that a sufficient market will
develop in the stock, in which case it could be difficult for stockholders to
sell their stock.

The market price for our common stock may be volatile and
subject to wide fluctuations, which may adversely affect the price at which you
can sell our shares.

The
market price for our common stock may be volatile and subject to wide
fluctuations in response to factors including the following:

- actual or anticipated fluctuations in our quarterly operations results;
- changes in financial estimates by securities research analysts;
- conditions in foreign or domestic specialty lighting markets;
- changes in the economic performance or market valuations of other specialty
  lighting companies;
- announcements by us or our competitors of new products, acquisitions,
  strategic partnerships, joint ventures or capital commitments;
- addition or departure of key personnel;
- fluctuations of exchange rates between the Renminbi and the U.S. dollar;
- intellectual property litigation; and
- general economic or political conditions in the PRC.

In
addition, the securities market has from time to time experienced significant
price and volume fluctuations that are not related to the operating performance
of particular companies. These market fluctuations may also materially and
adversely affect the market price of our stock.

Trading of our stock may be restricted by the Securities and
Exchange Commissions penny stock regulations which may limit a stockholders
ability to buy and sell our stock.

The
Securities and Exchange Commission has adopted regulations which generally
define penny stock to be any equity security that has a market price (as
defined) less than $5.00 per share or an exercise price of less than $5.00 per
share, subject to certain exceptions. Our securities are covered by the penny
stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
accredited investors. The term accredited investor refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission which provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customers account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customers confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the

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- 24 -

penny stock is a suitable investment for the purchaser and
receive the purchasers written agreement to the transaction. These disclosure
requirements may have the effect of reducing the level of trading activity in
the secondary market for the stock that is subject to these penny stock rules.
Consequently, these penny stock rules may affect the ability of broker-dealers
to trade our securities. We believe that the penny stock rules discourage
investor interest in and limit the marketability of, our common stock.

The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements, which may limit a stockholders ability to
buy and sell our shares.

In
addition to the penny stock rules described above, FINRA has adopted rules
requiring that in recommending an investment to a customer, a broker-dealer must
have reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low-priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customers financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low-priced securities
will not be suitable for at least some customers. FINRA requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit our shareholders ability to buy and sell our
stock and which may have an adverse effect on the market for our shares.

Potential sales of a substantial number of shares of our
common stock into the public market by selling stockholders may result in
significant downward pressure on the price of our common stock and could affect
the ability of our stockholders to realize any current trading price of our
common stock.

We
granted registration rights to the holders of shares of our common stock (and
holders of warrants to purchase shares of our common stock) issued pursuant to a
capital-raising transaction which we closed on March 17, 2008. If and when a
registration statement covering these shares and warrants is filed by our
company and declared effective by the Securities and Exchange Commission, the
selling stockholders may be reselling up to approximately 15.7% of the issued
and outstanding shares of our common stock. As a result of such registration
statement, a substantial number of our shares of common stock which have been
issued may be available for immediate resale, which could have an adverse effect
on the price of our common stock. As a result of any such decrease in price of
our common stock, our current stockholders and purchasers who acquire shares
from the selling stockholders may lose some or all of their investment.

If we are late in filing any of our annual or quarterly
reports during the next three reporting periods, or if we are late multiple
times in filing any of our annual or quarterly reports during the next two
years, our common stock may become ineligible for quotation on the OTC Bulletin
Board, which would negatively affect the market for our shares and our ability
to obtain additional financing.

Companies
trading on the OTC Bulletin Board, such as us, must have a class of securities
registered under Section 12 of the Exchange Act, as amended, and must be current
in their reports under Section 13, in order to maintain price quotation
privileges on the OTC Bulletin Board. More specifically, Rule 6530 of the NASD
Manual Marketplace Rules, which determines eligibility of issuers quoted on the
OTC Bulletin Board, requires an issuer to be current in its filings with the
Securities and Exchange Commission. Pursuant to Rule 6530(e), as it is currently
in effect, if we file our reports late with the Commission three times in a
two-year period or our securities are removed from the OTC Bulletin Board twice
in a two-year period for failure to file reports, then we will be ineligible for
quotation on the OTC Bulletin Board.

We
have been late in filing our quarterly and annual reports on two occasions in
the past two years: our quarterly report for the period ending September 30,
2006 and our annual report for the period ending March 31, 2007. As a result, if
we are late in filing our annual report for the period ending March 31, 2008,
our quarterly report for the period ending June 30, 2008 or our quarterly report
for the period ending September 30, 2008, we would have been late in filing our
reports three times in a two-year period and we may become ineligible for
quotation on the OTC Bulletin Board. In addition, if we are late multiple times
in filing any of our annual or quarterly reports during the next two years, we
may become ineligible for quotation on the OTC Bulletin Board. If our common
stock becomes ineligible for quotation on the OTC Bulletin Board, it would
negatively affect the market for our common

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- 25 -

stock and it may become more difficult for us to obtain
additional equity financing as shares of our common stock would be less
attractive to potential investors.

**ITEM
2.**     **DESCRIPTION OF PROPERTY.**

Our
  principal office is located at 3/F., 80 Gloucester Road, Wanchai, Hong Kong.
  The 4,110 square feet office space serves as the base of operations for our
  corporate, managerial, accounting, financial, administrative, sales and marketing
  functions. Our company has leased the office premises for the period from December
  18, 2006 to December 17, 2008. The monthly fixed rent is $11,754, plus a monthly
  service charge of $2,007. Upon expiration of the lease, we intend to move to
  a larger office space in Hong Kong as additional space is required to accommodate
  our business development.

Our
company has leased premises at workshops 1 and 2, 9th Floor,
Technology Plaza, No. 651 Kings Road, Hong Kong as show room space for our LED
lighting products and services. The lease period is from October 15, 2007 to
October 14, 2009. The monthly fixed rent is $2,410, plus a monthly service
charge of $572.

Our
company, through Tech Team Development (Zhuhai) Limited, leases a facility at
No. 52, Guang Ming Jei, Xiang Zhou, Zhuhai, PRC. Zhuhai, a Special Economic
Zone, is located in Guangdong Province in southern China. The 3,229 square feet
space serves as a supporting office for our business development activities in
the PRC, as well as a base for logistics and administrative functions related to
our business activities in China. The lease period is from March 8, 2008 to
March 7, 2009. The monthly fixed rent is $514.

Our
company, through Beijing Aihua New Enterprise Lighting Appliance Company
Limited, has leased a facility at 1st to 4th Floor, No. 7
Shuang-qiao Xili Chaoyang District, Beijing, PRC. The 34,183 square feet space
serves as the base for manufacturing, research and development of lighting and
specialty lighting source products, as well as sales and marketing activity
within China. The term of the lease is for the period from 2004 to 2010. The
monthly fixed rent is $8,033, plus a monthly service charge of $309.

**ITEM
3.**     **LEGAL PROCEEDINGS.**

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

**ITEM
4.**     **SUBMISSIONS OF MATTERS TO
A VOTE OF SECURITY HOLDERS.**

None.

PART II

|ITEM 5. | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
      SECURITIES.
|------- | ------------------------------------------------------------------------------------------------------------------------------

Our
stock is listed for quotation on the OTC Bulletin Board under the trading symbol
LTSC and the CUSIP number is 53227B 101. Our common shares initially began
trading on the OTC Bulletin Board on April 17, 2001 under the trading symbol
GBIS. The following table sets forth, for the periods indicated, the high and
low closing prices for each quarter within the last two fiscal years ended March
31, 2008 as reported by the quotation service operated by the OTC Bulletin
Board. All quotations for the OTC Bulletin Board reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.

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- 26 -

Quarter Ended
      High
      LowMarch 31, 2008
    $1.25
    $0.49December 31, 2007
    0.90
    0.50September 30, 2007
    0.55
    0.40June 30, 2007
    0.76
    0.51March 31, 2007
    1.01
    0.75December 31, 2006
    0.90
    0.33September 30, 2006
    1.10
    0.65June 30, 2006
    1.20
    0.70


On
June 30, 2008, the closing price for the common stock as reported by the
quotation service operated by the OTC Bulletin Board was $1.50.

As
of June 30, 2008, there were 177 holders of record of our common stock. As of
such date, 55,876,410 common shares were issued and outstanding.

Dividend Policy

We
have not declared or paid any cash dividends since inception. Although there are
no restrictions that limit our ability to pay dividends on our common shares, we
intend to retain future earnings, if any, for use in the operation and expansion
of our business and do not intend to pay any cash dividends in the foreseeable
future.

Equity Compensation Plan Information

We
currently do not have any stock option or equity compensation plans or
arrangements.

Transfer Agent and Registrar

The
transfer agent and registrar of our common stock is Pacific Stock Transfer
Company with an address at 500 E. Warm Springs Road, Suite 240, Las Vegas NV
89119, telephone number of (702) 361-3033 and facsimile number of (702)
433-1979.

Recent Sales of Unregistered Securities

We
did not issue any equity securities that were not registered under the
Securities Act of 1933 during the fiscal year ended March 31, 2008 that were not
otherwise disclosed in a quarterly report on Form 10-QSB or in a current report
on Form 8-K.

Penny Stock Rules

Our
securities are covered by the penny stock rules, which impose additional sales
practice requirements on broker-dealers who sell to persons other than
established customers and accredited investors. The term accredited investor
refers generally to institutions with assets in excess of $5,000,000 or
individuals with a net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouse. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document in a form prepared
by the Securities and Exchange Commission which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the

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- 27 -

broker-dealer and salesperson compensation information, must be
given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities.

**ITEM
6.**     **MANAGEMENTS DISCUSSION
AND ANALYSIS OR PLAN OF OPERATION.**

The
following is a discussion and analysis of our companys results of operation and
the factors that could affect our future financial condition and results of
operation. This discussion and analysis should be read in conjunction with our
consolidated financial statements and the notes thereto included elsewhere in
this annual report. Our companys audited consolidated financial statements are
prepared in accordance with United States generally accepted accounting
principles. All references to dollar amounts in this section are in United
States dollars unless expressly stated otherwise. Please see the Note on
Forward-Looking Statements and Risk Factors for a list of our risk factors.

Our
audited consolidated financial statements are stated in United States dollars
and are prepared in accordance with United States generally accepted accounting
principles.

Company Overview

We
were incorporated under the laws of the State of Nevada under the name Legacy
Bodysentials Inc. on September 14, 1995. On September 25, 1996, we changed our
name to Legacy Minerals Inc. and on May 18, 1998, we changed our name to
Global Commonwealth Inc. On November 12, 1999, we changed our name to Global
Innovative Systems Inc. and on April 20, 2007, we changed our name to
Lightscape Technologies Inc.

We
are a holding company owning subsidiaries engaged in four main business
activities: (i) LED outdoor advertising, (ii) LED solutions, (iii) lighting
source products and (iv) energy-savings solutions.

LED Outdoor Advertising Business

Through
a joint venture and independently, we design, install and operate LED outdoor
advertising billboards.

LED Solutions Business

We
operate in three principal lines of the LED products and services industry: (i)
LED Systems, (ii) OEM and Licensing, and (iii) LED Screen Rental Service. We
provide design, installation and digital control of LED video and lighting
systems; OEM and licensing of our proprietary digital controller software
system; and rentals of LED screens and related hardware.

Lighting Source Products Business

Through
our 76.8% ownership of Beijing Illumination, we research, develop, manufacture
and sell lighting source products. Beijing Illumination, through its
wholly-owned subsidiary Beijing Aihua New Enterprise Lighting Appliance Company
Ltd., manufactures and sells the following four main categories of HID lighting
products: (i) metal halide lamps; (ii) high-pressure sodium lamps; (iii) xenon
lamps; and (iv) special application HID lamps. In addition to HID lamps, Beijing
Illumination has expanded its product mix into ultra high-pressure mercury
lamps.

Energy-Savings Solutions Business

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- 28 -

Through
our 100% ownership of Tech Team, we develop, manufacture and integrate
energy-saving products and technologies, and provide energy management
consulting services. Tech Teams primary product is the Eco-Pro® Energy Saver, a
proprietary system which reduces energy consumed by lighting and other
electrical equipment and acts as a protective buffer against voltage surges and
other distortions. During the year ended March 31, 2008, our company
discontinued operations in the energy-savings solutions business. We decided to
discontinue operations in the energy-savings solutions business to more
effectively utilize our financial and other resources within our other business
units, including our LED outdoor advertising business and LED solutions
business.

Material Trends and Uncertainties

Periodic
changes occur in our companys industry and business that make it reasonably
likely that aspects of our future operating results will be materially different
from our historical operating results. Sometimes these matters have not
occurred, but their existence is sufficient to raise doubt regarding the
likelihood that historical operating results are an accurate gauge of future
performance. Our company attempts to identify and describe these trends, events,
and uncertainties to assist investors in assessing the likely future performance
of our company. Investors should understand that these matters typically are
new, sometimes unforeseen, and often are fluid in nature. Moreover, the matters
described below are not the only issues that may result in variances between
past and future performance nor are they necessarily the only material trends,
events, and uncertainties that will affect our company. As a result, investors
are encouraged to use this and other information to judge for themselves the
likelihood that past performance will be indicative of future performance.

Independently
and through a joint venture agreement signed in February 2008, we are building
an LED outdoor advertising network in China, Hong Kong and other areas of Asia.
Following the acquisition of Lightscape Macau in 2006, our company entered the
LED solutions business, which includes the design, supply and build of LED
systems, OEM and licensing of our proprietary intelligent lighting control
software, and rental of LED hardware. Our current business strategy is focused
on (i) building and expanding our LED outdoor advertising network through
existing partnerships and by establishing new partnerships with major property
owners and developers in Asia, (ii) establishing advertising sales channels for
our LED outdoor advertising network by forming strategic partnerships with
advertising agencies and (iii) growing sales from our LED solutions business,
primarily our LED systems segment, through design, supply and build contracts
with high-end real estate developments in China, Hong Kong, Singapore and other
areas of Asia. The future performance of these specific business segments may
materially affect the future performance of our company. Our company continues
to develop, manufacture and sell lighting source products. However, we are
reviewing our plans and strategic options related to this business unit. During
the year ended March 31, 2008, our company discontinued operations in the
energy-savings solutions business. Our company has identified this shift in
strategic business focus away from lighting source products and energy-savings
solutions towards LED outdoor advertising and LED solutions as a trend that is
reasonably likely to materially affect the comparison of historical operating
results reported herein to either past period results or to future operating
results.

Summary of Key Results

Total
net revenue for the year ended March 31, 2008 was $6,032,423 which represents a
56% decrease from the total net revenue of $13,629,406 for the year ended March
31, 2007.

Operating
expenses, consisting of selling and marketing expenses and general and
administrative expenses, for the year ended March 31, 2008 were $5,734,128 which
represents a 27% increase in operating expenses of $4,510,897 for the year ended
March 31, 2007.

Net
loss from continuing operations totalled $6,830,273 for the year ended March 31,
2008 as compared to a net profit of $1,737,751 for the year ended March 31,
2007.

Net
loss arising from discontinued operations totalled $2,585,802 for the year ended
March 31, 2008 as compared to $657,860 for the year ended March 31, 2007.

Net
loss for the year ended March 31, 2008 was $9,416,075 compared to a net profit
of $1,079,891 for the year ended March 31, 2007.

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Basic
loss per share for the year ended March 31, 2008 was $0.22 compared to a basic
profit per share of $0.03 for the year ended March 31, 2007. Fully diluted loss
per share for the year ended March 31, 2008 was $0.22 compared to a profit per
share of $0.02 on a fully diluted basis for the year ended March 31, 2007.

Results of Operations

Comparison of Fiscal Years Ended March 31, 2008 and March
31, 2007

Our
companys net loss from continuing operations totalled $6,830,273 for the year
ended March 31, 2008 as compared to a net profit of $1,737,751 for the year
ended March 31, 2007. The decrease in profit from continuing operations is
primarily attributable to the decrease in sales and contract revenue from LED
solutions and lighting source products, and the increase in up-front staff and
business development costs incurred to support the increasing number of LED
solutions projects expected in the foreseeable future and the ramp-up of our LED
outdoor advertising business unit. Expenses from continuing operations, which
are not expected to be recurring, also contributed to our net loss. During the
year ended March 31, 2008, impairment losses on intangible assets were $689,204
and impairment losses on goodwill were $526,863, compared to $nil for each
during the year ended March 31, 2007. These losses are related to write-downs of
intangible assets and goodwill associated with our acquisition of 76.8% of
subsidiary Beijing Illumination in 2006.

Net
loss arising from discontinued operations totalled $2,585,802 for the year ended
March 31, 2008 as compared to a net loss of $657,860 for the year ended March
31, 2007. The increase in net loss from discontinued operations is attributable
to the discontinuation of operations in our energy-savings solutions business
unit during the year ended March 31, 2008, specifically operations of our
wholly-owned subsidiaries Tomi Fuji Energy Management Services Limited (TFEMS)
and Tech Team Development (Zhuhai) Limited. Our companys decision to
discontinue operations in the energy-savings business was intended to more
effectively utilize our financial and human resources by focusing on our LED
outdoor advertising and LED systems business units which we consider to have
more promising potential for revenue and margin growth.

Revenues and Cost of Revenues

Total
net revenue for the year ended March 31, 2008 was $6,032,423, representing a 56%
decrease from the total net revenue of $13,629,406 for the year ended March 31,
2007. The decrease in net revenues is primarily attributable to the decrease in
sales and contract revenue of LED solutions by Lightscape Macau and Lightscape
Greater China and the decrease in sales of lighting source products by
subsidiary Beijing Illumination.

Specifically,
sales and contract revenue related to our LED solutions business decreased by
55% to $3,564,537 for the year ended March 31, 2008 from $7,881,399 during the
year ended March 31, 2007. The decrease in revenues was due primarily to the
longer than expected lead times to secure and complete new LED solutions
contracts during the year ended March 31, 2008. Our LED solutions business is
expected to contribute increased revenues in the foreseeable future as several
key projects are expected to be initiated in the near future.

Sales
of lighting source products derived from Beijing Illumination were $2,346,981
for the year ended March 31, 2008 compared to $5,210,646 for the year ended
March 31, 2007, representing a decrease of 55%. The decrease in revenues from
Beijing Illumination was due primarily to the effect of the companys change of
local senior executives and internal restructuring during the year ended March
31, 2008. The purpose of the changes and restructuring was to reduce
manufacturing costs and foster the companys sales and marketing network in
China. Revenues from sales of lighting source products are expected to increase
in the foreseeable future following the completion of the internal restructuring
initiatives. We are currently reviewing our plans and strategic options related
to our lighting source products business.

Total
cost of revenues for the year ended March 31, 2008 was $4,712,536, which
represents a decrease of 41% as compared with the total cost of revenues of
$8,004,379 for the year ended March 31, 2007. The decrease in the total cost of
revenues during the year ended March 31, 2008 was directly associated with the
corresponding decrease in sales revenues.

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Our
company acquired certain intangible assets through the acquisitions of TFEMS and
Beijing Illumination. These intangible assets are comprised of completed
technology for the production of Aihua Ultra-High Pressure Mercury (AHP) and
HID lamps, trademarks, a customer base and a distributors list. Amortization of
intangible assets incurred for the year ended March 31, 2008 was $934,393 as
compared to $818,872 for the year ended March 31, 2007.

Operating Expenses

Operating
expenses for the year ended March 31, 2008 were $5,734,128 which represents a
27% increase in operating expenses of $4,510,897 for the year ended March 31,
2007. Selling and marketing expenses as well as general and administrative
expenses constitute the components of our companys operating expenses.

Selling
and marketing expenses for the year ended March 31, 2008 decreased approximately
2% to $666,426 from $678,762 for the year ended March 31, 2007. Our company
anticipates that selling and marketing expenses will increase in the future to
support our companys further expansion in the LED outdoor advertising and LED
solutions businesses.

General
and administrative expenses increased by 32% during the year ended March 31,
2008 to $5,067,702 from $3,832,135 for the year ended March 31, 2007. The
increase was mainly due to increased staff and business development costs for
the year ended March 31, 2008 to provide the foundation to support our
anticipated overall business growth, particularly our LED outdoor advertising
and LED solutions businesses. Our company anticipates that general and
administrative costs will continue to increase in the foreseeable future as our
companys operations continue to expand.

Liquidity and Capital Resources

Our
companys principal cash requirements are for operating expenses, including
staff costs and funding costs of inventory.

As
of March 31, 2008, our company had a net working capital surplus of $11,490,237
compared with a surplus of $5,837,302 as of March 31, 2007, representing an
increase in working capital of $5,652,935. The cash and cash equivalents of our company decreased to $3,978,500 as at March 31, 2008 as compared to $4,117,107
as of March 31, 2007. As of March 31, 2008, our company had not obtained any
credit facilities.

On
August 20, 2007, we completed the repayment of redeemable convertible notes in
the aggregate principal amount of $6,000,000, plus all accrued interest thereon.
Following receipt, the notes were immediately cancelled by our company.

On
August 21, 2007, we closed a private placement consisting of an aggregate of
6,600,000 common shares at a price of $0.55 per share for gross proceeds of
$3,630,000.

On
December 11, 2007, we closed a private placement consisting of an aggregate
2,450,000 common shares at a price of $0.65 per share for gross proceeds of
$1,592,500.

On
March 17, 2008, we closed a private placement consisting of an aggregate
9,375,000 common shares at a price of $0.80 per share for gross proceeds of
$7,500,000. On the same date, we issued to Roth Capital Partners, LLC, our
placement agent in connection with the private placement, warrants to purchase
up to 656,250 shares of our common stock. The warrants have a term of five
years, are exercisable immediately upon issuance and have an exercise price of
$0.80.

The
ability of our company to meet our financial commitments is primarily dependent
upon the extension of credit by creditors, the continued financial support of
our directors and shareholders and our ability to achieve and maintain
profitable operations. Management believes that our companys cash and cash
equivalents, and cash provided by operating activities, if any, will be
sufficient to meet our working capital requirements for the next twelve months.
If additional funds are required, the issuance of additional equity securities
by our company may result in a significant dilution in the equity interests of
our current shareholders.

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Cash Flow Related to Operating Activities

Operating
activities used cash of $5,909,210 for the year ended March 31, 2008 as compared
to cash provided of $1,826,236 for the year ended March 31, 2007. The net cash
used in operating activities was mainly due to the net loss from continuing
operations and an increase in inventories of finished goods during the year
ended March 31, 2008.

Cash Flow Related to Investing Activities

Net
cash used in investing activities amounted to $269,758 during the year ended
March 31, 2008 as compared with investing activities using cash of $430,037
during the year ended March 31, 2007. The decrease in cash used in investing
activities is attributable primarily to decreased purchases of plant, equipment
and intangible assets during the year ended March 31, 2008 as compared to the
year ended March 31, 2007.

Cash Flow Related to Financing Activities

Financing
activities generated cash of $6,029,618 for the year ended March 31, 2008 as
compared to financing activities generating cash of $2,553,157 for the year
ended March 31, 2007. The increase in net cash flow generated from financing
activities was mainly due to new capital raising activities and a reduction in
the repayment of short-term borrowings and long-term debts during the year ended
March 31, 2008 as compared to the year ended March 31, 2007.

Capital Expenditures

Our
company incurred capital expenditures of $268,424 during the year ended March
31, 2008 and $1,354,500 for the year ended March 31, 2007. The decrease in
capital expenditures for the year ended March 31, 2008 as compared to March 31,
2007 was mainly attributable to decreased purchases of equipment. As of March
31, 2008, our company did not have any material commitments for capital
expenditures and management does not anticipate that our company will spend
additional material amounts on capital expenditures in the near future.

Off-Balance Sheet Arrangements

Our
company has no outstanding derivative financial instruments, off-balance sheet
guarantees, interest rate swap transactions or foreign currency contracts. Our
company does not engage in trading activities involving non-exchange traded
contracts.

Application of Critical Accounting Policies

Our
consolidated financial statements and accompanying notes are prepared in
accordance with United States generally accepted accounting principles.
Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses. These estimates and assumptions are affected by managements
application of accounting policies. We believe that understanding the basis and
nature of the estimates and assumptions involved with the following aspects of
our consolidated financial statements is critical to an understanding of our
operating results and financial position.

Principle of Consolidation

The
consolidated financial statements include the financial statements of our
company and its majority-owned subsidiaries. All significant intercompany
transactions and balances are eliminated on consolidation.

Trade Receivables and Allowance for Doubtful Accounts

In
regards to our companys allowance for doubtful accounts, our company
periodically records a provision for doubtful accounts based on an evaluation of
the collectibility of accounts receivable by assessing, among other factors, the
customers willingness or ability to pay, repayment history, general economic
conditions, and the

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ongoing relationship with our company's customers. The total
amount of this provision is determined by first identifying the receivables of
customers that are considered to be a higher credit risk based on their current
overdue accounts, difficulties in collecting from these customers in the past
and their overall financial condition. For each of these customers, our company
estimates the extent to which the customer will be able to meet its financial
obligations, and our company records an allowance that reduces its accounts
receivable for that customer to the amount that is reasonably believed will be
collected. Additional allowances may be required in the future if the financial
condition of our company's customers or general economic conditions deteriorate,
thereby reducing net income.

Inventories

Inventories
are stated at the lower of cost or market value. Cost is determined on the
first-in, first-out basis. Write-down of potentially obsolete or slow-moving
inventory is recorded based on managements analysis of inventory levels and our
company's assessment of estimated obsolescence based upon assumptions about
future demand and market conditions. Further write-down of the value may be
required in the future if there is rapid technological and structural change in
the industry. This may reduce the results of operations of our company.

Goodwill

Our
company accounted for acquisitions of business in accordance with SFAS No. 141
Business Combinations, which resulted in the recognition of goodwill. Goodwill
represents the excess of the purchase price over the fair value of net assets
acquired in business combinations accounted for under the purchase method.
Goodwill is not subject to amortization but will be subject to periodic
evaluation for impairment. Goodwill is stated in the consolidated balance sheet
at cost less accumulated impairment loss.

Intangible Assets

Our
company acquired certain intangible assets through the acquisition of
subsidiaries. These intangible assets comprise of trademark, customer lists and
relationships, unfulfilled purchase orders, completed technology for the
production of Aihua Ultra-High Pressure Mercury (AHP) lamps and HID lamps, a
customer base and a distributor base. The acquired trademarks were determined to
have an indefinite useful life which are not subject to amortization, unless and
until their useful life are determined no longer to be indefinite.

Our
company tests for impairment of trademarks annually, or more frequently if
events or changes in circumstances indicate that the asset might be impaired.
The completed technologies for the production of AHP and HID, distributor base,
customer lists and relationships and unfulfilled purchase orders are subject to
amortization over their respective economic useful life and reviewed for
impairment if the carrying amount of these intangible assets are not recoverable
and their carrying amount exceeds their fair market value. After an impairment
loss is recognized, the adjusted carrying amount of the intangible assets shall
be their new accounting basis.

The
estimation of the useful life of the trademarks, completed technologies for the
production of AHP and HID, distributor base, customer lists and relationships
will be affected by factors such as change in demand, unanticipated competition
and other economic factors including stability of industry, change in
technology, legislative action that results in an uncertain or an adverse change
in the regulatory environment and changes in distribution channels and business
climate. If impairment loss is recognized, the results of operations and the
financial condition of our company will be adversely affected.

Software
and license is recognized as intangible assets at cost less accumulated
amortization which is amortized over 3 years.

Plant and Equipment and Construction in Progress

Plant
and equipment is recorded at cost less accumulated depreciation. Depreciation is
provided on a straight-line basis over the estimated useful lives of the assets.
Estimated useful lives of equipment are as follows:

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|Testing equipment               | 4 years                                                      
|------------------------------- | -------------------------------------------------------------
|Office equipment                | 3  4 years                                                  
|Furniture and fixtures          | 3 - 4 years                                                  
|Leasehold improvements          | shorter of 4 years or the remaining terms of
      the leases
|Motor vehicles                  | 5 - 7 years                                                  
|Energy savers                   | 10 years                                                     
|Moulds                          | 3 years                                                      
|Factory machinery and equipment | 10 - 16 years                                                

Construction
in progress is stated at cost which comprises all direct costs incurred in
relation to their construction. The cost of construction in progress will not be
depreciated until they are put into use and are transferred to a specific
category of plant and equipment when the construction is completed. Expenditures
for repairs, maintenance and minor renewals and betterments are expensed.

Revenue Recognition

Our
company recognizes revenue when it is realized or realizable and earned. Our
company considers revenue realized or realizable and earned when it has
persuasive evidence of an arrangement, the product has been delivered and
installed or the services have been provided to the customer, the sales price is
fixed or determinable, and collectibility is reasonably assured. In addition to
the aforementioned general policy, the following are specific revenue
recognition policies for each major category of revenue.

Sale
of energy saving products  Our company sells its products directly to end
users with installation (Direct Sales Contracts) and through distributors
(Trading Contracts). Direct Sales Contracts revenue from hardware sales or
sales-type leases is recognized when the product is delivered to the customer
and related installation is completed when there are no unfulfilled company
obligations that affect the customer's final acceptance of the arrangement and
when all other revenue recognition criteria are met. Revenue from Trading
Contracts is recognized when the product is delivered and title is transferred
and when all other revenue recognition criteria are met.

Sale
of lighting source products  Our company sells its products directly to end
users and through distributors. Revenue is recognized when the product is
delivered to the customer and all other revenue recognition criteria are met.

Sale
of lighting design solutions  Our company sells its products directly to
end users and through distributors. Revenue is recognized when the product is
delivered to the customer and all other revenue recognition criteria are met.

Contract
revenue from lighting design solutions - Revenues are recognized on the
percentage-of-completion method, measured by the ratio of costs incurred up to a
given date to estimated total costs for each contract.

Contract
costs include all direct material, labor, subcontract and other costs and those
indirect costs related to contract performance, such as indirect salaries and
wages, equipment repairs and depreciation, insurance and payroll taxes.
Administrative and general expenses are charged to expense as incurred.
Provisions for estimated losses on uncompleted contracts are made in the period
in which such losses are determined. Changes in job performance, job conditions
and estimated profitability, including those changes arising from contract
penalty provisions and final contract settlements may result in revisions to
costs and income and are recognized in the period in which the revisions are
determined. An amount attributable to contract claims is included in revenues
when realization is probable and the amount can be reliably estimated. Our
company generally provides a one-year warranty for workmanship under its
contracts. Warranty claims historically have been inconsequential.

The
asset, Costs and estimated earnings in excess of billings on uncompleted
contracts represents revenues recognized in excess of amounts billed on these
contracts. The liability Billings in excess of costs and

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- 34 -

estimated earnings on uncompleted contracts represents
billings in excess of revenues recognized on these contracts.

Advertising
revenue  revenues from advertising services, net of agency rebates and
commission, are recognised rateably over the year in which the advertisement is
displayed. Prepayments for the advertising services are deferred and recognised
as revenue when the advertising services are rendered.

Rental
income - Revenue from rentals and operating leases without any acceptance
provisions is recognized on a straight-line basis over the term of the rental or
lease.

Commission
and services income - Revenue from consultancy services related to energy -
saving feasibility study is recognized when granted. Services are considered
granted when our company delivers its assessment to its customer and the
customer signs the acceptance report.

Sales-type
lease income - Represents finance income attributable to sales-type leases
and is recognized over the term of the lease, using the effective interest
method.

Basic and Diluted Earning (Loss) per Share

Our
company reports basic earnings per share in accordance with SFAS No. 128,
Earnings Per Share. Basic earnings per share is computed using the weighted
average number of shares outstanding during the periods presented. The weighted
average number of shares of our company represents the common stock outstanding
during the period.

Diluted
earnings per share is based on the assumption that if there is no anti-dilutive
effect on the basic earnings per share, all dilutive convertible notes, options
and warrants were converted or exercised. Dilution is computed by applying the
treasury stock method. Under this method, options are assumed to be exercised at
the beginning of the year (or at the time of issuance, if later), and as if
funds obtained thereby were used to purchase common stock at the average market
price during the period.

The
basic and diluted losses per share are the same for the year ended March 31,
2008 because our company recorded net loss attributable to shareholders. The
assumed conversion of the potential dilutive shares at March 31, 2008 would have
an anti-dilutive effect.

Recent Accounting Pronouncements

In
September 2006, the FASB issued Statement of Financial Accounting Standards No.
157, Fair Value Measurements (SFAS 157). SFAS 157 defines fair value,
establishes a framework for measuring fair value, and expands disclosures about
fair value instruments. SFAS 157 does not require any new fair value
measurements, but applies under other accounting pronouncements that require or
permit fair value measurements. SFAS 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007 (the Groups fiscal
year ending March 31, 2009). Management believes that implementation of SFAS 157
will have little or no impact on the Groups Financial Statements.

In
September 2006, the FASB issued Statement of Financial Accounting Standards No.
158, Employers Accounting for Defined Benefit Pension and Other Postretirement
Plans  an amendment of FASB Statements No. 87, 88, 106, and 132(R) (SFAS 158).
SFAS 158 requires plan sponsors of defined benefit pension and other
postretirement benefit plans (collectively, postretirement benefit plans) to
fully recognize the funded status of their postretirement benefit plans in the
statement of financial position, measure the fair value of plan assets and
benefit obligations as of the date of the fiscal year-end statement of financial
position and provide additional disclosures. Management believes that
implementation of SFAS 157 will have little or no impact on our companys
financial statements since our company has no applicable plan.

In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities (SFAS No. 159). SFAS No. 159 permits
entities to choose to measure many financial assets and financial liabilities at
fair value. Unrealized gains and losses on items for which the fair value option
has been

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elected will be reported in earnings. SFAS No. 159 is effective
for fiscal years beginning after November 15, 2007. Our companys management
believes that this statement will not have a significant impact on our companys
financial statements.

In
December 2007, the FASB issued SFAS No. 141 (revised 2007) (SFAS 141R),
Business Combinations, which replaces SFAS No 141. SFAS 141R retains the
purchase method of accounting for acquisitions, but requires a number of
changes, including changes in the way assets and liabilities are recognized in
the purchase accounting. It also changes the recognition of assets acquired and
liabilities assumed arising from contingencies, requires the capitalization of
in-process research and development at fair value, and requires the expensing of
acquisition-related costs as incurred. SFAS No. 141R is effective for fiscal
years beginning July 1, 2009 and will apply prospectively to business
combinations completed on or after that date. Our companys management believes
that this statement will not have a significant impact on our companys
financial statements.

In
December 2007, the FASB issued SFAS No. 160 (SFAS 160) Noncontrolling
Interests in Consolidated Financial Statements - an amendment of ARB No. 51.
SFAS 160 applies to all entities that prepare consolidated financial statements,
but will affect only those entities that have an outstanding noncontrolling
interest in one or more subsidiaries or that deconsolidate a subsidiary. This
statement is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008. Earlier adoption is prohibited.
Management does not expect that the application of this standard will have any
significant effect on our company's financial statements.

In
December 2007, the SEC issued Staff Accounting Bulletin No. 110 (SAB 110). SAB
110 amends and replaces Question 6 of Section D.2 of Topic 14, Share-Based
Payment of the Staff Accounting Bulletin series. Question 6 of Section D.2 of
Topic 14 expresses the views of the staff regarding the use of the simplified
method in developing an estimate of expected term of plain vanilla share
options and allows usage of the simplified method for share option grants
prior to December 31, 2007. SAB 110 allows public companies which do not have
historically sufficient experience to provide a reasonable estimate to continue
use of the simplified method for estimating the expected term of plain
vanilla share option grants after December 31, 2007. SAB 110 is effective for
our company on January 1, 2008. As there are no options granted prior to
December 31, 2007, our companys management does not expect that the application
of this standard will have any significant effect on our company's financial
statements.

In
March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities-an amendment of FASB Statement No. 133 (SFAS
161). SFAS 161 requires enhanced disclosures about an entity's derivative and
hedging activities, including (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under SFAS No. 133,"Accounting for Derivative Instruments and
Hedging Activities" (SFAS 133), and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity's financial
position, financial performance, and cash flows. SFAS 161 is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008. Our company does not expect that the adoption of the above
recent pronouncements will have a material effect on our company's financial
statements.

In
May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles (SFAS No. 162). SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States of America. The sources of accounting principles that are
generally accepted are categorized in descending order as follows:

a)
FASB Statements of Financial Accounting Standards and Interpretations, FASB
Statement 133 Implementation Issues, FASB Staff Positions, and American
Institute of Certified Public Accountants (AICPA) Accounting Research Bulletins
and Accounting Principles Board Opinions that are not superseded by actions of
the FASB.

b)
FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry Audit and
Accounting Guides and Statements of Position.

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- 36 -

c)
AICPA Accounting Standards Executive Committee Practice Bulletins that have been
cleared by the FASB, consensus positions of the FASB Emerging Issues Task Force
(EITF), and the Topics discussed in Appendix D of EITF Abstracts (EITF
D-Topics).

d)
Implementation guides (Q&As) published by the FASB staff, AICPA Accounting
Interpretations, AICPA Industry Audit and Accounting Guides and Statements of
Position not cleared by the FASB, and practices that are widely recognized and
prevalent either generally or in the industry.

SFAS
No. 162 is effective 60 days following the SECs approval of the Public Company
Accounting Oversight Board amendment to its authoritative literature. It is only
effective for nongovernmental entities; therefore, the GAAP hierarchy will
remain in SAS 69 for state and local governmental entities and federal
governmental entities. The management of our company does not expect the
adoption of this pronouncement to have a material impact on our financial
statements.

On
May 26, 2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee
Insurance Contracts (SFAS No. 163). SFAS No. 163 clarifies how SFAS No. 60,
Accounting and Reporting by Insurance Enterprises (SFAS No. 60), applies to
financial guarantee insurance contracts issued by insurance enterprises,
including the recognition and measurement of premium revenue and claim
liabilities. It also requires expanded disclosures about financial guarantee
insurance contracts.

The
accounting and disclosure requirements of SFAS No. 163 are intended to improve
the comparability and quality of information provided to users of financial
statements by creating consistency. Diversity exists in practice in accounting
for financial guarantee insurance contracts by insurance enterprises under SFAS
No. 60, Accounting and Reporting by Insurance Enterprises. That diversity
results in inconsistencies in the recognition and measurement of claim
liabilities because of differing views about when a loss has been incurred under
FASB Statement No. 5, Accounting for Contingencies (SFAS No. 5). SFAS No.
163 requires that an insurance enterprise recognize a claim liability prior to
an event of default when there is evidence that credit deterioration has
occurred in an insured financial obligation. It also requires disclosure about
(a) the risk-management activities used by an insurance enterprise to evaluate
credit deterioration in its insured financial obligations and (b) the insurance
enterprises surveillance or watch list.

SFAS
No. 163 is effective for financial statements issued for fiscal years beginning
after December 15, 2008, and all interim periods within those fiscal years,
except for disclosures about the insurance enterprises risk-management
activities. Disclosures about the insurance enterprises risk-management
activities are effective the first period beginning after issuance of SFAS No.
163. Except for those disclosures, earlier application is not permitted. The
management of our company does not expect the adoption of this pronouncement to
have material impact on our financial statements.

**ITEM
7.**     **FINANCIAL
STATEMENTS**.

Our
consolidated financial statements are stated in United States dollars and are
prepared in conformity with generally accepted accounting principles of the
United States.

The
following consolidated financial statements pertaining to our company are filed
as part of this annual report:

| | Audited consolidated
      financial statements for the fiscal years ended March 31, 2008 and 2007:
| | ---------------------------------------------------------------------------------------------------
| |                                                                                                    
| |                                                                                                    
| |                                                                                                    
| |                                                                                                    
| |                                                                                                    
| |                                                                                                    
| |                                                                                                    
| |                                                                                                    

---

- 37 -

| | Consolidated
      Statements of Cash Flows for the years ended March 31, 2008 and 2007
| | ---------------------------------------------------------------------------------------
| |                                                                                        
| | Notes
      to Consolidated Financial Statements                                       

---

- 38 -













LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES



CONSOLIDATED FINANCIAL STATEMENTS

For the years ended March 31, 2008 and 2007(Stated in U.S. Dollars) and Report of Independent Registered Public
Accounting Firm

---

- 39 -



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders of Lightscape
Technologies Inc.

We have audited the accompanying consolidated balance sheets of
Lightscape Technologies Inc. and subsidiaries (the Company) as of March 31, 2008 and 2007, and
the related consolidated statements of (operations) income, stockholders equity
and comprehensive income, and cash flows for each of the years then ended. The
Companys management is responsible for these consolidated financial statements.
Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of
Lightscape Technologies Inc. and subsidiaries as of March 31, 2008 and 2007, and
the results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.

/s/ Yu and Associates CPA Corporation

June 11, 2008 Arcadia, California

---

- 40 -

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES
|---------------------------------------------
|                                             
|CONSOLIDATED BALANCE SHEETS                  
|Expressed in US
      dollars                

|                                                                                  |  | March 31,  |  |  | March 31,  | 
|--------------------------------------------------------------------------------- |  | ---------- |  |  | ---------- | 
|                                                                                  |  | 2008       |  |  | 2007       | 
|                                                                                  |  | $          |  |  | $          | 
|ASSETS                                                                            |  |            |  |  |            | 
|Current assets:                                                                   |  |            |  |  |            | 
|Cash and cash
      equivalents                                                   |  | 3,976,565  |  |  | 4,108,180  | 
|Accounts receivable, net of
      allowance for doubtful accounts                 |  |            |  |  |            | 
|of
      $817,790 on March 31, 2008 and $413,082 on March 31, 2007                |  | 4,438,207  |  |  | 4,785,841  | 
|Costs and estimated earnings in
      excess of billings on uncompleted           |  |            |  |  |            | 
|contracts                                                                         |  | 639,035    |  |  | -          | 
|Prepaid expenses and other
      current assets                                   |  | 1,742,031  |  |  | 2,034,460  | 
|Inventories                                                                       |  | 3,903,798  |  |  | 1,569,203  | 
|Current assets of discontinued
      operations                                   |  | 699,847    |  |  | 593,381    | 
|                                                                                  |  |            |  |  |            | 
|Total current assets                                                              |  | 15,399,483 |  |  | 13,091,065 | 
|                                                                                  |  |            |  |  |            | 
|Other investments, net of write-off amount                                        |  |            |  |  |            | 
|of $31,516 on March 31,
      2008 and 2007                                       |  | -          |  |  | -          | 
|Intangible assets, net                                                            |  | 1,700,114  |  |  | 3,138,568  | 
|Goodwill                                                                          |  | 4,476,574  |  |  | 5,003,437  | 
|Plant and equipment, net                                                          |  | 4,650,398  |  |  | 3,923,120  | 
|Construction in progress                                                          |  | -          |  |  | 1,715,141  | 
|Net investment in sales-type leases of discontinued
      operation               |  | 126,521    |  |  | 329,238    | 
|Intangible assets, plant and equipment, net
      investment in sales-type leases |  |            |  |  |            | 
|of discontinued operations                                                        |  | -          |  |  | 1,381,478  | 
|                                                                                  |  |            |  |  |            | 
|                                                                                  |  | 10,953,607 |  |  | 15,490,982 | 
|                                                                                  |  |            |  |  |            | 
|TOTAL ASSETS                                                                      |  | 26,353,090 |  |  | 28,582,047 | 
|                                                                                  |  |            |  |  |            | 
|LIABILITIES AND SHAREHOLDERS' EQUITY                                              |  |            |  |  |            | 
|Current liabilities:                                                              |  |            |  |  |            | 
|Options to subscribe for
      additional convertible notes                       |  | -          |  |  | 2,619,000  | 
|Trade payables                                                                    |  | 2,413,203  |  |  | 2,966,420  | 
|Amount due to a director                                                          |  | -          |  |  | 39,846     | 
|Accrued expenses
      and other current liabilities                              |  | 763,797    |  |  | 978,744    | 
|Obligations under capital leases
       current portion                          |  | 1,774      |  |  | 1,774      | 
|Income tax
      payable                                                          |  | 366,281    |  |  | 251,018    | 
|Liabilities of discontinued
      operations                                      |  | 364,191    |  |  | 396,961    | 
|                                                                                  |  |            |  |  |            | 
|Total current liabilities                                                         |  | 3,909,246  |  |  | 7,253,763  | 
|                                                                                  |  |            |  |  |            | 
|Non-current liabilities:                                                          |  |            |  |  |            | 
|Obligations
      under capital leases  non-current portion                      |  | 5,469      |  |  | 6,947      | 
|Redeemable convertible notes                                                      |  | -          |  |  | 147,047    | 
|                                                                                  |  |            |  |  |            | 
|Total non-current liabilities                                                     |  | 5,469      |  |  | 153,994    | 
|                                                                                  |  |            |  |  |            | 
|Total liabilities                                                                 |  | 3,914,715  |  |  | 7,407,757  | 

---

- 41 -

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES
|---------------------------------------------
|                                             
|CONSOLIDATED BALANCE SHEETS (continued)      
|Expressed in US
      dollars                

|                                                          |  | March 31,   |   |  | March 31,  |  
|--------------------------------------------------------- |  | ----------- | - |  | ---------- | -
|                                                          |  | 2008        |   |  | 2007       |  
|                                                          |  | $           |   |  | $          |  
|                                                          |  |             |   |  |            |  
|Minority interest                                         |  | 1,421,702   |   |  | 1,865,916  |  
|                                                          |  |             |   |  |            |  
|COMMITMENTS AND CONTINGENCIES (see Notes 18
      and 19) |  |             |   |  |            |  
|                                                          |  |             |   |  |            |  
|Shareholders' equity:                                     |  |             |   |  |            |  
|Common stock                                              |  |             |   |  |            |  
|Authorized:                                               |  |             |   |  |            |  
|800,000,000 common shares, par value $0.001 per share     |  |             |   |  |            |  
|100,000,000 preferred shares, par value $0.001 per share  |  |             |   |  |            |  
|Issued and
      outstanding:                             |  |             |   |  |            |  
|55,876,410 common shares at March 31, 2008 and 37,451,410 |  |             |   |  |            |  
|at March 31, 2007                                         |  | 55,876      |   |  | 37,451     |  
|Additional paid-in capital                                |  | 34,140,708  |   |  | 24,139,333 |  
|Common stock warrants                                     |  | 344,673     |   |  | -          |  
|Other reserves                                            |  | 28,944      |   |  | 28,944     |  
|Accumulated other comprehensive income                    |  | 1,082,442   |   |  | 322,541    |  
|Accumulated deficit                                       |  | (14,635,970 | ) |  | (5,219,895 | )
|                                                          |  |             |   |  |            |  
|Total shareholders' equity                                |  | 21,016,673  |   |  | 19,308,374 |  
|                                                          |  |             |   |  |            |  
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                |  | 26,353,090  |   |  | 28,582,047 |  

See notes to consolidated financial statements.

---

- 42 -

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES 
|----------------------------------------------
|                                              
|CONSOLIDATED STATEMENTS OF (OPERATIONS) INCOME
|Expressed in US
      dollars                 

|                                                                                        |  | Year Ended March 31, |  
|--------------------------------------------------------------------------------------- |  | -------------------- | -
|                                                                                        |  | 2008                 |  
|                                                                                        |  | $                    |  
|Revenues:                                                                               |  |                      |  
|Sale of lighting source products                                                        |  | 2,346,981            |  
|Sale of lighting design solutions                                                       |  | 1,039,548            |  
|Contract revenue from lighting
      design solutions contracts                         |  | 2,524,989            |  
|Rental income                                                                           |  | 5,141                |  
|Commission and service income                                                           |  | 45,752               |  
|Total net revenues                                                                      |  | 5,962,411            |  
|                                                                                        |  |                      |  
|Cost of revenues:                                                                       |  |                      |  
|Cost of sale of lighting source
      products                                          |  | (1,715,679           | )
|Cost of sale of lighting design solutions                                               |  | (970,169             | )
|Contract costs of lighting design
      solutions contracts                             |  | (2,008,918           | )
|Costs of rental                                                                         |  | -                    |  
|Costs of commission and service                                                         |  | -                    |  
|Total cost of revenues                                                                  |  | (4,694,766           | )
|                                                                                        |  |                      |  
|Gross profit                                                                            |  | 1,267,645            |  
|Selling and marketing expenses                                                          |  | (662,628             | )
|General and administrative expenses                                                     |  | (4,952,165           | )
|                                                                                        |  |                      |  
|(Loss) income from operations                                                           |  | (4,347,148           | )
|Interest expense                                                                        |  | (382,022             | )
|Interest income                                                                         |  | 39,424               |  
|Other income                                                                            |  | 888,412              |  
|Loss on disposal of plant and equipment                                                 |  | (3,728               | )
|Impairment loss on intangible assets                                                    |  | (689,204             | )
|Impairment on goodwill                                                                  |  | (526,863             | )
|Gain on disposal of investments                                                         |  | -                    |  
|Loss on redemption of redeemable convertible notes and options                          |  | (2,253,359           | )
|Equity share of the result of joint venture                                             |  | -                    |  
|                                                                                        |  |                      |  
|(Loss) income from continuing operations before
      income tax and minority interests |  | (7,274,488           | )
|Income taxes                                                                            |  | -                    |  
|                                                                                        |  |                      |  
|Net (loss) income from continuing operations before minority
      interests            |  | (7,274,488           | )
|Minority interests                                                                      |  | 444,215              |  
|                                                                                        |  |                      |  
|Net (loss) income from continuing operations                                            |  | (6,830,273           | )

---

- 43 -

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES             
|----------------------------------------------------------
|                                                          
|CONSOLIDATED STATEMENTS OF( OPERATIONS) INCOME (continued)
|Expressed in US
      dollars                             

|                                                                    |  | Year Ended March 31, |  
|------------------------------------------------------------------- |  | -------------------- | -
|                                                                    |  | 2008                 |  
|                                                                    |  | $                    |  
|Discontinued operations                                             |  |                      |  
|Net loss from discontinued operations, net of
      income taxes    |  | (244,131             | )
|Loss on disposal of discontinued
      component                    |  | (2,341,671           | )
|                                                                    |  |                      |  
|(Loss) on discontinued operations                                   |  | (2,585,802           | )
|                                                                    |  |                      |  
|Net (loss) income attributable to shareholders
      of the Company |  | (9,416,075           | )
|                                                                    |  |                      |  
|(Loss) Earnings per share                                           |  |                      |  
|- Basic                                                             |  |                      |  
|Continuing operations                                               |  | (0.16                | )
|Discontinued operations                                             |  | (0.06                | )
|Total                                                               |  | (0.22                | )
|- Diluted                                                           |  |                      |  
|Continuing operations                                               |  | (0.16                | )
|Discontinued operations                                             |  | (0.06                | )
|Total                                                               |  | (0.22                | )
|                                                                    |  |                      |  
|Weighted average number of common shares outstanding                |  |                      |  
|- Basic                                                             |  | 42,574,361           |  
|- Diluted                                                           |  | 42,574,361           |  

See notes to consolidated financial statements.

---

- 44 -

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES                                       
|------------------------------------------------------------------------------------
|                                                                                    
|CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND
      COMPRHENSIVE (LOSS) INCOME
|Expressed in US
      dollars (except for number of common shares)                  

|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  | Accumulated Other |   |  |             |   |  |             |  
|-------------------------- | ------------------- |  |  | ------ |  |  | -------- | - |  | ---------- | - |  | --------------------------- |  |  | ----------------- | - |  | ----------- | - |  | ----------- | -
|                           | Common
      Shares |  |  |        |  |  |          |   |  |            |   |  | Comprehensive (Loss) Income |  |  |                   |   |  |             |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  | Foreign     |   |  |             |  
|                           |                     |  |  |        |  |  | Common   |   |  | Additional |   |  |                             |  |  | Unrealized        |   |  | Currency    |   |  |             |  
|                           |                     |  |  |        |  |  | Stock    |   |  | Paid-In    |   |  | Other                       |  |  | Loss on           |   |  | Translation |   |  | Accumulated |  
|                           | Number              |  |  | Amount |  |  | Warrants |   |  | Capital    |   |  | Reserves                    |  |  | Investments       |   |  | Adjustment  |   |  | Deficit     |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Balance at April 1, 2006   | 30,535,719          |  |  | 30,535 |  |  | 573,692  |   |  | 14,667,387 |   |  | -                           |  |  | (36,597           | ) |  | (3,742      | ) |  | (6,274,386  | )
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Issuance of shares for the |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|acquisition of additional  |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|interests in Beijing       |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Illumination               | 3,076,923           |  |  | 3,077  |  |  | -        |   |  | 3,381,538  |   |  | -                           |  |  | -                 |   |  | -           |   |  | -           |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Issuance of shares for the |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|acquisition of additional  |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|interests in Lightscape    |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Macau                      | 1,200,000           |  |  | 1,200  |  |  | -        |   |  | 838,800    |   |  | -                           |  |  | -                 |   |  | -           |   |  | -           |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Issuance of shares for the |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|capitalisation of balance  |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|due to a director          | 2,638,768           |  |  | 2,639  |  |  | -        |   |  | 1,448,716  |   |  | -                           |  |  | -                 |   |  | -           |   |  | -           |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Issuance of redeemable     |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|convertible notes          | -                   |  |  | -      |  |  | -        |   |  | 3,229,200  |   |  | -                           |  |  | -                 |   |  | -           |   |  | -           |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Expiry of stock warrants   | -                   |  |  | -      |  |  | (573,692 | ) |  | 573,692    |   |  | -                           |  |  | -                 |   |  | -           |   |  | -           |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Foreign currency           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|translation adjustment     | -                   |  |  | -      |  |  | -        |   |  | -          |   |  | -                           |  |  | -                 |   |  | 329,827     |   |  | -           |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Net income                 | -                   |  |  | -      |  |  | -        |   |  | -          |   |  | -                           |  |  | -                 |   |  | -           |   |  | 1,079,891   |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Transfer                   | -                   |  |  | -      |  |  | -        |   |  | -          |   |  | 28,944                      |  |  | -                 |   |  | (3,544      | ) |  | (25,400     | )
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Disposal of investment     | -                   |  |  | -      |  |  | -        |   |  | -          |   |  | -                           |  |  | 36,597            |   |  | -           |   |  | -           |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Balance at March 31,       |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|2007                       | 37,451,410          |  |  | 37,451 |  |  | -        |   |  | 24,139,333 |   |  | 28,944                      |  |  | -                 |   |  | 322,541     |   |  | (5,219,895  | )
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Cancellation of beneficial |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|conversion feature upon    |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|redemption of              |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|redeemable convertible     |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|notes (note 9)             | -                   |  |  | -      |  |  | -        |   |  | (1,647,273 | ) |  | -                           |  |  | -                 |   |  | -           |   |  | -           |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Issuance of shares for     |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|additional working         |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|capital                    | 18,425,000          |  |  | 18,425 |  |  | -        |   |  | 11,993,321 |   |  | -                           |  |  | -                 |   |  | -           |   |  | -           |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Issuance of warrants       | -                   |  |  | -      |  |  | 344,673  |   |  | (344,673   | ) |  | -                           |  |  | -                 |   |  | -           |   |  | -           |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Foreign currency           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|translation adjustment     | -                   |  |  | -      |  |  | -        |   |  | -          |   |  | -                           |  |  | -                 |   |  | 759,901     |   |  | -           |  
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Net loss                   | -                   |  |  | -      |  |  | -        |   |  | -          |   |  | -                           |  |  | -                 |   |  | -           |   |  | (9,416,075  | )
|                           |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|Balance at March 31,       |                     |  |  |        |  |  |          |   |  |            |   |  |                             |  |  |                   |   |  |             |   |  |             |  
|2008                       | 55,876,410          |  |  | 55,876 |  |  | 344,673  |   |  | 34,140,708 |   |  | 28,944                      |  |  | -                 |   |  | 1,082,442   |   |  | (14,635,970 | )

See notes to consolidated financial statements.

---

- 45 -

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES
|---------------------------------------------
|                                             
|CONSOLIDATED STATEMENTS OF CASH FLOWS        
|Expressed in US
      dollars                

|                                                                                   |  | Year Ended March 31, |  
|---------------------------------------------------------------------------------- |  | -------------------- | -
|                                                                                   |  | 2008                 |  
|                                                                                   |  | $                    |  
|Cash flows from operating activities:                                              |  |                      |  
|Net (loss) income                                                                  |  | (9,416,075           | )
|Net loss from discontinued operations,
      net of income taxes                   |  | 244,131              |  
|Loss on disposal
      of discontinued component                                   |  | 2,341,671            |  
|Net (loss) income from continuing
      operations                                 |  | (6,830,273           | )
|                                                                                   |  |                      |  
|Adjustment to reconcile net (loss) income to                                       |  |                      |  
|net cash (used in) generated from operating
      activities:                      |  |                      |  
|Amortization of intangible assets                                                  |  | 749,251              |  
|Impairment on goodwill                                                             |  | 526,863              |  
|Impairment loss on intangible assets                                               |  | 689,204              |  
|Depreciation expense                                                               |  | 504,244              |  
|Loss on disposal of investments                                                    |  | -                    |  
|Loss on disposal
      of plant and equipment                                      |  | 3,728                |  
|Equity share of the result of corporate
      joint venture                        |  | -                    |  
|Minority interest                                                                  |  | (444,215             | )
|Waiver of amount due to a former
      minority shareholder of a subsidiary        |  | -                    |  
|Gain on changes
      in fair value of embedded options                            |  | (866,400             | )
|Loss on redemption of redeemable
      convertible notes and options               |  | 2,253,359            |  
|Changes in operating assets and liabilities,
      net of acquisitions:            |  |                      |  
|Accounts receivable, net of allowance
      for doubtful debts                     |  | 347,634              |  
|Costs and estimated
      earnings in excess of billings on uncompleted contracts  |  | (639,035             | )
|Prepaid expenses and other current
      assets                                    |  | 232,046              |  
|Inventories                                                                        |  | (2,334,595           | )
|Trade payables                                                                     |  | (553,217             | )
|Amount due from
      a related company                                            |  | -                    |  
|Accrued expenses and other current
      liabilities                               |  | 340,761              |  
|Income tax payable                                                                 |  | 115,263              |  
|                                                                                   |  |                      |  
|Net cash (used in) provided by operating activities
      of continuing operations |  | (5,905,382           | )
|Net cash used in operating activities of discontinued operations                   |  | (3,828               | )
|Net cash (used in) generated from operating
      activities                       |  | (5,909,210           | )
|                                                                                   |  |                      |  
|Cash flows from investing activities:                                              |  |                      |  
|Purchase of plant and equipment and intangible assets                              |  | (268,424             | )
|Proceed from sales of plant and equipment                                          |  | 642                  |  
|Proceed from sales of investments                                                  |  | -                    |  
|Cash paid for acquisition of a joint venture                                       |  | -                    |  
|Net cash paid for acquisition of subsidiaries                                      |  | -                    |  
|Decrease in restricted deposits                                                    |  | -                    |  
|                                                                                   |  |                      |  
|Net cash used in investing activities of continuing
      operations               |  | (267,782             | )
|Net cash used in investing activities of discontinued operations                   |  | (1,976               | )
|Net cash used in investing activities                                              |  | (269,758             | )

---

- 46 -

|LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES    
|-------------------------------------------------
|                                                 
|CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
|Expressed in US
      dollars                    

|                                                                                        |  | Year Ended March 31, |  
|--------------------------------------------------------------------------------------- |  | -------------------- | -
|                                                                                        |  | 2008                 |  
|                                                                                        |  | $                    |  
|                                                                                        |  |                      |  
|Cash flows from financing activities:                                                   |  |                      |  
|Discount on redeemable convertible notes                                                |  | -                    |  
|Net repayment of short-term borrowings and
      long-term debts                        |  | -                    |  
|Net proceeds from the issuance of redeemable convertible notes                          |  | -                    |  
|Net proceed from issuance of share capital                                              |  | 12,011,746           |  
|Early redemption of redeemable convertible notes                                        |  | (6,000,000           | )
|Repayment of capital lease obligations                                                  |  | (1,478               | )
|Advances from directors of a subsidiary                                                 |  | -                    |  
|Advance from a director                                                                 |  | 324,664              |  
|Repayment to a director                                                                 |  | (304,127             | )
|                                                                                        |  |                      |  
|Net cash provided by financing activities of continuing operations                      |  | 6,030,805            |  
|Net cash (used in) generated from financing
      activities of discontinued operations |  | (1,187               | )
|Net cash provided by financing activities                                               |  | 6,029,618            |  
|                                                                                        |  |                      |  
|Effect of foreign exchange rates change                                                 |  | 10,743               |  
|                                                                                        |  |                      |  
|Net (decrease) increase in cash and cash equivalents                                    |  | (138,607             | )
|Cash and cash equivalents at beginning of the
      year                                |  | 4,117,107            |  
|                                                                                        |  |                      |  
|Cash and cash equivalents at end of the year                                            |  | 3,978,500            |  
|                                                                                        |  |                      |  
|Analysis of cash and cash equivalents:                                                  |  |                      |  
|Cash at banks and in hand  continuing operations                                       |  | 3,976,565            |  
|Cash at banks and in hand 
      discontinued operations                               |  | 1,935                |  
|                                                                                        |  | 3,978,500            |  
|                                                                                        |  |                      |  
|Supplemental disclosure of cash flows information                                       |  |                      |  
|Bank interest expenses paid                                                             |  | 9,912                |  
|Interest on capital lease obligations paid                                              |  | -                    |  
|Income taxes paid                                                                       |  | -                    |  
|                                                                                        |  |                      |  
|Supplemental schedules of non-cash investing
      and financing activities             |  |                      |  
|Inception of capital lease for acquisition of
      plant equipment                     |  | -                    |  
|Issuance of shares on the capitalization
      of balance due to a director             |  | -                    |  

See notes to consolidated financial statements.

---

- 47 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS

Lightscape Technologies Inc. (Lightscape) was incorporated
under the laws of the State of Nevada. On April 23, 2007, the Company changed
its name from Global Innovative System Inc. to Lightscape Technologies Inc. The
Company is an investment holding company with its subsidiaries (together with
Lightscape collectively referred to as the Company) principally engaging in
four main business activities: (i) light-emitting diode (LED) outdoor
advertising, (ii) LED solutions, (iii) lighting source products and (iv)
energy-savings solutions. However, before the end of the fiscal year ended March
31, 2008, the Company decided to exit the energy-savings solutions business,
details of which are disclosed in note 16.

The consolidated financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities and commitments in the normal course of
business.

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements of the
Company have been prepared in accordance with generally accepted accounting
principles in the United States of America.

Principle of Consolidation

The consolidated financial statements include the financial
statements of the Company and its majority-owned subsidiaries. All significant
intercompany transactions and balances are eliminated on consolidation.

Use of Estimates

The preparation of financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and demand
deposits which are unrestricted as to withdrawal and use, and which have
maturities of three months or less when purchased.

Other Investment

Other investment is stated at cost less accumulated impairment
loss. It represents the investment in Xianghe Aihua New Enterprise Lighting
Equipment Company Ltd. (Xianghe Aihua), an indirect 51% owned company of
Beijing Illumination (Hong Kong) Limited (Beijing Illumination) which is, in
turn, an indirect 76.8% owned company of the Company. The control of Xianghe
Aihua does not reside with the Company and the Company does not have significant
influence on it. The Company is unable to obtain any updated financial
statements of Xianghe Aihua. As a consequence, the results of Xianghe Aihua were
not included in the consolidated financial statements of the Company.

---

- 48 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (continued)

Accounts Receivables and Allowance for Doubtful Accounts

In regards to the Companys allowance for doubtful accounts,
the Company periodically records a provision for doubtful accounts based on an
evaluation of the collectibility of accounts receivable by assessing, among
other factors, the customers willingness or ability to pay, repayment history,
general economic conditions, and the ongoing relationship with the Company's
customers. The total amount of this provision is determined by first identifying
the receivables of customers that are considered to be a higher credit risk
based on their current overdue accounts, difficulties in collecting from these
customers in the past and their overall financial condition. For each of these
customers, the Company estimates the extent to which the customer will be able
to meet its financial obligations, and the Company records an allowance that
reduces its accounts receivable for that customer to the amount that is
reasonably believed will be collected. Additional allowances may be required in
the future if the financial condition of the Company's customers or general
economic conditions deteriorate, thereby reducing net income.

Inventories

Inventories are stated at the lower of cost or market value.
Cost is determined on the first-in, first-out basis. Write-down of potentially
obsolete or slow-moving inventory is recorded based on managements analysis of
inventory levels and the Company's assessment of estimated obsolescence based
upon assumptions about future demand and market conditions. Further write-down
of the value may be required in the future if there is rapid technological and
structural change in the industry. This may reduce the results of operations of
the Company.

Goodwill

The Company accounted for acquisitions of business in
accordance with SFAS No. 141 Business Combinations, which resulted in the
recognition of goodwill. Goodwill represents the excess of the purchase price
over the fair value of net assets acquired in business combinations accounted
for under the purchase method. Goodwill is not subject to amortization but will
be subject to periodic evaluation for impairment. Goodwill is stated in the
consolidated balance sheet at cost less accumulated impairment loss.

Intangible Assets

The Company acquired certain intangible assets through the
acquisition of subsidiaries. These intangible assets comprise of trademark,
customer lists and relationships, unfulfilled purchase orders, completed
technology for the production of Aihua Ultra-High Pressure Mercury (AHP) lamps
and HID lamps, a customer base and a distributor base. The acquired trademarks
were determined to have an indefinite useful life which are not subject to
amortization, unless and until their useful life are determined no longer to be
indefinite.

The Company tests for impairment of trademarks annually, or
more frequently if events or changes in circumstances indicate that the asset
might be impaired. The completed technologies for the production of AHP and HID,
distributor base, customer lists and relationships and unfulfilled purchase
orders are subject to amortization over their respective economic useful life
and reviewed for impairment if the carrying amount of these intangible assets
are not recoverable and their carrying amount exceeds their fair market value.
After an impairment loss is recognized, the adjusted carrying amount of the
intangible assets shall be their new accounting basis.

---

- 49 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (continued)

Intangible Assets (continued)

The estimation of the useful life of the trademarks, completed
technologies for the production of AHP and HID, distributor base, customer lists
and relationships will be affected by factors such as change in demand,
unanticipated competition and other economic factors including stability of
industry, change in technology, legislative action that results in an uncertain
or an adverse change in the regulatory environment and changes in distribution
channels and business climate. If impairment loss is recognized, the results of
operations and the financial condition of the Company will be adversely
affected.

Software and license is recognized as intangible assets at cost
less accumulated amortization which is amortized over 3 years.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for potential impairment
based on a review of projected undiscounted cash flows associated with these
assets. Long-lived assets are included in impairment evaluations when events and
circumstances exist that indicate the carrying amount of these assets may not be
recoverable. Measurement of impairment losses for long-lived assets that the
Company expects to hold and use is based on the estimated fair value of the
assets. Therefore, future changes in the Companys strategy and other changes in
its operations could impact the projected future operating results that are
inherent in estimates of fair value, resulting in impairments in the future.
Additionally, other changes in the estimates and assumptions, including the
discount rate and expected long-term growth rate, which drive the valuation
techniques employed to estimate the fair value of long-lived assets could change
and, therefore, impact the assessments of impairment in the future.

Plant and Equipment and Construction in Progress

Plant and equipment is recorded at cost less accumulated
depreciation. Depreciation is provided on a straight-line basis over the
estimated useful lives of the assets. Estimated useful lives of equipment are as
follows:

|Testing equipment               | 4 years                                                      
|------------------------------- | -------------------------------------------------------------
|Office equipment                | 3  4 years                                                  
|Furniture and fixtures          | 3 - 4 years                                                  
|Leasehold improvements          | shorter of 4 years or the remaining terms of
      the leases
|Motor vehicles                  | 5 - 7 years                                                  
|Energy savers                   | 10 years                                                     
|Moulds                          | 3 years                                                      
|Factory machinery and equipment | 10 - 16 years                                                

Energy savers are electronic devices sold by the Company that
assist in regulating the consumption of electricity by certain equipment thereby
resulting in energy savings. The Company retains a number of these devices as
demonstration units for marketing and promotion purposes.

---

- 50 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (continued)

Plant and equipment and Construction in Progress (continued)

Construction in progress is stated at cost which comprises all
direct costs incurred in relation to their construction.

The cost of construction in progress will not be depreciated
until they are put into use and are transferred to a specific category of plant
and equipment when the construction is completed.

Expenditures for repairs, maintenance and minor renewals and
betterments are expensed.

Net Investment in Sales - Type Leases

At the time a sales-type lease is consummated, the Company
records the gross finance receivable, less unearned income. Unearned income is
recognized as lease income using the interest method over the term of the lease
and is included as financing revenue in the Company's consolidated statements of
operations. The Company reviews minimum lease payments receivable considered at
risk on a periodic basis. The review primarily consists of an analysis based
upon current information available about the client as well as the current
economic environment, value of leased assets net of repossession cost and prior
history. Impairment is measured using the fair value of the leased assets when
foreclosure is probable. Using this information, the Company determines the
expected cash flow for the receivable and calculates a recommended estimate of
the potential loss and the probability of loss. For those accounts in which the
loss is probable, the Company records a specific reserve.

Revenue Recognition

The Company recognizes revenue when it is realized or
realizable and earned. The Company considers revenue realized or realizable and
earned when it has persuasive evidence of an arrangement, the product has been
delivered and installed or the services have been provided to the customer, the
sales price is fixed or determinable, and collectibility is reasonably assured.
In addition to the aforementioned general policy, the following are specific
revenue recognition policies for each major category of revenue.

Sale of energy saving products - The Company sells its
products directly to end users with installation (Direct Sales Contracts) and
through distributors (Trading Contracts). Direct Sales Contracts revenue from
hardware sales or sales-type leases is recognized when the product is delivered
to the customer and related installation is completed when there are no
unfulfilled Company obligations that affect the customer's final acceptance of
the arrangement and when all other revenue recognition criteria are met. Revenue
from Trading Contracts is recognized when the product is delivered and title is
transferred and when all other revenue recognition criteria are met.

Sale of lighting source products - The Company sells its
products directly to end users and through distributors. Revenue is recognized
when the product is delivered to the customer and all other revenue recognition
criteria are met.

Sale of lighting design solutions - The Company sells
its products directly to end users and through distributors. Revenue is
recognized when the product is delivered to the customer and all other revenue
recognition criteria are met.

---

- 51 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (continued)

Revenue Recognition (continued)

Contract revenue from lighting design solutions -
Revenues are recognized on the percentage-of-completion method, measured by the
ratio of costs incurred up to a given date to estimated total costs for each
contract.

Contract costs include all direct material, labor, subcontract
and other costs and those indirect costs related to contract performance, such
as indirect salaries and wages, equipment repairs and depreciation, insurance
and payroll taxes. Administrative and general expenses are charged to expense as
incurred. Provisions for estimated losses on uncompleted contracts are made in
the period in which such losses are determined. Changes in job performance, job
conditions and estimated profitability, including those changes arising from
contract penalty provisions and final contract settlements may result in
revisions to costs and income and are recognized in the period in which the
revisions are determined. An amount attributable to contract claims is included
in revenues when realization is probable and the amount can be reliably
estimated. The Company generally provides a one-year warranty for workmanship
under its contracts. Warranty claims historically have been inconsequential.

The asset, Costs and estimated earnings in excess of billings
on uncompleted contracts represents revenues recognized in excess of amounts
billed on these contracts. The liability Billings in excess of costs and
estimated earnings on uncompleted contracts represents billings in excess of
revenues recognized on these contracts.

Advertising revenue  revenues from advertising
services, net of agency rebates and commission, are recognised rateably over the
year in which the advertisement is displayed. Prepayments for the advertising
services are deferred and recognised as revenue when the advertising services
are rendered.

Rental income - Revenue from rentals and operating
leases without any acceptance provisions is recognized on a straight-line basis
over the term of the rental or lease.

Commission and services income - Revenue from
consultancy services related to energy - saving feasibility study is recognized
when granted. Services are considered granted when the Company delivers its
assessment to its customer and the customer signs the acceptance report.

Sales-type lease income - Represents finance income
attributable to sales-type leases and is recognized over the term of the lease,
using the effective interest method.

Income Taxes

Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the carrying amounts
of existing assets and liabilities and their respective tax bases as well as
operating loss and tax credit carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. Valuation allowances are established when it is more likely than
not that some or all of the deferred tax assets will not be realized.

---

- 52 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (continued)

Foreign Currency Translation

The functional currency of the Company is Hong Kong dollars
(HKD). Transactions in other currencies are recorded in HKD at the rates of
exchange prevailing when the transactions occur. Monetary assets and liabilities
denominated in other currencies are measured in HKD at rates of exchange in
effect at the balance sheet dates. Exchange gains and losses are recorded in the
consolidated statements of operations as a component of current period earnings.

For financial reporting purposes, the financial statements of
the Company which are prepared using the functional currency have been
translated into United States dollars. Assets and liabilities are translated at
the exchange rates at the balance sheet dates and revenue and expenses are
translated at the average exchange rates and stockholders equity is translated
at historical exchange rates. Any translation adjustments resulting are not
included in determining net income but are included in foreign exchange
adjustment to other comprehensive income, a component of stockholders equity.

Segment Information

The Companys segment reporting is prepared in accordance with
SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information. The management approach required by SFAS 131 designates that the
internal reporting structure that is used by management for making operating
decisions and assessing performance should be used as the source for presenting
the Companys reportable segments.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, trade
receivables, and trade payables approximate their fair values due to the
short-term maturity of these instruments. The fair value of long-term debts and
capital lease obligations approximate their carrying value as the interest rates
approximate those which would have been available for loans of similar remaining
maturity at the respective period ends.

Comprehensive Income

Comprehensive income is defined to include all changes in
equity except those resulting from investments by owners and distributions to
owners.

Stock-based Payment

The Company adopted the SFAS No. 123R, "Share-Based Payment"
("SFAS 123R") using the modified prospective method. Under SFAS 123R, equity
instruments issued to service providers for their services are measured at the
grant-date fair value and recognized in the statement of operations over the
vesting period.

Basic and Diluted (Loss) Earnings per Share

The Company reports basic earnings per share in accordance with
SFAS No. 128, Earnings Per Share. Basic earnings per share is computed using
the weighted average number of shares outstanding during the periods presented.
The weighted average number of shares of the Company represents the common stock
outstanding during the period.

---

- 53 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (continued)

Basic and Diluted (Loss) Earnings per Share (continued)

Diluted earnings per share is based on the assumption that if
there is no anti-dilutive effect on the basic earnings per share, all dilutive
convertible notes, options and warrants were converted or exercised. Dilution is
computed by applying the treasury stock method. Under this method, options are
assumed to be exercised at the beginning of the year (or at the time of
issuance, if later), and as if funds obtained thereby were used to purchase
common stock at the average market price during the period.

The basic and diluted losses per share are the same for the
year ended March 31, 2008 because the Company recorded net loss attributable to
shareholders. The assumed conversion of the potential dilutive shares at March
31, 2008 would have an anti-dilutive effect.

Recent Accounting Pronouncements

In September 2006, the FASB issued Statement of Financial
Accounting Standards No. 157, Fair Value Measurements (SFAS 157). SFAS 157
defines fair value, establishes a framework for measuring fair value, and
expands disclosures about fair value instruments. SFAS 157 does not require any
new fair value measurements, but applies under other accounting pronouncements
that require or permit fair value measurements. SFAS 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007
(the Groups fiscal year ending March 31, 2009). Management believes that
implementation of SFAS 157 will have little or no impact on the Groups
Financial Statements.

In September 2006, the FASB issued Statement of Financial
Accounting Standards No. 158, Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88,
106, and 132(R) (SFAS 158). SFAS 158 requires plan sponsors of defined benefit
pension and other postretirement benefit plans (collectively, postretirement
benefit plans) to fully recognize the funded status of their postretirement
benefit plans in the statement of financial position, measure the fair value of
plan assets and benefit obligations as of the date of the fiscal year-end
statement of financial position and provide additional disclosures. Management
believes that implementation of SFAS 157 will have little or no impact on the
Companys financial statements since the Company has no applicable plan.

In February 2007, the FASB issued SFAS No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities (SFAS No. 159). SFAS No.
159 permits entities to choose to measure many financial assets and financial
liabilities at fair value. Unrealized gains and losses on items for which the
fair value option has been elected will be reported in earnings. SFAS No. 159 is
effective for fiscal years beginning after November 15, 2007. The Companys
management believes that this statement will not have a significant impact on
the Companys financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007)
(SFAS 141R), Business Combinations, which replaces SFAS No 141. SFAS 141R
retains the purchase method of accounting for acquisitions, but requires a
number of changes, including changes in the way assets and liabilities are
recognized in the purchase accounting. It also changes the recognition of assets
acquired and liabilities assumed arising from contingencies, requires the
capitalization of in-process research and development at fair value, and
requires the expensing of acquisition-related costs as incurred. SFAS No. 141R
is effective for fiscal years beginning July 1, 2009 and will apply
prospectively to business combinations completed on or after that date. The
Companys management believes that this statement will not have a significant
impact on the Companys financial statements.

---

- 54 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements (continued)

In December 2007, the FASB issued SFAS No. 160 (SFAS 160)
Noncontrolling Interests in Consolidated Financial Statements - an amendment of
ARB No. 51. SFAS 160 applies to all entities that prepare consolidated
financial statements, but will affect only those entities that have an
outstanding noncontrolling interest in one or more subsidiaries or that
deconsolidate a subsidiary. This statement is effective for fiscal years, and
interim periods within those fiscal years, beginning on or after December 15,
2008. Earlier adoption is prohibited. Management does not expect that the
application of this standard will have any significant effect on the Company's
financial statements.

In December 2007, the SEC issued Staff Accounting Bulletin No.
110 (SAB 110). SAB 110 amends and replaces Question 6 of Section D.2 of Topic
14, Share-Based Payment of the Staff Accounting Bulletin series. Question 6 of
Section D.2 of Topic 14 expresses the views of the staff regarding the use of
the simplified method in developing an estimate of expected term of plain
vanilla share options and allows usage of the simplified method for share
option grants prior to December 31, 2007. SAB 110 allows public companies which
do not have historically sufficient experience to provide a reasonable estimate
to continue use of the simplified method for estimating the expected term of
plain vanilla share option grants after December 31, 2007. SAB 110 is
effective for the Company on January 1, 2008. As there are no options granted
prior to December 31, 2007, the Companys management does not expect that the
application of this standard will have any significant effect on the Company's
financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about
Derivative Instruments and Hedging Activities-an amendment of FASB Statement No.
133 (SFAS 161). SFAS 161 requires enhanced disclosures about an entity's
derivative and hedging activities, including (a) how and why an entity uses
derivative instruments, (b) how derivative instruments and related hedged items
are accounted for under SFAS No. 133,"Accounting for Derivative Instruments and
Hedging Activities" (SFAS 133), and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity's financial
position, financial performance, and cash flows. SFAS 161 is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008. The Company does not expect that the adoption of the above
recent pronouncements will have a material effect on the Company's financial
statements.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of
Generally Accepted Accounting Principles (SFAS No. 162). SFAS No. 162
identifies the sources of accounting principles and the framework for selecting
the principles used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with generally
accepted accounting principles in the United States of America. The sources of
accounting principles that are generally accepted are categorized in descending
order as follows:

a) FASB Statements of Financial Accounting Standards and
Interpretations, FASB Statement 133 Implementation Issues, FASB Staff Positions,
and American Institute of Certified Public Accountants (AICPA) Accounting
Research Bulletins and Accounting Principles Board Opinions that are not
superseded by actions of the FASB.

b) FASB Technical Bulletins and, if cleared by the FASB, AICPA
Industry Audit and Accounting Guides and Statements of Position.

c) AICPA Accounting Standards Executive Committee Practice
Bulletins that have been cleared by the FASB, consensus positions of the FASB
Emerging Issues Task Force (EITF), and the Topics discussed in Appendix D of
EITF Abstracts (EITF D-Topics).

d) Implementation guides (Q&As) published by the FASB
staff, AICPA Accounting Interpretations, AICPA Industry Audit and Accounting
Guides and Statements of Position not cleared by the FASB, and practices that
are widely recognized and prevalent either generally or in the industry.

---

- 55 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements (continued)

SFAS No. 162 is effective 60 days following the SECs approval
of the Public Company Accounting Oversight Board amendment to its authoritative
literature. It is only effective for nongovernmental entities; therefore, the
GAAP hierarchy will remain in SAS 69 for state and local governmental entities
and federal governmental entities. The management of the Company does not expect
the adoption of this pronouncement to have a material impact on its financial
statements.

On May 26, 2008, the FASB issued SFAS No. 163, Accounting for
Financial Guarantee Insurance Contracts (SFAS No. 163). SFAS No. 163
clarifies how SFAS No. 60, Accounting and Reporting by Insurance Enterprises
(SFAS No. 60), applies to financial guarantee insurance contracts issued by
insurance enterprises, including the recognition and measurement of premium
revenue and claim liabilities. It also requires expanded disclosures about
financial guarantee insurance contracts.

The accounting and disclosure requirements of SFAS No. 163 are
intended to improve the comparability and quality of information provided to
users of financial statements by creating consistency. Diversity exists in
practice in accounting for financial guarantee insurance contracts by insurance
enterprises under SFAS No. 60, Accounting and Reporting by Insurance
Enterprises. That diversity results in inconsistencies in the recognition and
measurement of claim liabilities because of differing views about when a loss
has been incurred under FASB Statement No. 5, Accounting for Contingencies
(SFAS No. 5). SFAS No. 163 requires that an insurance enterprise recognize a
claim liability prior to an event of default when there is evidence that credit
deterioration has occurred in an insured financial obligation. It also requires
disclosure about (a) the risk-management activities used by an insurance
enterprise to evaluate credit deterioration in its insured financial obligations
and (b) the insurance enterprises surveillance or watch list.

SFAS No. 163 is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and all interim periods within
those fiscal years, except for disclosures about the insurance enterprises
risk-management activities. Disclosures about the insurance enterprises
risk-management activities are effective the first period beginning after
issuance of SFAS No. 163. Except for those disclosures, earlier application is
not permitted. The management of the Company does not expect the adoption of
this pronouncement to have material impact on its financial statements.

NOTE 3. COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS
ON UNCOMPLETED CONTRACTS

Costs and estimated earnings in excess of billings on
uncompleted contracts as of March 31, 2008 and 2007 are summarized as follows:

|                                                         |  | March 31, |  |  | March 31, | 
|-------------------------------------------------------- |  | --------- |  |  | --------- | 
|                                                         |  | 2008      |  |  | 2007      | 
|                                                         |  | $         |  |  | $         | 
|                                                         |  |           |  |  |           | 
|Cumulative costs incurred on uncompleted
      contracts |  | 1,575,574 |  |  | -         | 
|Cumulative estimated earnings to date                    |  | 1,071,896 |  |  | -         | 
|                                                         |  | 2,647,470 |  |  | -         | 
|Less: Billings to date                                   |  | 2,008,435 |  |  | -         | 
|                                                         |  | 639,035   |  |  | -         | 

---

- 56 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 4. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the
following:

|                                     |  | March 31, |  |  | March 31, | 
|------------------------------------ |  | --------- |  |  | --------- | 
|                                     |  | 2008      |  |  | 2007      | 
|                                     |  | $         |  |  | $         | 
|Trade deposits                       |  | 1,546     |  |  | 776,437   | 
|Rental, utilities and other deposits |  | 393,373   |  |  | 187,207   | 
|Deferred notes issuance costs        |  | -         |  |  | 90,823    | 
|Prepaid expenses                     |  | 863,092   |  |  | 422,253   | 
|Other receivables                    |  | 465,216   |  |  | 549,373   | 
|Others                               |  | 18,804    |  |  | 8,367     | 
|                                     |  | 1,742,031 |  |  | 2,034,460 | 

NOTE 5. INVENTORIES

Inventories by major categories are summarized as follows:

|                 |  | March 31, |  |  | March 31, | 
|---------------- |  | --------- |  |  | --------- | 
|                 |  | 2008      |  |  | 2007      | 
|                 |  | $         |  |  | $         | 
|Raw materials    |  | 700,302   |  |  | 833,160   | 
|Work in progress |  | 589,119   |  |  | 542,491   | 
|Finished goods   |  | 2,614,377 |  |  | 193,552   | 
|                 |  | 3,903,798 |  |  | 1,569,203 | 

NOTE 6. PLANT AND EQUIPMENT, NET

Plant and equipment, net consists of the following:

|                                |  | March 31,  |   |  | March 31,  |  
|------------------------------- |  | ---------- | - |  | ---------- | -
|                                |  | 2008       |   |  | 2007       |  
|                                |  | $          |   |  | $          |  
|Testing equipment               |  | -          |   |  | 606        |  
|Office equipment                |  | 666,009    |   |  | 524,442    |  
|Furniture and fixtures          |  | 16,428     |   |  | 15,412     |  
|Leasehold improvements          |  | 323,900    |   |  | 321,899    |  
|Motor vehicles                  |  | 56,405     |   |  | 87,233     |  
|Moulds                          |  | -          |   |  | 18,431     |  
|Factory machinery and equipment |  | 5,349,055  |   |  | 4,258,482  |  
|Total                           |  | 6,411,797  |   |  | 5,226,505  |  
|Less: Accumulated depreciation  |  | (1,761,399 | ) |  | (1,303,385 | )
|Plant and equipment, net        |  | 4,650,398  |   |  | 3,923,120  |  

Equipment, net held under capital leases are summarized as
follows:

|                                         |  | March 31, |   |  | March 31, |  
|---------------------------------------- |  | --------- | - |  | --------- | -
|                                         |  | 2008      |   |  | 2007      |  
|                                         |  | $         |   |  | $         |  
|Office equipment                         |  | 8,869     |   |  | 12,571    |  
|Less: Accumulated depreciation           |  | (3,449    | ) |  | (3,276    | )
|Equipment, net held under capital leases |  | 5,420     |   |  | 9,295     |  

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- 57 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 7. CONSTRUCTION IN PROGRESS

Construction in progress consists of the following:

|                                                                |  | March 31, |   |  | March 31, | 
|--------------------------------------------------------------- |  | --------- | - |  | --------- | 
|                                                                |  | 2008      |   |  | 2007      | 
|                                                                |  | $         |   |  | $         | 
|Production facilities for AHP lamps                             |  | -         |   |  | 545,723   | 
|Others                                                          |  | -         |   |  | 58,203    | 
|                                                                |  | -         |   |  | 603,926   | 
|Production facilities for Xenon lights                          |  | 1,221,978 |   |  | 1,111,215 | 
|Loss on write-down of production facilities
      held-for-sale |  | (916,484  | ) |  | -         | 
|Transferred to current assets of discontinued operation         |  | (305,494  | ) |  | -         | 
|                                                                |  |           |   |  |           | 
|                                                                |  | -         |   |  | 1,715,141 | 

During the fourth quarter of the year ended March 31, 2008,
management of the Company had determined to dispose of certain facilities for
the production of a proposed new product line of its lighting source business
and had been actively finding a buyer. Hence, these production facilities which
had never been put into use have been stated at its fair value, measured as the
sale price expected to be received, less costs to sell at March 31, 2008.

NOTE 8. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill is recognised relating to the acquisition of equity
interest in Beijing Illumination (Hong Kong) Limited (Beijing Illumination)
and Lightscape Technologies (Macau) Limited (Lightscape Macau).

Changes to goodwill during the years ended March 31, 2008 and
2007 are as follows:

|                                     |  | March 31, |   |  | March 31, | 
|------------------------------------ |  | --------- | - |  | --------- | 
|                                     |  | 2008      |   |  | 2007      | 
|                                     |  | $         |   |  | $         | 
|Balance at the beginning of the year |  | 5,003,437 |   |  | 4,086,888 | 
|Arising on acquisitions              |  | -         |   |  | 916,549   | 
|Impairment losses recognized         |  | (526,863  | ) |  | -         | 
|                                     |  |           |   |  |           | 
|Balance at the end of the year       |  | 4,476,574 |   |  | 5,003,437 | 

Additions to goodwill in 2007 relate to the acquisition of
additional interest in Beijing Illumination and Lightscape Macau and represent
the costs of the investment over the estimated fair value of the underlying net
assets acquired.

Impairment Losses on Goodwill for Investment in Beijing
Illumination

The write-down goodwill of $526,863 was based on the valuation
report for Beijing Illumination prepared by  an
independent third party valuer. Income approach which is also known as the
discounted cash flow method is adopted for the calculation of the goodwill for
investment in Beijing Illumination as of March 31, 2008.

---

- 58 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 8. GOODWILL AND INTANGIBLE ASSETS, NET (continued)

Intangible Assets

Intangible assets arise from the acquisitions of interests in
subsidiaries and the costs of the intangible assets were determined during the
allocation of the purchase prices based on the estimated fair values of the
assets acquired and liabilities assumed as of the date of acquisition. Acquired
intangible assets consist of the following:

March
        31, 2008
      
      
      March
        31, 2007Accumulated
      
      
      
      
      
      
      
      
      Accumulatedamortization
      
      
      
      
      
      
      
      
      amortizationand
      
      
      
      
      
      
      
      
      andCost
      
      
      impairment
      
      
      Net
      
      
      Cost
      
      
      impairment
      
      
      Net$
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $Subject to amortizationCompleted technology  AHP
      
      1,172,616
      
      
      (999,494
      )
      
      173,122
      
      
      1,172,616
      
      
      (167,454
      )
      
      1,005,162Completed technology  HID
      
      1,214,012
      
      
      (617,252
      )
      
      596,760
      
      
      1,214,012
      
      
      (304,109
      )
      
      909,903Software and license
      
      641,077
      
      
      (345,101
      )
      
      295,976
      
      
      641,077
      
      
      (131,232
      )
      
      509,845Customer lists and relationships
      
      45,797
      
      
      (19,437
      )
      
      26,360
      
      
      45,797
      
      
      (4,574
      )
      
      41,223Distributors list
      
      179,351
      
      
      (137,665
      )
      
      41,686
      
      
      179,351
      
      
      (60,015
      )
      
      119,336Total
      
      3,252,853
      
      
      (2,118,949
      )
      
      1,133,904
      
      
      3,252,853
      
      
      (667,384
      )
      
      2,585,469Not subject to amortizationTrademark
      
      566,210
      
      
      -
      
      
      566,210
      
      
      553,099
      
      
      -
      
      
      553,099Total
      
      3,819,063
      
      
      (2,118,949
      )
      
      1,700,114
      
      
      3,805,952
      
      
      (667,384
      )
      
      3,138,568


During the year, the following impairment losses were
recognised:

|                                 |  | Year Ended March 31, | 
|-------------------------------- |  | -------------------- | 
|                                 |  | 2008                 | 
|                                 |  | $                    | 
|Impairment loss on:              |  |                      | 
|Completed technology  AHP       |  | 651,415              | 
|Completed technology  HID       |  | 9,640                | 
|Customer lists and relationships |  | 10,283               | 
|Distributors list                |  | 17,866               | 
|                                 |  |                      | 
|                                 |  | 689,204              | 

The fair value of intangible assets as of March 31, 2008 was
determined based on the valuation report prepared by  an
independent third party valuer. The income approach is adopted to determine the
net present value of Beijing Illuminations future expected cash flows.

Under the income approach, the Relief-from-royalty Method is
used for the valuations of the intangible assets. Under the Relief-from-royalty
Method, the completed technology  AHP and HIP (the Technologies) were valued
based upon the incremental after tax cash flows accruing to the owner by virtue
of the fact that the owner does not have to pay a fair royalty to a third party
for the use of the assets.

---

- 59 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 8. GOODWILL AND INTANGIBLE ASSETS, NET (continued)

Similar to the Technologies, the Relief-from-royalty Method is
used for the valuations of Trademark. An estimate of a reasonable royalty rates
were made assuming that the Trademark was licensed at fair rate as a result of
arms length negotiations.

To determine the values of the Customer Relationships and
Distribution Lists, economic capital charges were considered in the valuations.
The economic capital charges were the sum of the required returns of other
assets, including the Completed Technology  AHP, Completed Technology  HID,
the Trademark, the fixed assets and the working capital.

Amortization expenses charged to net (loss) income from
operations for the years ended March 31, 2008 and 2007 were $749,251 and
$633,731 respectively. Anticipated amortization expense on intangible assets for
each of the following years is as follows:

|Twelve months ending March 31, |  | $         | 
|------------------------------ |  | --------- | 
|2009                           |  | 591,678   | 
|2010                           |  | 418,584   | 
|2011                           |  | 37,919    | 
|2012                           |  | 37,919    | 
|2013 and thereafter            |  | 47,804    | 
|                               |  | 1,133,904 | 

NOTE 9. REDEMPTION OF CONVERTIBLE NOTES

On January 23, 2007, pursuant to the terms and conditions of
the subscription agreements, the Company issued 60 $100,000 redeemable
convertible notes in an aggregate principal amount of $6,000,000 to three
investors consisting of Investec Bank (UK) Limited (Investec Bank), Full Moon
Resources Limited (Full Moon Resources) and LP Asset Management Limited (LP
Asset Management).

Each note bears a fixed rate of interest at 10% per annum,
payable quarterly, calculated on a 360 day year on the principal amount
outstanding. Unless previously converted or redeemed, each note will be redeemed
by the Company on the maturity date of December 31, 2009 at a final redemption
amount, calculated in accordance with a formula set out in the note, together
with all interest thereon. The notes are convertible into common shares at the
rate of one common share per each $0.55 of principal converted (subject to
adjustment as described in the subscription agreements).

In addition, pursuant to the terms and conditions of the
subscription agreements, the Company granted two options to each investor to
purchase additional redeemable convertible notes of the Company in the aggregate
amount of $12,000,000, the first option (First Option) of which is exercisable
at any time during the period from April 1, 2007 to June 30, 2008. The first
option entitles the holder to subscribe for additional $100,000 redeemable
convertible notes of the Company in the aggregate principal amount of up to
$6,000,000. The second option (Second Option), which is exercisable on July 1,
2008, January 1, 2009 and July 1, 2009, or as otherwise described in the
subscription agreements, entitles the holder to subscribe for additional
$100,000 redeemable convertible notes of the Company in the aggregate principal
amount of up to $6,000,000. The conversion price of the notes underlying the
first option are convertible at $0.55 per share if converted on or before June
30, 2007 and at $0.66 per share if converted after June 30, 2007. The conversion
price of the notes underlying the second option is subject to a formula as set
out in the subscription agreements.

---

- 60 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 9. REDEMPTION OF CONVERTIBLE NOTES (continued)

The fair value of the First Option was determined using the
Black-Scholes option pricing model, based on the following assumptions:

|Expected volatility     | 130.30%                    
|----------------------- | ---------------------------
|Expected term in years  | 1.25 years                 
|Risk-free interest rate | 4.89%                      
|Exercise price          | $0.55                      
|Stock price             | $0.76 (at January 23, 2007)

Expected volatilities were calculated using the historical
prices of the Companys common stock. The expected term of first option was
based on the term of the exercisable periods. The risk-free interest rates were
based on the U.S. Treasury Note rate with terms comparable with the first
option.

The fair value of Second Option was not determinable due to the
high dependence on the future performance and future number of shares of the
Company caused no reasonable basis for the valuation of the Second Option.

The following table summarizes the accounting for the
redeemable convertible notes as of March 31, 2007:

|                                                                          |  | March 31,  |  
|------------------------------------------------------------------------- |  | ---------- | -
|                                                                          |  | 2007       |  
|                                                                          |  | $          |  
|Face value of redeemable convertible notes                                |  | 6,000,000  |  
|Estimated value of embedded options                                       |  | (2,770,800 | )
|Intrinsic value of beneficial conversion
      feature                    |  | (3,229,200 | )
|Amortization of discount                                                  |  | 147,047    |  
|                                                                          |  |            |  
|Redeemable convertible notes included under non-current
      liabilities |  | 147,047    |  

Early Redemption

On July 10, 2007, the Company entered into a redemption
agreement (Redemption Agreement) with Investec Bank, Full Moon Resources, LP
Asset Management and Bondy Tan, whereby the Company agreed to redeem the
convertible notes in the principal amount of $6,000,000 plus pay all accrued
interest on such notes.

On August 20, 2007, the Company completed the convertible note
redemption transaction. Pursuant to the terms and conditions of the Redemption
Agreement, the Company completed the repayment of the redeemable convertible
notes in the aggregate principal amount of $6,000,000 to Investec Bank, Full
Moon Resources and LP Asset Management, plus all accrued interest thereon.
Following receipt, the notes were immediately cancelled by the Company. Pursuant
to the terms of the Redemption Agreement, the options to purchase up to
$12,000,000 additional redeemable convertible notes of the Company were also
cancelled.

The notes were discounted for the fair value of options,
pursuant to APB 14 Accounting for Convertible Debt and Debt Issued with Stock
Purchase Warrants. The notes were further discounted for the intrinsic value of
the beneficial conversion feature, pursuant to EITF 98-5 Accounting for
Convertible Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios. The discount is being amortized over the life of
the notes. Through date of redemption, $199,721 was amortized and recorded as
part of interest expenses for the year ended December 31, 2007.

---

- 61 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 9. REDEMPTION OF CONVERTIBLE NOTES (continued)

At redemption of the convertible notes, a value of $1,752,600
was allocated to the First Option based on its intrinsic value estimated using
the Black-Scholes option pricing model, resulting in a gain of $866,400 on
changes in the fair value of the First Option from April 1, 2007 through
redemption. The following assumptions were used in estimating the intrinsic
value of the First Option at date of redemption using the Black-Scholes option
pricing model:

|Expected volatility                                               | 112.56% 
|----------------------------------------------------------------- | --------
|Expected term in years                                            | 335 days
|Risk-free interest rate                                           | 4.89%   
|Exercise price                                                    | $0.55   
|Stock price at July 16, 2007 being date of
      first redemption | $0.54   

Portion of the redemption price, measured as the intrinsic
value of $1,647,273 of the beneficial conversion feature at the redemption date,
has been allocated to the beneficial conversion feature. The cancellation of
this beneficial conversion feature, which was originally recognized as equity,
has been considered an adjustment within stockholders equity with reference to
EITF98-5 and EITF00-27. The remaining portion of $2,253,359 of the redemption
price less the aggregate carrying value of the convertible note and First Option
at the redemption date has been recognized as a loss on extinguishment of debts
in accordance with SFAS 140 and APB 26.

NOTE 10. OBLIGATIONS UNDER CAPITAL LEASES

|                                                                |  | March 31, |   |  | March 31, |  
|--------------------------------------------------------------- |  | --------- | - |  | --------- | -
|                                                                |  | 2008      |   |  | 2007      |  
|                                                                |  | $         |   |  | $         |  
|Total minimum lease payments                                    |  | 7,243     |   |  | 8,721     |  
|Less: Amounts representing interests                            |  | -         |   |  | -         |  
|                                                                |  |           |   |  |           |  
|Present value of minimum lease payments                         |  | 7,243     |   |  | 8,721     |  
|Less: Current portion of obligations under
      capital leases |  | (1,774    | ) |  | (1,774    | )
|                                                                |  |           |   |  |           |  
|Long-term portion of obligations under
      capital leases     |  | 5,469     |   |  | 6,947     |  

The following is a summary of future minimum lease payments
under capital leases as of March 31, 2008:

|Twelve months ending March 31, |  | $     | 
|------------------------------ |  | ----- | 
|2009                           |  | 1,774 | 
|2010                           |  | 1,774 | 
|2011                           |  | 1,774 | 
|2012                           |  | 1,774 | 
|Thereafter                     |  | 147   | 
|                               |  | 7,243 | 

The Company entered into capital lease arrangements for leasing
equipment used in its operations. The lease is for a term of 5 years. For the
year ended March 31, 2008, the capital lease arrangement was on a non-interest
bearing basis. The leases are on a fixed repayment basis and no arrangement
entered into includes contingent rental payments.

The interest expenses incurred on these capital leases were nil
and nil for the years ended March 31, 2008 and 2007, respectively.

---

- 62 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 11. OTHER RESERVES

The other reserves represent the statutory surplus reserve of
the Companys subsidiaries in the PRC.

Statutory Surplus Reserve

In accordance with the relevant laws and regulations of the PRC
and the subsidiaries articles of association, the subsidiaries are required to
appropriate 10% of its net income, after offsetting any prior years losses, to
the statutory surplus reserve. When the balance of such reserve reaches 50% of
the PRC subsidiaries share capital, any further appropriation is optional.

The statutory surplus reserve can be used to offset prior
years losses, if any, and may be converted into share capital by issuing new
shares to shareholders in proportion to their existing shareholding or by
increasing the par value of the shares currently held by them, provided that the
remaining balance of the reserve after such issue is not less than 25% of share
capital. The statutory surplus reserve is non-distributable.

NOTE 12. OTHER INCOME

Year Ended March 31,2008
      
      
      2007$
      
      
      $Consulting income
      
      -
      
      
      303,327Gain on fair value changes in options
      
      866,400
      
      
      151,800Write back of amounts due to shareholders
      
      -
      
      
      147,246Waiver of amount due to a former minorityshareholder of a subsidiary
      
      -
      
      
      613,918Others
      
      22,012
      
      
      118,365888,412
      
      
      1,334,656


NOTE 13. TOTAL COMPREHENSIVE (LOSS) INCOME

Year Ended March 31,2008
      
      
      2007$
      
      
      $Net (loss) income attributable to shareholders
        ofthe Company
      
      (9,416,075
      )
      
      1,079,891Foreign currency translation adjustments
      
      759,901
      
      
      329,827Total comprehensive (loss) income
      
      (8,656,174
      )
      
      1,409,718


NOTE 14. FOREIGN CURRENCY TRANSACTION GAIN

Foreign currency transaction gain $19,668 and of $39,845 for
the years ended March 31, 2008 and 2007 were included in determining net (loss)
income for the respective years.

---

- 63 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 15. INCOME TAX

The components of (loss) income before income tax and minority
interests are as follows:

Year Ended March 31,2008
      
      
      2007$
      
      
      $Hong Kong
      
      (4,258,488
      )
      
      (1,736,248
      )Macau
      
      (280,976
      )
      
      3,323,301Mainland, the Peoples Republic of
        China (PRC)
      
      (2,735,024
      )
      
      952,996(7,274,488
      )
      
      2,540,049


Taxes laws applicable to the Company and its subsidiaries are
as follows:

|- | Tech Team Holdings Limited (TTHL) is a tax-exempted
      company incorporated in the Cayman Islands.                                                                                                                                                                                                                                                                                                                                                                                  
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | Under the current BVI law, Tech Team (China) Limiteds,
      Tech Team Investment Limiteds and Powerland Technology Limiteds income
      are not subject to taxation.                                                                                                                                                                                                                                                                                                                
|- | Lightscape Technologies Inc. and Tomi Fuji Energy Pte.
      Limited also had no assessable profits earned or had tax losses brought
      forward to set off current year assessable profit during the periods
      presented.                                                                                                                                                                                                                                                         
|- | No provision for PRC income tax has been made as Tech
      Team Development (Zhuhai) Limited (TT (Zhuhai)) had no assessable
      profits earned during the year ended March 31, 2008 and 2007. Preferential
      tax treatment has been agreed with the relevant tax authorities and
      TT(Zhuhai) is exempted from PRC income tax in the first two profitable
      years and is subject to half of the standard statutory tax rate of 15% in
      the subsequent three years.
|- | Pursuant to the relevant laws and regulations in the PRC,
      Beijing Aihua New Enterprise Lighting Appliance Company Limited (Beijing
      Aihua) is exempted from PRC enterprise income tax for two years starting
      from its first profit-making year i.e. 2004 after it became a wholly
      foreign owned enterprise and followed by a 50% reduction for the next
      three years.                                                                                      
|- | Beijing Illumination is a Hong Kong company which is
      subject to a profits tax rate of 17.5%.                                                                                                                                                                                                                                                                                                                                                                                       
|- | Lightscape Technologies (Macau) Limited (Lightscape
      Macau) is a company incorporated in Macau Special Administrative Region,
      which is subjected to progressive tax rate charging at a rate of 12% in
      maximum.                                                                                                                                                                                                                                                        
|- | Other companies are dormant and had no assessable profits
      earned during the periods presented.                                                                                                                                                                                                                                                                                                                                                                                     

Income tax expense for the year ended March 31, 2008 and 2007
represents the provision for income tax in the following jurisdictions:

Year Ended March 31,2008
      
      
      2007$
      
      
      $Current taxes:Hong Kong
      
      -
      
      
      -Macau
      
      -
      
      
      271,751Mainland, PRC
      
      -
      
      
      --
      
      
      271,751


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LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 15. INCOME TAX (continued)

Income tax expense for the year ended March 31, 2008
represented the provision for income tax of the subsidiaries operating in Hong
Kong, Macau and Mainland PRC which were calculated at the applicable tax
rate.

A reconciliation of the provision for income taxes determined
at the US statutory corporate income tax rate to the Companys effective income
tax rate is as follows:

Year Ended March 31,2008
      
      
      2007$
      
      
      $(Loss)/income before income tax
      
      (7,274,488
      )
      
      2,540,049US statutory corporate income tax rate
      
      35%
      
      
      35%Income tax (benefit) expense computed at
        United Statesstatutory corporate income tax rate
      
      (2,546,071
      )
      
      889,017Reconciling items:Rate differential for Hong Kong earnings
      
      1,273,035
      
      
      (444,508
      )Rate differential for PRC earnings
      
      -
      
      
      (77,566
      )Tax effect of expenses not deductible for tax
        purposes
      
      856,860
      
      
      37,170Tax effect of income not taxable
        for tax purposes
      
      (48,372
      )
      
      (230,584
      )Loss not recognized as deferred income tax
        assets
      
      437,546
      
      
      98,222Others
      
      27,002
      
      
      -Income tax expense
      
      -
      
      
      271,751


Deferred income taxes arose from the following:

At March 31,2008
      
      
      2007$
      
      
      $Deferred tax assets- tax losses
      
      961,976
      
      
      461,192- valuation allowance
      
      (877,511
      )
      
      (347,607
      )Net deferred tax assets
      
      84,465
      
      
      113,585Deferred tax liabilities- Book depreciation and amortisation in excess of tax
      
      (84,465
      )
      
      (113,585
      )Net deferred tax
      
      -
      
      
      -


For the operating loss carry forwards of approximately
$5,156,023 as of March 31, 2008, $795,626 will expire in 2012, and the remainder
will be carried forward indefinitely.

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LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 16. DISCONTINUED OPERATIONS

The Company accounts for its discontinued operations under the
provisions of SFAS 144. Accordingly, results of operations and the related
charges for discontinued operations have been classified as (Loss) income from
discontinued operations, net of income taxes in the accompanying Consolidated
Statements of (Operations) Income. Assets and liabilities of the discontinued
operations have been reclassified and reflected on the accompanying Consolidated
Balance Sheets as Assets of discontinued operations and Liabilities of
discontinued operations. For comparative purposes, all prior periods presented
have been restated to reflect the reclassifications on a consistent basis.

During the year ended March 31, 2008, in order to more
effectively utilize the financial and other resources within other business
units, including the LED outdoor advertising business and LED solutions
business, the Company has decided to exit the energy-savings solutions business.
No further energy-savings products will be developed. Nor will the Company
provide further energy management consulting services.

Assets that have still remained in the energy savings segment
include only certain receivables and lease receivables less unearned interests
under sales-type leases. Except for the collection of these receivables, the
Company will no longer have any significant continuing involvement in the
energy-savings segment. Therefore, the energy savings segment has been
classified as discontinued operations. In accordance with FAS 144, Accounting
for Impairment or Disposal of Long-Lived Assets, the Company has reflected
results of the energy savings segment in the consolidated statement of
operations as discontinued operations for all periods presented. The assets and
liabilities of the energy savings segment in the Companys consolidated balance
sheet as of March 31, 2007 have been reclassified. The cash flows of
discontinued operations have also been reclassified.

Furthermore, as the Company had determined to dispose of
certain facilities for the production of a proposed product line of its lighting
source business, the construction in progress of this product line has also been
stated at fair value less costs to sell and classified as discontinued
operation.

Revenues and net loss from discontinued operations of the
energy savings business and disposal of certain facilities for the production of
a proposed new product line were as follows:

|                                          |  | Year Ended March 31, |  
|----------------------------------------- |  | -------------------- | -
|                                          |  | 2008                 |  
|                                          |  | $                    |  
|                                          |  |                      |  
|Operating revenue                         |  | 70,012               |  
|                                          |  |                      |  
|Pre-tax loss from discontinued operations |  | (2,551,079           | )
|Income tax expense                        |  | (34,723              | )
|                                          |  |                      |  
|Net loss from discontinued operations     |  | (2,585,802           | )

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- 66 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 17. CONCENTRATION OF CREDIT RISK

Financial instruments that potentially expose the Company to
concentrations of credit risk consist primarily of cash, trade receivables,
deposits for goods and net investment in sales-type leases. The Company places
its cash with financial institutions with high-credit ratings and quality.

The Company conducts credit evaluation of customers and
generally does not require collateral or other security from its customers. The
Company establishes an allowance for doubtful accounts primarily based upon the
age of the receivables and factors surrounding the credit risk of specific
customers.

Other than the two customers who accounted for approximately
29% and 13%, respectively of the Companys total revenues for the year ended
March 31, 2008, no other single external customer exceeded 10% of the Companys
total revenues for the year ended March 31, 2008.

The Company relies on supplies from numerous vendors. For the
year ended March 31, 2008, the Company had two vendors that accounted for
approximately 50% of total supply purchases for the year.

The Companys business, assets and operations is currently
focused on the sale of specialty lighting source products, sales and contract
revenue from lighting design solutions in Hong Kong, China and Macau, and
accordingly, is affected to a significant degree by any economic, political and
legal developments in Hong Kong, China and Macau.

NOTE 18. COMMITMENTS

The Company has operating lease agreements principally for its
office facilities and factory buildings. Such leases have remaining terms of
approximately 1.75 years to 3.25 years. The following is a summary of future
minimum lease payments under operating leases as of March 31, 2008. Rental
expense was $264,234 and $139,372 for the year ended March 31, 2008 and 2007,
respectively.

Twelve months ending March 31,

|           |  | $       | 
|---------- |  | ------- | 
|2009       |  | 265,198 | 
|2010       |  | 112,461 | 
|2011       |  | 64,267  | 
|Thereafter |  | -       | 
|           |  | 441,926 | 

Royalties

Pursuant to a supplier agreement (Agreement) dated March 8,
2006, entered into between Beijing Illumination and an independent third party,
the independent third party appointed Beijing Illumination as a non-exclusive
licensed OEM manufacturer with rights to make and distribute certain products
worldwide and Beijing Illumination shall pay to the independent third party
during the term of the Agreement 7% of gross revenues of certain products sold
to customers or distributors other than this independent third party. Such
royalty payments shall survive for five years after termination of the
Agreement.

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- 67 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 19. CONTINGENT LIABILITIES

Registration Rights Agreement

In connection with the March 2008 securities purchase agreement
(Note 21) the Company has agreed to provide certain registration rights to the
investors that participated in the securities purchase agreement. Under the
registration rights agreement (Registration Rights Agreement), the Company
agreed to register the common shares issued to the investors as well the common
shares underlying the common stock warrants issued. The registration rights
clause provides for liquidated damages in the event a registration statement is
(i) not filed by the Company with the SEC within 45 days from March 17, 2008,
the closing date, or (ii) not declared effective by the SEC within 120 days of
the closing date, or (iii) not maintained effective by the Company for a period
of two years following the closing date. The liquidated damages total an amount
equal to one percent of the purchase price of the common stock issued for each
one month period of late filing of the registration statement, late
effectiveness of the registration statement, or if effectiveness of a
registration statement is not maintained. The Company will be granted relief
from these penalties in certain circumstances if the SEC does not allow the
Company to register the total number of shares of common stock issued and all
the common stock underlying the warrants pursuant to a limitation to the
registration under Section 415(a)(1) of the Securities Act.

Up to the date of this report, the Company has not filed the
registration statement according to the terms of the Registration Rights
Agreement within the time allowed. However, no provision for the liquidated
damages has been made because in May 2008, the Company obtained agreements in
writing from the investors who represented over 90% of the value of the shares
issued pursuant to the securities purchase agreement to waive the liquidated
damages due to the Companys failure to file the registration statement within
the time allowed. The Company has estimated that the amount of liquidated
damages payable to those remaining investors who havent signed the waiver
agreement would be immaterial.

Besides the above, the Company knows of no material, active, or
pending legal proceeding against the Company, nor is the Company involved as a
plaintiff in any material proceeding or pending litigation. There are no
proceedings in which any of the Companys directors, officers, or affiliates, or
any registered or beneficial shareholders, is an adverse party or has a material
interest adverse to the Companys interest.

---

- 68 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 20. RELATED PARTY BALANCES AND TRANSACTIONS

Related Party Transactions

In 2004, the Company acquired Tomi Fuji Energy Management
Services Limited (TFEMS) by issuing shares to its holding company, Tomi Fuji
Corporation Limited (TFCL). The owner of TFCL guaranteed certain net profit of
TFEMS for the period from date of acquisition to June 30, 2005 (the guaranteed
period). TFEMs net profit during the guaranteed period fell short of the
guaranteed amount by $604,546. Management is considering taking appropriate
actions to enforce the damage thereon from the guarantor.

The Company acquired Lightscape Technologies (Macau) Limited
(Lightscape Macau) in 2006 by payment of $1,550 (MOP12,400) and issuance of
1,200,000 shares of the Company upon the condition that Lightscape Macau would
made a net profit of not less than $2,564,103 (HK$20,000,000) for the period
from October 1, 2006 to September 30, 2007 (the guarantee period). Lightscape
Macau made a loss during the guaranteed period and management is taking action
to cancel the 1,200,000 shares issued.

Related Party Balances

The amounts due to a director and a five percent beneficial
shareholder represent cash advances from them and are unsecured, non-interest
bearing and have no fixed repayment terms. The balances related to such advances
are as follows:

|                            |  | March 31, |  |  | March 31, | 
|--------------------------- |  | --------- |  |  | --------- | 
|                            |  | 2008      |  |  | 2007      | 
|                            |  | $         |  |  | $         | 
|                            |  |           |  |  |           | 
|Amount due to a director    |  | -         |  |  | 39,846    | 
|                            |  |           |  |  |           | 
|Amount due to a shareholder |  | 45,161    |  |  | 46,546    | 

---

- 69 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 21. SEGMENT INFORMATION

The Company is continuously engaged in (i) the provision of LED
lighting design products and construction services (Lighting design solutions)
and (ii) the manufacture and distribution of lighting source products (Lighting
source products). The Company has two reportable segments, lighting source
business and lighting design solutions (sales and contract revenue), based on
the business segment engaged.

The accounting policies of the operating segments are the same
as those described in the Summary of Principal Accounting Policies (see Note 2).
The Company evaluates performance based on profit or loss from operations,
excluding corporate, general and administrative expenses.

Information for the Lighting design solutions and Lighting
source business is disclosed under FAS 131, Disclosures about Segments of an
Enterprise and Related Information as below:

Year Ended March 31,2008
      
      
      2007$
      
      
      $Segment revenues from external customers:Lighting source business
      
      2,397,874
      
      
      5,240,209Lighting design solutions- Sales
      
      1,039,548
      
      
      2,410,025- Contract revenue
      
      2,524,989
      
      
      5,471,3745,962,411
      
      
      13,121,608Segment results:Lighting source business
      
      (1,920,291
      )
      
      (718,861
      )Lighting design solutions
      
      (3,624,640
      )
      
      3,564,952(5,544,931
      )
      
      2,846,091Unallocated income:Interest income
      
      39,424
      
      
      11,186Gain on fair value changes in options
      
      866,400
      
      
      151,800Unallocated expenses:Interest expenses
      
      (382,022
      )
      
      (469,028
      )Loss on redemption of convertible
        notes and options
      
      (2,253,359
      )
      
      -(Loss) income from continuing operations
        before income tax andminority interest
      
      (7,274,488
      )
      
      2,540,049Other segment information:Depreciation:Lighting source business
      
      444,371
      
      
      438,385Lighting design solutions
      
      59,873
      
      
      512504,244
      
      
      438,897


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- 70 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 21. SEGMENT INFORMATION (CONTINUED)

March 31,
    
    
    March 31,2008
    
    
    2007$
    
    
    $Segment assets:Lighting source business
    
    8,193,453
    
    
    20,968,713Lighting design solutions
    
    17,333,269
    
    
    4,198,02225,526,722
    
    
    25166,735Assets of discontinued
      operations
    
    826,368
    
    
    3,415,31226,353,090
    
    
    28,582,047Capital expenditure:Lighting source business
    
    15,133
    
    
    1,336,068Lighting design solutions
    
    253,291
    
    
    18,432268,424
    
    
    1,354,500


Geographical Information:

Year Ended March 31,2008
      
      
      2007$
      
      
      $Total sales:Mainland, the PRC
      
      2,342,481
      
      
      6,637,319Hong Kong
      
      2,339,313
      
      
      1,012,915Singapore
      
      181,990
      
      
      -Macau
      
      801,792
      
      
      5,471,374Others
      
      296,835
      
      
      -5,962,411
      
      
      13,121,608


The location of the Companys long-lived assets is as follows:

March 31,
    
    
    March 31,2008
    
    
    2007$
    
    
    $Hong Kong
    
    6,805,936
    
    
    10,069,185Mainland, the PRC
    
    4,147,671
    
    
    5,421,79710,953,607
    
    
    15,490,982


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- 71 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 22. SHARE CAPITAL, OPTIONS AND WARRANTS

Share Capital

On January 18, 2007, the Company entered into subscription
agreements with three investors consisting of Investec Bank, Full Moon Resources
and LP Asset Management. Pursuant to the subscription agreements, the Company
issued 60 $100,000 redeemable convertible notes in an aggregate principal amount
of $6,000,000 to the three investors, which carry an annual interest rate of 10%
and mature on December 31, 2009. Each note is convertible from the date of
issuance until December 30, 2009 into common shares at the rate of one common
share for every $0.55 of principal converted (subject to adjustment as described
in the subscription agreements).

On July 10, 2007, the Company entered into a Redemption
Agreement with Investec Bank, Full Moon Resources, LP Asset Management and Bondy
Tan, whereby the Company agreed to redeem the convertible notes in the principal
amount of $6,000,000 plus pay all accrued interest on such notes.

On August 20, 2007, the Company completed the convertible note
redemption transaction. Pursuant to the terms and conditions of the Redemption
Agreement, the Company completed the repayment of the redeemable convertible
notes in the aggregate principal amount of $6,000,000 to Investec Bank, Full
Moon Resources and LP Asset Management, plus all accrued interest thereon.
Following receipt, the notes were immediately cancelled by the Company.

On August 21, 2007, the Company entered into a subscription
agreement with Galaxy China Opportunities Fund, a Cayman Islands company
(Galaxy). Pursuant to the terms and conditions of the subscription agreement,
the Company agreed to issue 6,000,000 common shares at a price of $0.55 per
share to Galaxy. On August 21, 2007, the Company closed the subscription
agreement. Pursuant to the terms and conditions of the subscription agreement,
the Company issued 6,000,000 common shares at a price of $0.55 per share to
Galaxy for gross proceeds of $3,300,000.

On August 21, 2007, the Company entered into a subscription
agreement with an individual investor. Pursuant to the terms and conditions of
the subscription agreement, the Company agreed to issue 600,000 common shares at
a price of $0.55 per share to the investor. On August 21, 2007, the Company
closed the subscription agreement. Pursuant to the terms and conditions of the
subscription agreement, the Company issued 600,000 common shares at a price of
$0.55 per share to the investor for gross proceeds of $330,000.

On December 11, 2007, the Company entered into a subscription
agreement with SMC Investment Management Limited, a British Virgin Islands
company (SMC). Pursuant to the terms and conditions of the subscription
agreement, the Company agreed to issue 2,450,000 common shares at a price of
$0.65 per share to SMC. On December 11, 2007, the Company closed the
subscription agreement. Pursuant to the terms and conditions of the subscription
agreement, the Company issued 2,450,000 common shares at a price of $0.65 per
share to SMC for gross proceeds of $1,592,500.

On March 9, 2008, the Company entered into a securities
purchase agreement with several accredited investors. Pursuant to the terms and
conditions of the securities purchase agreement, the Company agreed to issue an
aggregate 9,375,000 common shares to the investors at a price of $0.80 per share
.. On March 17, 2008, the Company closed the securities purchase agreement.
Pursuant to the terms and conditions of the securities purchase agreement, the
Company issued an aggregate 9,375,000 common shares at a price of $0.80 per
share to the investors for gross proceeds of $7,500,000.

---

- 72 -

LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED MARCH 31, 2008 AND 2007

NOTE 22. SHARE CAPITAL, OPTIONS AND WARRANTS (continued)

Options

Pursuant to the terms and conditions of the subscription
agreements with Investec Bank, Full Moon Resources and LP Asset Management, the
Company agreed to grant two options to each investor, the first option of which
is exercisable at the at any time during the period from April 1, 2007 to June
30, 2008. The first option entitles the holder to subscribe for additional
$100,000 redeemable convertible notes of the Company in the aggregate principal
amount of up to $6,000,000. The second option, which is exercisable on July 1,
2008, January 1, 2009 and July 1, 2009, or as otherwise described in the
subscription agreements, entitles the holder to subscribe for additional
$100,000 redeemable convertible notes of the Company in the aggregate principal
amount of up to $6,000,000. The conversion price of the notes underlying the
first option are convertible at $0.55 per share if converted on or before June
30, 2007 and at $0.66 per share if converted after June 30, 2007. The conversion
price of the notes underlying the second option is subject to a formula as set
out in the subscription agreements.

On January 23, 2007, the Company closed the convertible note
financing transaction. Pursuant to the terms and conditions of the subscription
agreements, the Company issued the 60 $100,000 redeemable convertible notes in
an aggregate principal amount of $6,000,000 to the three investors. Each note
bears a fixed rate of interest at 10% per annum, payable quarterly, calculated
on a 360 day year on the principal amount outstanding. Unless previously
converted or redeemed, each note will be redeemed by the Company on the maturity
date of December 31, 2009 at a final redemption amount, calculated in accordance
with a formula set out in the note, together with all interest thereon. The
notes are convertible into common shares at the rate of one common share per
each $0.55 of principal converted (subject to adjustment as described in the
subscription agreements). In addition, the Company issued two options to each of
the three investors to purchase additional redeemable convertible notes of the
Company in the aggregate amount of $12,000,000. The Company issued the notes,
the common shares issuable upon conversion of the notes, and the options in an
offshore transaction to non U.S. persons (as that term is defined in Regulation
S under the Securities Act of 1933) relying on Section 4(2) or Regulation S
promulgated under the Securities Act of 1933.

Pursuant to the terms of the Redemption Agreement, the options
to purchase up to $12,000,000 additional redeemable convertible notes of the
Company cancelled on August 20, 2007.

Warrants

In connection with the placement of 9,375,000 shares completed
on March 17, 2008, the Company issued warrants to Roth Capital Partners, LLC,
the placement agent to purchase up to 656,250 shares of the Companys common
stock (representing 7% of the shares placed) as compensation for its placement
service. The warrants have a term of five years, are exercisable immediately
upon issuance and have an exercise price of $0.80 per share.

---

- 73 -

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

We
engaged the firm of Yu and Associates CPA Corporation as our principal
independent accountant on May 31, 2007. Other than as described below, there has
been no change in the accountants and no disagreements with Yu and Associates
CPA Corporation on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope procedure.

On
November 25, 2006, we dismissed BDO McCabe Lo Limited, Certified Public
Accountants, as our principal independent accountant, and on December 9, 2006,
we engaged Schwartz Levitsky Feldman LLP, Chartered Accountants, as our
principal independent accountant, as reported on our current report on Form
8-K/A filed on December 14, 2006.

On
May 30, 2007, we dismissed Schwartz Levitsky Feldman LLP, Chartered Accountants,
as our principal independent accountant, and on May 31, 2007, we engaged Yu and
Associates CPA Corporation as our principal independent accountant, as reported
on our current report on Form 8-K/A filed on June 5, 2007.

ITEM 8A(T).  CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

As
required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end
of the period covered by this annual report, being March 31, 2008, we carried
out an evaluation of the effectiveness of the design and operation of our
companys disclosure controls and procedures. This evaluation was carried out
under the supervision and with the participation of our companys management,
including our companys Chief Executive Officer. Based upon that evaluation, our
companys Chief Executive Officer concluded that our companys disclosure
controls and procedures were not effective as of March 31, 2008 because
insufficiency was identified in our financial reporting system as described
below. There has been no change in our internal controls over financial
reporting that occurred during our last fiscal quarter ended March 31, 2008 that
has materially affected, or is reasonably likely to materially affect our
internal controls over financial reporting.

Our   accounting systems and financial transactions are managed by our accounting and   financial reporting team based in Hong Kong. Management perceived that with the   recent growth of our operations in the Greater China region, as of March 31,   2008, our company did not have sufficient numbers of accounting personnel to   effectively manage internal controls over financial reporting in a timely   manner. To strengthen the timeliness of our disclosure controls and procedures,   new accounting personnel have been retained by our company since March 31, 2008,   and additional accounting personnel are expected to be retained during calendar   year 2008.

Disclosure
controls and procedures and other procedures that are designed to ensure that
information required to be disclosed in our reports filed or submitted under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported,
within the time period specified in the Securities and Exchange Commissions
rules and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed in our reports filed under the Securities Exchange Act of 1934 is
accumulated and communicated to management, including our Chief Executive
Officer, to allow timely decisions regarding required disclosure.

Managements Annual Report on Internal Control over
Financial Reporting

Management
is responsible for establishing and maintaining adequate control over financial
reporting. In order to evaluate the effectiveness of internal control over
financial reporting as required by Section 404 of the Sarbanes-Oxley Act,
management conducted an evaluation of the effectiveness of our internal control
over financial reporting based on the framework in Internal Control 
Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission. Based on this evaluation, management concluded that our
companys internal control over financial reporting was not effective as of
March 31, 2008 because the following insufficiency in internal control over
financial reporting existed as of March 31, 2008:

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- 74 -

Our   accounting systems and financial transactions are managed by our accounting and   financial reporting team based in Hong Kong. Management perceived that with the   recent growth of our operations in the Greater China region, as of March 31,   2008, our company did not have sufficient numbers of accounting personnel to   effectively manage internal controls over financial reporting in a timely   manner. To improve this insufficiency, new accounting personnel have been   retained by our company since March 31, 2008, and additional accounting   personnel are expected to be retained during calendar year   2008.

Our
companys management, including our Chief Executive Officer and Chief Accounting
Officer, does not expect that our companys disclosure controls and procedures
or our companys internal controls will prevent all errors and all fraud. A
control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. Further, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of the controls can provide absolute assurance that all
control issues and instances of fraud, if any, within our company have been
detected.

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

ITEM 8B.    OTHER INFORMATION

None.

PART III

|ITEM 9. | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL
      PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF
      THE EXCHANGE ACT.
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------

Directors and Executive Officers, Promoters and Control
Persons

All
directors of our company hold office until the next annual meeting of the
stockholders or until their successors have been elected and qualified. The
officers of our company are appointed by our board of directors and hold office
until their death, resignation or removal from office. Our directors and
executive officers, their ages, positions held, and duration as such, are as
follows:

Name
      Position Held with the Company
      Age
      Date First Elected or AppointedBondy Tan
    Director, President, Secretary,
      Treasurer and Chief Executive Officer of our company
    41
    January 13, 2005Charles Cheung
    Director
    72
    January 13, 2005Edmand Yuk Man
      Wong(1)
    Director
    51
    June
      5, 2006Kwok Tin
      Tang(1)
    Director
    57
    June
      5, 2006Francis Man Chung Wong(1)
    Director
    43
    August 1, 2007


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- 75 -

(1)Members of the Audit Committee.

Business Experience

The
following is a brief account of the education and business experience of each
director and executive officer during at least the past five years, indicating
each persons principal occupation during the period, and the name and principal
business of the organization by which he or she was employed.

Bondy Tan

Bondy
Tan is a director and the President, Secretary, Treasurer and Chief Executive
Officer of our company and is the President and Chief Executive Officer of Tech
Team and Tech Team Development Limited. From October 1999 to present, Mr. Tan
has served as the Chief Executive Officer and a director of Tech Team
Development Limited. Mr. Tan incorporated Tech Team Development Limited and has
led its development and growth over the past five years. From February 2002 to
present, Mr. Tan has served as the Chief Executive Officer and a director of
Tech Team. In these roles, Mr. Tan is responsible for the overall management and
strategic planning for Tech Team and its subsidiaries. Mr. Tans experience
includes an additional 10 years of marketing management and business development
roles in China and Hong Kong. His former positions include Marketing and Sales
Coordinator for Sony (Hong Kong), where he was responsible for advertising,
promotion and sales activities for Sony in China and Hong Kong. Mr. Tan also
held several roles with Caltex, a wholly-owned subsidiary of Chevron-Texaco
Corporation, in China and Hong Kong. In these positions, Mr. Tan rebuilt
Caltexs corporate image, developed brand awareness in China, led the formation
of two joint venture projects and managed the operation of 51 service stations
in Hong Kong. Mr. Tan holds a Bachelor of Commerce, with a major in company law,
from Murdoch University in Australia, and a Bachelor of Business, with a major
in marketing, from Edith Cowan University in Australia.

Charles Cheung

Dr.
Charles Cheung Wai Bun is chairman and a director of our company. He has over 30
years of senior management experience in various industries including over 22
years within the banking industry. He currently serves as Chairman of Joy
Harvest International Limited, a Hong Kong company. Dr. Cheung is also a Senior
Adviser to the Metropolitan Bank & Trust Company, a commercial bank in the
Philippines. He is an independent Non-Executive Director and Chairman of Audit
Committee of Shanghai Electric Group Limited, one of the largest PRC state
corporations, Pioneer Global Group Limited and Prime Investments Holdings
Limited, and former Independent Non-Executive Director and Chairman of the Audit
Committee of Galaxy Entertainment Group Limited and K. Wah International
Holdings Limited which are listed on the main board of the Hong Kong Stock
Exchange. Dr. Cheung is also an independent director and Chairman of the Audit
Committee of China Water & Drinks Inc., a U.S. public company. He is also a
Council Member of the Hong Kong Institute of Directors. Dr. Cheung was formerly
Group Chief Executive and Executive Deputy Chairman of Mission Hills Group in
China which is engaged in property development, golf resort and hotel management
in mainland China. He was also a former director and advisor to the Tung Wah
Group of Hospitals, and he has served on a number of committees of the Hong Kong
Government. Dr. Cheung was awarded the Hong Kong Director of the Year Award for
Listed Company Non-Executive Directors in 2002. Dr. Cheung holds an honorary
Doctor degree in Business Administration from John Dewey University, and a
Master degree in Business Administration and a Bachelor of Science degree from
New York University.

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- 76 -

Edmand Yuk Man Wong

Edmand
Yuk Man Wong is an independent director of our company. From 2005 to present,
Mr. Wong has served as College Secretary with the Community College of City
University of Hong Kong. From 2004 to 2005, he served as Assistant Registrar
with the University of Hong Kong. From 2003 to 2004, Mr. Wong served as the
Director of Global Communications for Project Orbis International, Inc., an
international charitable organization. Within his career, Mr. Wong has also held
various senior positions in communications departments of government agencies
and with the Hong Kong Jockey Club. Within these roles over the past 25 years,
Mr. Wong was responsible for public relations strategy, corporate branding, and
publicity. Mr. Wong holds a Bachelor of Arts degree in Political Science from
the University of British Columbia.

Kwok Tin Tang

Kwok
Tin Tang is an independent director of our company. For the past 20 years, Mr.
Tang has operated as the General Manager of Martin Tang Accountants which
provides accounting, corporate secretary and business consultancy services to
companies in Hong Kong. Mr. Tang is an associate member of The Hong Kong
Institute of Chartered Secretaries and he holds the designation of Chartered
Secretary (ACIS). Mr. Tang holds a Higher Diploma in Accounting from The Hong
Kong Polytechnic University.

Francis Man Chung Wong

Francis
Man Chung Wong is an independent director of our company. From 2003 to present,
Mr. Wong has been a practicing Certified Public Accountant through Francis Wong
C.P.A. Co. Limited. He has over 19 years of experience in auditing, taxation,
management and financial advisory services. Mr. Wong is currently an independent
director and either chairman or member of the audit / remuneration committee of
four companies listed on the Hong Kong Stock Exchange: China Oriental Group
Company Limited, Digital China Holdings Limited, Wai Kee Holdings Limited and
Yardway Group Limited. Mr. Wongs previous experience includes 6 years with KPMG
and 2 years with the Hong Kong Securities Clearing Company Limited. Mr. Wong is
a fellow member of the Association of Chartered Certified Accountants, the Hong
Kong Institute of Certified Public Accountants and the Taxation Institute of
Hong Kong, he is an associate member of the Institute of Chartered Accountants
of England and Wales, and he is a member of the Society of Chinese Accountants
& Auditors. Mr. Wong holds a masters degree in management from Guangzhou
Jinan University.

Family Relationships

There
are no family relationships among our directors or officers.

Involvement in Certain Legal Proceedings

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

|1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                
|2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
      minor offences);                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                
|3. | being subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities; or
|   |                                                                                                                                                                                                                                                                                                                                
|4. | being found by a court of competent jurisdiction (in a
      civil action), the Commission or the Commodity Futures Trading Commission
      to have violated a federal or state securities or commodities law, and the
      judgment has not been reversed, suspended, or
vacated.                                           

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- 77 -

Code of Ethics

Effective
October 29, 2004, our companys board of directors adopted a Code of Business
Conduct and Ethics that applies to, among other persons, our companys President
and Chief Executive Officer as well as the individuals performing the functions
of our Chief Financial Officer, Secretary and Controller. As adopted, our Code
of Business Conduct and Ethics sets forth written standards that are designed to
deter wrongdoing and to promote:

|1. | honest and ethical conduct, including the ethical
      handling of actual or apparent conflicts of interest between personal and
      professional relationships;                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                              
|2. | full, fair, accurate, timely, and understandable
      disclosure in reports and documents that we file with, or submit to, the
      Securities and Exchange Commission and in other public communications made
      by us;
|   |                                                                                                                                                                                                                              
|3. | compliance with applicable governmental laws, rules and
      regulations;                                                                                                                                                   
|   |                                                                                                                                                                                                                              
|4. | the prompt internal reporting of violations of the Code
      of Business Conduct and Ethics to an appropriate person or persons
      identified in the Code of Business Conduct and Ethics; and                            
|   |                                                                                                                                                                                                                              
|5. | accountability for adherence to the Code of Business
      Conduct and Ethics.                                                                                                                                               

Our
Code of Business Conduct and Ethics requires, among other things, that all of
our companys personnel shall be accorded full access to our President and Chief
Executive Officer with respect to any matter which may arise relating to the
Code of Business Conduct and Ethics. Further, all of our companys personnel are
to be accorded full access to our companys board of directors if any such
matter involves an alleged breach of the Code of Business Conduct and Ethics by
our President and Chief Executive Officer.

In
addition, our Code of Business Conduct and Ethics emphasizes that all employees,
and particularly managers and/or supervisors, have a responsibility for
maintaining financial integrity within our company, consistent with generally
accepted accounting principles, and federal, provincial and state securities
laws. Any employee who becomes aware of any incidents involving financial or
accounting manipulation or other irregularities, whether by witnessing the
incident or being told of it, must report it to his or her immediate supervisor
or to our companys President and Chief Executive Officer. If the incident
involves an alleged breach of the Code of Business Conduct and Ethics by the
President and Chief Executive Officer, the incident must be reported to any
member of our board of directors. Any failure to report such inappropriate or
irregular conduct of others is to be treated as a severe disciplinary matter. It
is against our company policy to retaliate against any individual who reports in
good faith the violation or potential violation of our companys Code of
Business Conduct and Ethics by another.

Our
Code of Business Conduct and Ethics is filed as Exhibit 14.1 to this annual
report. We will provide a copy of the Code of Business Conduct and Ethics to any
person without charge, upon request. Requests can be sent to: Lightscape
Technologies Inc., 3/F., 80 Gloucester Road, Wanchai, Hong Kong.

Section 16(a) Beneficial Ownership Compliance

Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
officers and directors and persons who own more than 10% of our common stock, to
file reports regarding ownership of, and transactions in, our securities with
the Securities and Exchange Commission and to provide us with copies of those
filings. Based solely on our review of Forms 3, 4 and 5 (and amendments thereto)
furnished to us during or in respect of the fiscal year ended March 31, 2008,
all directors, executive officers and beneficial owners of more than 10% of the
outstanding common stock filed the reports in a timely manner, with the
exception of the following:

---

- 78 -

Name
      Number of Late
      Reports
      Number of Transactions That Were
      Not Reported On a Timely Basis
      Known Failure to
      File a Required FormAeneas Capital
      Management, LP
    4
      (1)
    24
      (1)
    N/AInvestec Bank (UK)
      Limited
    1
      (2)
    1
      (2)
    N/A


|(1) | (i) Initial Statement of Beneficial Ownership of
      Securities on Form 3 that was not timely filed with the Securities and
      Exchange Commission to report acquisition of beneficial ownership of more
      than 10% of our common stock as of July 5, 2006 (1 transaction). Aeneas
      Capital Management, LP corrected the late reporting by filing a Form 3
      with the Securities and Exchange Commission on October 17, 2006; (ii)
      Statement of Changes in Beneficial Ownership of Securities on Form 4 that
      was not timely filed with the Securities and Exchange Commission to report
      share dispositions made on November 14, 2006 (2 transactions), June 5,
      2007 (4 transactions), June 6, 2007 (2 transactions), June 11, 2007 (2
      transactions), June 12, 2007 (2 transactions), June 18, 2007 (2
      transactions), June 22, 2007 (2 transactions) and June 26, 2007 (2
      transactions). Aeneas Capital Management, LP corrected the late reporting
      by filing a Form 4 with the Securities and Exchange Commission on July 11,
      2007; (iii) Statement of Changes in Beneficial Ownership of Securities on
      Form 4 that was not timely filed with the Securities and Exchange
      Commission to report a share disposition made on July 9, 2007 (1
      transaction). Aeneas Capital Management, LP corrected the late reporting
      by filing a Form 4 with the Securities and Exchange Commission on July 12,
      2007; (iv) Statement of Changes in Beneficial Ownership of Securities on
      Form 4 that was not timely filed with the Securities and Exchange
      Commission to report share dispositions made on July 11, 2007 (1
      transaction), July 13, 2007 (1 transaction), July 16, 2007 (1 transaction)
      and July 18, 2007 (1 transaction). Aeneas Capital Management, LP corrected
      the late reporting by filing a Form 4 with the Securities and Exchange
      Commission on July 23, 2007.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(2) | Initial Statement of Beneficial Ownership of Securities
      on Form 3 that was not timely filed by Investec Bank (UK) Limited, which
      acquired convertible notes in our company convertible into more than 10%
      of our common stock on January 23, 2007 (1 transaction). Investec Bank
      (UK) Limited corrected the late filing by filing a Form 3 with the
      Securities and Exchange Commission on August 7,
2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

Audit Committee

Our
audit committee consists of Francis Man Chung Wong, Kwok Tin Tang and Edmand Yuk
Man Wong, all of whom are non-employee directors of our company. All members of
the audit committee are independent as defined by Rule 4200(a)(15) of the Nasdaq
Marketplace Rules. The audit committee was established in accordance with
Section 3(a)(58)(A) of the Exchange Act. The audit committee is directed to
review the scope, cost and results of the independent audit of our books and
records, the results of the annual audit with management and the adequacy of our
accounting, financial and operating controls; to recommend annually to the board
of directors the selection of the independent registered accountants; to
consider proposals made by the independent registered accountants for consulting
work; and to report to the board of directors, when so requested, on any
accounting or financial matters. The audit committee of the board of directors
was formed on June 6, 2007 and adopted its charter on June 6, 2006. Francis Man
Chung Wong has been appointed as the chairperson of the audit committee by
unanimous consent resolution by our directors on August 1, 2007.

Audit Committee Financial Expert

In
the judgment of our board of directors, Francis Man Chung Wong meets the
definition of an audit committee financial expert, as such term is defined in
Item 407(d)(5)(ii) of Regulation SB and the rules and regulations promulgated by
the Securities and Exchange Commission thereunder, and is able to read and
understand fundamental financial statements, including our companys balance
sheet, income statement, and cash flow statement.

---

- 79 -

ITEM 10.    EXECUTIVE COMPENSATION.

Summary Compensation Table

The
particulars of compensation paid to the following persons:

|(a) | our principal executive officer;                                                                                                                                                                                                    
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                     
|(b) | each of our two most highly compensated executive
      officers who were serving as executive officers at the end of the year
      ended March 31, 2008; and                                                                      
|    |                                                                                                                                                                                                                                     
|(c) | up to two additional individuals for whom disclosure
      would have been provided under (b) but for the fact that the individual
      was not serving as our executive officer at the end of the year ended
      March 31, 2008,

who we will collectively refer to as our named executive
officers, of our company for the years ended March 31, 2008 and 2007, are set
out in the following summary compensation table, except that no disclosure is
provided for any named executive officer, other than our principal executive
officer, whose total compensation does not exceed $100,000 for the respective
fiscal year:

Name and
      Principal Position
    Year
    Salary ($)
    Bonus ($)
    Stock
      Awards ($)
    Option
      Awards ($)
    Non- Equity
      Incentive Plan Compen- sation
      ($)
    Non-
      Qualified Deferred Compen-
      sation Earnings ($)
    Other
      Annual Compen- sation ($)
    Total ($)Bondy Tan President, Secretary, Treasurer and
      CEO
    2008 2007
    154,242 154,242
    - -
    - -
    - -
    - -
    - -
    - -
    154,242 154,242


Employment Agreements with our Named Executive Officers

Bondy
Tan, as Chief Executive Officer of Tech Team, our wholly-owned operating
subsidiary, was paid a salary of $154,242 and $154,242 for our fiscal years
ended March 31, 2008 and 2007, respectively. Other than Bondy Tan, there were no
executive officers of any of our wholly-owned subsidiaries serving as of March
31, 2008, and no executive officers who served as such during the fiscal years
2008 and 2007, whose total salary and bonus exceeded $100,000 per year. Other
than the employment agreement with Bondy Tan, no individual has entered into any
employment agreements with our company or our wholly-owned or majority owned
subsidiaries. There were no compensatory plans or arrangements with any
executive officer of our company or any of our subsidiaries for payments to be
made to an executive officer following the retirement, resignation or
termination of any executive officers employment or from a change in control of
our company or a change in such officers responsibilities following a change of
control.

Our
wholly-owned subsidiaries do not maintain, and did not maintain at any time
during their most recently completed fiscal years, any long-term compensation
plans. As such, there were no long-term compensation plan awards or payouts to
any of the executive officers of our wholly-owned subsidiaries during any of
their two most recently completed fiscal years ended March 31, 2008 and 2007.

Our
compensation program for our executive officers is administered and reviewed by
our board of directors. Historically, executive compensation consists of a base
salary. Individual compensation levels are designed to reflect individual
responsibilities, performance and experience, as well as the performance of our
company. The determination of discretionary bonuses is based on various factors,
including implementation of our business plan, development of corporate
opportunities and completion of financing.

---

- 80 -

Stock Option Grants to our Named Executive Officers

Our
company does not have a stock option plan and our company did not grant any
stock options to any named executive officers during the years ended March 31,
2008 or 2007.

Outstanding Equity Awards at Fiscal Year End

There
were no outstanding equity awards granted to any named executive officer as of
March 31, 2008 or 2007.

Aggregate Option Exercises in 2008 by Executive Officers

There
were no options outstanding, and hence no options exercised, by any named
executive officers during the years ended March 31, 2008 or 2007.

Compensation of the Companys Directors

Directors
may be paid their expenses for attending each board of directors meeting and may
be paid a fixed sum for attendance at each meeting of the directors or a stated
salary as director. No payment precludes any director from serving our company
in any other capacity and being compensated for the service. Members of special
or standing committees may be allowed like reimbursement and compensation for
attending committee meetings. The following table summarizes compensation paid
to all of our directors during the years ended March 31, 2008 and 2007:

Name
      Fees Earned
      or Paid in Cash ($)
      Stock
      Awards ($)
      Option
      Awards ($)
      Non- Qualified Deferred
      Compen- sation Earnings ($)
      Non-Equity Incentive
      Plan Compen- sation ($)
      All Other
      Compensation ($)
      Total
      ($)Bondy Tan
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    NilCharles Cheung
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    NilEdmand Yuk Man Wong
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    NilKwok Tin Tang
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    NilFrancis Man Chung Wong
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil


Pension, Retirement or Similar Benefit Plans

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

Equity Plan Compensation Information

Our
company does not currently have an equity compensation plan.

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- 81 -

|ITEM 11. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENTAND RELATED STOCKHOLDER MATTERS.
|-------- | ----------------------------------------------------------------------------------------------------

The
following table sets forth, as of June 30, 2008 certain information with respect
to the beneficial ownership of our common stock by each stockholder known by us
to be the beneficial owner of more than 5% of our common stock and by each of
our current directors and executive officers. Each person has sole voting and
investment power with respect to the shares of common stock, except as otherwise
indicated. Beneficial ownership consists of a direct interest in the shares of
common stock, except as otherwise indicated.

Name and Address of Beneficial Owner
      Position Held
      Amount and Nature ofBeneficial Owner
      Percent ofClass(1)Eastern Advisor Fund, LP 101 Park Avenue,
      48th Floor New York, New York 10178
    N/A
    4,842,682 (2)
    8.7%Eastern Advisor Offshore Fund, Ltd. c/o
      Caledonian Fund Services (Cayman) Limited P.O. Box 1043 Caledonian
      House 69 Dr. Roys Drive Grand Cayman KY1-1102 Cayman Islands
    N/A
    2,371,063 (2)
    4.2%Galaxy China Opportunities Fund Unit 603,
      Tower 1 Admiralty Centre, 18 Harcourt Road, Hong Kong
    N/A
    6,000,000 (3)
    10.7%SMC Investment Management Limited P.O.
      Box 957, Offshore Incorporations Centre, Road Town, Tortola, British
      Virgin Islands
    N/A
    3,700,000 (4)
    6.6%Wellchamp Fund Limited M&C Corporate
      Services Limited, PO Box 309GT, Ugland House, South Church Street,
      George Town, Grand Cayman, Cayman Islands
    N/A
    3,140,775 (5)
    5.6%Bondy Tan 3/F., 80 Gloucester Road
      Wanchai, Hong Kong
    Director, President and Chief Executive
      Officer of our company
    4,099,633 (6)
    7.3%Charles Cheung A2, 6/F Evergreen Villa,
      43 Stubbs Road, Hong Kong
    Director of our company
    1,458,293 (7)
    2.6%Edmand Yuk Man Wong Community College of
      City University, 6/F., Mong Man-wai Building, Kowloon Tong,
      Kowloon, Hong Kong
    Director of our company
    Nil
    NilKwok Tin Tang Room B, Block A, 1/F., Hoi
      Tao Building, 11 Belchers Street, Sai Wan, Hong Kong
    Director of our company
    Nil
    NilFrancis Man Chung Wong 19th/F, No. 3 Lockhart Road, Wanchai, Hong Kong
    Director of our company
    Nil
    NilDirectors and
      Executive Officers as a Group (five persons)
    
    5,557,926
    9.9%


|(1) | Based on 55,876,410 shares of common stock issued and
      outstanding as of June 30, 2008. Except as otherwise indicated, we believe
      that the beneficial owners of the common stock listed above, based on
      information furnished by such owners, have sole investment and voting
      power with respect to such shares, subject to community property laws
      where applicable. Beneficial ownership is determined in accordance with
      the rules of the Securities and Exchange Commission and
  generally
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

- 82 -

|    | includes voting or investment power with respect to
      securities. Shares of common stock subject to convertible or derivative
      securities currently convertible or exercisable or convertible or
      exercisable within 60 days are deemed outstanding for purposes of
      computing the percentage ownership of the person holding such securities,
      but are not deemed outstanding for purposes of computing the percentage
      ownership of any other person.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(2) | As disclosed in a Schedule 13G/A filed on March 25, 2008
      and a Form 4 filed on April 1, 2008, Eastern Advisors Capital Group, LLC
      is the investment manager of Eastern Advisor Fund, LP and Eastern Advisor
      Offshore Fund, Ltd. Eastern Advisors, LLC is the general partner of
      Eastern Advisor Fund, LP. Scott Booth is the managing member of Eastern
      Advisors Capital Group, LLC and Eastern Advisors, LLC, and a director of
      Eastern Advisor Offshore Fund, Ltd. Eastern Advisors Capital Group, LLC,
      Scott Booth, Eastern Advisor Fund, LP, Eastern Advisors, LLC and Eastern
      Advisor Offshore Fund, Ltd. share voting and investment power over shares
      of our common stock. Mr. Booth and Eastern Advisors Capital Group, LLC
      share investment control and power to vote or to direct the vote over
      7,213,745 shares of common stock. Eastern Advisor Fund, LP and Eastern
      Advisors, LLC share investment control and power to vote or to direct the
      vote over 4,842,682 shares of common stock. Eastern Advisor Offshore Fund,
      Ltd. shares investment control and the power to vote or to direct the vote
      over 2,371,063 shares of common stock. Eastern Advisor Fund, LP, Eastern
      Advisor Offshore Fund, Ltd., Eastern Advisors Capital Group, LLC, Eastern
      Advisors, LLC and Scott Booth each disclaim beneficial ownership of such
      shares of common stock, except to the extent of its or his pecuniary
      interest therein, if any.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(3) | Joe Man Fai Chan is director of Galaxy China
      Opportunities Fund and has voting and investment control over the shares
      of common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(4) | Hamilton Tang is director of SMC Investment Management
      Ltd. and has voting and investment control over the shares of common
      stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(5) | Ronald Cheng is director of Wellchamp Fund Limited and
      has voting and investment control over the shares of common
  stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(6) | As disclosed in a Schedule 13D/A filed on February 12,
      2008, Bondy Tan directly beneficially owns and holds investment control
      and the power to vote or to direct the vote of 2,888,768 shares of our
      company. Bondy Tan indirectly beneficially owns and holds investment
      control and power to vote or to direct the vote of 387,000 shares of our
      company held by Glory Hill Holdings Limited, a company which he solely
      owns. Bondy Tan indirectly beneficially owns and holds investment control
      and the power to vote or to direct the vote of 252,273 shares of our
      company held by Full Scope Group Limited, a company which he solely owns.
      Bondy Tan indirectly beneficially owns and holds investment control the
      power to vote or to direct the vote of 571,592 shares of our company held
      by Excel Means Limited, a company which he solely owns.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(7) | As disclosed in a Schedule 13D filed on January 24, 2005,
      Charles Cheung indirectly beneficially owns and holds investment control
      and the power to vote or to direct the vote of 1,458,293 shares of our
      company held by Leisure Assets Limited, a company which he solely
    owns.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

From
time to time, the number of our shares held in the street name accounts of
various securities dealers for the benefit of their clients or in centralized
securities depositories may exceed 5% of the total shares of our common stock
outstanding.

Changes in Control

We
are unaware of any contract, or other arrangement or provision of our Articles
or Bylaws, the operation of which may at a subsequent date result in a change of
control of our company.

ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Other
than as listed below, we have not been a party to any transaction, proposed
transaction, or series of transactions in which the amount involved exceeds the
lesser of $120,000 or one percent of the average of our companys total assets
at year end for the last two completed fiscal years in which, to our knowledge,
any of our directors, officers, five percent beneficial security holder, or any
member of the immediate family of the foregoing persons has had or will have a
direct or indirect material interest:

In
2004, our company acquired Tomi Fuji Energy Management Services Limited
(TFEMS) by issuing shares to its holding company, Tomi Fuji Corporation
Limited (TFCL). The owner of TFCL guaranteed certain net profit of TFEMS for
the period from date of acquisition to June 30, 2005 (the guaranteed period).
TFEMs net profit during the guaranteed period fell short of the guaranteed
amount by $604,546. Management is considering taking appropriate actions to
enforce the damage thereon from the guarantor.

---

- 83 -

Our
company acquired Lightscape Technologies (Macau) Limited (Lightscape Macau) in
2006 by payment of $1,550 (MOP12,400) and issuance of 1,200,000 shares of our
company upon the condition that Lightscape Macau would made a net profit of not
less than $2,564,103 (HK$20,000,000) for the period from October 1, 2006 to
September 30, 2007 (the guarantee period). Lightscape Macau made a loss during
the guaranteed period and management is taking action to cancel the 1,200,000
shares issued.

The
amounts due to a director and a five percent beneficial shareholder represent
cash advances from them and are unsecured, non-interest bearing and have no
fixed repayment terms. The balances related to such advances are as follows:

|                            |  | March 31, |  |  | March 31, | 
|--------------------------- |  | --------- |  |  | --------- | 
|                            |  | 2008      |  |  | 2007      | 
|                            |  | $         |  |  | $         | 
|                            |  |           |  |  |           | 
|                            |  |           |  |  |           | 
|Amount due to a director    |  | -         |  |  | 39,846    | 
|                            |  |           |  |  |           | 
|Amount due to a shareholder |  | 45,161    |  |  | 46,546    | 

Corporate Governance

We
currently act with 5 directors, consisting of Bondy Tan, Charles Cheung, Edmand
Yuk Man Wong, Kwok Tin Tang and Francis Man Chung Wong. We have determined that
Edmand Yuk Man Wong, Kwok Tin Tang and Francis Man Chung Wong are independent
directors as defined by Rule 4200(a)(15) of the Nasdaq Marketplace Rules.

We
currently act with a standing audit committee. We do not have a standing
compensation or nominating committee but our entire board of directors acts as
our compensation and nominating committee. If any stockholders seek to nominate
a director or bring any other business at any meeting of our stockholders, the
stockholder must comply with the procedures contained in our bylaws and the
stockholder must notify us in writing and such notice must be delivered to or
received by the President in accordance with Rule 14a-8 of the Exchange Act. A
stockholder may write to the President of our company at our principal executive
office, as set out on the cover page of this annual report, to deliver the
notices discussed above and for a copy of the relevant bylaw provisions
regarding the requirements for making stockholder proposals and nominating
director candidates. We do not believe that it is necessary to have a standing
compensation committee because we believe that the functions of such a committee
can be adequately performed by our board of directors.

Audit Committee

Our
audit committee consists of Francis Man Chung Wong, Kwok Tin Tang and Edmand Yuk
Man Wong, all of whom are non-employee directors of our company. All members of
the audit committee are independent as defined by Rule 4200(a)(15) of the Nasdaq
Marketplace Rules. The audit committee was established in accordance with
Section 3(a)(58)(A) of the Exchange Act. The audit committee is directed to
review the scope, cost and results of the independent audit of our books and
records, the results of the annual audit with management and the adequacy of our
accounting, financial and operating controls; to recommend annually to the board
of directors the selection of the independent registered accountants; to
consider proposals made by the independent registered accountants for consulting
work; and to report to the board of directors, when so requested, on any
accounting or financial matters. The audit committee of the board of directors
was formed on June 6, 2007 and adopted its charter on June 6, 2006. Francis Man
Chung Wong has been appointed as the chairperson of the audit committee by
unanimous consent resolution by our directors on August 1, 2007.

In
the judgment of our board of directors, Francis Man Chung Wong meets the
definition of an audit committee financial expert, as such term is defined in
Item 407(d)(5)(ii) of Regulation SB and the rules and

---

- 84 -

regulations promulgated by the Securities and Exchange
Commission thereunder, and is able to read and understand fundamental financial
statements, including our companys balance sheet, income statement, and cash
flow statement.

Nomination Procedures for Appointment of Directors

As
of June 30, 2008, we did not effect any material changes to the procedures by
which our stockholders may recommend nominees to our board of directors. Our
board of directors has determined that it is in the best position to evaluate
our companys requirements as well as the qualifications of each candidate when
the board considers a nominee for a position on our board of directors. If
stockholders wish to recommend candidates directly to our board, they may do so
by sending communications to the President of the company at the address on the
cover of this annual report.

Transactions with Independent Directors

Other
than as set out below or disclosed under the heading CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE, none of our independent
directors entered into any transaction, relationship or arrangement during the
year ended March 31, 2008 that was considered by our board of directors in
determining whether the director maintained his or her independence in
accordance with Rule 4200(a)(15) of the Nasdaq Marketplace Rules.

ITEM 13.    EXHIBITS.

Exhibits required by Item 601 of Regulation S-B

|Exhibit Number | Description                                                                                                                                                                                                                                                         
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                     
|(2)            | Plan of
      Purchase, Sale, Reorganization, Arrangement, Liquidation or Succession                                                                                                                                                                                
|               |                                                                                                                                                                                                                                                                     
|2.1            | Share Exchange Agreement dated January 7, 2005, among
      Global Innovative Systems Inc., Tech Team Holdings Limited, Bondy Tan and
      the Selling Shareholders (incorporated by reference from our Current
      Report on Form 8-K filed on January 18, 2005)
|               |                                                                                                                                                                                                                                                                     
|(3)            | (i) Articles of Incorporation; and (ii) Bylaws                                                                                                                                                                                                                      
|               |                                                                                                                                                                                                                                                                     
|3.1            | Charter (incorporated by reference from our Registration
      Statement on Form 10-SB filed on April 11, 2000)                                                                                                                                                     
|               |                                                                                                                                                                                                                                                                     
|3.2            | Articles of Incorporation (incorporated by reference from
      our Registration Statement on Form 10-SB filed on April 11, 2000)                                                                                                                                   
|               |                                                                                                                                                                                                                                                                     
|3.3            | Bylaws (incorporated by reference from our Registration
      Statement on Form 10-SB filed on April 11, 2000)                                                                                                                                                      
|               |                                                                                                                                                                                                                                                                     
|3.4            | Certificate of Reverse Stock Split filed with the Nevada
      Secretary of State on November 12, 2003 (incorporated by reference from
      our Current Report on Form 8-K filed on December 17, 2003)                                                             
|               |                                                                                                                                                                                                                                                                     
|3.5            | Certificate of Amendment to Articles of Incorporation
      filed with the Secretary of State of Nevada on March 3, 2004 (incorporated
      by reference from our Quarterly Report on Form 10- QSB filed on May 15,
      2004)                                    
|               |                                                                                                                                                                                                                                                                     
|3.6            | Certificate of Change filed with the Secretary of State
      of Nevada on December 23, 2004 (incorporated by reference from our Current
      Report on Form 8-K filed on January 6, 2005)                                                                         

---

- 85 -

|Exhibit Number | Description                                                                                                                                                                                                                                                                                                                                    
|-------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                                                                                                
|3.7            | Articles of Merger filed with the Secretary of State of
      Nevada on April 17, 2007 effective April 20, 2007 (incorporated by
      reference from our Current Report on Form 8-K filed on April 23, 2007)                                                                                                                                  
|               |                                                                                                                                                                                                                                                                                                                                                
|(10)           | Material Contracts                                                                                                                                                                                                                                                                                                                             
|               |                                                                                                                                                                                                                                                                                                                                                
|10.1           | Management Contract between Tech Team Holdings Limited /
      Tech Team Development Limited and Bondy Tan (incorporated by reference
      from our Current Report on Form 8-K filed on January 18, 2005)                                                                                                                                     
|               |                                                                                                                                                                                                                                                                                                                                                
|10.2           | Sale and Purchase Agreement dated March 30, 2006 between
      Tech Team Investment Limited, Woo Yuen Yu, Michelle Siu Kwan Lam and
      Joseph Sui Kei Lam (incorporated by reference from our Current Report on
      Form 8-K filed on April 4, 2006)                                                                                      
|               |                                                                                                                                                                                                                                                                                                                                                
|10.3           | Purchase Agreement between Global Innovative Systems Inc.
      and Aeneas Portfolio Company LP, dated March 29, 2006 (incorporated by
      reference from our Current Report on Form 8-K filed on July 5, 2006)                                                                                                                              
|               |                                                                                                                                                                                                                                                                                                                                                
|10.4           | Purchase Agreement between Global Innovative Systems Inc.
      and Aeneas Portfolio Company LP, dated April 3, 2006 (incorporated by
      reference from our Current Report on Form 8-K filed on July 5, 2006)                                                                                                                               
|               |                                                                                                                                                                                                                                                                                                                                                
|10.5           | Amendment Agreement between Global Innovative Systems
      Inc. and Aeneas Portfolio Company LP dated June 21, 2006 to Purchase
      Agreement between Global Innovative Systems Inc. and Aeneas Portfolio
      Company LP, dated March 29, 2006 (incorporated by reference from our
      Current Report on Form 8-K filed on July 5, 2006)
|               |                                                                                                                                                                                                                                                                                                                                                
|10.6           | Amendment Agreement between Global Innovative Systems
      Inc. and Aeneas Portfolio Company LP dated June 21, 2006 to Purchase
      Agreement between Global Innovative Systems Inc. and Aeneas Portfolio
      Company LP, dated April 3, 2006 (incorporated by reference from our
      Current Report on Form 8-K filed on July 5, 2006) 
|               |                                                                                                                                                                                                                                                                                                                                                
|10.7           | Sale and Purchase Agreement between Tech Team Development
      Limited, Albert Yee Tat Chan, Luminous LED Technologies Limited, Michelle
      Siu Kwan Lam and Joseph Sui Kei Lam, dated September 29, 2006
      (incorporated by reference from our Current Report on Form 8-K filed on
      October 5, 2006)                             
|               |                                                                                                                                                                                                                                                                                                                                                
|10.8           | Cancellation Deed between Tech Team Investment Limited,
      Woo Yuen Yu, Michelle Siu Kwan Lam, Joseph Sui Kei Lam and Lightscape
      Holding Ltd., dated September 29, 2006 (incorporated by reference from our
      Current Report on Form 8-K filed on October 5, 2006)                                                                
|               |                                                                                                                                                                                                                                                                                                                                                
|10.9           | OEM Agreement between Lightscape Technologies (Macau)
      Limited and Strong Base Electronic-optic Technology Corp., dated October
      23, 2006 (incorporated by reference from our Current Report on Form 8-K
      filed on October 31, 2006)                                                                                            
|               |                                                                                                                                                                                                                                                                                                                                                
|10.10          | Subscription Agreement between Global Innovative Systems
      Inc. and Bondy Tan, dated January 18, 2007 (incorporated by reference from
      our Quarterly Report on Form 10-QSB filed on February 20, 2007)                                                                                                                                

---

- 86 -

|Exhibit Number | Description                                                                                                                                                                                                                                                                                                           
|-------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                                                                       
|10.11          | Subscription
        Agreement between Global Innovative Systems Inc., Investec Bank (UK) Limited
        and the persons set out in Schedule 1 to the Subscription Agreement, dated
        January 18, 2007 (incorporated by reference from our Quarterly Report
        on Form 10-QSB filed on February 20, 2007) 
|               |                                                                                                                                                                                                                                                                                                                       
|10.12          | Note issued
        by Global Innovative Systems Inc. to Investec Bank (UK) Limited dated
        January 23, 2007 (incorporated by reference from our Quarterly Report
        on Form 10-QSB filed on February 20, 2007)                                                                                            
|               |                                                                                                                                                                                                                                                                                                                       
|10.13          | Subscription
        Agreement between Global Innovative Systems Inc., Full Moon Resources
        Limited and the persons set out in Schedule 1 to the Subscription Agreement,
        dated January 18, 2007 (incorporated by reference from our Quarterly Report
        on Form 10-QSB filed on February 20, 2007)
|               |                                                                                                                                                                                                                                                                                                                       
|10.14          | Note issued
        by Global Innovative Systems Inc. to Full Moon Resources Limited dated
        January 23, 2007 (incorporated by reference from our Quarterly Report
        on Form 10-QSB filed on February 20, 2007)                                                                                           
|               |                                                                                                                                                                                                                                                                                                                       
|10.15          | Subscription
        Agreement between Global Innovative Systems Inc., LP Asset Management
        Limited and the persons set out in Schedule 1 to the Subscription Agreement,
        dated January 18, 2007 (incorporated by reference from our Quarterly Report
        on Form 10-QSB filed on February 20, 2007)
|               |                                                                                                                                                                                                                                                                                                                       
|10.16          | Note issued
        by Global Innovative Systems Inc. to LP Asset Management Limited dated
        January 23, 2007 (incorporated by reference from our Quarterly Report
        on Form 10-QSB filed on February 20, 2007)                                                                                           
|               |                                                                                                                                                                                                                                                                                                                       
|10.17          | Redemption Agreement
        between Lightscape Technologies Inc., Investec Bank (UK) Limited, Full
        Moon Resources Limited, LP Asset Management Limited and Bondy Tan, dated
        July 10, 2007 (incorporated by reference from our Current Report on Form
        8-K filed on August 22, 2007)           
|               |                                                                                                                                                                                                                                                                                                                       
|10.18          | Form of Subscription
        Agreement dated August 21, 2007 (incorporated by reference from our Current
        Report on Form 8-K filed on August 22, 2007)                                                                                                                                                         
|               |                                                                                                                                                                                                                                                                                                                       
|10.19          | Subscription
        Agreement between Lightscape Technologies Inc. and SMC Investment Management
        Limited dated December 11, 2007 (incorporated by reference from our Current
        Report on Form 8-K filed on December 14, 2007)                                                                          
|               |                                                                                                                                                                                                                                                                                                                       
|10.20*         | Joint
        Venture Agreement between Lightscape Technologies (Greater China) Limited,
        Beijing Xintong Media & Cultural Development Co. Ltd., Beijing New
        Vision Media Advertising Co. Ltd. and Miss Yao Po Chun dated February
        12, 2008 (Translated from Chinese)                          
|               |                                                                                                                                                                                                                                                                                                                       
|10.21          | Form of Securities
        Purchase Agreement, among Lightscape Technologies Inc. and the investors
        named therein dated March 9, 2008 (incorporated by reference from our
        Current Report on Form 8-K filed on March 10, 2007)                                                                         
|               |                                                                                                                                                                                                                                                                                                                       
|10.22          | Form of Registration
        Rights Agreement among Lightscape Technologies Inc. and the investors
        named therein dated March 9, 2008 (incorporated by reference from our
        Current Report on Form 8-K filed on March 10, 2007)                                                                          

---

- 87 -

|Exhibit Number | Description                                                                                                                                                                                                                                                             
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                         
|10.23          | Escrow Agreement
        among Lightscape Technologies Inc., Roth Capital Partners, LLC and Tri-
        State Title & Escrow, LLC, as escrow agent, dated March 9, 2008 (incorporated
        by reference from our Current Report on Form 8-K filed on March 10, 2007)
|               |                                                                                                                                                                                                                                                                         
|10.24          | Form of Placement
        Agent Warrant (incorporated by reference from our Current Report on Form
        8-K filed on March 10, 2007)                                                                                                                                 
|               |                                                                                                                                                                                                                                                                         
|(14)           | Code of Ethics                                                                                                                                                                                                                                                          
|               |                                                                                                                                                                                                                                                                         
|14.1           | Code of Ethics
        (incorporated by reference from our Annual Report on Form 10-KSB filed
        on December 30, 2004)                                                                                                                                             
|               |                                                                                                                                                                                                                                                                         
|(21)           | Subsidiaries                                                                                                                                                                                                                                                            
|               |                                                                                                                                                                                                                                                                         
|21.1*          | List
        of subsidiaries                                                                                                                                                                                                                                            
|               |                                                                                                                                                                                                                                                                         
|(31)           | Rule 13a-14(a)/15d-14(a)
        Certifications                                                                                                                                                                                                                         
|               |                                                                                                                                                                                                                                                                         
|31.1*          | Certification
        of Principal Executive Officer and Principal Financial Officer filed pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                           
|               |                                                                                                                                                                                                                                                                         
|(32)           | Section 1350
        Certifications                                                                                                                                                                                                                                     
|               |                                                                                                                                                                                                                                                                         
|32.1*          | Certification
        of Principal Executive Officer and Principal Financial Officer pursuant
        to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002.                                                          

*Filed herewith

ITEM 14.    PRINCIPAL ACCOUNTANT FEES
AND SERVICES.

Fees Paid to Independent Accountant

On May
31, 2007, our company retained Yu and Associates CPA Corporation to provide
audit services during the fiscal years ended March 31, 2008 and 2007. On
December 9, 2006, our company retained Schwartz Levitsky Feldman LLP, Chartered
Accountants, to provide audit services during the fiscal year ended March 31,
2007. On April 28, 2006, our company retained BDO McCabe Lo Limited, an
independent registered public accounting firm, to provide audit services during
the fiscal year ended March 31, 2006. Our company paid the following fees to our
independent accountants during the fiscal years ended March 31, 2008 and March
31, 2007:

---

- 88 -

Fiscal year ended March 31,
      2008
      Fiscal year ended March 31,
      2007Audit Fees - BDO McCabe Lo Limited -
      Schwartz Levistsky Feldman LLP - Yu and Associates CPA Corporation
    - - $277,500
    $63,354 $51,050 $170,000Audit Related Services
    Nil
    NilTax Fees - BDO McCabe Lo Limited - Schwartz
      Levistsky Feldman LLP - Yu and Associates CPA Corporation - GC
      Alliance Limited
    - - $12,000 -
    - - - $3,342All Other Fees - BDO McCabe Lo Limited - Yu
      and Associates CPA Corporation - Deloitte Touche Tohmatsu
    $6,000 $50,000 -
    - - $20,500Total
    $345,500
    $308,246


Audit Fees

This
category includes the fees for the examination of our consolidated financial
statements and our quarterly reviews of interim financial statements. This
category also includes advice on audit and accounting matters that arose during
or as a result of the audit or the review of our interim financial statements,
and the preparation of an annual management letter on internal control
matters.

The fees
billed by Yu and Associates CPA Corporation for professional services rendered
for the audit of our annual financial statements for the fiscal year ended March
31, 2008 were $195,000. For the fiscal year ended March 31, 2008, Yu and
Associates CPA Corporation billed our company an aggregate fee of $82,500 for
assurance or services relating to our quarterly financial statements. Our audit
fees for our prior fiscal year ended March 31, 2007 were $284,404.

Audit Related Services

We did
not incur any audit related services billed by Yu and Associates CPA Corporation
during the fiscal year ended March 31, 2008. Our audit related services for our
prior fiscal year ended March 31, 2007, including the aggregate fees billed for
assurance and related services relating to the performance of the audit of our
financial statements which are not reported under the caption Audit Fees
above, were $nil.

Tax Fees

We
incurred tax fees billed by Yu and Associates CPA Corporation of $12,000 during
the fiscal year ended March 31, 2008. The aggregate fees billed during our prior
fiscal year ended March 31, 2007, for products and services provided by our
former auditors for tax compliance, tax advice and tax planning, were $nil.

All Other Fees

---

- 89 -

We
did not incur any additional fees billed by Yu and Associates CPA Corporation,
Schwartz Levitsky Feldman LLP or BDO McCabe Lo Limited other than the fees
listed above during the fiscal year ended March 31, 2008 and we did not incur
any additional fees billed by our former auditors other than the fees listed
above during our prior fiscal year ended March 31, 2007.

The
Securities and Exchange Commission requires that, before Yu and Associates CPA
Corporation is engaged by us or our subsidiaries to render any auditing or
permitted non-audit related services, the engagement be:

- approved by our audit committee; or

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

Our
audit committee pre-approved all services provided by our independent
accountant. Our audit committee does not have records of what percentage of the
above fees were pre-approved. All of the services and fees described under the
categories of Audit Related Fees, Tax Fees and All Other Fees were
reviewed and approved by our audit committee before or after the respective
services were rendered.

Our
audit committee has considered the nature and amount of the fees of $339,500
billed by Yu and Associates CPA Corporation and believes that the provision of
the services for activities unrelated to the audit is compatible with
maintaining the independence of Yu and Associates CPA Corporation.

---

- 90 -

SIGNATURES

In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

LIGHTSCAPE TECHNOLOGIES INC.

****

By:/s/ Bondy Tan Bondy Tan President,
Secretary and Treasurer and Chief Executive Officer and Director
(Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer)

Date: July 14, 2008

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.

|Signature                  | Title                           | Date         
|-------------------------- | ------------------------------- | -------------
|                           |                                 |              
|                           |                                 |              
|/s/ Bondy Tan              |                                 |              
|Bondy Tan                  | President, Secretary, Treasurer | July 14, 2008
|                           | and Chief Executive Officer and |              
|                           | Director                        |              
|                           | (Principal Executive Officer,   |              
|                           | Principal Financial Officer and |              
|                           | Principal Accounting Officer)   |              
|                           |                                 |              
|                           |                                 |              
|                           |                                 |              
|/s/ Charles Cheung         |                                 |              
|Charles Cheung             | Director                        | July 14, 2008
|                           |                                 |              
|                           |                                 |              
|                           |                                 |              
|/s/ Edmand Yuk Man Wong    |                                 |              
|Edmand Yuk Man Wong        | Director                        | July 14, 2008
|                           |                                 |              
|                           |                                 |              
|                           |                                 |              
|/s/ Kwok Tin Tang          |                                 |              
|Kwok Tin Tang              | Director                        | July 14, 2008
|                           |                                 |              
|                           |                                 |              
|                           |                                 |              
|/s/ Francis Man Chung Wong |                                 |              
|Francis Man Chung Wong     | Director                        | July 14, 2008

---

- 91 -

EXHIBIT INDEX

|Exhibit Number | Description                                                                                                                                                                                                                                                         
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                     
|(2)            | Plan of Purchase, Sale, Reorganization, Arrangement,
      Liquidation or Succession                                                                                                                                                                                
|               |                                                                                                                                                                                                                                                                     
|2.1            | Share Exchange Agreement dated January 7, 2005, among
      Global Innovative Systems Inc., Tech Team Holdings Limited, Bondy Tan and
      the Selling Shareholders (incorporated by reference from our Current
      Report on Form 8-K filed on January 18, 2005)
|               |                                                                                                                                                                                                                                                                     
|(3)            | (i) Articles of Incorporation; and (ii) Bylaws                                                                                                                                                                                                                      
|               |                                                                                                                                                                                                                                                                     
|3.1            | Charter (incorporated by reference from our Registration
      Statement on Form 10-SB filed on April 11, 2000)                                                                                                                                                     
|               |                                                                                                                                                                                                                                                                     
|3.2            | Articles of Incorporation (incorporated by reference from
      our Registration Statement on Form 10-SB filed on April 11, 2000)                                                                                                                                   
|               |                                                                                                                                                                                                                                                                     
|3.3            | Bylaws (incorporated by reference from our Registration
      Statement on Form 10-SB filed on April 11, 2000)                                                                                                                                                      
|               |                                                                                                                                                                                                                                                                     
|3.4            | Certificate of Reverse Stock Split filed with the Nevada
      Secretary of State on November 12, 2003 (incorporated by reference from
      our Current Report on Form 8-K filed on December 17, 2003)                                                             
|               |                                                                                                                                                                                                                                                                     
|3.5            | Certificate of Amendment to Articles of Incorporation
      filed with the Secretary of State of Nevada on March 3, 2004 (incorporated
      by reference from our Quarterly Report on Form 10- QSB filed on May 15,
      2004)                                    
|               |                                                                                                                                                                                                                                                                     
|3.6            | Certificate of Change filed with the Secretary of State
      of Nevada on December 23, 2004 (incorporated by reference from our Current
      Report on Form 8-K filed on January 6, 2005)                                                                         
|               |                                                                                                                                                                                                                                                                     
|3.7            | Articles of Merger filed with the Secretary of State of
      Nevada on April 17, 2007 effective April 20, 2007 (incorporated by
      reference from our Current Report on Form 8-K filed on April 23, 2007)                                                       
|               |                                                                                                                                                                                                                                                                     
|(10)           | Material Contracts                                                                                                                                                                                                                                                  
|               |                                                                                                                                                                                                                                                                     
|10.1           | Management Contract between Tech Team Holdings Limited /
      Tech Team Development Limited and Bondy Tan (incorporated by reference
      from our Current Report on Form 8-K filed on January 18, 2005)                                                          
|               |                                                                                                                                                                                                                                                                     
|10.2           | Sale and Purchase Agreement dated March 30, 2006 between
      Tech Team Investment Limited, Woo Yuen Yu, Michelle Siu Kwan Lam and
      Joseph Sui Kei Lam (incorporated by reference from our Current Report on
      Form 8-K filed on April 4, 2006)           
|               |                                                                                                                                                                                                                                                                     
|10.3           | Purchase Agreement between Global Innovative Systems Inc.
      and Aeneas Portfolio Company LP, dated March 29, 2006 (incorporated by
      reference from our Current Report on Form 8-K filed on July 5, 2006)                                                   
|               |                                                                                                                                                                                                                                                                     
|10.4           | Purchase Agreement between Global Innovative Systems Inc.
      and Aeneas Portfolio Company LP, dated April 3, 2006 (incorporated by
      reference from our Current Report on Form 8-K filed on July 5, 2006)                                                    

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|Exhibit Number | Description                                                                                                                                                                                                                                                                                                                                    
|-------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                                                                                                
|10.5           | Amendment Agreement between Global Innovative Systems
      Inc. and Aeneas Portfolio Company LP dated June 21, 2006 to Purchase
      Agreement between Global Innovative Systems Inc. and Aeneas Portfolio
      Company LP, dated March 29, 2006 (incorporated by reference from our
      Current Report on Form 8-K filed on July 5, 2006)
|               |                                                                                                                                                                                                                                                                                                                                                
|10.6           | Amendment Agreement between Global Innovative Systems
      Inc. and Aeneas Portfolio Company LP dated June 21, 2006 to Purchase
      Agreement between Global Innovative Systems Inc. and Aeneas Portfolio
      Company LP, dated April 3, 2006 (incorporated by reference from our
      Current Report on Form 8-K filed on July 5, 2006) 
|               |                                                                                                                                                                                                                                                                                                                                                
|10.7           | Sale and Purchase Agreement between Tech Team Development
      Limited, Albert Yee Tat Chan, Luminous LED Technologies Limited, Michelle
      Siu Kwan Lam and Joseph Sui Kei Lam, dated September 29, 2006
      (incorporated by reference from our Current Report on Form 8-K filed on
      October 5, 2006)                             
|               |                                                                                                                                                                                                                                                                                                                                                
|10.8           | Cancellation Deed between Tech Team Investment Limited,
      Woo Yuen Yu, Michelle Siu Kwan Lam, Joseph Sui Kei Lam and Lightscape
      Holding Ltd., dated September 29, 2006 (incorporated by reference from our
      Current Report on Form 8-K filed on October 5, 2006)                                                                
|               |                                                                                                                                                                                                                                                                                                                                                
|10.9           | OEM Agreement between Lightscape Technologies (Macau)
      Limited and Strong Base Electronic-optic Technology Corp., dated October
      23, 2006 (incorporated by reference from our Current Report on Form 8-K
      filed on October 31, 2006)                                                                                            
|               |                                                                                                                                                                                                                                                                                                                                                
|10.10          | Subscription Agreement between Global Innovative Systems
      Inc. and Bondy Tan, dated January 18, 2007 (incorporated by reference from
      our Quarterly Report on Form 10-QSB filed on February 20, 2007)                                                                                                                                
|               |                                                                                                                                                                                                                                                                                                                                                
|10.11          | Subscription Agreement between Global Innovative Systems
      Inc., Investec Bank (UK) Limited and the persons set out in Schedule 1 to
      the Subscription Agreement, dated January 18, 2007 (incorporated by
      reference from our Quarterly Report on Form 10-QSB filed on February 20,
      2007)                                  
|               |                                                                                                                                                                                                                                                                                                                                                
|10.12          | Note issued by Global Innovative Systems Inc. to Investec
      Bank (UK) Limited dated January 23, 2007 (incorporated by reference from
      our Quarterly Report on Form 10-QSB filed on February 20, 2007)                                                                                                                                 
|               |                                                                                                                                                                                                                                                                                                                                                
|10.13          | Subscription Agreement between Global Innovative Systems
      Inc., Full Moon Resources Limited and the persons set out in Schedule 1 to
      the Subscription Agreement, dated January 18, 2007 (incorporated by
      reference from our Quarterly Report on Form 10-QSB filed on February 20,
      2007)                                 
|               |                                                                                                                                                                                                                                                                                                                                                
|10.14          | Note issued by Global Innovative Systems Inc. to Full
      Moon Resources Limited dated January 23, 2007 (incorporated by reference
      from our Quarterly Report on Form 10-QSB filed on February 20, 2007)                                                                                                                                
|               |                                                                                                                                                                                                                                                                                                                                                
|10.15          | Subscription Agreement between Global Innovative Systems
      Inc., LP Asset Management Limited and the persons set out in Schedule 1 to
      the Subscription Agreement, dated January 18, 2007 (incorporated by
      reference from our Quarterly Report on Form 10-QSB filed on February 20,
      2007)                                 

---

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|Exhibit Number | Description                                                                                                                                                                                                                                                                                                
|-------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                                                            
|10.16          | Note issued
        by Global Innovative Systems Inc. to LP Asset Management Limited dated
        January 23, 2007 (incorporated by reference from our Quarterly Report
        on Form 10-QSB filed on February 20, 2007)                                                                                
|               |                                                                                                                                                                                                                                                                                                            
|10.17          | Redemption Agreement
        between Lightscape Technologies Inc., Investec Bank (UK) Limited, Full
        Moon Resources Limited, LP Asset Management Limited and Bondy Tan, dated
        July 10, 2007 (incorporated by reference from our Current Report on Form
        8-K filed on August 22, 2007)
|               |                                                                                                                                                                                                                                                                                                            
|10.18          | Form of Subscription
        Agreement dated August 21, 2007 (incorporated by reference from our Current
        Report on Form 8-K filed on August 22, 2007)                                                                                                                                              
|               |                                                                                                                                                                                                                                                                                                            
|10.19          | Subscription
        Agreement between Lightscape Technologies Inc. and SMC Investment Management
        Limited dated December 11, 2007 (incorporated by reference from our Current
        Report on Form 8-K filed on December 14, 2007)                                                               
|               |                                                                                                                                                                                                                                                                                                            
|10.20          | Joint
        Venture Agreement between Lightscape Technologies (Greater China) Limited,
        Beijing Xintong Media & Cultural Development Co. Ltd., Beijing New
        Vision Media Advertising Co. Ltd. and Miss Yao Po Chun dated February
        12, 2008 (Translated from Chinese)               
|               |                                                                                                                                                                                                                                                                                                            
|10.21          | Form of Securities
        Purchase Agreement, among Lightscape Technologies Inc. and the investors
        named therein dated March 9, 2008 (incorporated by reference from our
        Current Report on Form 8-K filed on March 10, 2007)                                                              
|               |                                                                                                                                                                                                                                                                                                            
|10.22          | Form of Registration
        Rights Agreement among Lightscape Technologies Inc. and the investors
        named therein dated March 9, 2008 (incorporated by reference from our
        Current Report on Form 8-K filed on March 10, 2007)                                                               
|               |                                                                                                                                                                                                                                                                                                            
|10.23          | Escrow Agreement
        among Lightscape Technologies Inc., Roth Capital Partners, LLC and Tri-
        State Title & Escrow, LLC, as escrow agent, dated March 9, 2008 (incorporated
        by reference from our Current Report on Form 8-K filed on March 10, 2007)                                   
|               |                                                                                                                                                                                                                                                                                                            
|10.24          | Form of Placement
        Agent Warrant (incorporated by reference from our Current Report on Form
        8-K filed on March 10, 2007)                                                                                                                                                                    
|               |                                                                                                                                                                                                                                                                                                            
|(14)           | Code of Ethics                                                                                                                                                                                                                                                                                             
|               |                                                                                                                                                                                                                                                                                                            
|14.1           | Code of Ethics
        (incorporated by reference from our Annual Report on Form 10-KSB filed
        on December 30, 2004)                                                                                                                                                                                
|               |                                                                                                                                                                                                                                                                                                            
|(21)           | Subsidiaries                                                                                                                                                                                                                                                                                               
|               |                                                                                                                                                                                                                                                                                                            
|21.1           | List
        of subsidiaries                                                                                                                                                                                                                                                                               
|               |                                                                                                                                                                                                                                                                                                            
|(31)           | Rule 13a-14(a)/15d-14(a)
        Certifications                                                                                                                                                                                                                                                            
|               |                                                                                                                                                                                                                                                                                                            
|31.1           | Certification
        of Principal Executive Officer and Principal Financial Officer filed pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                              
|               |                                                                                                                                                                                                                                                                                                            
|(32)           | Section 1350
        Certifications                                                                                                                                                                                                                                                                        

---

- 94 -

|Exhibit Number | Description                                                                                                                                                                                                   
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                               
|32.1           | Certification
        of Principal Executive Officer and Principal Financial Officer pursuant
        to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002.

---